LADISH CO INC, S-1/A, 1998-02-03

LADISH CO INC
S-1/A, 1998-02-03
METAL FORGINGS & STAMPINGS

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As filed with the Securities and Exchange Commission on February 3, 1998

Registration No. 333-43011

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________

AMENDMENT NO. 1
to
FORM S-1
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
___________________

Ladish Co., Inc.
(Exact name of registrant as specified in its charter)

Wisconsin 3462 31-1145953
(State of incorporation) (Primary (I.R.S. Employer
Standard Identification No.)
Industrial
Classification
Code Number)

5481 South Packard Avenue
Cudahy, Wisconsin 53110
(414) 747-2611
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
_______________________
Wayne E. Larsen
Vice President Law/Finance and Secretary
Ladish Co., Inc.
5481 South Packard Avenue
Cudahy, Wisconsin 53110
(414) 747-2611
Facsimile (414) 747-2963
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
______________________________

Copies to:

John M. Olson Gary L. Sellers
Foley & Lardner Simpson Thacher & Bartlett
777 East Wisconsin Avenue 425 Lexington Avenue
Milwaukee, Wisconsin 53202 New York, New York 10017
(414) 271-2400 (212) 455-2000
Facsimile: (414) 297-4900 Facsimile: (212) 455-2502

____________________________

Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [_]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration number of the
earlier effective registration statement for the same offering. [_]
_________________
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
_______________________________
If this form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration number of the earlier effective registration
statement for the same offering. [_]
_______________________________________
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [_]
______________________

The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.

<PAGE>

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE
ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED FEBRUARY 3, 1998
3,350,000 Shares
Ladish Co., Inc.
Common Stock
($.01 par value)
_______________

Of the 3,350,000 shares of common stock, par value $.01 per share (the
"Common Stock"), offered hereby (the "Offering"), 2,336,000 shares are
being sold by Ladish Co., Inc. (the "Company") and 1,014,000 shares are
being sold by the Selling Shareholders. See "Principal and Selling
Shareholders". The Company will not receive any of the proceeds from the
sale of Common Stock being sold by the Selling Shareholders. The
Company's Common Stock is thinly traded and is quoted on the OTC
Electronic Bulletin Board, a quotation system, in the
over-the-counter market under the symbol "LDSH". On January 30, 1998,
the reported closing price for the Common Stock was $15.75 per share.
It is anticipated that the initial public offering price will
be between $15.00 and $18.00 per share. For information
relating to factors to be considered in determining the
initial public offering price, see "Underwriting".
Application will be made for the quotation of the
Common Stock on The Nasdaq Stock Market's
National Market under the symbol "LDSH".

For a discussion of certain factors that should be considered in
connection with an investment in the Common Stock, see "Risk Factors"
beginning on page 9 herein.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Underwriting Proceeds
Discounts to Proceeds to
Price to and Company Selling
Public Commissions (1) Shareholders

Per Share $ $ $ $

Total (2) $ $ $ $
__________

(1) Before deduction of expenses payable by the Company estimated at
$550,000.

(2) Certain of the Selling Shareholders have granted the Underwriters an
option, exercisable for 30 days from the date of this Prospectus, to
purchase a maximum of 502,500 additional shares to cover
over-allotments of the Common Shares. If such option is exercised in
full, the total Price to Public will be $ , Underwriting
Discounts and Commissions will be $ , proceeds to Company will be
$ and proceeds to Selling Shareholders will be $ .

The shares of Common Stock are offered by the several Underwriters
when, as and if delivered to and accepted by the Underwriters and subject
to their right to reject orders in whole or in part. It is expected that
the shares of Common Stock will be ready for delivery on or about ,
1998, against payment in immediately available funds.

Credit Suisse First Boston BT Alex. Brown

Prospectus dated , 1998.

<PAGE>

[inside front cover]

Certain persons participating in this Offering may engage in
transactions that stabilize, maintain, or otherwise affect the price of
the Securities offered hereby, including over-allotment, stabilizing
transactions, syndicate short covering transactions and penalty bids. For
a description of these activities, see "Underwriting".

<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be
read in conjunction with, the more detailed information and financial
statements and the related notes thereto included elsewhere in this
Prospectus. As used in this Prospectus, unless the context otherwise
requires, the term "Ladish" or "Company" means Ladish Co., Inc. Except as
otherwise indicated, all information in this Prospectus has been adjusted
to give effect to a one for six reverse split of the Common Stock which
occurred effective December 12, 1997. Information in this Prospectus
concerning the number of shares of Common Stock outstanding does not,
except where otherwise indicated, assume the exercise of currently
outstanding and exercisable warrants to purchase an aggregate of 7,608,932
shares, and assumes that the Underwriters have not exercised their over-
allotment option.

The Company

Ladish Co., Inc. ("Ladish" or the "Company") is a leading producer of
highly engineered, technically advanced components for the jet engine,
aerospace and general industrial markets.

Ladish engineers, produces and markets high-strength, high-technology
forged and formed metal components for a wide variety of load-bearing and
fatigue-resisting applications in the jet engine, aerospace and industrial
markets. The Company has been engaged in producing parts for aircraft
engines and other military, aerospace and general industrial applications
for over 50 years. Products developed by Ladish include (i) rotating jet
engine parts, such as fan, compressor and turbine discs, and jet engine
casings, (ii) other aerospace products, including structural aircraft
components, landing gear components, flap tracks, helicopter rotor parts
and shafts and large missile components and (iii) general industrial
forgings such as large crankshafts for power generation equipment. These
products require a high degree of engineering skill and technical
expertise and are generally manufactured from titanium, high-temperature
alloys, steel or aluminum. Components for such rigorous applications
often necessitate manufacture through forging, which yields a seamless
product with a high strength-to-weight ratio relative to castings.
Principal customers include all of the major jet engine manufacturers, as
well as both commercial and government aircraft and satellite
manufacturers, power plants and manufacturers of farm and heavy-duty off-
road equipment. For the nine months ended September 30, 1997,
approximately 89% of the Company's sales were to the aerospace industry.

Since late 1995, demand for forged components has strengthened,
primarily due to increased demand from the commercial aerospace industry.
The Company believes the principal reasons for the recent improvement in
new aircraft orders include increased demand for air travel in Asia, the
recent improved profitability of U.S. commercial airlines and U.S.
Environmental Protection Agency rules requiring airlines to reduce noise,
which, in turn, have prompted airlines to modernize their fleets.
Accordingly, airlines have been retrofitting existing aircraft or
purchasing new jet engines.

In addition to the favorable trends in commercial aviation discussed
above, world airframe manufacturers are seeking to improve the
affordability and efficiency of their products by reducing the number of
engines on airplanes. Newer engines, therefore, must be bigger and run
faster and at higher temperatures, which in turn has increased demand for
components that are structurally larger and more metallurgically complex.
The Company believes that it is well positioned to capitalize on the
current upturn in the commercial aerospace industry in wide-body aircraft
as well as regional and business jets. The Company believes that the
combination of its unique equipment, metallurgical expertise and leading-
edge computer process modeling of forging, heat treating and machining
operations, together with its industry-recognized core competencies in
large and complex forgings, will enable the Company to compete effectively
for this demand.

Business Strategy

The Company's goal is to generate profitable growth and to enhance
shareholder value by capitalizing on Ladish's reputation for quality and
value and its unique manufacturing equipment. To accomplish this goal,
management intends to continue pursuing the following strategies:

Maximize Benefits from Industry Upturn

Ladish intends to capitalize on the current upturn in the aerospace
industry by continuing to manufacture components that meet the demand by
airframe manufacturers for stronger, larger and more metallurgically
complex parts. The Company believes that it is well positioned to benefit
from the reduction in excess capacity in the U.S. airline industry, the
other trends in the commercial aerospace industry and the corresponding
increase in demand for new aircraft and parts.

Make Strategic Acquisitions

As a part of the global consolidation of the aerospace industry,
management believes there are numerous opportunities to grow and enhance
the Company through strategic acquisitions. As an example of these
opportunities, in June 1997, Ladish acquired substantially all of the
assets and assumed a portion of the liabilities of Stowe Machine Co., Inc.
("Stowe"). Located in Windsor, Connecticut, Stowe provides finish
machining services and products to the jet engine industry. Operating
Stowe will further Ladish's efforts to capitalize on the upturn in the jet
engine industry through the value-added services provided by Stowe to the
Company's existing customer base and the vertical integration
opportunities offered through Stowe. With a customer list which mirrors
that of Ladish, Stowe provides Ladish with the ability to integrate
vertically and offer further value-added services to its core markets.

Leverage Core Competencies into New Products and Markets

The Company's growth strategy also includes continuing to identify
new products and markets where it can become a leading supplier by using
its core competencies in metallurgy, precision metal-working and the
management of complex manufacturing processes. The Company has expanded
its processing technology to alloys such as aluminum-lithium in order to
compete for both solid and liquid fuel motor cases for future generations
of launch vehicles such as the Expendable Extended Launch Vehicle
("EELV"). In addition, the Company's ability to shear-form various alloys
has enabled it to develop technically advanced domes, rings and cylinders
for launch vehicles and seamless titanium drums used to manufacture copper
foil for use by the telecommunications industry. Ladish's metallurgical
expertise, combined with the world's largest counterblow hammer, has
enabled it to become the leading supplier of titanium hemispheres in the
commercial satellite industry and large steel crankshafts in the power
generation industry.

Additionally, the Company believes that its manufacturing,
engineering and technical expertise gives it the ability to develop and
process next generation jet engine components for increased performance of
high-temperature materials as well as to develop products for non-
aerospace applications such as farm and heavy-duty off-road machinery.
For example, the Company is currently producing what the Company believes
is the world's largest crankshaft in a closed-die for use in the
international power generation market.

Enhance Market Access Through Customer Cooperation and Strategic
Alliances

Ladish intends to continue its long-standing practice of working
closely with its customers and strategic participants in the forging
industry. The Company works closely with customers by using its
manufacturing and technical expertise to engineer, tool and manufacture
new products according to customer specification. In exchange, the
Company is often designated as the sole-source supplier by its customers
for the life of the program. In addition, Ladish's well-respected
research and development departments have enabled the Company to establish
and maintain strong relationships with GE, Rolls-Royce PLC ("Rolls-
Royce"), Pratt & Whitney, Lockheed Martin Corp. and the United States Air
Force on a number of development projects, many of which are customer
funded. Management believes that these projects position the Company to
win early production contracts on new equipment.

In addition to working closely with customers, Ladish has developed
strategic alliances with other participants in the forging industry to
take advantage of synergy opportunities. In September 1995, the Company
entered into a joint venture with Weber Metals, Inc. ("Weber"), a
subsidiary of German conglomerate Otto Fuchs Metallwerke KG, whereby the
Company combines its engineering and metallurgical expertise with the
capabilities of Weber's 38,000 ton hydraulic press. The product which
results from the combination of the Company's technology with Weber's
press frees up Company capacity, reduces manufacturing costs and gives the
Company access to high-temperature niches of the jet engine market.

Improve Profitability Through Operating Efficiencies and Lower Costs

Since mid-1995, the Company has significantly reduced overhead costs,
improved worker productivity, shortened production cycle times and
rationalized its product mix in order to improve operating margins and
lower its break-even point. During this time, management has invested in
new technologies, developed more efficient manufacturing processes and
focused on selling higher value-added products. By reducing lot sizes,
set-up times and process times throughout its facility, the Company has
reduced its average cycle time by approximately 75% from 1994 to 1996. In
addition, pieces per man-hour increased 11% in 1996 from 1995. Sales per
employee have increased 11% from December 31, 1996 to September 30, 1997.
As a result of the implementation of process improvement techniques
coupled with applied synchronous manufacturing concepts, the Company has
reduced its costs and improved product quality as measured by the
reduction of rework and scrap. In addition, the Company is currently
computerizing the operation of its hammers, which the Company believes
will lead to additional operational efficiency and further improve the
quality of its forgings. Ladish is also implementing cellular
manufacturing techniques in an effort to further decrease production times
and reduce costs.

Focus on Core Business

In the fourth quarter of 1996, the Company decided to focus its
efforts on its core forging business and the markets it serves.
Consequently, Ladish determined that its Industrial Products Division
("IPD"), with its commodity fitting and valve business, was not strategic
to the future direction of the Company. In May 1997, the Company sold
substantially all of the assets of IPD to a subsidiary of Trinity
Industries, Inc. for cash consideration of $36.5 million and the
assumption of certain liabilities. Ladish utilized proceeds from the sale
of IPD to reduce debt and fund the Stowe acquisition, and intends to use
the remainder of the proceeds to fund a significant portion of its
underfunded pension liability. The sale has also allowed management to
focus its time and energy on the growth of the core business and to
identify strategic acquisition opportunities such as Stowe.

History

The Ladish forge shop was founded in 1905. For the next 75 years,
Ladish Co. continued to grow its operations under the control of the
Ladish family. During this period, Ladish Co. supplied forged products to
virtually every industry, including the aerospace industry beginning in
the 1930s, and became a leader within the commercial and military
aerospace industry for forged products and material application.

Beginning in 1981, Ladish Co. experienced a series of ownership
changes. The Company was incorporated as the successor to Ladish Co. in
connection with one of these transactions. From 1991 until the middle of
1995, the aerospace industry experienced a severe cyclical downturn. This
decline resulted from a combination of reduced demand from the commercial
airline industry, which was suffering from weak passenger revenues and
overcapacity, and reduced military budgets as a result of the end of the
Cold War. At the same time, the Company faced substantial debt service on
$110 million of subordinated debentures publicly issued in connection with
a 1987 leveraged buyout. In February 1993, the Company filed a voluntary
petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Under this "pre-packaged" plan, the subordinated debentures were converted
to equity at a ratio of $1,000.00 of principal amount of subordinated
debentures for approximately 43 shares of Common Stock, including the
debentures held by the Company's largest current shareholder; no other
class of creditor was affected. The plan was confirmed and the Company
emerged from reorganization in April 1993.

Beginning in 1995, the Company implemented a program to reduce
overhead costs, improve worker productivity, shorten production cycle
times and rationalize product mix. This program has resulted in improved
operating margins and a lower break-even point. Over the same time
period, the market for forged components strengthened due primarily to
increased demand from the commercial airline industry. This resurgence in
demand, which the Company believes is attributable to a number of factors
affecting airlines in the U.S. and throughout the world, has resulted in
strong revenue growth for the Company. The Company's income before taxes
increased from $2.2 million in the first nine months of 1996 to
$14.9 million in the first nine months of 1997, due principally to the
substantial increase in net sales.

The Company has elected to undertake an initial public offering at
this time in order (i) to raise capital to reduce debt and other
liabilities and thereby improve its balance sheet, and (ii) to create a
more liquid market for the present and future shareholders of the Company.

Certain officers and principal shareholders of the Company are
Selling Shareholders in the Offering and will benefit in the amount of the
net proceeds received for the shares of Common Stock sold by them
hereunder. See "Principal and Selling Shareholders".

The Offering

Common Stock offered by:

The Company . . . . . . . . . . . 2,336,000 shares

Selling Shareholders(1) . . . . . 1,014,000 shares

Total . . . . . . . . . . . . 3,350,000 shares

Common Stock and equivalents to be
outstanding after the Offering(2) . . 15,260,405 shares
Use of Proceeds . . . . . . . . . . . . The proceeds to the Company
from the sale of Common Stock
by the Company are expected to
be approximately $35 million
(net of underwriting discounts
and estimated expenses payable
by the Company and assuming an
offering price per share of
$16.50, the midpoint of the
range set forth on the cover
page of this Prospectus). The
net proceeds from the sale of
shares by the Company will be
used primarily to repay
subordinated debt and a portion
of outstanding indebtedness
under the Company's senior
credit facility, and to
contribute to certain
underfunded pension plans. Any
remaining funds will be used
for general corporate purposes,
which may include acquisitions.
The Company will not receive
any proceeds from the sale of
shares by the Selling
Shareholders. See "Use of
Proceeds" and "Principal and
Selling Shareholders".

Dividend policy . . . . . . . . . . . . The Company currently intends
to retain all of its earnings
to finance its operations and
future growth and does not
expect to pay any dividends for
the foreseeable future. See
"Dividend Policy".

Proposed Nasdaq National Market symbol "LDSH".
_______________
(1) Does not include up to 502,500 shares of Common Stock issuable upon
exercise of the Underwriters' over-allotment option in full.

(2) Includes 7,608,932 shares subject to outstanding common stock
purchase warrants, but excludes (i) 322,500 shares issuable
pursuant to outstanding options under the Incentive Plan (as
hereinafter defined) and (ii) 496,188 shares reserved for issuance
upon exercise of outstanding options previously granted to former
employees and others. See "Management-Incentive Stock Option
Plan", "Certain Relationships and Related Party Transactions", and
Note 4 to Financial Statements.

Summary Financial Data

The following table sets forth certain historical financial data for
the fiscal years 1994 through 1996, and the nine-month periods ended
September 30, 1996 and 1997. The historical financial data for the fiscal
years ended December 31, 1994, 1995 and 1996 were derived from the audited
financial statements of the Company included elsewhere herein. The
historical financial data for the nine-month periods ended September 30,
1996 and September 30, 1997 have not been audited. The Company's
Industrial Products Division, which was sold during 1997, has been treated
as a discontinued operation and its results of operations are excluded
from the table.

In the opinion of management, the historical financial data for the
nine-month periods ending September 30, 1996 and 1997 include all
adjusting entries (consisting only of normal recurring adjustments)
necessary to present fairly the information set forth therein. The
historical financial data are not necessarily indicative of the results of
operations for any future period. Furthermore, the results of operations
for the nine-month periods ended September 30, 1996 and 1997 should not be
regarded as indicative of the results that may be expected for the full
year. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations".

<TABLE>
<CAPTION>
Years Ended December 31, Nine Months Ended
September 30,
1994 1995 1996 1996 1997
Results of Operations: (Dollars in thousands, except earnings per share)

<S> <C> <C> <C> <C> <C>
Net sales $121,803 $115,738 $162,002 $124,068 $157,072
Cost of sales 130,537 128,351 149,637 114,154 134,055
-------- -------- -------- -------- --------
Gross profit (loss) (8,734) (12,613) 12,365 9,914 23,017

Selling, general &
administrative
expenses 5,966 6,139 6,556 4,888 5,607
-------- -------- -------- -------- --------
Income (loss) from
operations (14,700) (18,752) 5,809 5,026 17,410

Interest expense 2,466 3,339 3,703 2,870 2,659

Other income
(expense), net 138 (55) 29 7 143
-------- -------- -------- -------- --------
Income (loss) from
operations before
provision for income
taxes (17,028) (22,146) 2,135 2,163 14,894

Provision for income
taxes - - - - 1,132
-------- -------- -------- -------- --------
Net income (loss) from
continuing operations $(17,028) $(22,146) $ 2,135 $ 2,163 $ 13,762
======== ======== ======== ======== ========
Earnings per share
from continuing
operations(1) $ (3.39) $ (4.40) $ 0.20 $ 0.21 $ 1.09

Other Data:

EBITDA(2) $(5,837) $ (9,899) $ 14,974 $ 11,963 $ 24,931
Capital expenditures 2,549 2,865 4,997 2,747 6,255

Depreciation expense 8,725 8,908 9,136 6,930 7,365

Balance Sheet (at end of
period):

Total assets $164,347 $164,696 $170,270 $182,623 $171,092
Total debt 31,665 43,932 51,848 48,516 33,235
Stockholders' equity
(deficit) 11,141 (9,751) (16,287) (7,331) (1,416)

Backlog(3) $100,648 $150,493 $233,730 $216,811 $277,712

_______________

(1) Calculated in accordance with Note 14 to Financial Statements.
(2) EBITDA from continuing operations for any relevant period presented
above represents net income (loss) from continuing operations, plus
income taxes and interest expense, plus depreciation and amortization
of goodwill and other intangibles. EBITDA may not be comparable to
similarly titled measures reported by other companies. While EBITDA
should not be construed as a substitute for operating income or a
better indicator of liquidity than cash flow from operating
activities, which is determined in accordance with generally accepted
accounting principles, it is included herein to provide additional
information with respect to the ability of the Company to meet its
future debt service, capital expenditure and working capital
requirements. EBITDA is not necessarily a measure of the Company's
ability to fund its cash needs. See the Company's Financial
Statements and the related notes thereto appearing elsewhere herein.
(3) Backlog represents unfilled purchase orders received by the Company
as of the end of each period.
</TABLE>

Recent Operating Results (Unaudited)

During the year ended December 31, 1997, the Company's
sales totaled $210 million, as compared with $162 million in 1996. Pretax
income for 1997 increased to $20.5 million from $2.1 million in 1996. As
of December 31, 1997, the Company's backlog was $278 million, compared to
$234 million at the end of 1996.

RISK FACTORS

Prior to making any investment decision, prospective investors should
carefully consider the risk factors set forth below in addition to the
other information presented in this Prospectus.

History of Recent Losses

Although the Company reported net income from continuing operations
of $2.1 million in 1996 and $13.8 million for the nine months ended
September 30, 1997, the Company reported net losses for each of the years
ended December 31, 1991 through 1995. In addition, the Company reported
gross losses for 1994 and 1995 and had an accumulated deficit of
approximately $38.0 million at September 30, 1997. In 1993, the Company
was unable to service its subordinated debt and consequently underwent a
financial restructuring pursuant to Chapter 11 of the United States
Bankruptcy Code, in which the subordinated debt was converted into Common
Stock. The Company has implemented changes designed to improve its cost
structure and increase efficiency and productivity at its facilities,
which the Company believes have enabled it to increase profitability and
to withstand better the volatility inherent in its primary markets. There
can be no assurance, however, that the Company's operations will be
profitable in the future.

Cyclicality of the Aerospace and Jet Engine Industries

Substantially all of the Company's revenues are derived from the
aerospace and jet engine industries, which are cyclical in nature and
subject to changes based on general economic conditions, airline
profitability and international relations. The duration and severity of
upturns and downturns in these industries are influenced by a variety of
factors, including those set forth herein. Accordingly, they cannot be
predicted with any certainty. Historically, orders for new commercial
aircraft and related commercial aerospace components have been driven by
the operating profits or losses of commercial airlines. Purchases by
customers in the military aerospace sector are dependent upon defense
budgets. The commercial aerospace industry experienced a greatly reduced
volume of orders between 1992 and early 1995, although this decline has
been reversed in 1996 and the first nine months of 1997. Events adversely
affecting the aircraft industry, such as cyclical overcapacity and
inability to maintain profitable fare structures, would likely have a
material adverse effect on the financial condition and results of
operations of the Company. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations".

Reductions in Government Spending

Since 1990, almost one-quarter of the Company's revenue has been
derived from the government-sponsored aerospace industry, an industry that
is dependent upon government budgets and, in particular, the United States
government budget. In general, defense and space budgets in the United
States have been declining in recent years, resulting in reduced demand
for new aircraft and spare parts. While the effect of U.S. defense and
space budget reductions may be offset in part by foreign military sales,
such sales are affected by U.S. governmental regulation, regulation by the
purchasing government and political uncertainties in the United States and
abroad. There can be no assurance that U.S. defense and space budgets and
the related demand for defense and space equipment will not continue to
decline or that sales of defense and space equipment to foreign
governments will continue at present levels.

Competition

The sale of metal components for the aerospace, jet engine and
industrial markets is highly competitive. Many Ladish products are
readily interchangeable with the products manufactured by Ladish's
competitors. Many of the Company's products are sold under long-term
contracts which are bid upon by several suppliers. Ladish's principal
competitor, Wyman-Gordon Company, is substantially larger than Ladish and
has greater financial resources. See "Business-Competition".

Reliance on Major Customers

The Company's three largest customers accounted for approximately 54%
of the Company's revenues in 1996 and 60% during the nine months ended
September 30, 1997. Because of the small number of customers for some of
the Company's principal products, those customers exercise significant
influence over the Company's prices and other terms of trade. The loss of
any of the Company's largest customers could have a material adverse
effect on the Company's financial condition and results of operations.
See "Business-Customers".

Dependence on Key Personnel

The Company has been and continues to be dependent on certain key
management personnel. The Company's ability to maintain its competitive
position will depend, in part, upon its ability to retain these key
managers and to continue to attract and retain highly qualified
managerial, manufacturing and sales and marketing personnel. There can be
no assurance that the loss of key personnel would not have a material
adverse effect on the Company's results of operations or that the Company
will be able to recruit and retain such personnel. See "Management".

Product Liability Exposure

The Company produces many critical engine and structural parts for
commercial and military aircraft and for other specialty applications. As
a result, the Company has an inherent risk of exposure to product
liability claims. The Company currently maintains product liability
insurance, but there can be no assurance that insurance coverage will
continue to be available on terms acceptable to the Company or that such
coverage will be adequate for any liabilities that might be incurred.

Availability and Price of Raw Materials

The largest single component of the Company's cost of goods sold is
raw material costs. The Company manufactures products in a wide variety
of specialty metals and alloys, some of which can only be purchased from a
limited number of suppliers. The Company holds limited quantities of raw
materials in inventory but, for the principal part of its business, seeks
to procure delivery of raw materials in quantities and at times matching
customers' orders. The Company, along with other entities in the
industry, has experienced periods of increased delivery times for
nickel-based and titanium alloys and certain stainless steels, which
account for a significant portion of the Company's raw materials.
Significant scarcity of supply of raw materials used by the Company could
have a material adverse effect on the Company's results of operations by
affecting both the timing of delivery and the cost of purchasing such
materials. Many of the Company's products are sold pursuant to long-term
agreements with its customers, which currently provide the Company the
right to pass through material cost increases. Any inability to obtain
such rights in future long-term agreements could have a material adverse
effect on the Company's results of operations. See "Business-Raw
Materials".

Labor Contracts

Approximately 83% of the Company's employees are represented by eight
collective bargaining units. Contracts are typically renegotiated every
three years with each union. While management does not expect that work
stoppages will arise in connection with the renewal of labor agreements
expiring in the foreseeable future, no assurance can be given that work
stoppages will not occur. An extended or widespread work stoppage could
have a material adverse effect on the Company's results of operations.
See "Business-Employees".

Pension and Other Postretirement Benefit Obligations

The Company's employees are eligible to participate in various
Company-sponsored pension plans. In addition to pension benefits, the
Company provides health care and life insurance benefits to its eligible
employees and retirees. The pension benefits have been and will continue
to be funded through contributions to pension trusts, while health care
and life insurance benefits are paid as incurred.

The Company has several pension plans, certain of which are
underfunded. The aggregate liability recorded for the Company's pension
plans on the balance sheet at September 30, 1997 was approximately $48
million. The Company has entered into an agreement with the Pension
Benefit Guarantee Corporation requiring minimum contributions to the
underfunded plans of $18 million in 1997, $7.4 million in 1998 and $7.8
million in 1999 in order to substantially reduce this liability. In
addition, approximately $15 million of the net proceeds from the Offering
will be used to make a further contribution to these plans. See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations-Pensions" and Note 8 to Financial Statements.

The liability recorded for postretirement health care and life
insurance benefits on the balance sheet at September 30, 1997 was
approximately $50 million on an actuarial basis and will be paid as
incurred annually. See Note 9 to Financial Statements.

Compliance with Environmental and Other Government Regulations

The Company's operations are subject to extensive environmental,
health and safety laws and regulations promulgated by federal, state and
local governments. Many of these laws and regulations provide for
substantial fines and criminal sanctions for violations. The nature of
the Company's business exposes the Company to risks of liability due to
the use and storage of materials that can cause contamination or personal
injury if released into the environment. In addition, environmental laws
may have a significant effect on the nature, scope and cost of cleanup of
contamination at operating facilities. It is difficult to predict the
future development of such laws and regulations or their impact on future
earnings and operations, but the Company anticipates that these standards
will continue to require increased capital expenditures. There can be no
assurance that the Company will not incur material costs and liabilities
in the future relating to environmental matters.

Based upon information presently available, the Company does not
expect that costs for future environmental compliance and remediation will
have a material adverse effect on its competitive or financial position or
its ongoing results of operations. However, it is not possible to predict
accurately the amount or timing of costs of any future environmental
remediation requirements. Such costs could be material to future results
of operations. In addition, the "Superfund" statutes may impose joint and
several liability for the costs of remedial investigations and actions on
the entities that arranged for disposal of the wastes, the waste
transporters that delivered materials to the disposal sites and the past
and present owners and operators of such sites; responsible parties may be
required to bear all costs, regardless of fault, legality of the original
disposal or ownership of the disposal site. The Company has been named a
potentially responsible party at three sites and has reserved
approximately $300,000 for such liability. The Company believes that the
amount for which it is liable at such sites will not be material; however,
there can be no assurances that the amount for which the Company will be
responsible will not be significantly greater than anticipated. See
"Business-Environmental, Health and Safety Matters".

Significant Shareholders

After the Offering, ING Equity Partners, L.P. I and affiliated
entities (collectively "ING") will continue to own shares of
Common Stock, which will represent approximately % of the outstanding
shares of Common Stock. ING will also own warrants to purchase another
shares of Common Stock which, if exercised, would increase ING's
ownership to % of the then outstanding shares. Grace Brothers, Ltd.
("Grace") will also own warrants to purchase shares of Common
Stock which, if exercised, would represent % of the then outstanding
shares. (If both ING and Grace exercised their warrants, they would own
% and %, respectively, of the outstanding shares of Common Stock
immediately after the Offering.) Consequently, ING and Grace have and
will continue to have significant influence over the affairs of the
Company. See "Principal and Selling Shareholders" and "Certain
Relationships and Related Transactions".

Net Operating Loss Carryforwards

At January 1, 1997, the Company had approximately $73.1 million of
net operating loss carryforwards ("NOLs") for federal income tax purposes,
of which approximately $24.2 million are restricted due to the 1993 change
of ownership of the Company in connection with the Company's financial
restructuring through Chapter 11 proceedings. To the extent the Company
generates taxable income, these NOLs will reduce the federal income taxes
of the Company in future years, and therefore increase its after-tax cash
flow. Under Section 382 of the Internal Revenue Code of 1986, as amended
(the "Code"), certain restrictions on the utilization of NOLs or credit
carryforwards will apply in the event of an ownership change of a
corporation entitled to use such carryforwards. It is likely that the
sale of Common Stock pursuant to the Offering, combined with sales of
Common Stock within the past three years, will cause an ownership change
of the Company (within the meaning of Section 382 of the Code), resulting
in restrictions on the Company's ability to utilize its NOLs during all
taxable years (including partial taxable years) after the date of such
ownership change.

Based on the limitations noted above, and the Company's recent
history of losses, the Company has recorded a valuation allowance against
the entire amount of these NOLs. The Company will continue to evaluate
the ultimate realizability of the NOLs in the future. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations-
Net Operating Loss Carryforwards" and Note 7 to Financial Statements.

Dilution

Purchasers of Common Stock in the Offering will experience immediate
dilution of $13.74 per share of Common Stock purchased, assuming an
offering price of $16.50 per share (the midpoint of the range set forth on
the cover page of this Prospectus) and exercise of all of the Company's
outstanding warrants. See "Dilution". In connection with the Company's
December 1995 and February 1996 private offering of senior subordinated
secured notes (the "Subordinated Notes"), the Company issued warrants to
acquire 7,775,722 shares of Common Stock. Each warrant entitles the
holder to purchase one share of Common Stock at a price of $1.20 per
share. The exercise price may be paid in cash, or by the surrender of
outstanding Common Stock, Subordinated Notes or other warrants having a
fair value equal to the exercise price. An aggregate of 166,790 of such
warrants have subsequently been exercised. Additionally, there are
options to acquire 322,500 shares of Common Stock at an exercise price of
$6.00 per share pursuant to the Company's Incentive Stock Option Plan, and
options to purchase an additional 496,188 shares at exercise prices
ranging from $12.00 to $21.00 per share issued in 1993 in consideration of
consulting services. The exercise of all outstanding options would result
in the issuance by the Company of up to 818,688 additional shares of
Common Stock, and would result in substantial additional dilution to
investors purchasing Common Stock in the Offering.

Limited Prior Market for Common Stock; Possible Volatility of Common Stock
and the Securities Markets

Although the Common Stock of the Company has been quoted on the OTC
Electronic Bulletin Board prior to the Offering, trading has been
sporadic. Application will be made to have the Common Stock quoted on the
Nasdaq National Market. The initial public offering price of the Common
Stock will be determined through negotiations among the Company, the
Selling Shareholders and the representatives of the Underwriters. There
can be no assurance that the initial public offering price will correspond
to the price at which the Common Stock will trade in the public market
subsequent to the Offering or that an active trading market for the Common
Stock will develop and continue after the completion of the Offering. See
"Underwriting". In addition, the market price of the Common Stock upon
the completion of the Offering could be subject to significant
fluctuations in response to variations in the Company's quarterly
financial results or other developments, such as announcements of new
products by the Company or the Company's competitors, enactment of
legislation or regulation affecting the aerospace industry, interest rate
movements or general economic conditions.

Shares Eligible for Future Sale; Registration Rights; Possible Adverse
Effect on Future Market Prices

Upon completion of the Offering, there will be 7,651,473 shares of
Common Stock outstanding. An additional 8,427,620 shares have been
reserved against the exercise of outstanding warrants and options which
are currently exercisable. The 3,350,000 shares sold in the Offering will
be immediately tradeable without restriction by persons other than those
who may be deemed "affiliates" of the Company, as that term is defined in
Rule 144 under the Securities Act. Substantially all the 5,315,473 shares
of Common Stock outstanding prior to the Offering were issued in 1993 in
connection with the reorganization of the Company. Of these shares, those
held by persons who are not "affiliates" of the Company (believed by
management to number approximately 3,193,638 shares) will be immediately
tradeable. The remaining shares (believed to number approximately
2,121,835) are held by "affiliates" and may be sold only pursuant to a
registration statement under the Securities Act or under Rule 144 or
another available exemption. The Underwriters have conditioned the
Offering on the receipt of agreements of the holders of substantially all
Common Stock purchase warrants, all persons selling shares in the
Offering, all holders of registration rights with respect to the Company's
securities and all executive officers and directors of the Company, that
they will not sell any shares of Common Stock without the consent of
Credit Suisse First Boston Corporation, on behalf of the Underwriters, for
a period of 180 days following the date of this Prospectus. After the
Offering, the holders of an aggregate of 25% of the Company's then
outstanding warrants and shares then issued upon exercise of such warrants
will have the right to require the Company to register all or a portion of
the shares underlying such warrants under the Securities Act to permit the
public sale of such shares.

The shares issuable upon the exercise of the Company's outstanding
options and warrants will be "restricted shares" as that term is defined
in Rule 144. As a result, such shares, if and when issued, will only be
subject to resale pursuant to a registration statement under the
Securities Act or under Rule 144 or other available exemption.

Significant sales of shares of Common Stock under a registration
statement, pursuant to Rule 144 or otherwise in the future, or the
prospect of such sales, may depress the price of the shares of Common
Stock or any market that may develop. See "Shares Eligible for Future
Sale" and "Certain Relationships and Related Party Transactions-
Registration Rights".

FORWARD-LOOKING STATEMENTS

This Prospectus contains certain forward-looking statements.
Forward-looking statements are statements other than historical
information or statements of current condition. Some forward-looking
statements may be identified by use of terms such as "believes",
"anticipates", "intends" or "expects". The forward-looking statements
contained and incorporated by reference in this Prospectus are generally
located in the material set forth under the headings "Prospectus Summary",
"Risk Factors", "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business" but may be found in
other locations as well. These forward-looking statements relate to the
plans and objectives of the Company for future operations. In light of
the risks and uncertainties inherent in all future projections, including
but not limited to those set forth under the heading "Risk Factors", the
inclusion of the forward-looking statements in this Prospectus should not
be regarded as a representation by the Company or any other person that
the objectives or plans of the Company will be achieved. Many factors
could cause the Company's actual results to differ materially from those
in the forward-looking statements, including in particular unanticipated
fluctuation in demand for the Company's products which are sold in markets
subject to severe cyclicality. The foregoing review of important factors
should not be construed as exhaustive and should be read in conjunction
with other cautionary statements that are included in this Prospectus.
The Company undertakes no obligation to release publicly the results of
any future revisions it may make to forward-looking statements to reflect
events or circumstances after the date hereof or to reflect the occurrence
of unanticipated events.

DIVIDEND POLICY

The declaration of dividends is within the discretion of the
Company's Board of Directors. The Company has not paid a dividend on its
Common Stock since 1987. The Company currently intends to retain all of
its earnings from periods following the Offering to finance its operations
and future growth and, accordingly, does not expect to pay any dividends
for the foreseeable future. The Board of Directors will review this
dividend policy from time to time in light of the conditions then
existing, including the Company's financial condition, results of
operations, capital requirements, restrictions (if any) contained in
financing or other agreements binding upon the Company, and such other
factors as the Board of Directors deems relevant. The Company's senior
credit facility currently prohibits the payment of dividends.

USE OF PROCEEDS

The proceeds to the Company from the sale of shares of Common Stock
by the Company are estimated to be approximately $35 million (net of
underwriting discounts and estimated expenses payable by the Company and
assuming an offering price per share of $16.50, the midpoint of the range
set forth on the cover page of this Prospectus). The net proceeds from
the sale of shares by the Company will be used primarily (i) to repay all
of the Company's senior subordinated secured notes, due in February 2000,
$11.3 million aggregate principal amount of which was outstanding at
December 31, 1997, and which bear interest at the rate of 12% per year,
(ii) to repay approximately $9 million of outstanding indebtedness under
the Company's current senior credit facility, which had an outstanding
balance of approximately $27 million at December 31, 1997, and (iii) to
make contributions in the amount of approximately $15 million to certain
pension plans to reduce their underfunded status to approximately
$22 million. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations-Pensions". Some of these uses of
proceeds will require the consent of the Company's lender under the senior
credit facility, which consent is anticipated prior to the date of the
Offering. Any remaining funds will be used for general corporate
purposes, which may include one or more strategic business acquisitions.
See "Business-Business Strategy". The Company currently has no plans or
agreements with respect to specific acquisitions. The Company will not
receive any proceeds from the sale of shares by the Selling Shareholders.
See "Principal and Selling Shareholders".

MARKET FOR COMMON STOCK

Prior to the Offering, limited trading of Common Stock has occurred
in the over-the-counter market. The Common Stock has not previously been
registered under either the Securities Act of 1933, as amended (the
"Securities Act") or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), nor is such stock listed on any exchange or on Nasdaq.
The Company has been informed that three market-makers in the Common Stock
regularly publish bid quotations.

The following table sets forth, for the fiscal periods indicated, the
high and low bid prices for the Common Stock in the over-the-counter
market as reported on the OTC Electronic Bulletin Board. Such quotations
have been adjusted to reflect the 1 for 6 reverse split of the Common
Stock and reflect inter-dealer bid prices, without retail mark-up,
mark-down or commission, and do not necessarily represent actual
transactions. As of the date of this Prospectus, quotations for the
Common Stock on the OTC Electronic Bulletin Board have not been adjusted
to reflect the reverse stock split, which became effective December 12,
1997.

Bid Price
High Low
1996
First Quarter . . . $ 4.50 $ 3.90
Second Quarter . . . 11.40 3.90
Third Quarter . . . 11.40 8.70
Fourth Quarter . . . 12.00 9.60
1997
First Quarter . . . 12.60 9.90
Second Quarter . . . 13.50 9.90
Third Quarter . . . 22.80 12.60
Fourth Quarter . . . 19.80 17.10
1998
First Quarter . . . 22.50 15.00

On January 30, 1998, the last reported sale price of the Common
Stock, as reported on the OTC Bulletin Board, was $15.75 per share. As of
January 30, 1998, there were approximately 100 record holders of the
Common Stock. The Company estimates that there are approximately 200
beneficial owners of the Company's Common Stock.

Application will be made to have the Common Stock quoted on the
Nasdaq National Market under the symbol "LDSH". There can be no assurance
that an active market for the Common Stock will develop or, if developed,
will continue. See "Risk Factors-Limited Prior Market for Common Stock;
Possible Volatility of Common Stock Price and the Securities Markets" and
"Underwriting".

DILUTION

At September 30, 1997, the Company had a net tangible book value of
$6.5 million (assuming exercise of all warrants as described below) or
$.50 per share of Common Stock. Net tangible book value per share is
determined by dividing the Company's tangible net book value (total
tangible assets less total liabilities) by the total number of shares of
Common Stock outstanding. After giving effect to the sale of the
2,336,000 shares offered by the Company hereby, at an assumed initial
offering price of $16.50 per share (the midpoint of the range set forth on
the cover page of the Prospectus), and deducting the underwriting
discounts and commissions and estimated Offering expenses payable by the
Company, the net tangible book value of the Company at September 30, 1997
would have been approximately $41.8 million, or $2.76 per share. This
represents an immediate increase in net tangible book value of $2.26 per
share to the existing shareholders and an immediate dilution in net
tangible book value of $13.74 per share to new investors purchasing Common
Stock in the Offering. The following table illustrates this dilution on a
per share basis:

Assumed initial public offering price per share . . . . . . . $16.50

Net tangible book value per share, without
giving effect to the Offering . . . . . . . $ .50
Increase in net tangible book value per share
attributable to new investors . . . . . . . 2.26
-----

Net tangible book value per share after the Offering . . . . 2.76
------

Dilution per share to new investors . . . . . . . . . . . . . $13.74
======

The following table sets forth the number of shares of Common Stock
purchased from the Company, the total consideration paid and the average
price per share paid by the Company's existing shareholders and to be paid
by new investors in the Offering (assuming an initial public offering
price of $16.50 per share, the midpoint of the range set forth on the
cover page of this Prospectus) and before deduction of estimated
underwriting discounts and commissions:

<TABLE>
<CAPTION>
Shares of
Common Stock
Purchased Total Consideration
Price
Number Percent Amount Percent Per Share

<S> <C> <C> <C> <C> <C>
Existing shareholders(1) 12,805,239 84.6% $44,511,000(2) 53.6% $ 3.48
New investors(1) . . . . 2,336,000 15.4% 38,544,000 46.4% 16.50
---------- ----- ---------- -----

Total . . . . . . . 15,141,239 100.0% $83,055,000 100.0%

_______________

(1) Sales by the Selling Shareholders in the Offering will reduce the
number of shares held by existing shareholders to 11,791,239 or
approximately 77.9% of the total number of shares of Common Stock
outstanding after the Offering, and will increase the number of
shares held by new investors to 3,350,000 or approximately 22.1% of
the total number of shares of Common Stock outstanding after the
Offering.

(2) Amount represents the fair value of the Company's net assets as of
the financial reorganization, plus all consideration received for
subsequent stock issuance.
</TABLE>

The foregoing tables assume exercise of all 7,608,932 outstanding
warrants to purchase Common Stock at an exercise price of $1.20 per share,
but no exercise of outstanding options and no exercise of any options that
may be granted under the Incentive Plan. See "Executive Compensation-
Incentive Stock Option Plan". At September 30, 1997, there were
outstanding options to purchase 929,521 shares of Common Stock at a
weighted average exercise price of $11.34 per share. Based on the pro
forma net tangible book value of $2.76 per share after the Offering and
the assumed initial public offering price of $16.50 per share, dilution to
new investors would be $13.25 per share if all of the outstanding options
were exercised.

CAPITALIZATION

The following table sets forth the consolidated capitalization of the
Company as of September 30, 1997, and as adjusted to reflect the sale of
2,336,000 shares of Common Stock offered by the Company hereby (at an
assumed initial public offering price of $16.50 per share, the mid-point
of the range set forth on the cover page of this Prospectus) and the
application of the proceeds therefrom, net of estimated underwriting
discounts and expenses of the Offering. See "Use of Proceeds". This
table should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the
Company's Financial Statements and the Notes thereto, included elsewhere
in this Prospectus.

As of September 30, 1997
As
Actual Adjusted(1)
(Dollars in thousands)
Credit Agreement, including current
portion . . . . . . . . . . . . . . . $ 21,220 $11,939(2)

Notes payable, including current
portion . . . . . . . . . . . . . . . 1,000 1,000

Subordinated debt . . . . . . . . . . . 11,015 --

Stockholders' equity:

Common Stock, $0.01 par value,
100,000,000 shares authorized,
5,196,307 actual shares issued and
outstanding, and 7,532,307 shares
issued and outstanding, as adjusted
(3) . . . . . . . . . . . . . . . . 52 75
Additional paid in capital . . . . . 36,506 71,779

Accumulated deficit . . . . . . . . . (37,974) (37,974)
-------- --------
Total stockholders' equity . . . . (1,416) 33,880
-------- --------

Total capitalization . . . . . . . $ 31,819 $46,819
======== ========

____________________

(1) Does not reflect the contribution of approximately $15 million of net
proceeds to certain pension plans to reduce their underfunded status.
See "Use of Proceeds".

(2) The Company may borrow approximately another $38 million under this
facility.

(3) Does not include 7,608,932 shares reserved against the exercise of
warrants.

PRO FORMA CONSOLIDATED STATEMENTS OF INCOME

The following Unaudited Pro Forma Consolidated Statements of Income
for the year ended December 31, 1996 and for the nine months ended
September 30, 1997 have been prepared to reflect the following
transactions as if such transactions occurred on January 1, 1996: (i) the
June 16, 1997 acquisition of Stowe, and (ii) the Offering and the
application of the estimated net proceeds to the Company from the Offering
to repay certain indebtedness and fund certain pension obligations.

The pro forma information set forth below is unaudited and not
necessarily indicative of the results that would actually have occurred if
the transactions had been consummated as of such dates or results that may
be attained in the future.

The pro forma adjustments, as described in the Notes to the Unaudited
Pro Forma Consolidated Statements of Income, are based upon available
information and upon certain assumptions that the Company believes are
reasonable. The Unaudited Pro Forma Consolidated Information should be
read in conjunction with the "Selected Historical Consolidated Financial
Data," "Management's Discussion and Analysis of Results of Operations and
Financial Condition" and the Company's Consolidated Financial Statements
and related notes included elsewhere herein.

<TABLE>
<CAPTION>
Stowe Offering
Historical Adjustments(1) Adjustments Pro Forma
Nine months ended September 30,
1997 (In thousands, except per share data)

<S> <C> <C> <C> <C>
Net sales $ 157,072 $ 3,703 $ - $ 160,775
Cost of sales 134,055 3,037 (1,041)(2) 136,051
------- ------- ------- -------
Gross profit 23,017 666 1,041 24,724

Selling, general &
administrative expenses 5,607 279 - 5,886
------- ------ ------- -------
Income from operations 17,410 387 1,041 18,838
Interest expense 2,659 590 (1,369)(3) 1,880
Other (income), net (143) - - (143)
------- ------- ------- -------
Income (loss) from continuing 14,894 (203) 2,410 17,101
Provision (credit) for income
taxes 1,132 (15) 183(4) 1,300
------- ------- ------- -------
Net income (loss) from
continuing operations $ 13,762 $ (188) $ 2,227 $ 15,801
======= ======= =======
Net income per share from
continuing operations $1.09 $ 1.05

Weighted average shares
outstanding 12,644 14,980(6)

Year Ended December 31, 1996

Net sales $162,002 $7,888 $ - $169,890
Cost of sales 149,637 6,432 (1,388)(2) 154,681
------- ------- ------- -------
Gross profit 12,365 1,456 1,388 15,209
Selling, general &
administrative expenses 6,556 469 - 7,025
------- ------- ------- -------
Income from operations 5,809 987 1,388 8,184
Interest expense 3,703 914 (1,671)(3) 2,946
Other (income), net (29) - - (29)
------- ------- ------- -------
Income from continuing
operations before income
taxes 2,135 73 3,059 5,267

Provision for income taxes - 32 - 32
Net income from continuing
operations $ 2,135 $ 41 $ 3,059 $ 5,235
======= ======= ====== ======
Net income per share from
continuing operations $ 0.20(5) $ 0.36

Weighted average shares
outstanding 12,163 14,499(6)

(1) Reflects the historical results of operations of Stowe, adjusted for
1996 and for the period from January 1997 through the acquisition
date as follows:

1996 1997

Additional depreciation expense $ 260 $ 119
Elimination of employment costs of
former owners (334) (5)
Additional interest expense 470 386
Amortization of goodwill 43 21

In connection with the acquisition of Stowe, the Company incurred
approximately $5,200 of additional related indebtedness. The
adjustment for additional interest expense assumes the indebtedness
was incurred on January 1, 1996 at an approximate rate of 9%.

(2) Reflects the reduction of pension expense due to the additional
funding of $15,000 to be contributed from the proceeds of the
Offering, using an actuarial assumption for return on assets of 9.25%
and assuming the contribution is made on January 1, 1996.
(3) Reflects the reduction of interest expense based on the repayment of
the Subordinated Notes and a portion of the indebtedness under the
Credit Agreement from the proceeds of the Offering.

(4) Reflects the pro forma tax effects of all adjustments using the
Company's effective tax rate for the applicable period. See Note 7
to the Company's Financial Statements for a reconciliation from the
statutory tax rate to the effective tax rate.

(5) Historical net income has been adjusted by $306 to reflect the
interest savings calculated when applying the modified treasury stock
method.

(6) Reflects the historical weighted average shares outstanding, adjusted
for the 2,336 shares offered hereby.
</TABLE>

SELECTED FINANCIAL DATA

The following table sets forth certain historical financial data for
fiscal years (or periods) 1992 through 1996, and the nine-month periods
ended September 30, 1996 and 1997. The historical financial data for the
years ended December 31, 1994, 1995 and 1996 were derived from the audited
financial statements included elsewhere herein. The historical financial
data for the periods ended December 31 and April 30, 1993 and the year
ended December 31, 1992 were derived from the audited financial statements
of the Company not included herein. The historical financial data for the
nine-month periods ended September 30, 1996 and 1997 have not been
audited. The Company's Industrial Products Division, which was sold
during 1997, has been treated as a discontinued operation and its results
of operations are excluded from the table.

<TABLE>
<CAPTION>
Year Ended Nine Months Ended
December 31, Periods From Years Ended December 31, September 30,
January 1
to May 1 to
April 30, December 31,
1992 1993(1)(2) 1993(1) 1994 1995 1996 1996 1997
(Dollars in thousands, except earnings per share)
Results of Operations:

<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $148,701 $ 54,261 $ 86,628 $121,803 $115,738 $162,002 $124,068 $157,072
Cost of sales 164,338 57,145 88,843 130,537 128,351 149,637 114,154 134,055
-------- ------- ------- ------- ------- ------- ------- -------
Gross profit (loss) (15,637) (2,884) (2,215) (8,734) (12,613) 12,365 9,914 23,017
Selling, general &
administrative
expenses 8,623 2,644 5,212 5,966 6,139 6,556 4,888 5,607
Restructuring
charges 2,250 2,115 -- -- -- -- -- --
------ ------- ------- ------- ------- ------- ------- -------
Income (loss) from
operations (26,510) (7,643) (7,427) (14,700) (18,752) 5,809 5,026 17,410
Interest expense 13,548 3,314 1,528 2,466 3,339 3,703 2,870 2,659
Other income
(expense), net (1,385) (32) (4) 138 (55) 29 7 143
------- ------- ------- ------- ------- ------- ------- -------
Income (loss) from
operations
before
provision for
income taxes &
cumulative
items (41,443) (10,989) (8,959) (17,028) (22,146) 2,135 2,163 14,894
Reorganization
credit -- 15,703 -- -- -- -- -- --
Provision (credit)
for income
taxes (992) -- -- -- -- -- -- 1,132
-------- -------- -------- -------- -------- -------- --------- --------
Net income (loss)
from continuing
operations $(40,451) $ 4,714 $ (8,959) $(17,028) $(22,146)$ 2,135 $ 2,163 $ 13,762
======== ======== ======== ======== ======== ======== ========= ========
Earnings per share
from continuing
operations(3) N/A N/A N/A $(3.39) $(4.40) $0.20 $0.21 $1.09

Other Data:

EBITDA(4) $(18,144) $(4,096) $(1,742) $(5,837) $(9,899) $14,974 $11,963 $24,931
Capital expenditures 5,598 965 3,181 2,549 2,865 4,997 2,747 6,255
Depreciation expense 9,751 3,579 5,689 8,725 8,908 9,136 6,930 7,365

Balance Sheet (end
of period)

Total assets $188,515 $208,815 $182,235 $164,347 $164,696 $170,270 $182,623 $171,092
Total debt 148,493 39,200 29,108 31,665 43,932 51,848 48,516 33,235
Stockholders' equity
(deficit) (103,244) 35,180 27,904 11,141 (9,751) (16,287) (7,331) (1,416)

Backlog(5) $254,480 $236,901 $109,935 $100,648 $150,493 $233,730 $216,811 $277,712

_______________

(1) As a result of the Company's emergence from Chapter 11 bankruptcy
proceedings, the Company adopted "fresh start" accounting on April
30, 1993. As a result of the application of "fresh start"
accounting, the financial condition and results of operations of the
Company for the dates and periods subsequent to April 30, 1993 are
not comparable to those prior to May 1, 1993.

(2) The results of operations for the period from January 1 to April 30,
1993 do not include a $95,518 extraordinary gain on the forgiveness
of indebtedness and related interest thereon.

(3) Calculated in accordance with Note 14 to Financial Statements. The
EPS would not be meaningful for the year ended December 31, 1992 or
the periods ended April 30, 1993 and December 31, 1993 due to changes
in the Company's capital structure following the restructuring and
change of ownership.

(4) EBITDA from continuing operations for any relevant period presented
above represents net income (loss) from continuing operations, plus
income taxes and interest expense, plus depreciation and amortization
of goodwill and other intangibles. EBITDA may not be comparable to
similarly titled measures reported by other companies. While EBITDA
should not be construed as a substitute for operating income or a
better indicator of liquidity than cash flow from operating
activities, which are determined in accordance with generally
accepted accounting principles, it is included herein to provide
additional information with respect to the ability of the Company to
meet its future debt service, capital expenditure and working capital
requirements. EBITDA is not necessarily a measure of the Company's
ability to fund its cash needs. See the Company's Financial
Statements and the related notes thereto appearing elsewhere herein.

(5) Backlog represents unfilled purchase orders received by the Company
as of the end of each period.
</TABLE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

Substantially all of the Company's revenue is generated from the jet
engine, aerospace and general industrial markets. Approximately 53%, 59%,
67% and 73% of the Company's revenues during 1994, 1995, 1996 and the nine
months ended September 30, 1997, respectively, was derived from the jet
engine industry, an industry that is cyclical in nature and subject to
changes based on general economic conditions, airline profitability and
government spending. During the period from 1992 through 1994, the
Company experienced a significant deterioration in its core forging
business. The economic recession combined with an unprecedented decline
in air traffic in 1992 led to a prolonged downturn in the jet engine and
aerospace markets which adversely impacted the Company's performance.
Additionally, a reduction by the U.S. government in military spending and
reductions in the NASA budget compounded the effects of the downturn in
the jet engine and aerospace markets.

Beginning in 1995, the Company implemented a program to reduce
overhead costs, improve worker productivity, shorten production cycle
times and rationalize product mix. This program has resulted in improved
operating margins and a lower break-even point. Over the same time
period, the market for forged components strengthened due primarily to
increased demand from the commercial airline industry. This resurgence in
demand, which the Company believes is attributable to a number of factors
affecting airlines in the U.S. and throughout the world, has resulted in
strong revenue growth for the Company. The Company recorded net sales of
$162 million and net income of $2.1 million from continuing operations in
1996, and net sales of $157 million and net income of $13.8 million from
continuing operations in the first nine months of 1997.

The Company's sales are not subject to significant seasonal
fluctuations. However, production and resulting sales are subject to the
number of "working days" in any given period, with the fourth quarter
containing more holidays than each of the first three quarters of the
year. Therefore, results for various periods may vary materially due to
the number of working days available in any period, with the fourth
quarter results typically lower than the first three periods in any given
year.

Recent Events

For the year ended December 31, 1997, unaudited results show the
Company's sales totaled $210 million, as compared with $162 million in
1996. Pretax income for 1997 increased to $20.5 million from $2.1 million
in 1996. As of December 31, 1997, the Company's backlog was $278 million,
compared to $234 million at the end of 1996.

In June 1997, the Company acquired the assets and assumed certain of
the liabilities of Stowe. The acquisition price for Stowe was
approximately $9.5 million. Located in Windsor, Connecticut, Stowe
provides finish machining services for jet engine components. With a
customer list which mirrors that of Ladish, Stowe provides Ladish with the
ability to integrate vertically and offer further value-added services to
its core markets. See Note 15 to Financial Statements.

On May 30, 1997, the Company sold substantially all of the assets,
and transferred a portion of the liabilities, of its Industrial Products
Division ("IPD") to a subsidiary of Trinity Industries, Inc. As a part of
the consideration for the transaction, the Company received approximately
$36.5 million in cash proceeds. The Company elected to dispose of IPD in
order to better focus on its core forging business for the jet engine,
commercial and general industrial markets. IPD had been primarily focused
on the production of commodity fitting and flange products. The proceeds
from the sale were used to repay approximately $12 million of outstanding
senior debt, fund working capital requirements, and finance $8.5 million
of the Stowe acquisition and a portion will be applied to reduce the level
of the Company's unfunded pension liability. IPD has been treated as a
discontinued operation and its results of operations are excluded from
those of the continuing operations in the accompanying financial
statements. See Note 13 to Financial Statements.

Results of Operations

The following table sets forth for the periods indicated certain
income statement data from continuing operations of the Company expressed
as a percentage of net sales.

<TABLE>
<CAPTION>
Nine Months Ended
Year Ended December 31, September 30,

1994 1995 1996 1996 1997

<S> <C> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0% 100.0%

Cost of sales 107.2 110.9 92.4 92.0 85.3
----- ----- ----- ----- -----
Gross profit (loss) (7.2) (10.9) 7.6 8.0 14.7

Selling, general &
administrative
expenses 4.9 5.3 4.0 3.9 3.6
----- ----- ----- ----- -----
Income (loss) from
operations (12.1) (16.2) 3.6 4.1 11.1

Interest expense 1.9 2.9 2.3 2.4 1.6
----- ----- ----- ----- -----

Income (loss) from
continuing operations
before provision for
income taxes (14.0) (19.1) 1.3 1.7 9.5

Provision for income
taxes 0.0 0.0 0.0 0.0 0.7
----- ----- ----- ----- -----

Net income (loss) from
continuing operations (14.0)% (19.1)% 1.3% 1.7% 8.8%
===== ===== ===== ===== =====
</TABLE>

Nine Months Ended September 30, 1997 Compared to Nine Months Ended
September 30, 1996

Net sales for the nine months ended September 30, 1997 were $157.1
million compared to $124.1 million for the comparable period in 1996, an
increase of 27%. The increase in sales in the first nine months of 1997
was largely the result of a continued resurgence in the jet engine market
with steady volume in the aerospace and general industrial markets.
Ladish also benefitted in the first nine months of 1997 as a result of
increased sales and improved pricing due to significant improvement in on-
time deliveries and manufacturing productivity. Gross profit increased by
132% in the 1997 period due to improved operating efficiencies, greater
absorption of fixed costs by higher sales volumes and improved pricing in
the commercial aerospace industry.

Selling, general and administrative expenses, as a percentage of
sales, were 3.6% for the nine months ended September 30, 1997 compared to
3.9% for the comparable period in 1996. This reduced percentage, which
resulted primarily from the increase in sales, occurred even though
foreign sales, which involve greater commission expense than domestic
sales, increased from 39% of net sales in the 1996 period to 42% in the
1997 period.

Interest expense for the nine months ended September 30, 1997 was
$2.7 million compared to $2.9 million for the nine months ended September
30, 1996, a decrease of 7%. The decrease in interest expense was
attributable to lower loan balances of senior debt along with reduced
interest rates. Approximately $0.9 million of the interest expense in the
first nine months of 1997 and $0.8 million in the first nine months of
1996 was attributable to non-cash payment-in-kind ("PIK") payments on
certain Subordinated Notes issued in late 1995 and early 1996. See "-
Liquidity and Capital Resources". As of September 30, 1997, the Company's
senior debt had an effective interest rate equal to the commercial paper
rate plus 2.0% per annum (reduced from 2.5% as of December 31, 1996).
Effective interest rates averaged 8.4% during the nine months ended
September 30, 1997 compared to 10.3% during the same period of 1996.

The Company's income before taxes increased from $2.2 million in the
first nine months of 1996 to $14.9 million in the first nine months of
1997, due principally to the substantial increase in net sales.

The $1.1 million provision for taxes for the nine-month period ending
September 30, 1997 represented a non-cash accounting charge. The use of
pre-restructuring NOLs requires the Company to record a tax provision and
to reflect the offset as an addition to paid-in capital. The Company
intends to continue to use its NOLs in the future to reduce actual payment
of federal income taxes. The future use of the NOLs is subject to certain
statutory restrictions. See "-Liquidity and Capital Resources-Net
Operating Loss Carryforwards".

Contract backlog at September 30, 1997 was $278 million, compared to
$217 million at September 30, 1996, an increase of 28%, due primarily to
an increase in orders.

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

The year 1996 represented a turn-around year for the Company as sales
increased 40%, to $162 million from $115.7 million in 1995 and operating
earnings returned to a positive position for the first time in five years.
The return to profitability was attributable to a significant increase in
sales to the jet engine market, a better product mix and improved
operating efficiencies throughout the Company. Gross profit increased by
$25 million in 1996 over 1995 due to the increased volume of business in
the jet engine market, internal improvements accelerating the movement of
product and pricing increases associated with improved product mix and
selection.

In 1996, selling, general and administrative expenses dropped to 4.0%
of sales from 5.3% in 1995. This reduction reflected improved cost
controls within the Company and an increased level of sales.

Interest expense for 1996 was $3.7 million compared to $3.3 million
in 1995, due to higher levels of indebtedness resulting from increased
demands for working capital in 1996. Approximately $1.0 million of the
interest expense in 1996 was attributable to non-cash PIK payments on the
Subordinated Notes. Effective interest rates averaged 9.9% during 1996
compared with 11.1% during 1995.

The Company's income before taxes increased from a $22.1 million loss
in 1995 to earnings of $2.1 million in 1996. This turnaround was
attributable principally to the increase in net sales, allowing fuller
absorption of the Company's fixed costs.

Contract backlog at December 31, 1996 was $234 million, compared to
$150 million at December 31, 1995, an increase of 56%, due primarily to an
increase in orders.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Net sales for 1995 were $115.7 million compared to $121.8 million for
1994, a decrease of 5%. However, 1994 sales had the benefit of
approximately $11 million of contract settlement payments for a NASA
program terminated in the fourth quarter of 1993. Operations for the
first half of 1995 were similar to 1994. In the second half of the year,
however, the Company experienced a considerable improvement in operating
results over the prior year after excluding the contract settlement from
the prior year. This improvement resulted from an overall increase in
demand in the jet engine and aerospace markets. For the six-month period
from July through December 1995, sales were $57.7 million, up 12.7% over
the $51.2 million of sales during the same period of the prior year.
Gross profit (loss) for the same six-month period showed an improvement,
from $(8.1) million in 1994 to $(4.7) million in 1995. Customer orders
exceeded shipments during every month in 1995.

Selling, general and administrative expenses increased to 5.3% of
sales in 1995 from 4.9% in 1994, primarily due to increased consulting
services and commissions and other expenses related to international
shipments.

Interest expense for 1995 was $3.3 million compared to $2.5 million
in 1994, due to higher loan balances during 1995 and higher average
interest rates. Average loan balances on senior debt were $38.1 million
in 1995 versus $32.2 million in 1994. Effective interest rates averaged
11.1% during 1995 compared with 9.5% during 1994.

The Company's pretax loss increased from $17.0 million in 1994 to
$22.1 million in 1995, due principally to a contract settlement received
by the Company in 1994.

The Company's contract backlog at December 31, 1995 was approximately
$150 million, compared to $101 million at December 31, 1994, an increase
of 49%, due primarily to an increase in orders.

Liquidity and Capital Resources

In July 1995, the Company entered into a credit agreement (the
"Credit Agreement") with General Electric Capital Corporation which
expires on June 30, 2000. The Credit Agreement currently consists of two
facilities: (i) a $45 million revolving line of credit (the "Revolving
Credit Facility") and (ii) an $8 million term loan (the "Term Loan"). All
of the Company's assets have been pledged to secure borrowings under the
Credit Agreement. An affiliated party of the senior lender is also a
significant customer of the Company.

Borrowings under the Revolving Credit Facility bear interest at a
rate equal to the commercial paper rate plus 2.0% per annum (reduced from
2.5% as of December 31, 1996). Availability under the Revolving Credit
Facility is subject to a borrowing base limitation which is calculated
based upon eligible accounts receivable and inventories reduced by the
amount of any letters of credit. At September 30, 1997, approximately $24
million was available and undrawn under the Revolving Credit Facility.

The Term Loan is payable in 16 consecutive quarterly installments
which commenced on September 30, 1996. The first four quarterly
installments were $375,000 each, the next eight installments are $500,000
each beginning September 30, 1997, and the last four installments are
$625,000 each, with the first installment due on September 30, 1999 and
the last installment due on June 30, 2000. Borrowings under the Term Loan
bear interest at a rate equal to the commercial paper rate plus 2.0% per
annum. The Company may, at any time, prepay the outstanding balance of
the Term Loan, in whole or in part, subject to a prepayment fee of 1% of
the outstanding balance (or in the case of a partial prepayment, of the
amount prepaid) if the Term Loan is prepaid on or before July 1, 1999.
The balance of the Term Loan as of September 30, 1997 was $6.0 million.

The Credit Agreement contains certain covenants, including, but not
limited to, restrictions on the incurrence of additional indebtedness and
operations and capital expenditures. In addition, the Company is required
to maintain an interest coverage ratio of 1.5 to 1 for 1997 and 2.0 to 1
thereafter and to maintain a fixed charge coverage ratio of 1.0 to 1. At
September 30, 1997, the Company was in compliance with all covenants under
the Credit Agreement and believes that it will remain in compliance with
such covenants for the foreseeable future.

Transaction fees incurred in connection with the Credit Agreement
were approximately $1.1 million, $645,000 of which was refunded to the
Company as a result of its offering of Subordinated Notes in December 1995
and February 1996. In addition, the Company is required to pay an unused
facility fee of 0.25% per annum on the average daily unused balance.

In December 1995, the Company issued a total of $4.0 million of its
12% senior subordinated secured notes due December 22, 2000 (the
"Subordinated Notes") to ING and Grace. In February 1996, the Company
completed a second offering of Subordinated Notes when it issued an
additional $5.3 million of Subordinated Notes to ING, Grace and certain
other stockholders. The Subordinated Notes bear interest at a rate of 12%
per annum, are due in December 2000 and include detachable ten-year
warrants to purchase an aggregate of 7,775,722 shares of Common Stock at
an exercise price of $1.20 per share. Interest on the Subordinated Notes
is payable quarterly in the form of additional Subordinated Notes. The
Subordinated Notes are secured by a second security interest in
substantially all of the Company's assets, and are subordinated to
indebtedness under the Credit Agreement. The Subordinated Notes include a
number of affirmative and negative covenants, including, but not limited
to, restrictions on the incurrence of indebtedness junior to obligations
under the Credit Agreement and senior to the Subordinated Notes. Upon a
change in control of the Company, the Company is required to redeem the
outstanding Subordinated Notes at a price equal to the outstanding
principal amount plus accrued and unpaid interest. At September 30, 1997
the Company was in compliance with all covenants under the Subordinated
Notes. Proceeds from the sale of the Subordinated Notes were used to fund
working capital requirements associated with an increase in customer
orders. See Note 3 to Financial Statements.

During 1996, cash used for operating activities decreased
approximately $8.4 million to $2.4 million. The decrease was due
primarily to the significant decrease in the net loss between years, the
non-cash loss on the disposal of IPD and increase in accounts payable and
accrued liabilities offset by increases in accounts receivable and
inventory levels and decreases in other liabilities. Cash flow used for
investing purposes increased $3.1 million in 1996 due to an increase in
capital expenditures. These capital expenditures were funded primarily
through additional financing activities.

Due to the significant increase in the Company's shipments and
backlog, accounts receivable increased to $33.1 million at September 30,
1997 from $21.8 million at December 31, 1996. During the same period, the
Company's inventories increased from $36.0 million to $48.5 million.
Ladish funded this growth in working capital through internally generated
cash and a portion of the proceeds from the sale of IPD.

Capital expenditures for the first nine months of 1997 were $6.3
million versus $2.7 million for the same period in 1996. For all of 1997,
Ladish anticipates its capital expenditures will increase to approximately
$9.5 million, which will reflect the efforts of the Company to reinvest
and improve its operations. For 1998, Ladish anticipates increasing its
capital investment level to approximately $12.0 million. In addition, a
portion of the proceeds of the Offering may be used to improve and expand
the Company's operations. See "Use of Proceeds".

Net Operating Loss Carryforwards

At January 1, 1997, the Company had approximately $73.1 million of
net operating loss carryforwards ("NOLs") for federal income tax purposes,
of which approximately $24.2 million are restricted due to the 1993 change
of ownership of the Company. To the extent that the Company generates
taxable income, these NOLs will reduce the federal income taxes of the
Company in future years, and therefore increase its after-tax cash flow.
Under Section 382 of the Code, certain restrictions on the utilization of
NOLs or credit carryforwards will apply in the event of an ownership
change of a corporation entitled to use such carryforwards. Such an
ownership change occurs when there is a change in the ownership of the
stock of such corporation of more than 50 percentage points over a period
of not more than three years. Those restrictions, if applicable, would
permit the utilization of only a specified portion of the NOLs in any
taxable year following the ownership change.

It is likely that the sale of Common Stock pursuant to the Offering,
combined with sales of Common Stock by the Company's shareholders during
the past two years, will cause an ownership change of the Company (within
the meaning of Section 382 of the Code). If such an ownership change
occurs, the ability of the Company to fully utilize the NOLs could be
adversely affected, depending on factors such as the time at which the
ownership change occurs, the equity value of the Company at the time of
such ownership change, prevailing interest rates at the time of such
change, the ability of the Company to generate income to utilize the NOLs
both before and after the ownership change and the realization of any
built-in gains. Based on the limitations noted above, and the Company's
recent history of losses, the Company has recorded a valuation allowance
against the entire amount of these NOLs. The Company will continue to
evaluate the ultimate realizability of the NOLs in the future. See Note 7
to Financial Statements.

Pensions

On June 17, 1996, the Company and the Pension Benefit Guarantee
Corporation (the "PBGC") entered into a Payment and Security Agreement
(the "PBGC Agreement") whereby the Company was able to defer the immediate
payment of the minimum funding for plan year 1995 for certain of the
Company's defined benefit pension plans. The PBGC Agreement also granted
a third lien to the PBGC on certain of the Company's physical assets in
Wisconsin.

The Company and the PBGC entered into an Amended Payment and Security
Agreement on October 14, 1997 (the "Amended PBGC Agreement"). Pursuant to
the Amended PBGC Agreement, the Company has agreed to increase the funding
of six underfunded pension plans by an aggregate of approximately $18
million. Of this amount, the Company has discharged $4 million through a
cash contribution, and intends to discharge approximately another $4
million through the merger into the underfunded plans of certain
overfunded plans. The remaining $10 million will be contributed prior to
the end of 1997 from the proceeds from the sale of IPD. The PBGC has
agreed that the above increases in the funding levels for those plans will
satisfy the Company's funding obligation for plan years 1995-1997 and will
satisfy the Company's obligation under the PBGC Agreement which will in
turn obligate the PBGC to release its third lien on the Company's physical
assets in Wisconsin.

In addition to the amounts specified above and the $15 million of
proceeds from the Offering which the Company intends to contribute to the
underfunded plans, the Company intends to make cash contributions into the
pension trust for the underfunded plans of approximately $7.4 million in
1998 and $7.8 million in 1999.

Impact of Inflation

The Company's operating income is affected by changes in price levels
and in particular pricing from its raw material suppliers. The Company's
contracts with customers generally provide for fixed prices with limited
protection against cost increases. Gross margins, therefore, are affected
by supplier price changes during the duration of its customer contracts.
The Company attempts to minimize its risk by entering into fixed price
contracts with its raw material suppliers.

BUSINESS

General

Ladish Co., Inc. ("Ladish" or the "Company") is a leading producer of
highly engineered, technically advanced components for the jet engine,
aerospace and general industrial markets.

History

Beginning in 1981, Ladish Co. experienced a series of ownership
changes. The Company was incorporated as the successor to Ladish Co. in
connection with one of these transactions. From 1991 until the middle of
1995, the aerospace industry experienced a severe cyclical downturn. This
decline resulted from a combination of reduced demand from the commercial
airline industry, which was suffering from weak passenger revenues and
overcapacity, and reduced military budgets as a result of the end of the
Cold War. At the same time, the Company faced substantial debt service on
$110 million of subordinated debentures publicly issued in connection with
a 1987 leveraged buyout. In 1992, when the number of owners of
subordinated debentures fell below fifty, the Company terminated its
reporting obligations under the Exchange Act. In February 1993, after
missing two interest payments on the subordinated debentures, the Company
filed a voluntary petition for reorganization under Chapter 11 of the
U.S. Bankruptcy Code. Under this "pre-packaged" plan, each $1,000
principal amount of subordinated debentures was converted into
approximately 43 shares of Common Stock; no other class of creditor was
affected. The plan was confirmed and the Company emerged from
reorganization in April 1993.

Since late 1995, demand for forged components has strengthened,
primarily due to increased demand from the commercial aerospace industry.
The Company believes the principal reasons for the recent improvement in
new aircraft orders include increased demand for air travel in Asia, the
recent improved profitability of U.S. commercial airlines, and U.S.
Environmental Protection Agency rules requiring airlines to reduce noise,
which, in turn, have prompted airlines to modernize their fleets.
Accordingly, airlines have been retrofitting existing aircraft or
purchasing new jet engines.

Business Strategy

Maximize Benefits from Industry Upturn

Make Strategic Acquisitions

As a part of the global consolidation of the aerospace industry,
management believes there are numerous opportunities to grow and enhance
the Company through strategic acquisitions. As an example of these
opportunities, in June 1997, Ladish acquired substantially all of the
assets and assumed a portion of the liabilities of Stowe. Located in
Windsor, Connecticut, Stowe provides finish machining services and
products to the jet engine industry. Operating Stowe will further
Ladish's efforts to capitalize on the upturn in the jet engine industry
through the value-added services provided by Stowe to the Company's
existing customer base and the vertical integration opportunities offered
through Stowe. With a customer list which mirrors that of Ladish, Stowe
provides Ladish with the ability to integrate vertically and offer further
value-added services to its core markets.

Leverage Core Competencies into New Products and Markets

Additionally, the Company believes that its manufacturing,
engineering and technical expertise gives it the ability to develop and
process next generation jet engine components for increased performance of
high-temperature materials as well as to develop products for non-
aerospace applications such as farm and heavy-duty off-road machinery.
For example, the Company is currently producing the largest known
crankshaft in a closed-die for use in the international power generation
market.

Enhance Market Access Through Customer Cooperation and Strategic
Alliances

Ladish intends to continue its long-standing practice of working
closely with its customers and strategic participants in the forging
industry. The Company works closely with customers by using its
manufacturing and technical expertise to engineer, tool and manufacture
new products according to customer specification. In exchange, the
Company is often designated as the sole-source supplier by its customers
for the life of the program. In addition, Ladish's well-respected
research and development effort has enabled the Company to establish and
maintain strong relationships with GE, Rolls-Royce PLC ("Rolls-Royce"),
Pratt & Whitney, Lockheed Martin Corp. and the United States Air Force on
a number of development projects, many of which are customer funded.
Management believes that these projects position the Company to win early
production contracts on new equipment.

In addition to working closely with customers, Ladish has developed
strategic alliances with other participants in the forging industry to
take advantage of synergy opportunities. In September 1995, the Company
entered into a joint venture with Weber Metals, Inc. ("Weber"), a
subsidiary of German conglomerate Otto Fuchs Metallwerke KG, whereby the
Company combines its engineering and metallurgical expertise with the
capabilities of Weber's 38,000 ton hydraulic press. The product which
results from the combination of the Company's technology with Weber's
press frees up Company capacity, reduces manufacturing costs and gives the
Company significantly improved access to high-temperature niches of the
jet engine market.

Improve Profitability Through Operating Efficiencies and Lower Costs

Focus on Core Business

In the fourth quarter of 1996, the Company decided to focus its
efforts on its core forging business and the markets it serves.
Consequently, Ladish determined that IPD, with its commodity fitting and
valve business, was not strategic to the future direction of the Company.
In May 1997, the Company sold substantially all of the assets of IPD to a
subsidiary of Trinity Industries, Inc. for cash consideration of $36.5
million and the assumption of certain liabilities. Ladish utilized the
proceeds from the sale of IPD to reduce debt, fund the Stowe acquisition
and fund a significant portion of its underfunded pension liability. The
sale has also allowed management to focus its time and energy on the
growth of the core business and to identify strategic acquisition
opportunities such as Stowe.

Products and Markets

The Company markets its forging products primarily to manufacturers
of jet engines, commercial business and defense aircraft, helicopters,
satellites, heavy-duty off-road vehicles and industrial and marine
turbines. The principal forging markets served by the Company are jet
engine, commercial aerospace (defined by Ladish as satellite, rocket and
aircraft components other than jet engines) and general industrial
forgings. The amount of revenue and the revenue as a percentage of total
revenue by market were as follows for the periods indicated:

<TABLE>
<CAPTION>
Years Ended December 31, Nine Months Ended September 30,

(Dollars in millions) 1994 1995 1996 1996 1997

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Jet Engine Forgings $ 65 53% $ 69 59% $108 67% $ 83 67% $115 73%

Aerospace Forgings 34 28 24 21 31 19 23 19 25 16

General Industrial Forgings 23 19 23 20 23 14 18 14 17 11
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total $122 100% $116 100% $162 100% $124 100% $157 100%
==== ==== ==== ==== ==== ==== ==== ==== ==== ===
</TABLE>

Jet Engine Forgings

The Company is a market leader in manufacturing large, complex forged
components for use in jet engines. Products include fan, compressor and
turbine discs, shafts for large and small jet engines, and containment
cases for larger jet engines. The Company manufactures a variety of jet
engine forgings for virtually every active commercial and military jet
engine program in existence today, including those of GE, Rolls-Royce,
Pratt & Whitney and Allison.

Because jet engines may produce in excess of 100,000 pounds of thrust
and may subject components to temperatures exceeding 1,350 degrees
Fahrenheit, producing components for such extreme conditions requires
precision manufacturing and expertise with titanium, nickel-based
superalloys and powder metallurgy alloys. In addition, rotating parts
such as fan, compressor and turbine discs and shafts must be manufactured
to precise quality specifications. These products all require forging,
which imparts structural integrity into key engine parts and allows them
to withstand high temperatures and stress. Further, newer jet engines are
bigger, run hotter and spin faster. As this market shift continues, the
demand for even larger forged components utilizing materials that must
withstand ever-greater stress at higher operating temperatures is expected
to grow. The Company believes it possesses the industry's largest
isothermal press, shear forming machine, ring rolling machine and
counterblow hammer. The Company believes combining these unique pieces of
equipment with years of material process technology expertise and computer
process modeling of the forging, heat treating, and machining operations
positions the Company to compete effectively for parts for these newer
engines. Furthermore, the Company's joint venture with Weber allows the
Company to free up Company capacity and reduce manufacturing costs, while
providing the Company access to a technically demanding niche of the jet
engine market.

Aerospace Forgings

The Company manufactures products utilized in commercial and military
aircraft (including both airplanes and helicopters), such as landing gear
components, rotors, hubs, shafts and wing structurals and beams. Critical
structural components must be strong, yet lightweight. Many of these
forgings, therefore, are made from titanium and high-alloy steels. The
Company believes that given its expertise in material process technology
and its unique equipment, Ladish is well positioned to meet the increasing
demand by air carriers and corporate users for new aircraft and the U.S.
military's demand for helicopter spare parts. For example, as a result of
the Company's strong relationship with Sikorsky, the Company is
manufacturing all of the large titanium power transmission components for
Sikorsky's next generation helicopter.

The Company also manufactures components for solid and liquid motors
for launch vehicles, as well as forgings for satellite fuel tanks. The
Company has produced the cylinders, skirts and domes for the solid rocket
motor cases for every Titan IV and Space Shuttle launch recorded to date.
As programs such as the EELV have developed, the Company has expanded its
processing technology to alloys other than steel, such as aluminum-
lithium, in order to compete for both solid and liquid cylinders for
future launch platforms. The Company also produces titanium hemisphere
fuel tanks that are forged on its largest counterblow hammer. Satellite
fuel systems use two of these hemispheres, welded together, for storing
liquid propellant for the life of each satellite. The Company expects
that the satellite launch industry will grow significantly, primarily to
service the global needs of the telecommunications industry. Launch
vehicles are evolving in an effort to service this demand.

General Industrial Forgings

The Company manufactures a number of key industrial components in
which structural integrity, product strength and toughness drive the need
for a forged product. These components include large crankshafts, axles,
gears, reaction hubs, links and yokes for such customers as Caterpillar,
Inc. ("Caterpillar") and Allison. As the components become larger and
more complex, the Company can utilize its full range of equipment,
knowledge and technical expertise to manufacture these products. Using
the Company's expertise in forging engineering and its unique
manufacturing equipment, the Company has recently expanded into
manufacturing large crankshafts for land-based and marine power generation
equipment. The Company believes this market will continue to grow based
upon the need to develop the infrastructure of emerging nations.

Marketing and Sales

The forging product sales force (consisting of 14 engineers), based
in Cudahy, Wisconsin, is supported by the Company's metallurgical staff of
97 engineers and technicians. These technically trained sales engineers,
organized along product line and customer groupings, work with customers
on an ongoing basis to monitor competitive trends and technological
innovations. Additionally, sales engineers consult with customers
regarding potential projects and product development opportunities.
During the past few years, the Company has refocused its marketing efforts
on the jet engine components market and the commercial aerospace industry.

The Company is actively involved with key customers in joint
cooperative research and development, engineering, quality control, just-
in-time inventory control and computerized process modeling programs. The
Company has entered into strategic life-of-the-program contracts for a
number of sole-sourced products with each of Allison, Sikorsky and Thyssen
for major programs. The Company believes that these contracts are a
reflection of the aerospace and industrial markets' recognition of the
Company's manufacturing and technical expertise.

The research and development of jet engine components is actively
supported by the Company's Advanced Materials and Process Technology
Group. The Company's long-standing commitment to research and development
is evidenced by its industry-recognized materials and process advancements
such as processing aluminum-lithium, Udimet 720 and titanium aluminides.
The experienced staff and fully equipped research facilities support
Ladish sales through customer-funded projects. Management believes that
these research efforts position the Company to participate in future
growth in demand for critical advanced jet engine components.

Customers

The Company's top three customers, Rolls-Royce, United Technologies
and General Electric, accounted for approximately 44% of the Company's
revenues in 1994, 48% of the Company's revenues in 1995, 54% of the
Company's revenues in 1996 and 60% of the Company's revenues during the
nine months ended September 30, 1997. No other customer accounted for ten
percent or more of the Company's sales.

Caterpillar, Volvo and Allison are also significant customers of the
Company. Because of the relatively small number of customers for some of
the Company's principal products, the Company's largest customers exercise
significant influence over the Company's prices and other terms of trade.
See "Risk Factors-Reliance on Major Customers".

A substantial portion of the Company's revenues are derived from
long-term, fixed price contracts with major engine and aircraft
manufacturers. These contracts are typically "requirements" contracts
under which the purchaser commits to purchase a given portion of its
requirements of a particular component from the Company. Actual purchase
quantities are typically not determined until shortly before the year in
which products are to be delivered. The Company attempts to minimize its
risk by entering into fixed-price contracts with its raw material
suppliers. Additionally, a portion of the Company's revenue is directly
or indirectly related to government spending, particularly military and
space program spending. See "Risk Factors-Reductions in Government
Spending".

Backlog

The average amount of time necessary to manufacture the Company's
products is five to six weeks from the receipt of raw material. The
timing of the placement and filling of specific orders may significantly
affect the Company's backlog figures, which are subject to cancellation
for a variety of reasons. As a result, the Company's backlog may not be
indicative of actual results or provide meaningful data for period-to-
period comparisons. The following table provides certain information with
respect to the Company's total firm backlog as of September 30, 1996 and
1997:

As of September 30,
1996 1997
(Dollars in millions)

Jet Engine $155 71% $211 76%
Aerospace 49 23 53 19
General Industrial 13 6 14 5
---- ---- ---- ----
Total $217 100% $278 100%
==== ==== ==== ====

At September 30, 1997, approximately $208 million of total firm
backlog was scheduled to be shipped within one year and the remainder in
subsequent years in comparison to September 30, 1996 backlog of
approximately $175 million which was scheduled for shipment within one
year. Sales during any period may include sales which were not part of
the backlog at the end of the prior period. Due to the customer-specified
nature of the Company's products, the Company does not accept product
returns.

Manufacturing Process

Forging

Forging is the process by which desired shapes, metallurgical
characteristics and mechanical properties are imparted to metal by heating
and shaping it through hammering, pressing, extruding or ring rolling.
Cold forming of cylindrical shapes is performed utilizing a proprietary
shear forming process. The Company forges alloys of titanium, aluminum
and steel as well as high-temperature nickel-based superalloys.

The Company forges its products at its facilities in Cudahy,
Wisconsin. Much of the Company's forging business is capital intensive,
requiring large and sophisticated hydraulic and mechanical presses,
single-action and counterblow hammers and extensive facilities for heat
treatment, machining inspection and testing of components after forging.
The Company has independently designed and built much of its unique and
specialized equipment. The Company considers its manufacturing equipment
to be in good operating condition and adequate for the purposes for which
it is being used.

The Company employs all major forging methods, including the
following:

Open-Die Forging. In this process, the metal is hammered or pressed
between dies that never completely surround the metal, thus allowing the
metal to be observed during the process. Typically, open-die forging is
used to create relatively simple, preliminary shapes to be further
processed by closed-die forging or for simple low-quantity orders.

Closed-Die Forging. Closed-die forging involves hammering or
pressing heated metal into the required shapes and size determined by
machined impressions in specially prepared dies which exert three
dimensional control on the metal. The Company's multiple-ram process
featured on the Company's 15,000 ton press enables the Company to produce
extremely large, complex-shaped forgings in a single heating and pressing
cycle. In hot-die forging, a unique type of closed-die process, the dies
are heated to a temperature approaching the transformation temperature of
the materials being forged which allows the metal to flow more easily
within the die cavity, producing forgings with superior surface
conditions, stronger metallurgical structures, tighter tolerances,
enhanced repeatability of the part shapes and greater metallurgical
control. Both titanium and nickel-based superalloys are forged using this
process, in which the dies are heated to a temperature of approximately
1,300 degrees Fahrenheit.

Isothermal Forging. Isothermal forging is a closed-die pressing
process in which the dies are heated to the same temperature as the metal
being forged, typically in excess of 1,700 degrees Fahrenheit. The forged
material typically consists of nickel-based superalloy and powder
metallurgy alloys. Because of the extreme temperatures necessary for
forming these alloys, the dies must be made of refractory metal (such as
molybdenum) so that the die retains its strength and shape during the
forging process. Because the dies may oxidize at these elevated
temperatures, the forging process is carried on in a vacuum or inert gas
atmosphere. The Company's two isothermal presses allow it to produce
near-net shape components (requiring less machining by the customer) made
from nickel-based superalloys. The Company believes that its 10,000 ton
isothermal press is the largest in the industry, allowing it to press
larger, more complex parts than the Company's competitors.

Ring Rolling. Ring rolling involves rotating heated metal rings
through presses to produce seamless cylindrical and/or contoured products.
The Company believes that it has the largest ring-rolling machine in the
industry, with the capability of producing metal rings that weigh up to
350,000 pounds with outside diameters as large as 28 feet and face heights
up to 10 feet. This process is also utilized to extrude large, heavy wall
preforms used in the manufacture of roll form cylinders.

Shear Forming. Shear forming is a process whereby metal cylinders
are formed by thinning the cylinder walls while increasing the length of
the cylinder without heating the metal. The process yields uniform
metallurgical properties and maximizes metal usage allowing formation of
cylinders much longer than those capable of being formed by conventional
forge methods. The Company believes that it has the largest shear forming
machine in the industry, which allows the Company to produce larger and
more complex thin-walled components for the missile and rocket industry.

Conversion

The Company converts ingot material, primarily titanium, into a range
of billet sizes through a proprietary forging process. This yields
superior metallurgical properties utilized in the manufacture of jet
engine components. The Company utilizes its conventional press
capabilities and subjects the material to high sensitivity ultrasonic
testing performed on an exclusive multi-zone ultrasonic unit, which
management believes is one of only three in the aerospace industry. This
unit provides state-of-the-art material testing to meet the most stringent
customer requirements.

Modeling

For the successful engineering of highly complex forged shapes and
demanding metallurgical specifications, the Company uses computer-based
modeling. This modeling has enabled the Company to improve die design,
improve predictability of metal flow and enhance grain flow
characteristics. The Company has embarked upon a program with the
assistance of the United States Air Force and the cooperation of several
major universities to advance its modeling capabilities to the next
generation of modeling with three-dimensional models. A number of
Ladish's major customers rely on the Company's unique expertise in this
area to assist them with processing issues.

Support Operations

The Company manufactures most of its own forging dies out of high-
strength steel and molybdenum. These dies can weigh in excess of 50 tons
and can be up to 20 feet in length. In manufacturing its dies, the
Company utilizes its customers' drawings and engineers the dies using
CAD/CAM equipment and sophisticated metal flow computer models that
simulate metal flow during the forging process. This activity improves
die design and process control and permits the Company to enhance the
metallurgical characteristics of the forging and reduce lead times.

Ladish has machine shops with computer-aided profiling equipment,
vertical turret lathes and other equipment that it employs to rough
machine products to a shape allowing inspection of the products. The
Company also operates rotary and car-bottom heat treating furnaces that
enhance the performance characteristics of the forgings. These furnaces
have sufficient capacity to handle all the Company's forged products.

Testing

Because the Company's products endure high performance end uses,
rigorous testing is necessary and is performed internally by Company
engineers. Throughout the manufacturing process, numerous tests and
inspections are performed to insure the final quality of each product;
statistical process control ("SPC") techniques are also applied throughout
the entire manufacturing process. The Company subjects its products to
extensive quality inspection and contract qualification procedures
involving zyglo, chemical etching, ultrasonic, red dye and electrical
conductivity testing facilities.

Raw Materials

Raw materials used by the Company in its forgings include alloys of
titanium, nickel, steel, aluminum, tungsten and other high temperature
alloys. The major portion of metal requirements for forged products are
purchased from major metal suppliers producing forging quality material as
needed to fill customer orders. The Company has two or more sources of
supply for all significant raw materials.

The titanium and nickel-based superalloys used by the Company have a
relatively high dollar value. Accordingly, the Company recovers and
recycles scrap materials such as machine turnings, forging flash, solids
and test pieces.

The Company's most significant raw materials consist of nickel and
titanium alloys. Its principal suppliers of nickel alloys include Special
Metals Corporation and Allvac Corporation. Its principal suppliers of
titanium alloys are Titanium Metals Corporation of America, Oregon
Metallurgical Corp. and Reactive Metals, Inc. Each of these suppliers has
experienced increases in the market prices of the elements (e.g. nickel,
titanium, cobalt) that they use in manufacturing their products. The
Company often has fixed-price contracts with its suppliers. Because
aerospace suppliers generally have alternative markets for their products
where they may have greater ability to increase their prices, suppliers
have in some cases diverted materials away from the aerospace industry in
favor of alternative markets. During 1996, the Company's lead time for
deliveries from its suppliers increased from 20 weeks to 45 weeks in the
case of titanium alloys and from 22 weeks to 48 weeks in the case of
nickel-based alloys. In the event of cancellation by its customer because
of production delays, the Company may, under certain circumstances, obtain
reimbursement from the customer if the material cannot be diverted to
other uses. Costs of material already on hand, along with any conversion
costs incurred, are usually billed to the customer unless transferable to
another order. As demand for the Company's products grew during fiscal
year 1995, and prices of raw materials rose, the Company experienced
certain raw material shortages and production delays. Although this
situation improved during the first nine months of 1996, it had a negative
impact on overall revenues. Availability of titanium, due to limited mill
capacity, has yet to recover to the level demanded by the jet engine
industry. To counter this situation, the Company has established long-
term relationships and technical support with the mills in an effort to
secure its position for raw material. See "Risk Factors".

The Company has successfully sought price increases and other
financial considerations from its customers which have allowed it to meet
the rising prices demanded by suppliers. In addition, the Company, its
customers and suppliers have undertaken active programs for supply chain
management which are reducing overall lead times and the total cost of raw
materials.

Energy

Energy is required by the Company primarily for heating metals to be
forged, heat treating materials after forging, operating equipment, die-
sinking and machining. The Company uses natural gas and electricity in
varying amounts at its manufacturing facilities; however, natural gas is
traditionally the largest energy source. Supplies of natural gas and
electricity have been sufficient and there is no anticipated shortage for
the future. In the event of shortages of natural gas, the Company
maintains back-up supplies of propane for heating and processing.

Employees

As of September 30, 1997, the Company had approximately 1,075
employees, of whom 770 were engaged in manufacturing functions, 90 in
executive and administrative functions, another 165 in technical
functions, and 45 in sales and sales support. At such date, approximately
890 employees, principally those engaged in manufacturing, were
represented by labor organizations under collective bargaining agreements.
The following table sets forth certain information with respect to the
Company's collective bargaining agreements with its employees:

Number of
Employees
Represented
by Collective
Bargaining
Union Expiration Date Agreement

International Association of
Machinists & Aerospace Workers,
Local 1862 February 20, 2000 378

International Brotherhood of
Boilermakers, Iron Ship Builders,
Blacksmiths, Forgers & Helpers,
Subordinate Lodge 1509 September 24, 2000 212

International Federation of
Professional & Technical Engineers,
Technical Group, Local 92 August 20, 2000 118

International Association of
Machinists & Aerospace Workers, Die
Sinkers, Local 140 March 26, 2000 81

Office & Professional Employees
International Union, Clerical
Group, Local 35 July 1, 2001 45

International Federation of
Professional & Technical Engineers,
Professional Group, Local 92 March 1, 1998 26

International Brotherhood of
Electrical Workers, Local 662 October 15, 2000 26

Service Employees International,
Local 150 April 23, 2000 4

Research and Development

The Company maintains a research and development department which is
engaged in applied research and development work primarily relating to the
Company's forging operations. The Company works closely with customers,
universities and government technical agencies in developing advanced
forgings, materials and processes. The Company spent approximately $3.9
million, $3.8 million, $3.4 million, and $2.2 million on applied research
and development work during 1994, 1995, 1996 and the nine months ended
September 30, 1997, respectively.

Although the Company owns patents covering certain of its processes,
the Company does not consider these patents to be of material importance
to the Company's business as a whole. The Company considers certain other
information that it owns to be trade secrets and the Company takes
measures to protect the confidentiality and control the disclosure and use
of such information. The Company believes that these safeguards
adequately protect its proprietary rights and the Company vigorously
defends these rights.

The Company owns or has obtained licenses for various trademarks,
trademark registrations, service marks, service mark registrations, trade
names, copyrights, copyright registrations, patent applications,
inventions, know-how, trade secrets, confidential information and any
other intellectual property that are necessary for the conduct of its
businesses (collectively, "Intellectual Property"). The Company is not
aware of any existing or threatened patent infringement claim (or of any
facts that would reasonably be expected to result in any such claim) or
any other existing or threatened challenge by any third party that would
significantly limit the rights of the Company with respect to any such
Intellectual Property or to the validity or scope of any such Intellectual
Property. The Company has no pending claim against a third party with
respect to the infringement by such third party of any such Intellectual
Property that, if determined adversely to the Company, would individually
or in the aggregate have a material adverse effect on the Company's
financial condition or results of operations. While the Company considers
all of its proprietary rights as a whole to be important, the Company does
not consider any single right to be essential to its operations as a
whole.

Competition

The sale of forged metal components is highly competitive. Certain
of the Company's competitors are larger than the Company, and have
substantially greater capital resources. Although the Company is the sole
supplier of several sophisticated components required by prime contractors
under a number of governmental programs, many of the Company's products
could be replaced with other similar products of its competitors.
However, the significant investment in tooling, the time required and the
cost of obtaining the status of a "certified supplier" are barriers to
entry. Competition is based on quality (including advanced engineering
and manufacturing capability), price and the ability to meet delivery
requirements. See "Risk Factors-Competition".

Product Liability Exposure

The Company produces many critical engine and structural parts for
commercial and military aircraft. As a result, the Company faces an
inherent business risk of exposure to product liability claims. The
Company maintains insurance against product liability claims, but there
can be no assurance that such coverage will be adequate for liabilities
actually incurred. The Company has not experienced any material loss from
product liability claims and believes that its insurance coverage is
adequate to protect it against any claims to which it may be subject.

Environmental, Health and Safety Matters

The Company's operations are subject to many federal, state and local
regulations relating to the protection of the environment and to workplace
health and safety. In particular, the Company's operations are subject to
extensive federal, state and local laws and regulations governing waste
disposal, air and water emissions, the handling of hazardous substances,
environmental protection, remediation, workplace exposure and other
matters. Management believes that the Company is presently in substantial
compliance with all such laws and does not currently anticipate that the
Company will be required to expend any substantial amounts in the
foreseeable future in order to meet current environmental, workplace
health or safety requirements. However, additional costs and liabilities
may be incurred to comply with current and future requirements, which
costs and liabilities could have a material adverse effect on the
Company's results of operations or financial condition.

There are no known pending remedial actions or claims relating to
environmental matters that are expected to have a material effect on the
Company's financial position or results of operations. Both of the
properties owned by the Company, however, are located in industrial areas
and have a history of heavy industrial use. These properties may
potentially incur environmental liabilities in the future that could have
a material adverse effect on the Company's financial condition or results
of operations. The Company has been named a potentially responsible party
at three "Superfund" sites. Although the Company does not believe that
the amount for which it may be held liable will be material and has
reserved approximately $300,000 for such loss, no assurance can be given
that the amount for which the Company will be held responsible will not be
significantly greater than expected. In connection with the sale of IPD,
the Company has agreed to indemnify Trinity Industries, Inc. until May 29,
2001 against certain environmental liabilities that may arise with respect
to the properties and operations of IPD relating to the period prior to
closing.

Properties

The following table sets forth the location and size of the Company's
two facilities:

Approximate Square
Location Approximate Acreage Footage

Cudahy, Wisconsin 184.5 1,650,000
Windsor, Connecticut 8.2 20,000

The above facilities are owned by the Company. The Company also owns
approximately 4 acres of land in Houston, Texas, which is currently vacant
and for sale.

The Company believes that its facilities are well maintained, are
suitable to support the Company's business and are adequate for the
Company's present and anticipated needs. While the rate of utilization of
the Company's manufacturing equipment is not uniform, the Company
estimates that its facilities overall are currently operating at
approximately 60% of capacity. The Company-owned facilities have been
pledged as collateral to its senior lender, with a secondary lien on the
Wisconsin facility granted to the holders of the Subordinated Notes and a
third lien on the Wisconsin facility to the PBGC. The PBGC lien will be
released pursuant to the Amended PBGC Agreement.

The principal executive offices of the Company are located at
5481 South Packard Avenue, Cudahy, Wisconsin 53110. Its telephone number
at such address is (414) 747-2611.

Legal Proceedings

From time to time the Company is involved in legal proceedings
relating to claims arising out of its operations in the normal course of
business. The Company believes that there are no material legal
proceedings pending or threatened against the Company or any of its
properties.

Year 2000 Compliance

The Company is in the process of installing and implementing a new
computer operating system which is compliant with Year 2000 demands. This
new system includes hardware, software, fiber-optic wiring and extensive
training for numerous Company personnel. The project was initiated in
1997 and the Company anticipates it will be fully operational in 1998.
The Company has estimated the cost of this new operating system to be
approximately $4 million.

MANAGEMENT

Directors and Executive Officers

The following table sets forth certain information concerning the
current directors and executive officers of the Company:

Name Age Position

Kerry L. Woody . . . . . 46 President and Director

Wayne E. Larsen . . . . . 43 Vice President Law/Finance &
Secretary and Director

Gene E. Bunge . . . . . . 51 Vice President, Engineering

Robert J. Noel . . . . . 57 Vice President, Quality &
Technology

James K. Sorenson . . . . 60 Vice President, Materials
Management

Gary J. Vroman 37 Vice President, Sales &
Marketing

Lawrence C. Hammond . . . 49 Vice President, Human
Resources

Ronald O. Wiese . . . . . 63 Treasurer

Thomas S. Plichta . . . . 54 Corporate Controller

Gregory P. Flynn . . . . 41 Director

Robert W. Sullivan . . . 38 Director

Fred W. Whitridge, Jr. . 42 Director

Kerry Woody has served as President since October 1994. Prior to
that time he was Vice President, Operations; Vice President, Manufacturing
Services; Production Manager; and an industrial engineer. Mr. Woody
joined the Company in 1975 from General Electric. He has a B.S. in
Engineering from Milliken University. He has served as a Director of the
Company since August 1997.

Wayne Larsen has been Vice President Law/Finance and Secretary of the
Company since September 1995, and a Director since December 1997. He
served as General Counsel and Secretary since May 1989 and as its
Corporate Counsel and Secretary since February 1987. Mr. Larsen has been
with the Company since 1981. He has a B.A. from Marquette University and
a J.D. from Marquette Law School.

Gene Bunge has served as Vice President, Engineering since November
1991. From 1985 until that time he was General Manager of Engineering.
Mr. Bunge has been with the Company since 1973. He has a B.S.E.E. from
the Milwaukee School of Engineering.

Robert Noel has been Vice President, Quality and Technology since
March 1991. He has been Manager of Metallurgy since 1985 and prior to
that period was a Product Metallurgist for jet engine components. Mr.
Noel has been with the Company since 1963. He has a B.S. in Mechanical
Engineering from Marquette University.

James Sorenson has served as Vice President, Materials Management
since March 1991. Prior to that time he had been Purchasing Manager,
Production Manager, and Head Buyer. Mr. Sorenson has been with the
Company since 1963. He has a B.S. in Mechanical Engineering from the
University of Wisconsin.

Gary Vroman has served as Vice President, Sales and Marketing since
December 1995. From January 1994 to December 1995 he was General Manager
of Sales. Prior to that period he had been the Product Manager for jet
engine components. Mr. Vroman has been with the Company since 1982. He
has a B.S. in Engineering from the University of Illinois and a M.S. in
Engineering Management from the Milwaukee School of Engineering.

Lawrence Hammond has served as Vice President, Human Resources since
January 1994. Prior to that time he had served as Director of Industrial
Relations at the Company and he had been Labor Counsel at the Company.
Mr. Hammond has been with the Company since 1980. He has a B.A. and a
Masters in Industrial Relations from Michigan State University and a J.D.
from the Detroit College of Law.

Ronald Wiese has served as Treasurer since May 1989. He was
Assistant Treasurer of the Company since 1986 and was its Tax Manager from
1982 to 1986. Mr. Wiese has been with the Company since 1955. He holds a
B.S. in Accounting from Marquette University.

Thomas Plichta has served as Corporate Controller since May 1989. He
served as Assistant Corporate Controller for more than five years prior to
that time. Mr. Plichta has been with the Company since 1965. He has a
B.S. in Accounting from Marquette University.

Gregory Flynn has served as a Director of the Company since May 1993.
Mr. Flynn is a Managing Partner of ING Equity Partners L.P. I, an
investment partnership. Mr. Flynn also serves as a director of The
Presley Companies, a home building firm.

Robert Sullivan has served as a Director of the Company since May
1993. Mr. Sullivan is President of The Martec Group, a sales and
marketing consulting group.

Fred Whitridge, Jr. has served as a Director of the Company since
August 1997. Since 1993, Mr. Whitridge has been President of Archipelago
Corporation, an investment firm. From 1988 to 1993, Mr. Whitridge served
as President of Investor International (U.S.), Inc., an investment firm.
He also serves as a Director of California Microwave Inc., a producer of
communications equipment.

In connection with the Offering, the Board of Directors will add one
or two additional independent Director(s) as soon as practicable after
completion of the Offering, which directors will not be officers or
employees of the Company or have a relationship with the Company's
principal shareholders or their affiliates. At this time, such additional
Director(s) have not been identified.

EXECUTIVE COMPENSATION

The following table summarizes all compensation paid to the Company's
five most highly compensated executive officers (the "Named Executive
Officers") for services rendered in all capacities to the Company during
the fiscal year ended December 31, 1997.

Summary Compensation Table

Name and Annual Compensation
Principal Position Salary Bonus(1) Other(2)

Kerry L. Woody
President 204,799 $1,776

Robert J. Noel
Vice President,
Quality & Technology 141,663 $1,800

Gary J. Vroman
Vice President,
Sales & Marketing 132,460 $1,776

Wayne E. Larsen
Vice President
Law/Finance & Secretary 158,464 $1,776

Lawrence C. Hammond
Vice President
Human Resources 128,426 $1,776
______________________

(1) Not yet determined at the date of this Prospectus.

(2) This sum represents the imputed value of additional life insurance
benefits provided to certain officers of the Company.

Employment Agreements

The Company has entered into employment agreements with Messrs.
Woody, Noel, Vroman, Larsen and Hammond which are substantially similar in
all respects. The basic employment agreement provides for a number of
benefits, all of which vest after ten years of employment, including group
term life insurance, health and dental coverage and long-term disability
coverage.

The agreements provide that, upon the involuntary termination of the
employee other than for cause, the Company is required to pay the employee
up to 24 months of severance pay, determined by multiplying the employee's
years of service by the employee's base monthly salary at the time of
termination. In the case of Messrs. Woody and Larsen, should they be
terminated due to a change of control or ownership, they are entitled to
24 months of severance pay. Upon retirement at age 65, the employee will
receive his normal retirement benefits. Such benefits include a monthly
payment equal to 52.5% of the employee's average compensation (i.e.,
monthly average of compensation for the five years of highest compensation
over the ten years prior to retirement) multiplied by a fraction, the
numerator of which is the length of service of the employee and the
denominator of which is 35. There are also provisions adjusting this
calculation in the event of early retirement. Disabled employees can also
be eligible for certain retirement benefits. All retirement benefits are
tolled during any period of re-employment. Each agreement further
provides that any compensation paid by the Company shall be reduced by any
benefit paid under the Company's salaried employees retirement plan.

Pension Benefits

Defined Benefit Plan. The Ladish Co., Inc. Salaried Pension Plan
(the "Pension Plan") is a "defined benefit" pension plan generally
covering salaried, non-union employees of the Company who are not covered
by any other defined benefit plan to which the Company makes contributions
pursuant to a collective bargaining agreement.

Upon reaching normal retirement at or after age 65, a participant is
generally entitled to receive an annual retirement benefit for life. The
Pension Plan provides alternative actuarially equivalent forms of benefit
payment. Vesting under the Pension Plan occurs after five years of
continued service.

The monthly retirement benefit at the normal retirement age of at
least 65 is determined pursuant to a formula as follows: 1.1% of the
average monthly base salary (exclusive of bonuses or other incentive or
special compensation) of the individual during the consecutive five year
period of service within the ten years preceding termination of employment
(or after age 45, if longer) that his/her earnings were highest is
multiplied by the number of years of Benefit Service (as defined).
Monthly normal retirement benefits are payable on a straight life annuity
basis and such amounts are not subject to any deduction for Social
Security or other offset amounts.

The following table sets forth the annual benefits payable to a
participant who qualifies for normal retirement in 1997, with the
specified highest average earnings during the consecutive five year period
of service within the ten years prior to retirement and the specified
years of Benefit Service:

Average Annual Years of Benefit Service
Earnings for
Highest 5-Year
Period Within
the 10-Years
Preceding
Retirement 10 15 20 25 30 35

<S> <C> <C> <C> <C> <C> <C>
$50,000 $ 5,500 $ 8,250 $11,000 $13,750 $16,500 $19,250

$95,000 $10,450 $15,675 $20,900 $26,125 $31,350 $36,575

$100,000 $11,000 $16,500 $22,000 $27,500 $33,000 $38,500

$150,000 $16,500 $24,750 $33,000 $41,250 $49,500 $57,750

$200,000 $22,000 $33,000 $44,000 $55,000 $66,000 $77,000

$250,000 $27,500 $41,250 $55,000 $68,750 $82,500 $96,250
</TABLE>

The years of Benefit Service for Messrs. Woody, Noel, Vroman, Larsen
and Hammond as of January 1, 1998 were 23, 35, 16, 17 and 18,
respectively.

Deferred Compensation Agreements. The Company has entered into
deferred compensation agreements (the "Agreements") with nine current
officers of the Company, including Messrs. Woody, Noel, Vroman, Larsen and
Hammond. Each employee covered by the Agreements (an "Employee"), upon
full vesting, is entitled to receive supplemental disability or retirement
benefits; provided that in no event may a person's total retirement
benefits under the Agreements exceed 52.5% of the monthly average base
salary (inclusive of bonuses or other compensation) during the five
calendar years immediately preceding retirement.

The retirement benefit at the normal retirement age of at least 65 is
determined pursuant to a formula as follows: 52.5% of the monthly average
of the Employee's base salary during the five calendar years immediately
preceding retirement multiplied by years of service, up to 35, and divided
by 35. If an Employee suffers a disability (as defined), he is entitled
to benefits paid under the same formula as in the preceding sentence (with
his years of service calculated as if he had retired at age 65), reduced
by other disability benefits paid by the Company or through workers'
compensation (unless he is receiving fixed statutory payments for certain
bodily injuries).

Any amount to be paid under the Agreement shall be reduced by any
benefit paid to an Employee or his beneficiary pursuant to the Pension
Plan.

Defined Contribution Plan. The Ladish Co., Inc. Savings and Deferral
Investment Plan ("SDIP"), which has been qualified under section 401(k) of
the Code, provides that salaried, non-union employees with six months'
service may contribute 1% to 18% of their annual base salary to SDIP and
the Company will provide a matching contribution in an amount to be
determined by the Board of Directors of the Company. Employee's
contributions of 1% to 18% can be "before tax" contributions, "after tax"
contributions or a combination of both. The employees' contributions and
the matching Company contribution may be placed by the employee in a fixed
income fund, an equity investment fund or various combinations of each.

Incentive Stock Option Plan

The Ladish Co., Inc. 1996 Long-Term Incentive Plan (the "Incentive
Plan") has been established by the Company to promote the long-term
financial interest of the Company by providing for the award of equity-
based incentives to key employees and other persons providing material
services to the Company. The Incentive Plan provides a means whereby such
individuals may acquire shares of Common Stock through the grant of stock
options and stock appreciation rights.

The Incentive Plan is not subject to any provision of ERISA or
qualified under Section 401(a) of the Code.

The number of shares of Common Stock subject to awards under the
Incentive Plan may not exceed 833,333, of which 433,333 have been issued
or are subject to outstanding options and 400,000 have been reserved for
issuance under future grants. The number of shares underlying awards made
to any one individual in any one-year period may not exceed 166,667
shares. The Common Stock issued under the Incentive Plan may be shares
currently authorized but unissued or currently held or subsequently
acquired by the Company as treasury shares.

The number of shares subject to the Incentive Plan and the terms of
any outstanding award may be adjusted as described in the Incentive Plan
to reflect certain changes in the capitalization of the Company.

The authority to manage and control the operation and administration
of the Incentive Plan is vested in a committee selected by the Board of
Directors of the Company (the "Committee") which shall consist of two or
more members of the Board. The Committee has the authority and discretion
to determine the individuals who will receive awards under the Incentive
Plan and to determine the time of receipt, type of award, the number of
shares covered by such award and the terms, conditions, performance
criteria, restrictions and other provisions applicable to such award. The
Committee also has the authority and discretion to interpret the Incentive
Plan and to establish, amend and rescind any rules and regulations
relating to the Incentive Plan. Any interpretation of the Incentive Plan
by the Committee and any decision made by it under the Incentive Plan is
final and binding on all persons.

Subject to the terms and provisions of the Incentive Plan, a
participant to whom a stock option is granted will have the right to
purchase the number of shares of Common Stock covered by the option.
Subject to the conditions and limitations of the Incentive Plan, the
Committee shall determine all of the terms and conditions of such grant,
including without limitation, the option price, any vesting schedule and
the period of exercisability.

No option may be exercised after its expiration date. The expiration
date shall be determined by the Committee at the time of grant, but may
not be later than the earliest to occur of: (i) the ten-year anniversary
of the grant date; (ii) if the participant's termination of employment
with the Company and its affiliates occurs by reason of death or
disability (as defined in the Incentive Plan), the one-year anniversary of
such termination of employment; (iii) if the participant's termination of
employment with the Company and its affiliates occurs by reason of
retirement, the three-month anniversary of such termination of employment;
or (iv) if the participant's termination with the Company and its
affiliates occurs for any other reason, the date of such termination.

The full purchase price of each share of Common Stock purchased upon
the exercise of an option shall be paid at the time of such exercise in
cash or in shares of Common Stock (valued at fair market value as of the
date of exercise) that have been held by the participant at least six
months, or in any combination thereof, as determined by the Committee. To
the extent provided by the Committee, a participant may elect to pay the
purchase price upon the exercise of an option through a cashless exercise
arrangement.

Options awarded under the Incentive Plan may be nonqualified options
or incentive stock options, as determined in the discretion of the
Committee. Under the terms of the Incentive Plan, the Committee may also
issue stock appreciation rights ("SARs"). Upon exercise, a SAR entitles
the holder thereof to a payment equal to the excess of the fair market
value of a share of stock on the exercise date over the fair market value
of a share of stock on the grant date. If the committee so determines,
SARs may be issued in tandem with stock options.

Generally, options and SARs are not transferable prior to the
participant's death. However, the Committee may provide that an option or
SAR award may be transferred to an immediate family member or to a trust
for the benefit of an immediate family member.

Upon a change in control of the Company (as defined in the Incentive
Plan), all options and SARs shall become immediately exercisable.

The Board of Directors of the Company may amend or terminate the
Incentive Plan at any time, provided that no such amendment or termination
may materially adversely affect the rights of any participant or
beneficiary under any award made under the plan prior to the date such
amendment is adopted by the Board.

No stock options were granted to any of the Named Executive Officers
during 1997.

<TABLE>
Aggregated Option Exercises in 1997 and
Fiscal Year-End Options Values
<CAPTION>

Number of Number of Shares
Shares Underlying Unexercised Value of Unexercised
Acquired Options at Fiscal In-the-Money Options
on Value Year-End at Fiscal Year-End
Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable

<S> <C> <C> <C> <C>
Kerry L. Woody . . . 20,833 $250,000 29,167/50,000 $87,500/$150,000
Wayne E. Larsen . . . 12,500 150,000 12,500/25,000 $37,500/$75,000
Robert J. Noel . . . 12,500 150,000 12,500/25,000 $37,500/$75,000
Gary J. Vroman . . . 12,500 150,000 12,500/25,000 $37,500/$75,000
Lawrence C. Hammond . 8,333 100,000 8,333/16,667 $25,000/$50,000
</TABLE>

Directors' Compensation

Non-employee Directors currently receive an annual retainer of twenty
thousand dollars ($20,000) and a fee of one thousand dollars ($1,000) per
meeting attended in person and two hundred fifty dollars ($250) per
telephonic meeting.

Compensation Committee Interlocks and Insider Participation

During 1997, the Board of Directors of the Company established a
Compensation Committee consisting of Messrs. Flynn, Sullivan and Woody.
Executive compensation levels during 1997 were established by the
Compensation Committee.

PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth certain information regarding
beneficial ownership of the Company's Common Stock as of December 12,
1997, and as adjusted to reflect the sale of Common Stock in the Offering,
by (i) each person who is known by the Company to own beneficially more
than 5% of the Company's Common Stock, (ii) each Named Executive Officer,
(iii) each Director, and (iv) each Selling Shareholder.

For purposes of this filing, the Company has assumed that ING Equity
Partners L.P. I and/or Internationale Nederlanden (U.S.) Capital
Corporation will sell all 1,014,000 shares offered by the Selling
Shareholders. In the event other shareholders having registration rights
elect to participate in the Offering, the foregoing entities'
participations will be reduced.

Beneficial Ownership Beneficial Ownership
Prior to the Offering After the Offering
Number
of
Shares
Name Number(1) Percent(2) Offered Number(1) Percent(2)

<S> <C> <C> <C> <C> <C>
Kerry L. Woody . . . . . 29,167 * - 29,167 *

Wayne E. Larsen . . . . . 12,500 * - 12,500 *

Robert J. Noel . . . . . 14,353 * 14,353 *

Gary J. Vroman . . . . . 14,833 * - 14,833 *

Lawrence C. Hammond . . . 8,500 * 8,500 *

Gregory P. Flynn(3) . . . 2,259,320 34.05%

Robert W. Sullivan . . . 83 * - 83 *

Fred Whitridge, Jr. . . . - * - - *

All Directors and
executive officers as a
group (13 persons) . . . 2,388,673 34.85

ING Equity Partners L.P. I
("ING")(4) . . . . . . . 2,259,320 34.05

Grace Brothers, Ltd.
("Grace")(5) . . . . . . 2,862,573 35.50 -
Internationale Nederlanden
(U.S.) Capital
Corporation ("INCC")(6) 2,246,820 33.86

Franklin Principal
Maturity Trust(7) . . . 1,103,429 18.54

____________________

* Less than 1%

(1) Includes, in the case of each Named Executive Officer and Directors
and executive officers as a group, options granted under the
Incentive Plan which are exercisable within 60 days.

(2) In accordance with regulations of the Securities and Exchange
Commission, the percentage of shares beneficially owned by each named
shareholder in the accompanying table assumes the prior exercise of
all options, warrants and similar rights owned by such shareholder
which are exercisable within 60 days but does not assume the exercise
of options, warrants or rights owned by any other shareholder.

(3) Consists of 828,033 shares of Common Stock and 1,431,287 warrants
held by ING, of which Mr. Flynn is a partner. Mr. Flynn disclaims
beneficial ownership of such shares, except to the extent of his
financial interest in such partnership. Mr. Flynn's address is 135
East 57 Street, New York, New York 10022.

(4) Consists of 828,033 shares of Common Stock and 1,431,287 shares of
Common Stock issuable upon exercise of warrants, but does not include
815,533 shares beneficially owned by INCC nor the 1,431,287 warrants
held by INCC, as discussed in footnote 6, as to all of which
beneficial ownership is disclaimed. ING's address is 135 East 57
Street, New York, New York 10022. Mr. Flynn has shared voting and
investment power with respect to the shares of Common Stock owned by
ING, of which he is one of three Managing Partners.

(5) Consists of 2,862,573 shares of Common Stock issuable upon exercise
of warrants. Grace Brothers, Ltd.'s address is 1560 Sherman Avenue,
Suite 900, Evanston, Illinois 60201.

(6) Consists of 815,533 shares of Common Stock and 1,431,287 shares of
Common Stock issuable upon exercise of warrants, but does not include
828,033 shares beneficially owned by ING nor the 1,431,287 warrants
held by ING, as discussed in footnote 4, as to all of which
beneficial ownership is disclaimed. (INCC is a limited partner of
ING.) INCC's address is 135 East 57 Street, New York, New York
10022.

(7) Includes 746,096 shares of Common Stock issuable upon exercise of
warrants. Franklin Principal Maturity Trust's address is 777
Mariner's Island Boulevard, San Mateo, California 94404.
</TABLE>

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Letter of Credit

On June 30, 1994, the Company issued 12,500 shares of Common Stock to
ING in exchange for ING causing INCC to issue a $2 million letter of
credit in favor of the Company. The letter of credit was canceled in
June 1995 with the establishment of the Credit Agreement.

Subordinated Note Offering

In December 1995, the Company issued $2 million of senior
subordinated secured notes ("Subordinated Notes") to each of ING and
Grace. In February 1996, the Company issued an additional $1.435 million
of Notes to each of ING and Grace. The Notes purchased by ING and Grace
were each accompanied by warrants to purchase 2,862,573 shares of Common
Stock at a price of $1.20 per share. Pursuant to the terms of the Notes,
in 1996 and the first nine months of 1997, ING (and its affiliates) and
Grace were issued an aggregate of $1,395,507 principal amount of
additional Notes as interest payments. The Notes were offered in a
private placement to all shareholders of the Company that represented that
they were "accredited investors" as defined in Rule 501 under the
Securities Act.

Certain Options

In April 1993, the Company issued options to purchase 496,188 shares
of Common Stock, at exercise prices ranging from $12.00 to $21.00 per
share, to Anchor Industries International, Inc. ("AII"), in connection
with an agreement to perform certain consulting services. AII was owned
by Vincent J. Naimoli, who, at the time of issuance of the options, was
Chairman of the Board of Directors of Ladish. The Company believes that
the fair market value of its Common Stock on the date of issuance was
substantially below the exercise price of the options. Such options,
which are still outstanding and currently exercisable, expire ten years
from the date of grant.

Registration Rights

In connection with the offering of the Subordinated Notes, the
Company entered into an agreement granting certain registration rights
with respect to (i) all Common Stock held at any time by ING and Grace and
(ii) all Common Stock issuable upon the exercise of the warrants
(collectively, the "Registerable Stock"). At any time beginning six
months after the effective date of a registration statement covering a
public offering of securities of the Company, the holders of Registerable
Stock constituting at least 25% of the shares of Registerable Stock then
outstanding may require the Company to register all or any portion of
their shares for sale. In addition, all holders of Registerable Stock
have certain "piggyback" rights in the event the Company proposes to
register any of its securities for sale to the public. All registration
rights are subject to certain conditions and limitations. The Company is
required to bear the expenses of such registrations, other than
underwriting discounts and selling commissions. The registration rights
expire at such time as all Registerable Shares have been effectively
registered and disposed of pursuant to such registration or sold pursuant
to Rule 144.

DESCRIPTION OF COMMON STOCK

General

Under the Articles of Incorporation, the authorized capital stock of
the Company consists of 100,000,000 shares of Common Stock, $.01 par
value. Except as provided by Section 180.0662(2)(b) of the Wisconsin
Business Corporation Law ("WBCL"), all outstanding shares of Common Stock
are, and all of the shares of Common Stock offered hereby will be, legally
issued, fully paid and non-assessable. WBCL Section 180.0662(2)(b)
provides that shareholders of every corporation, other than railroad
corporations, are personally liable to an amount equal to the par value of
shares owned by them, or to the consideration for which their shares
without par value were issued, for all debts owing to employees of the
corporation for services performed for such corporation, but not exceeding
six months' service in any one case. At December 31, 1997, there were
5,315,473 shares of Common Stock outstanding and 8,427,620 reserved for
issuance upon exercise of outstanding options and warrants.

Common Stock

Voting Rights. The holders of Common Stock have one vote per share
on all matters submitted to a vote by the shareholders of the Company.
Shares of Common Stock do not have cumulative voting rights.

Dividend Rights. Each share of Common Stock is entitled to dividends
if, as and when dividends are declared by the Board of Directors.

Liquidation Rights. The holders of the Common Stock are entitled to
participate equally on a share for share basis in all distributions to the
holders of Common Stock in any liquidation, distribution or winding up of
the Company.

Preemptive Rights. The holders of Common Stock do not have
preemptive rights to purchase shares of any class of the Company's capital
stock.

Subscription or Conversion Rights. The holders of Common Stock have
no statutory subscription or conversion rights.

Redemption and Sinking Fund Privileges. The holders of the Common
Stock do not have any redemption or sinking fund privileges.

Transfer Agent. Firstar Trust Company will be the transfer agent for
the Common Stock.

Common Stock Warrants

In 1995 and 1996, the Company issued warrants to purchase an
aggregate of 7,775,722 shares of Common Stock, at a purchase price of
$1.20 per share. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations-Liquidity and Capital Resources".
Such warrants expire ten years after issuance. The holders of unexercised
warrants are entitled to receive all dividends and other distributions
made to holders of Common Stock, as if such warrants had been previously
exercised. In addition, the holders of the warrants have certain rights
to require the Company to register the warrant shares for resale. See
"Certain Relationships and Related Party Transactions-Registration
Rights".

Anti-Takeover Effects of Wisconsin Law and Articles of Incorporation and
By-Laws

The Articles of Incorporation, the By-Laws and the Wisconsin Business
Corporation Law ("WBCL") contain certain provisions that may make more
difficult the acquisition of control of the Company by means of a tender
offer, open market purchase, a proxy contest or otherwise. These
provisions are designed to encourage persons seeking to acquire control of
the Company to negotiate with the Board of Directors. However, these
provisions could have the effect of discouraging a prospective acquiror
from making a tender offer or otherwise attempting to obtain control of
the Company. To the extent that these provisions discourage takeover
attempts, they could deprive shareholders of opportunities to realize
takeover premiums for their shares or could depress the market price of
the shares of the Common Stock.

Control Share Voting Restrictions

Section 180.1150 of the WBCL provides that the voting power of shares
of a "resident domestic corporation" held by any person, including shares
issuable upon conversion of convertible securities or upon exercise of
options or warrants, in excess of 20% of the voting power in the election
of directors shall be limited to 10% of the full voting power of those
shares. This statute is a scaled voting rights or control share
acquisition statute, designed to protect corporations against uninvited
take-over bids. This voting restriction is not applicable to securities
acquired prior to April 22, 1986, shares acquired directly from the
Company or shares acquired in other circumstances described in Section
180.1150(3) of the WBCL. A "resident domestic corporation" is defined as
a domestic corporation (i) whose principal offices are located in
Wisconsin, (ii) which has significant business operations in Wisconsin,
(iii) more than 10% of whose holders of record are residents of Wisconsin,
and (iv) more than 10% of whose shares are held of record by residents of
Wisconsin. Based upon the Company's stock transfer records as of the date
of this Prospectus, management believes that the Company is not a
"resident domestic corporation". The Company may, however, through
securities transfers occurring in the future and beyond the Company's
control, become a "resident domestic corporation".

Business Combination Restrictions

Sections 180.1140 to 180.1144 of the WBCL provide that a "resident
domestic corporation" may not engage in a business combination with an
interested stockholder (a person beneficially owning 10% or more of the
aggregate voting power of the stock of such corporation) for three years
after the interested stockholder's stock acquisition date unless the board
of directors of the corporation has approved such business combination or
purchase of stock prior to the stock acquisition date. After the three-
year period, any such business combination may be consummated only if it
is approved by a vote of the majority of the voting stock not beneficially
owned by the interested stockholder, or made at a certain statutory
formula price intended to provide a fair price for the shares held by
disinterested shareholders.

Sections 180.1130 to 180.1134 of the WBCL provide that certain
business combinations of a "resident domestic corporation" not meeting
specified statutory adequacy-of-price standards must be approved by 80% of
the votes entitled to be cast by shareholders, and two-thirds of the votes
entitled to be cast by holders of voting shares other than voting shares
beneficially owned by a "significant shareholder" (generally including a
person that is a beneficial owner of 10% or more of the voting power of
the shares of the corporation) or an affiliate or associate thereof who is
a party to the transaction.

Availability of Shares of Capital Stock for Future Issuance

The availability for issue of shares of authorized but unissued
Common Stock by the Company without further action by shareholders (except
as may be required by applicable stock exchange or Nasdaq National Market
regulations) could be viewed as enabling the Board of Directors to make
more difficult a change in control of the Company. The issuance of
warrants or rights to acquire shares of Common Stock may discourage or
defeat unsolicited stock accumulation programs and acquisition proposals,
and the issuance of shares in a private placement or public offering to
dilute or deter stock ownership of persons seeking to obtain control of
the Company may have a similar effect. The Company has no present plans
to issue any shares of Common Stock other than as contemplated under the
Incentive Plan and pursuant to the exercise of outstanding options or
warrants.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offering, there has been only a limited market for the
Common Stock of the Company and no prediction can be made as to the
effect, if any, that market sales of shares or the availability of such
shares for sale will have on the market price of the Common Stock
prevailing from time to time. Future sales of substantial numbers of
shares of Common Stock in the public market, however, could adversely
affect prevailing market prices and impair the Company's future ability to
raise capital through the sale of its equity securities.

Upon completion of the Offering, the Company will have outstanding
7,651,473 shares of Common Stock. Of these shares, the 3,350,000 sold in
the Offering will be freely tradeable without restriction or further
registration under the Securities Act, except for any shares purchased by
"affiliates" of the Company (as defined under the Securities Act). Shares
purchased by affiliates may not be sold unless the sale is registered
under the Securities Act or unless they are sold pursuant to Rule 144
under the Securities Act or another exemption from registration.

Of the 5,315,473 shares of Common Stock outstanding at the date of
this Prospectus, 3,193,638 are held by persons not deemed by the Company
to be affiliates. The Underwriters have conditioned the Offering on the
receipt of agreements of the holders of substantially all Common Stock
purchase warrants, all persons selling shares in the Offering, all holders
of registration rights with respect to the Company's securities and all
executive officers and directors of the Company, that they will not sell
any shares of Common Stock without the consent of Credit Suisse First
Boston Corporation, on behalf of the Underwriters, for a period of
180 days following the date of this Prospectus. See "Underwriting" and
"Risk Factors-Shares Eligible for Future Sale; Registration Rights;
Possible Adverse Effects on Future Market Prices". Any such shares will
be tradeable without restriction under Rule 144(k) after the end of the
180 day lock-up period. The remaining shares held by non-
affiliates are, and immediately after the Offering will be, freely
tradeable without restriction. The remaining 2,121,835 outstanding shares
of Common Stock are held by persons deemed to be affiliates of the
Company. These shares will be available for sale in the public market
beginning 180 days after the date of this Prospectus (or earlier with the
consent of the Underwriters), subject to the restrictions imposed by
Rule 144. The holders of certain of the foregoing shares have rights to
require the Company to register such shares for resale. See "Certain
Relationships and Related Party Transactions".

In general, under Rule 144 as in effect on the date of this
Prospectus, an affiliate of the Company, or any other person (or persons
whose shares are aggregated) who has beneficially owned restricted
securities for at least one year, will be entitled to sell in any
three-month period a number of shares that does not exceed the greater of
(i) 1% of the then outstanding shares of Common Stock of the Company
(approximately 76,500 shares immediately after the Offering) or (ii) the
average weekly trading volume during the four calendar weeks immediately
preceding the date on which notice of the sale is filed with the
Securities and Exchange Commission. Sales pursuant to Rule 144 are
subject to certain requirements relating to manner of sale, notice and
availability of current public information about the Company. A person
(or persons whose shares are aggregated) who is not deemed to have been an
affiliate of the Company at any time during the 90 days immediately
preceding the sale and who has beneficially owned restricted shares for at
least two years is entitled to sell shares pursuant to Rule 144(k) without
regard to the limitations above.

In addition to the foregoing, there are outstanding at the date of
this Prospectus (i) options to purchase 322,500 shares of Common Stock
held by persons who are employees of the Company, (ii) options to purchase
496,188 shares of Common Stock beneficially owned by persons who were
formerly employees or executives of the Company, and (iii) warrants to
purchase 7,608,932 shares of Common Stock issued in connection with
certain financing provided to the Company by the Company's controlling
shareholders. See "Certain Relationships and Related Transactions". The
foregoing options and warrants were issued in unregistered transactions,
and the shares issuable upon exercise will constitute "restricted
securities" within the meaning of Rule 144 and therefore be subject to a
one-year holding period from the date such shares are deemed to have been
acquired. The holders of the warrants have certain rights to require the
Company to register such shares for resale. See "Certain Relationships
and Related Party Transactions". Such demand rights may not be exercised
within 120 days after the date of this Prospectus.

UNDERWRITING

Under the terms and subject to the conditions contained in an
Underwriting Agreement dated , 1998 (the "Underwriting
Agreement") among the Company, the Selling Shareholders and the
underwriters named below (the "Underwriters"), for whom Credit Suisse
First Boston Corporation ("CSFBC") and BT Alex. Brown Incorporated are
acting as representatives (the "Representatives"), the Underwriters have
severally but not jointly agreed to purchase from the Company and the
Selling Shareholders the following respective numbers of shares of Common
Stock.
Underwriter Number of
Shares

Credit Suisse First Boston Corporation . . .
BT Alex. Brown Incorporated . . . . . . . . .

Total . . . . . . . . . . . . . . . . . 3,350,000
=========

The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all of the shares of Common
Stock offered hereby (other than those shares covered by the over-
allotment option described below) if any are purchased. The Underwriting
Agreement provides that, in the event of a default by an Underwriter, in
certain circumstances the purchase commitments of non-defaulting
Underwriters may be increased or the Underwriting Agreement may be
terminated.

Certain of the Selling Shareholders have granted to the Underwriters
an option, exercisable by CSFBC on behalf of the Underwriters, expiring at
the close of business on the 30th day after the date of this Prospectus,
to purchase up to 502,500 additional shares of the Common Stock at the
initial public offering price less the underwriting discounts and
commissions, all as set forth on the cover page of this Prospectus. Such
option may be exercised only to cover over-allotments, if any, in the sale
of the shares of Common Stock. To the extent such option is exercised,
each Underwriter will become obligated, subject to certain conditions, to
purchase approximately the same percentage of such additional shares of
Common Stock as it was obligated to purchase pursuant to the Underwriting
Agreement.

The Company and the Selling Shareholders have been advised by the
Representatives that the Underwriters propose to offer the shares of
Common Stock to the public initially at the public offering price set
forth on the cover page of this Prospectus and, through the Underwriters,
to certain dealers at such price less a concession of $ per share,
and the Underwriters and such dealers may allow a discount of $ per
share on sales to certain other dealers. After the initial public
offering, the public offering price and concession and discount to dealers
may be changed by the Representatives.

The Representatives have informed the Company that they do not expect
discretionary sales by the Underwriters to exceed 5% of the shares being
offered hereby.

The Underwriters have conditioned the Offering on the agreement of
the Company, its executive officers and directors, the holders of
substantially all Common Stock purchase warrants, all persons holding
registration rights with respect to the Company's securities and the
Selling Shareholders that they will not offer, sell, contract to sell,
announce their intention to sell, pledge, hypothecate, grant any option to
purchase or otherwise dispose of, directly or indirectly, or, in the case
of the Company, file with the Securities and Exchange Commission (the
"Commission") a registration statement under the Securities Act relating
to any additional shares of the Company's Common Stock or securities
convertible into or exchangeable or exercisable for any shares of the
Company's Common Stock, without the prior written consent of CSFBC for a
period of 180 days after the date of this Prospectus, except, in the case
of the Company, issuances pursuant to the exercise of stock options
granted under the Incentive Plan.

The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including civil liabilities
under the Securities Act, and to contribute to payments which the
Underwriters may be required to make in respect thereof.

Prior to the Offering, there has been a limited public market for the
Common Stock. The initial public offering price for the shares of Common
Stock has been negotiated between the Company and the Representatives.
Among the factors considered in determining the initial public offering
price of the Common Stock were the Company's historical performance,
estimates of the business potential and earnings prospects of the Company
and its industry in general, an assessment of the Company's management,
the market valuation of companies in related businesses, the general
condition of the equity securities market, the limited trading history of
the Common Stock and other relevant factors. There can be no assurance
that the initial public offering price of the Common Stock will correspond
to the price at which the Common Stock has traded in the past or will
trade in the public market subsequent to the Offering, or that an active
public market for the Common Stock will develop and continue after the
Offering.

CSFBC, on behalf of the Underwriters, may engage in over-allotment,
stabilizing transactions, syndicate covering transactions and penalty bids
in accordance with Regulation M under the Exchange Act. Over-allotment
involves syndicate sales in excess of the offering size, which creates a
syndicate short position. Stabilizing transactions permit bids to
purchase shares of Common Stock so long as the stabilizing bids do not
exceed a specified maximum. Syndicate covering transactions involve
purchases of Common Stock in the open market after the distribution has
been completed in order to cover syndicate short positions. Penalty bids
permit CSFBC, on behalf of the Underwriters, to reclaim a selling
concession from a dealer when the shares originally sold by such dealer
are purchased in a syndicate covering transaction to cover syndicate short
positions. Such over-allotment, stabilizing transactions, syndicate
covering transactions and penalty bids may cause the price of shares of
Common Stock to be higher than it would otherwise be in the absence of
such transactions. These transactions may be effected on the Nasdaq
National Market or otherwise and, if commenced, may be discontinued at any
time.

Certain of the Underwriters have provided certain financial, advisory
and investment banking services to the Company and ING in the past.

NOTICE TO CANADIAN RESIDENTS

Resale Restrictions

The distribution of the Common Stock in Canada is being made only on
a private placement basis exempt from the requirement that the Company and
the Selling Shareholders prepare and file a prospectus with the securities
regulatory authorities in each province where trades of Common Stock are
effected. Accordingly, any resale of the Common Stock in Canada must be
made in accordance with applicable securities laws which will vary
depending on the relevant jurisdiction, and which may require resales to
be made in accordance with available statutory exemptions or pursuant to a
discretionary exemption granted by the applicable Canadian securities
regulatory authority. Purchasers are advised to seek legal advice prior
to any resale of the Common Stock.

Representations of Purchasers

Each purchaser of Common Stock in Canada who receives a purchase
confirmation will be deemed to represent to the Company, the Selling
Shareholders and the dealer from whom such purchase confirmation is
received that (i) such purchaser is entitled under applicable provincial
securities law to purchase such Common Stock without the benefit of a
prospectus qualified under such securities laws, (ii) where required by
law, that such purchaser is purchasing as principal and not as agent and
(iii) such purchaser has reviewed the text above under "Resale
Restrictions."

Rights of Action (Ontario Purchasers)

The securities being offered are those of a foreign issuer and
Ontario purchasers will not receive the contractual right of action
prescribed by section 32 of the Regulation under the Securities Act
(Ontario). As a result, Ontario purchasers must rely on other remedies
that may be available, including common law rights of action for damages
or rescission or rights of action under the civil liability provisions of
the U.S. federal securities laws.

Enforcement of Legal Rights

All of the issuer's directors and officers as well as the experts
named herein and the Selling Shareholders may be located outside of Canada
and, as a result, it may not be possible for Canadian purchasers to effect
service of process within Canada upon the issuer or such persons. All or
a substantial portion of the assets of the issuer and such persons and the
Selling Shareholders may be located outside of Canada and, as a result, it
may not be possible to satisfy a judgment against the issuer or such
persons in Canada or to enforce a judgment obtained in Canadian courts
against the issuer or such persons outside of Canada.

Notice to British Columbia Residents

A purchaser of Common Stock to whom the Securities Act (British
Columbia) applies is advised that such purchaser is required to file with
the British Columbia Securities Commission a report within ten days of the
sale of any Common Stock acquired by such purchaser pursuant to the
Offering. Such report must be in the form attached to British Columbia
Securities Commission Blanket Order BOR #95/17, a copy of which may be
obtained from the Company. Only one such report must be filed in respect
of Common Stock acquired on the same date and under the same prospectus
exemption.

Taxation and Eligibility for Investment

Certain purchasers of Common Stock should consult their own legal and
tax advisors with respect to the tax consequences of an investment in the
Common Stock in their particular circumstances and with respect to the
eligibility of the Common Stock for investment by the purchaser under
relevant Canadian Legislation.

EXPERTS

The financial statements of Ladish Co., Inc. as of December 31, 1995
and 1996 and for each of the three years ending December 31, 1996 included
in this Prospectus and elsewhere in the registration statement have been
audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving such
reports.

The financial statements of Stowe Machine Company Incorporated at
December 31, 1995 and 1996, and for the years then ended, appearing in
this Prospectus and Registration Statement have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon
appearing elsewhere herein, and are included in reliance upon such report
given upon the authority of such firm as experts in accounting and
auditing.

LEGAL MATTERS

The validity of the issuance of the shares of Common Stock offered
hereby will be passed upon for the Company by Foley & Lardner, Milwaukee,
Wisconsin. Certain legal matters will be passed upon for the Underwriters
by Simpson Thacher & Bartlett (a partnership which includes professional
corporations), New York, New York.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission
(the "Commission") a Registration Statement on Form S-1 (herein, together
with all amendments thereto, called the "Registration Statement") under
the Securities Act with respect to the Common Stock offered hereby.
Reference is made to the Registration Statement, including the exhibits
thereto and the financial statements, notes and schedules filed as a part
thereof. This Prospectus, which is a part of the Registration Statement,
does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto, certain items of which
are omitted as permitted by the rules and regulations of the Commission.
For further information with respect to the Company and the Common Stock
offered hereby, reference is made to the Registration Statement and to the
financial statements, schedules, and exhibits filed as a part thereof.
The Registration Statement, including all schedules and exhibits thereto,
may be inspected without charge at the public reference facilities
maintained by the Commission at its principal office at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. and at the Commission's regional
offices at 7 World Trade Center, 13th floor, New York, New York, and 500
West Madison Street, Suite 1400, Chicago, Illinois. Copies of such
material may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates or may be accessed electronically by means of the
Commission's home page on the Internet at http:\\www.sec.gov.

Statements contained in this Prospectus concerning the contents of
any contract or other document are not necessarily complete and, in each
instance, reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement or otherwise with the
Commission, each such statement being qualified in all respects by such
reference.

<PAGE>

LADISH CO., INC.

INDEX TO FINANCIAL STATEMENTS

LADISH CO., INC.

Report of Independent Public Accountants . . . . . . . . . . . . . . F-2

Balance Sheets at December 31, 1995 and 1996 and
(unaudited) September 30, 1997 . . . . . . . . . . . . . . . . . . . F-3

Statements of Operations for the three years ended December 31,
1994, 1995 and 1996 and (unaudited) for the nine months ended
September 30, 1996 and 1997 . . . . . . . . . . . . . . . . . . . . . F-4

Statements of Stockholders' Equity for the three years ended
December 31, 1994, 1995 and 1996, and (unaudited) for nine
months ended September 30, 1997 . . . . . . . . . . . . . . . . . . . F-5

Statements of Cash Flows for the three years ended December 31,
1994, 1995 and 1996, and (unaudited) for nine months ended
September 30, 1996 and 1997 . . . . . . . . . . . . . . . . . . . . . F-6

Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . F-7

STOWE MACHINE COMPANY INCORPORATED

Report of Independent Auditors . . . . . . . . . . . . . . . . . . . F-22

Balance Sheets at December 31, 1995 and 1996 . . . . . . . . . . . . F-23

Statements of Operations for the two years ended
December 31, 1995 and 1996 . . . . . . . . . . . . . . . . . . . . . F-25

Statements of Cash Flows for the two years ended December 31,
1995 and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-26

Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . F-27

Statements of Operations (unaudited) for the three months ended
March 31, 1996 and 1997 . . . . . . . . . . . . . . . . . . . . . . . F-32

Statements of Cash Flows (unaudited) for the three months ended
March 31, 1996 and 1997 . . . . . . . . . . . . . . . . . . . . . . . F-33

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders
of Ladish Co., Inc.:

We have audited the accompanying balance sheets of Ladish Co., Inc., a
Wisconsin corporation, as of December 31, 1995 and 1996, and the related
statements of operations, stockholders' equity and cash flows for each of
the years in the three year period ended December 31, 1996. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Ladish Co., Inc. as of
December 31, 1995 and 1996, and the results of its operations and its cash
flows for each of the years in the three year period ended December 31,
1996, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Milwaukee, Wisconsin,
June 16, 1997,
except for matters discussed
in Note 17, as to which
the date is December 12, 1997.

<PAGE>
LADISH CO., INC.

BALANCE SHEETS
(Dollars in Thousands Except Per Share Data)

December 31, September 30,
1995 1996 1997
ASSETS
(Unaudited)
CURRENT ASSETS:
Cash $337 $102 $693
Accounts receivable, less
allowance of $450, $300
and $300, respectively 16,066 21,757 33,135
Inventories 27,795 36,006 48,509
Prepaid expenses and other
current assets 378 368 2,117
Net assets of IPD (Note 13) 14,772 31,640 --
------- ------- -------
Total current assets 59,348 89,873 84,454

NET ASSETS OF IPD (Note 13) 20,505 -- --
PROPERTY, PLANT AND EQUIPMENT:
Land and improvements 4,156 4,156 3,855
Building and improvements 11,785 12,504 13,165
Machinery and equipment 87,815 90,418 98,802
Construction in progress 3,708 5,267 7,301
------- ------- -------
107,464 112,345 123,123

Less-Accumulated depreciation (23,255) (32,361) (39,718)

Net property, plant and
equipment 84,209 79,984 83,405

DEFERRED FINANCING COSTS AND
634 413 3,233
OTHER ASSETS
------- ------- -------
Total assets $164,696 $170,270 $171,092
======= ======= =======

December 31, September 30,
LIABILITIES AND 1995 1996
STOCKHOLDERS' EQUITY 1997
CURRENT LIABILITIES: (Unaudited)

Current portion of senior bank
loan $750 $22,498 $2,000
Notes payable -- -- 250
Accounts payable 16,894 17,719 22,828
Accrued liabilities-
Pensions 878 15,300 15,629
Postretirement benefits 6,290 5,790 5,790
Wages and salaries 4,695 5,174 5,474
Taxes, other than income taxes 358 295 264
Interest 184 153 145
Profit sharing -- 2,780 2,400
Other 4,894 4,689 6,622
-------- -------- --------
Total current liabilities 34,943 74,398 61,402

LONG-TERM LIABILITIES:
Senior bank loan-less current
portion 39,210 19,197 19,220
Subordinated debt 3,972 10,153 11,015
Notes payable -- -- 750
Pensions 45,236 33,295 31,991
Postretirement benefits 46,757 45,315 43,965
Officers' deferred
compensation 2,246 2,224 2,206
Other noncurrent liabilities 2,083 1,975 1,959
------- ------- -------
Total long term liabilities 139,504 112,159 111,106
------- ------- -------
Total liabilities 174,447 186,557 172,508

STOCKHOLDERS' EQUITY:
Common stock-authorized
100,000,000, issued and
outstanding 5,029,517,
5,139,993 and 5,196,307
shares in each period of no
par, $.01 par and $.01 par,
respectively 35,224 51 52
Additional paid-in capital 40 35,398 36,506
Accumulated deficit (45,015) (51,736) (37,974)
Total stockholders' equity (9,751) (16,287) (1,416)
------- ------- -------
Total liabilities and
stockholders' equity $164,696 $170,270 $171,092
======= ======= =======

<PAGE>

LADISH CO., INC.

STATEMENTS OF OPERATIONS

(Dollars in Thousands Except Per Share Data)

<TABLE>
<CAPTION>
(Unaudited)
Nine Months Ended
Years Ended December 31, September 30,
1994 1995 1996 1996 1997

<S> <C> <C> <C> <C> <C>
NET SALES $121,803 $115,738 $162,002 $124,068 $157,072
COST OF SALES 130,537 128,351 149,637 114,154 134,055
------- ------- ------- ------- -------
Gross profit (loss) (8,734) (12,613) 12,365 9,914 23,017

SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 5,966 6,139 6,556 4,888 5,607
------- ------- ------- ------- -------
Income (loss) from operations (14,700) (18,752) 5,809 5,026 17,410

OTHER (INCOME) EXPENSE:
Interest expense 2,466 3,339 3,703 2,870 2,659
Other, net (138) 55 (29) (7) (143)
------- ------- ------- ------- -------
Income (loss) from continuing
operations before provision
for income taxes (17,028) (22,146) 2,135 2,163 14,894

PROVISION FOR INCOME TAXES -- -- -- -- 1,132
------- ------- ------- ------- -------
Income (loss) from continuing
operations (17,028) (22,146) 2,135 2,163 13,762

DISCONTINUED OPERATIONS (Note
13):

Income (loss) from operations
of IPD (net of tax effect of
$-- for all periods) 221 1,214 (262) 72 --
Loss on disposal of IPD (net of
tax effect of $--) -- -- (8,594) -- --
------- ------- ------- ------- -------

Net income (loss) $(16,807) $(20,932) $(6,721) $2,235 $13,762
======= ======= ======= ======= =======
NET INCOME (LOSS) PER SHARE:

From continuing operations $(3.39) $(4.40) $ 0.20 $ 0.21 $ 1.09

From discontinued operations .04 .24 (.73) -- --
------- ------- ------- ------- -------

Net income (loss) $(3.35) $(4.16) $(.53) $ 0.21 $ 1.09
======= ======= ======= ======= =======

</TABLE>

The accompanying notes to financial statements are an integral
part of these statements.

<PAGE>
LADISH CO., INC.

STATEMENTS OF STOCKHOLDERS' EQUITY

(Dollars in Thousands Except Share Data)

<TABLE>
<CAPTION>
Common Stock Additional Accumulated
Paid-In
Shares Amount Capital Deficit Total

<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1993 5,017,017 $5,017 $30,163 $(7,276) $27,904

Net loss -- -- -- (16,807) (16,807)

Issuance of common stock 12,500 13 31 -- 44
--------- ------- ------- -------- --------
BALANCE, December 31, 1994 5,029,517 5,030 30,194 (24,083) 11,141

Net loss -- -- -- (20,932) (20,932)

Change in par value of common stock
from $1 to no par -- 30,194 (30,194) -- --

Issuance of warrants on senior -- -- 40 -- 40
subordinated notes
--------- ------- ------- ------- --------
BALANCE, December 31, 1995 5,029,517 35,224 40 (45,015) (9,751)
Net loss -- -- -- (6,721) (6,721)

Change in par value of common stock
from no par to $.01 -- (35,174) 35,174 -- --

Issuance of warrants on senior
subordinated notes -- -- 53 -- 53

Exercise of warrants 110,476 1 131 -- 132
--------- ------- ------- -------- -------
BALANCE, December 31, 1996 5,139,993 51 35,398 (51,736) (16,287)

Net income -- -- -- 13,762 13,762

Reduction in valuation allowance
related to pre-fresh start NOLs -- -- 1,040 -- 1,040

Exercise of warrants 56,314 1 68 -- 69
--------- ------ ------- -------- -------

BALANCE, September 30, 1997
(Unaudited) 5,196,307 $52 $36,506 $(37,974) $(1,416)
========= ====== ======= ======== =========

</TABLE>

The accompanying notes to financial statements are an
integral part of these statements.

<PAGE>

LADISH CO., INC.
STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
(Unaudited)
Nine Months Ended
Years Ended December 31, September 30,
1994 1995 1996 1996 1997

<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)- $(16,807) $(20,932) $(6,721) $2,235 $13,762
Adjustments to reconcile net income (loss) to
net cash provided by (used for) operating
activities-
Depreciation 8,725 8,908 9,136 6,930 7,365
Amortization 5 121 151 119 113
Deferred interest on subordinated debt -- 12 1,035 773 931
Deferred tax provision -- -- -- -- 1,040
Loss on disposal of IPD -- -- 8,594 -- --
Changes in assets and liabilities-
Accounts receivable 1,128 (3,166) (5,691) (7,474) (10,886)
Inventories 5,501 (2,925) (8,211) (7,008) (8,886)
Net assets of IPD 3,422 (1,091) (5,768) (5,086) --
Other assets 64 (650) 96 516 (156)
Accounts payable and accrued liabilities (3,244) 7,494 17,707 22,117 1,793
Other liabilities (438) 1,480 (12,702) (11,194) (2,688)
------- ------- ------- ------- --------
Net cash provided by (used for) operating
activities (1,644) (10,749) (2,374) 1,928 2,388

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (2,549) (2,865) (4,997) (2,747) (6,255)
Proceeds from sale of property, plant and
equipment 1,877 1,018 70 70 612
Acquisition of business -- -- -- -- (8,529)
Net proceeds from sale of IPD -- -- -- -- 32,850
-------- -------- -------- -------- --------
Net cash provided by (used for) investing
activities (672) (1,847) (4,927) (2,677) 18,678
------- -------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of senior bank loan -- (31,665) -- -- --
Net proceeds from (repayments of) senior bank
loan 2,557 39,960 1,735 (1,335) (20,475)
Proceeds from issuance of (retirement of)
subordinated debt and warrants -- 4,000 5,199 5,199 (69)
Issuance of common stock 44 -- 132 132 69
------- -------- -------- -------- --------
Net cash provided by (used in) financing
activities 2,601 12,295 7,066 3,996 (20,475)
------- -------- -------- -------- --------
INCREASE (DECREASE) IN CASH: 285 (301) (235) 3,247 591

CASH, beginning of period 353 638 337 337 102
------- -------- -------- -------- --------
CASH, end of period $638 $337 $102 $3,584 $693
======= ======== ======== ======== ========

SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid $21 $20 $14 $14 $297
Interest paid $3,110 $4,560 $4,087 $3,309 $2,216

</TABLE>

The accompanying notes to financial statements are an
integral part of these statements.

<PAGE>

LADISH CO., INC.

NOTES TO FINANCIAL STATEMENTS

(Dollars in Thousands Except Share and Per Share Data)

(1) Business Information-

Through May 30, 1997, Ladish Co., Inc. (the "Company") operated
facilities located in Cudahy, Wisconsin; Russellville, Arkansas; and
Cynthiana, Kentucky. On May 30, 1997, the Company disposed of its
Industrial Products Division ("IPD") which includes the facilities
located in Arkansas and Kentucky. (See Note 13.)

The Company engineers, produces and markets high-strength, high-
technology forged and formed metal components for a wide variety of
load-bearing and fatigue-resisting applications in the aerospace,
defense and industrial markets, for both domestic and international
customers. Net sales to the aerospace, defense and industrial
markets were approximately 71%, 15% and 14%, respectively, of total
Company net sales in 1996 from continuing operations.

For the years ended December 31, 1994, 1995 and 1996, the Company
had one customer that accounted for 15%, 23% and 18% and another
customer that accounted for 19%, 18% and 17%, respectively, of net
sales from continuing operations. For the year ended December 31,
1996, the Company had an additional customer that accounted for 19%
of net sales from continuing operations.

Exports accounted for approximately 28%, 31%, and 40% of the Company
sales for the years ended December 31, 1994, 1995 and 1996
respectively. Sales to Europe constituted approximately 18%, 19%
and 31% for the periods ended December 31, 1994, 1995 and 1996,
respectively. Of the European sales, 11%, 8% and 17% were to the
United Kingdom for the same periods.

As of September 30, 1997, approximately 83% of the Company's
employees are represented by one of eight collective bargaining
units. The collective bargaining agreements with most of these
units will expire during 2000. The Company does not anticipate that
work stoppages will arise in connection with the renewal of these
agreements in the future.

(2) Summary of Significant Accounting Policies-

(a) Outstanding checks-

Outstanding payroll and accounts payable checks related to
certain bank accounts are recorded as accounts payable in the
accompanying balance sheets. These checks amounted to $2,071
and $2,171 as of December 31, 1995 and 1996, respectively.

(b) Inventories-

Inventories are stated at the lower of cost or market using the
first-in, first-out (FIFO) valuation method. Inventory costs
include material, labor and overhead.

Inventories consist of the following:
(Unaudited)
December 31, September 30,
1995 1996 1997

Raw materials $11,836 $10,867 $19,272
Work-in-process and
finished 18,375 28,723 32,251
------- ------- -------
30,211 39,590 51,523

Less progress payments (2,416) (3,584) (3,014)
------- ------- -------
Total inventories $27,795 $36,006 $48,509
======= ======= =======

Additions to property, plant, and equipment are recorded at
cost. Tooling costs are expensed as incurred. Depreciation is
provided using the straight-line method over the estimated
useful lives of the assets, as follows:

Land improvements 39 years
Buildings and improvements 39 years
Machinery and equipment 5 to 12 years

(d) Revenue recognition-

Sales revenue is recognized when products are shipped or in
other instances when the customer accepts legal title. Net
sales include reductions for returns and allowances, sales
discounts and freight out. Progress payments on contracts are
generally recognized as a reduction of the related inventory
costs.

(e) Contract settlement adjustments-

Settlement adjustments applicable to long-term contracts are
recognized as an adjustment to sales revenue in the year
agreement is reached on the amounts to be received or paid.
Losses on individual contracts are recorded as soon as they are
identified. Settlement amounts for the years ended December 31,
1994, 1995 and 1996, were not significant, except for the
contract termination set forth below.

On October 28, 1993, the Company was notified by its customer,
Babcock & Wilcox, that NASA had terminated the Advanced Solid
Rocket Motor ("ASRM") program. A termination claim was filed
with Babcock & Wilcox by the Company in 1993 and was
subsequently settled during 1994. This termination settlement
resulted in the realization of net sales of $11,000, $6,228 of
which is reflected in gross profit in the statement of
operations for the year ended December 31, 1994.

(f) Income taxes-

Deferred income taxes are provided at the enacted marginal rates
on the difference between the financial statement and income tax
basis of assets and liabilities. Deferred income tax provisions
or benefits are based on the change in the deferred tax assets
and liabilities from period to period. See Note 7 for further
discussion.

(g) Use of estimates-

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.

(h) Fair value of financial instruments-

Based on the borrowing rates currently available to the Company
for loans with similar terms and maturities, the fair value of
long-term debt of the Company approximates book value as of
December 31, 1996.

(3) Debt-

Senior bank loan-

In 1993, the Company and its lenders entered into an Amended and
Restated Loan & Security Agreement (the "Amended Loan Agreement").

On May 10, 1994, the First Amendment to the Amended Loan Agreement
provided the Company with a total credit facility of $45,000 which
included a term loan of $3,950 with scheduled amortization payments
under the term loan of $600 per year. On July 7, 1995, the Company
entered into a credit agreement with a new lender which provided for
a $45,000 total credit facility which included an $8,000 term loan.
On November 12, 1996, the total credit facility was increased to
$53,000. All personal and real property of the Company has been
pledged as collateral under the new credit agreement. An affiliated
party of this lender is also a significant customer of the Company.

As of December 31, 1996, the $45,000 revolving credit facility
carried an interest rate of commercial paper plus 2-1/2%,
approximately 8.6% at December 31, 1996. The credit facility
expires on June 30, 2000. To the extent the Company meets certain
cash flow provisions of the credit agreement in the future, the
interest rate on the revolving credit facility will be reduced by
0.5% effective the month following achievement of the cash flow
provisions. The credit line availability is subject to a borrowing
base limitation which is calculated based on eligible accounts
receivable and inventories reduced by any letters of credit.
Letters of credit outstanding total $884 as of December 31, 1995 and
1996, respectively. As of December 31, 1996, the amount available
for future borrowing under the revolving credit facility was
approximately $10,000.

The $8,000 term loan is payable in sixteen quarterly installments
and commenced on September 30, 1996. The first four quarterly
installments were $375 each, the next eight installments are $500
each and the last four installments beginning September 30, 1999
will be $625 each with the last installment due on June 30, 2000.
The Company may, at any time, prepay the outstanding balance, but
will be subject to a prepayment fee of 1% if the prepayment is prior
to July 1, 1999. The term loan carries an interest rate of
commercial paper plus 2-1/2%. As of December 31, 1996, the interest
rate was approximately 8.6%. To the extent the Company meets
certain cash flow provisions of the credit agreement in the future,
the interest rate on the term loan will also be reduced by 0.5%
effective the month following achievement of the cash flow
provisions.

The revolving credit facility and term loan contain covenants
including but not limited to restrictions on indebtedness,
operations, change in control and the requirement that interest
coverage and fixed charge coverage ratios, as defined, be
maintained. As of December 31, 1996, the Company was in compliance
with all covenants under the credit facility and term loan.
Transaction fees incurred in connection with this refinancing were
approximately $1,115. The credit agreement provided for a refund of
up to $645 of the transaction fees if the Company received an
acceptable infusion of capital prior to June 30, 1996. The Company
obtained refunds of transaction fees of $344 in December, 1995 and
the remaining $301 in February, 1996 as a result of the issuance of
senior subordinated notes described below. In addition, the
revolving credit facility requires that the Company pay an unused
facility fee of 0.25% per annum on the average daily unused balance.

The annual maturities of the Company's term loan are as follows:

1997 $1,750
1998 2,000
1999 2,250
2000 1,250
------
$7,250
======

Senior subordinated secured notes and warrants-

In December 1995, the Company issued a total of $4,000 of senior
subordinated notes ("Notes") to two of the Company's largest
stockholders. In February 1996, in a second offering of these
notes, additional proceeds of $5,331 ($132 of these proceeds related
to the purchase of common stock under the rights attached to
warrants as discussed later in this note) were received by the
Company. These Notes carry interest at 12%, are due in December
2000, and include detachable warrants to purchase shares of common
stock. Interest is payable quarterly in the form of additional
notes also carrying interest at 12%.

The Notes are secured by a second security interest in substantially
all of the Company's assets, and are subordinated to the $53,000
Credit Agreement. The Company has undertaken a number of
affirmative and negative covenants including but not limited to
restrictions on indebtedness, operations and change in control. The
Subordinated Notes include a number of affirmative and negative
covenants, including, but not limited to, restrictions on the
incurrence of indebtedness junior to obligations under the Credit
Agreement and senior to the Subordinated Notes. Upon a change in
control of the Company, the Company is required to redeem the
outstanding Subordinated Notes at a price equal to the outstanding
principal amount plus accrued and unpaid interest. At September 30,
1997 the Company was in compliance with all covenants under the
Subordinated Notes.

As stated above, the noteholders also received warrants with each
Note purchased. Each warrant entitles the holder to purchase common
stock for $1.20 per share. The exercise price may be paid in cash,
or by the surrender of already outstanding Ladish common stock,
Notes or other warrants having a fair value equal to the exercise
price. Based on the total proceeds of $9,331 from the private
placement, warrants were issued, which, when exercised, would
entitle the holders to purchase 7,775,722 shares of common stock.
The warrants expire ten years from the date of issuance. The
warrants were recorded as an increase to additional paid-in capital
at their stated value which is considered to approximate fair value
at the date of issuance.

(4) Stockholders' Equity-

In November 1995, the Company's stockholders approved an amendment
to the articles of incorporation which increased the number of
authorized shares to 100,000,000 and changed the par value of a
share of common stock from $1 to "no par". This amendment increased
common stock by $30,194 and reduced additional paid-in capital by
$30,194.

In June 1996, the Company's stockholders approved an amendment to
the articles of incorporation which changed the par value of a share
of common stock from "no par" to $.01 par. This amendment decreased
common stock by $35,174 and increased additional paid-in-capital by
$35,174.

In addition to the common stock outstanding, the Board of Directors
entered into an agreement in 1993 to issue to a former executive
496,188 options to purchase common stock at an average exercise
price of $16.00 per share. All of these options are exercisable but
remain outstanding.

In 1996, the Company adopted the Ladish Co., Inc. 1996 Long-Term
Incentive Plan (the "Plan"). Under the Plan, incentive stock
options may be granted to employees of Ladish Co., Inc. which expire
ten years from the vesting date. The options vest over four years.
In September 1996, the Company issued 433,333 options under the
Plan, and has reserved 400,000 shares for future issuance under the
Plan.

The Company accounts for its option grants using the intrinsic value
based method pursuant to APB Opinion No. 25 and Statement of
Financial Accounting Standards No. 123 ("SFAS 123") under which no
compensation expense was recognized in 1995 and 1996. Had
compensation cost for these options been determined pursuant to the
fair value method under SFAS 123, the Company's net loss and
earnings per share from continuing operations would have been
reduced by the following pro forma amounts:

1995 1996
As Reported Pro Forma As Reported Pro Forma

Net Income (Loss) $ (22,146) $(22,146) $ 2,135 $ 1,523

Earnings (Loss)
Per Share $ (4.40) $ (4.40) $ 0.20 $ 0.13

Because the SFAS 123 method of accounting has not been applied to
options granted prior to January 1, 1995, and additional awards in
future years are anticipated, the effects of applying SFAS 123 in
these pro forma disclosure are not indicative of future amounts.

The fair value of the 1995 and 1996 option grants used to compute
the pro forma amounts above was estimated on the date of the grant
using the Minimum Value option pricing model with the following
assumptions used for grants in 1995 and 1996 respectively: risk
free interest rate of 6%, expected remaining lives of 10 years, and
market value of $3.00 and $9.00. The weighted average minimum value
of options granted in 1995 and 1996 was zero and $5.64 respectively.

<TABLE>
<CAPTION>
1994 1995 1996
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Options Price Options Price Options Price

<S> <C> <C> <C> <C> <C> <C>
Outstanding at
beginning of Period 220,528 $12.00 220,528 $ 12.00 385,924 $ 14.57
Granted - - 165,396 18.00 543,597 9.04
Exercised - - - - - -
Canceled - - - - - -
------- ------- -------- ------- -------- --------
Outstanding at end
of Period 220,528 12.00 385,924 14.57 929,521 11.34

Exercisable at end of
Period 220,528 12.00 385,924 14.57 604,521 14.21
</TABLE>

(5) Research and Development-

Research and Development costs are expensed as incurred. These
costs of continuing operations were $3,908, $3,783 and $3,384 in
1994, 1995 and 1996, respectively. Research and Development costs
funded by customers, amounting to $1,328, $1,535 and $885 from
continuing operations in 1994, 1995 and 1996, respectively, have
been recorded as sales. Revenues from research and development
funded by customers are recognized when the related product is
shipped or the services are provided.

(6) Leases-

Certain office and warehouse facilities and equipment are leased
under noncancelable operating leases expiring on various dates
through 2001. Rental expense from continuing operations was $292,
$266 and $284 in 1994, 1995 and 1996, respectively.

Minimum lease obligations under noncancelable operating leases are
as follows:

1997 $279
1998 226
1999 213
2000 152
2001 and thereafter 146
------
Total $1,016
======

(7) Income Taxes-

As a result of a financial restructuring completed on April 30,
1993, tax net operating loss ("NOL") carryforwards generated prior
to the financial restructuring are limited under the Internal
Revenue Code by a formula based upon the Company's stockholders'
equity of $35,180 as of April 30, 1993, which was calculated in
conjunction with fresh start reporting. The annual use of this NOL
carryforward is limited to the lesser of the Company's taxable
income or the NOL allowed to be used under the formula. Each year
under the formula, approximately $2,100 of the NOL generated prior
to the financial restructuring is available for use. Any amount not
used in the current or previous years is allowed to be used in
subsequent years. These NOL carryforwards may be used to offset
taxable income through the year 2007. Based on these limitations
and certain other factors, a valuation allowance has been recorded
against the entire amount of the NOL carryforward and other deferred
tax assets. Any tax benefit that is realized in subsequent years
from the reduction of the valuation allowance established at or
prior to the financial restructuring will be recorded as an addition
to paid-in capital.

In addition, NOL carryforwards generated subsequent to the financial
restructuring of approximately $14,000, $20,000 and $15,000 for the
eight months ended December 31, 1993, and for the years ended
December 31, 1994 and 1995, respectively, are available to offset
future taxable income through the years 2008, 2009 and 2010,
respectively. The Company has also recorded a valuation allowance
against the entire amount of these NOL carryforwards. Any tax
benefit that is realized in subsequent years from the utilization of
these NOL carryforwards will be recorded as a reduction of future
income tax provisions.

There is no provision for Federal income taxes in 1994, 1995 and
1996 due to the utilization of the NOL carryforwards.
Components of the deferred income taxes are as follows:

December 31,
1995 1996
Deferred tax liabilities-
Property, plant and equipment $(24,267) $(21,700)
------- -------
Total deferred tax
liabilities (24,267) (21,700)
------- -------
Deferred tax assets-
Postretirement health care
benefits 21,219 20,442
Pension benefits 19,327 16,968
Tax operating loss 33,619 32,984
carryforwards
Inventory adjustments 646 1,048
Accrued employee costs 1,615 1,606
Other, net (1,008) 2,454
------- -------
Total deferred tax assets 75,418 75,502
------- -------
Valuation allowance (51,151) (53,802)
------- -------
Net deferred taxes $ -- $ --
======= =======

(8) Pension Plans-

The Company has noncontributory defined benefit pension plans
("Plans") covering substantially all employees. Plans covering
salaried and management employees provide pension benefits that are
based on the highest five consecutive years of an employee's
compensation during the last ten years prior to retirement. Plans
covering hourly employees and union members generally provide
benefits of stated amounts for each year of service. The Company's
funding policy is to contribute annually the minimum amount required
under the Employee Retirement Income Security Act of 1974. The
Plans' assets are primarily invested in U.S. Government securities,
corporate bonds and common stocks.

A summary of the Plans' funded status and amounts reflected in the
balance sheets is as follows:

December 31, 1995
Assets Exceed Accumulated
Accumulated Benefits
Benefits Exceed Assets
Actuarial present value of benefit
obligations:
Vested benefit obligations $(66,872) $(99,300)
======= ========
Accumulated benefit obligations $(70,043) $(108,379)
======= ========
Projected benefit obligations $(71,763) $(108,379)
Plan assets at fair value 82,804 67,765
-------- --------
Plan assets in excess of (less
than) projected benefit
obligations 11,041 (40,614)

Unrecognized net gain (10,593) (8,964)
Unrecognized prior service cost 302 2,757
Adjustment to recognize minimum
liability -- (43)
------- -------
Prepaid (accrued) pension cost $ 750 $(46,864)
======= =======

December 31, 1996
Assets Exceed Accumulated
Accumulated Benefits Exceed
Benefits Assets
Actuarial present value of
benefit obligations:
Vested benefit obligations $(71,985) $(86,073)
======= =======

Accumulated benefit
obligations $(75,053) $(93,508)
======= =======
Projected benefit obligations $(76,480) $(93,508)
Plan assets at fair value 94,998 56,263
------- -------
Plan assets in excess of
(less than) projected
benefit obligations 18,518 (37,245)

Unrecognized net gain (19,043) (13,188)
Unrecognized prior service
cost 242 2,163
Adjustment to recognize
minimum liability -- (42)
------- --------
Accrued pension cost $(283) $(48,312)
======= ========

Net periodic pension cost includes the following components:

December 31,
1994 1995 1996
Service cost-benefits earned
during the period $ 2,095 $ 1,624 $ 1,595
Interest cost on projected
benefit obligation 13,626 14,469 14,013
Actual return on plan assets 352 (28,029) (17,303)
Net amortization and deferral (13,038) 16,164 5,501
Curtailment gain -- -- (445)
------- ------- -------
Net periodic pension
cost $ 3,035 $ 4,228 $ 3,361
======= ======= =======

Assumptions used in the determination of net periodic pension cost
for these periods are:

December 31,
1994 1995 1996
Discount rate 7.00% 8.25% 7.75%
Rate of increase in
compensation levels 4.50% 4.50% 2.00%
Expected long-term
rate of return on assets 8.00% 8.00% 8.00%

The actuarial present value of the projected benefit obligation was
determined utilizing a discount rate of 7.75% and 8.25% as of
December 31, 1995 and 1996, respectively. The increase in the
discount rate resulted in a decrease in the accumulated benefit
obligation of approximately $6,895 as of December 31, 1996.

Certain employees are covered by union-sponsored, collectively-
bargained, multi-employer pension plans.

The actuarial calculation of the Company's minimum funding pension
payment due in 1997 for 1996 and 1997 is $15,300. This amount is
shown as a current liability on the balance sheet as of December 31,
1996.

Due to the sale of IPD, the Company experienced a gain of $445
related to the pension benefit plans that are being placed in
curtailment. The Company will remain liable for the plans and will
continue to administer the plans. This gain is reflected as a
component of the loss on the sale of IPD.

(9) Postretirement Health Care and Life Insurance Benefits-

In addition to pension benefits, employees are provided certain
postretirement health care and life insurance benefits.
Substantially all of the employees may become eligible for these
benefits when they retire. The Company accrues, as current costs,
the future lifetime retirement benefits for both active and retired
employees and their dependents. Steps have been taken by the
Company to reduce the amount of the future obligation for
postretirement benefits of future retirees by capping the amount of
funds payable on behalf of the retirees.

Amounts reflected in the balance sheets for postretirement benefit
obligations are as follows:

December 31,
1995 1996
Retirees $43,951 $37,838
Fully eligible active plan participants 3,366 2,984
Other active plan participants 6,585 6,034
------- -------
Accumulated postretirement benefit
obligation 53,902 46,856
Unrecognized net gain (loss) (855) 4,615
Curtailment gain -- (366)
------- -------
Postretirement liability $53,047 $51,105
======= =======

Net periodic postretirement benefit cost includes the following
components:

December 31,
1994 1995 1996
Service cost benefits earned during
the period $476 $369 $380
Interest cost on accumulated
postretirement benefit obligation 3,758 4,015 3,890
Net amortization and deferral -- (38) (56)
Curtailment gain -- -- (366)
------- ------- -------
Net periodic postretirement
benefit cost $4,234 $4,346 $3,848
======= ======= =======

Assumptions used in the determination of net periodic postretirement
benefit cost for these periods are:

December 31,
1994 1995 1996

Discount rate 7.00% 8.25% 7.75%
Inflation-
Retirees as of 1991
Pre-65 Medical trending rate
-initial 14.00% 13.00% 12.00%
-ultimate 7.00% 7.00% 7.00%

Post-65 Medical trending rate
-initial 8.50% 8.00% 7.50%
-ultimate 5.00% 5.00% 5.00%

Retirees Subsequent to 1991
-initial and ultimate
medical trending rate 3.00% 3.00% 3.00%

The initial rates used for the retirees as of 1991, are estimated to
decrease at a rate of 1% and .5% for the pre-65 and post-65 retiree
populations, respectively, until they reach the ultimate medical
trending rate.

An increase of one percentage point in the assumed medical trending
rate for each future year would increase the accumulated
postretirement benefit obligation as of December 31, 1995 and 1996,
by approximately $2,930 and $2,342, respectively, and the aggregate
of the service and interest cost components of net periodic
postretirement benefit cost by approximately $265 for the year ended
December 31, 1996.

The accumulated postretirement benefit obligation was determined
utilizing a discount rate of 7.75% and 8.25% as of December 31, 1995
and 1996, respectively. The increase in the discount rate resulted
in a decrease of the accumulated postretirement benefit obligation
of approximately $1,695 as of December 31, 1996.

Due to the sale of IPD, the Company experienced a gain of $366
related to the postretirement benefits that are being placed in
curtailment. This gain is reflected as a component of the loss on
the sale of IPD.

(10) Officers' Deferred Compensation Plan-

Certain officers have deferred compensation agreements which, upon
retirement, provide them with, among other things, supplemental
pension and other postretirement benefits. An accumulated liability
of $2,246 and $2,224 as of December 31, 1995 and 1996, respectively,
has been recorded under these agreements as actuarially determined.
The expense was $186, $208 and $169 in 1994, 1995 and 1996,
respectively.

(11) Profit Sharing-

Effective January 1, 1996, the Company initiated a profit sharing
program in which substantially all of the employees are eligible to
participate. The profit sharing payout is derived from a formula
based on pretax income and is payable no later than February 15th of
the subsequent year. The expense was $2,780 for the year ended
December 31, 1996.

(12) Commitments and Contingencies-

The Company is involved in various stages of investigation relative
to environmental protection matters relating to various waste
disposal sites. The potential costs related to such matters and the
possible impact thereof on future operations are uncertain due in
part to uncertainty as to the extent of the pollution, the
complexity of government laws and regulations and their
interpretations, the varying costs and effectiveness of alternative
cleanup technologies and methods, and the questionable level of the
Company's involvement. The Company has made provisions in the
financial statements for potential losses related to these matters.
The Company does not anticipate such losses will have a material
impact on the financial statements beyond the aforementioned
provisions.

Various other lawsuits and claims arising in the normal course of
business are pending against the Company and such losses are not
expected to be material to the financial statements.

In 1995, the Company resolved a dispute with a previous owner of the
Company. The resolution of this dispute resulted in the Company
recovering $1,650 of costs incurred in prior years associated with
the indemnification of another lawsuit. This recovery was recorded
as discontinued operations in the 1995 statement of operations.

(13) Discontinued Operations-

Subsequent to year end, the Board of Directors approved of the
disposition of the Company's Industrial Products Division ("IPD")
which includes two facilities located in Arkansas and Kentucky. The
disposal date was May 30, 1997 and substantially all IPD assets were
sold to a third party buyer for approximately $36,500 in cash
subject to a working capital adjustment. Ten percent of the cash
proceeds ($3,650) was placed in an escrow account to secure certain
representations made by the Company in connection with the sale.
$1,825 of the total escrow is reflected on the balance sheet as
other current assets and $1,825 as other noncurrent assets. The
proceeds from the sale of IPD will be used for minimum pension
funding requirements and to reduce the outstanding bank debt.

The net results of these operations prior to December 31, 1996 are
included in the consolidated statements of operations under
"discontinued operations." Sales for IPD were $43,506, $44,348 and
$46,034 for the years ended December 31, 1994, 1995 and 1996,
respectively.

The operating results of IPD include an interest allocation based
upon net assets of IPD. Interest expense allocated to the
discontinued operation was $821, $1,178 and $1,422 for the years
ended December 31, 1994, 1995 and 1996, respectively.

The loss on disposal of IPD reflected in the consolidated statements
of operations includes the write-down of the assets of IPD to
estimated net realizable value, estimated operating losses incurred
by IPD during the period of January 1, 1997 through May 30, 1997 and
the estimated disposal costs of these operations. Subsequent to
year end, the Kentucky facility of IPD sustained significant flood
damage which, in management's opinion, is covered by insurance, less
a $1,300 deductible. The deductible related to the flood damage is
included in the loss on disposal of IPD.

The net assets of IPD as shown on the balance sheet consist of the
following:

December 31,
1995 1996
Current assets (primarily receivables
and inventory) $18,298 $23,838
Property and equipment, net 20,505 19,933
Current liabilities (3,526) (2,726)
Writedown of IPD net assets to net
realizable value -- (4,545)
------- -------
35,277 36,500

Provision for operating losses and
disposal costs of IPD -- (4,860)
------- -------
Total IPD net assets $35,277 $31,640
======= =======

(14) Earnings Per Share-

Earnings per share is computed on the basis of the weighted average
number of common stock and common stock equivalents outstanding
during the periods. The weighted average number of common stock and
common stock equivalents outstanding for the years ended December
31, 1994, 1995 and 1996, were 5,023, 5,030, and 5,092, respectively.
Staff Accounting Bulletin No. 83 requires an adjustment to earnings
per share for any stock, options or warrants that are issued or
granted within one year of an initial public offering ("IPO") at a
price below the IPO price. The Company has not issued any
securities within the past year that would require an earnings per
share adjustment.

In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per
Share" ("SFAS 128"). The Company will adopt SFAS 128 effective for
the year ending December 31, 1997. On a pro forma basis, if the
Company had adopted SFAS 128 for the three years ended December 31,
1994, 1995 and 1996, and for the nine months ended September 30,
1996 and 1997 (unaudited), the reported earnings per share on
continuing operations would be:

(Unaudited)
December 31, September 30,
1994 1995 1996 1996 1997
Earnings per share:
Basic $ (3.39) $ (4.40) $0.42 $0.43 $2.66
Diluted (3.39) (4.40) 0.20 0.21 1.09

(15) Acquisition-

On June 16, 1997, the Company completed the purchase of certain
assets and assumption of certain liabilities of Stowe Machine Co.,
Inc. (Stowe). The purchase price was composed of approximately
$8,500 in cash and a note payable for $1,000.

The acquisition has been accounted for using the purchase method of
accounting. Accordingly, the net assets are included in the
Company's Unaudited Consolidated Balance Sheets as of September 30,
1997 based upon their estimated fair values at the acquisition's
effective date of June 16, 1997. The Company's Consolidated
Statements of Operations do not include the revenues and expenses of
Stowe prior to this date. The excess of the purchase price over the
estimated fair value of the net assets acquired (goodwill) of
approximately $870 will be amortized on a straight-line basis over
20 years. The purchase price allocation is based on preliminary
estimates of the fair value of the net assets acquired and is
subject to reallocation as additional information becomes available
during 1997 and 1998. There are no remaining contingencies that
will impact the overall purchase price.

Supplemental pro forma results of operations (Unaudited)-

The following unaudited pro forma summary presents the consolidated
results of operations as if the acquisition had occurred at the
beginning of the periods presented and does not purport to be
indicative of what would have occurred had the acquisition actually
been made as of such date or of results which may occur in the
future.

Nine-Month
Year Ended Period Ended
December 31, September 30,
1996 1997
Net sales $169,890 $160,775
Net income from continuing
operations 2,176 13,574
Net income per share from continuing
operations 0.18 1.07

(16) Valuation and Qualifying Accounts-

Payments
Provision and
Balance at Charged to Accounts Balance
Beginning Profit and Written at End of
of Year Loss Off Year

Year ended December 31,
1994
Allowance for
doubtful accounts $450 $3 $3 $450
==== ==== ==== ====

Year ended December 31,
1995
Allowance for
doubtful accounts $450 $44 $44 $450
==== ==== ==== ====

Year ended December 31,
1996
Allowance for
doubtful accounts $450 $(121) $29 $300
==== ==== ==== ====

(17) Events Subsequent to December 31, 1996-

a) Effective December 12, 1997, the Company effected a 1 for 6
reverse stock split. All share and per share data have been
retroactively restated.

b) In October 1997, the Company reached an agreement with the
Pension Benefit Guarantee Corporation whereby the Company's
minimum funding requirements for 1996 were adjusted. The
adjusted amounts are expected to be paid during the fourth
quarter of 1997.

<PAGE>

Report of Independent Auditors

Stockholders and Board of Directors
Stowe Machine Company Incorporated

We have audited the accompanying balance sheets of Stowe Machine Company
Incorporated as of December 31, 1995 and 1996, and the related statements
of operations and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Stowe Machine Company
Incorporated at December 31, 1995 and 1996, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

Ernst & Young LLP
Hartford, Connecticut
March 24, 1997

<PAGE>

Stowe Machine Company Incorporated

Balance Sheets

December 31,
1995 1996
Assets
Current assets:
Cash $102,405 $59,987
Accounts receivable 569,109 651,519
Inventories 3,278,411 3,463,044
Deferred state income
taxes 5,210 10,587
Prepaid expense 12,658 13,356
--------- ---------
Total current assets 3,967,793 4,198,493

Property, plant and
equipment:
Land and land improvements 255,881 279,924
Buildings 731,595 731,595
Machinery and equipment 5,266,146 5,354,874
Furniture, fixtures and
automobiles 72,573 72,573
--------- ---------
6,326,195 6,438,966

Less accumulated
depreciation 4,186,713 4,373,767
--------- ---------
2,139,482 2,065,199

Intangible assets, net of
accumulated amortization of
$93,301 in 1995 and
$106,349 in 1996 65,964 52,916
--------- ---------
Total assets $ 6,173,239 $6,316,608
========= ==========

<PAGE>

Stowe Machine Company Incorporated

Balance Sheets (continued)

December 31,
1995 1996

Liabilities and stockholders'
equity
Current liabilities:
Demand notes payable to
officers $80,000 $80,000
Accounts payable 406,818 748,312
Accrued expenses 495,416 552,146
Interest payable 27,609 20,282
State income taxes payable -- 27,496
Current portion of long-term
debt 963,938 620,947
--------- ---------
Total current liabilities 1,973,781 2,049,183

Long-term debt:
Notes payable, less current
portion 2,877,490 2,656,543
Notes payable to officers 383,333 283,334
--------- ---------
3,260,823 2,939,877

Deferred state income taxes 104,949 111,420

Stockholders' equity:
Common stock, $100 par value:
Authorized--10,000 shares
Issued and outstanding--577
shares 57,700 57,700
Additional paid-in capital 242,300 242,300
Retained earnings 533,686 916,128
--------- ---------
Total stockholders' equity 833,686 1,216,128
--------- ---------
Total liabilities and
stockholders' equity $6,173,239 $6,316,608
========= =========

The accompanying notes to financial statements are an integral part of
these financial statements.

<PAGE>

Stowe Machine Company Incorporated

Statements of Operations

Year ended December 31,

1995 1996

Net Sales $ 6,854,037 $7,887,583
Cost of sales 5,592,343 6,470,349
Selling, general and
administrative expenses 477,217 473,583
--------- ---------

6,069,560 6,943,932
--------- ---------
Income from operations 784,477 943,651

Interest expense 494,536 444,183
--------- ---------
Income before provision for
income taxes and
extraordinary charge 289,941 499,468

State income taxes 18,209 31,992
--------- ---------
Income before extraordinary
charge 271,732 467,476

Extraordinary charge (75,702) (85,034)
-------- --------
Net income $196,030 $382,442
======== ========

The accompanying notes to financial statements are an integral part of
these financial statements.

<PAGE>

Stowe Machine Company Incorporated

Statements of Cash Flows

Year Ended December 31,
1995 1996
Cash flows from operating
activities:
Net income $196,030 $382,442
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 181,812 200,102
Changes in assets and liabilities:
Accounts receivable 58,505 (82,410)
Inventories and prepaid expenses 267,728 (185,331)
Accounts payable, accrued
expenses, interest payable and
state income taxes payable (179,369) 418,393
Deferred state income taxes 12,109 1,094
------- -------
Net cash provided by operating
activities 536,815 734,290

Cash flows used by investing
activities:

Additions for property, plant and
equipment (589,692) (112,771)
------- -------
Net cash used by investing
activities (589,692) (112,771)

Cash flows used by financing
activities:
Principal borrowings on long-term
debt 575,865 --
Principal payments on notes payable
to officers (100,000) (99,999)
Principal payments on long-term debt
(503,156) (563,938)
------- -------
Net cash used by financing
activities (27,291) (663,937)
------- -------
Net (decrease) increase in cash (80,168) (42,418)

Cash, beginning of period 182,573 102,405
------- -------
Cash, end of period $102,405 $59,987
======= =======

The accompanying notes to financial statements are an integral part of
these financial statements.

<PAGE>

Stowe Machine Company Incorporated

Notes to Financial Statements

December 31, 1996

1. Business and Significant Accounting Policies

Description of Business

Stowe Machine Company Incorporated (the Company) is a manufacturer of
machined components for the jet engine industry. It has special machining
capabilities which are applied to cylindrical forgings of titanium or
nickel alloy. The Company had three customers that accounted for 45%, 30%
and 10% of net sales for the year ended December 31, 1995, and 55%, 25%
and 5% of net sales for the year ended December 31, 1996. The Company's
three primary customers, one of which is the U.S. Government, account for
approximately eighty-five percent of sales, and the Company has not
experienced losses related to accounts receivable in the past.

Inventories

Inventories are stated at the lower cost or market. Cost is determined by
the last-in, first-out (LIFO) method.

On orders where the Company is either the prime contractor or a
subcontractor for the U.S. Government, the Company is entitled to receive
progress payments prior to shipment. Inventories are reduced for payments
received on orders which have not been shipped at year-end.

Property, Plant and Equipment

Property, plant and equipment is stated on the basis of cost. Depreciation
is calculated using the straight-line method over the estimated useful
lives of the assets.

Income Taxes

The Company operates under Subchapter S of the Internal Revenue Code, and
consequently, it is not subject to federal income tax; the stockholders
include the Company's income in their own income for federal income tax
purposes.

Deferred state income taxes are provided on the temporary differences
between financial statement and tax bases of assets and liabilities using
enacted tax rates in effect in the years in which such differences are
expected to reverse.

Intangible Assets

Intangible assets consist of deferred financing costs which are being
amortized on a straight-line basis over the terms of the related
agreements (seven years).

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

2. Long-Term Debt and Extraordinary Charge

Long-term debt consisted of the following:

1995 1996
People's term note A, prime plus
1.25%, payable October 1,
2001. $ 1,333,334 $ 1,104,762

People's term note B, prime plus
1.25%, payable October 1,
2001. 368,850 342,150

People's term note C, prime plus
1.25%, payable October 1,
2001. 832,565 689,705

People's revolving credit note,
prime plus 1.25%, payable
July 31, 1998. 360,000 300,000

Mortgage note payable, 15%
interest, maturing March 1,
2001. Secured by the
mortgage on property and is
subordinate to the above
People's debt. 796,679 690,873

Promissory notes payable to
officers, prime plus 1.25%,
payable October 1, 1999. 383,333 283,334

Promissory note payable, 12%
interest, payable April 1,
1999. 150,000 150,000
--------- ---------
4,224,761 3,560,824

Less current portion 963,938 620,947
--------- ---------
$ 3,260,823 $ 2,939,877
========= =========

The Company has three term promissory notes and a revolving line of credit
with People's Bank (People's). Term note A is to be repaid commencing
November 1, 1994 in eighty-four consecutive monthly principal payments of
$19,048. Term note B is to be repaid commencing on November 1, 1994 in
eighty-three consecutive monthly principal payments of $2,225, followed by
a single payment of $215,325. Term note C is to be repaid commencing on
November 1, 1994 in eighty-four consecutive monthly principal payments of
$11,905. Interest on the unpaid principal balance of all the loans is due
monthly at People's base rate plus 1.75% (10.25% at December 31, 1995).
The People's notes are secured by accounts receivable, inventory and
property, plant and equipment. Additionally, repayment of up to 75% of the
total amount borrowed on term note C has been guaranteed by the Small
Business Administration.

In July 1996, the term promissory notes and revolving credit note
agreement with People's Bank was amended, changing the interest rate to
the People's base rate plus 1.25% (9.5% at December 31, 1996) and
increasing the borrowing capacity and expiration date under the revolving
credit note to $800,000 and July 1998, respectively.

Aggregate scheduled annual maturities of long-term debt during each of the
five years subsequent to 1996 are as follows:

1997 $ 620,947
1998 940,690
1999 796,940
2000 590,208
2001 612,039
---------
$3,560,824
=========

In 1989, the Company retired outstanding senior secured notes early. The
related agreement required the Company, among other things, to pay an
amount equal to 6% of the gross profit each year, up to and including
fiscal 1998, or until the total paid equals $550,545, whichever comes
first. As of December 31, 1996 the total amount paid or accrued was
$520,537, of which $397,537 is included in accrued expenses. The early
extinguishment of the debt resulted in extraordinary charges of $85,034 in
1996 and $75,702 in 1995; there were no state income tax effects.

Interest paid on the above obligations in 1996 and 1995 was $429,130 and
$477,670, respectively.

3. Inventories

The components of inventories were as follows:

December 31,
1995 1996

Raw materials $ 241,185 $ 490,196
Work in process 1,260,901 1,263,738
Finished goods 1,973,077 1,977,482
Inventory owned by U.S.
Government (25,303) --
---------- ----------
3,449,860 3,731,416

Less LIFO reserve 171,449 268,372
---------- ----------
$ 3,278,411 $ 3,463,044
========== ==========

4. Demand Notes Payable to Officers

F. Robert and William R. Petricone, executive officers, have loaned the
Company $80,000 for working capital purposes. The notes are payable on
demand and bear interest at Shawmut Bank Connecticut, N.A. prime rate plus
1 1/2% (9.75% at December 31, 1996 and 10% at December 31, 1995).

Interest paid on the above obligations amounted to $8,149 in 1996 and
$8,548 in 1995.

5. State Income Taxes

State income taxes for the years ended December 31 consisted of the
following:

1995 1996

Current $ 6,100 $30,898
Deferred 12,109 1,094
------- -------
$ 18,209 $31,992
======= ========

Significant components of the net deferred state income tax liability
follow:

December 31,
1995 1996
Current asset:
Inventory $ 5,210 $10,587
5,210 10,587
Noncurrent liability:
Property, plant and equipment (105,400) (109,744)
Intangible assets 451 (1,676)
--------- ---------
(104,949) (111,420)
--------- ---------
Net deferred liability $ (99,739) $(100,833)
========= =========

Income taxes paid in 1996 and 1995 were $12,500 and $21,250, respectively.

6. Employee 401(k) Plan

Under the Company's 401(k) plan, all employees may contribute up to 15% of
their salary to a retirement account up to the maximum amount allowed by
law. The Company contributes an amount equal to 30% of the amount
contributed by each participant. The Company's contribution to the plan
was $27,308 in 1996 and $21,373 in 1995.

<PAGE>

Stowe Machine Company Incorporated

Statements of Operations

(Dollars in Thousands)

(unaudited)
Three Months Ended
March 31,
1996 1997

NET SALES $1,490 $1,738
COST OF SALES 1,157 1,402
------ ------
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 67 85
------ ------
1,224 1,487
------ ------
Income from operations 266 251

INTEREST EXPENSE (116) 94
------ ------
Income before provision for income
taxes and extraordinary charge 150 157

STATE INCOME TAXES 8 --
------ ------
Income before extraordinary charge 142 157

EXTRAORDINARY CHARGE (20) (8)
------ ------
Net income $ 122 $ 149
====== ======

<PAGE>

Stowe Machine Company Incorporated

Statements of Cash Flows

(Dollars in Thousands)

(unaudited)
Three Months Ended
March 31,
1996 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 122 $ 149
Adjustments to reconcile net income to
net cash provided by (used for)
operating activities
Depreciation and amortization 50 51
Changes in assets and liabilities:
Accounts receivable (84) 73
Inventories and prepaid expenses (316) 76
Accounts payable and accrued
expenses 231 (290)
------ -----
NET CASH PROVIDED BY OPERATING
ACTIVITIES 3 59

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and
equipment (15) (12)
------ ------

(12)
NET CASH USED BY INVESTING ACTIVITIES (15)

CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on notes payable to
officers (25) (25)
Principal payments on long-term debt
obligations (34) (28)
----- -----

NET CASH USED BY FINANCING
ACTIVITIES (59) (53)
----- -----
NET INCREASE (DECREASE) IN CASH (71) (6)

Cash, beginning of period 102 60
----- -----
CASH, END OF PERIOD $ 31 $ 54
===== =====

<PAGE>

Notes To Interim Financial Statements
(Unaudited)

NOTE A - BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the
information and footnotes required for complete financial statements. In
the opinion of management, all adjustments considered necessary for a fair
presentation have been included. Adjustments consisted of only normal
recurring accruals. Operating results and cash flows for the three-month
periods ended March 31, 1996 and March 31, 1997 are not necessarily
indicative of the results that may be expected for the entire year.

<PAGE>

No dealer, salesperson or other person has been authorized to give
any information or to make any representation not contained in this
Prospectus and, if given or made, such information or representation must
not be relied upon as having been authorized by the Company, any Selling
Shareholder or any Underwriter. This Prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any of the securities
offered hereby in any jurisdiction to any person to whom it is unlawful to
make such offer in such jurisdiction. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that the information herein is correct as of any
time subsequent to the date hereof or that there has been no change in the
affairs of the Company since such date.

_____________

TABLE OF CONTENTS Page

Prospectus Summary . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . 9
Forward-Looking Statements . . . . . . . . . . . . . . 13
Dividend Policy . . . . . . . . . . . . . . . . . . . . 14
Use of Proceeds . . . . . . . . . . . . . . . . . . . . 14
Market for Common Stock . . . . . . . . . . . . . . . . 14
Dilution . . . . . . . . . . . . . . . . . . . . . . . 15
Capitalization . . . . . . . . . . . . . . . . . . . . 17
Pro Forma Consolidated
Statements of Income . . . . . . . . . . . . . . . . 18
Selected Financial Data . . . . . . . . . . . . . . . . 21
Management's Discussion and
Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . 24
Business . . . . . . . . . . . . . . . . . . . . . . . 30
Management . . . . . . . . . . . . . . . . . . . . . . 42
Executive Compensation . . . . . . . . . . . . . . . . 44
Principal and Selling Shareholders . . . . . . . . . . 49
Certain Relationships and
Related Party Transactions . . . . . . . . . . . . . 50
Description of Common Stock . . . . . . . . . . . . . . 51
Shares Eligible for Future Sale . . . . . . . . . . . . 53
Underwriting . . . . . . . . . . . . . . . . . . . . . 54
Notice to Canadian Residents . . . . . . . . . . . . . 56
Experts . . . . . . . . . . . . . . . . . . . . . . . . 57
Legal Matters . . . . . . . . . . . . . . . . . . . . . 57
Additional Information . . . . . . . . . . . . . . . . 57
Index to Financial Statements . . . . . . . . . . . . .
F-1

Until , 1998 (25 days after the commencement of the
Offering), all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be
required to deliver a Prospectus. This is in addition to the obligation
of dealers to deliver a Prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.

[LOGO]

LADISH CO., INC.

3,350,000 Shares

Common Stock

($0.01 par value)

PROSPECTUS

Credit Suisse First Boston

BT Alex. Brown
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following are the estimated expenses in connection with the
distribution of the securities being registered:

Securities and Exchange Commission
Registration Fee . . . . . . . . . . . . . . $20,457
NASD Filing Fee . . . . . . . . . . . . . . . 7,435
Printing and Engraving Expenses . . . . . . .
Accounting Fees and Expenses . . . . . . . .
Attorneys' Fees and Expenses . . . . . . . .
Transfer Agent's and Registrar's Fees . . . .
Blue Sky Fees and Expenses (including
attorneys' fees) . . . . . . . . . . . . . .
Nasdaq Listing Fees . . . . . . . . . . . . . 36,629
Miscellaneous . . . . . . . . . . . . . . . .
----------
Total . . . . . . . . . . . . . . . . . . . $
==========

Item 14. Indemnification of Directors and Officers

(a) The Company is incorporated under the Wisconsin Business
Corporation Law ("WBCL"). Under Section 180.0851(1) of the WBCL, the
Company is required to indemnify a director or officer, to the extent that
such person is successful on the merits or otherwise in the defense of a
proceeding, for all reasonable expenses incurred in the proceeding if such
person was a party because he or she was a director or officer of the
Company. In all other cases, the Company is required by
Section 180.0851(2) to indemnify a director or officer against liability
incurred in a proceeding to which such a person was a party because he or
she was a director or officer of the Company, unless it is determined that
he or she breached or failed to perform a duty owed to the Company and the
breach or failure to perform constitutes:

(i) a willful failure to deal fairly with the Company or its
shareholders in connection with a matter in which the director or officer
has a material conflict of interest;

(ii) a violation of criminal law, unless the director or officer had
reasonable cause to believe his or her conduct was lawful or no reasonable
cause to believe his or her conduct was unlawful;

(iii) a transaction from which the director or officer derived an
improper personal profit; or

(iv) willful misconduct.

Section 180.0858(1) provides that, subject to certain limitations, the
mandatory indemnification provisions do not preclude any additional right
to indemnification or allowance of expenses that a director or officer may
have under the Company's articles of incorporation, by-laws, a written
agreement or a resolution of the Board of Directors or shareholders.

Section 180.0859 of the WBCL provides that it is the public policy of the
State of Wisconsin to require or permit indemnification, allowance of
expenses and insurance to the extent required to be permitted under
Sections 180.0850 to 180.0858 of the WBCL, for any liability incurred in
connection with a proceeding involving a federal or state statute, rule or
regulation regulating the offer, sale or purchase of securities.

Section 180.0828 of the WBCL provides that, with certain exceptions, a
director is not liable to a corporation, its shareholders, or any person
asserting rights on behalf of the corporation or its shareholders, for
damages, settlements, fees, fines, penalties or other monetary liabilities
arising from a breach of or failure to perform, any duty resulting solely
from his or her status as a director, unless the person asserting
liability proves that the breach or failure to perform constitutes any of
the four exceptions to mandatory indemnification under Section 180.0851(2)
referred to above.

Under Section 180.0833 of the WBCL, directors of the Company against whom
claims are asserted with respect to the declaration of improper dividends
or distributions to shareholders or certain other improper acts which they
approved are entitled to contribution from other directors who approved
such actions and from shareholders who knowingly accepted an improper
dividend or distribution, as provided therein.

(b) Article XIII of the By-Laws of the Registrant provides for
indemnification of directors, to the maximum extent allowed or mandated by
the laws of the State of Wisconsin and of officers and employees to the
maximum extent allowed or mandated by the laws of the State of Wisconsin
except that no indemnification shall be made in respect to any issue or
matter as to which such officer or employee shall have been adjudged to be
liable for negligence or misconduct in the performance of duty to the
corporation unless the court in which such action or suit is brought shall
determine that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such expenses.

(c) Reference is made to Section 7(c) of the Underwriting Agreement
(the form of which is included as Exhibit 1.1 to this Registration
Statement) for provisions regarding the indemnification under certain
circumstances of the Registrant, its directors and certain of its officers
by the Underwriters.

Item 15. Recent Sale of Unregistered Securities

On June 30, 1994 the Company issued 12,500 shares of Common Stock to ING
in exchange for ING causing INCC to issue a $2 million letter of credit in
favor of the Company. The letter of credit was canceled in June 1995 with
the establishment of the Credit Agreement. ING is an accredited,
institutional investor, affiliated with the issuer and not created for the
purpose of this investment, and the issuance was not part of a larger
financing plan. Such issuance was therefore exempt from registration
under the Securities Act pursuant to Section 4(2) thereof.

In December 1995, the Company issued $4.0 million of its Subordinated
Notes to ING and Grace. In February 1996, in a second private placement
of Subordinated Notes, the Company issued an additional $5.3 million of
Notes to ING, Grace and other shareholders. The Subordinated Notes were
accompanied by detachable ten-year warrants to purchase an aggregate of
7,775,722 shares of Common Stock at $1.20 per share. During 1996 and the
first nine months of 1997, the Company has issued another $1.6 million of
Subordinated Notes as interest upon the outstanding Subordinated Notes.
The Subordinated Notes and warrants were issued to a total of
approximately 25 persons, all of whom were accredited investors and
current shareholders of the Company. Appropriate steps were taken to
prevent retransfer of such securities without compliance with the
registration requirements of the Securities Act. Such issuances were
exempt from such requirements pursuant to Section 4(2) of the Securities
Act.

In addition, during 1996 and 1997 the Company has issued an aggregate of
166,790 shares upon exercise of outstanding warrants, and 110,833 shares
upon exercise of outstanding stock options granted in September 1996 to
officers of the Company at an exercise price of $18.00 per share. The
warrants were issued as provided in the preceding paragraph, pursuant to a
warrant agreement that included appropriate precautions to prevent
retransfer of the Common Stock received upon exercise, without compliance
with the registration requirements of the Securities Act. The stock
options were granted to a total of approximately 20 key management
employees of the Company. All the foregoing issuances were exempt from
the registration requirements of the Securities Act under Section 4(2)
thereof.

In October 1997, the Company issued 8,333 shares of Common Stock to a
former employee in partial settlement of certain litigation. At the time
of such issuance, the Common Stock was trading in the over-the-counter
market at approximately $18.00 per share. The recipient of such stock had
been an affiliate of the Company and was, based upon his salary from the
Company, an accredited investor. Thus the issuance of Common Stock was
exempt from the registration requirements of the Securities Act under
Section 4(2) thereof.

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits:

A list of the exhibits included as part of this Registration Statement is
set forth in the Exhibit Index which immediately precedes such exhibits
and is incorporated herein by reference.

(b) Financial Statement Schedules:

None.

Item 17. Undertakings

The undersigned Registrant hereby undertakes to provide to the
underwriters at the closing specified in the Underwriting Agreements
certificates in such denominations and registered in such names as
required by the Underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed
to be part of this registration statement as of the time it was declared
effective.

(2) For purposes of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Cudahy, State of Wisconsin, on February 3, 1998.

LADISH CO., INC.

By /s/ Wayne E. Larsen
Wayne E. Larsen, Vice President

Pursuant to the requirements of the Securities Act of 1933, as amended,
this amendment to the Registration Statement has been signed by the
following persons in the capacities indicated on February 3, 1998.

Name Title

/s/ Kerry L. Woody President (Principal
Kerry L. Woody Executive Officer),
Director

/s/ Wayne E. Larsen Vice President,
Wayne E. Larsen Law/Finance and
Secretary (Principal
Financial and
Accounting Officer),
Director

/s/ Gregory P. Flynn * Director
Gregory P. Flynn

/s/ Robert W. Sullivan * Director
Robert W. Sullivan

/s/ Fred W. Whitridge, Jr. * Director
Fred W. Whitridge, Jr.

*By: /s/ Wayne E. Larsen
Wayne E. Larsen
Attorney-in-Fact

<PAGE>

INDEX TO EXHIBITS

Sequentially
Numbered
Number Exhibit Page

1.1 Form of Underwriting Agreement. Filed
herewith. . . . . . . . . . . . . . . . . . .

3.1 Restated Articles of Incorporation of the
Registrant, as amended. Filed on December
23, 1997 as Exhibit 3.1 to this Registration
Statement. . . . . . . . . . . . . . . . . .

3.2 By-Laws of the Registrant. Filed on December
23, 1997 as Exhibit 3.2 to this Registration
Statement. . . . . . . . . . . . . . . . . .

4.1* Form of Common Stock Certificate . . . . . .

4.2 Amended and Restated Note and Warrant
Purchase Agreement dated February 22, 1996
among Ladish Co., Inc. and the Purchasers
named therein. Filed on December 23, 1997 as
Exhibit 4.2 to this Registration Statement. .

4.3 Amended and Restated Warrant Agreement dated
February 22, 1996 among Ladish Co., Inc. and
the purchasers named therein. Filed on
December 23, 1997 as Exhibit 4.3 to this
Registration Statement. . . . . . . . . . . .

4.4 Amended and Restated Registration Rights
Agreement dated February 22, 1996 among
Ladish Co., Inc. and certain note and warrant
purchasers. Filed on December 23, 1997 as
Exhibit 4.4 to this Registration Statement. .

5 Form of Opinion of Foley & Lardner. Filed on
December 23, 1997 as Exhibit 5 to this
Registration Statement. . . . . . . . . . . .

10.1 Credit Agreement dated June 30, 1995 among
Ladish Co., Inc. and General Electric Capital
Corporation, as amended. Filed on December
23, 1997 as Exhibit 10.1 to this Registration
Statement. . . . . . . . . . . . . . . . . .

10.2 Asset Purchase Agreement dated June 14, 1997
between Ladish Co., Inc. and Stowe Machine
Co., Inc. Filed herewith. . . . . . . . . .

10.3 Asset Purchase Agreement dated April 24, 1997
between Ladish Co., Inc. and Trinity Fitting
& Flange Group, Inc. Filed herewith. . . . .

10.4 Ladish Co., Inc. 1996 Long-Term Incentive
Plan. Filed on December 23, 1997 as Exhibit
10.4 to this Registration Statement. . . . .

10.5 Form of Employment Agreement between Ladish
Co., Inc. and certain of its executive
officers, together with a schedule of parties
thereto. Such agreements are materially
different only as to the signing officers,
the compensation of such officers and the
dates of execution. Filed herewith. . . . .

10.6 Amended Payment and Security Agreement dated
October 14, 1997 between Ladish Co., Inc. and
the Pension Benefit Guaranty Corporation.
Filed herewith. . . . . . . . . . . . . . . .

11 Statement re: Computation of Per Share
Earnings. Filed on December 23, 1997 as
Exhibit 11 to this Registration Statement. .

21 Subsidiaries of the Registrant. Filed on
December 23, 1997 as Exhibit 21 to this
Registration Statement. . . . . . . . . . . .

23.1 Consent of Arthur Andersen LLP. Filed
herewith. . . . . . . . . . . . . . . . . . .

23.2 Consent of Ernst & Young LLP. Filed
herewith. . . . . . . . . . . . . . . . . . .

23.3 Consent of Foley & Lardner (contained in
their Opinion filed
as Exhibit 5 to this Registration Statement)

24 Powers of Attorney (appearing on the
signature page hereof) . . . . . . . . . . .

27 Financial Data Schedule. Filed on December
23, 1997 as Exhibit 27 to this Registration
Statement. . . . . . . . . . . . . . . . . .

______________
*To be filed by amendment.

ST&B DRAFT 1/15/98

3,852,000 Shares

LADISH CO., INC.

Common Stock

UNDERWRITING AGREEMENT

February __, 1998

Credit Suisse First Boston Corporation
BT Alex. Brown Incorporated
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629

Dear Sirs:

1. Ladish Co., Inc., a Wisconsin corporation ("Company"), proposes
to issue and sell 2,336,000 shares of its Common Stock (the "Securities")
and the stockholders listed in Schedule A hereto (the "Selling
Stockholders") propose severally to sell an aggregate of 1,014,000
outstanding shares of the Securities (such 3,350,000 shares of Securities
being hereinafter referred to as the "Firm Securities"). Certain of the
Selling Stockholders also propose to sell to the Underwriters, at the
option of the Underwriters, an aggregate of not more than 502,500
additional outstanding shares of the Company's Securities, as set forth
below (such 502,500 additional shares being hereinafter referred to as the
"Optional Securities"). The Firm Securities and the Optional Securities
are herein collectively called the "Offered Securities". The Company and
the Selling Stockholders hereby agree with the several Underwriters named
in Schedule B hereto ("Underwriters") as follows:

2. Representations and Warranties of the Company and the Selling
Stockholders. (a) The Company represents and warrants to, and agrees
with, the several Underwriters that:

(i) A registration statement (No. 333-43011) relating to the
Offered Securities, including a form of prospectus, has been filed
with the Securities and Exchange Commission ("Commission") and either
(A) has been declared effective under the Securities Act of 1933
("Act") and is not proposed to be amended or (B) is proposed to be
amended by amendment or post-effective amendment. If such
registration statement (the "initial registration statement") has
been declared effective, either (A) an additional registration
statement (the "additional registration statement") relating to the
Offered Securities may have been filed with the Commission pursuant
to Rule 462(b) ("Rule 462(b)") under the Act and, if so filed, has
become effective upon filing pursuant to such Rule and the Offered
Securities all have been duly registered under the Act pursuant to
the initial registration statement and, if applicable, the additional
registration statement or (B) such an additional registration
statement is proposed to be filed with the Commission pursuant to
Rule 462(b) and will become effective upon filing pursuant to such
Rule and upon such filing the Offered Securities will all have been
duly registered under the Act pursuant to the initial registration
statement and such additional registration statement. If the Company
does not propose to amend the initial registration statement or if an
additional registration statement has been filed and the Company does
not propose to amend it, and if any post-effective amendment to
either such registration statement has been filed with the Commission
prior to the execution and delivery of this Agreement, the most
recent amendment (if any) to each such registration statement has
been declared effective by the Commission or has become effective
upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the Act or,
in the case of the additional registration statement, Rule 462(b).
For purposes of this Agreement, "Effective Time" with respect to the
initial registration statement or, if filed prior to the execution
and delivery of this Agreement, the additional registration statement
means (A) if the Company has advised the Representatives that it does
not propose to amend such registration statement, the date and time
as of which such registration statement, or the most recent post-
effective amendment thereto (if any) filed prior to the execution and
delivery of this Agreement, was declared effective by the Commission
or has become effective upon filing pursuant to Rule 462(c), or
(B) if the Company has advised the Representatives that it proposes
to file an amendment or post-effective amendment to such registration
statement, the date and time as of which such registration statement,
as amended by such amendment or post-effective amendment, as the case
may be, is declared effective by the Commission. If an additional
registration statement has not been filed prior to the execution and
delivery of this Agreement but the Company has advised the
Representatives that it proposes to file one, "Effective Time" with
respect to such additional registration statement means the date and
time as of which such registration statement is filed and becomes
effective pursuant to Rule 462(b). "Effective Date" with respect to
the initial registration statement or the additional registration
statement (if any) means the date of the Effective Time thereof. The
initial registration statement, as amended at its Effective Time,
including all information contained in the additional registration
statement (if any) and deemed to be a part of the initial
registration statement as of the Effective Time of the additional
registration statement pursuant to the General Instructions of the
Form on which it is filed and including all information (if any)
deemed to be a part of the initial registration statement as of its
Effective Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the
Act, is hereinafter referred to as the "Initial Registration
Statement". The additional registration statement, as amended at its
Effective Time, including the contents of the initial registration
statement incorporated by reference therein and including all
information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "Additional Registration
Statement". The Initial Registration Statement and the Additional
Registration Statement are hereinafter referred to collectively as
the "Registration Statements" and individually as a "Registration
Statement". The form of prospectus relating to the Offered
Securities, as first filed with the Commission pursuant to and in
accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no
such filing is required) as included in a Registration Statement, is
hereinafter referred to as the "Prospectus". No document has been or
will be prepared or distributed in reliance on Rule 434 under the
Act.

(ii) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement:
(A) on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all respects to the
requirements of the Act and the rules and regulations of the
Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (B) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement
conformed or will conform, in all respects to the requirements of the
Act and the Rules and Regulations and did not include, or will not
include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
and (C) on the date of this Agreement, the Initial Registration
Statement and, if the Effective Time of the Additional Registration
Statement is prior to the execution and delivery of this Agreement,
the Additional Registration Statement each conforms, and at the time
of filing of the Prospectus pursuant to Rule 424(b) or (if no such
filing is required) at the Effective Date of the Additional
Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform, in all
respects to the requirements of the Act and the Rules and
Regulations, and neither of such documents includes, or will include,
any untrue statement of a material fact or omits, or will omit, to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading. If the Effective Time of
the Initial Registration Statement is subsequent to the execution and
delivery of this Agreement: on the Effective Date of the Initial
Registration Statement, the Initial Registration Statement and the
Prospectus will conform in all respects to the requirements of the
Act and the Rules and Regulations, neither of such documents will
include any untrue statement of a material fact or will omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading, and no Additional Registration
Statement has been or will be filed. The two preceding sentences do
not apply to statements in or omissions from a Registration Statement
or the Prospectus based upon written information furnished to the
Company by any Underwriter through the Representatives specifically
for use therein, it being understood and agreed that the only such
information is that described as such in Section 7(c) hereof.

(iii) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the state of
Wisconsin, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
and the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business
requires such qualification.

(iv) Each subsidiary of the Company has been duly incorporated
and is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority
(corporate and other) to own its properties and conduct its business
as described in the Prospectus; and each subsidiary of the Company is
duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease
of property or the conduct of its business requires such
qualification; all of the issued and outstanding capital stock of
each subsidiary of the Company has been duly authorized and validly
issued and is fully paid and nonassessable (except as provided in
Wisconsin Statutes section 180.0622(2)(b) as interpreted); and the
capital stock of each subsidiary owned by the Company, directly or
through subsidiaries, is owned free from liens, encumbrances and
defects.

(v) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable (except as provided in
Wisconsin Statutes section 180.0622(2)(b) as interpreted) and conform
to the description thereof contained in the Prospectus; and the
stockholders of the Company have no preemptive rights with respect to
the Securities.

(vi) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or
any Underwriter for a brokerage commission, finder's fee or other
like payment in connection with this offering.

(vii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file
a registration statement under the Act with respect to any securities
of the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to a Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act.

(viii) The Securities have been approved for listing subject to
notice of issuance on the Nasdaq Stock Market's National Market.

(ix) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
to be obtained or made by the Company for the consummation of the
transactions contemplated by this Agreement in connection with the
sale of the Offered Securities, except such as have been obtained and
made under the Act and such as may be required under state securities
laws.

(x) The execution, delivery and performance of this Agreement,
and the consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any statute, any rule, regulation
or order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company or any subsidiary of
the Company or any of their properties, or any agreement or
instrument to which the Company or any such subsidiary is a party or
by which the Company or any such subsidiary is bound or to which any
of the properties of the Company or any such subsidiary is subject,
or the charter or by-laws of the Company or any such subsidiary.

(xi) This Agreement has been duly authorized, executed and
delivered by the Company.

(xii) Except as disclosed in the Prospectus, the Company and
its subsidiaries have good and marketable title to all real
properties and all other properties and assets owned by them, in each
case free from liens, encumbrances and defects that would materially
affect the value thereof or materially interfere with the use made or
to be made thereof by them; and except as disclosed in the
Prospectus, the Company and its subsidiaries hold any leased real or
personal property under valid and enforceable leases with no
exceptions that would materially interfere with the use made or to be
made thereof by them.

(xiii) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business now
operated by them and have not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit that, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have
a material adverse effect on the Company and its subsidiaries taken
as a whole.

(xiv) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent
that might have a material adverse effect on the Company and its
subsidiaries taken as a whole.

(xv) The Company and its subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks, trade names and
other rights to inventions, know-how, patents, copyrights,
confidential information and other intellectual property
(collectively, "intellectual property rights") necessary to conduct
the business now operated by them, or presently employed by them, and
have not received any notice of infringement of or conflict with
asserted rights of others with respect to any intellectual property
rights that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the Company and its subsidiaries taken as a whole.

(xvi) Except as disclosed in the Prospectus, neither the
Company nor any of its subsidiaries is in violation of any statute,
any rule, regulation, decision or order of any governmental agency or
body or any court, domestic or foreign, relating to the use, disposal
or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "environmental laws"),
owns or operates any real property contaminated with any substance
that is subject to any environmental laws, is liable for any off-site
disposal or contamination pursuant to any environmental laws, or is
subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in
the aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole; and the Company is not aware of any
pending investigation which might lead to such a claim.

(xvii) Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting the
Company, any of its subsidiaries or any of their respective
properties that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the condition (financial or other), business,
properties or results of operations of the Company and its
subsidiaries taken as a whole, or would materially and adversely
affect the ability of the Company to perform its obligations under
this Agreement, or which are otherwise material in the context of the
sale of the Offered Securities; and no such actions, suits or
proceedings are threatened or, to the Company's knowledge,
contemplated.

(xviii) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position of
the Company and its consolidated subsidiaries as of the dates shown
and their results of operations and cash flows for the periods shown,
and such financial statements have been prepared in conformity with
generally accepted accounting principles in the United States applied
on a consistent basis; the schedules included in each Registration
Statement present fairly the information required to be stated
therein; and the assumptions used in preparing the pro forma
financial statements included in each Registration Statement and the
Prospectus provide a reasonable basis for presenting the significant
effects directly attributable to the transactions or events described
therein, the related pro forma adjustments give appropriate effect to
those assumptions, and the pro forma columns therein reflect the
proper application of those adjustments to the corresponding
historical financial statement amounts.

(xix) Except as disclosed in the Prospectus, since the date of
the latest audited financial statements included in the Prospectus
there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the
condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole, and,
except as disclosed in or contemplated by the Prospectus, there has
been no dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital stock.

(xx) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of
the proceeds thereof as described in the Prospectus, will not be an
"investment company" as defined in the Investment Company Act of
1940.

(xxi) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes and the Company agrees to comply with such Section if prior
to the completion of the distribution of the Offered Securities it
commences doing such business.

(b) Each Selling Stockholder severally represents and warrants
to, and agrees with, the several Underwriters that:

(i) Such Selling Stockholder has and on each Closing Date
hereinafter mentioned will have valid and unencumbered title to the
Offered Securities to be delivered by such Selling Stockholder on
such Closing Date and full right, power and authority to enter into
this Agreement and to sell, assign, transfer and deliver the Offered
Securities to be delivered by such Selling Stockholder on such
Closing Date hereunder; and upon the delivery of and payment for the
Offered Securities on each Closing Date hereunder the several
Underwriters will acquire valid and unencumbered title to the Offered
Securities to be delivered by such Selling Stockholder on such
Closing Date.

(ii) The two following sentences apply only to the extent that
any statements in or omissions from a Registration Statement or the
Prospectus are based on written information furnished to the Company
by such Selling Stockholder specifically for use therein. If the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement: (A) on the Effective Date
of the Initial Registration Statement, the Initial Registration
Statement conformed in all respects to the requirements of the Act
and the Rules and Regulations and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (B) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement
conformed, or will conform, in all respects to the requirements of
the Act and the Rules and Regulations did not include, or will not
include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
and (C) on the date of this Agreement, the Initial Registration
Statement and, if the Effective Time of the Additional Registration
Statement is prior to the execution and delivery of this Agreement,
the Additional Registration Statement each conforms, and at the time
of filing of the Prospectus pursuant to Rule 424(b) or (if no such
filing is required) at the Effective Date of the Additional
Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform, in all
respects to the requirements of the Act and the Rules and
Regulations, and neither of such documents includes, or will include,
any untrue statement of a material fact or omits, or will omit, to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading. If the Effective Time of
the Initial Registration Statement is subsequent to the execution and
delivery of this Agreement: on the Effective Date of the Initial
Registration Statement, the Initial Registration Statement and the
Prospectus will conform in all respects to the requirements of the
Act and the Rules and Regulations, neither of such documents will
include any untrue statement of a material fact or will omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading.

(iii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between such Selling
Stockholder and any person that would give rise to a valid claim
against such Selling Stockholder or any Underwriter for a brokerage
commission, finder's fee or other like payment in connection with
this offering.

3. Purchase, Sale and Delivery of Offered Securities. On the basis
of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company and each
Selling Stockholder agree, severally and not jointly, to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Company and each Selling Stockholder, at a purchase
price of $ per share, that number of Firm Securities (rounded
up or down, as determined by Credit Suisse First Boston Corporation
("CSFBC") in its discretion, in order to avoid fractions) obtained by
multiplying 2,336,000 Firm Securities in the case of the Company and the
number of Firm Securities set forth opposite the name of such Selling
Stockholder in Schedule A hereto, in the case of a Selling Stockholder, in
each case by a fraction the numerator of which is the number of Firm
Securities set forth opposite the name of such Underwriter in Schedule B
hereto and the denominator of which is the total number of Firm
Securities.

Certificates in negotiable form for the Offered Securities to be sold
by the Selling Stockholders selling fewer than 750,000 Securities
hereunder have been placed in custody, for delivery under this Agreement,
under Custody Agreements made with Wayne E. Larsen, Esq., as custodian
("Custodian"). Each such Selling Stockholder agrees that the shares
represented by the certificates held in custody for such Selling
Stockholder under such Custody Agreements are subject to the interests of
the Underwriters hereunder, that the arrangements made by such Selling
Stockholder for such custody are to that extent irrevocable, and that the
obligations of such Selling Stockholder hereunder shall not be terminated
by operation of law, whether by the death of any such individual Selling
Stockholder or the occurrence of any other event, or in the case of a
trust, by the death of any trustee or trustees or the termination of such
trust. If any such individual Selling Stockholder or any such trustee or
trustees should die, or if any other such event should occur, or if any of
such trusts should terminate, before the delivery of the Offered
Securities hereunder, certificates for such Offered Securities shall be
delivered by the Custodian in accordance with the terms and conditions of
this Agreement as if such death or other event or termination had not
occurred, regardless of whether or not the Custodian shall have received
notice of such death or other event or termination.

The Company, the Custodian and the other Selling Stockholders not
party to the Custody Agreement will deliver the Firm Securities to the
Representatives for the accounts of the Underwriters, against payment of
the purchase price in Federal (same day) funds by official bank check or
checks or wire transfer to an account at a bank acceptable to CSFBC drawn
to the order of Ladish Co., Inc., in the case of the shares of Firm
Securities to be sold by the Company and to the Custodian, c/o Ladish Co.,
Inc., in the case of the shares of Firm Securities to be sold by those
Selling Stockholders party to a Custody Agreement and __________________
and ________________, in the case of the shares of Firm Securities to be
sold by the other Selling Stockholders, at the office of Simpson Thacher &
Bartlett, 425 Lexington Avenue, New York, NY, at 9:30 A.M., New York time,
on February __, 1998, or at such other time not later than seven full
business days thereafter as CSFBC and the Company determine, such time
being herein referred to as the "First Closing Date". The certificates
for the Firm Securities so to be delivered will be in definitive form, in
such denominations and registered in such names as CSFBC requests and will
be made available for checking and packaging at the above office of
Simpson Thacher & Bartlett at least 24 hours prior to the First Closing
Date.

In addition, upon written notice from CSFBC given to the Company and
the Selling Stockholders who have proposed to sell Optional Securities
from time to time not more than 30 days subsequent to the date of the
Prospectus, the Underwriters may purchase all or less than all of the
Optional Securities at the purchase price per Security to be paid for the
Firm Securities. Such Selling Stockholders agree, severally and not
jointly, to sell to the Underwriters the respective numbers of Optional
Securities obtained by multiplying the number of Optional Securities
specified in such notice by a fraction the numerator of which is the
number of shares set forth opposite the names of such Selling Stockholders
in Schedule A hereto under the caption "Number of Optional Securities to
be Sold" and the denominator of which is the total number of Optional
Securities (subject to adjustment by CSFBC to eliminate fractions). Such
Optional Securities shall be purchased from each such Selling Stockholder
for the account of each Underwriter in the same proportion as the number
of Firm Securities set forth opposite such Underwriter's name bears to the
total number of Firm Securities (subject to adjustment by CSFBC to
eliminate fractions) and may be purchased by the Underwriters only for the
purpose of covering over-allotments made in connection with the sale of
the Firm Securities. No Optional Securities shall be sold or delivered
unless the Firm Securities previously have been, or simultaneously are,
sold and delivered. The right to purchase the Optional Securities or any
portion thereof may be exercised from time to time and to the extent not
previously exercised may be surrendered and terminated at any time upon
notice by CSFBC to the Company and such Selling Stockholders.

Each time for the delivery of and payment for the Optional
Securities, being herein referred to as an "Optional Closing Date", which
may be the First Closing Date (the First Closing Date and each Optional
Closing Date, if any, being sometimes referred to as a "Closing Date"),
shall be determined by CSFBC but shall be not later than five full
business days (and, except if the Optional Closing Date is the First
Closing Date, not earlier than three business days) after written notice
of election to purchase Optional Securities is given. The Custodian and
the other Selling Stockholders, as the case may be, will deliver the
Optional Securities being purchased on each Optional Closing Date to the
Representatives for the accounts of the several Underwriters, against
payment of the purchase price therefor in Federal (same day) funds by
official bank check or checks or wire transfer to an account at a bank
acceptable to CSFBC drawn to the order of the Custodian, c/o Ladish Co.,
Inc., in the case of the Optional Securities to be sold by those Selling
Stockholders party to a Custody Agreement and _________, _____________ and
__________, in the case of the Optional Securities to be sold by the other
Selling Stockholders, at the office of Simpson Thacher & Bartlett, 425
Lexington Avenue, New York, NY. The certificates for the Optional
Securities being purchased on each Optional Closing Date will be in
definitive form, in such denominations and registered in such names as
CSFBC requests upon reasonable notice prior to such Optional Closing Date
and will be made available for checking and packaging at the above office
of Simpson Thacher & Bartlett at a reasonable time in advance of such
Optional Closing Date.

4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the
public as set forth in the Prospectus.

5. Certain Agreements of the Company and the Selling Stockholders.
The Company agrees with the several Underwriters and the Selling
Stockholders that:

(a) If the Effective Time of the Initial Registration Statement
is prior to the execution and delivery of this Agreement, the Company
will file the Prospectus with the Commission pursuant to and in
accordance with subparagraph (1) (or, if applicable and if consented
to by CSFBC, subparagraph (4)) of Rule 424(b) not later than the
earlier of (A) the second business day following the execution and
delivery of this Agreement or (B) the fifteenth business day after
the Effective Date of the Initial Registration Statement. The Company
will advise CSFBC promptly of any such filing pursuant to
Rule 424(b). If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement
and an additional registration statement is necessary to register a
portion of the Offered Securities under the Act but the Effective
Time thereof has not occurred as of such execution and delivery, the
Company will file the additional registration statement or, if filed,
will file a post-effective amendment thereto with the Commission
pursuant to and in accordance with Rule 462(b) on or prior to 10:00
P.M., New York time, on the date of this Agreement or, if earlier, on
or prior to the time the Prospectus is printed and distributed to any
Underwriter, or will make such filing at such later date as shall
have been consented to by CSFBC.

(b) The Company will advise CSFBC promptly of any proposal to
amend or supplement the initial or any additional registration
statement as filed or the related prospectus or the Initial
Registration Statement, the Additional Registration Statement (if
any) or the Prospectus and will not effect such amendment or
supplementation without CSFBC's consent; and the Company will also
advise CSFBC promptly of the effectiveness of each Registration
Statement (if its Effective Time is subsequent to the execution and
delivery of this Agreement) and of any amendment or supplementation
of a Registration Statement or the Prospectus and of the institution
by the Commission of any stop order proceedings in respect of a
Registration Statement and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.

(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection
with sales by any Underwriter or dealer, any event occurs as a result
of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company will promptly notify CSFBC of such event and will
promptly prepare and file with the Commission, at its own expense, an
amendment or supplement which will correct such statement or omission
or an amendment which will effect such compliance. Neither CSFBC's
consent to, nor the Underwriters' delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set
forth in Section 6.

(d) As soon as practicable, but not later than the Availability
Date (as defined below), the Company will make generally available to
its security holders an earnings statement covering a period of at
least 12 months beginning after the Effective Date of the Initial
Registration Statement (or, if later, the Effective Date of the
Additional Registration Statement) which will satisfy the provisions
of Section 11(a) of the Act. For the purpose of the preceding
sentence, "Availability Date" means the 45th day after the end of the
fourth fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the
last quarter of the Company's fiscal year, "Availability Date" means
the 90th day after the end of such fourth fiscal quarter.

(e) The Company will furnish to the Representatives copies of
each Registration Statement (three of which will be signed and will
include all exhibits), each related preliminary prospectus, and, so
long as a prospectus relating to the Offered Securities is required
to be delivered under the Act in connection with sales by any
Underwriter or dealer, the Prospectus and all amendments and
supplements to such documents, in each case in such quantities as
CSFBC requests. The Prospectus shall be so furnished on or prior to
3:00 P.M., New York time, on the business day following the later of
the execution and delivery of this Agreement or the Effective Time of
the Initial Registration Statement. All other such documents shall
be so furnished as soon as available. The Company will pay the
expenses of printing and distributing to the Underwriters all such
documents.

(f) The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions in
the United States and Canada as CSFBC designates and will continue
such qualifications in effect so long as required for the
distribution.

(g) During the period of five years hereafter, the Company will
furnish to the Representatives and, upon request, to each of the
other Underwriters, as soon as practicable after the end of each
fiscal year, a copy of its annual report to stockholders for such
year; and the Company will furnish to the Representatives (i) as soon
as available, a copy of each report and any definitive proxy
statement of the Company filed with the Commission under the
Securities Exchange Act of 1934 or mailed to stockholders, and
(ii) from time to time, such other information concerning the Company
as CSFBC may reasonably request.

(h) For a period of 180 days after the date of the initial
public offering of the Offered Securities, the Company will not
offer, sell, contract to sell, pledge, hypothecate, grant any option
to purchase or otherwise dispose of, directly or indirectly, or file
with the Commission a registration statement under the Act relating
to, any additional shares of its Securities or securities convertible
into or exchangeable or exercisable for any shares of its Securities,
or publicly disclose the intention to make any such offer, sale,
pledge, disposition or filing, without the prior written consent of
CSFBC, except issuances of Securities pursuant to the conversion or
exchange of convertible or exchangeable securities or the exercise of
warrants or options, in each case outstanding on the date hereof,
grants of employee stock options pursuant to the terms of a plan in
effect on the date hereof, issuances of Securities pursuant to the
exercise of such options or issuances of Securities pursuant to any
dividend reinvestment plan.

(i) The Company and each Selling Stockholder agree with the
several Underwriters that the Company will pay all expenses incident
to the performance of the obligations of the Company and such Selling
Stockholder, as the case may be, under this Agreement, for any filing
fees and other expenses (including fees and disbursements of counsel
to the Company and the fees and disbursements of one counsel to the
Selling Stockholders) in connection with qualification of the Offered
Securities for sale under the laws of such jurisdictions in the
United States and Canada as CSFBC designates and the printing of
memoranda relating thereto, for the filing fee incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the National Association of Securities
Dealers, Inc. of the Offered Securities, for any travel expenses of
the Company's officers and employees and any other expenses of the
Company in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities, and for expenses
incurred in distributing preliminary prospectuses and the Prospectus
(including any amendments and supplements thereto) to the
Underwriters, except that each Selling Stockholder will pay any
transfer taxes on the sale by the Selling Stockholders of the Offered
Securities to the Underwriters.

(j) Each Selling Stockholder agrees to deliver to CSFBC,
attention: Transactions Advisory Group on or prior to the First
Closing Date a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified
by Treasury Department regulations in lieu thereof).

(k) Each Selling Stockholder agrees that without the prior
written consent of CSFBC, such Selling Stockholder will not offer,
sell, contract to sell, pledge, hypothecate, grant any option to
purchase or otherwise dispose of, directly or indirectly, any
additional shares of the Securities of the Company or securities
convertible into or exchangeable or exercisable for any shares of
Securities (including, without limitation, securities of the Company
which may be deemed to be beneficially owned by such Selling
Stockholder in accordance with the rules and regulations of the
Securities and Exchange Commission and securities which may be issued
upon exercise of a stock option or warrant), or publicly disclose the
intention to make any such offer, sale, pledge, hypothecation, grant
or disposal, for a period of 180 days after the date of the initial
public offering of the Offered Securities.

6. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm
Securities on the First Closing Date and the Optional Securities to be
purchased on each Optional Closing Date will be subject to the accuracy of
the representations and warranties on the part of the Company and the
Selling Stockholders herein, to the accuracy of the statements of Company
officers made pursuant to the provisions hereof, to the performance by the
Company and the Selling Stockholders of their obligations hereunder and to
the following additional conditions precedent:

(a) The Representatives shall have received a letter, dated the
date of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on or prior to the date of this Agreement or, if
the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to
the registration statement to be filed shortly prior to such
Effective Time), of Arthur Andersen LLP confirming that they are
independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating to
the effect that:

(i) in their opinion the financial statements examined
by them and included in the Registration Statements comply as to
form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;

[(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on the unaudited financial statements included in
the Registration Statements;]

(iii) on the basis of [the review referred to in
clause (ii) above,] a reading of the latest available interim
financial statements of the Company, inquiries of officials of
the Company who have responsibility for financial and accounting
matters and other specified procedures, nothing came to their
attention that caused them to believe that:

[(A) the unaudited financial statements included in
the Registration Statements do not comply as to form in all
material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations or any material modifications should be made to
such unaudited financial statements for them to be in
conformity with generally accepted accounting principles;]

[(B) the unaudited consolidated net sales, operating
income, net income and net income per share amounts from
continuing operations for the nine month periods ended
September 30, 1996 and September 30, 1997 included in the
Prospectus do not agree with the amounts set forth in the
unaudited consolidated financial statements for those same
periods or were not determined on a basis substantially
consistent with that of the corresponding amounts in the
audited statements of income;]

(C) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date
not more than five business days prior to the date of this
Agreement, there was any change in the common stock or any
increase in short-term indebtedness or long-term debt of
the Company and its consolidated subsidiaries or, at the
date of the latest available balance sheet read by such
accountants, there was any decrease in consolidated net
current assets or net assets, as compared with amounts
shown on the latest balance sheet included in the
Prospectus; or

(D) for the period from the closing date of the latest
statements of operations included in the Prospectus to the
closing date of the latest available statement read by such
accountants there were any decreases, as compared with the
corresponding period of the previous year, in consolidated
net sales or operating income in the total or per share
amounts of consolidated income or net income from
continuing operations;

except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter; and

(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the
general accounting records of the Company and its subsidiaries
subject to the internal controls of the Company's accounting
system or are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a reading
of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement
with such results, except as otherwise specified in such letter.

For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statements is subsequent to the execution and
delivery of this Agreement, "Registration Statements" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to
its Effective Time, (ii) if the Effective Time of the Initial
Registration Statements is prior to the execution and delivery of
this Agreement but the Effective Time of the Additional Registration
Statement is subsequent to such execution and delivery, "Registration
Statements" shall mean the Initial Registration Statement and the
additional registration statement as proposed to be filed or as
proposed to be amended by the post-effective amendment to be filed
shortly prior to its Effective Time, and (iii) "Prospectus" shall
mean the prospectus included in the Registration Statements.

(b) If the Effective Time of the Initial Registration Statement
is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 P.M.,
New York time, on the date of this Agreement or such later date as
shall have been consented to by CSFBC. If the Effective Time of the
Additional Registration Statement (if any) is not prior to the
execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date
of this Agreement or, if earlier, the time the Prospectus is printed
and distributed to any Underwriter, or shall have occurred at such
later date as shall have been consented to by CSFBC. If the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement, the Prospectus shall have
been filed with the Commission in accordance with the Rules and
Regulations and Section 5(a) of this Agreement. Prior to such Closing
Date, no stop order suspending the effectiveness of a Registration
Statement shall have been issued and no proceedings for that purpose
shall have been instituted or, to the knowledge of any Selling
Stockholder, the Company or the Representatives, shall be
contemplated by the Commission.

(c) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development or
event involving a prospective change, in the condition (financial or
other), business, properties or results of operations of the Company
or its subsidiaries which, in the judgment of a majority in interest
of the Underwriters including the Representatives, is material and
adverse and makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
Offered Securities; (ii) any downgrading in the rating of any debt
securities or preferred stock of the Company by any "nationally
recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act), or any public announcement that any
such organization has under surveillance or review its rating of any
debt securities or preferred stock of the Company (other than an
announcement with positive implications of a possible upgrading, and
no implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the
New York Stock Exchange, or any setting of minimum prices for trading
on such exchange, or any suspension of trading of any securities of
the Company on any exchange or in the over-the-counter market;
(iv) any banking moratorium declared by U.S. Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities
in which the United States is involved, any declaration of war by
Congress or any other substantial national or international calamity
or emergency if, in the judgment of a majority in interest of the
Underwriters including the Representatives, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities.

(d) The Representatives shall have received an opinion, dated
such Closing Date, of Foley & Lardner, counsel for the Company, and
Wayne E. Larsen, Esq., General Counsel of the Company (which opinions
may be divided in any manner satisfactory to counsel to the
Representatives), to the effect that:

(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Wisconsin, with corporate power and authority to own
its properties and conduct its business as described in the
Prospectus; and the Company is duly qualified to do business as
a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification; each of the
subsidiaries of the Company has been duly incorporated or
organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation,
and each such subsidiary has full corporate power and authority
to conduct its business as described in the Registration
Statement and the Prospectus;

(ii) The Company has an authorized capitalization as set
forth in the Registration Statement and the Prospectus and all
of the issued shares of capital stock of each such subsidiary
have been duly and validly authorized and issued, are fully paid
and nonassessable (except as provided in Wisconsin Statutes
section 180.0622(2)(b) as interpreted), and (except for
directors' qualifying shares) all such shares are owned of
record by the Company and/or a subsidiary of the Company, free
and clear of all liens, encumbrances, equities or claims;

(iii) The Offered Securities delivered on such Closing
Date and all other outstanding shares of the Common Stock of the
Company have been duly authorized and validly issued, are fully
paid and nonassessable (except as provided in Wisconsin Statutes
section 180.0622(2)(b) as interpreted) and conform to the
description thereof contained in the Prospectus; and the
stockholders of the Company have no preemptive rights with
respect to the Securities;

(iv) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings known to such counsel
between the Company and any person granting such person the
right to require the Company to file a registration statement
under the Act with respect to any securities of the Company
owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to
the Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the
Company under the Act;

(v) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application
of the proceeds thereof as described in the Prospectus, will not
be an "investment company" as defined in the Investment Company
Act of 1940.

(vi) To such counsel's knowledge, neither the Company nor
any of its subsidiaries (A) is in violation of its charter or
by-laws, (B) is in default, and no event has occurred, which,
with notice or lapse of time or both, would constitute a
default, in the due performance or observance of any term,
covenant or condition contained in any agreement or instrument
to which it is a party or by which it is bound or to which any
of its properties or assets is subject or (C) is in violation of
any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject or
has failed to obtain any license, permit, certificate, franchise
or other governmental authorization or permit necessary to the
ownership of its property or to the conduct of its business
except, in the case of clauses (B) and (C), for those defaults,
violations or failures which, either individually or in the
aggregate, would not be reasonably likely to have a material
adverse effect on the Company and its subsidiaries taken as a
whole.

(vii) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is
required to be obtained or made by the Company for the
consummation of the transactions contemplated by this Agreement
in connection with the sale of the Offered Securities, except
such as have been obtained and made under the Act and such as
may be required under state securities laws;

(viii) The execution, delivery and performance of this
Agreement and the consummation of the transactions herein or
therein contemplated will not result in a breach or violation of
any of the terms and provisions of, or constitute a default
under, any statute, any rule, regulation or order of any
governmental agency or body or any court having jurisdiction
over the Company or any subsidiary of the Company or any of
their properties, or any agreement or instrument to which the
Company or any such subsidiary is a party or by which the
Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject, or
the charter or by-laws of the Company or any such subsidiary;

(ix) To the best of such counsel's knowledge and other
than as set forth in the Registration Statement and the
Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a
party or of which any property or asset of the Company or any of
its subsidiaries is the subject which, if determined adversely
to the Company or any of its subsidiaries, might be reasonably
likely to have a material adverse effect on the condition
(financial or otherwise), business, properties or results of
operations of the Company and its subsidiaries taken as a whole
(a "Material Adverse Effect"); and, to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others;

(x) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property owned by
them, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Registration
Statement and the Prospectus or such as do not materially affect
the value of such property and do not materially interfere with
the use made and proposed to be made of such property by the
Company and its subsidiaries; and all real property and
buildings held under lease by the Company and its subsidiaries
are held by them under valid, subsisting and enforceable leases,
with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries;

(xi) To such counsel's knowledge and other than as set
forth in the Registration Statement and the Prospectus, (A) the
Company possesses such certificates, authorizations or permits
issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct the business now
operated by it, except where the failure to possess such
certificates, authorizations or permits would not be reasonably
expected to have a Material Adverse Effect, and (B) the Company
has not received any notice of proceedings relating to the
revocation or modification of any such certificate,
authorization or permit which, singularly or in the aggregate,
if the subject of an unfavorable decision, ruling, or finding,
would be reasonably expected to have such a Material Adverse
Effect;

(xii) To such counsel's knowledge and other than as set
forth in the Registration Statement and the Prospectus, the
Company and each of its subsidiaries own or possess adequate
rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service mark registrations, copyrights and licenses necessary
for the conduct of their respective businesses and have no
reason to believe that the conduct of their respective
businesses will conflict with, and have not received any notice
of any claim of conflict with, any such rights of others;

(xiii) The Initial Registration Statement was declared
effective under the Act as of the date and time specified in
such opinion, the Additional Registration Statement (if any) was
filed and became effective under the Act as of the date and time
(if determinable) specified in such opinion, the Prospectus
either was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the
date specified therein or was included in the Initial
Registration Statement or the Additional Registration Statement
(as the case may be), and, to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of a
Registration Statement or any part thereof has been issued and
no proceedings for that purpose have been instituted or are
pending or contemplated under the Act, and each Registration
Statement and the Prospectus, and each amendment or supplement
thereto, as of their respective effective or issue dates,
complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations; such
counsel have no reason to believe that any part of a
Registration Statement or any amendment thereto, as of its
effective date or as of such Closing Date, contained any untrue
statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading; or that the Prospectus or any
amendment or supplement thereto, as of its issue date or as of
such Closing Date, contained or contains any untrue statement of
a material fact or omitted or omits to state any material fact
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
the descriptions in the Registration Statements and Prospectus
of statutes, legal and governmental proceedings and contracts
and other documents are accurate and fairly present the
information required to be shown; and such counsel do not know
of any legal or governmental proceedings required to be
described in a Registration Statement or the Prospectus which
are not described as required or of any contracts or documents
of a character required to be described in a Registration
Statement or the Prospectus or to be filed as exhibits to a
Registration Statement which are not described and filed as
required; it being understood that such counsel need express no
opinion as to the financial statements or other financial data
contained in the Registration Statements or the Prospectus;

(xiv) This Agreement has been duly authorized, executed and
delivered by the Company; and

(xv) Assuming that each Power of Attorney and each Custody
Agreement has been duly authorized, executed and delivered by
the applicable Selling Stockholder, an Attorney-in-Fact and the
Custodian, each such Power of Attorney and Custody Agreement
constitutes a valid and legally binding obligation of such
Selling Stockholder enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equitable principles.

(e) The Representatives shall have received an executed copy of
the opinion contemplated by the Power of Attorney executed and
delivered by or on behalf of each Selling Stockholder party to the
Custody Agreement and an opinion, dated such Closing Date, of Mayer,
Brown & Platt and ______________, counsel for the other Selling
Stockholders, to the effect that:

(i) Such Selling Stockholder had valid and unencumbered
title to the Offered Securities delivered by such Selling
Stockholder on such Closing Date and had full right, power and
authority to sell, assign, transfer and deliver the Offered
Securities delivered by such Selling Stockholder on such Closing
Date hereunder; and the several Underwriters have acquired valid
and unencumbered title to the Offered Securities purchased by
them from the Selling Stockholders on such Closing Date
hereunder;

(ii) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is
required to be obtained or made by such Selling Stockholder for
the consummation of the transactions contemplated by this
Agreement in connection with the sale of the Offered Securities
sold by such Selling Stockholder, except such as have been
obtained and made under the Act and such as may be required
under state securities laws;

(iii) The execution, delivery and performance of this
Agreement and the consummation of the transactions therein and
herein contemplated will not result in a breach or violation of
any of the terms and provisions of, or constitute a default
under, any statute, any rule, regulation or order of any
governmental agency or body or any court having jurisdiction
over such Selling Stockholder or any of its properties or any
agreement or instrument to which such Selling Stockholder is a
party or by which such Selling Stockholder is bound or to which
any of the properties of such Selling Stockholder is subject, or
the charter or by-laws of such Selling Stockholder which is a
corporation; and

(iv) This Agreement has been duly authorized, executed and
delivered by such Selling Stockholder.

(f) The Representatives shall have received from Simpson
Thacher & Bartlett, counsel for the Underwriters, such opinion or
opinions, dated such Closing Date, with respect to the incorporation
of the Company, the validity of the Offered Securities delivered on
such Closing Date, the Registration Statements, the Prospectus and
other related matters as the Representatives may require, and the
Selling Stockholders and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling
them to pass upon such matters. In rendering such opinion, Simpson
Thacher & Bartlett may rely as to the incorporation of the Company
and all other matters governed by Wisconsin law upon the opinion
of Foley & Lardner referred to above.

(g) The Representatives shall have received a certificate,
dated such Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the Company in which
such officers, to the best of their knowledge after reasonable
investigation, shall state that: the representations and warranties
of the Company in this Agreement are true and correct; the Company
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to such
Closing Date; no stop order suspending the effectiveness of any
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are contemplated by the Commission;
the Additional Registration Statement (if any) satisfying the
requirements of subparagraphs (1) and (3) of Rule 462(b) was filed
pursuant to Rule 462(b), including payment of the applicable filing
fee in accordance with Rule 111(a) or (b) under the Act, prior to the
time the Prospectus was printed and distributed to any Underwriter;
and, subsequent to the date of the most recent financial statements
in the Prospectus, there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the condition (financial or other), business, properties or
results of operations of the Company and its subsidiaries taken as a
whole except as set forth in or contemplated by the Prospectus or as
described in such certificate.

(h) The Representatives shall have received a letter, dated
such Closing Date, of Arthur Andersen LLP which meets the
requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not more
than three business days prior to such Closing Date for the purposes
of this subsection.

The Selling Stockholders and the Company will furnish the Representatives
with such conformed copies of such opinions, certificates, letters and
documents as the Representatives reasonably request. CSFBC may in its
sole discretion waive on behalf of the Underwriters compliance with any
conditions to the obligations of the Underwriters hereunder, whether in
respect of an Optional Closing Date or otherwise.

7. Indemnification and Contribution. (a) The Company will
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement, the Prospectus,
or any amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter or any Selling Stockholder (as applicable)
through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in subsection
(c) below.

(b) The Selling Stockholders, severally and not jointly, will
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement, the Prospectus,
or any amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case only
to the extent that the untrue statement or alleged untrue statement or the
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Company or the Underwriters by
such Selling Stockholder expressly for use therein, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by
such Underwriter in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred;
provided that the liability of each Selling Stockholder under the
foregoing indemnity agreement shall be limited to an amount equal to the
initial public offering price of the Securities sold by such Selling
Stockholder, less the underwriting discount as set forth on the cover page
of the Prospectus.

(c) Each Underwriter will severally and not jointly indemnify and
hold harmless the Company and each Selling Stockholder against any losses,
claims, damages or liabilities to which the Company or such Selling
Stockholder may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives specifically for use therein, and will reimburse any legal
or other expenses reasonably incurred by the Company and each Selling
Stockholder in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the following information in the Prospectus
furnished on behalf of each Underwriter: the last paragraph at the bottom
of the cover page concerning the terms of the offering by the
Underwriters, the legend concerning over-allotments, stabilizing and
passive market making on the inside front cover page and the concession,
reallowance figures appearing in the fourth paragraph under the caption
"Underwriting" and the fifth and ninth paragraphs under such caption.

(d) Promptly after receipt by an indemnified party under this
Section or Section 9 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under subsection (a), (b) or (c) above or
Section 9, notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than
under subsection (a), (b) or (c) above or Section 9. In case any such
action is brought against any indemnified party and it notifies an
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified
party under this Section or Section 9, as the case may be, for any legal
or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release
of such indemnified party from all liability on any claims that are the
subject matter of such action.

(e) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a), (b) or (c) above (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other from the
offering of the Securities or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company and
the Selling Stockholders bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Selling Stockholders or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by
an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (e) shall
be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any
action or claim which is the subject of this subsection (e).
Notwithstanding the provisions of this subsection (e), no Underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. The liability of each Selling Stockholder for contribution
hereunder shall be limited to an aggregate amount equal to the initial
public offering price of the Securities sold by such Selling Stockholder,
less the underwriting discount, as set forth on the front cover page of
the Prospectus. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations in this subsection (e) to contribute are
several in proportion to their respective underwriting obligations and not
joint.

(f) The obligations of the Company and the Selling Stockholders
under this Section or Section 9 shall be in addition to any liability
which the Company and the Selling Stockholders may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any,
who controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section shall be in addition to
any liability which the respective Underwriters may otherwise have and
shall extend, upon the same terms and conditions, to each director of the
Company, to each officer of the Company who has signed a Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Act.

8. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Offered Securities hereunder on
either the First or any Optional Closing Date and the aggregate number of
shares of Offered Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the
total number of shares of Offered Securities that the Underwriters are
obligated to purchase on such Closing Date, CSFBC may make arrangements
satisfactory to the Company and the Selling Stockholders for the purchase
of such Offered Securities by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date,
the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the
Offered Securities that such defaulting Underwriters agreed but failed to
purchase on such Closing Date. If any Underwriter or Underwriters so
default and the aggregate number of shares of Offered Securities with
respect to which such default or defaults occur exceeds 10% of the total
number of shares of Offered Securities that the Underwriters are obligated
to purchase on such Closing Date and arrangements satisfactory to CSFBC,
the Company and the Selling Stockholders for the purchase of such Offered
Securities by other persons are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of
any non-defaulting Underwriter, the Company or the Selling Stockholders,
except as provided in Section 9 (provided that if such default occurs with
respect to Optional Securities after the First Closing Date, this
Agreement will not terminate as to the Firm Securities or any Optional
Securities purchased prior to such termination). As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.

9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Selling Stockholders, of the Company or its officers and
of the several Underwriters set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on
behalf of any Underwriter, any Selling Stockholder, the Company or any of
their respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Offered
Securities. If this Agreement is terminated pursuant to Section 8 or if
for any reason the purchase of the Offered Securities by the Underwriters
is not consummated, the Company and the Selling Stockholders shall remain
responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 and the respective obligations of the Company, the Selling
Stockholders, and the Underwriters pursuant to Section 7 shall remain in
effect, and if any Offered Securities have been purchased hereunder the
representations and warranties in Section 2 and all obligations under
Section 5 shall also remain in effect. If the purchase of the Offered
Securities by the Underwriters is not consummated for any reason other
than solely because of the termination of this Agreement pursuant to
Section 8 or the occurrence of any event specified in clause (iii), (iv)
or (v) of Section 6(c), the Company and the Selling Stockholders will,
severally, reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them
in connection with the offering of the Offered Securities.

10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telecopied and
confirmed to the Representatives, c/o Credit Suisse First Boston
Corporation, Eleven Madison Avenue, New York, N.Y. 10010-3629,
Attention: Investment Banking Department Transactions Advisory Group,
or, if sent to the Company, will be mailed, delivered or telecopied and
confirmed to it at Ladish Co., Inc., 5481 South Packard Avenue, Cudahy, WI
53110, Attention: Wayne E. Larsen, or, if sent to the Selling Stockholders
party to the Custody Agreement or any of them, will be mailed, delivered
or telecopied and confirmed to the address set forth in each Custody
Agreement or, if sent to the other Selling Stockholders, will be mailed or
delivered or telecopied and confirmed to the address previously supplied
to the Company; provided, however, that any notice to an Underwriter
pursuant to Section 7 will be mailed, delivered or telecopied and
confirmed to such Underwriter.

11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective personal
representatives and successors and the officers and directors and
controlling persons referred to in Section 7, and no other person will
have any right or obligation hereunder.

12. Representation. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this
Agreement, and any action under this Agreement taken by the
Representatives jointly or by CSFBC will be binding upon all the
Underwriters. The Attorneys-in-Fact under the Power of Attorney will act
for the Selling Stockholders party to the Custody Agreement in connection
with such transactions, and any action under or in respect of this
Agreement taken by such Attorneys-in-Fact will be binding upon those
Selling Stockholders party to the Custody Agreement.

13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same Agreement.

14. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without
regard to principles of conflicts of laws.

The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New
York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.

If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company one
of the counterparts hereof, whereupon it will become a binding agreement
among the Selling Stockholders, the Company and the several Underwriters
in accordance with its terms.

Very truly yours,

Ladish Co., Inc.

By.........................................

[ING Equity Partners]

[INCC]

............................................
[Names of Selling Stockholders party to
Custody Agreement]

By.........................................
Attorney-in-Fact

The foregoing Underwriting Agreement is hereby confirmed and
accepted as of the date first above written.

Credit Suisse First Boston Corporation

BT Alex. Brown Incorporated

Acting on behalf of themselves and as the
Representatives of the several Underwriters.

By Credit Suisse First Boston Corporation

By.................................................

<PAGE>

SCHEDULE A

Number of Number of
Firm Optional
Securities to Securities
Selling Stockholder be Sold to be Sold

Total............................

<PAGE>

SCHEDULE B

Number of
Firm Securities
Underwriter to be Purchased
Credit Suisse First Boston Corporation . . . .
BT Alex. Brown Incorporated . . . . . . . . .

Total . . . . . . . . . . . . .

ASSET PURCHASE AGREEMENT

LADISH CO., INC.
Buyer

STOWE MACHINE CO., INC.
Company

June 14, 1997

ASSET PURCHASE AGREEMENT

TABLE OF CONTENTS

1. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . 1
1.1. Assets to be Transferred . . . . . . . . . . . . . . . 1
1.2. Excluded Assets . . . . . . . . . . . . . . . . . . . . 3

2. ASSUMPTION OF LIABILITIES . . . . . . . . . . . . . . . . . . 4
2.1. Liabilities to be Assumed . . . . . . . . . . . . . . . 4
2.2. Liabilities Not to be Assumed . . . . . . . . . . . . . 5

3. PURCHASE PRICE - PAYMENT . . . . . . . . . . . . . . . . . . . 7
3.1. Purchase Price . . . . . . . . . . . . . . . . . . . . 7
3.2. Payment of Purchase Price . . . . . . . . . . . . . . . 7
3.3. Determination of Net Working Capital . . . . . . . . . 9
3.4. Prorations . . . . . . . . . . . . . . . . . . . . . . 11
3.5. Other Payments and Adjustments . . . . . . . . . . . . 12
3.6. Intentionally Left Blank . . . . . . . . . . . . . . . 13

4. REPRESENTATIONS AND WARRANTIES OF COMPANY AND SHAREHOLDERS . . 13
4.1. Corporate . . . . . . . . . . . . . . . . . . . . . . . 13
4.2. Authority . . . . . . . . . . . . . . . . . . . . . . . 14
4.3. No Violation . . . . . . . . . . . . . . . . . . . . . 14
4.4. Financial Statements . . . . . . . . . . . . . . . . . 14
4.5. Tax Matters . . . . . . . . . . . . . . . . . . . . . . 15
4.6. Accounts Receivable . . . . . . . . . . . . . . . . . . 16
4.7. Inventory . . . . . . . . . . . . . . . . . . . . . . . 16
4.8. Absence of Certain Changes . . . . . . . . . . . . . . 17
4.9. Absence of Undisclosed Liabilities . . . . . . . . . . 18
4.10. No Litigation . . . . . . . . . . . . . . . . . . . . . 18
4.11. Compliance With Laws and Orders . . . . . . . . . . . . 18
4.12. Title to and Condition of Properties . . . . . . . . . 20
4.13. Insurance . . . . . . . . . . . . . . . . . . . . . . . 22
4.14. Contracts and Commitments . . . . . . . . . . . . . . . 23
4.15. Labor Matters . . . . . . . . . . . . . . . . . . . . . 24
4.16. Employee Benefit Plans . . . . . . . . . . . . . . . . 25
4.17. Employment Compensation . . . . . . . . . . . . . . . . 29
4.18. Trade Rights . . . . . . . . . . . . . . . . . . . . . 29
4.19. Major Customers and Suppliers . . . . . . . . . . . . . 29
4.20. Product Warranty and Product Liability . . . . . . . . 30
4.21. Affiliates' Relationships to Company . . . . . . . . . 31
4.22. Shareholder List . . . . . . . . . . . . . . . . . . . 31
4.23. Assets Necessary to Business . . . . . . . . . . . . . 31
4.24. No Brokers or Finders . . . . . . . . . . . . . . . . . 31
4.25. Disclosure . . . . . . . . . . . . . . . . . . . . . . 31

5. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . 32
5.1. Corporate . . . . . . . . . . . . . . . . . . . . . . . 32
5.2. Authority . . . . . . . . . . . . . . . . . . . . . . . 32
5.3. No Brokers or Finders . . . . . . . . . . . . . . . . . 32
5.4. Disclosure . . . . . . . . . . . . . . . . . . . . . . 32
5.5. Financial Statements . . . . . . . . . . . . . . . . . 32

6. EMPLOYEES - EMPLOYEE BENEFITS . . . . . . . . . . . . . . . . 33
6.1. Affected Employees . . . . . . . . . . . . . . . . . . 33
6.2. Retained Responsibilities . . . . . . . . . . . . . . . 33
6.3. Payroll Tax . . . . . . . . . . . . . . . . . . . . . . 33
6.4. Termination Benefits . . . . . . . . . . . . . . . . . 33
6.5. Employee Benefit Plans . . . . . . . . . . . . . . . . 33

7. OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . 35
7.1. Title Insurance . . . . . . . . . . . . . . . . . . . . 35
7.2. Surveys . . . . . . . . . . . . . . . . . . . . . . . . 35
7.3. Environmental Audits . . . . . . . . . . . . . . . . . 35
7.4. Escrow Agreement . . . . . . . . . . . . . . . . . . . 35
7.5. Consulting and Noncompetition Agreements . . . . . . . 35
7.6. Noncompetition . . . . . . . . . . . . . . . . . . . . 36
7.7. Confidential Information . . . . . . . . . . . . . . . 37
7.8. Intentionally Left Blank . . . . . . . . . . . . . . . 37
7.9. Intentionally Left Blank . . . . . . . . . . . . . . . 37
7.10. Intentionally Left Blank . . . . . . . . . . . . . . . 37
7.11. Use of Company's Name . . . . . . . . . . . . . . . . . 37
7.12. Sales Tax Matters . . . . . . . . . . . . . . . . . . . 37
7.13. Unemployment Compensation . . . . . . . . . . . . . . . 38

8. FURTHER COVENANTS OF COMPANY AND SHAREHOLDERS . . . . . . . . 38
8.1. Access to Information and Records . . . . . . . . . . . 38
8.2. Intentionally Left Blank . . . . . . . . . . . . . . . 38
8.3. Conduct of Business Pending the Closing . . . . . . . . 38
8.4. Change of Corporate Name . . . . . . . . . . . . . . . 39
8.5. Consents . . . . . . . . . . . . . . . . . . . . . . . 39
8.6. Other Action . . . . . . . . . . . . . . . . . . . . . 40
8.7. Disclosure . . . . . . . . . . . . . . . . . . . . . . 40

9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS . . . . . . . . . 40
9.1. Representations and Warranties True on the Closing
Date . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.2. Compliance With Agreement . . . . . . . . . . . . . . . 40
9.3. Absence of Litigation . . . . . . . . . . . . . . . . . 40
9.4. Consents and Approvals . . . . . . . . . . . . . . . . 40
9.5. Title Insurance . . . . . . . . . . . . . . . . . . . . 41
9.6. Estoppel Certificates . . . . . . . . . . . . . . . . . 41
9.7. Intentionally Left Blank . . . . . . . . . . . . . . . 41
9.8. Section 1445 Affidavit . . . . . . . . . . . . . . . . 41
9.9. Environmental Audit . . . . . . . . . . . . . . . . . . 41

10. CONDITIONS PRECEDENT TO COMPANY'S OBLIGATIONS . . . . . . . . 41
10.1. Representations and Warranties True on the Closing
Date . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.2. Compliance With Agreement . . . . . . . . . . . . . . . 42
10.3. Absence of Litigation . . . . . . . . . . . . . . . . . 42

11. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . 42
11.1. By Company and Shareholders . . . . . . . . . . . . . . 42
11.2. By Buyer . . . . . . . . . . . . . . . . . . . . . . . 43
11.3. Indemnification of Third-Party Claims . . . . . . . . . 43
11.4. Payment . . . . . . . . . . . . . . . . . . . . . . . . 44
11.5. Indemnification for Environmental Matters . . . . . . . 45
11.6. Limitations on Indemnification . . . . . . . . . . . . 45
11.7. No Waiver . . . . . . . . . . . . . . . . . . . . . . . 46

12. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
12.1. Documents to be Delivered by Company and
Shareholders . . . . . . . . . . . . . . . . . . . . . . 46
12.2. Documents to be Delivered by Buyer . . . . . . . . . . 47

13. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . 48
13.1. Right of Termination Without Breach . . . . . . . . . . 48
13.2. Termination for Breach . . . . . . . . . . . . . . . . 49

14. INTENTIONALLY LEFT BLANK . . . . . . . . . . . . . . . . . . . 50

15. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 50
15.1. Disclosure Schedule . . . . . . . . . . . . . . . . . . 50
15.2. Further Assurance . . . . . . . . . . . . . . . . . . . 50
15.3. Disclosures and Announcements . . . . . . . . . . . . . 50
15.4. Assignment; Parties in Interest . . . . . . . . . . . . 50
15.5. Equitable Relief . . . . . . . . . . . . . . . . . . . 50
15.6. Law Governing Agreement . . . . . . . . . . . . . . . . 51
15.7. Amendment and Modification . . . . . . . . . . . . . . 51
15.8. Notice . . . . . . . . . . . . . . . . . . . . . . . . 51
15.9. Expenses . . . . . . . . . . . . . . . . . . . . . . . 52
15.10. Entire Agreement . . . . . . . . . . . . . . . . . . . 53
15.11. Counterparts . . . . . . . . . . . . . . . . . . . . . 53
15.12. Headings . . . . . . . . . . . . . . . . . . . . . . . 53
15.13. Glossary of Terms . . . . . . . . . . . . . . . . . . . 53

Disclosure Schedule

Schedule 1.1.(a) - Owned Real Property
Schedule 1.1.(b) - Leased Real Property
Schedule 1.1.(e) - Personal Property Leases
Schedule 1.1.(g)(i) - Contracts
Schedule 1.1.(g)(ii) - Purchase Orders
Schedule 1.1.(g)(iii) - Sales Orders
Schedule 4.1.(c) - Foreign Corporation Qualification
Schedule 4.3 - Violation, Conflict, Default
Schedule 4.4 - Business Financial Statements
Schedule 4.5.(b) - Tax Returns
Schedule 4.5.(c) - Tax Audits
Schedule 4.5.(d) - Consolidated Group
Schedule 4.5.(e) - Other
Schedule 4.6 - Accounts Receivable (Aged Schedule)
Schedule 4.7 - Inventory Off Premises
Schedule 4.8 - Certain Changes
Schedule 4.9 - Off-Balance Sheet Liabilities
Schedule 4.10 - Litigation Matters
Schedule 4.11.(a) - Non-Compliance with Laws
Schedule 4.11.(b) - Licenses and Permits
Schedule 4.11.(c) - Environmental Matters (Exceptions to
Representations)
Schedule 4.12.(a)(i) - Pre-Closing Liens
Schedule 4.12.(a)(ii) - Post-Closing Liens
Schedule 4.12.(b) - Asset Condition
Schedule 4.12.(c) - Underground Storage Tanks
Schedule 4.13 - Insurance
Schedule 4.14.(g) - Collective Bargaining Agreements
Schedule 4.14.(h) - Loans
Schedule 4.14.(i) - Guarantees
Schedule 4.14.(k) - Burdensome or Restrictive Agreements
Schedule 4.14.(l) - Material Contracts
Schedule 4.15 - Labor Matters
Schedule 4.16.(a) - Employee Plans/Agreements
Schedule 4.16.(g) - Post-Retirement Benefits
Schedule 4.17 - Employment Compensation
Schedule 4.18 - Trade Rights
Schedule 4.19.(a) - Major Customers
Schedule 4.19.(b) - Major Suppliers
Schedule 4.19.(c) - Dealers and Distributors
Schedule 4.20 - Product Warranty, Warranty Expense and
Liability Claims
Schedule 4.21.(a) - Contracts with Affiliates
Schedule 4.21.(c) - Obligations
Schedule 4.22 - Shareholder List

Exhibit Schedule

Exhibit 3.2.(d) - Note
Exhibit 5.5 - Buyer's Financial Statements
Exhibit 7.4 - Escrow Agreement
Exhibit 7.5 - Consulting and Noncompetition Agreement
Exhibit 12.1.(c) - Opinion of Company Counsel
Exhibit 12.2.(d) - Opinion of Buyer's Counsel

ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT (this "Agreement") dated June ___,
1997, by and among Ladish Co., Inc., a Wisconsin corporation ("Buyer"),
and Stowe Machine Co., Inc., a Connecticut corporation ("Company") and F.
Robert Petricone and William R. Petricone (individually "Shareholder" and
together the "Shareholders").

RECITALS

A. Company is engaged in the manufacturing and selling of
machined components for the jet engine industry (the "Business").
Shareholders own eighty-six percent (86%) of the issued and outstanding
capital stock of Company and will deliver the consent of the third party
owning the remainder of the issued and outstanding capital stock of the
Company.

B. Company's facilities consist of a plant and office
located at 45 Hayden Station Road, Windsor, Connecticut (the
"Facilities").

C. Buyer desires to purchase from Company, Company desires
to sell to Buyer, and the Shareholders desire to cause Company to sell to
Buyer the Business and substantially all of the property and assets of
Company.

NOW THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, agreements and
conditions hereinafter set forth, and intending to be legally bound
hereby, the parties hereto agree as follows.

1. PURCHASE AND SALE OF ASSETS

1.1. Assets to be Transferred. Subject to the terms and
conditions of this Agreement, on the Closing Date (as hereinafter defined)
Company shall, and Shareholders shall cause Company to, sell, transfer,
convey, assign, and deliver to Buyer (or upon Buyer's request, to one or
more wholly-owned subsidiaries of Buyer as designated by Buyer), and Buyer
shall purchase and accept all of the business, rights, claims and assets
(of every kind, nature, character and description, whether real, personal
or mixed, whether tangible or intangible, whether accrued, contingent or
otherwise, and wherever situated) of Company, together with all rights and
privileges associated with such assets and with the business of the
Company, other than the Excluded Assets (as hereinafter defined)
(collectively the "Purchased Assets"). The Purchased Assets shall
include, but not be limited to, the following:

1.1.(a) Owned Real Property. All of the real property,
including fixtures, buildings, improvements, and all appurtenant
rights owned by Company, including the real property described on
Schedule 1.1.(a) (the "Owned Real Property").

1.1.(b) Leased Real Property. All of the leases of real
property with respect to real property leased by Company, including
the leases (the "Real Property Leases") described on Schedule
1.1.(b) with respect to the real property described thereon (the
"Leased Real Property").

1.1.(c) Personal Property. All machinery, equipment,
vehicles, supplies, spare parts, furniture and all other personal
property (other than personal property leased pursuant to Personal
Property Leases as hereinafter defined) owned, utilized or held for
use by Company on the Closing Date.

1.1.(d) Inventory. All inventories of raw materials,
work-in-process and finished goods (including all such in transit),
tooling and service and repair parts, supplies and components held
for resale by Company on the Closing Date, together with related
packaging materials (collectively the "Inventory").

1.1.(e) Personal Property Leases. All leases of machinery,
equipment, vehicles, furniture and other personal property leased
by Company except for leases of property for the use of the
Shareholders, including all such leases (the "Personal Property
Leases") described in Schedule 1.1.(e) .

1.1.(f) Trade Rights. All the Company's interest in any
Trade Rights. As used herein, the term "Trade Rights" shall mean
and include: (i) all trademark rights, business identifiers, trade
dress, service marks, trade names, and brand names; (ii) all
copyrights and all other rights associated therewith and the
underlying works of authorship; (iii) all patents and all
proprietary rights associated therewith; (iv) all contracts or
agreements granting any right, title, license or privilege under
the intellectual property rights of any third party; (v) all
inventions, know-how, discoveries, improvements, designs, trade
secrets, shop and royalty rights, employee covenants and agreements
respecting intellectual property and non-competition and all other
types of intellectual property; and (vi) all registrations of any
of the foregoing, all applications therefor, all goodwill
associated with any of the foregoing, and all claims for
infringement or breach thereof.

1.1.(g) Contracts. All the Company's rights in, to and
under all contracts ("Contracts") purchase orders ("Purchase
Orders") and sales orders ("Sales Orders") described in Schedules
1.1.(g)(i), 1.1.(g)(ii) and 1.1.(g)(iii) of the Disclosure
Schedule, respectively, as well as every Purchase Order or Sales
Order entered into by Company after the date of this Agreement in
the ordinary course of business and in accordance with past
practice to the extent that such Contracts, Purchase Orders and
Sales Orders individually exceed One Thousand Dollars ($1,000) or
in the aggregate exceed Twenty-Five Thousand Dollars ($25,000). At
the Closing, Company shall update the Disclosure Schedule to
include all Contracts, Purchase Orders and Sales Orders entered
into by the Company after the date of this Agreement in the
ordinary course of business which involve consideration or other
expenditures in each case by Company in excess of Fifty Thousand
and 00/100 Dollars ($50,000) or performance over a period of more
than twelve (12) months from the date of the Contract, Purchase
Order or Sales Order. Prior to Closing, Buyer shall have the
opportunity to review the updated Disclosure Schedule and should
Buyer elect not to assume any Contract, Purchase Order or Sales
Order disclosed thereon, Buyer may terminate this Agreement without
incurring any liability pursuant to Section 13 of this Agreement.

1.1.(h) Computer Software. All computer source and object
codes, programs and other software owned or licensed by Company,
including all machine readable code, printed listings of code,
documentation and related property and information of Company.

1.1.(i) Literature. All sales literature, promotional
literature, catalogs and similar materials of Company.

1.1.(j) Records and Files. All records and files of Company
of every kind including, without limitation, invoices, customer and
vendor lists, blueprints, specifications, designs, drawings, and
operating and marketing plans, and all other documents, tapes,
discs, programs or other embodiments of information of Company.

1.1.(k) Notes and Accounts Receivable. All notes, drafts
and accounts receivable of Company, except for those described in
Section 1.2.(e) hereof.

1.1.(l) Licenses; Permits. All licenses, permits,
approvals, certifications and listings of Company.

1.1.(m) Corporate Name. The name "Stowe Machine Co., Inc.,"
and all rights to use or allow others to use such name.

1.1.(n) General Intangibles. All prepaid items, all causes
of action arising out of occurrences before or after the Closing,
and other intangible rights and assets.

1.2. Excluded Assets. The provisions of Section 1.1
notwithstanding, Company shall not sell, transfer, assign, convey or
deliver to Buyer, and Buyer will not purchase or accept the following
assets of Company (collectively the "Excluded Assets"):

1.2.(a) Cash and Cash Equivalents. All cash and cash
equivalents, other than petty cash balances at Company's various
places of business.

1.2.(b) Consideration. The consideration delivered by Buyer
to Company pursuant to this Agreement.

1.2.(c) Tax Credits and Records. Federal, state and local
income and franchise tax credits and tax refund claims and
associated returns and records. Buyer shall have reasonable access
to such returns and records and may make excerpts therefrom and
copies thereof.

1.2.(d) Corporate Franchise. Company's franchise to be a
corporation, its certificate of incorporation, corporate seal,
stock books, minute books and other corporate records having
exclusively to do with the corporate organization and
capitalization of Company. Buyer shall have reasonable access to
such books and records and may make excerpts therefrom and copies
thereof.

1.2.(e) Obligations of Affiliates. Notes, drafts, accounts
receivable or other obligations for the payment of money, made or
owed by any Affiliate of Company. For purposes of this Agreement,
the term "Affiliate" shall mean and include all shareholders,
directors and officers of Company; the spouse of any such person;
any person who would be the heir or descendant of any such person
if he or she were not living; and any entity in which any of the
foregoing has a direct or indirect interest (except through
ownership of less than 5% of the outstanding shares of any entity
whose securities are listed on a national securities exchange or
traded in the national over-the-counter market).

1.2.(f) Insurance Refund. Unearned premiums on policies of
insurance purchased by Company before the Closing Date providing
such unearned premiums are not used in determining Net Working
Capital under Article 3 hereof.

1.2.(g) Health Insurance Trust Account. Any balance in
Company's health insurance trust account, providing said balance is
not used in determining Net Working Capital under Article 3 hereof,
and Company and Shareholders apply said balance to the retained
responsibilities in Section 6.2 prior to utilizing the balance for
any other purpose.

2. ASSUMPTION OF LIABILITIES

2.1. Liabilities to be Assumed. As used in this Agreement, the
term "Liability" shall mean and include any direct or indirect
indebtedness, guaranty, endorsement, claim, loss, damage, deficiency,
cost, expense, obligation or responsibility, fixed or unfixed, known or
unknown, asserted or unasserted, liquidated or unliquidated, secured or
unsecured. Subject to the terms and conditions of this Agreement, on the
Closing Date, Buyer shall assume and agree to perform and discharge the
following, and only the following Liabilities of Company (collectively the
"Assumed Liabilities"):

2.1.(a) Closing Business Balance Sheet Liabilities. The
accounts payable and accrued Liabilities reflected or reserved
against on the Closing Business Balance Sheet (as hereinafter
defined), but only in the amounts so reflected or reserved.

2.1.(b) Contractual Liabilities. Company's Liabilities
arising from and after the Closing Date under and pursuant to the
following:

(i) The Real Property Leases described on
Schedule 1.1.(b) of the Disclosure Schedule.

(ii) The Personal Property Leases described on
Schedule 1.1.(e) of the Disclosure Schedule.

(iii) The Contracts described on Schedule
1.1.(g)(i) of the Disclosure Schedule.

(iv) The unfilled Purchase Orders described on
Schedule 1.1.(g)(ii).

(v) The unfilled Sales Orders described on
Schedule 1.1.(g)(iii).

(vi) Every other Purchase Order or Sales Order
constituting a Purchased Asset under Section 1.1.(g).

The Real Property Leases, Personal Property Leases, Contracts,
Purchase Orders and Sales Orders described in this Section 2.1.(b)
are hereinafter collectively described as the "Assumed Contracts."

2.1.(c) Liabilities Under Permits and Licenses. Company's
Liabilities arising from and after the Closing Date under any
permits or licenses listed in Schedule 4.11.(b) and assigned to
Buyer at the Closing.

2.2. Liabilities Not to be Assumed. Except as and to the extent
specifically set forth in Section 2.1, Buyer is not assuming any
Liabilities of Company and all such Liabilities shall be and remain the
responsibility of Company. Notwithstanding the provisions of Section 2.1,
Buyer is not assuming and Company shall not be deemed to have transferred
to Buyer the following Liabilities of Company:

2.2.(a) Certain Contracts. The Liabilities of Company under
and pursuant to the following contracts and leases:

(i) Any and all institutional financing
obligations or Liabilities of the Company which exist at the
time of the Closing.

(ii) Any and all Liabilities of the Company to the
Shareholders.

(iii) Any obligation or Liability of the Company
with respect to wages or benefits for the Shareholders or to
any third party on behalf of the Shareholders except as set
forth in the Consulting and Noncompetition Agreements attached
hereto as Exhibits 7.5.

2.2.(b) Taxes Arising from Transaction. Any taxes
applicable to, imposed upon or arising out of the sale or transfer
of the Purchased Assets to Buyer and the other transactions
contemplated by this Agreement, including but not limited to any
income, transfer, sales, use (except for use taxes associated with
relicensing Company automobiles, gross receipts or documentary
stamp taxes.

2.2.(c) Income and Franchise Taxes. Any Liability of
Company for Federal income taxes and any state or local income,
profit or franchise taxes (and any penalties or interest due on
account thereof).

2.2.(d) Insured Claims. Any Liability of Company insured
against, to the extent such Liability is or will be paid by an
insurer.

2.2.(e) Product Liability. Any Liability of Company arising
out of or in any way relating to or resulting from any product
manufactured, assembled or sold prior to the Closing Date
(including any Liability of Company for claims made for injury to
person, damage to property or other damage, whether made in product
liability, tort, breach of warranty or otherwise), except only that
Buyer is assuming Company's Liabilities under and pursuant to
Company's standard written product warranty on products currently
produced by the Company as set forth in Schedule 4.20, to the
extent of the reserve carried on the Closing Business Balance
Sheet. Provided further, that with respect to product liability
claim arising under this Section 2.2.(e) to the extent Buyer can
repair or replace the defective product Buyer shall do so on behalf
of Company and Company and Shareholders shall reimburse Buyer for
the cost and expenses associated with said repair or replacement.

2.2.(f) Litigation Matters. Any Liability with respect to
any action, suit, proceeding, arbitration, investigation or
inquiry, whether civil, criminal or administrative ("Litigation")
brought prior to the Closing Date or arising from events occurring
prior to the Closing Date, whether or not described in Schedule
4.10.

2.2.(g) Infringements. Any Liability to a third party for
infringement of such third party's Trade Rights.

2.2.(h) Transaction Expenses. All Liabilities incurred by
Company in connection with this Agreement and the transactions
contemplated herein.

2.2.(i) Liability For Breach. Liabilities of Company for
any breach or failure to perform any of Company's covenants and
agreements contained in, or made pursuant to, this Agreement, or,
prior to the Closing, any other contract, whether or not assumed
hereunder, including breach arising from assignment of contracts
hereunder without consent of third parties.

2.2.(j) Liabilities to Affiliates. Liabilities of Company
to its present or former Affiliates.

2.2.(k) Violation of Laws or Orders. Liabilities of Company
for any violation of or failure to comply with any statute, law,
ordinance, rule or regulation (collectively, "Laws") or any order,
writ, injunction, judgment, plan or decree (collectively, "Orders")
of any court, arbitrator, department, commission, board, bureau,
agency, authority, instrumentality or other body, whether federal,
state, municipal, foreign or other (collectively, "Government
Entities").

2.2.(l) Lazzari Contract. Any contractual liability of
Company to its employee William J. Lazzari.

2.2.(m) Uninsured Health Claims. Uninsured health claims
incurred prior to the Closing Date, whether submitted or not, which
arose prior to the Closing Date will be paid by the Company and
will not be reflected on the Closing Business Balance Sheet.

3. PURCHASE PRICE - PAYMENT

3.1. Purchase Price. The purchase price (the "Purchase Price")
for the Purchased Assets shall be (i) the assumption of the Assumed
Liabilities, and (ii) Nine Million Five Hundred Thousand Dollars
($9,500,000.00).

3.2. Payment of Purchase Price. The Purchase Price shall be paid
by Buyer as follows:

3.2.(a) Assumption of Liabilities. At the Closing, Buyer
shall deliver to Company such documents and instruments as are
reasonably required to evidence the assumption of the Assumed
Liabilities.

3.2.(b) Cash to Escrow Agent. At the Closing, Buyer shall
deliver to the Escrow Agent, under the Escrow Agreement (as defined
in Section 7.4), the sum of One Hundred Thousand Dollars
($100,000.00) plus the excess of the cash and cash equivalents on
hand at the Company on the Closing Date over One Hundred Fifty
Thousand Dollars ($150,000.00) (collectively the "Escrow Funds").
The Escrow Funds are held to guarantee Company's portion of any
post closing adjustment pursuant to Section 3.2.(e) of this
Agreement.

3.2.(c) Cash to Company. At the Closing, Buyer shall
deliver to Company Eight Million Five Hundred Thousand Dollars
($8,500,000.00), less the amount paid to the Escrow Agent pursuant
to Subsection 3.2.(b) above.

3.2.(d) Note to Company. At the Closing, Buyer shall
deliver to the Company a promissory note (the "Note") in the amount
of One Million Dollars ($1,000,000.00). The Note shall have a
three-year term and will bear interest at the rate of 7% per annum,
calculated on a 365-day year. Interest payments shall be made
quarterly beginning ninety days after the closing. The principal
of the Note shall be repaid in three installments on the first
three anniversaries of the Closing. The first installment shall be
in the amount of Two Hundred Fifty Thousand Dollars ($250,000.00).
The second and third installments shall each be in the amount of
Three Hundred Seventy-Five Thousand Dollars ($375,000.00). The
Note shall be in the form of Exhibit 3.2.(d) hereto.

3.2.(e) Adjustment of Cash Purchase Price on Settlement
Date. On or before the fifth business day following the final
determination of the Closing Business Balance Sheet (as hereinafter
defined) (such date being hereinafter referred to as the
"Settlement Date"):

(i) either (A) Company shall pay to Buyer the
amount, if any, by which Net Working Capital on the Recent
Business Balance Sheet (as hereinafter defined) exceeds Net
Working Capital on the Closing Business Balance Sheet (as
hereinafter defined), or (B) Buyer shall pay to Company the
amount, if any, by which Net Working Capital on the Closing
Business Balance Sheet exceeds Net Working Capital on the
Recent Business Balance Sheet, in each case together with
interest from the Closing Date to the date of payment at the
rate of seven percent (7%) per annum from the Closing Date.

(ii) Company shall pay to Buyer, or Buyer shall
pay to Company, as the case may be, an amount equal to the net
of any reconciliation of the prorations as provided in Section
3.4 below.

3.2.(f) Method of Payment. All payments under this Section
3.2 shall be made in the form of certified or bank cashier's check
payable to the order of the recipient or, at the recipient's
option, by wire transfer of immediately available funds to an
account designated by the recipient not less than 48 hours prior to
the time for payment specified herein. The first payments made by
Company pursuant to Section 3.2.(e)(i)(A) shall be from the Escrow
Funds.

3.3. Determination of Net Working Capital.

3.3.(a) Definition of Net Working Capital. The term "Net
Working Capital" shall mean the dollar amount by which the net book
value of the Purchased Assets constituting accounts and notes
receivable, prepaid expenses and inventory exceeds the net book
value of the Assumed Liabilities constituting accounts payable and
accrued expenses, as reflected in the Recent Business Balance Sheet
or Closing Business Balance Sheet, as applicable.

3.3.(b) Closing Business Balance Sheet. The balance sheet
of Company prepared as of the Closing Date shall be prepared as
follows:

(i) Within 45 days after the Closing Date, Buyer
shall deliver to Company a balance sheet of Company as of the
Closing Date (the "Closing Business Balance Sheet"), prepared
in accordance with generally accepted accounting principles
from the books and records of Company, on a basis consistent
with the generally accepted accounting principles theretofore
followed by Company in the preparation of the Recent Business
Balance Sheet as of December 31, 1996 ("Recent Business
Balance Sheet") and in accordance with this Section 3.3, and
fairly presenting the financial position of Company as of the
Closing Date. The Closing Business Balance Sheet shall be
accompanied by detailed schedules of the Purchased Assets and
Assumed Liabilities and by a report (1) setting forth the
amount of Net Working Capital (as defined above) reflected in
the Closing Business Balance Sheet, (2) stating that (a) the
examination of the Closing Business Balance Sheet has been
made in accordance with generally accepted auditing standards
and (b) the Closing Business Balance Sheet has been prepared
in accordance with generally accepted accounting principles,
on a basis consistent with the accounting principles
theretofore followed by Company, except as otherwise provided
in this Section 3.3, and (3) setting forth the amount of any
adjustment to the Purchase Price to be paid and by whom
pursuant to Section 3.2.(e) hereof.

(ii) Within 30 days following the delivery of the
balance sheet referred to in (i) above, Company may object to
any of the information contained in said balance sheet or
accompanying schedules which could affect the necessity or
amount of any payment by Buyer or Company pursuant to Section
3.2.(e) hereof. Any such objection shall be made in writing
and shall state Company's determination of the amount of the
Net Working Capital.

(iii) In the event of a dispute or disagreement
relating to the balance sheet or schedules which Buyer and
Company are unable to resolve, either party may elect to have
all such disputes or disagreements resolved by an accounting
firm of nationally recognized standing (the "Third Accounting
Firm") to be mutually selected by Company and Buyer or, if no
agreement is reached, by Company's Accountants and Buyer's
Accountants. The Third Accounting Firm shall make a
resolution of the balance sheet of Company as of the Closing
Date and the calculation of Net Working Capital, which shall
be final and binding for purposes of this Article 3. The
Third Accounting Firm shall be instructed to use every
reasonable effort to perform its services within 15 days of
submission of the Closing Business Balance Sheet to it and, in
any case, as soon as practicable after such submission. The
fees and expenses for the services of the Third Accounting
Firm shall be shared by Buyer and Company as follows:

Company shall pay a percentage of such fees and
expenses equal to A/(A+B) and Buyer shall pay a percentage of
such fees and expenses equal to B/(A+B), where A is equal to
the absolute value of the difference (in dollars) between Net
Working Capital as finally determined by the Third Accounting
Firm and Net Working Capital as reflected in the objection
prepared and delivered by Company in accordance with Section
3.3.(b)(ii), and B is equal to the absolute value of the
difference (in dollars) between Net Working Capital as finally
determined by the Third Accounting Firm and Net Working
Capital as reflected in the report prepared and delivered by
Buyer in accordance with Section 3.3.(b)(i). As used in this
Agreement, the term "Closing Business Balance Sheet" shall
mean the balance sheet of Company as of the Closing Date as
finally determined for purposes of this Article 3, whether by
acquiescence of Company in the figures supplied by Buyer in
accordance with Section 3.3.(b)(i), by negotiation and
agreement of the parties or by the Third Accounting Firm in
accordance with Section 3.3.(b)(iii).

(iv) Buyer agrees to permit Company, Company's
accountants, and their respective representatives, during
normal business hours, to have reasonable access to, and to
examine and make copies of, all books and records of Company,
including but not limited to the books, records, schedules,
work papers and audit programs of Buyer and Buyer's
Accountants and access to representatives of Buyer's
Accountants, which documents and access are necessary to
review the balance sheet delivered by Buyer in accordance with
Section 3.3.(b)(i). In addition, Company's Accountants shall
have the opportunity to observe the taking of the inventory in
connection with the preparation of the Closing Business
Balance Sheet. Company similarly agrees to permit Buyer's
Accountants and their respective representatives, during
normal business hours, to have reasonable access to any books
and records of Company which do not constitute Purchased
Assets, in order to enable them to prepare such balance sheet.

(v) Notwithstanding any provision contained herein
requiring that the Closing Business Balance Sheet be prepared
in a manner consistent with Company's past practices or in
accordance with generally accepted accounting principles, the
Closing Business Balance Sheet shall be prepared utilizing the
following criteria:

(A) Prepaid expenses shall be valued at not
more than the net realizable value which Buyer can
obtain from such assets.

(B) Inventory shall be calculated by adding
to the December 31, 1996, inventory as set forth on the
Recent Business Balance Sheet, the cost of forgings
received by the Company into inventory from January 1,
1997, to the closing Date, and subtracting therefrom
the cost of forgings shipped or otherwise transferred
to customers or forgings scrapped between January 1,
1997, and the Closing Date. To the extent that there
is a difference between the actual inventory on hand on
the Closing Date and the foregoing calculation, the
method of valuation set forth herein shall prevail.

(C) All accrued liabilities shall be
sufficient for the payment in full of the liabilities
to which they relate and accrued expenses shall reflect
all accruals of a character that would be reflected in
a manner consistent with a year-end balance sheet.

(D) Accounts receivable and notes receivable
shall be the book value of all receivables on the
Closing Date minus the book value of all receivables
over 120 days at the Closing Date, the book value of
which receivables shall be retained by the Company.

(E) No insurance claim relating to damage to
or full or partial loss of any property occurring after
the date of the Recent Business Balance Sheet shall be
valued in excess of the book value (net of accumulated
depreciation) of such property as reflected in the
Recent Balance Sheet.

3.4. Prorations. The following prorations relating to the
Purchased Assets will be made as of the Closing Date, with Company liable
to the extent such items relate to any time period up to and including the
Closing Date if not already taken into account on the Closing Business
Balance Sheet and Buyer liable to the extent such items relate to periods
subsequent to the Closing Date. Except as otherwise specifically provided
herein, the net amount of all such prorations will be settled and paid on
the Settlement Date as provided by Section 3.2.(e) hereof:

3.4.(b) Rents, additional rents, taxes and other items
payable by Company under any lease, license, permit, contract or
other agreement or arrangement to be assigned to or assumed by
Buyer.

3.4.(c) The amount of rents, taxes and charges for sewer,
water, fuel, telephone, electricity and other utilities; provided
that if practicable, meter readings shall be taken at the Closing
Date and the respective obligations of the parties determined in
accordance with such readings.

3.4.(d) All other items normally adjusted in connection with
similar transactions.

If the actual expense of any of the above items for the billing
period within which the Closing Date falls is not known on or before the
Settlement Date, the proration shall be made based on the expense incurred
in the previous billing period, for expenses billed less often than
quarterly, and on the average expense incurred in the preceding three
billing periods, for expenses billed quarterly or more often. Company
agrees to furnish Buyer with such documents and other records as shall be
reasonably requested in order to confirm all proration calculations.

3.5. Other Payments and Adjustments. The amount of wages and
other remuneration due in respect of periods to and including the Closing
Date to employees of Company and the amount of bonuses due to such
employees for all such periods will be paid by Company directly to such
employees. Except to the extent taken into account on the Closing
Business Balance Sheet, Buyer shall receive a credit on the Settlement
Date in an amount equal to all vacation, holiday and sick pay unpaid by
Company as of the Closing Date attributable to any period or partial
period of employment by Company prior to the Closing Date, plus employee
payroll taxes applicable thereto due or to become due, for those employees
of Company who will be employed by Buyer after the Closing and (i) who
have not as of the Closing Date taken vacation, holiday or sick time
earned prior to Closing, or (ii) who have not earned vacation, holiday or
sick time as of the Closing Date but who would have earned vacation,
holiday or sick time for any such period or partial period of employment
prior to the Closing (on a pro rata basis) had they continued as employees
of Company to the date when such vacation, holiday or sick pay would have
accrued to them. Notwithstanding the foregoing, the Company and the Buyer
agree that the accrual of a pro rata portion of vacation pay for the
employees of the Company on the Closing Business Balance Sheet shall
satisfy the requirements of this subsection 3.5 and shall require no
further adjustment or credit to Buyer hereunder. For purposes of the
foregoing, the term "pro rata" shall mean an amount equal to the total
vacation pay actually paid or to be paid to all employees of the Company
who became employees of Buyer during 1997, multiplied by a fraction, the
numerator of which shall be the number of days from January 1, 1997, to
the Closing Date, and the denominator of which shall be the number of days
from the Closing Date to December 31, 1997.

3.6. Intentionally Left Blank.

4. REPRESENTATIONS AND WARRANTIES OF COMPANY AND SHAREHOLDERS

Company and Shareholders, jointly and severally, make the following
representations and warranties to Buyer, each of which is true and correct
on the date hereof, shall remain true and correct to and including the
Closing Date, shall be unaffected by any investigation heretofore or
hereafter made by Buyer, or any knowledge of Buyer other than as
specifically disclosed in the Disclosure Schedule delivered to Buyer at
the time of the execution of this Agreement, and shall survive the Closing
of the transactions provided for herein.

4.1. Corporate.

4.1.(a) Organization. Company is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Connecticut.

4.1.(b) Corporate Power. Company has all requisite
corporate power and authority to own, operate and lease its
properties, to carry on its business as and where such is now being
conducted, to enter into this Agreement and the other documents and
instruments to be executed and delivered by Company pursuant hereto
and to carry out the transactions contemplated hereby and thereby.

4.1.(c) Qualification. Company is duly licensed or
qualified to do business as a foreign corporation, and is in good
standing, in each jurisdiction wherein the character of the
properties owned or leased by it, or the nature of its business,
makes such licensing or qualification necessary. The states in
which Company is licensed or qualified to do business are listed in
Schedule 4.1.(c).

4.1.(d) No Subsidiaries. Company does not own any interest
in any corporation, partnership or other entity.

4.2. Authority. The execution and delivery of this Agreement and
the other documents and instruments to be executed and delivered by
Company pursuant hereto and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the Board of
Directors and shareholders of Company. No other or further corporate act
or proceeding on the part of Company is necessary to authorize this
Agreement or the other documents and instruments to be executed and
delivered by Company pursuant hereto or the consummation of the
transactions contemplated hereby and thereby. This Agreement constitutes,
and when executed and delivered, the other documents and instruments to be
executed and delivered by Company pursuant hereto will constitute, valid
binding agreements of Company, enforceable in accordance with their
respective terms.

4.3. No Violation. Except as set forth on Schedule 4.3, neither
the execution and delivery of this Agreement or the other documents and
instruments to be executed and delivered by Company pursuant hereto, nor
the consummation by Company of the transactions contemplated hereby and
thereby (a) will violate any applicable Law or Order, (b) will require any
authorization, consent, approval, exemption or other action by or notice
to any Government Entity (including, without limitation, under any "plant-
closing" or similar law), or (c) subject to obtaining the consents
referred to in Schedule 4.3, will violate or conflict with, or constitute
a default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, or will result in the termination of, or
accelerate the performance required by, or result in the creation of any
Lien (as defined in Section 4.12.(a)) upon any of the assets of Company
under, any term or provision of the Articles of Incorporation or By-laws
of Company or of any contract, commitment, understanding, arrangement,
agreement or restriction of any kind or character to which Company is a
party or by which Company or any of its assets or properties may be bound
or affected.

4.4. Financial Statements. Included as Schedule 4.4 are true and
complete copies of the financial statements of Company consisting of
balance sheets of Company as of December 31, 1994, 1995 and 1996, and the
related statements of income and cash flows for the years then ended
(including the notes contained therein or annexed thereto), which
financial statements have been reported on, and are accompanied by, the
signed, unqualified opinions of Ernst & Young LLP, independent auditors
for Company for such years. All of such financial statements (including
all notes and schedules contained therein or annexed thereto) are true,
complete and accurate, have been prepared in accordance with generally
accepted accounting principles (except, in the case of unaudited
statements, for the absence of footnote disclosure) applied on a
consistent basis, have been prepared in accordance with the books and
records of Company, and fairly present, in accordance with generally
accepted accounting principles, the assets, liabilities and financial
position, the results of operations and cash flows of Company as of the
dates and for the years and periods indicated. The Recent Business
Balance Sheet and the Closing Business Balance Sheet shall be in
accordance with the specifications set forth in Article 3; the books and
records of the Company utilized to prepare such Closing Business Balance
Sheet shall accurately reflect the transactions of the Company from
January 1, 1997 to the Closing Date on a basis consistent with the Recent
Business Balance Sheet.

4.5. Tax Matters.

4.5.(a) Provision for Taxes. To the best of Company's
knowledge, the provision made for taxes on the Recent Balance Sheet
is sufficient for the payment of all federal, state, foreign,
county, local and other income, ad valorem, excise, profits,
franchise, occupation, property, payroll, sales, use, gross
receipts and other taxes (and any interest and penalties) and
assessments, whether or not disputed at the date of the Recent
Balance Sheet, and for all years and periods prior thereto. Since
the date of the Recent Balance Sheet, Company has not incurred any
taxes other than taxes incurred in the ordinary course of business
consistent in type and amount with past practices of Company.

4.5.(b) Tax Returns Filed. Except as set forth on Schedule
4.5.(b), all federal, state, foreign, county, local and other tax
returns required to be filed on or on behalf of Company have been
timely filed and when filed were true and correct in all material
respects, and the taxes shown as due thereon were paid or
adequately accrued. To the best of Company's knowledge, Company
has duly withheld and paid all taxes which it is required to
withhold and pay relating to salaries and other compensation
heretofore paid to the employees of Company.

4.5.(c) Tax Audits. The federal and state income tax
returns of Company have been audited by the Internal Revenue
Service and appropriate state taxing authorities for the periods
and to the extent set forth in Schedule 4.5.(c), and Company has
not received from the Internal Revenue Service or from the tax
authorities of any state, county, local or other jurisdiction any
notice of underpayment of taxes or other deficiency which has not
been paid nor any objection to any return or report filed by
Company, except for a sales and use tax deficiency for years prior
to September, 1990 which deficiency has been paid in full. There
are outstanding no agreements or waivers extending the statutory
period of limitations applicable to any tax return or report.

4.5.(d) Consolidated Group. Schedule 4.5.(d) lists every
year Company was a member of an affiliated group of corporations
that filed a consolidated tax return on which the statute of
limitations does not bar a federal tax assessment, and each
corporation that has been part of such group.

4.5.(e) Other. Except as set forth in Schedule 4.5.(e),
since December 31, 1996 Company has not (i) filed any consent or
agreement under Section 341(f) of the Code, (ii) applied for any
tax ruling, (iii) entered into a closing agreement with any taxing
authority, (iv) filed an election under Section 338(g) or Section
338(h)(10) of the Code (nor has a deemed election under Section
338(e) of the Code occurred), (v) made any payments, or been a
party to an agreement (including this Agreement) that under any
circumstances could obligate it to make payments that will not be
deductible because of Section 280G of the Code, or (vi) been a
party to any tax allocation or tax sharing agreement.

4.6. Accounts Receivable. All accounts receivable of Company
reflected on the Recent Business Balance Sheet, and as incurred in the
normal course of business since the date thereof, represent arm's length
sales actually made in the ordinary course of business; are collectible in
the ordinary course of business without the necessity of commencing legal
proceedings; are subject to no counterclaim or setoff; and are not in
dispute. Schedule 4.6 contains an aged schedule of accounts receivable
included in the Recent Business Balance Sheet. All accounts receivable of
Company reflected on the Closing Business Balance Sheet will represent
arm's length sales actually made in the ordinary course of business and
will be collected in the ordinary course of business. Provided, that for
those accounts receivable reflected on the Closing Business Balance Sheet
which are not collected in 120 days after the invoice date of the
receivable, Company and Shareholders shall pay Buyer the amount of such
accounts receivable and Buyer shall assign said accounts receivable to
Company and Shareholders.

4.7. Inventory. All inventory of Company reflected on the Recent
Business Balance Sheet, including goods that are imperfect, slow moving,
obsolete or unusable are stated at amounts not in excess of their good
faith estimated net realizable values and are valued in accordance with
generally accepted accounting principles at the lower of cost on a LIFO
basis or market. All inventory purchased since the date of the Recent
Business Balance Sheet consists of a quality and quantity usable and
saleable in the ordinary course of business. Except as set forth in
Schedule 4.7, all inventory of Company is located on premises owned or
leased by Company as reflected in this Agreement. Except as set forth in
Schedule 4.7, all work-in-process contained in inventory constitutes items
in process of production pursuant to contracts or open orders taken in the
ordinary course of business, from regular customers of Company with no
recent history of credit problems with respect to Company; to the best of
Company's knowledge, neither Company nor any such customer is in material
breach of the terms of any obligation to the other and no valid grounds
exist for any set-off of amounts billable to such customers on the
completion of orders to which work-in-process relates. Except as set
forth in Schedule 4.7, all work-in-process is of a quality ordinarily
produced in accordance with the requirements of the orders to which such
work-in-process is identified.

4.8. Absence of Certain Changes. Except as and to the extent set
forth in Schedule 4.8, since the date of the Recent Business Balance Sheet
there has not been:

4.8.(a) No Adverse Change. Any adverse change in the
financial condition, assets, Liabilities, business, prospects or
operations of Company;

4.8.(b) No Damage. Any loss, damage or destruction, whether
covered by insurance or not, affecting Company's business or
properties;

4.8.(c) No Increase in Compensation. Any increase in the
compensation, salaries or wages payable or to become payable to any
employee or agent of Company (including, without limitation, any
increase or change pursuant to any bonus, pension, profit sharing,
retirement or other plan or commitment), or any bonus or other
employee benefit granted, made or accrued;

4.8.(d) No Labor Disputes. Any labor dispute or
disturbance, other than routine individual grievances which are not
material to the business, financial condition or results of
operations of Company;

4.8.(e) No Commitments. Any commitment or transaction by
Company (including, without limitation, any borrowing or capital
expenditure) other than in the ordinary course of business
consistent with past practice;

4.8.(f) No Dividends. Any declaration, setting aside, or
payment of any dividend or any other distribution in respect of
Company's capital stock; any redemption, purchase or other
acquisition by Company of any capital stock of Company, or any
security relating thereto; or any other payment to any shareholder
of Company as such a shareholder, except for a Subchapter S
distribution to Shareholders on April 17, 1997;

4.8.(g) No Disposition of Property. Any sale, lease or
other transfer or disposition of any properties or assets of
Company, except for the sale of inventory items in the ordinary
course of business;

4.8.(h) No Indebtedness. Any indebtedness for borrowed
money incurred, assumed or guaranteed by Company;

4.8.(i) No Liens. Any Lien made on any of the properties or
assets of Company;

4.8.(j) No Amendment of Contracts. Any entering into,
amendment or termination by Company of any contract, or any waiver
of material rights thereunder, other than in the ordinary course of
business;

4.8.(k) Loans and Advances. Any loan or advance (other than
advances to employees in the ordinary course of business for travel
and entertainment in accordance with past practice) to any person
including, but not limited to, any officer, director or employee of
Company, or any Shareholder or Affiliate;

4.8.(l) Credit. Any grant of credit to any customer or
distributor on terms or in amounts more favorable than those which
have been extended to such customer or distributor in the past, any
other change in the terms of any credit heretofore extended, or any
other change of Company's policies or practices with respect to the
granting of credit; or

4.8.(m) No Unusual Events. Any other event or condition not
in the ordinary course of business of Company.

4.9. Absence of Undisclosed Liabilities. Except as and to the
extent specifically disclosed in the Recent Business Balance Sheet, or in
Schedule 4.9, to the best of Company's knowledge Company does not have any
Liabilities other than commercial liabilities and obligations incurred
since the date of the Recent Business Balance Sheet in the ordinary course
of business and consistent with past practice and none of which has or
will have a material adverse effect on the business, financial condition
or results of operations of Company. Except as and to the extent
described in the Recent Business Balance Sheet or in Schedule 4.9, neither
Company nor any Shareholder has knowledge of any basis for the assertion
against Company of any Liability and there are no circumstances,
conditions, happenings, events or arrangements, contractual or otherwise,
which may give rise to Liabilities, except commercial liabilities and
obligations incurred in the ordinary course of Company's business and
consistent with past practice.

4.10. No Litigation. Except as set forth in Schedule 4.10 there
is no Litigation pending or threatened against Company, its directors (in
such capacity), its business or any of its assets, nor does Company or any
Shareholder know, or have grounds to know, of any basis for any
Litigation. Except as set forth in Schedule 4.10, neither Company nor its
business or assets is subject to any Order.

4.11. Compliance With Laws and Orders.

4.11.(a) Compliance. To the best of Company's knowledge,
except as set forth in Schedule 4.11.(a), Company (including each
and all of its operations, practices, properties and assets) is in
compliance with all applicable Laws and Orders, including, without
limitation, those applicable to discrimination in employment, and
the Company has received no notice of any occupational safety and
health, trade practices, competition and pricing, product
warranties, zoning, building and sanitation, employment, retirement
and labor relations, product advertising and the Environmental Laws
as hereinafter defined. Except as set forth in Schedule 4.11.(a),
Company has not received notice of any violation or alleged
violation of, and to the best of Company's knowledge is subject to
no Liability for past or continuing violation of, any Laws or
Orders. All reports and returns required to be filed by Company
with any Government Entity have been filed, and were accurate and
complete when filed. Without limiting the generality of the
foregoing:

(i) To the best of Company's knowledge the operation
of Company's business as it is now conducted does not, nor
does any condition existing at any of the Facilities, in any
manner constitute a nuisance or other tortious interference
with the rights of any person or persons in such a manner as
to give rise to or constitute the grounds for a suit, action,
claim or demand by any such person or persons seeking
compensation or damages or seeking to restrain, enjoin or
otherwise prohibit any aspect of the conduct of such business
or the manner in which it is now conducted.

(ii) Company has made all required payments to its
unemployment compensation reserve accounts with the
appropriate governmental departments of the states where it is
required to maintain such accounts, and each of such accounts
has a positive balance.

(iii) Company has delivered to Buyer copies of all
reports of Company for the past five (5) years filed under the
federal Occupational Safety and Health Act of 1970, as
amended, and under all other applicable health and safety laws
and regulations.

4.11.(b) Licenses and Permits. Company has all licenses,
permits, approvals, authorizations and consents of all Government
Entities and all certification organizations required for the
conduct of business (as presently conducted and as proposed to be
conducted) and operation of the Facilities. All such licenses,
permits, approvals, authorizations and consents are described in
Schedule 4.11.(b), are in full force and effect and except as set
forth in Schedule 4.11.(b) are assignable to Buyer in accordance
with the terms hereof. Except as set forth in Schedule 4.11.(b),
Company (including its operations, properties and assets) is and
has been in compliance with all such permits and licenses,
approvals, authorizations and consents.

4.11.(c) Environmental Matters. The applicable Laws relating
to pollution or protection of the environment, including Laws
relating to emissions, discharges, generation, storage, releases or
threatened releases of pollutants, contaminants, chemicals or
industrial, toxic, hazardous or petroleum or petroleum-based
substances or wastes ("Waste") into the environment (including,
without limitation, ambient air, surface water, ground water, land
surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Waste including, without
limitation, the Clean Water Act, the Clean Air Act, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act and
the Comprehensive Environmental Response Compensation Liability Act
("CERCLA"), as amended, and their state and local counterparts are
herein collectively referred to as the "Environmental Laws".
Without limiting the generality of the foregoing provisions of this
Section 4.11, the Business is in full compliance with all
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in
the Environmental Laws or contained in any regulations, code, plan,
order, decree, judgment, injunction, notice or demand letter
issued, entered, promulgated or approved thereunder. Except as set
forth in Schedule 4.11.(c), there is no Litigation nor any demand,
claim, hearing or notice of violation pending or to the best of
Company's knowledge threatened against Company relating in any way
to the Environmental Laws or any Order issued, entered, promulgated
or approved thereunder. Except as set forth in Schedule 4.11.(c),
there are no past or present (or, to the best of Company's and the
Shareholders' knowledge, future) events, conditions, circumstances,
activities, practices, incidents, actions, omissions or plans which
may interfere with or prevent compliance or continued compliance
with the Environmental Laws or with any Order issued, entered,
promulgated or approved thereunder, or which may give rise to any
Liability, including, without limitation, Liability under CERCLA or
similar state or local Laws, or otherwise form the basis of any
Litigation, hearing, notice of violation, study or investigation,
based on or related to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling, or the
emission, discharge, release or threatened release into the
environment, of any Waste.

4.12. Title to and Condition of Properties.

4.12.(a) Marketable Title. Company has good and marketable
title to all the Purchased Assets, free and clear of all mortgages,
liens (statutory or otherwise), security interests, claims,
pledges, licenses, equities, options, conditional sales contracts,
assessments, levies, easements, covenants, reservations,
restrictions, rights-of-way, exceptions, limitations, charges or
encumbrances of any nature whatsoever (collectively, "Liens")
except those described in Schedule 4.12.(a)(i); and, in the case of
real property, Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings (and which have
been sufficiently accrued or reserved against in the Recent Balance
Sheet), municipal and zoning ordinances and easements for public
utilities, none of which interfere with the use of the property as
currently utilized ("Permitted Real Property Liens"). None of the
Purchased Assets are subject to any restrictions with respect to
the transferability thereof. Company has complete and unrestricted
power and right to sell, assign, convey and deliver the Purchased
Assets to Buyer as contemplated hereby. At Closing, Buyer will
receive good and marketable title to all the Purchased Assets, free
and clear of all Liens of any nature whatsoever except those
described in Schedule 4.12.(a)(ii) and Permitted Real Property
Liens.

4.12.(b) Condition. Except as set forth in Schedule
4.12.(b), all tangible assets (real and personal) constituting
Purchased Assets hereunder are in good operating condition and
repair, free from any defects (except such minor defects as do not
interfere with the use thereof in the conduct of the normal
operations of Company), have been maintained consistent with the
standards generally followed in the industry and are sufficient to
carry on the business of Company as conducted during the preceding
12 months. To the best of Company's knowledge all buildings,
plants and other structures owned or otherwise utilized by Company
are in good operating condition and repair and have no structural
defects or defects materially affecting the plumbing, electrical,
sewerage, or heating, ventilating or air conditioning systems.

4.12.(c) Real Property. Schedules 1.1.(a) and 1.1.(b) set
forth all real property owned, used or occupied by Company (the
"Real Property"), including a description of all land, and all
encumbrances, easements or rights of way of record (or, if not of
record, of which Company has notice or knowledge) granted on or
appurtenant to or otherwise affecting such Real Property, the
zoning classification thereof, and all plants, buildings or other
structures located thereon. Schedule 1.1.(b) also sets forth, with
respect to each parcel of Real Property which is leased, the
material terms of such lease. There are now in full force and
effect duly issued certificates of occupancy permitting the Real
Property and improvements located thereon to be legally used and
occupied as the same are now constituted. All of the Real Property
has permanent rights of access to dedicated public highways. No
fact or condition exists which would prohibit or adversely affect
the ordinary rights of access to and from the Real Property from
and to the existing highways and roads and there is no pending or
threatened restriction or denial, governmental or otherwise, upon
such ingress and egress. There is not (i) any claim of adverse
possession or prescriptive rights involving any of the Real
Property, (ii) any structure located on any Real Property which
encroaches on or over the boundaries of neighboring or adjacent
properties or (iii) any structure of any other party which
encroaches on or over the boundaries of any of such Real Property.
None of the Real Property is located in a flood plain, flood hazard
area, wetland or lakeshore erosion area within the meaning of any
Law. No public improvements have been commenced and to Company's
and Shareholders' knowledge none are planned which in either case
may result in special assessments against or otherwise materially
adversely affect any Real Property. To the best of Company's
knowledge no portion of any of the Real Property has been used as a
landfill or for storage or landfill of hazardous or toxic
materials. Neither Company nor any Shareholder has notice or
knowledge of any (i) planned or proposed increase in assessed
valuations of any Real Property, (ii) Order requiring repair,
alteration, or correction of any existing condition affecting any
Real Property or the systems or improvements thereat, (iii)
condition or defect which could give rise to an order of the sort
referred to in "(ii)" above, or (iv) except as set forth in
Schedule 4.12.(c), underground storage tanks, or any structural,
mechanical, or other defects of material significance affecting any
Real Property or the systems or improvements thereat (including,
but not limited to, inadequacy for normal use of mechanical systems
or disposal or water systems at or serving the Real Property).

4.12.(d) No Condemnation or Expropriation. Neither the whole
nor any portion of the property or any other assets of Company is
subject to any Order to be sold or is being condemned, expropriated
or otherwise taken by any Government Entity with or without payment
of compensation therefor, nor to the best of Company's and
Shareholders' knowledge has any such condemnation, expropriation or
taking been proposed.

4.12.(e) No Certified Survey Map Required. No certified
survey map or other state, municipal, or other governmental
approval regarding the division, platting, or mapping of real
estate is required as a prerequisite to the conveyance by Company
to Buyer (or as a prerequisite to the recording of any conveyance
document) of any Owned Real Property or Leased Real Property
pursuant to the terms hereof.

4.13. Insurance. Set forth in Schedule 4.13 is a complete and
accurate list and description of all policies of fire, liability, product
liability, workers compensation, health and other forms of insurance
presently in effect with respect to the business and properties of
Company, true and correct copies of which have heretofore been delivered
to Buyer. Schedule 4.13 includes, without limitation, the carrier, the
description of coverage, the limits of coverage, retention or deductible
amounts, amount of annual premiums, date of expiration and the date
through which premiums have been paid with respect to each such policy,
and any pending claims in excess of Ten Thousand Dollars ($10,000.00).
All such policies are valid, outstanding and enforceable policies and
provide insurance coverage for the properties, assets and operations of
Company, of the kinds, in the amounts and against the risks customarily
maintained by organizations similarly situated; and no such policy (nor
any previous policy) provides for or is subject to any currently
enforceable retroactive rate or premium adjustment, loss sharing
arrangement or other actual or contingent liability arising wholly or
partially out of events arising prior to the date hereof. Schedule 4.13
indicates each policy as to which (a) the coverage limit has been reached
or (b) the total incurred losses to date equal 75% or more of the coverage
limit. No notice of cancellation or termination has been received with
respect to any such policy, and neither Company nor any Shareholder has
knowledge of any act or omission of Company which could result in
cancellation of any such policy prior to its scheduled expiration date.
Company has not been refused any insurance with respect to any aspect of
the operations of the business nor has its coverage been limited by any
insurance carrier to which it has applied for insurance or with which it
has carried insurance during the last three years. Company has duly and
timely made all claims it has been entitled to make under each policy of
insurance. Since January 1, 1994 all general liability policies
maintained by or for the benefit of Company have been "occurrence"
policies and not "claims made" policies. There is no claim by Company
pending under any such policies as to which coverage has been questioned,
denied or disputed by the underwriters of such policies, and neither
Company nor any of the Shareholders knows of any basis for denial of any
claim under any such policy. Company has not received any written notice
from or on behalf of any insurance carrier issuing any such policy that
insurance rates therefor will hereafter be substantially increased (except
to the extent that insurance rates may be increased for all similarly
situated risks) or that there will hereafter be a cancellation or an
increase in a deductible (or an increase in premiums in order to maintain
an existing deductible) or nonrenewal of any such policy. Such policies
are sufficient in all material respects for compliance by Company with all
requirements of law and with the requirements of all material contracts to
which Company is a party.

4.14. Contracts and Commitments.

4.14.(a) Real Property Leases. Except as set forth in
Schedule 1.1.(b), Company has no leases of real property.

4.14.(b) Personal Property Leases. Except as set forth in
Schedule 1.1.(e), Company has no leases of personal property
involving consideration or other expenditure in excess of Five
Thousand Dollars ($5,000.00) or involving performance over a period
of more than 12 months.

4.14.(c) Purchase Commitments. Company has no purchase
commitments for inventory items or supplies that, together with
amounts on hand, constitute an amount in excess of that required to
fulfill firm Sales Contracts, or which are at an excessive price.

4.14.(d) Sales Commitments. Company has no sales contracts
or commitments except those made in the ordinary course of
business, at arm's length, and no such contracts or commitments are
for a sales price which are anticipated to result in a loss to the
Company.

4.14.(e) Contracts for Services. Company has no agreement,
understanding, contract or commitment (written or oral) with any
officer, employee, agent, consultant, distributor, dealer or
franchisee that is not cancelable by Company on notice of not
longer than 30 days without liability, penalty or premium of any
nature or kind whatsoever.

4.14.(f) Powers of Attorney. The Company has not given a
power of attorney, which is currently in effect, to any person,
firm or corporation for any purpose whatsoever.

4.14.(g) Collective Bargaining Agreements. Except as set
forth in Schedule 4.14.(g), Company is not a party to any
collective bargaining agreements with any unions, guilds, shop
committees or other collective bargaining groups. Copies of all
such agreements have heretofore been delivered to Buyer.

4.14.(h) Loan Agreements. Except as set forth in Schedule
4.14.(h), Company is not obligated under any loan agreement,
promissory note, letter of credit, or other evidence of
indebtedness as a signatory, guarantor or otherwise.

4.14.(i) Guarantees. Except as disclosed on Schedule
4.14.(i), Company has not guaranteed the payment or performance of
any person, firm or corporation, agreed to indemnify any person or
act as a surety, or otherwise agreed to be contingently or
secondarily liable for the obligations of any person.

4.14.(j) Contracts Subject to Renegotiation. Company is not
a party to any contract with any governmental body which is subject
to renegotiation.

4.14.(k) Burdensome or Restrictive Agreements. Except as set
forth on Schedule 4.14.(k), Company is not a party to nor is it
bound by any agreement, deed, lease or other instrument which is so
burdensome as to materially affect or impair the operation of
Company. Without limiting the generality of the foregoing, Company
is not a party to nor is it bound by any agreement requiring
Company to assign any interest in any trade secret or proprietary
information, or prohibiting or restricting Company from competing
in any business or geographical area or soliciting customers or
otherwise restricting it from carrying on its business anywhere in
the world.

4.14.(l) Other Material Contracts. Except for Purchase
Orders and Sales Orders, Company has no lease, license, contract or
commitment of any nature involving consideration or other
expenditure in excess of Five Thousand Dollars ($5,000.00), or
involving performance over a period of more than 12 months, or
which is otherwise individually material to the operations of
Company, except as explicitly described in Schedule 4.14.(l) or in
any other Schedule.

4.14.(m) No Default. To the best of Company's knowledge,
Company is not in default under any lease, contract or commitment,
nor has any event or omission occurred which through the passage of
time or the giving of notice, or both, would constitute a default
thereunder or cause the acceleration of any of Company's
obligations or result in the creation of any Lien on any of the
assets owned, used or occupied by Company. To the best of
Company's knowledge no third party is in default under any lease,
contract or commitment to which Company is a party, nor has any
event or omission occurred which, through the passage of time or
the giving of notice, or both, would constitute a default
thereunder or give rise to an automatic termination, or the right
of discretionary termination, thereof.

4.15. Labor Matters. Except as set forth in Schedule 4.15, within
the last five years Company has not experienced any labor disputes, union
organization attempts or any work stoppage due to labor disagreements in
connection with its business. Except to the extent set forth in Schedule
4.15 to the best of Company's knowledge, (a) Company is in compliance with
all applicable laws respecting employment and employment practices, terms
and conditions of employment and wages and hours, and is not engaged in
any unfair labor practice; (b) there is no unfair labor practice charge or
complaint against Company pending or to the best of Company's knowledge
threatened; (c) there is no labor strike, dispute, request for
representation, slowdown or stoppage actually pending or to the best of
Company's knowledge threatened against or affecting Company nor any
secondary boycott with respect to products of Company; (d) no notice of
any question concerning representation has been raised or to the best of
Company's knowledge is threatened respecting the employees of Company; (e)
no grievance which might have a material adverse effect on Company, nor
any arbitration proceeding arising out of or under collective bargaining
agreements, is pending and no such claim therefor exists; and (f) there
are no administrative charges or court complaints against Company
concerning alleged employment discrimination or other employment related
matters pending or threatened before the U.S. Equal Employment Opportunity
Commission or any Government Entity.

4.16. Employee Benefit Plans.

4.16.(a) Disclosure. Schedule 4.16.(a) sets forth all
pension, thrift, savings, profit sharing, retirement, incentive
bonus or other bonus, medical, dental, life, accident insurance,
benefit, employee welfare, disability, group insurance, stock
purchase, stock option, stock appreciation, stock bonus, executive
or deferred compensation, hospitalization and other similar fringe
or employee benefit plans, programs and arrangements, and any
employment or consulting contracts, "golden parachutes," collective
bargaining agreements, severance agreements or plans, vacation and
sick leave plans, programs, arrangements and policies, including,
without limitation, all "employee benefit plans" (as defined in
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")), all employee manuals, and all written
or binding oral statements of policies, practices or understandings
relating to employment, which are provided to, for the benefit of,
or relate to, any persons ("Company Employees") employed by
Company. The items described in the foregoing sentence are
hereinafter sometimes referred to collectively as "Employee
Plans/Agreements," and each individually as an "Employee
Plan/Agreement." True and correct copies of all the Employee
Plans/Agreements, including all amendments thereto, have heretofore
been provided to Buyer. Each of the Employee Plans/Agreements is
identified on Schedule 4.16.(a), to the extent applicable, as one
or more of the following: an "employee pension benefit plan" (as
defined in Section 3(2) of ERISA), a "defined benefit plan" (as
defined in Section 414 of the Code), an "employee welfare benefit
plan" (as defined in Section 3(1) of ERISA), and/or as a plan
intended to be qualified under Section 401 of the Code. No
Employee Plan/Agreement is a "multiemployer plan" (as defined in
Section 4001 of ERISA), and Company has never contributed nor been
obligated to contribute to any such multiemployer plan.

4.16.(b) Terminations, Proceedings, Penalties, etc. With
respect to each employee benefit plan (including, without
limitation, the Employee Plans/Agreements) that is subject to the
provisions of Title IV of ERISA and with respect to which the
Company or any of its assets may, directly or indirectly, be
subject to any Liability, contingent or otherwise, or the
imposition of any Lien (whether by reason of the complete or
partial termination of any such plan, the funded status of any such
plan, any "complete withdrawal" (as defined in Section 4203 of
ERISA) or "partial withdrawal" (as defined in Section 4205 of
ERISA) by any person from any such plan, or otherwise):

(i) no such plan has been terminated so as to subject,
directly or indirectly, any assets of Company to any Liability
or the imposition of any Lien under Title IV of ERISA;

(ii) no proceeding has been initiated or threatened by
any person (including the Pension Benefit Guaranty Corporation
("PBGC")) to terminate any such plan;

(iii) no condition or event currently exists or
currently is expected to occur that could subject, directly or
indirectly, any assets of Company to any Liability or the
imposition of any Lien under Title IV of ERISA, whether to the
PBGC or to any other person or otherwise on account of the
termination of any such plan;

(iv) if any such plan were to be terminated as of the
Closing Date, no assets of Company would be subject, directly
or indirectly, to any Liability or the imposition of any Lien
under Title IV of ERISA;

(v) no "reportable event" (as defined in Section 4043
of ERISA) has occurred with respect to any such plan;

(vi) no such plan which is subject to Section 302 of
ERISA or Section 412 of the Code has incurred any "accumulated
funding deficiency" (as defined in Section 302 of ERISA and
Section 412 of the Code, respectively), whether or not waived;
and

(vii) no such plan is a multiemployer plan or a plan
described in Section 4064 of ERISA.

4.16.(c) Prohibited Transactions, etc. There have been no
"prohibited transactions" within the meaning of Section 406 or 407
of ERISA or Section 4975 of the Code for which a statutory or
administrative exemption does not exist with respect to any
Employee Plan/Agreement, and no event or omission has occurred in
connection with which the Company or any of its assets or any
Employee Plan/Agreement, directly or indirectly, could be subject
to any Liability under ERISA, the Code or any other Law or Order
applicable to any Employee Plan/Agreement, or under any agreement,
instrument, Law or Order pursuant to which Company is required to
indemnify any person against liability incurred under any such Law
or Order.

4.16.(d) Full Funding. The funds available under each
Employee Benefit Plan which is intended to be a funded plan exceed
the amounts required to be paid, or which would be required to be
paid if such Plan were terminated, on account of rights vested or
accrued as of the Closing Date (using the actuarial methods and
assumptions then used by Company's actuaries in connection with the
funding of such Plan).

4.16.(e) Controlled Group; Affiliated Service Group; Leased
Employees. Company is not and never has been a member of a
controlled group of corporations as defined in Section 414(b) of
the Code or in common control with any unincorporated trade or
business as determined under Section 414(c) of the Code. Company
is not and never has been a member of an "affiliated service group"
within the meaning of Section 414(m) of the Code. There are not
and never have been any leased employees within the meaning of
Section 414(n) of the Code who perform services for Company, and no
individuals are expected to become leased employees with the
passage of time.

4.16.(f) Payments and Compliance. With respect to each
Employee Plan/Agreement, (i) all payments due from Company to date
have been made and all amounts properly accrued to date as
Liabilities of Company which have not been paid have been properly
recorded on the books of Company and are reflected in the Recent
Balance Sheet; (ii) to the best of Company's knowledge Company has
complied with, and each such Employee Plan/Agreement conforms in
form and operation to, all applicable laws and regulations,
including but not limited to ERISA and the Code, in all respects
and all reports and information relating to such Employee
Plan/Agreement required to be filed with any governmental entity
have been timely filed; (iii) all reports and information relating
to each such Employee Plan/Agreement required to be disclosed or
provided to participants or their beneficiaries have been timely
disclosed or provided; (iv) each such Employee Plan/Agreement which
is intended to qualify under Section 401 of the Code has received a
favorable determination letter from the Internal Revenue Service
with respect to such qualification, its related trust has been
determined to be exempt from taxation under Section 501(a) of the
Code, and nothing has occurred since the date of such letter that
has or is likely to adversely affect such qualification or
exemption; (v) there are no actions, suits or claims pending (other
than routine claims for benefits) or to the best of Company's
knowledge threatened with respect to such Employee Plan/Agreement
or against the assets of such Employee Plan/Agreement; and (vi) no
Employee Plan/Agreement is a plan which is established and
maintained outside the United States primarily for the benefit of
individuals substantially all of whom are nonresident aliens.

4.16.(g) Post-Retirement Benefits. Except as set forth in
Schedule 4.16.(g), no Employee Plan/Agreement provides benefits,
including, without limitation, death or medical benefits (whether
or not insured) with respect to current or former Company Employees
beyond their retirement or other termination of service other than
(i) coverage mandated by applicable law, (ii) death or retirement
benefits under any Employee Plan/Agreement that is an employee
pension benefit plan, (iii) deferred compensation benefits accrued
as liabilities on the books of the Company (including the Recent
Balance Sheet), (iv) disability benefits under any Employee
Plan/Agreement that is an employee welfare benefit plan and which
have been fully provided for by insurance or otherwise or (v)
benefits in the nature of severance pay.

4.16.(h) No Triggering of Obligations. The consummation of
the transactions contemplated by this Agreement will not (i)
entitle any current or former employee of Company to severance pay,
unemployment compensation unless not hired by Buyer or any other
payment, except as expressly provided in this Agreement, (ii)
except for certain payments the Company may owe to William J.
Lazzari, accelerate the time of payment or vesting, or increase the
amount of compensation due to any such employee or former employee
or (iii) result in any prohibited transaction described in Section
406 of ERISA or Section 4975 of the Code for which an exemption is
not available.

4.16.(i) Delivery of Documents. There has been delivered to
Buyer, with respect to each Employee Plan/Agreement:

(i) a copy of the annual report, if required under
ERISA, with respect to each such Employee Plan/Agreement for
the last two years;

(ii) a copy of the summary plan description, together
with each summary of material modifications, required under
ERISA with respect to such Employee Plan/Agreement, all
material employee communications relating to such Employee
Plan/Agreement, and, unless the Employee Plan/Agreement is
embodied entirely in an insurance policy to which Company is a
party, a true and complete copy of such Employee
Plan/Agreement;

(iii) if the Employee Plan/Agreement is funded through
a trust or any third party funding vehicle (other than an
insurance policy), a copy of the trust or other funding
agreement and the latest financial statements thereof; and

(iv) the most recent determination letter received
from the Internal Revenue Service with respect to each
Employee Plan/Agreement that is intended to be a "qualified
plan" under Section 401 of the Code.

With respect to each Employee Plan/Agreement for which
an annual report has been filed and delivered to Buyer
pursuant to clause (i) of this Section 4.16.(i), no material
adverse change has occurred with respect to the matters
covered by the latest such annual report since the date
thereof.

4.16.(j) Future Commitments. Company has no announced plan
or legally binding commitment to create any additional Employee
Plans/Agreements or to amend or modify any existing Employee
Plan/Agreement.

4.17. Employment Compensation. Schedule 4.17 contains a true and
correct list as of December 31, 1996 of all employees to whom the Company
is paying compensation, including bonuses and incentives, for services
rendered or otherwise; and such list identifies the current annual rate of
compensation for each employee and in the case of hourly or commission
employees identifies certain reasonable ranges of rates, reflecting any
increases in compensation since December 31, 1996.

4.18. Trade Rights. Schedule 4.18 lists all Trade Rights of the
type described in clauses (i), (ii), (iii) or (iv) of Section 1.1.(f) in
which Company now has any interest, specifying whether such Trade Rights
are owned, controlled, used or held (under license or otherwise) by
Company, and also indicating which of such Trade Rights are registered.
All Trade Rights shown as registered in Schedule 4.18 have been properly
registered, all pending registrations and applications have been properly
made and filed and all annuity, maintenance, renewal and other fees
relating to registrations or applications are current. In order to
conduct the business of Company, as such is currently being conducted or
proposed to be conducted, Company does not require any Trade Rights that
it does not already have. Company is not infringing and has not infringed
any Trade Rights of another in the operation of the business of Company,
nor is any other person infringing the Trade Rights of Company. Company
has not granted any license or made any assignment of any Trade Right
listed on Schedule 4.18, and no other person has any right to use any
Trade Right owned or held by Company. Company does not pay any royalties
or other consideration for the right to use any Trade Rights of others.
There is no Litigation pending or to the best of Company's knowledge
threatened to challenge Company's right, title and interest with respect
to its continued use and right to preclude others from using any Trade
Rights of Company. All Trade Rights of Company are valid, enforceable and
in good standing, and to the best of Company's knowledge there are no
equitable defenses to enforcement based on any act or omission of Company.

4.19. Major Customers and Suppliers.

4.19.(a) Major Customers. Schedule 4.19.(a) contains a list
of the ten largest customers, including distributors, of Company
for each of the two (2) most recent fiscal years (determined on the
basis of the total dollar amount of net sales) showing the total
dollar amount of net sales to each such customer during each such
year. Except as set forth on Schedule 4.19.(a), neither Company
nor any Shareholder has any knowledge or information of any facts
indicating, nor any other reason to believe, that any of the
customers listed on Schedule 4.19.(a) will not continue to be
customers of the business of Company after the Closing at
substantially the same level of purchases as heretofore.

4.19.(b) Major Suppliers. Schedule 4.19.(b) contains a list
that includes the ten largest suppliers to Company for each of the
two (2) most recent fiscal years (determined on the basis of the
total dollar amount of purchases) showing the total dollar amount
of purchases from each such supplier during each such year.
Neither Company nor any Shareholder has any knowledge or
information of any facts indicating, nor any other reason to
believe, that any of the suppliers listed on Schedule 4.19.(b) will
not continue to be suppliers to the business of Company after the
Closing and will not continue to supply the business with
substantially the same quantity and quality of goods at competitive
prices.

4.19.(c) Dealers and Distributors. Schedule 4.19.(c)
contains a list by product line of all sales representatives,
dealers, distributors and franchisees of Company, together with
representative copies of all sales representative, dealer,
distributor and franchise contracts and policy statements, and a
description of all substantial modifications or exceptions.

4.20. Product Warranty and Product Liability. The Company has no
express standard warranty with respect to the sale of its Products (as
defined below). Schedule 4.20 contains a true, correct and complete copy
of those warranty or warranties for sales of Products incorporated in the
standard terms and conditions imposed by General Electric and Pratt &
Whitney and, except as stated therein, there are no warranties,
commitments or obligations with respect to the return, repair or
replacement of Products except those specified in the Uniform Commercial
Code as enacted in the relevant jurisdictions and under such
jurisdictions' Common Law. Schedule 4.20 sets forth the estimated
aggregate annual cost to Company of performing warranty obligations for
customers for each of the three (3) preceding fiscal years and the current
fiscal year to the date of the Recent Business Balance Sheet. Schedule
4.20 contains a description of all product liability claims and similar
Litigation relating to Products manufactured or sold, or services
rendered, which are presently pending or which to Company's or any
Shareholder's knowledge are threatened, or which have been asserted or
commenced against Company within the last three (3) years, in which a
party thereto either requests injunctive relief or alleges damages. To
the best of Company's knowledge there are no defects in manufacture of
Products which would adversely affect performance or create an unusual
risk of injury to persons or property. None of the Products has been the
subject of any field fix, retrofit, modification or recall campaign
requiring the Company to incur costs with respect thereto and, to
Company's or any Shareholder's knowledge, no facts or conditions exist
which could reasonably be expected to result in such a recall campaign.
The Products have been manufactured so as to meet and comply with all
customer standards and specifications at time of manufacture. As used in
this Section 4.20, the term "Products" means any and all products
currently or at any time previously manufactured, distributed or sold by
Company prior to the Closing Date.

4.21. Affiliates' Relationships to Company.

4.21.(a) Contracts With Affiliates. All leases, contracts,
agreements or other arrangements between Company and any Affiliate
are described on Schedule 4.21.(a).

4.21.(b) No Adverse Interests. No Affiliate has any direct
or indirect interest in (i) any entity which does business with
Company or is competitive with the Company's business, or (ii) any
property, asset or right which is used by Company in the conduct of
its business.

4.21.(c) Obligations. All obligations of any Affiliate to
Company, and all obligations of Company to any Affiliate, are
listed on Schedule 4.21.(c).

4.22. Shareholder List. Schedule 4.22 sets forth a complete list
of all the holders of capital stock of Company issued and outstanding on
the date hereof, together with the number of shares held by each
shareholder. Except as set forth in Schedule 4.22, each person so listed
is a competent adult and is the record and the beneficial owner of all
shares so listed in his or her name, with the sole right to vote, dispose
of, and receive dividends or distributions with respect to such shares.

4.23. Assets Necessary to Business. The Purchased Assets include
all property and assets (except for the Excluded Assets), tangible and
intangible, and all leases, licenses and other agreements, which are
necessary to permit Buyer to carry on, or currently used or held for use
in, the business of Company as presently conducted.

4.24. No Brokers or Finders. Neither Company nor any of its
directors, officers, employees, Shareholders or agents have retained,
employed or used any broker or finder in connection with the transactions
provided for herein or the negotiation thereof, except for Duff & Phelps
LLC and Brian Hollander. Company is solely liable for the payment of any
fees and expenses of Duff & Phelps LLC and Brian Hollander.

4.25. Disclosure. No representation or warranty by Company and/or
the Shareholders in this Agreement, nor any statement, certificate,
schedule, document or exhibit hereto furnished or to be furnished by or on
behalf of Company or Shareholders pursuant to this Agreement or in
connection with transactions contemplated hereby, contains or shall
contain any untrue statement of material fact or omits or shall omit a
material fact necessary to make the statements contained therein not
misleading. All statements and information contained in any certificate,
instrument, Disclosure Schedule or document delivered by or on behalf of
Company and/or Shareholders shall be deemed representations and warranties
by the Company and the Shareholders.

5. REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer makes the following representations and warranties to Company
and the Shareholders, each of which is true and correct on the date
hereof, shall remain true and correct to and including the Closing Date,
shall be unaffected by any investigation heretofore or hereafter made by
Company or any notice to Company, and shall survive the Closing of the
transactions provided for herein.

5.1. Corporate.

5.1.(a) Organization. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Wisconsin.

5.1.(b) Corporate Power. Buyer has all requisite corporate
power to enter into this Agreement and the other documents and
instruments to be executed and delivered by Buyer and to carry out
the transactions contemplated hereby and thereby.

5.2. Authority. The execution and delivery of this Agreement and
the other documents and instruments to be executed and delivered by Buyer
pursuant hereto and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by the Board of Directors of
Buyer. No other corporate act or proceeding on the part of Buyer or its
shareholders is necessary to authorize this Agreement or the other
documents and instruments to be executed and delivered by Buyer pursuant
hereto or the consummation of the transactions contemplated hereby and
thereby. This Agreement constitutes, and when executed and delivered, the
other documents and instruments to be executed and delivered by Buyer
pursuant hereto will constitute, valid and binding agreements of Buyer,
enforceable in accordance with their respective terms, except as such may
be limited by bankruptcy, insolvency, reorganization or other laws
affecting creditors' rights generally, and by general equitable
principles.

5.3. No Brokers or Finders. Neither Buyer nor any of its
directors, officers, employees or agents have retained, employed or used
any broker or finder in connection with the transactions provided for
herein or the negotiation thereof.

5.4. Disclosure. No representation or warranty by Buyer in this
Agreement, nor any statement, certificate, schedule, document or exhibit
hereto furnished or to be furnished by or on behalf of Buyer pursuant to
this Agreement or in connection with transactions contemplated hereby,
contains or shall contain any untrue statement of material fact or omits
or shall omit a material fact necessary to make the statements contained
therein not misleading.

5.5. Financial Statements. Included as Exhibit 5.5 are true and
complete copies of the financial statements of Buyer as of December 31,
1995 and 1996 and the related Statements of income and cash flows for the
years then ended, which financial statements will be accompanies by
signed, unqualified opinions of Arthur Andersen.

6. EMPLOYEES - EMPLOYEE BENEFITS

6.1. Affected Employees. "Affected Employees" shall mean
employees of the Company who are employed by Buyer immediately after the
Closing.

6.2. Retained Responsibilities. Company agrees to satisfy, or
cause its insurance carriers to satisfy, all claims for benefits, whether
insured or otherwise (including, but not limited to, workers'
compensation, life insurance, medical and disability programs), under
Company's employee benefit programs brought by, or in respect of, Affected
Employees and other employees and former employees of the Company, which
claims were incurred prior to the Closing Date, in accordance with the
terms and conditions of such programs or applicable workers' compensation
statutes without interruption as a result of the employment by Buyer of
any such employees after the Closing Date.

6.3. Payroll Tax. Company agrees to make a clean cut-off of
payroll and payroll tax reporting with respect to the Affected Employees
paying over to the federal, state and city governments those amounts
respectively withheld or required to be withheld for periods ending on or
prior to the Closing Date. Company also agrees to issue, by the date
prescribed by IRS Regulations, Forms W-2 for wages paid through the
Closing Date. Except as set forth in this Agreement, Buyer shall be
responsible for all payroll and payroll tax obligations after the Closing
Date for Affected Employees.

6.4. Termination Benefits. Buyer shall be solely responsible
for, and shall pay or cause to be paid, severance payments and other
termination benefits, if any, to Affected Employees who may become
entitled to such benefits by reason of any events occurring after Closing.
If any action on the part of Company prior to the Closing, or if the sale
to Buyer of the business and assets of Company pursuant to this Agreement
or the transactions contemplated hereby, or if the failure by Buyer to
hire as a permanent employee of Buyer any employee of Company, shall
directly or indirectly result in any Liability (i) for severance payments
or termination benefits or (ii) by virtue of any state, federal or local
"plant-closing" or similar law, such Liability shall be the sole
responsibility of Company, and Company and Shareholders shall, jointly and
severally, indemnify and hold harmless Buyer against such Liability.

6.5. Employee Benefit Plans.

6.5.(a) Defined Contribution Plans. Within 90 days after
the Closing Date, Buyer shall elect, with respect to each employee
pension benefit plan that is not a defined benefit plan ("defined
contribution plan") maintained by Company for any Affected
Employee, either (i) or (ii).

(i) If this option is elected by Buyer, Company shall
vest and make non-forfeitable as of the Closing Date the
interest of each Affected Employee in each such defined
contribution plan.

(ii) If this option is elected by Buyer, as soon as
practicable after receipt by Buyer of a favorable
determination letter with respect to a successor plan of any
such defined contribution plan that is established by Buyer
("successor defined contribution plan"), Company shall
transfer to such successor defined contribution plan the
account of any Affected Employee still existing in such
defined contribution plan. Pending such transfer, Company
shall: (1) maintain the accounts of such Affected Employees
on the same basis as other employees; (2) accept new funds
into the accounts of such Affected Employees; and (3) make
payments from the accounts of such Affected Employees to or
for the benefit of the Affected Employees as Buyer may direct.

6.5.(b) Intentionally Left Blank.

6.5.(c) Delivery of Records. Company shall deliver to Buyer
not less than 10 days prior to the Closing Date, with respect to
each Employee Plan/Agreement, information adequate to determine the
liability thereunder, whether or not contingent, to any Affected
Employee or other employee or former employee who is or was
employed by Company and with respect to whom Buyer may have any
liability, and any beneficiary or dependent of any such Affected
Employee, employee or former employee, together with data, records
and other documentation adequate to determine the existence and
amount of such liability. Delivery of such data, records and other
documentation shall be made in machine readable form, if existing,
and shall be made by Company or any other person at the time
providing or who has provided services with respect to the Employee
Plan/Agreement. Company or persons designated by Company prior to
the Closing Date will have reasonable access after the Closing Date
to such items.

6.5.(d) No Third-Party Rights. Nothing in this Agreement,
express or implied, is intended to confer upon any of Company's
employees, former employees, collective bargaining representatives,
job applicants, any association or group of such persons or any
Affected Employees any rights or remedies of any nature or kind
whatsoever under or by reason of this Agreement, including, without
limitation, any rights of employment.

7. OTHER MATTERS

7.1. Title Insurance. Not less than 15 days prior to the
Closing, Company, at its expense, shall provide to Buyer title insurance
commitments, issued by a title insurance company or companies reasonably
satisfactory to Buyer, agreeing to issue to Buyer standard form owner's
(or lessee's, as the case may be) policies of title insurance with respect
to all Owned Real Property and Leased Real Property, together with a copy
of each document to which reference is made in such commitments. In the
case of Owned Real Property, such policies shall be standard ALTA Form
1990 owner's policies in the full amount of that portion of the Purchase
Price allocated respectively to each subject parcel of Owned Real Property
under Section 3.6 hereof, insuring good and marketable title thereto
(expressly including all easements and other appurtenances). In the case
of Leased Real Property, such policies shall be upon standard ALTA Form
1990 leasehold owner's policies and in such amounts as such shall be
reasonably acceptable to Buyer. In either case, all policies shall insure
title in full accordance with the representations and warranties set forth
herein and shall be subject only to such conditions and exceptions as
shall be reasonably acceptable to Buyer, and shall contain such
endorsements as Buyer shall reasonably request (including, but not limited
to, an endorsement over rights of creditors, if requested by Buyer or
Buyer's lender).

7.2. Surveys. Not less than 15 days prior to the Closing,
Company, shall provide to Buyer surveys of all Owned Real Property and all
Leased Real Property prepared in accordance with ALTA/ASCM standards, each
dated no more than ninety (90) days prior to the Closing and each
detailing the legal description, the perimeter boundaries, all
improvements located thereon, all easements and encroachments affecting
each such parcel of Owned Real Property and such other matters as may be
reasonably requested by Buyer or the title insurance companies, each
containing a surveyor certificate reasonably acceptable to Buyer and the
title insurance companies, and each prepared by a registered land surveyor
satisfactory to Buyer. Company and Buyer shall equally pay for the cost
of the survey.

7.3. Environmental Audits. Buyer will promptly retain a firm
engaged in the regular business of environmental engineering to conduct
such environmental audits of Company's operations and the real estate
occupied by Company as Buyer or Company in their respective discretion
shall consider necessary or appropriate.

7.4. Escrow Agreement. At the Closing, Company and Buyer shall
execute and deliver an Escrow Agreement (the "Escrow Agreement") in the
form of Exhibit 7.4 hereto.

7.5. Consulting and Noncompetition Agreements. At the Closing,
Company shall cause to be delivered to Buyer an Consulting and
Noncompetition Agreements, substantially in the form of Exhibit 7.5
hereto, duly executed by F. Robert Petricone and William R. Petricone.

7.6. Noncompetition. Subject to the Closing, and as an
inducement to Buyer to execute this Agreement and complete the
transactions contemplated hereby, and in order to preserve the goodwill
associated with the business of Company being acquired pursuant to this
Agreement, and in addition to and not in limitation of any covenants
contained in any agreement executed and delivered pursuant to Section 7.5
hereof, Company hereby covenants and agrees that for a period of three (3)
years from the Closing Date, it will not, directly or indirectly:

(i) engage in, continue in or carry on any business
which competes with the Business or is substantially similar
thereto, including owning or controlling any financial
interest in any corporation, partnership, firm or other form
of business organization which is so engaged;

(ii) consult with, advise or assist in any way,
whether or not for consideration, any corporation,
partnership, firm or other business organization which is now
or becomes a competitor of Buyer in any aspect with respect to
the Business including, but not limited to, advertising or
otherwise endorsing the products of any such competitor;
soliciting customers or otherwise serving as an intermediary
for any such competitor; loaning money or rendering any other
form of financial assistance to or engaging in any form of
business transaction on other than an arm's length basis with
any such competitor;

(iii) hire, offer to hire, or solicit for employment
any Affected Employee, without the prior consent of Buyer,
until such person has been separated from employment by the
Buyer for at least 180 days; or

(iv) engage in any practice the purpose of which is
to evade the provisions of this covenant not to compete or to
commit any act which adversely affects the Business, Purchased
Assets or Assumed Liabilities;

provided, however, that the foregoing shall not prohibit the ownership of
securities of corporations which are listed on a national securities
exchange or traded in the national over-the-counter market in an amount
which shall not exceed 5% of the outstanding shares of any such
corporation. The parties agree that the geographic scope of this covenant
not to compete shall extend for North America and Europe. The parties
agree that Buyer may sell, assign or otherwise transfer this covenant not
to compete, in whole or in part, to any person, corporation, firm or
entity that purchases all or part of the Business or the Purchased Assets,
being acquired by Buyer hereunder. In the event a court of competent
jurisdiction determines that the provisions of this covenant not to
compete are excessively broad as to duration, geographical scope or
activity, it is expressly agreed that this covenant not to compete shall
be construed so that the remaining provisions shall not be affected, but
shall remain in full force and effect, and any such over broad provisions
shall be deemed, without further action on the part of any person, to be
modified, amended and/or limited, but only to the extent necessary to
render the same valid and enforceable in such jurisdiction.

7.7. Confidential Information. Neither Company nor any
Shareholder shall at any time subsequent to the Closing, except as
explicitly requested by Buyer, use for any purpose, disclose to any
person, or keep or make copies of documents, tapes, discs, programs or
other information storage media ("records") containing, any confidential
information concerning the Business, the Purchased Assets, or the Assumed
Liabilities, all such information being deemed to be transferred to the
Buyer hereunder. For purposes hereof, "confidential information" shall
mean and include, without limitation, all Trade Rights in which Company
has an interest, all customer and vendor lists and related information,
all information concerning Company's processes, products, costs, prices,
sales, marketing and distribution methods, properties and assets,
liabilities, finances, employees, all privileged communications and work
product, and any other information not previously disclosed to the public
directly by Company. The foregoing provisions shall not apply to any
information which is an "Excluded Asset" as defined in Section 1.2, or
which relates solely to one or more Excluded Assets. If at any time after
Closing Company or any Shareholder should discover that it is in
possession of any records containing the confidential information of
Buyer, then the party making such discovery shall immediately turn such
records over to Buyer, which shall upon request make available to the
surrendering party any information contained therein which is not
confidential information. Company and each Shareholder severally agree
that they will not assert a waiver or loss of confidential or privileged
status of the information based upon such possession or discovery.
Company hereby consents to Buyer's consultation with legal, accounting and
other professional advisors to Company prior to the Closing regarding the
Business, the Purchased Assets or the Assumed Liabilities, excluding,
however, the negotiation and drafting of this Agreement and the
transactions entered into pursuant hereto.

7.8. Intentionally Left Blank.

7.9. Intentionally Left Blank.

7.10. Intentionally Left Blank.

7.11. Use of Company's Name. Following the Closing, neither
Company nor any Affiliate shall, without the prior written consent of
Buyer, make any use of the name "Stowe Machine Company, Incorporated" or
any other name confusingly similar thereto, except as may be necessary for
Company to pay its liabilities, prepare tax returns and other reports, and
to otherwise wind up and conclude its business.

7.12. Sales Tax Matters. At or prior to the Closing, Company
shall obtain a sales tax clearance certificate from the Connecticut
Department of Revenue. At or prior to the Closing Company shall surrender
to the Connecticut Department of Revenue its Connecticut seller's permit
so as to cause Company to qualify for an occasional sale exemption.

7.13. Unemployment Compensation. Company shall cooperate with
Buyer in any efforts by Buyer to obtain the transfer of Company's rate
under the Connecticut unemployment compensation fund applicable to
Affected Employees. In connection therewith, Company will execute such
documents as Buyer may reasonably request in order to effectuate such
transfer.

8. FURTHER COVENANTS OF COMPANY AND SHAREHOLDERS

Company and Shareholders covenant and agree as follows:

8.1. Access to Information and Records. During the period prior
to the Closing:

8.1.(a) Company shall, and shall cause its officers,
employees, agents, independent accountants and advisors to, furnish
to Buyer, its officers, employees, agents, independent accountants
and advisors, at reasonable times and places, all information in
their possession concerning Company as may be requested, and give
such persons access to all of the properties, books, records,
contracts and other documents of or pertaining to Company that
Company or its officers, employees, agents, independent accountants
or advisors shall have in their custody.

8.1.(b) With the prior consent of Company in each
instance (which consent shall not be unreasonably withheld), Buyer
and its officers, employees, agents, independent accountants and
advisors, shall have access to vendors, customers, and others
having business dealings with Company for the purpose of performing
Buyer's due diligence investigation.

8.2. Intentionally Left Blank.

8.3. Conduct of Business Pending the Closing. From the date
hereof until the Closing, except as otherwise approved in writing by the
Buyer:

8.3.(a) No Changes. Company will carry on its business
diligently and in the same manner as heretofore and will not make
or institute any changes in its methods of purchase, sale,
management, accounting or operation.

8.3.(b) Maintain Organization. Company will take such
action as may be necessary to maintain, preserve, renew and keep in
favor and effect the existence, rights and franchises of Company
and will use its best efforts to preserve the business organization
of Company intact, to keep available to Buyer the present officers
and employees, and to preserve for Buyer its present relationships
with suppliers and customers and others having business
relationships with Company.

8.3.(c) No Breach. Company and Shareholders will not do or
omit any act, or permit any omission to act, which may cause a
breach of any material contract, commitment or obligation, or any
breach of any representation, warranty, covenant or agreement made
by Company and/or the Shareholders herein, or which would have
required disclosure on Schedule 4.8 had it occurred after the date
of the Recent Balance Sheet and prior to the date of this
Agreement.

8.3.(d) No Material Contracts. No contract or commitment
will be entered into, and no purchase of raw materials or supplies
and no sale of goods or services (real, personal, or mixed,
tangible or intangible) will be made, by or on behalf of Company,
except contracts, commitments, purchases or sales which are in the
ordinary course of business and consistent with past practice, and
would not have been required to be disclosed in the Disclosure
Schedule had they been in existence on the date of this Agreement.

8.3.(e) No Corporate Changes. Company shall not amend its
Articles of Incorporation or By-Laws or make any changes in
authorized or issued capital stock.

8.3.(f) Maintenance of Insurance. Company shall maintain
all of the insurance in effect as of the date hereof and shall
procure such additional insurance as shall be reasonably requested
by Buyer.

8.3.(g) Maintenance of Property. Company shall use,
operate, maintain and repair all property of Company in a normal
business manner.

8.3.(h) Interim Financials. Company will provide Buyer with
interim monthly financial statements and other management reports
as and when they are available.

8.3.(i) No Negotiations. Neither Company nor any
Shareholder will directly or indirectly (through a representative
or otherwise) solicit or furnish any information to any prospective
buyer, commence, or conduct presently ongoing, negotiations with
any other party or enter into any agreement with any other party
concerning the sale of Company, Company's assets or business or any
part thereof or any equity securities of Company (an "acquisition
proposal"), the Company and Shareholders shall immediately advise
Buyer of the receipt of any acquisition proposal.

8.4. Change of Corporate Name. Concurrently with the Closing,
Company shall change its corporate name to a new name bearing no
resemblance to its present name so as to permit the use of its present
name by Buyer.

8.5. Consents. Company and Shareholders will obtain all consents
necessary for the consummation of the transactions contemplated hereby.

8.6. Other Action. Company and Shareholders shall use their best
efforts to cause the fulfillment at the earliest practicable date of all
of the conditions to the parties' obligations to consummate the
transactions contemplated in this Agreement.

8.7. Disclosure. Company and Shareholders shall have a
continuing obligation to promptly notify Buyer in writing with respect to
any matter hereafter arising or discovered which, if existing or known at
the date of this Agreement, would have been required to be set forth or
described in the Disclosure Schedule, but no such disclosure shall cure
any breach of any representation or warranty which is inaccurate.

9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS

Each and every obligation of Buyer to be performed on the Closing
Date shall be subject to the satisfaction prior to or at the Closing of
each of the following conditions:

9.1. Representations and Warranties True on the Closing Date.
Each of the representations and warranties made by Company and
Shareholders in this Agreement, and the statements contained in the
Disclosure Schedule or in any instrument, list, certificate or writing
delivered by Company pursuant to this Agreement, shall be true and correct
in all material respects when made and shall be true and correct in all
material respects at and as of the Closing Date as though such
representations and warranties were made or given on and as of the Closing
Date, except for any changes permitted by the terms of this Agreement or
consented to in writing by Buyer.

9.2. Compliance With Agreement. Company and Shareholders shall
have in all material respects performed and complied with all of its
agreements and obligations under this Agreement which are to be performed
or complied with by them prior to or on the Closing Date, including the
delivery of the closing documents specified in Section 12.1.

9.3. Absence of Litigation. No Litigation shall have been
commenced or threatened, and no investigation by any Government Entity
shall have been commenced, against Buyer, Company or any of the
affiliates, officers or directors of any of them, with respect to the
transactions contemplated hereby.

9.4. Consents and Approvals. All approvals, consents and waivers
that are required to effect the transactions contemplated hereby shall
have been received, and executed counterparts thereof shall have been
delivered to Buyer not less than two business days prior to the Closing.
Notwithstanding the foregoing, receipt of the consent of any third party
to the assignment of a Contract which is not (and is not required to be)
disclosed in the Disclosure Schedule shall not be a condition to Buyer's
obligation to close, provided that the aggregate of all such Contracts
does not represent a material portion of Company's sales or expenditures.
After the Closing, Company and Shareholders will continue to use their
best efforts to obtain any such consents or approvals, and neither Company
nor any Shareholder shall hereby be relieved of any liability hereunder
for failure to perform any of their respective covenants or for the
inaccuracy of any representation or warranty.

9.5. Title Insurance. Buyer shall have obtained good and valid
title insurance policies or, in final form, irrevocable title insurance
binders, dated as of the Closing Date, conforming to the specifications
set forth in Section 7.1 hereof.

9.6. Estoppel Certificates. Company shall have delivered to
Buyer on or prior to the Closing Date an estoppel certificate or status
letter from the landlord under each lease of real property which estoppel
certificate or status letter certify (i) the lease is valid and in full
force and effect; (ii) the amounts payable by Company under the lease and
the date to which the same have been paid; (iii) whether there are, to the
knowledge of said landlord, any defaults thereunder, and, if so,
specifying the nature thereof; and (iv) that the transactions contemplated
by this Agreement will not constitute default under the lease and that the
landlord consents to the assignment of the lease to Buyer.

9.7. Intentionally Left Blank.

9.8. Section 1445 Affidavit. Company shall have delivered to
Buyer an affidavit, in form satisfactory to Buyer, to the effect that
Company is not a "foreign person," "foreign corporation," "foreign
partnership," "foreign trust," or "foreign estate" under Section 1445 of
the Code, and containing all such other information as is required to
comply with the requirements of such Section.

9.9. Environmental Audit. The results of the environmental audit
conducted pursuant to Section 7.3 shall not have disclosed any past or
present condition, process or practice with respect to Company or any
property owned, occupied or operated by Company which is not in full
compliance with all applicable Environmental Laws or which otherwise
requires remediation under any Environmental Law, if a reasonable estimate
by Buyer of the cost of remediation, or the potential liability to third
persons arising from such condition, process or practice, or the cost of
bringing Company or such property into full compliance with all applicable
Environmental Laws, would exceed $25,000 in the aggregate with respect to
all matters described in this Section.

10. CONDITIONS PRECEDENT TO COMPANY'S OBLIGATIONS

Each and every obligation of Company and Shareholders to be
performed on the Closing Date shall be subject to the satisfaction prior
to or at the Closing of the following conditions:

10.1. Representations and Warranties True on the Closing Date.
Each of the representations and warranties made by Buyer in this Agreement
shall be true and correct in all material respects when made and shall be
true and correct in all material respects at and as of the Closing Date as
though such representations and warranties were made or given on and as of
the Closing Date.

10.2. Compliance With Agreement. Buyer shall have in all material
respects performed and complied with all of Buyer's agreements and
obligations under this Agreement which are to be performed or complied
with by Buyer prior to or on the Closing Date, including the delivery of
the closing documents specified in Section 12.2.

10.3. Absence of Litigation. No Litigation shall have been
commenced or threatened, and no investigation by any Government Entity
shall have been commenced, against Buyer, Company or any of the
affiliates, officers or directors of any of them, with respect to the
transactions contemplated hereby.

11. INDEMNIFICATION

11.1. By Company and Shareholders. Subject to the terms and
conditions of this Article 11, Company and each Shareholder, jointly and
severally, hereby agrees to indemnify, defend and hold harmless Buyer, and
its directors, officers, employees and controlled and controlling persons
(hereinafter "Buyer's Affiliates"), from and against all Claims asserted
against, resulting to, imposed upon, or incurred by Buyer, Buyer's
Affiliates or the business and assets transferred to Buyer pursuant to
this Agreement, directly or indirectly, by reason of, arising out of or
resulting from

(a) the inaccuracy or breach of any representation or
warranty of Company or any Shareholder contained in or made
pursuant to this Agreement (regardless of whether such breach is
deemed "material");

(b) the breach of any covenant of Company or any
Shareholder contained in this Agreement (regardless of whether such
breach is deemed "material");

(c) any Claim brought by or on behalf of any broker or
finder retained, employed or used by Company or any of its
directors, officers, employees, Shareholders or agents in
connection with the transactions provided for herein or the
negotiation thereof, whether or not disclosed herein; or

(d) any Claim of or against Company, the Purchased Assets
or the business of Company not specifically assumed by Buyer
pursuant hereto.

As used in this Article 11, the term "Claim" shall include (i) all
Liabilities; (ii) all losses, damages (including, without limitation,
consequential damages), judgments, awards, penalties and settlements;
(iii) all demands, claims, suits, actions, causes of action, proceedings
and assessments, whether or not ultimately determined to be valid; and
(iv) all costs and expenses (including, without limitation, interest
(including prejudgment interest in any litigated or arbitrated matter),
court costs and fees and expenses of attorneys and expert witnesses) of
investigating, defending or asserting any of the foregoing or of enforcing
this Agreement.

11.2. By Buyer. Subject to the terms and conditions of this
Article 11, Buyer hereby agrees to indemnify, defend and hold harmless
Company, its directors, officers, employees and controlling persons, and
each Shareholder from and against all Claims asserted against, resulting
to, imposed upon or incurred by any such person, directly or indirectly,
by reason of or resulting from

(a) the inaccuracy or breach of any representation or
warranty of Buyer contained in or made pursuant to this Agreement
(regardless of whether such breach is deemed "material");

(b) the breach of any covenant of Buyer contained in this
Agreement (regardless of whether such breach is deemed "material");
or

11.3. Indemnification of Third-Party Claims. The following
provisions shall apply to any Claim subject to indemnification which is
(i) a suit, action or arbitration proceeding filed or instituted by any
third party, or (ii) any other form of proceeding or assessment instituted
by any Government Entity:

11.3.(a) Notice and Defense. The party or parties to be
indemnified (whether one or more, the "Indemnified Party") will
give the party from whom indemnification is sought (the
"Indemnifying Party") prompt written notice of any such Claim, and
the Indemnifying Party will undertake the defense thereof by
representatives chosen by it. The assumption of defense shall not
constitute an admission by the Indemnifying Party of its
indemnification obligation hereunder with respect to such Claim,
and its undertaking to pay directly all costs, expenses, damages,
judgments, awards, penalties and assessments incurred in connection
therewith. Failure to give such notice shall not affect the
Indemnifying Party's duty or obligations under this Article 11,
except to the extent the Indemnifying Party is prejudiced thereby.
So long as the Indemnifying Party is defending any such Claim
actively and in good faith, the Indemnified Party shall not settle
such Claim. The Indemnified Party shall make available to the
Indemnifying Party or its representatives all records and other
materials required by them and in the possession or under the
control of the Indemnified Party, for the use of the Indemnifying
Party and its representatives in defending any such Claim, and
shall in other respects give reasonable cooperation in such
defense.

11.3.(b) Failure to Defend. If the Indemnifying Party,
within a reasonable time after notice of any such Claim, fails to
defend such Claim actively and in good faith, the Indemnified Party
will (upon further notice) have the right to undertake the defense,
compromise or settlement of such Claim or consent to the entry of a
judgment with respect to such Claim, on behalf of and for the
account and risk of the Indemnifying Party, and the Indemnifying
Party shall thereafter have no right to challenge the Indemnified
Party's defense, compromise, settlement or consent to judgment.

11.3.(c) Indemnified Party's Rights. Anything in this
Article 11 to the contrary notwithstanding, (i) if there is a
reasonable probability that a Claim may materially and adversely
affect the Indemnified Party other than as a result of money
damages or other money payments, the Indemnified Party shall have
the right to defend, compromise or settle such Claim, and (ii) the
Indemnifying Party shall not, without the written consent of the
Indemnified Party, settle or compromise any Claim or consent to the
entry of any judgment which does not include as an unconditional
term thereof the giving by the claimant or the plaintiff to the
Indemnified Party of a release from all Liability in respect of
such Claim.

11.4. Payment. The Indemnifying Party shall promptly pay the
Indemnified Party any amount due under this Article 11, which payment may
be accomplished in whole or in part, at the option of the Indemnified
Party, by the Indemnified Party setting off any amount owed to the
Indemnifying Party by the Indemnified Party. To the extent set-off is
made by an Indemnified Party in satisfaction or partial satisfaction of an
indemnity obligation under this Article 11 that is disputed by the
Indemnifying Party, upon a subsequent determination by final judgment not
subject to appeal that all or a portion of such indemnity obligation was
not owed to the Indemnified Party, the Indemnified Party shall pay the
Indemnifying Party the amount which was set off and not owed together with
interest from the date of set-off until the date of such payment at an
annual rate equal to the prime lending rate then being published by money
center banks. Upon judgment, determination, settlement or compromise of
any third party Claim, the Indemnifying Party shall pay promptly on behalf
of the Indemnified Party, and/or to the Indemnified Party in reimbursement
of any amount theretofore required to be paid by it, the amount so
determined by judgment, determination, settlement or compromise and all
other Claims of the Indemnified Party with respect thereto, unless in the
case of a judgment an appeal is made from the judgment. If the
Indemnifying Party desires to appeal from an adverse judgment, then the
Indemnifying Party shall post and pay the cost of the security or bond to
stay execution of the judgment pending appeal. Upon the payment in full
by the Indemnifying Party of such amounts, the Indemnifying Party shall
succeed to the rights of such Indemnified Party, to the extent not waived
in settlement, against the third party who made such third party Claim.

11.5. Indemnification for Environmental Matters.

11.5.(a) Indemnification. Without limiting the generality of
the foregoing, Company and each Shareholder, jointly and severally
(hereinafter collectively referred to in this Section 11.5 jointly
and severally as "Sellers"), agree to indemnify, reimburse, hold
harmless and defend Buyer for, from, and against all Claims
asserted against, imposed on, or incurred by Buyer, directly or
indirectly, in connection with any pollution, threat to the
environment, or exposure to, or manufacture, processing,
distribution, use, treatment, generation, transport or handling,
disposal, emission, discharge, storage or release of Waste that (A)
is related in any way to Company's or any previous owner's or
operator's ownership, operation or occupancy of the business,
properties and assets being transferred to Buyer, and (B) in whole
or in part occurred, existed, arose out of conditions or
circumstances that existed, or was caused on or before the Closing
Date.

11.5.(b) Transfers of Permits. Except with respect to those
matters disclosed in the Disclosure Schedules. Sellers agree to
indemnify, reimburse, defend, and hold harmless Buyer from, for and
against all demands, claims, actions or causes of action arising
from or in connection with the operation of the Purchased Assets by
Buyer in the absence of a permit required by law, subsequent to the
Closing Date and prior to transfer to the Buyer of any permits
currently applicable to the Purchased Assets.

11.6. Limitations on Indemnification. Except for any willful or
knowing breach or misrepresentation, as to which claims may be brought
without limitation as to time or amount:

11.6.(a) Time Limitation. No claim or action shall be
brought under this Article 11 for breach of a representation or
warranty after the lapse of two (2) years following the Closing or
for a claim under Section 11.5 after the lapse of five (5) years
following the Closing. Regardless of the foregoing, however, or
any other provision of this Agreement:

(i) Any claim or action brought for breach of any
representation or warranty made in or pursuant to Section 4.5
may be brought at any time until the underlying tax obligation
is barred by the applicable period of limitation under federal
and state laws relating thereto (as such period may be
extended by waiver).

(ii) Any claim made by a party hereunder by filing a
suit or action in a court of competent jurisdiction or a court
reasonably believed to be of competent jurisdiction for breach
of a representation or warranty prior to the termination of
the survival period for such claim shall be preserved despite
the subsequent termination of such survival period.

(iii) If any act, omission, disclosure or failure to
disclosure shall form the basis for a claim for breach of more
than one representation or warranty, and such claims have
different periods of survival hereunder, the termination of
the survival period of one claim shall not affect a party's
right to make a claim based on the breach of representation or
warranty still surviving.

11.6.(b) Amount Limitation. Except with respect to claims
for breaches of representations or warranties contained in Sections
4.24 or 5.3, an Indemnified Party shall not be entitled to
indemnification under this Article 11 for breach of a
representation or warranty unless the aggregate of the Indemnifying
Party's indemnification obligations to the Indemnified Party
pursuant to this Article 11 (but for this Section 11.6.(b)) exceeds
$50,000; but in such event, the Indemnified Party shall be entitled
to indemnification in full up to a maximum amount of $750,000,
except for indemnification pursuant to Section 11.5.(a) with
respect to which there shall be no limit.

11.7. No Waiver. The closing of the transactions contemplated by
this Agreement shall not constitute a waiver by any party of its rights to
indemnification hereunder, regardless of whether the party seeking
indemnification has knowledge of the breach, violation or failure of
condition constituting the basis of the Claim at or before the Closing,
and regardless of whether such breach, violation or failure is deemed to
be "material."

12. CLOSING

The closing of this transaction ("the Closing") shall take place at
the offices of Sorokin Sorokin Gross Hyde & Williams PC, One Corporate
Center, Hartford, Connecticut, at 9:00 A.M. on June 16, 1997, or at such
other time and place as the parties hereto shall agree upon. Such date is
referred to in this Agreement as the "Closing Date."

12.1. Documents to be Delivered by Company and Shareholders. At
the Closing, Company and Shareholders shall deliver to Buyer the following
documents, in each case duly executed or otherwise in proper form:

12.1.(b) Compliance Certificate. A certificate signed by the
chief executive officer of Company that each of the representations
and warranties made by Company and Shareholders in this Agreement
is true and correct in all material respects on and as of the
Closing Date with the same effect as though such representations
and warranties had been made or given on and as of the Closing Date
(except for any changes permitted by the terms of this Agreement or
consented to in writing by Buyer), and that Company and
Shareholders have performed and complied with all of Company's and
Shareholders' obligations under this Agreement which are to be
performed or complied with on or prior to the Closing Date.

12.1.(c) Opinion of Counsel. A written opinion of Sorokin
Sorokin Gross Hyde & Williams PC, counsel to Company and
Shareholders, dated as of the Closing Date, addressed to Buyer,
substantially in the form of Exhibit 12.1.(c) hereto.

12.1.(d) Employment and Noncompetition Agreements. The
Employment and Noncompetition Agreements referred to in Section
7.5, duly executed by the persons referred to in such Section.

12.1.(e) Certified Resolutions. A certified copy of the
resolutions of the Board of Directors and the Shareholders of
Company authorizing and approving this Agreement and the
consummation of the transactions contemplated by this Agreement.

12.1.(f) Escrow Agreement. The Escrow Agreement duly
executed by Company and the Escrow Agent in the form of Exhibit 7.4
hereto.

12.1.(g) Articles; By-laws. A copy of the By-laws of Company
certified by the secretary of Company, and a copy of the Articles
of Incorporation of Company certified by the Secretary of State of
the state of incorporation of Company.

12.1.(h) Incumbency Certificate. Incumbency certificates
relating to each person executing any document executed and
delivered to Buyer pursuant to the terms hereof.

12.1.(i) Intentionally Left Blank.

12.1.(j) Other Documents. All other documents, instruments
or writings required to be delivered to Buyer at or prior to the
Closing pursuant to this Agreement and such other certificates of
authority and documents as Buyer may reasonably request.

12.2. Documents to be Delivered by Buyer. At the Closing, Buyer
shall deliver to Company the following documents, in each case duly
executed or otherwise in proper form:

12.2.(a) Cash Purchase Price. To Company a certified or bank
cashier's check or wire transfer as required by Section 3.2.(c)
hereof, and to the Escrow Agent, a certified or bank cashier's
check or wire transfer as required by Section 3.2.(b) hereof.

12.2.(b) Assumption of Liabilities. Such undertakings and
instruments of assumption as will be reasonably sufficient in the
opinion of Company and its counsel to evidence the assumption of
Company Liabilities as provided for in Article 2.

12.2.(c) Compliance Certificate. A certificate signed by the
chief executive officer of Buyer that the representations and
warranties made by Buyer in this Agreement are true and correct on
and as of the Closing Date with the same effect as though such
representations and warranties had been made or given on and as of
the Closing Date (except for any changes permitted by the terms of
this Agreement or consented to in writing by Company), and that
Buyer has performed and complied with all of Buyer's obligations
under this Agreement which are to be performed or complied with on
or prior to the Closing Date.

12.2.(d) Opinion of Counsel. A written opinion of Wayne E.
Larsen, counsel to Buyer, dated as of the Closing Date, addressed
to Company, in substantially the form of Exhibit 12.2.(d) hereto.

12.2.(e) Certified Resolutions. A certified copy of the
resolutions of the Board of Directors of Buyer authorizing and
approving this Agreement and the consummation of the transactions
contemplated by this Agreement.

12.2.(f) Escrow Agreement. The Escrow Agreement duly
executed by Buyer and the Escrow Agent in the form of Exhibit 7.4
hereto.

12.2.(g) Incumbency Certificate. Incumbency certificates
relating to each person executing any document executed and
delivered to Company by Buyer pursuant to the terms hereof.

12.2.(h) Other Documents. All other documents, instruments
or writings required to be delivered to Company at or prior to the
Closing pursuant to this Agreement and such other certificates of
authority and documents as Company may reasonably request.

12.2.(i) Promissory Note. The Note described in Section
3.2.(d) of this Agreement.

13. TERMINATION

13.1. Right of Termination Without Breach. This Agreement may be
terminated without further liability of any party at any time prior to the
Closing:

13.1.(a) by mutual written agreement of Buyer and Company, or

13.1.(b) by either Buyer or Company if the Closing shall not
have occurred on or before August 1, 1997, provided the terminating
party has not, through breach of a representation, warranty or
covenant, prevented the Closing from occurring on or before such
date.

13.2. Termination for Breach.

13.2.(a) Termination by Buyer. If (i) there has been a
material violation or breach by Company of any of the agreements,
representations or warranties contained in this Agreement which has
not been waived in writing by Buyer, or (ii) there has been a
failure of satisfaction of a condition to the obligations of Buyer
which has not been so waived, or (iii) Company shall have attempted
to terminate this Agreement under this Article 13 or otherwise
without grounds to do so, then Buyer may, by written notice to
Company at any time prior to the Closing that such violation,
breach, failure or wrongful termination attempt is continuing,
terminate this Agreement with the effect set forth in Section
13.2.(c) hereof.

13.2.(b) Termination by Company. If (i) there has been a
material violation or breach by Buyer of any of the agreements,
representations or warranties contained in this Agreement which has
not been waived in writing by Company, or (ii) there has been a
failure of satisfaction of a condition to the obligations of
Company which has not been so waived, or (iii) Buyer shall have
attempted to terminate this Agreement under this Article 13 or
otherwise without grounds to do so, then Company may, by written
notice to Buyer at any time prior to the Closing that such
violation, breach, failure or wrongful termination attempt is
continuing, terminate this Agreement with the effect set forth in
Section 13.2.(c) hereof.

13.2.(c) Effect of Termination. Termination of this
Agreement pursuant to this Section 13.2 shall not in any way
terminate, limit or restrict the rights and remedies of any party
hereto against any other party which has violated, breached or
failed to satisfy any of the representations, warranties,
covenants, agreements, conditions or other provisions of this
Agreement prior to termination hereof. In addition to the right of
any party under common law to redress for any such breach or
violation, each party whose breach or violation has occurred prior
to termination shall jointly and severally indemnify each other
party for whose benefit such representation, warranty, covenant,
agreement or other provision was made ("indemnified party") from
and against all losses, damages (including, without limitation,
consequential damages), costs and expenses (including, without
limitation, interest (including prejudgment interest in any
litigated matter), penalties, court costs, and attorneys fees and
expenses) asserted against, resulting to, imposed upon, or incurred
by the indemnified party, directly or indirectly, by reason of,
arising out of or resulting from such breach or violation. Subject
to the foregoing, the parties' obligations under Section 15.9 of
this Agreement shall survive termination.

14. INTENTIONALLY LEFT BLANK

15. MISCELLANEOUS

15.1. Disclosure Schedule. The Schedules referenced from time to
time in the body of this Agreement are sometimes collectively referred to
herein as the "Disclosure Schedule." The Disclosure Schedule in its
entirety constitutes a part of this Agreement. Information set forth in
any portion of the Disclosure Schedule shall be deemed disclosed for all
purposes hereunder, so long as its import is clearly stated or summarized.

15.2. Further Assurance. From time to time, at Buyer's request
and without further consideration, Company and Shareholders will execute
and deliver to Buyer such documents, instruments and consents and take
such other action as Buyer may reasonably request in order to consummate
more effectively the transactions contemplated hereby, to discharge the
covenants of Company and the Shareholders and to vest in Buyer good, valid
and marketable title to the business and assets being transferred
hereunder.

15.3. Disclosures and Announcements. Both the timing and the
content of all disclosure to third parties and public announcements
concerning the transactions provided for in this Agreement by either
Company or Buyer shall be subject to the approval of the other in all
essential respects, except that Company's approval shall not be required
as to any statements and other information which Buyer may submit to
Buyer's stockholders.

15.4. Assignment; Parties in Interest.

15.4.(a) Assignment. Except as expressly provided herein,
the rights and obligations of a party hereunder may not be
assigned, transferred or encumbered without the prior written
consent of the other parties. Notwithstanding the foregoing, Buyer
may, without consent of any other party, cause one or more
subsidiaries of Buyer to carry out all or part of the transactions
contemplated hereby; provided, however, that Buyer shall,
nevertheless, remain liable for all of its obligations, and those
of any such subsidiary, to Company hereunder.

15.4.(b) Parties in Interest. This Agreement shall be
binding upon, inure to the benefit of, and be enforceable by the
respective successors and permitted assigns of the parties hereto.
Nothing contained herein shall be deemed to confer upon any other
person any right or remedy under or by reason of this Agreement.

15.5. Equitable Relief. Company and each Shareholder agree that
any breach of the Company's obligation to consummate the sale of the
Purchased Assets on the Closing Date, any breach of any noncompetition
obligation imposed by Section 7.6 hereof or by any agreement delivered to
Buyer pursuant to Section 7.5 hereof, or any breach by Company or any
Shareholder of its or their obligations imposed by Section 7.7 hereof,
will result in irreparable injury to Buyer for which a remedy at law would
be inadequate; and that, in addition to any relief at law which may be
available to Buyer for such breach and regardless of any other provision
contained in this Agreement, Buyer shall be entitled to injunctive and
other equitable relief as a court may grant. This Section 15.5 shall not
be construed to limit Buyer's right to obtain equitable relief for other
breaches of this Agreement under general equitable standards.

15.6. Law Governing Agreement. This Agreement shall be construed
and interpreted according to the internal laws of the State of Wisconsin,
excluding any choice of law rules that may direct the application of the
laws of another jurisdiction. Process and pleadings mailed to a party at
the address provided in Section 15.8 shall be deemed properly served and
accepted for all purposes.

15.7. Amendment and Modification. Buyer, and Company and
Shareholders may amend, modify and supplement this Agreement in such
manner as may be agreed upon by them in writing.

15.8. Notice. All notices, requests, demands and other
communications hereunder shall be given in writing and shall be: (a)
personally delivered; (b) sent by telecopier, facsimile transmission or
other electronic means of transmitting written documents; or (c) sent to
the parties at their respective addresses indicated herein by registered
or certified U.S. mail, return receipt requested and postage prepaid, or
by private overnight mail courier service. The respective addresses to be
used for all such notices, demands or requests are as follows:

(a) If to Buyer, to:

Ladish Co., Inc.
5841 South Packard Avenue
Cudahy, Wisconsin 53110
Attention: K. L. Woody
Facsimile: (414) 747-2602

(with a copy to)

Ladish Co., Inc.
5841 South Packard Avenue
Cudahy, Wisconsin 53110
Attention: Wayne E. Larsen
Facsimile: (414) 747-2890

or to such other person or address as Buyer shall furnish to Company in
writing.

(b) If to Company or Shareholders, to:

William R. Petricone
406 Windtree
Torrington, Connecticut 06790

(and)

F. Robert Petricone
East Chestnut Hill Road
Litchfield, Connecticut 06759

(with a copy to)

Sorokin Sorokin Gross Hyde & Williams PC
One Corporate Center
Hartford, Connecticut 06103
Attention: Morris Banks, Esq.
Facsimile: (860) 522-1781

or to such other person or address as Company shall furnish to Buyer in
writing.

If personally delivered, such communication shall be deemed
delivered upon actual receipt; if electronically transmitted pursuant to
this paragraph, such communication shall be deemed delivered the next
business day after transmission (and sender shall bear the burden of proof
of delivery); if sent by overnight courier pursuant to this paragraph,
such communication shall be deemed delivered upon receipt; and if sent by
U.S. mail pursuant to this paragraph, such communication shall be deemed
delivered as of the date of delivery indicated on the receipt issued by
the relevant postal service, or, if the addressee fails or refuses to
accept delivery, as of the date of such failure or refusal. Any party to
this Agreement may change its address for the purposes of this Agreement
by giving notice thereof in accordance with this Section.

15.9. Expenses. Regardless of whether or not the transactions
contemplated hereby are consummated:

15.9.(a) Expenses to be Paid by Company. Company shall pay,
and shall indemnify, defend and hold Buyer harmless from and
against, each of the following:

(i) Transfer Taxes. Any sales, use (except for use
taxes associated with relicensing Company automobiles),
excise, transfer or other similar tax imposed with respect to
the transactions provided for in this Agreement, and any
interest or penalties related thereto.

(ii) Title Insurance Premiums. All premiums for the
issuance of the title insurance policies issued pursuant to
Section 9.5 hereof, and one-half the cost of surveys performed
pursuant to Section 7.2.

(iii) Environmental Audit. One-half of the fees and
other expenses relating to the environmental audit performed
pursuant to Section 7.3 hereof.

(iv) Professional Fees. All fees and expenses of
Company's legal, accounting, investment banking and other
professional counsel in connection with the transactions
contemplated hereby.

15.9.(b) Other. Except as otherwise provided herein, each of
the parties shall bear its own expenses and the expenses of its
counsel and other agents in connection with the transactions
contemplated hereby.

15.9.(c) Costs of Litigation or Arbitration. The parties
agree that the prevailing party in any action brought with respect
to or to enforce any right or remedy under this Agreement shall be
entitled to recover from the other party or parties all reasonable
costs and expenses of any nature whatsoever incurred by the
prevailing party in connection with such action, including without
limitation attorneys' fees and prejudgment interest.

15.10. Entire Agreement. This instrument embodies the entire
agreement between the parties hereto with respect to the transactions
contemplated herein, and there have been and are no agreements,
representations or warranties between the parties other than those set
forth or provided for herein.

15.11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

15.12. Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.

15.13. Glossary of Terms. The following sets forth the location of
definitions of capitalized terms defined in the body of this Agreement:

"Affected Employees" - Section 6.1
"Affiliate" - Section 1.2.(e)
"Assumed Contracts" - Section 2.1.(b)
"Assumed Liabilities" - Section 2.1
"Buyer's Affiliates" - Section 11.1
"CERCLA" - Section 4.11.(c)
"Claim" - Section 11.1
"Closing" - Preamble to Article 12
"Closing Date" - Section 12
"Closing Business Balance Sheet" - Section 3.3.(b)(i)
"Code" - Section 3.6
"Company Employees" - Section 4.16.(a)
"Contracts" - Section 1.1.(g)
"Disclosure Schedule" - Article 15.1
"Employee Plans/Agreements" - Section 4.16.(a)
"Environmental Laws" - Section 4.11.(c)
"ERISA" - Section 4.16.(a)
"Escrow Agreement" - Section 7.4
"Escrow Funds" - Section 3.2.(b)
"Excluded Assets" - Section 1.2
"Government Entities" - Section 2.2.(k)
"IRS" - Section 3.6
"Indemnified Party" - Section 11.3.(a)
"Indemnifying Party" - Section 11.3.(a)
"Inventory" - Section 1.1.(d)
"Laws" - Section 2.2.(k)
"Leased Real Property" - Section 1.1.(b)
"Liability" - Section 2.1
"Lien" - Section 4.12.(a)
"Litigation" - Section 2.2.(f)
"Net Working Capital" - Section 3.3.(a)
"Note" - Section 3.2.(d)
"Orders" - Section 2.2.(k)
"Owned Real Property" - Section 1.1.(a)
"PBGC" - Section 4.16.(b)
"Permitted Real Property Liens" - Section 4.12.(a)
"Personal Property Leases" - Section 1.1.(e)
"Products" - Section 4.20
"Purchased Assets" - Section 1.1
"Purchase Orders" - Section 1.1.(g)
"Purchase Price" - Section 3.1
"Real Property" - Section 4.12.(c)
"Real Property Leases" - Section 1.1.(b)
"Recent Business Balance Sheet" - Section 3.3.(b)(i)
"Sales Orders" - Section 1.1.(g)
"Settlement Date" - Section 3.2.(e)
"Third Accounting Firm" - Section 3.3.(b)(iii)
"Trade Rights" - Section 1.1.(f)
"Waste" - Section 4.11.(c)

Where any group or category of items or matters is defined collectively in
the plural number, any item or matter within such definition may be
referred to using such defined term in the singular number.

IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.

STOWE MACHINE COMPANY, LADISH CO., INC.
INCORPORATED

By: /s/ By: /s/

Attest: /s/ Attest: /s/

/s/ F. Robert Petricone
F. Robert Petricone

/s/ William R. Petricone
William R. Petricone

ASSET PURCHASE AGREEMENT

TRINITY FITTING & FLANGE GROUP, INC.
Buyer

LADISH CO., INC.
Company

April 24, 1997

ASSET PURCHASE AGREEMENT

TABLE OF CONTENTS

1. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . 1
1.1. Definition of "Business" . . . . . . . . . . . . . . . . . 1
1.2. Assets to be Transferred . . . . . . . . . . . . . . . . . 1
1.3. Excluded Assets . . . . . . . . . . . . . . . . . . . . . . 3

2. ASSUMPTION OF LIABILITIES . . . . . . . . . . . . . . . . . . . . 4
2.1. Liabilities to be Assumed . . . . . . . . . . . . . . . . . 4
2.2. Liabilities Not to be Assumed . . . . . . . . . . . . . . . 5

3. PURCHASE PRICE - PAYMENT . . . . . . . . . . . . . . . . . . . . . 6
3.1. Purchase Price . . . . . . . . . . . . . . . . . . . . . . 6
3.2. Payment of Purchase Price . . . . . . . . . . . . . . . . . 6
3.3. Determination of Net Working Capital . . . . . . . . . . . 7
3.4. Prorations . . . . . . . . . . . . . . . . . . . . . . . . 10
3.5. Intentionally Left Blank. . . . . . . . . . . . . . . . . . 11
3.6. Allocation of Purchase Price . . . . . . . . . . . . . . . 11

4. REPRESENTATIONS AND WARRANTIES OF COMPANY . . . . . . . . . . . . 11
4.1. Corporate . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2. Authority . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.3. No Violation . . . . . . . . . . . . . . . . . . . . . . . 12
4.4. Division Financial Statements . . . . . . . . . . . . . . . 12
4.5. Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . 13
4.6. Accounts Receivable . . . . . . . . . . . . . . . . . . . . 13
4.7. Inventory . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.8. Absence of Certain Changes . . . . . . . . . . . . . . . . 14
4.9. Absence of Undisclosed Liabilities . . . . . . . . . . . . 15
4.10. No Litigation . . . . . . . . . . . . . . . . . . . . . . . 15
4.11. Compliance With Laws and Orders . . . . . . . . . . . . . . 15
4.12. Title to and Condition of Properties . . . . . . . . . . . 20
4.13. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.14. Contracts and Commitments . . . . . . . . . . . . . . . . . 22
4.15. Labor Matters . . . . . . . . . . . . . . . . . . . . . . . 23
4.16. Intentionally Left Blank . . . . . . . . . . . . . . . . . 24
4.17. Intentionally Left Blank . . . . . . . . . . . . . . . . . 24
4.18. Trade Rights . . . . . . . . . . . . . . . . . . . . . . . 24
4.19. Major Customers and Suppliers . . . . . . . . . . . . . . . 24
4.20. Product Warranty and Product Liability . . . . . . . . . . 25
4.21. Affiliates' Relationships to Company . . . . . . . . . . . 25
4.22. Assets Necessary to Business . . . . . . . . . . . . . . . 26
4.23. No Brokers or Finders . . . . . . . . . . . . . . . . . . . 26

5. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . 26
5.1. Corporate . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.2. Authority . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.3. No Brokers or Finders . . . . . . . . . . . . . . . . . . . 27

6. EMPLOYEES - EMPLOYEE BENEFITS . . . . . . . . . . . . . . . . . . 27
6.1. Plant Closing Notification . . . . . . . . . . . . . . . . 27
6.2. Employment Liabilities. . . . . . . . . . . . . . . . . . . 27
6.3. Employees . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.4. COBRA. . . . . . . . . . . . . . . . . . . . . . . . . . . 27

7. OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.1. Title Matters . . . . . . . . . . . . . . . . . . . . . . . 28
7.2. Environmental Audits . . . . . . . . . . . . . . . . . . . 28
7.3. Noncompetition . . . . . . . . . . . . . . . . . . . . . . 28
7.4. Confidential Information . . . . . . . . . . . . . . . . . 30
7.5. Privileged Materials . . . . . . . . . . . . . . . . . . . 30
7.6. HSR Act Filings . . . . . . . . . . . . . . . . . . . . . . 30
7.7. Use of Company's Name . . . . . . . . . . . . . . . . . . . 31
7.8. Sales Tax Matters . . . . . . . . . . . . . . . . . . . . . 31
7.9. Intentionally Left Blank. . . . . . . . . . . . . . . . . . 31
7.10. Cynthiana, Kentucky Flood . . . . . . . . . . . . . . . . . 31
7.11. Nondisparagement . . . . . . . . . . . . . . . . . . . . . 32
7.12. Form 8594 Filing . . . . . . . . . . . . . . . . . . . . . 32

8. FURTHER COVENANTS OF COMPANY . . . . . . . . . . . . . . . . . . . 32
8.1. Access to Information and Records and Physical Inspections 32
8.2. Conduct of Business Pending the Closing . . . . . . . . . . 33
8.3. Consents . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.4. Other Action . . . . . . . . . . . . . . . . . . . . . . . 34
8.5. Production Contract . . . . . . . . . . . . . . . . . . . . 34

9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS . . . . . . . . . . . 34
9.1. Representations and Warranties True on the Closing Date . . 34
9.2. Compliance With Agreement . . . . . . . . . . . . . . . . . 34
9.3. Absence of Litigation . . . . . . . . . . . . . . . . . . . 34
9.4. Consents and Approvals . . . . . . . . . . . . . . . . . . 34
9.5. Title Insurance . . . . . . . . . . . . . . . . . . . . . . 35
9.6. Hart-Scott-Rodino Waiting Period . . . . . . . . . . . . . 35
9.7. Section 1445 Affidavit . . . . . . . . . . . . . . . . . . 35
9.8. Environmental Audit . . . . . . . . . . . . . . . . . . . . 35

10. CONDITIONS PRECEDENT TO COMPANY'S OBLIGATIONS . . . . . . . . . . 35
10.1. Representations and Warranties True on the Closing Date . . 35
10.2. Compliance With Agreement . . . . . . . . . . . . . . . . . 35
10.3. Absence of Litigation . . . . . . . . . . . . . . . . . . . 36
10.4. Waiting Periods . . . . . . . . . . . . . . . . . . . . . . 36

11. ESCROW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

12. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
12.1. Documents to be Delivered by Company . . . . . . . . . . . 36
12.2. Documents to be Delivered by Buyer . . . . . . . . . . . . 37

13. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
13.1. Right of Termination Without Breach . . . . . . . . . . . . 38
13.2. Termination for Breach . . . . . . . . . . . . . . . . . . 38
13.3. Environmental Defects . . . . . . . . . . . . . . . . . . . 39

14. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 39
14.1. Disclosure Schedule . . . . . . . . . . . . . . . . . . . . 39
14.2. Further Assurance . . . . . . . . . . . . . . . . . . . . . 40
14.3. Disclosures and Announcements . . . . . . . . . . . . . . . 40
14.4. Assignment; Parties in Interest . . . . . . . . . . . . . . 40
14.5. Equitable Relief . . . . . . . . . . . . . . . . . . . . . 40
14.6. Law Governing Agreement . . . . . . . . . . . . . . . . . . 41
14.7. Amendment and Modification . . . . . . . . . . . . . . . . 41
14.8. Notice . . . . . . . . . . . . . . . . . . . . . . . . . . 41
14.9. Expenses; Cost of Litigation . . . . . . . . . . . . . . . 42
14.10. Entire Agreement . . . . . . . . . . . . . . . . . . . . . 43
14.11. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 43
14.12. Headings . . . . . . . . . . . . . . . . . . . . . . . . . 43
14.13. Glossary of Terms . . . . . . . . . . . . . . . . . . . . . 43

Disclosure Schedule

Schedule 1.2.(a) - Owned Real Property
Schedule 1.2.(b) - Leased Real Property
Schedule 1.2.(e) - Personal Property Leases
Schedule 1.2.(g)(i) - Contracts
Schedule 1.2.(g)(ii) - Purchase Orders
Schedule 1.2.(g)(iii) - Sales Orders
Schedule 4.1.(c) - Foreign Corporation Qualification
Schedule 4.3 - Violation, Conflict, Default
Schedule 4.4 - Business Financial Statements
Schedule 4.5 - Tax Matters
Schedule 4.6 - Accounts Receivable (Aged Schedule)
Schedule 4.7 - Inventory Off Premises
Schedule 4.8 - Certain Changes
Schedule 4.9 - Off-Balance Sheet Liabilities
Schedule 4.10 - Litigation Matters
Schedule 4.11.(a) - Non-Compliance with Laws
Schedule 4.11.(b) - Licenses and Permits
Schedule 4.11.(c) - Environmental Matters (Exceptions to
Representations)
Schedule 4.11.(c)(E) - Storage Tanks
Schedule 4.11.(c)(L) - Environmental Consents and Approvals
Schedule 4.12.(a)(i) - Pre-Closing Liens
Schedule 4.12.(a)(ii) - Post-Closing Liens
Schedule 4.12.(b) - Condition (Exceptions to
Representations)
Schedule 4.13 - Insurance
Schedule 4.14.(d) - Sales Commitments
Schedule 4.14.(g) - Collective Bargaining Agreements
Schedule 4.14.(h) - Material Contracts
Schedule 4.15 - Labor Matters
Schedule 4.18 - Trade Rights
Schedule 4.19.(a) - Major Customers
Schedule 4.19.(b) - Major Suppliers
Schedule 4.19.(c) - Sales Representatives
Schedule 4.20 - Product Warranty and Product Liability
Schedule 4.21.(a) - Contracts with Affiliates

Exhibit Schedule

Exhibit 8.5. - Machining Contract
Exhibit 11.1 - Escrow Agreement

ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT (this "Agreement") dated April 24,
1997, by and between Trinity Fitting & Flange Group, Inc., a Delaware
corporation ("Buyer"), and Ladish Co., Inc., a Wisconsin corporation
("Company").

RECITALS

A. Company is engaged, through its Industrial Products
Division (the "Division"), in the manufacture and sale of piping
components.

B. The Division operates at Company's facilities located at
Cynthiana, Kentucky and Russellville, Arkansas (the "Facilities").

C. Buyer desires to purchase from Company, and Company desires
to sell to Buyer, certain of the property and assets of the Division.

NOW THEREFORE, in consideration of the respective
representations, warranties, covenants, agreements and conditions
hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to
be legally bound hereby, the parties hereto agree as follows.

1. PURCHASE AND SALE OF ASSETS

1.1. Definition of "Business". As used herein, "Business" shall
mean the manufacture, production, marketing, distribution, exploitation,
sale and related research and development by Company of pipes, valves and
fittings including, without limitation, all operations carried on by, or
related to products associated by trade name or otherwise with, the
Division prior to the Closing Date (as defined below). The term
"Business" shall also mean the Company insofar as the operation of the
Business prior to the Closing Date is concerned.

1.2. Assets to be Transferred. Subject to the terms and conditions
of this Agreement, on the Closing Date, Company shall sell, transfer,
convey, assign, and deliver to Buyer (or upon Buyer's request, to one or
more wholly-owned subsidiaries of Buyer as designated by Buyer), and Buyer
shall purchase from Company all of the rights, claims and assets (of every
kind, nature, character and description, whether real, personal or mixed,
whether tangible or intangible, whether accrued, contingent or otherwise,
and wherever situated) of Company used, held for use or acquired or
developed for use in the Business, together with all rights and privileges
associated with such assets, other than the Excluded Assets (as
hereinafter defined) (collectively, the "Purchased Assets"). The
Purchased Assets shall include, without limitation, the following:

1.2.(a) Owned Real Property. The real property, including
fixtures, buildings, improvements, and all appurtenant rights,
described on Schedule 1.2.(a) of the Disclosure Schedule attached
hereto and made a part hereof (the "Disclosure Schedule") (the "Owned
Real Property").

1.2.(b) Leased Real Property. The leases of real property
described on Schedule 1.2.(b) of the Disclosure Schedule (the "Real
Property Leases") with respect to the real property described thereon
(the "Leased Real Property").

1.2.(c) Personal Property. All machinery, equipment,
vehicles, tools, supplies, spare parts, furniture and all other
personal property (other than personal property leased pursuant to
Personal Property Leases as hereinafter defined) owned, utilized or
held for use in the Business by Company on the Closing Date.

1.2.(d) Inventory. All inventories of raw materials,
work-in-process and finished goods (including all such in transit),
and service and repair parts, supplies and components held for resale
in the Business by Company on the Closing Date, together with related
packaging materials (collectively the "Inventory").

1.2.(e) Personal Property Leases. All leases of machinery,
equipment, vehicles, furniture and other personal property leased by
Company for the Business, described in Schedule 1.2.(e) of the
Disclosure Schedule (the "Personal Property Leases").

1.2.(f) Trade Rights. All the Company's right, title and
interest in and to any and all Trade Rights used in the Business. As
used herein, the term "Trade Rights" shall mean and include: (i) all
trademark rights, business identifiers, trade dress, service marks,
trade names, and brand names (except as otherwise provided herein);
(ii) all copyrights and all other rights associated therewith and the
underlying works of authorship; (iii) all patents and all proprietary
rights associated therewith; (iv) all contracts or agreements
granting any right, title, license or privilege under the
intellectual property rights of any third party; (v) all inventions,
mask works and mask work registrations, know-how, discoveries,
improvements, designs, trade secrets, shop and royalty rights,
employee covenants and agreements respecting intellectual property
and non-competition and all other types of intellectual property; and
(vi) all registrations of any of the foregoing, all applications
therefor, all goodwill associated with any of the foregoing, and all
claims for infringement or breach thereof.

1.2.(g) Contracts. All the Company's rights in, to and
under all contracts ("Contracts") purchase orders ("Purchase Orders")
and sales orders ("Sales Orders") described in Schedules 1.2.(g)(i),
1.2.(g)(ii) and 1.2.(g)(iii) of the Disclosure Schedule,
respectively, as well as every Purchase Order or Sales Order entered
into by Company after the date of this Agreement in the ordinary
course of business and in accordance with past practice. At the
Closing, Company shall update the Disclosure Schedule to include all
Contracts, Purchase Orders and Sales Orders entered into by the
Company after the date of this Agreement in the ordinary course of
business which involve consideration or other expenditures by Company
in excess of Fifty Thousand and 00/100 Dollars ($50,000) or
performance over a period of more than twelve (12) months from the
date of the Contract, Purchase Order or Sales Order, as to which
Buyer shall have the right to elect to include or exclude from the
Purchased Assets.

1.2.(h) Computer Software. All computer source and object
codes, programs and other software of Company or licensed or
otherwise owned by the Company relating to the Business, including
all machine readable code, printed listings of code, documentation
and related property and information of Company relating to the
Business, to the extent necessary to operate the Business; provided
that with respect to licensed software to the extent Company is
permitted to transfer same.

1.2.(i) Literature. All sales literature, promotional
literature, catalogs and similar materials of the Company relating to
the Business.

1.2.(j) Records and Files. All books, records and files of
Company of every kind relating to the Business including, without
limitation, invoices, customer and vendor lists, blueprints,
specifications, designs, drawings, and operating and marketing plans,
and all other documents, tapes, discs, programs or other tangible
embodiments of any such information.

1.2.(k) Notes and Accounts Receivable. All notes, drafts
and accounts receivable of Company relating to the Business, except
for those described in Section 1.3.(e) hereof.

1.2.(l) Licenses; Permits. All licenses, permits,
approvals, certifications and listings of Company relating to the
Business.

1.2.(m) General Intangibles. All prepaid items, all causes
of action arising out of occurrences after the Closing, and other
intangible rights and assets relating to the Business except as
provided in Section 7.10.

1.3. Excluded Assets. The provisions of Section 1.2
notwithstanding, Company shall not sell, transfer, assign, convey or
deliver to Buyer, and Buyer will not purchase from the Company the
following assets of Company (collectively, the "Excluded Assets"):

1.3.(a) Cash and Cash Equivalents. All cash on hand,
escrows, deposit accounts and cash in banks, other than petty cash
balances at Cynthiana, Kentucky and Russellville, Arkansas.

1.3.(b) Consideration. The consideration delivered by Buyer
to Company pursuant to this Agreement.

1.3.(c) Tax Credits and Records. Federal, state and local
income and franchise tax credits and tax refund claims and associated
returns and records for periods prior to the Closing Date. Buyer
shall have reasonable access to such returns and records and may make
excerpts therefrom and copies thereof.

1.3.(d) Corporate Franchise. Company's franchise to be a
corporation, its certificate of incorporation, corporate seal, stock
books, minute books and other corporate records having exclusively to
do with the corporate organization and capitalization of Company.

1.3.(e) Obligations of Affiliates. Notes, drafts, accounts
receivable or other obligations for the payment of money, made or
owed by any Affiliate of Company, and any inter-company balances.
For purposes of this Agreement, the term "Affiliate" of the Company
shall mean and include all shareholders, directors and officers of
Company; the spouse of any such person; any person who would be the
heir or descendant of any such person if he or she were not living;
and any entity in which any of the foregoing has a direct or indirect
interest (except through ownership of less than 5% of the outstanding
shares of any entity whose securities are listed on a national
securities exchange or traded in the national over-the-counter
market.

1.3.(f) Privileged Materials. All of Company's interest in
privileged communications, attorney work product, and materials
concerning either of the foregoing.

1.3.(g) Insurance Proceeds. Proceeds of insurance claims
with respect to the March, 1997 flooding of the Company's facility at
Cynthiana, Kentucky, whether collected or not at the Closing Date,
but only to the extent set forth in section 7.10.

2. ASSUMPTION OF LIABILITIES

2.1. Liabilities to be Assumed. As used in this Agreement, the
term "Liability" shall mean and include any direct or indirect
indebtedness, guaranty, endorsement, claim, loss, damage, deficiency,
cost, expense, obligation or responsibility, fixed or unfixed, known or
unknown, asserted or unasserted, liquidated or unliquidated, secured or
unsecured. Subject to the terms and conditions of this Agreement, on the
Closing Date, Buyer shall assume and agree to perform and discharge when
due and payable and otherwise in accordance with the relevant governing
agreements and instruments the following Liabilities of the Company (the
"Assumed Liabilities"):

2.1.(a) Closing Balance Sheet Payables. All trade accounts
payable of the Business at the Effective Time, in an amount not to
exceed the amount of trade accounts payable reflected on the Division
Closing Balance Sheet as finally determined in accordance with
Section 3.3.(b). No Liability which is an account payable, note,
draft, inter-company balance or other Liability accounted for as an
obligation for the payment of money by the Division to Company or any
other division or affiliate of Company shall be assumed by Buyer.

2.1.(b) Contractual Liabilities. Company's Liabilities
arising from and after the Closing Date under and pursuant to the
following:

(i) the Real Property Leases described on
Schedule 1.2.(b) of the Disclosure Schedule.

(ii) the Personal Property Leases described on
Schedule 1.2.(e) of the Disclosure Schedule.

(iii) the Contracts described on Schedule
1.2.(g)(i) of the Disclosure Schedule.

(iv) the unfilled Purchase Orders described on
Schedule 1.2.(g)(ii).

(v) the unfilled Sales Orders described on
Schedule 1.2.(g)(iii).

(vi) Every other Purchase Order or Sales Order
constituting a Purchased Asset under Section 1.2.(g).

The Real Property Leases, Personal Property Leases, Contracts,
Purchase Orders and Sales Orders described in this Section 2.1.(b)
are hereinafter collectively described as the "Assumed Contracts."

2.2. Liabilities Not to be Assumed. Buyer is not assuming, and
shall not assume or be deemed to have assumed, any Liability of the
Company other than the Assumed Liabilities expressly set forth in Section
2.1. of this Agreement. Company acknowledges that the Purchased Assets to
be purchased by Buyer from Company under this Agreement constitute only
certain of Company's assets and that Buyer is not intended, nor shall it
be deemed, to be a successor to Company for any purpose. The Company
shall pay, perform and discharge any and all Liabilities of the Company
other than the Assumed Liabilities; provided, in no event, may Buyer
recover any amount against Company in respect of a claim for any damage,
loss, cost or expense resulting from Company's failure to pay, perform or
discharge any such Liability (i) unless and only to the extent that the
amount of such claim or claims in the aggregate is equal to or in excess
of Fifty Thousand United States Dollars and no/100 (U.S. $50,000) or (ii)
in excess of Twenty Million, Seven Hundred Fifty Thousand United States
Dollars and no/100 (U.S. $20,750,000) exclusive of the proceeds of
insurance available to the Company to satisfy any such Liability. The
Company shall pay, perform and discharge any and all Liabilities of the
Company incurred by or relating to acts or omissions prior to Closing
relating to the machining or fabrication of aircraft parts without regard
to the limitation set forth in the preceding sentence; and the Company
shall pay, perform and discharge any and all Environmental Claims of the
Company without regard to the limitation set forth in Section (i) of the
preceding sentence. The obligations of the Company under this provision
shall expire four (4) years after the Closing.

3. PURCHASE PRICE - PAYMENT

3.1. Purchase Price. The purchase price (the "Purchase Price") for
the Purchased Assets shall be (i) the assumption of the Assumed
Liabilities, and (ii) the sum of Thirty-Six Million, Five Hundred Thousand
United States Dollars and No/100 (U.S. $36,500,000).

3.2. Payment of Purchase Price. The Purchase Price shall be paid
by Buyer as follows:

3.2.(a) Assumption of Liabilities. At the Closing, Buyer
shall deliver to Company such documents and instruments as are
reasonably required to evidence the assumption of the Assumed
Liabilities.

3.2.(b) Cash to Company. At the Closing, Buyer shall
deliver to Company the sum of Thirty-Six Million, Five Hundred
Thousand United States Dollars and No/100 (U.S. $36,500,000), subject
to each of the adjustments contemplated in Section 3.2.(c) to be made
under this Agreement.

3.2.(c) Adjustment of Cash Purchase Price on Settlement
Date. On or before the fifth business day following the final
determination of the Closing Division Balance Sheet (as hereinafter
defined) (such date being hereinafter referred to as the "Settlement
Date"):

(i) either (A) Company shall pay to Buyer the
amount, if any, by which Net Working Capital on the Recent
Division Balance Sheet exceeds Net Working Capital on the
Closing Division Balance Sheet, or (B) Buyer shall pay to
Company the amount, if any, by which Net Working Capital on
the Closing Division Balance Sheet exceeds Net Working Capital
on the Recent Division Balance Sheet, in each case together
with interest from the Closing Date to the date of payment at
the rate of seven percent (7%) per annum.

(ii) Company shall pay to Buyer, or Buyer shall
pay to Company, as the case may be, an amount equal to the net
of any reconciliation of the prorations as provided in Section
3.4. below.

3.2.(d) Method of Payment. All payments under this Section
3.2 shall be made in the form of certified or bank cashier's check
payable to the order of the recipient or, at the recipient's option,
by wire transfer of immediately available funds to an account
designated by the recipient not less than 48 hours prior to the time
for payment specified herein. The obligation to make the adjustments
provided for in this Section 3.2. shall survive the Closing.

3.3. Determination of Net Working Capital.

3.3.(a) Definition of Net Working Capital. The term "Net
Working Capital" shall mean the dollar amount by which the net book
value of the Purchased Assets constituting accounts and notes
receivable and Inventory exceeds the net book value of the Assumed
Liabilities constituting accounts payable, as reflected in the Recent
Division Balance Sheet or Closing Division Balance Sheet, as
applicable.

3.3.(b) Closing Division Balance Sheet. The balance sheet
of the Division prepared as of the Effective Time shall be prepared
as follows:

(i) Within 45 days after the Closing Date, Buyer
shall prepare or cause to be prepared and deliver to Company a
partial balance sheet of the Division as of the close of
business on the business day immediately prior to the Closing
Date (the "Effective Time") prepared in accordance with
generally accepted accounting principles from the books and
records of the Company, on a basis consistent with the
generally accepted accounting principles theretofore followed
by Company in the preparation of the Recent Division Balance
Sheet and in accordance with this Section 3.3, and fairly
presenting as of the Effective Time the valuation of the
Purchased Assets and Assumed Liabilities needed in order to
calculate Net Working Capital at the Effective Time. The
balance sheet shall be accompanied by detailed schedules of
such Purchased Assets and Assumed Liabilities and by a report
(1) setting forth the amount of Net Working Capital (as
defined above) reflected in the balance sheet, (2) containing
the certification of a duly authorized officer of Buyer that
the balance sheet has been prepared in accordance with the
generally accepted accounting principles theretofore followed
by Company in the preparation of the Recent Division Balance
Sheet and in accordance with this Section 3.3. and (3) setting
forth the amount of any adjustment to the Purchase Price to be
paid and by whom pursuant to Section 3.2.(c)(i) hereof.

(ii) Within 30 days following the delivery of the
balance sheet referred to in (i) above, Company may object to
any of the information contained in said balance sheet or
accompanying schedules which could affect the necessity or
amount of any adjustment to the Purchase Price by Buyer or
Company pursuant to Section 3.2.(c)(i) hereof. Any such
objection shall be made in writing and shall state Company's
determination of the amount of the Net Working Capital and the
amount of any such adjustment.

(iii) In the event of a dispute or disagreement
relating to the balance sheet or schedules which Buyer and
Company are unable to resolve, either party may elect to have
all such disputes or disagreements resolved by such national
independent accounting firm as mutually agreed by Company and
Buyer (the "Independent Accounting Firm"). The Independent
Accounting Firm shall make a resolution of the balance sheet
of the Division as of the Effective Time and the calculation
of Net Working Capital which shall be final and binding for
purposes of this Article 3. The Independent Accounting Firm
shall be instructed to use every reasonable effort to perform
its services within 15 days of submission of the balance sheet
to it and, in any case, as soon as practicable after such
submission. The fees and expenses for the services of the
Independent Accounting Firm shall be shared by Buyer and
Company as follows: Company shall pay a percentage of such
fees and expenses equal to A/(A+B) and Buyer shall pay a
percentage of such fees and expenses equal to B/(A+B), where A
is equal to the absolute value of the difference (in dollars)
between Net Working Capital at the Effective Time as finally
determined by the Independent Accounting Firm and Net Working
Capital as reflected in the objection prepared and delivered
by Company in accordance with Section 3.3.(b)(ii), and B is
equal to the absolute value of the difference (in dollars)
between Net Working Capital at the Effective Time as finally
determined by the Independent Accounting Firm and Net Working
Capital as reflected in the report prepared and delivered by
Buyer in accordance with Section 3.3.(b)(i). As used in this
Agreement, the term "Closing Division Balance Sheet" shall
mean the partial balance sheet of Company determined in
accordance with Section 3.3(b)(i) as of the Effective Time as
finally determined for purposes of this Article 3, whether by
acquiescence of Company in the figures supplied by Buyer in
accordance with Section 3.3.(b)(i), by negotiation and
agreement of the parties or by the Independent Accounting Firm
in accordance with Section 3.3.(b)(iii).

(iv) Buyer agrees to permit Company, Company's
accountants, and their respective representatives, during
normal business hours, to have reasonable access to, and to
examine and make copies of, all books and records, including
but not limited to the books, records, schedules, work papers
and audit programs, to the extent not proprietary to a third
party, of Buyer and Buyer's accountants and access to
representatives of Buyer's accountants, which documents and
access are necessary to review the balance sheet delivered by
Buyer in accordance with Section 3.3.(b)(i). In addition,
Company's accountants shall have the opportunity to observe
the taking of the inventory in connection with the preparation
of such balance sheet.

(v) Notwithstanding any provision contained
herein requiring that the Closing Division Balance Sheet be
prepared in a manner consistent with Company's past practices
or in accordance with generally accepted accounting
principles, the Closing Division Balance Sheet shall be
prepared utilizing the following criteria:

(A) Inventory shall be valued on a First-In
First-Out ("FIFO") basis in accordance with
generally accepted accounting principles ("GAAP")
consistently applied using the lower of cost or
market valuation convention. A physical inventory
shall be taken by Buyer as of the Effective Time.
The Company shall have the right to have designated
representatives present for the physical inventory.
(i) Items of Finished Inventory in excess of the
usage for the 1996 calendar year shall be valued at
ninety percent (90%) of its value as otherwise
determined in accordance with GAAP, items of
Inventory in excess of two (2) times the usage in
1996 calendar year shall be valued at seventy
percent (70%) of its value as otherwise determined
in accordance with GAAP and items of inventory in
excess of three (3) times the usage in 1996 calendar
year shall be valued at fifty percent (50%) of its
value as otherwise determined in accordance with
GAAP. As used in the preceding sentence, "Usage"
shall be arms-length sales to third parties. For
special or custom items of Inventory which had no
Usage in 1996 calendar year but are subject to firm
purchase order for delivery in 1997 and which a
normal profit margin is projected, these items will
be valued at cost applied on a consistent basis.
(ii) Raw Material Inventory and Work-In-Process
Inventory shall be valued in accordance with GAAP
consistently applied using the lower of cost or
market valuation convention. Such valuation method
shall be applicable to each of the Recent Division
Balance Sheet and the Closing Division Balance
Sheet. No Inventory which has been written down in
value shall be written up by this pricing
convention.

(B) Accounts receivable and notes
receivable shall be stated net of an appropriate
reserve for doubtful accounts, discounts and
anticipated collection expenses; but such reserve
shall not be increased or decreased after the time
of the Recent Division Balance Sheet except (i) in
proportion to the increase or decrease in accounts
and notes receivable, or (ii) to reflect the
discovery or resolution of specific credit problems,
in accordance with the accounting practices employed
by Company in the Business prior to the Closing.

3.4. Prorations. The following prorations relating to the
Purchased Assets will be made as of the Effective Time, with Company
liable to the extent such items relate to any time period up to and
including the Effective Time and Buyer liable to the extent such items
relate to periods subsequent to the Effective Time. Except as otherwise
specifically provided herein, the net amount of all such prorations will
be settled and paid on the Closing Date:

3.4.(a) Personal property taxes, real estate taxes and
assessments, and other taxes, if any, on or with respect to the
Purchased Assets; provided that special assessments for work actually
commenced or levied prior to the date of this Agreement shall be paid
by Company. If the Effective Time occurs before the rate of any real
estate or personal property tax is fixed for the current year or
prior to the time that the assessed valuation of any Purchased Assets
subject to any such tax has been determined, the apportionment of the
taxes between the Company and Buyer at the Effective Time shall be
made upon the basis of the tax rate for the preceding year applied to
the latest assessed valuation. Any difference between the amount of
such taxes actually paid and the amount used in determining the
proration at the Effective Time shall be computed and adjusted
between the parties as hereinafter provided.

3.4.(b) Rents, additional rents, taxes and other items
payable by Company under any lease, license, permit, contract or
other agreement or arrangement to be assigned to or assumed by Buyer.

3.4.(c) The amount of rents, taxes and charges for sewer,
water, fuel, telephone, electricity and other utilities. If
practicable, meter readings shall be taken at the Effective Time and
the respective obligations of the parties determined in accordance
with such readings.

3.4.(d) All other items normally adjusted in connection with
similar transactions.

If the actual expense of any of the above items for the billing
period within which the Effective Time falls is not known on the Closing
Date, except as otherwise expressly provided above, the proration shall be
made based on the expense incurred in the previous billing period, for
expenses billed less often than quarterly, and on the average expense
incurred in the preceding three billing periods, for expenses billed
quarterly or more often, subject to adjustment based on the actual amounts
as hereinafter provided. Company shall furnish Buyer with such documents
and other records as shall be reasonably requested in order to confirm all
proration calculations. Company and Buyer shall reasonably cooperate
after Closing to make a final determination of the prorations under this
Section 3.4. Prior to the Settlement Date, the parties shall make a final
reconciliation of the prorations under this Section 3.4., and the party
which owes the other party any sums based on such reconciliation shall, on
the Settlement Date, pay such amount.

3.5. Intentionally Left Blank.

3.6. Allocation of Purchase Price. The aggregate Purchase Price
(including the assumption by Buyer of the Assumed Liabilities) shall be
allocated among the Purchased Assets for tax purposes in the manner and
amounts mutually determined by Buyer and Company. Company and Buyer will
follow and use such allocation in all tax returns, filings or other
related reports made by them to any governmental agencies. To the extent
that disclosures of this allocation are required to be made by the parties
to the Internal Revenue Service ("IRS") under the provisions of Section
1060 of the Internal Revenue Code of 1986, as amended (the "Code") or any
regulations thereunder, Buyer and Company will disclose such reports to
the other prior to filing with the IRS.

4. REPRESENTATIONS AND WARRANTIES OF COMPANY

Company makes the following representations and warranties to Buyer,
each of which is true and correct on the date hereof, shall remain true
and correct to and including the Closing Date, and, except as provided in
Section 13.3, shall be unaffected by any investigation heretofore or
hereafter made by Buyer, or any knowledge of Buyer other than as
specifically disclosed in the Disclosure Schedule delivered to Buyer at
the time of the execution of this Agreement, and shall survive the Closing
of the transactions provided for herein, for a period of three (3) years.

4.1. Corporate.

4.1.(a) Organization. Company is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Wisconsin.

4.1.(b) Corporate Power. Company has all requisite power
and authority, licenses, registrations, authorizations, permits,
consents, notices of intent, and approvals to own, operate and lease
its properties, including, without limitation, the Purchased Assets,
to carry on its business as and where such is now being conducted, to
enter into this Agreement and the other documents and instruments to
be executed and delivered by Company pursuant hereto and to carry out
the transactions contemplated hereby and thereby.

4.1.(c) Qualification. Company is duly licensed or
qualified to do business as a foreign corporation, and is in good
standing, in each jurisdiction wherein the character of the
properties which are Purchased Assets, or the nature of the Business,
makes such licensing or qualification necessary; such jurisdictions
are listed in Schedule 4.1.(c).

4.1.(d) No Subsidiaries. No portion of the Business is
conducted by means of any interest in, or through, any corporation,
partnership or other entity other than the Company.

4.2. Authority. The execution and delivery of this Agreement and
the other documents and instruments to be executed and delivered by
Company pursuant hereto and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the Board of
Directors of Company. No other or further corporate act or proceeding on
the part of Company is necessary to authorize this Agreement or the other
documents and instruments to be executed and delivered by Company pursuant
hereto or the consummation of the transactions contemplated hereby and
thereby. This Agreement and any and all instruments executed and
delivered by Company pursuant hereto have been duly and validly executed
and delivered by the Company and constitute, the legal, valid and binding
agreements of Company, enforceable against the Company in accordance with
their respective terms.

4.3. No Violation. Except as set forth on Schedule 4.3, neither
the execution and delivery of this Agreement or the other documents and
instruments to be executed and delivered by Company pursuant hereto, nor
the consummation by Company of the transactions contemplated hereby and
thereby (a) will violate any applicable Law or Order, (b) except for
applicable requirements of the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 (the "HSR Act"), will require any authorization, consent,
approval, exemption or other action by or notice to any Government Entity,
(c) subject to obtaining the consents referred to in Schedule 4.3, will
violate or conflict with, or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
will result in the termination of, or accelerate the performance required
by, or result in the creation of any Lien (as defined in Section 4.12.(a))
upon any of the assets of Company under any term or provision of the
Articles of Incorporation or By-laws of Company or of any contract,
commitment, understanding, arrangement, agreement, note, commitment, bond,
mortgage, indenture, license, lease, pledge or other instrument or
obligation of any kind or character to which Company is a party or by
which Company or any of its assets, including, without limitation, the
Purchased Assets, or properties may be bound or affected or (d) conflict
with or result in any breach of any provisions of the Articles of
Incorporation or Bylaws of the Company.

4.4. Division Financial Statements. Included as Schedule 4.4 of
the Disclosure Schedule are the following financial statements consisting
of (i) balance sheets of the Business as of December 31, 1995 and 1996
(the latter such balance sheet sometimes referred to herein as "Recent
Division Balance Sheet"), and (ii) statements of income and expense of the
Division for the years ended December 31, 1994, 1995, and 1996
(collectively, the "Division Financial Statements"). All of such
financial statements (including the related schedules thereto) have been
prepared in accordance with GAAP consistently applied over the periods
covered thereby and with the books and records of the Company; and fairly
present the assets, liabilities and financial position and the results of
operations of the Division as of the dates and for the periods indicated.
Where any asset, liability, or item of income or expense of the Company
relates in part to any operation other than the Division, this fact, and
the method of calculating the allocation, is set forth. Neither the
Recent Division Balance Sheet nor the Closing Division Balance Sheet
includes or shall include, as assets of the Division, any obligations to
the Division of the Company or any other division or Affiliate of the
Company; nor do they or shall they include as liabilities of the Division
any obligations of the Division to the Company or any other division or
Affiliate of the Company.

4.5. Tax Matters. Except as set forth on Schedule 4.5: (i) all
federal, state, foreign, county, local and other tax returns relating to
the Purchased Assets, or required to be filed by or on behalf of Company
in any jurisdiction required to be listed in Schedule 4.1.(c) of the
Disclosure Schedule or any political subdivision thereof, have been timely
filed and the taxes fully paid, directly or indirectly; (ii) Company has
duly withheld and paid all taxes which it is required to withhold and pay
relating to salaries and other compensation heretofore paid to the
employees of the Company; and (iii) Company has not received any notice of
underpayment of taxes or other deficiency which has not been paid and
there are outstanding no agreements or waivers extending the statutory
period of limitations applicable to any tax return or report relating to
the Purchased Assets, or required to have been filed by Company in any
jurisdiction required to be listed in Schedule 4.1.(c) of the Disclosure
Schedule or any political subdivision thereof. No deficiency or
adjustment in respect of any tax that was assessed against the Company
that might result in a Lien on any of the Purchased Assets remains unpaid
and no claim, assessment or audit is pending or threatened with respect to
any tax whose assessment might result in a Lien on any of the Purchased
Assets. No sales tax, use tax or other transfer tax of any type
whatsoever is required to be paid by Buyer or Company with respect to the
transfer of the Purchased Assets as provided herein.

4.6. Accounts Receivable. All accounts receivable of the Business
reflected on the Recent Division Balance Sheet, and as incurred in the
normal course of business since the date thereof, represent bona fide
arm's length sales transactions actually made in the ordinary course of
operating the Division consistent with past practices are collectible in
full (subject to the aggregate allowance for doubtful accounts and sales
returns and allowances of One Hundred Sixty Thousand Dollars ($160,000))
and to the best of Company's knowledge are not subject to any defenses or
offsets. Schedule 4.6 contains an aged schedule of accounts receivable
included in the Recent Division Balance Sheet. All accounts receivable of
the Division reflected on the Final Division Balance Sheet will represent
arm's length sales actually made in the ordinary course of business.

4.7. Inventory. All inventory reflected on the Recent Division
Balance Sheet consists of a quality and quantity usable and saleable in
the ordinary course of business, and is valued in accordance with
generally accepted accounting principles consistently applied by the
Company at the lower of cost or market. All inventory purchased since the
date of such balance sheet consists of a quality and quantity usable and
saleable in the ordinary course of business. Except as set forth in
Schedule 4.7, all inventory of the Division is located on premises owned
or leased by Company which premises, or leaseholds thereof, constitute
Purchased Assets hereunder. Company has good and marketable title to all
inventory, free and clear of all Liens. The value at which the inventory
is carried on Company's balance sheet reflects the normal inventory policy
of Company and has been determined in accordance with GAAP consistently
applied. Company is under no obligation to repurchase any inventory
previously sold in connection with the operation of the Business, except
in connection with product warranties set forth in Schedule 4.20.

4.8. Absence of Certain Changes. Except as and to the extent set
forth in Section 7.10 or Schedule 4.8, since the date of the Recent
Division Balance Sheet there has not been:

4.8.(a) No Adverse Change. Any adverse change in the
financial condition, assets, Liabilities, business, or operations of
the Division or the Business;

4.8.(b) No Damage. Any loss, damage or destruction, whether
covered by insurance or not, affecting the Business or any of the
Purchased Assets;

4.8.(c) No Commitments. Any commitment or transaction by
Company in connection with or affecting the Business (including,
without limitation, any borrowing or capital expenditure) other than
in the ordinary course of business consistent with past practice;

4.8.(d) No Disposition of Property. Any sale, lease or
other transfer or disposition of any properties or assets of the
Business that would have been Purchased Assets had no such sale,
lease, transfer or disposition occurred, except for the sale of
inventory items in the ordinary course of business;

4.8.(e) No Liens. Any Lien made, created or imposed on any
of the properties or assets of the Business that are Purchased Assets
(or would have become Purchased Assets if not sold, leased,
transferred or disposed of prior to the Closing Date);

4.8.(f) No Amendment of Contracts. Any entering into,
amendment or termination by Company of any contract in connection
with or affecting the Business or any of the Purchased Assets, or any
waiver of material rights thereunder, other than in the ordinary
course of business;

4.8.(g) Credit. Any grant of credit to any customer of the
Business or distributor of its products on terms or in amounts more
favorable than those which have been extended to such customer or
distributor in the past, any other change in the terms of any credit
heretofore extended, or any other change of Company's policies or
practices with respect to the granting of credit in connection with
the Business; or

4.8.(h) No Unusual Events. Any other event or condition not
in the ordinary course of business of Company's operation of the
Business.

4.9. Absence of Undisclosed Liabilities. Except as and to the
extent specifically disclosed in the Recent Division Balance Sheet, or in
Schedule 4.9, to the Company's best knowledge, the Business does not have
any Liabilities that affect, relate to or encumber the Purchased Assets
other than commercial liabilities and obligations incurred since the date
of the Recent Division Balance Sheet in the ordinary course of business
and consistent with past practice. Except as and to the extent described
in the Recent Division Balance Sheet or in Schedule 4.9, Company has no
knowledge of incurring any Liability affecting, relating to or encumbering
the Purchased Assets, except commercial liabilities and obligations
incurred in the ordinary course of the Business and consistent with past
practice.

4.10. No Litigation. Except as set forth in Schedule 4.10, there is
no Litigation pending or threatened against Company, its directors (in
such capacity), its business or any of its assets that in any way relates
to, directly or indirectly, the Division, the Business, the Purchased
Assets or the Assumed Liabilities, nor does Company know of any basis for
any such Litigation. Except as set forth in Schedule 4.10, neither
Company (in connection with its operation of the Business) nor the
Purchased Assets is subject to any Order. As used in this Agreement,
"Litigation" shall mean any action, writ, proceeding, arbitration,
investigation or inquiry, whether civil, criminal or administrative.

4.11. Compliance With Laws and Orders.

4.11.(a) Compliance. Except as set forth in Schedule
4.11.(a), Company, in all matters relating, directly or indirectly to
the Business (including each and all of its operations, practices,
properties and assets), is in compliance with all applicable Laws and
Orders, including, without limitation, those applicable to
discrimination in employment, occupational safety and health, trade
practices, competition and pricing, product warranties, zoning,
building and sanitation, employment, retirement and labor relations,
product advertising and the Environmental Laws (as hereinafter
defined). Except as set forth in Schedule 4.11.(a), Company has not
received notice of any violation or alleged violation of, and is
subject to no Liability for past or continuing violation of, any
Laws, Orders or Environmental Laws with respect to the operation of
the Business, nor has the Company received any notice or other
communication of any alleged, actual or potential obligation to
undertake or bear the cost of Remediation at the Facilities or other
locations leased by the Company in connection with the Business, or
to which Materials of Environmental Concern generated by the Company
may have been transported, disposed or treated. All reports and
returns required to be filed by Company with any Government Entity
with respect to the operation of the Business have been filed, and
were accurate and complete when filed.

4.11.(b) Licenses and Permits. Company has all licenses,
permits, approvals, authorizations and consents of all Government
Entities and all certifications required for the conduct of the
Business (as presently conducted) and operation of the Facilities.
All such licenses, permits, approvals, authorizations and consents
are described in Schedule 4.11.(b), are in full force and effect and
are assignable to Buyer in accordance with the terms hereof. Except
as set forth in Schedule 4.11.(b), the Business (including its
operations, properties and assets) is and has been in compliance with
all such permits and licenses, approvals, authorizations and
consents.

4.11.(c) Environmental Matters. Without in any manner
limiting any other representations and warranties set forth in this
Agreement:

(i) Except as disclosed in Schedule 4.11.(c)
hereto, neither Company, nor any of the Purchased Assets or
their use is in violation of, or has violated, or has been or
is in non-compliance with, any Environmental Laws in
connection with the ownership, use, maintenance or operation
of, or conduct of the Business or any of the Purchased Assets.

(ii) Except as disclosed on Schedule 4.11(c)
hereto, without in any manner limiting the generality of (i)
above:

(A) Except in compliance with
Environmental Laws as they have existed from time to time
(including, without limitation, the obtaining of necessary
Permits), no Materials of Environmental Concern have been
used, generated, manufactured, stored or treated, or disposed
of, or in any other way released (and no release is
threatened), on, under or about any property on which Company
has conducted the Business or transported to or from Company's
place or places of conducting the Business, and to the best
of Company's knowledge no Materials of Environmental Concern
have been generated, stored or treated or disposed of, or in
any way released (and no release is threatened), on, under,
about or from any property adjacent to Company's Facilities or
property leased in connection with the conduct of the
Business;

(B) Company is not now, as a result of the
operation or condition of the Business of Company or Purchased
Assets prior to or at Closing, subject to any; (i) contingent
liability in connection with any release or threatened release
of any Materials of Environmental Concern into the environment
whether on or, to the best of Company's knowledge, off
property of Company; (ii) reclamation or Remediation
requirements under Environmental Laws, or any reporting
requirements related thereto; or (iii) consent order,
compliance order or administrative order relating to or issued
under any Environmental Law;

(C) There are no Environmental Claims
known, pending or to the best of Company's knowledge,
threatened against Company with respect to, directly or
indirectly, the operation of the Business or the Facilities
and, to the best of Company's knowledge, there is no basis for
same;

(D) Company has all Permits (as listed on
Schedule 4.11(b)) to comply with Requirements of Environmental
Laws governing the Business, Company has all environmental and
pollution control equipment necessary for compliance with all
Environmental Laws (including, without limitation, all
applicable Permits) and operation of the Business as it is
presently conducted, and is hereunder transferring to Buyer
(to the extent permitted by law) all environmental and
pollution control equipment necessary for compliance with all
Environmental Laws;

(E) Except as set forth on Schedule
4.11(c)(E), there are no, nor have there ever been any,
storage tanks or solid waste management units located on or
under any property on which Company has conducted the
Business, and there are no Materials of Environmental Concern
on the Facilities or property leased by Company in connection
with the conduct of the Business in an amount exceeding
background levels for such geographic area or which would
require reporting to any governmental authority or Remediation
to comply with Requirements of Environmental Laws;

(F) To the best of Company's knowledge,
none of the off-site locations where Materials of
Environmental Concern generated from the Business or from any
of the Purchased Assets or for which Company has arranged for
their disposal have been stored, treated, recycled, disposed
of or released has been nominated or identified as a facility
which is subject to an existing or potential claim under
Environmental Laws or is otherwise not in compliance with
Requirements of Environmental Laws;

(G) With respect to the Business, Company
has not been named as a potentially responsible party under,
and not received notice that it has been nominated or
identified as a facility which is subject to an existing or
potential claim under, the Clean Water Act, the Clean Air Act,
the Resource Conservation and Recovery Act, the Toxic
Substances Control Act and the Comprehensive Environmental
Response Compensation Liability Act ("CERCLA") or comparable
federal or state Environmental Laws, and the Business is not
subject to any existing Lien arising under Environmental Laws:

(H) Company has not received notice of any
release or threatened release of Materials of Environmental
Concern, or of any violation of, noncompliance with, or
remedial obligation under, Environmental Laws or Permits,
relating to the ownership, use, maintenance, operation of, the
Business, the Purchased Assets, or any property on which
Company has conducted the Business, nor to the best of
Company's knowledge, is there any basis for any of the
foregoing, nor has Company voluntarily undertaken Remediation
or other cleanup of any facility or site or entered into any
agreement for the payment of costs associated with such
activity;

(I) Company has no knowledge of any
Requirement of Environmental Laws that will require future
compliance cost on the part of Company or Buyer in excess of
Twenty-Five Thousand United States Dollars and No/100 (U.S.
$25,000) in the aggregate assuming Buyer complies with all
Environmental Laws;

(J) To the best of Company's knowledge
there are no present or past event, facts, conditions,
circumstances, activities, practices, incidents, actions or
plans which may interfere with or prevent continued compliance
by the Business with Requirements of Environmental Laws or
which may give rise to any common law or statutory liability
under Environmental Laws or form the basis of an Environmental
Claim against the Business, assuming Buyer complies with all
Environmental Laws; or

(K) Other than those obligations arising
directly from statutes or regulations, there are no
obligations, undertakings or liabilities arising out of or
relating to Environmental Laws which Company has agreed to,
assumed or retained, by contract or otherwise, with respect to
the Business except pursuant to law.

(L) Except as set forth on Schedule
4.11.(c)(L), there are no consents or approvals required under
any Environmental Laws (including without limitation
applicable Permits) which must be obtained to consummate the
transaction contemplated by this Agreement.

(iii) As used in this Agreement "Environmental
Claim" shall mean any claim, demand, action, cause of action,
suit, loss, cost, including, but not limited to, attorneys'
fees, diminution in value, experts' fees, damage, punitive
damage, fine, penalty, expense, liability, strict liability,
criminal liability, judgment, governmental or private
investigation, testing, notification of status of being
potentially responsible for clean-up of any facility, or for
being in violation or in potential violation of any
Requirement of Environmental Law relating to Remediation or
compliance with Requirements of Environmental Laws,
proceeding, Lien, personal injury or death of any person, or
property damage, whether threatened, sought, brought or
imposed, that is related to or that seeks to recover costs or
damages related to, or seeks to impose liability for: (i)
explosives; (ii) pollution, contamination, preservation,
protection, remediation, removal, clean-up or monitoring of
the air, surface water, ground water, soil or protected lands;
(iii) solid, gaseous or liquid waste (whether hazardous or
non-hazardous) generation, handling, discharge, release,
threatened release, treatment, storage, disposal or
transportation; (iv) exposure of persons or property to
Materials of Environmental Concern and the effects thereof;
(v) the release, threatened release, manufacture, processing,
distribution in commerce, use, treatment, storage, disposal or
Remediation of Materials of Environmental Concern; (vi) injury
to, death of or threat to the health or safety of any person
or persons caused directly or indirectly by Materials of
Environmental Concern; (vii) destruction caused directly or
indirectly by Materials of Environmental Concern or the
release or threatened release of any Materials of
Environmental Concern on any property (whether real or
personal); (viii) the implementation or lack thereof of spill
prevention and/or disaster plans relating to Materials of
Environmental Concern; (ix) community right-to-know and other
disclosure laws; or (x) maintaining, disclosing or reporting
information to governmental authorities under any
Environmental Law. The term, "Environmental Claim" also
includes, without limitation, any damages, costs or expenses
incurred in testing for the likelihood of Remediation or
likelihood of breach or violation of any Requirements of
Environmental Laws, monitoring or responding to efforts to
require Remediation and any claim based upon any asserted or
actual breach or violation of any Requirements of
Environmental Law, any disruption in Buyer's business
associated with Remediation, or upon any event, occurrence or
condition as a consequence of which, pursuant to any
Requirements of Environmental Law, the Purchased Assets shall
be subject to any restriction on use after Closing as a result
of any events or circumstances relating to facts or conditions
existing prior to the Closing Date.

"Environmental Laws" shall mean any laws, rules,
regulations, ordinances, orders or guidance documents now or
hereafter in effect of any applicable federal, state or local
executive, legislative, judicial, regulatory or administrative
agency, board or authority or any judicial or administrative
decision relating thereto that relate in any manner to health,
worker protection, the environment, or a community's right to
know.

"Government Entity" shall mean any court,
arbitrator, department, commission, board, bureau, agency,
authority, instrumentality or other body, whether federal,
state, municipal, foreign or others.

"Law" shall mean any statute, law, ordinance, rule
or regulation of general application adopted, enacted or
promulgated by any Government Entity.

"Material of Environmental Concern" means: (i)
those substances included within the statutory and/or
regulatory definitions of "Hazardous substance," "hazardous
waste," "extremely hazardous substance," "regulated
substance," "Hazardous materials," "toxic substances," under
any Environmental Law; (ii) any material, waste or substance
which is: (A) petroleum, oil or a fraction thereof, (B)
explosives, (C) radioactive materials (including naturally
occurring radioactive materials), or (D) solid wastes that
pose imminent and substantial endangerment to health or the
environment (as defined by RCRA, 42 USC 6973(a)), and (iii)
such other substances, materials, or wastes that are
classified or regulated as hazardous or toxic under any
applicable federal, state or local law or regulation.

"Order" shall mean any order, writ, injunction,
judgment, plan or decree issued or promulgated by any
Government Entity.

"Permits" shall mean any permit, registration,
notice, notice with intent, permit by rule, or other
authorization which is necessary for the Business and/or
Company to be in compliance with Requirements of Environmental
Laws.

"Remediation" means any action necessary to: (i)
comply with and ensure compliance with the Requirements of
Environmental Laws; (ii) the taking of all reasonably
necessary precautions to protect against and/or respond to,
remove or remediate or monitor the release or threatened
release of Materials of Environmental Concern at, on, in,
about, under, within or near the air, soil, surface water,
groundwater or soil vapor at the Facilities or any public
domain affected by the Business; or (iii) ensure that any
storage vessels or tanks are closed or otherwise meet the
requirements of Environmental Laws.

"Requirement(s) of Environmental Law(s)" means all
requirements, conditions, restrictions or stipulations of
Environmental Laws imposed upon or related to Company, the
Purchased Assets and/or the Business of Company.

4.12. Title to and Condition of Properties.

4.12.(a) Marketable Title. Company has good and marketable
title to all the Purchased Assets, free and clear of all mortgages,
liens (statutory or otherwise), security interests, claims, pledges,
licenses, equities, options, conditional sales contracts,
assessments, levies, easements, covenants, reservations,
restrictions, rights-of-way, exceptions, limitations, charges or
encumbrances of any nature whatsoever (collectively, "Liens") except
those described in Schedule 4.12.(a)(i); and, in the case of real
property, Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings (and which have been
sufficiently accrued or reserved against in the Recent Division
Balance Sheet, which Liens for taxes and such proceedings are
described in Schedule 4.12.(a)(i)), municipal and zoning ordinances
and easements for public utilities, none of which interfere with the
use of the property as currently utilized ("Permitted Real Property
Liens"). Company has complete and unrestricted power and right to
sell, assign, convey and deliver the Purchased Assets to Buyer as
contemplated hereby. At Closing, Buyer will receive good and
marketable title to all the Purchased Assets (other than the Owned
Real Property and the Leased Real Property) free and clear of all
Liens of any nature whatsoever except those described in Schedule
4.12.(a)(ii).

4.12.(b) Condition. All tangible assets (real and personal)
constituting Purchased Assets hereunder are in good operating
condition and repair, have been maintained consistent with the
standards generally followed in the industry and are sufficient to
carry on the Business as conducted during the preceding 12 months.
Except as described in Schedule 4.12(b), all buildings, plants,
equipment and other structures owned or otherwise utilized by
Company in operating the Business are in good condition and repair.

4.12.(c) Real Property. Schedules 1.2.(a) and 1.2.(b) set
forth all real property owned, used or occupied by Company in
operating the Business (the "Real Property"), including a description
of all land, and all encumbrances, easements or rights of way of
record (or, if not of record, of which Company has notice or
knowledge) granted on or appurtenant to or otherwise affecting such
Real Property, the zoning classification thereof, and all plants,
buildings or other structures located thereon. Schedule 1.2.(b) also
sets forth, with respect to each parcel of Real Property which is
leased, the material terms of such lease. There are now in full
force and effect duly issued certificates of occupancy permitting the
Real Property and improvements located thereon to be legally used and
occupied as the same are now constituted. All of the Real Property
has permanent rights of access to dedicated public highways. There
is not (i) any claim of adverse possession or prescriptive rights
involving any of the Real Property, (ii) any structure located on any
Real Property which encroaches on or over the boundaries of
neighboring or adjacent properties or (iii) any structure of any
other party which encroaches on or over the boundaries of any of such
Real Property. No public improvements have been commenced and to
Company's knowledge none are planned which in either case may result
in special assessments against or otherwise materially adversely
affect any Real Property. To Company's best knowledge, no portion of
any of the Real Property has been used as a landfill. Company has no
notice or knowledge of any (i) planned or proposed increase in
assessed valuations of any Real Property, (ii) Order requiring
repair, alteration, or correction of any existing condition affecting
any Real Property or the systems or improvements thereat, (iii)
condition or defect which could give rise to an order of the sort
referred to in "(ii)" above, or (iv) underground storage tanks, or
any structural, mechanical, or other defects of material significance
affecting any Real Property or the systems or improvements thereat
(including, but not limited to, inadequacy for normal use of
mechanical systems or disposal or water systems at or serving the
Real Property).

4.12.(d) No Condemnation or Expropriation. Neither the whole
nor any portion of the Purchased Assets is subject to any Order to be
sold or is being condemned, expropriated or otherwise taken by any
Government Entity with or without payment of compensation therefor,
nor to the best of Company's knowledge has any such condemnation,
expropriation or taking been proposed.

4.12.(e) No Certified Survey Map Required. No certified
survey map or other state, municipal, or other governmental approval
regarding the division, platting, or mapping of real estate is
required as a prerequisite to the conveyance by Company to Buyer (or
as a prerequisite to the recording of any conveyance document) of any
Owned Real Property or Leased Real Property pursuant to the terms
hereof.

4.14. Contracts and Commitments.

4.14.(a) Real Property Leases. Except as set forth in
Schedule 1.2.(b), Company has no leases of real property used or held
for use in connection with the Business.

4.14.(b) Personal Property Leases. Except as set forth in
Schedule 1.2.(e), Company has no leases of personal property used or
held for use in connection with the Business.

4.14.(c) Purchase Commitments. Company has no purchase
commitments for inventory items or supplies in connection with the
Business that, together with amounts on hand, constitute in excess of
12 months normal usage, or which are in excess of the current price.

4.14.(d) Sales Commitments. Company has no sales contracts
or commitments in connection with or affecting the Business or the
Purchased Assets except those made in the ordinary course of
business, at arm's length or which are expected to produce a loss,
except as disclosed in Schedule 4.14.(d).

4.14.(e) Contracts for Services. Company has no agreement,
understanding, contract or commitment in connection with or affecting
the Business or the Purchased Assets (written or oral) with any
agent, consultant, distributor, dealer or franchisee that is not
cancelable by Company on notice of not longer than 30 days without
liability, penalty or premium of any nature or kind whatsoever.

4.14.(f) Powers of Attorney. The Company has not given a
power of attorney, which is currently in effect, to any person, firm
or corporation for any purpose whatsoever in connection with or
affecting the Business or the Purchased Assets.

4.14.(g) Collective Bargaining Agreements. Except as set
forth in Schedule 4.14.(g), Company is not a party to any collective
bargaining agreements with any unions, guilds, shop committees or
other collective bargaining groups representing or purporting to
represent employees of the Business. Copies of all such agreements
have heretofore been delivered to Buyer.

4.14.(h) Other Material Contracts. Company has no lease,
license, contract or commitment of any nature affecting the Business
which is individually or in the aggregate material to the operation
of the Business, except as explicitly described in Schedule 4.14.(h)
or any other Schedule.

4.14.(i) No Default. Company is not in default under any
lease, contract or commitment in its operation of the Business, nor
has any event or omission occurred which through the passage of time
or the giving of notice, or both, would constitute a default
thereunder or cause the acceleration of any of Company's obligations
or result in the creation of any Lien on any of the Purchased Assets.
To Company's best knowledge, no third party is in default under any
lease, contract or commitment to which Company is a party in its
operation of the Business, nor has any event or omission occurred
which, through the passage of time or the giving of notice, or both,
would constitute a default thereunder or give rise to an automatic
termination, or the right of discretionary termination, thereof.

4.15. Labor Matters. Except as set forth in Schedule 4.15, within
the last five years Company has not experienced any labor disputes, union
organization attempts or any work stoppage due to labor disagreements in
connection with the Business. In its operation of the Business, except to
the extent set forth in Schedule 4.15, (a) Company is in compliance with
all applicable laws respecting employment and employment practices, terms
and conditions of employment and wages and hours, and is not engaged in
any unfair labor practice; (b) there is no unfair labor practice charge or
complaint against Company pending or threatened; (c) there is no labor
strike, dispute, request for representation, slowdown or stoppage actually
pending or threatened against or affecting the Business nor any secondary
boycott with respect to products of the Business; (d) no question
concerning representation has been raised or is threatened respecting the
employees of the Business; and (e) there are no administrative charges or
court complaints against Company concerning alleged employment
discrimination or other employment related matters pending or threatened
before the U.S. Equal Employment Opportunity Commission or any Government
Entity.

4.16. Intentionally Left Blank.

4.17. Intentionally Left Blank.

4.18. Trade Rights. Schedule 4.18 lists all Trade Rights of the
type described in clauses (i), (ii), (iii) or (iv) of Section 1.2.(f) in
which Company now has any interest and which are or were used, held for
use, or acquired or developed for use in the Business, specifying whether
such Trade Rights are owned, controlled, used or held (under license or
otherwise) by Company, and also indicating which of such Trade Rights are
registered. In order to conduct the Business as such is currently being
conducted Company does not require any Trade Rights that it does not
already have. Company is not infringing and has not infringed any Trade
Rights of another in the operation of the Business, nor to the Company's
best knowledge is any other person infringing the Trade Rights of Company.
Company has not granted any license or made any assignment of any Trade
Right listed on Schedule 4.18, and no other person has any right to use
any Trade Right owned or held by Company in its operation of the Business.
Company does not pay any royalties or other consideration for the right to
use any Trade Rights of others used in the Business. There is no
Litigation pending or threatened to challenge Company's right, title and
interest with respect to its continued use and right to preclude others
from using any Trade Rights of Company used in the Business. All Trade
Rights of Company are valid, enforceable and in good standing, and there
are no equitable defenses to enforcement based on any act or omission of
Company.

4.19. Major Customers and Suppliers.

4.19.(a) Major Customers. Schedule 4.19.(a) contains a list
of the ten largest customers, including distributors, of the Business
for each of the two (2) most recent fiscal years (determined on the
basis of the total dollar amount of net sales) showing the total
dollar amount of net sales to each such customer during each such
year. Company has no knowledge or information of any facts
indicating, nor any other reason to believe, that any of the
customers listed on Schedule 4.19.(a) will not continue to be
customers of the Business after the Closing at substantially the same
level of purchases as heretofore.

4.19.(b) Major Suppliers. Schedule 4.19.(b) contains a list
of the ten largest suppliers to the Business for each of the two (2)
most recent fiscal years (determined on the basis of the total dollar
amount of purchases) showing the total dollar amount of purchases
from each such supplier during each such year. Company has no
knowledge or information of any facts indicating, nor any other
reason to believe, that any of the suppliers listed on Schedule
4.19.(b) will not continue to be suppliers to the Business after the
Closing and will not continue to supply the Business with
substantially the same quantity and quality of goods at competitive
prices.

4.19.(c) Sales Representatives. Schedule 4.19.(c) contains a
list by product line of all sales representatives of the Business,
together with representative copies of all sales representative
contracts, and a description of all substantial modifications or
exceptions.

4.20. Product Warranty and Product Liability. Schedule 4.20
contains a true, correct and complete copy of Company's standard warranty
or warranties for sales of Products (as defined below) and, except as
stated therein, there are no warranties, commitments or obligations with
respect to the return, repair or replacement of Products. Schedule 4.20
sets forth the estimated aggregate annual cost to Company of performing
warranty obligations for customers of the Business for each of the two (2)
preceding fiscal years and the current fiscal year to the date of the
Recent Division Balance Sheet. Schedule 4.20 contains a description of
all product liability claims and similar Litigation relating to Products
manufactured or sold, or services rendered, which are presently pending or
which to Company's knowledge are threatened, or which have been asserted
or commenced against the Company in connection with its operation of the
Business within the last two (2) years, in which a party thereto either
requests injunctive relief or alleges damages in excess of Twenty-Five
Thousand United States Dollars and No/100 (U.S. $25,000) (whether or not
covered by insurance). None of the Products has been the subject of any
replacement, field fix, retrofit, modification or recall campaign and, to
Company's knowledge, no facts or conditions exist which could reasonably
be expected to result in such a recall campaign. The Products have been
designed and manufactured so as to meet and comply with all applicable
governmental standards and specifications currently in effect, and have
received all governmental approvals necessary to allow their sale and use.
As used in this Section 4.20, the term "Products" means any and all
products currently or at any time previously manufactured, distributed or
sold by the Business, or by any predecessor of the Business under any
brand name or mark under which products are or have been manufactured,
distributed or sold by Company in or through the Business.

4.21. Affiliates' Relationships to Company.

4.21.(a) Contracts With Affiliates. All leases, contracts,
agreements or other arrangements concerning the Business between
Company and any Affiliate are described on Schedule 4.21.(a).

4.21.(b) No Adverse Interests. No Affiliate has any direct
or indirect interest in (i) any entity which does business with
Company in connection with the operation of, or is competitive with
the Business, or (ii) any property, asset or right which is used by
Company in the conduct of the Business.

4.22. Assets Necessary to Business. The Purchased Assets include
all property and assets (except for the Excluded Assets), tangible and
intangible, and all leases, licenses and other agreements, which are
necessary to permit Buyer to carry on, or currently used or held for use
in, the Business as presently conducted.

4.23. No Brokers or Finders. Neither Company nor any of its
directors, officers, employees, shareholders or agents have retained,
employed or used any broker or finder in connection with the transactions
provided for herein or the negotiation thereof, except for Credit Suisse
First Boston. Company shall be solely responsible for the payment of any
and all fees or expenses of Credit Suisse First Boston in connection with
the transactions contemplated in this Agreement.

4.24. Disclosure. No representation or warranty contained in this
Agreement contains any untrue statement of material fact or omits to state
a material fact necessary to make the statements herein not misleading.

5. REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer makes the following representations and warranties to Company
each of which is true and correct on the date hereof, shall remain true
and correct to and including the Closing Date, shall be unaffected by any
investigation heretofore or hereafter made by Company or any notice to
Company, and shall survive the Closing of the transactions provided for
herein for a period of three (3) years.

5.1. Corporate.

5.1.(a) Organization. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Delaware.

5.2. Authority. The execution and delivery of this Agreement and
the other documents and instruments to be executed and delivered by Buyer
pursuant hereto and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by the Board of Directors of
Buyer. No other corporate act or proceeding on the part of Buyer is
necessary to authorize this Agreement or the other documents and
instruments to be executed and delivered by Buyer pursuant hereto or the
consummation of the transactions contemplated hereby and thereby. This
Agreement constitutes, and when executed and delivered, the other
documents and instruments to be executed and delivered by Buyer pursuant
hereto will constitute, valid and binding agreements of Buyer, enforceable
in accordance with their respective terms, except as such may be limited
by bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally, and by general equitable principles.

6. EMPLOYEES - EMPLOYEE BENEFITS

6.1. Plant Closing Notification. Company shall make all necessary
notifications under any and all applicable federal and state plant-closing
laws.

6.2. Employment Liabilities. Company hereby retains any and all
employment related costs, obligations and liabilities of the Business
incurred on or prior to the Closing Date or which relate to events,
occurrences, conditions, actions or inactions which took place or were in
effect on or prior to the Closing Date (whether or not reported, filed,
billed or paid for on or prior to the date hereof), including, without
limitation, costs, obligations and liabilities relating to employment
discrimination, unfair labor practices, wage and hour laws, health and
safety, workers compensation, wrongful discharge, plant closing,
compensation, fringe benefits, insurance, employee benefit plans,
pensions, retiree medical, severance pay, vacations, torts, accidents,
disabilities, injuries, sickness, exposure to harmful conditions, breach
of oral or written employment contracts or collective bargaining
agreements or breach of law, statute, judgment, decree, injunction, order,
writ, rule or regulation of any federal, state or local governmental
agency. The proportionate liability for continuing acts or conditions
(such as exposure to harmful conditions or continuing discrimination)
shall be assumed by Company if any material portion of the act or
condition occurred on or prior to the Closing Date. Company shall be
responsible for paying to its employees accrued vacation time to the
Closing Date.

6.3. Employees. Company will terminate all the employees of Company
engaged in the Business as of the Closing Date. The parties hereby agree
that the Buyer is not assuming any of the Benefit Plans (as defined below)
nor shall it be deemed a successor employer with respect to any of the
Benefit Plans. The terms "Benefit Plans" shall mean collectively any (i)
"cafeteria plan" as described in Section 125 of the Internal Revenue Code
of 1986, as amended (ii) "employee welfare benefit plans", as defined in
Section 3 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or (iii) "employee pension benefit plan" as defined in
Section 3 (2) of ERISA whether insured or otherwise. Company agrees to
cooperate with Buyer and give Buyer access to employee information and
assistance with employee communications in connection with Buyer's
potential employment of certain current employees of Company. Buyer shall
be under no obligation to (i) maintain any of Company's employees it may
hire at the same position, title or level or responsibility and/or
compensation that they had with the Company; (ii) grant seniority or
service credit to any such employee; or (iii) pay any specified level of
compensation or benefits to any such employee.

6.4. COBRA. Buyer does not assume, and Company agrees to be solely
responsible for, any and all liabilities relating to health care
continuation coverage under the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended, which relate to, arise out of or are in
connection with the transaction or the events contemplated by this
Agreement.

6.5. Notification. After the Closing, Buyer agrees to promptly
notify Company of the identity of any of the former employees of the
Business which Buyer elects to hire. This obligation shall continue for a
period of two years after the Closing.

7. OTHER MATTERS

7.1. Title Matters.

7.1.(a) Title Commitments. By May 10, 1997, Company, at its
expense, shall provide to Buyer (i) title insurance commitments (each
a "Title Commitment") issued by a title insurance company or
companies reasonably satisfactory to Buyer (the "Title Company"),
agreeing to issue to Buyer standard form owner's (or lessee's, as the
case may be) policies of title insurance with respect to all Owned
Real Property and Leased Real Property, together with a copy of each
document to which reference is made in such commitments (the
"Supporting Documents"); and (ii) a current "as built" survey (each a
"Survey") of the Business' Russellville, Arkansas facility and the
Business' Cynthiana, Kentucky facility and all improvements situated
thereon made on the ground and certified by a professional land
surveyor licensed in the State in which the Real Property is located.
The costs and expenses associated with obtaining the above two
Surveys shall be shared equally by the Buyer and the Company
regardless of whether the transaction contemplated by this Agreement
actually Closes.

7.1.(b) Procedure for Objections to Title Commitments and
Surveys. Buyer shall have twenty (20) days after receipt of the last
of the Title Commitments together with complete and legible copies of
all Supporting Documents and the Surveys to notify Company in writing
("Buyer's Objection Notice") of any objections Buyer may have to
matters reflected in or relating to the Title Commitments, the
Supporting Documents or the Surveys. If Buyer timely delivers
Buyer's Objection Notice, Company shall have the option in its sole
and absolute discretion to determine whether or not to attempt to
remedy or cure any such objection within the 20-day period
("Company's Cure Period") following receipt of Buyer's Objection
Notice. If Company has not cured or undertaken in writing to cure
prior to Closing any objection set forth in Buyer's Objection Notice
to Buyer's reasonable satisfaction by the end of Company's Cure
Period, Buyer shall, as its sole and exclusive remedy, be entitled to
either (a) terminate this Agreement by written notice given (i)
within three (3) business days after the end of Company's Cure Period
or (ii) at or prior to the Closing Date, whichever shall first occur,
whereupon neither Buyer nor Company shall have any further right or
obligation hereunder except for rights or obligations which expressly
survive termination or (b) to proceed to Closing without any
abatement in Purchase Price and waive such uncured objection. As
used herein, the term "Permitted Real Property Liens" shall mean as
to each parcel of Real Property any and all matters disclosed in the
related Title Commitment, Survey or Supporting Documents, except for
those matters cured or undertaken by Company in writing to be cured
prior to Closing.

7.1.(c) Title Insurance. At Closing, Company shall convey
good and marketable title to all Owned Real Property by general
warranty deed, free and clear of all Liens except for the Permitted
Real Property Liens. In addition, at Closing, Company, at its
expense, shall provide to Buyer owner's (or lessee's, as the case may
be) policies of title insurance with respect to all Owned Real
Property and Leased Real Property. In the case of Owned Real
Property, each such policy shall be a standard ALTA Form 1990 owner's
policy in the full amount of that portion of the Purchase Price
allocated respectively to each subject parcel of Owned Real Property
under Section 3.6 hereof, insuring good and marketable title thereto
(expressly including all easements and other appurtenances) in fee
simple subject to no Liens other than the Permitted Real Property
Liens pertaining to such Owned Real Property. In the case of Leased
Real Property, each such policy shall be upon a standard ALTA Form
1990 leasehold owner's policies and in such amounts as such shall be
reasonably acceptable to Buyer insuring said leasehold estate to be
in Buyer subject to no Liens other than the Permitted Real Property
Liens pertaining to such Leased Real Property. In either case, all
policies shall contain such endorsements as Buyer shall reasonably
request.

7.2. Environmental Audits. Buyer will promptly assign certain of
its technical employees to conduct such environmental audits of the
Business' operations and the real estate occupied by the Business as Buyer
in its discretion shall consider necessary or appropriate, and thereafter
Buyer may promptly retain one or more firms engaged in the regular
business of environmental engineering to conduct such further
environmental audits of the Business' operations and real estate as are
indicated by the Buyer's own environmental audits. Buyer shall promptly
provide Company with copies of all written reports provided by its
employees or outside consultants.

7.3. Noncompetition. Subject to the Closing, and as an inducement
to Buyer to execute this Agreement and complete the transactions
contemplated hereby, Company hereby covenants and agrees that for a period
of five (5) years from the Closing Date (the "Noncompetition Term"), it
will not, directly or indirectly:

(i) engage in, continue in or carry on any
business which would be competitive with the Business as
currently conducted by the Company or is substantially similar
thereto, including owning or controlling any financial
interest in any corporation, partnership, firm or other form
of business organization which is so engaged, except that the
Company shall be free to continue to sell industrial forgings
and continue machining of forgings without violating this
provision;

(ii) consult with, advise or assist in any way,
whether or not for consideration, any person, corporation,
partnership, firm or other business organization which is now
or becomes a competitor of Buyer in any aspect with respect to
the Business as currently conducted by the Company including,
but not limited to, advertising or otherwise endorsing the
products of any such competitor; soliciting customers or
otherwise serving as an intermediary for any such competitor;
loaning money or rendering any other form of financial
assistance;

(iii) hire, offer to hire, or solicit for
employment any employee of Buyer, without the prior consent of
Buyer, until such person has been separated from employment by
the Buyer for at least 2 calendar years; or

(iv) engage in any practice the purpose of which
is to evade the provisions of this covenant not to compete or
to commit any act which adversely affects the Purchased Assets
acquired by Buyer hereunder;

provided, however, that the foregoing shall not prohibit the ownership by
Company of securities of corporations which are listed on a national
securities exchange or traded in the national over-the-counter market in
an amount which shall not exceed 5% of the outstanding shares of any such
corporation. The parties agree that the geographic scope of this covenant
not to compete shall be worldwide. The parties hereto agree and stipulate
that the agreements and covenants not to compete contained in this Section
7.3. are fair and reasonable in light of all of the facts and
circumstances of the relationship between Buyer and Company; however,
Company and Buyer are aware that in certain circumstances courts have
refused to enforce certain agreements not to compete. Therefore, in
furtherance of, and not in derogation of the provisions of this Section,
Company and Buyer agree that in the event a court should decline to
enforce the provisions hereof, that this Section 7.3. shall be deemed to
be modified or reformed to restrict Company's competition with Buyer or
its affiliated companies to the maximum extent, as to time, geography and
business scope, which the court shall find enforceable; provided, however,
in no event shall the provisions hereof be deemed to be more restrictive
to Company than those contained herein. If, during any period within the
Noncompetition Term, Company is not in compliance with the terms of
Section 7.3., Buyer shall be entitled to, among any other remedies
available hereunder, at law or in equity, compliance by Company with the
terms of this Section 7.3. for an additional period equal to the period of
such noncompliance. For purposes of the Agreement, the term
"Noncompetition Term" shall also include this additional period. Company
and Buyer hereby acknowledge that the geographic boundaries, scope of
prohibited activities and the time duration of the provisions of this
Section 7.3. are reasonable and no broader than are necessary to protect
the legitimate business interest of Buyer. The parties agree that Buyer
may sell, assign or otherwise transfer this covenant not to compete, in
whole or in part, to any person, corporation, firm or entity that
purchases all or part of the Purchased Assets, but no such sale,
assignment or transfer shall increase the term or the business or
geographic scope of this covenant.

7.4. Confidential Information. Company shall not at any time
subsequent to the Closing, except as explicitly requested by Buyer, use
for any purpose, disclose to any person, or keep or make copies of
documents, tapes, discs, programs or other information storage media
("records") containing, any confidential information concerning the
Business, the Purchased Assets, or the Assumed Liabilities, all such
information being deemed to be transferred to the Buyer hereunder. For
purposes hereof, "confidential information" shall mean and include,
without limitation, all Trade Rights which are Purchased Assets, all
customer and vendor lists and related information of the Company related
to the Business, all information concerning the processes, products,
costs, prices, sales, marketing and distribution methods, properties and
assets, liabilities, finances, and employees of the Company related to the
Business, and any other information not previously disclosed to the public
directly by Company. The foregoing provisions shall not apply to any
information which is an "Excluded Asset" as defined in Section 1.3, or
which relates solely to one or more Excluded Assets. If at any time after
Closing Company should discover that it is in possession of any records
containing the confidential information of Buyer, then Company shall
immediately turn such records over to Buyer, which shall upon request make
available to Company any information contained therein which is not
confidential or privileged information. After the Closing, each party
shall cooperate with the other in providing to the other information and
materials in its possession necessary or useful to the other party in
prosecuting or defending itself in any Litigation; provided that neither
party shall be required to provide any such information or materials (i)
if the parties are or may reasonably be expected to become adverse to one
another with respect to such Litigation or any other Litigation in which
such information or materials may be material, or (ii) to the extent such
provision would (in the opinion of counsel) constitute a waiver of
privilege.

7.5. Privileged Materials. The parties mutually agree that
neither party will assert a waiver or loss of confidential or privileged
status of information obtained by Buyer hereunder, nor disclose the
content of communications or work product related to such privilege,
without the express written consent of the other except in response to or
in connection with formal legal process or upon request from any
Government Entity. In the event Buyer shall receive a request or demand
for production of such material in connection with formal legal process or
from any Government Entity, Buyer shall promptly give notice thereof to
Company and, upon Company's request, shall allow Company at Company's
expense to make such objections to production as Company shall elect; and
Buyer shall not produce such materials unless Buyer is advised by counsel
that it is legally obligated to do so.

7.6. HSR Act Filings. To the extent such filings have not been
completed prior to the execution of this Agreement, each of Company and
Buyer shall, in cooperation with the other, file any reports or
notifications that may be required to be filed by it under the HSR Act,
with the Federal Trade Commission and the Antitrust Division of the
Department of Justice, and shall furnish to the other all such information
in its possession as may be necessary for the completion of the reports or
notifications to be filed by the other.

7.7. Use of Company's Name. Following the Closing, Company agrees
that it will not object to or interfere with Buyer's use or registration
of the name "Ladish" in connection with Buyer's operation of the Purchased
Assets in the manner operated by the Company in connection with the
Business prior to Closing with respect to the categories of products and
services constituting the Business prior to Closing. Company shall not
grant any other person or entity whatsoever any rights or forbearances
with respect to the use of the name "Ladish" in connection with the
activities described in Section 1.1. as constituting the Business.
Company shall bear no responsibility for the defense of Buyer's right to
use the name at any time hereafter (provided that, at Buyer's request and
expense, Company shall include Buyer's rights in the name "Ladish" in any
defense Company may make after the Closing of its own rights in such
name). Buyer agrees not to expand its use of the name "Ladish" beyond the
categories of products and services constituting the Business at the time
of Closing. Buyer acknowledges that except for the rights granted under
this Agreement, it has no right or interest in Company's name. Each party
agrees to indemnify the other for all claims, losses and Liabilities which
result from or may arise out of the indemnifying party's use of the name
"Ladish" after the Closing.

7.8. Sales Tax Matters. Buyer will use commercially reasonable
efforts to cooperate with Company in availing itself of any available
"occasional sale" or sale-of-business exemption from applicable sales and
use taxes arising out of the transactions described in Articles 1 and 2 of
this Agreement.

7.9. Intentionally Left Blank.

7.10. Cynthiana, Kentucky Flood. Buyer is aware of the occurrence
and the extent of the flooding of the Company's facility at Cynthiana,
Kentucky, which facility is entirely devoted to the Business. With
respect to the cleanup of such facility:

7.10.(a) Business Interruption Insurance. Claims upon and
proceeds of business interruption insurance received by Company
whether before or after Closing, relating to periods to and including
Closing, shall be retained by Company as an Excluded Asset. Claims
upon and proceeds of business interruption insurance received by
Company relating to periods after Closing shall be remitted promptly
to Buyer.

7.10.(b) Property Insurance. Claims upon and proceeds of
insurance covering the value of inventory shall be retained by
Company as an Excluded Asset. Claims upon and proceeds of insurance
covering improvements to realty and other fixed assets shall be
disposed of by Company as follows: Prior to Closing, subject to
Buyer's approval which approval shall not be unreasonably withheld,
Company shall as expeditiously as possible undertake to clean up and
restore the property, and all property insurance proceeds covering
property shall be applied for this purpose. Company agrees to
consult with Buyer with respect to such cleanup and restoration, to
the end that the property be reasonably suited to Buyer's intended
operation at or after Closing. Any such proceeds received by Company
relative to the fixed assets and not disbursed for the purpose of
such cleanup and restoration at the time of Closing shall be remitted
to Buyer at or promptly after Closing; any such proceeds received
after Closing shall be remitted to Buyer promptly after receipt.
Company shall exercise its best efforts to diligently and fully
prosecute its claim to recover such property insurance proceeds to
the maximum value of such insured loss. Company shall be solely
responsible for the payment of any and all deductibles payable with
respect to any insurance coverage referenced in this Section 7.10(b).

7.10.(c) If, after signing of this Agreement and before
Closing, in the course of the clean-up and restoration of the
property, representatives of the Buyer and the Company elect to
improve the condition or effectiveness of certain items of the
Purchased Assets to a level beyond their condition prior to the flood
and the cost of this improvement exceeds insurance proceeds available
for such improvement, then Buyer shall be responsible for the cost of
such improvements to the extent in excess of available insurance
proceeds and shall reimburse Company for any amount incurred by the
Company in respect of such excess amount. In order to be covered by
this Section 7.10.(c), the items of Purchased Assets must be
identified in a written instrument signed by duly authorized
representatives of Buyer and Company, which instrument also
identifies as to each such item, the extent to which it is being
improved beyond its condition prior to the flood.

7.11. Nondisparagement. For a period of two years from and after
the Closing Date, none of the parties to this Agreement shall say, publish
or cause to be published or do anything that casts any other party hereto
in an unfavorable light, or disparage or injure any other party's
goodwill, business reputation or relationship with existing or potential
suppliers, vendors, customers, employees, contractors, investors or the
financial community in general, or the good will or business reputation of
such party.

7.12. Form 8594 Filing. Company and Buyer agree that each shall
timely file Treasury Form 8594 "Asset Acquisition Statement" as required
under Section 1060 of the Internal Revenue Code of 1986, as amended based
upon the allocation of the purchase price of the Purchased Assets on or
after the Closing Date.

8. FURTHER COVENANTS OF COMPANY

Company covenants and agrees as follows:

8.1. Access to Information and Records and Physical Inspections.
During the period prior to the Closing:

8.1.(a) Company shall, and shall cause its officers,
employees, agents, independent accountants and advisors to: (i)
furnish to Buyer, its officers, employees, agents, independent
accountants and advisors, at reasonable times and places, all
information in their possession concerning the Division and the
operation of the Business as may be requested, and give such persons
access to all of the properties, books, records, contracts and other
documents of or pertaining to the Business that Company or its
officers, employees, agents, independent accountants or advisors
shall have in their custody; and (ii) grant to Buyer and its
employees, agents and contractors reasonable access to the Facilities
during normal business hours for the purpose of conducting such soils
tests, environmental tests and inspections and such other engineering
and physical tests and inspections as Buyer deems reasonably
necessary or desirable (so long as such tests and inspections do not
unreasonably interfere with the operation of the Facilities).

8.1.(b) With the prior consent of the authorized
representative of Company in each instance (which consent shall not
be unreasonably withheld), Buyer and its officers, employees, agents,
independent accountants and advisors, shall have access to vendors,
customers, and others having business dealings with the Business for
the purpose of performing Buyer's due diligence investigation.

8.2. Conduct of Business Pending the Closing. From the date hereof
until the Closing, except as otherwise approved in writing by the Buyer:

8.2.(a) No Changes. Company will carry on the Business
diligently and in the same manner as heretofore and will not make or
institute any changes in its methods of purchase, sale, management,
accounting or operation.

8.2.(b) Maintain Organization. Company will take such
action as may be necessary to maintain, preserve, renew and keep in
favor and effect the existence, rights and franchises of the Business
and will use its best efforts to preserve the Business intact, to
keep available to Buyer the present officers and employees of the
Business, and to preserve for Buyer its present relationships with
suppliers and customers and others having business relationships with
the Business.

8.2.(c) No Breach. Company will not do or omit any act, or
permit any omission to act, which may cause a breach of any contract,
commitment or obligation material to the Business, or any breach of
any representation, warranty, covenant or agreement made by Company
herein, or which would have required disclosure on Schedule 4.8 had
it occurred after the date of the Recent Business Balance Sheet and
prior to the date of this Agreement.

8.2.(d) No Material Contracts. No contract or commitment
will be entered into, and no purchase of raw materials or supplies
and no sale of goods or services (real, personal, or mixed, tangible
or intangible) will be made, by or on behalf of Company in connection
with its operation of the Business, except contracts, commitments,
purchases or sales which are in the ordinary course of business and
consistent with past practice, are not material to the Business and
would not have been required to be disclosed in the Disclosure
Schedule had they been in existence on the date of this Agreement.

8.2.(e) Maintenance of Insurance. Company shall maintain
all of the insurance in effect as of the date hereof with respect to
the Business and the Purchased Assets.

8.2.(f) Maintenance of Property. Company shall use,
operate, maintain and repair all property constituting Purchased
Assets in a normal business manner.

8.2.(g) Interim Financials. Company will provide Buyer as
promptly as is practical with interim monthly financial statements of
the Business.

8.2.(h) No Negotiations. Company will not directly or
indirectly (through a representative or otherwise) solicit or furnish
any information to any prospective buyer, commence, or conduct
presently ongoing, negotiations with any other party or enter into
any agreement with any other party concerning the sale of the
Business or any part thereof or any equity securities of Company.

8.3. Consents. Company will obtain all consents necessary for the
consummation of the transactions contemplated hereby.

8.4. Other Action. Company shall use its best efforts to cause the
fulfillment at the earliest practicable date of all of the conditions to
the parties' obligations to consummate the transactions contemplated in
this Agreement.

8.5. Production Contract. Company and Buyer agree that at Closing
they will enter into a contract under which Buyer shall machine forgings
manufactured by Company in the form attached hereto as Exhibit 8.5.

9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS

Each and every obligation of Buyer to be performed on the Closing
Date shall be subject to the satisfaction prior to or at the Closing of
each of the following conditions:

9.1. Representations and Warranties True on the Closing Date. Each
of the representations and warranties made by Company in this Agreement
shall be true and correct in all material respects when made and shall be
true and correct in all material respects at and as of the Closing Date as
though such representations and warranties were made or given on and as of
the Closing Date, except for any changes permitted by the terms of this
Agreement or consented to in writing by Buyer.

9.2. Compliance With Agreement. Company shall have in all material
respects performed and complied with all of its agreements and obligations
under this Agreement which are to be performed or complied with by it
prior to or on the Closing Date, including the delivery of the closing
documents specified in Section 12.1.

9.5. Title Insurance. Buyer shall have obtained good and valid
title insurance policies or, in final form, irrevocable title insurance
binders, dated as of the Effective Time, conforming to the specifications
set forth in Section 7.1 hereof.

9.6. Hart-Scott-Rodino Waiting Period. All applicable waiting
periods related to the HSR Act shall have expired.

9.7. Section 1445 Affidavit. Company shall have delivered to Buyer
an affidavit, in form satisfactory to Buyer, to the effect that Company is
not a "foreign person," "foreign corporation," "foreign partnership,"
"foreign trust," or "foreign estate" under Section 1445 of the Code, and
containing all such other information as is required to comply with the
requirements of such Section.

9.8. Environmental Audit. The results of the environmental audit
conducted pursuant to Section 7.2 shall not have disclosed any past or
present condition, process or practice with respect to the Business as
conducted by the Company prior to the Closing Date or any property owned,
occupied or operated by the Company in connection with Business which is
not in material compliance with all applicable Environmental Laws or which
otherwise requires Remediation under any Environmental Law, if a
reasonable estimate by Buyer of the cost of remediation, or the potential
liability to third persons arising from such condition, process or
practice, or the cost of bringing such property into material compliance
with all applicable Environmental Laws, would exceed Fifty Thousand United
States Dollars and No/100 (U.S. $50,000) in the aggregate with respect to
all matters described in this Section.

10. CONDITIONS PRECEDENT TO COMPANY'S OBLIGATIONS

Each and every obligation of Company to be performed on the Closing
Date shall be subject to the satisfaction prior to or at the Closing of
the following conditions:

10.1. Representations and Warranties True on the Closing Date. Each
of the representations and warranties made by Buyer in this Agreement
shall be true and correct in all material respects when made and shall be
true and correct in all material respects at and as of the Closing Date as
though such representations and warranties were made or given on and as of
the Closing Date.

10.4. Waiting Periods. All applicable waiting periods related to
the HSR Act and all applicable plant-closing laws shall have expired.

11. ESCROW

11.1. On the Closing Date, Company will deposit the sum of (i) the
Base Escrow Amount (hereinafter defined) plus (ii) the Environmental
Escrow Amount (as defined in Section 13.3), if any (collectively the
"Escrow Amount") with an escrow agent to be held and disbursed by such
escrow agent pursuant to the terms and conditions of an escrow agreement
in the form of Exhibit 11.1 attached hereto and made a part hereof (the
"Escrow Agreement"). The Escrow Agreement will direct the escrow agent to
deposit the Escrow Amount in an interest-bearing account, and so long as
Buyer has filed no claim against Company to pay the interest to Company
quarterly. Should a claim be filed the interest earned thereafter will
not be distributed but will remain with the Escrow Amount until the claim
is resolved. The Escrow Amount shall secure, in part, the performance of
Company's covenants and agreements under or pursuant to, and the accuracy
of the representations and warranties made by Company in, this Agreement,
including, without limitation any indemnity provided by Company pursuant
to Section 13.3. Should Buyer assert a claim against Company for breach
of any of Company's representations, warranties, covenants, indemnities or
agreements under this Agreement (an "Eligible Claim"), Company and Buyer
may by joint written notice direct the escrow agent to disburse all or any
part of the Escrow Amount to Buyer in respect of such Eligible Claim.
Otherwise, Buyer shall be entitled to receive disbursements of the Escrow
Amount only as provided in Section 4(b) of the Escrow Agreement. Provided
no Eligible Claim has been filed and is then pending in a court of
competent jurisdiction and provided the Escrow Amount does not then
include an Environmental Escrow Amount, (i) on the first (1st) anniversary
of the Closing Date, fifty percent (50%) of the Base Escrow Amount shall
be released to Company, (ii) on the second (2nd) anniversary of the
Closing Date, fifty percent (50%) of the then remaining Base Escrow Amount
shall be released to Company and (iii) on the third (3rd) anniversary of
the Closing Date, the then remaining Base Escrow Amount shall be released
to Company. In the event of an Eligible Claim arising under an Objection
Notice under Section 13.3 Company shall promptly engage qualified third
parties for remediation and Buyer shall join Company in giving
instructions to the Escrow Agent for the payment of the third parties'
costs and expenses arising from the remediation. If an Eligible Claim is
pending or any matter as to which Company has deposited the Environmental
Escrow Amount has not been fully resolved and cured to Buyer's reasonable
satisfaction on any of the foregoing dates, a portion of the Escrow Amount
sufficient to resolve the open Eligible Claim shall not be released to
Company until final resolution of all such Eligible Claims. Upon final
resolution of all Eligible Claims, Company shall be entitled to receive
any remaining balance of the Escrow Amount. Buyer's right to recover all
or any portion of the Escrow Amount shall be in addition to and cumulative
of any other right or remedy available to Buyer under the Agreement or
otherwise available to Buyer at law or in equity. As used herein, the
term "Base Escrow Amount" shall mean an amount equal to Three Million Six
Hundred Fifty Thousand Dollars ($3,650,000).

12. CLOSING

The closing of this transaction ("the Closing") shall take place at
the offices of Foley & Lardner, 777 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202, at 9:00 A.M. on May 30, 1997, or at such other time and
place as the parties hereto shall agree upon (the "Closing Date").

12.1. Documents to be Delivered by Company. At the Closing, Company
shall deliver to Buyer the following documents, in each case duly executed
or otherwise in proper form or take the following actions:

12.1.(a) Deeds, Bills of Sale. Warranty deeds to real estate
and bills of sale and such other instruments of assignment, transfer,
conveyance and endorsement as will be sufficient to transfer, assign,
convey and deliver to Buyer the Purchased Assets as contemplated
hereby. At or after the Closing, and without further consideration,
Company shall execute and deliver to Buyer such further instruments
of conveyance and transfer as Buyer may reasonably request in order
to more effectively convey and transfer to Buyer and of the Purchased
Assets, or for aiding and assisting in collecting and reducing to
possession and exercising rights with respect thereto.

12.1.(b) Compliance Certificate. A certificate signed by an
executive officer of Company that each of the representations and
warranties made by Company in this Agreement is true and correct in
all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made or
given on and as of the Closing Date (except for any changes permitted
by the terms of this Agreement or consented to in writing by Buyer),
and that Company has performed and complied with all of Company's
obligations under this Agreement which are to be performed or
complied with on or prior to the Closing Date.

12.1.(c) Certified Resolutions. A certified copy of the
resolutions of the Board of Directors of Company authorizing and
approving this Agreement and the consummation of the transactions
contemplated by this Agreement.

12.1.(d) Articles; By-laws. A copy of the By-laws of Company
certified by the secretary of Company, and a copy of the Articles of
Incorporation of Company certified by the Department of Financial
Institutions of the State of Wisconsin.

12.1.(e) Incumbency Certificate. Incumbency certificates
relating to each person executing any document executed and delivered
to Buyer pursuant to the terms hereof.

12.1.(f) Nonforeign Affidavit. Company shall deliver to
Buyer a nonforeign affidavit as required by Section 1445(b)(2),
Internal Revenue Code of 1986, as amended.

12.1.(g) Other Documents. All other documents, instruments
or writings required to be delivered to Buyer at or prior to the
Closing pursuant to this Agreement and such other certificates of
authority and documents as Buyer may reasonably request.

12.2. Documents to be Delivered by Buyer. At the Closing, Buyer
shall deliver to Company the following documents, in each case duly
executed or otherwise in proper form:

12.2.(a) Cash Purchase Price. A certified or bank cashier's
check (or wire transfer) as required by Section 3.2.(b) hereof.

12.2.(c) Compliance Certificate. A certificate signed by the
chief executive officer of Buyer that the representations and
warranties made by Buyer in this Agreement are true and correct on
and as of the Closing Date with the same effect as though such
representations and warranties had been made or given on and as of
the Closing Date (except for any changes permitted by the terms of
this Agreement or consented to in writing by Company), and that Buyer
has performed and complied with all of Buyer's obligations under this
Agreement which are to be performed or complied with on or prior to
the Closing Date.

12.2.(d) Certified Resolutions. A certified copy of the
resolutions of the Board of Directors of Buyer authorizing and
approving this Agreement and the consummation of the transactions
contemplated by this Agreement.

12.2.(e) Incumbency Certificate. Incumbency certificates
relating to each person executing any document executed and delivered
to Company by Buyer pursuant to the terms hereof.

12.2.(f) Other Documents. All other documents, instruments
or writings required to be delivered to Company at or prior to the
Closing pursuant to this Agreement and such other certificates of
authority and documents as Company may reasonably request.

13. TERMINATION

13.1. Right of Termination Without Breach. This Agreement may be
terminated without further liability of any party at any time prior to the
Closing:

(a) by mutual written agreement of Buyer and Company, or

(b) by either Buyer or Company if the Closing shall not have
occurred on or before August 1, 1997, provided the terminating party
has not, through breach of a representation, warranty or covenant,
prevented the Closing from occurring on or before such date.

13.2. Termination for Breach.

13.2.(a) Termination by Buyer. If (i) there has been a
material violation or breach by Company of any of the agreements,
representations or warranties contained in this Agreement which has
not been waived in writing by Buyer, or (ii) there has been a failure
of satisfaction of a condition to the obligations of Buyer which has
not been so waived or (iii) Company shall have attempted to terminate
this Agreement under this Article 13 or otherwise without grounds to
do so, then Buyer may, by written notice to Company at any time prior
to the Closing that such violation, breach, failure or wrongful
termination attempt is continuing, terminate this Agreement with the
effect set forth in Section 13.2.(c) hereof.

13.2.(b) Termination by Company. If (i) there has been a
material violation or breach by Buyer of any of the agreements,
representations or warranties contained in this Agreement which has
not been waived in writing by Company, (ii) there has been a failure
of satisfaction of a condition to the obligations of Company which
has not been so waived, or (iii) Buyer shall have attempted to
terminate this Agreement under this Article 13 or otherwise without
grounds to do so, then Company may, by written notice to Buyer at any
time prior to the Closing that such violation, breach, failure or
wrongful termination attempt is continuing, terminate this Agreement
with the effect set forth in Section 13.2.(c) hereof.

13.2.(c) Effect of Termination. Because of the inherent
difficultly in ascertaining actual damages resulting from the
termination of the Agreement pursuant to Section 13.2., the parties
hereby irrevocably agree to the fullest extent permitted by law to
establish liquidated damages in the amount of Ten Million United
States Dollars and No/100 (U.S. $10,000,000.00), in the event either
party shall refuse to close the transaction as provided herein
without having proper cause to terminate under either Section 13.1 or
13.2. Each party stipulates that such liquidated damage amount is
reasonable and is not designed as punishment for the wrongful
termination of the Agreement and shall be paid to the non breaching
party by the breaching party in such event. Subject to the
foregoing, the parties' obligations under Section 14.9. of this
Agreement shall survive termination.

13.3. Environmental Defects. Buyer will within ten (10) days after
completion of any environmental audits and final report conducted pursuant
to Section 7.2 but in no event later than twenty (20) days prior to the
Closing, notify Company ("Objection Notice") of any fact or condition
regarding Matters of Environmental Concern which is unacceptable to Buyer.
The Objection Notice shall include Buyer's good faith estimate of the cost
of remedying such objectionable matter. If Buyer fails to make a timely
Objection Notice, then any such objectionable matter disclosed in the
environmental audit report shall be deemed waived for purposes of Section
13.3. If Buyer makes a timely Objection Notice, and if the cost of
remedying such objectionable matter is reasonably estimated by Buyer to be
Fifty Thousand Dollars ($50,000) or less, then such objectionable matter
shall not be deemed "material" for purposes of Sections 9.1 and 13.2.(a),
provided Company remedies the same to Buyer's reasonable satisfaction at
Company's sole expense prior to Closing. If the cost of remedying such
objectionable matter is reasonably estimated by Buyer to be in excess of
Fifty Thousand Dollars ($50,000), then Buyer shall have the option, in its
sole discretion, of either (i) closing the transaction contemplated by
this Agreement on the conditions that Company (A) indemnifies Buyer fully
(and not subject to any limitation set forth in Section 2.2 of this
Agreement) for the cost of satisfying the Liability arising from such
objectionable matter and (B) deposits in escrow to be held and applied in
accordance with the Escrow Agreement the amount (the "Environmental Escrow
Amount"), if any, by which Buyer's estimated cost of curing the
objectionable matter exceeds the Base Escrow Amount (ii) closing the
transaction contemplated by this Agreement without the indemnity and
escrow deposit described in subpart (i) above, provided in that event
Company shall continue to be liable for any Liability arising from such
objectionable matter to the extent and on the terms set forth in Section
2.2 of this Agreement or (iii) terminating this Agreement.

14. MISCELLANEOUS

14.1. Disclosure Schedule. The Schedules referenced from time to
time in the body of this Agreement are sometimes collectively referred to
herein as the "Disclosure Schedule." The Disclosure Schedule in its
entirety constitutes a part of this Agreement. Information set forth in
any portion of the Disclosure Schedule shall be deemed disclosed for all
purposes hereunder, so long as its import is clearly stated or summarized.

14.2. Further Assurance. From time to time, at Buyer's request and
without further consideration, Company will execute and deliver to Buyer
such documents, instruments and consents and take such other action as
Buyer may reasonably request in order to consummate more effectively the
transactions contemplated hereby, to discharge the covenants of Company
and to vest in Buyer good, valid and marketable title to the business and
assets being transferred hereunder.

14.3. Disclosures and Announcements. Both the timing and the
content of all disclosure to third parties and public announcements
concerning the transactions provided for in this Agreement by either
Company or Buyer shall be subject to the approval of the other in all
essential respects, except that Company's approval shall not be required
as to any statements and other information which Buyer may be required to
make pursuant to any rule or regulation of the Securities and Exchange
Commission or the New York Stock Exchange, or otherwise required by law,
and Buyer's approval shall not be required as to any statements and other
information which Seller may be required to make pursuant to any law or
regulation governing plant closure notifications.

14.4. Assignment; Parties in Interest.

14.4.(a) Assignment. Except as expressly provided herein,
the rights and obligations of a party hereunder may not be assigned,
transferred or encumbered without the prior written consent of the
other parties. Notwithstanding the foregoing, Buyer may, without
consent of any other party, cause one or more subsidiaries of Buyer
to carry out all or part of the transactions contemplated hereby;
provided, however, that Buyer shall, nevertheless, remain liable for
all of its obligations, and those of any such subsidiary, to Company
hereunder.

14.4.(b) Parties in Interest. This Agreement shall be
binding upon, inure to the benefit of, and be enforceable by the
respective successors and permitted assigns of the parties hereto.
Nothing contained herein shall be deemed to confer upon any other
person any right or remedy under or by reason of this Agreement.

14.5. Equitable Relief. Company agrees that any breach of the
Company's obligation to consummate the sale of the Purchased Assets on the
Closing Date, any breach or threatened breach of any noncompetition
obligation imposed by Section 7.3 hereof, or any breach or threatened
breach by Company of its obligations imposed by Section 7.4 hereof, will
result in irreparable injury to Buyer for which a remedy at law would be
inadequate; and that, in addition to any relief at law which may be
available to Buyer for such breach or threatened breach and regardless of
any other provision contained in this Agreement, Buyer shall be entitled
to injunctive and other equitable relief as a court may grant. This
Section 14.5 shall not be construed to limit Buyer's right to obtain
equitable relief for other breaches of this Agreement under general
equitable standards.

14.6. Law Governing Agreement. This Agreement shall be construed
and interpreted according to the internal laws of the State of Wisconsin,
excluding any choice of law rules that may direct the application of the
laws of another jurisdiction. Process and pleadings mailed to a party at
the address provided in Section 14.8 shall be deemed properly served and
accepted for all purposes.

14.7. Amendment and Modification. Buyer and Company may amend,
modify and supplement this Agreement in such manner as may be agreed upon
by them in writing.

14.8. Notice. All notices, requests, demands and other
communications hereunder shall be given in writing and shall be sent to
the parties at their respective addresses indicated herein by registered
or certified U.S. mail, return receipt requested and postage prepaid, or
by private overnight mail courier service. The respective addresses to be
used for all such notices, demands or requests are as follows:

(a) If to Buyer, to:

Trinity Industries, Inc.
2525 Stemmons Freeway
Dallas, Texas 75207
Attention: John Sanford
Executive Vice President
Facsimile: (214) 589-8910
(with a copy to)

F.D. Phelps, Jr.
Vice President
Trinity Industries, Inc.
2525 Stemmons Freeway
Dallas, Texas 75207
Facsimile: (214) 589-8824

(and)

Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.
2200 Ross Avenue, Suite 900
Dallas, Texas 75201
Attention: Robert J. Banta
Facsimile: (214) 220-4899

or to such other person or address as Buyer shall furnish to Company in
writing.

(b) If to Company to:

Ladish Co., Inc.
5841 South Packard Avenue
Cudahy, Wisconsin
Attention: Wayne E. Larsen
Vice President
Facsimile: (414) 747-2890

(with a copy to)

John M. Olson
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Facsimile: (414) 297-4900

or to such other person or address as Company shall furnish to Buyer in
writing.

If sent by overnight courier pursuant to this paragraph, such
communication shall be deemed delivered upon receipt; and if sent by U.S.
mail pursuant to this paragraph, such communication shall be deemed
delivered as of the date of delivery indicated on the receipt issued by
the relevant postal service, or, if the addressee fails or refuses to
accept delivery, as of the date of such failure or refusal. Any party to
this Agreement may change its address for the purposes of this Agreement
by giving notice thereof in accordance with this Section.

14.9. Expenses; Cost of Litigation. Regardless of whether or not
the transactions contemplated hereby are consummated, except as otherwise
provided herein, each of the parties shall bear its own expenses and the
expenses of its counsel and other agents in connection with the
transactions contemplated hereby, including, without limitation, the fees
and expenses associated with necessary filings under the HSR Act. The
parties agree that the prevailing party in any action brought with respect
to or to enforce any right or remedy under this Agreement shall be
entitled to recover from the other party or parties all reasonable costs
and expenses of any nature whatsoever incurred by the prevailing party in
connection with such action, including without limitation attorneys' fees
and prejudgment interest.

14.10. Entire Agreement. This instrument embodies the entire
agreement between the parties hereto with respect to the transactions
contemplated herein, and there have been and are no agreements,
representations or warranties between the parties other than those set
forth or provided for herein, except for a Confidentiality Agreement dated
February 24, 1997, which is hereby ratified and reaffirmed.

14.11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

14.12. Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.

14.13. Glossary of Terms. The following sets forth the location of
definitions of capitalized terms defined in the body of this Agreement:

"Affiliate" - Section 1.3.(e)
"Assumed Contracts" - Section 2.1.(b)
"Assumed Liabilities" - Section 2.1
"Business" - Section 1.1
"CERCLA" - Section 4.11.(c)(ii)(G)
"Closing" - Preamble to Article 12
"Closing Date" - Preamble to Article 12
"Code" - Section 3.6
"Contracts" - Section 1.2.(g)
"Disclosure Schedule" - Section 14.1
"Division" - Recitals
"Effective Time" - Section 3.3.(b)
"Environmental Claim" - Section 4.11.(c)
"Environmental Laws" - Section 4.11.(c)
"Excluded Assets" - Section 1.3
"Facilities" - Recitals
"Government Entities" - Section 4.11.(b)
"HSR Act" - Section 4.3
"IRS" - Section 3.6
"Inventory" - Section 1.2.(d)
"Laws" - Section 4.11.(b)
"Leased Real Property" - Section 1.2.(b)
"Liability" - Section 2.1
"Lien" - Section 4.12.(a)
"Litigation" - Section 4.10
"Net Working Capital" - Section 3.3.(a)
"Orders" - Section 4.11.(b)
"Owned Real Property" - Section 1.1.(a)
"Permits" - Section 4.11.(c)
"Permitted Real Property Liens" - Section 4.12.(a)
"Personal Property Leases" - Section 1.2.(e)
"Products" - Section 4.20
"Purchase Orders" - Section 1.2.(g)
"Purchased Assets" - Section 1.2
"Purchase Price" - Section 3.1
"Real Property" - Section 4.12.(c)
"Real Property Leases" - Section 1.2.(b)
"Recent Business Balance Sheet" - Section 4.4
"Remediation" - Section 4.11.(c)
"Requirement(s) of Environmental Law(s)" - Section 4.11.(c)
"Sales Orders" - Section 1.2.(g)
"Settlement Date" - Section 3.2.(c)
"Trade Rights" - Section 1.2.(f)

IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.

TRINITY FITTING & FLANGE
GROUP, INC. LADISH CO., INC.

By: /s/ By: /s/

Attest: /s/ Attest: /s/

Exhibit 10.5

The Registrant has entered into the attached Agreement with each
of the following executive officers of the Registrant:

Kerry L. Woody
Wayne E. Larsen
Gene E. Bunge
Robert J. Noel
James K. Sorenson
Gary J. Vroman
Lawrence C. Hammond
Ronald O. Weise
Thomas S. Plichta

<PAGE>

AGREEMENT

THIS AGREEMENT made this 1st day of April, between LADISH CO.,
INC., a Wisconsin Corporation, hereinafter called the "Company", and
_________________________, an officer of the corporation hereinafter
called "Employee."

W I T N E S S E T H T H A T :

WHEREAS, the Company desires to assure itself of the continuing
availability of Employee, and

WHEREAS, the Company desires to provide adequate security to the
Employee, and

WHEREAS, the Employee desires to maintain his relationship with the
Company to their mutual advantage, and

WHEREAS, the Employee desires to be afforded retirement, disability
and severance benefits,

NOW THEREFORE, in consideration of the mutual promises of the parties
hereto, it is hereby AGREED:

1. Other Benefits Affecting the Employee.

1.1 Any amount required to be paid hereunder (except amounts payable
under 10.1, and 10.2 hereof) shall be reduced by any benefit paid the
Employee or his beneficiary pursuant to the provisions of the LADISH CO.
SALARIED EMPLOYEES RETIREMENT PLAN.

2. Definitions.

2.1 Whenever used in the Contract, the following terms shall have
the respective meanings set forth below unless otherwise expressly
provided herein:

(a) The term "Company" means LADISH CO., INC., or any successor
thereto.

(b) The term "Service" means the last continuous period of
employment of the Employee with the Company prior to his
retirement date, determined in accordance with reasonable
standards and policies adopted by the Company.

(c) The term "Compensation" means the total annual base salary
of the Employee, plus overtime pay, plus the following:
payments received after January 1, 1988 from Ladish Co.,
Inc.: bonuses, incentive compensation or special
compensation of any kind, the total of which shall not
exceed twenty percent (20%) of annual base salary.

(d) The term "Average Compensation" means the monthly average
of the Employee's "Compensation" for the period of the five
(5) years of highest compensation of the ten (10) years
next preceding his retirement date; provided further, that
if the Employee receives compensation for a part of a
calendar year, such compensation shall be projected to an
annual basis.

(e) The term "Disability" means incapacity, which in the
opinion of the Board of Directors of the Company prevents
the Employee from engaging in his usual employment activity
with the Company.

3. Consultation.

3.1 Undertaking by Employee. The Employee agrees that during the
term of this agreement and after any retirement from active employment, he
will remain available to the Company for consultation upon such reasonable
terms as to notice, time, place, fee and duration of consultation as the
Company may direct and will render such consultative services at the times
and in the place requested by the Company.

3.2 Expenses of Employee. The Company agrees that it will reimburse
the employee for all reasonable expenses incurred in rendering any such
consultative service to the Company.

4. Retirement Ages and Dates.

4.1 Normal. The normal retirement age shall be age 65 and the
normal retirement date shall be the first day of the calendar month
coincident with or next succeeding the date on which the Employee actually
retires following his 65th birthday. Upon such retirement, the Employee
will receive the benefit calculated at Section 5.1.

4.2 Early Retirement. An Employee who has reached age 55 and
accumulated at least 10 years of service may retire and receive a benefit
calculated in Section 5.2. The early retirement date shall be the first
day of the calendar month coincident with or next succeeding the date the
Employee actually retires under this paragraph.

4.3. Disability. In the event that the Board of Directors determines
that the Employee is disabled as herein defined, the Employee shall be
entitled to a disability retirement benefit as calculated pursuant to
Section 5.3, and the disability retirement date of the Employee shall be
the first day of the calendar month coincident with or next succeeding the
date the Employee ceased to receive long term disability payments under
Paragraph 10.3 or reaches normal retirement age, whichever is earlier.

5. Benefits.

5.1 Normal. If the Employee retires after attaining his normal
retirement age, he shall be entitled to a monthly normal retirement
benefit in an amount equal to 52-1/2% of his "Average Compensation,"
multiplied by a fraction, the numerator of which shall be his length of
"Service" in years (but no more than 35) and the denominator of which
shall be 35.

5.2 Early. If the Employee retires pursuant to paragraph 4.2 before
attaining his normal retirement age, he shall be entitled to an early
retirement benefit computed as if it were a normal retirement benefit but
based upon his "Service" and "Average Compensation" as of his early
retirement date; such benefit to be reduced as of the date the first early
retirement benefit payment commences to the actuarial equivalent of the
amount payable at age 65, but by not more than 5/10 of one percent (1%)
for each month by which such Employee's first early retirement benefit
payment precedes the first of the month following his normal retirement
age. Effective for Early Retirements on or after 8/l/88, an employee
attaining age 60 with 30 or more years of Service shall not be subject to
the benefit reduction provided herein.

5.3 Disability. If the Employee suffers a disability as herein
defined, he shall be entitled to a deferred disability retirement benefit
payable upon the termination of his long term disability payments
described in paragraph 10.3, of the same amount as his normal retirement
benefit based on his years of "Service" had he become disabled at his
normal retirement age and on his "Average Compensation" to the date of his
disability.

6. Commencement and Duration of Benefits.

6.1 Commencement and Duration.

(a) Retirement benefits shall be paid monthly.

(b) A normal retirement benefit shall begin as of the normal
retirement date of the eligible Employee. The payments
shall be made monthly thereafter as of the first day of
each succeeding month during the lifetime of the retired
Employee or until he is re-employed by the Company.

(c) An early retirement benefit shall begin as of the early
retirement date of the eligible Employee, except that such
retired Employee may elect to have his early retirement
benefit begin as of the first day of any month following
his retirement, but not later than the first day of the
month following his 65th birthday. The payments shall be
made monthly thereafter as of the first day of each
succeeding month during the lifetime of the retired
Employee, or until he is re-employed by the company.

6.2 Re-employment by the Company.

(a) If a retired Employee receiving a normal retirement benefit
shall be re-employed by the Company, no further payments
shall be made during the period of such employment. Upon
his subsequent retirement, his retirement benefit shall
again commence on his subsequent retirement date in the
same amount as he was receiving prior to such
re-employment.

(b) If a retired Employee receiving an early retirement benefit
shall be re-employed by the Company prior to his normal
retirement age, no further payments shall be made during
the period of such employment. Upon his subsequent
retirement, his retirement benefit shall be calculated as
if the Employee were then first retired, based upon his
"Service" at the time of his prior retirement plus the
"Service" earned following the date of re-employment and
his "Average Compensation" at the time of his subsequent
retirement.

(c) If a retired Employee receiving an early retirement benefit
shall be re-employed by the Company after his normal
retirement age, no further payments shall be made during
the period of such employment. Upon his subsequent
retirement his retirement benefit shall again commence on
his subsequent retirement in the same amount as he was
receiving prior to such re-employment.

(d) If an Employee receiving a disability retirement benefit
shall be re-employed by the Company upon the cessation of
such disability, then upon the subsequent termination of
his employment with the Company, his eligibility for a
retirement benefit hereunder and such benefit shall be
determined and calculated as if his employment were then
first terminated or he had then first retired, based upon
his "Service" at the time of his prior disability plus the
"Service" earned following the date of re-employment and
his "Average Compensation" at the time of his subsequent
termination of employment or retirement.

6.3 Options. If the Employee is entitled to an early or normal
retirement benefit, he may at any time during his active employment elect
either joint and survivor or ten (10) year certain options or among any
other settlement options then provided Employees of LADISH CO., INC. under
the then provisions of the Ladish Co. Salaried Employees Retirement Plan;
such benefit shall not be effective until actual retirement.

6.4 Payment to Legal Representative. In the event of a conservator,
guardian, or other legal representative of the estate of any retired
Employee shall be appointed by a court of competent jurisdiction,
retirement payments may be made to such conservator, guardian or other
legal representative, provided that proper proof of appointment and
continuing qualification is furnished. Any such payment shall be a
payment for the account of the retired Employee and shall be a complete
discharge of any liability of the Company hereunder.

6.5 Incompetency. In the event that it shall be considered by the
company that a retirement benefit is payable but that the Employee is
unable to care for his affairs because of illness or accident, any payment
due (unless a prior claim therefor shall have been made by a duly
qualified guardian or other legal representative) may, in the discretion
of the Company be paid to the spouse, parent, child, brother or sister of
the Employee or to any other person or institution deemed by the Company
to be maintaining or responsible for the maintenance of Employee; or in
any such instances, then in the discretion of the Company, payment may be
made by depositing the same in a responsible bank in Wisconsin in the name
of the Employee. Any such payment shall be a payment for the account of
the Employee and shall be a complete discharge of any liability of the
Company therefore.

7. Non-Alienation of Benefits.

7.1 Non-Alienation. No benefit payable at any time hereunder shall
be subject in any manner to alienation, sale, transfer, assignment, pledge
or encumbrance of any kind. Any attempt to alienate, sell, transfer,
assign, pledge or otherwise encumber any such benefit, whether presently
or thereafter payable shall be void. No retirement benefit shall in any
manner be liable for or subject to the debts or liabilities of the
Employee or retired Employee entitled to any retirement benefit, or
subject to or reachable by garnishment, attachment, execution or other
legal process or proceeding by or on behalf of any judgment creditor or
other creditor of or claimant against the retired Employee to whom such
benefit is or may be payable. If the Employee or retired Employee shall
attempt to alienate, sell, transfer, assign, pledge, or otherwise encumber
his benefits under the Plan, or any part thereof, or if by reason of his
bankruptcy or other event happening at any time, such benefits would
devolve upon anyone else or.would not be enjoyed by him, then the Company,
in its discretion, may suspend his interest in any such benefit and hold
or apply it to or for the benefit of the Employee, his spouse, children or
other dependents, or any of them, in such manner as the Company may deem
proper.

8. Vesting. The Employee will have vested rights under this
contract to a benefit at such time as he has accumulated ten (10) years of
service in the employment of the Company.

No provision of this contract shall interfere with the company's
right to terminate the Employee's services for any cause sufficient to it.
In the event of such termination, an Employee who has not become vested
under this provision shall have no rights pursuant to this contract
whatsoever.

9. Applicable Law.

9.1 Applicable Law. This contract shall be governed by the laws of
the State of Wisconsin and be binding upon and inure to the benefit of the
personal representatives of the Employee and the successors or assigns of
the Company. This contract is not subject to principal provisions of the
Employee Retirement Income Security Act of 1974 pursuant to statutory
exceptions from such Act.

10. Other Benefits. Application for Retirement.

10.1 Other Benefits. The company agrees to maintain in effect and at
Company expense:

(a) Group term life insurance coverage of $200,000 face amount
in effect until retirement and payable on death of the
employee to his designated beneficiary; and

(b) Group term life insurance of $100,000 face amount in effect
after retirement.

(c) Group hospital, surgical, major medical, dental and vision
care coverage for the Employee and his spouse, and the
survivor of them, in such form and manner as covers all
salaried employees of the Company.

10.2 Severance Pay. In addition to the other benefits provided in
this contract, the Employee is entitled to severance pay in the event his
employment with the Company is involuntarily terminated other than for
cause. Severance pay will be based upon one (1) month's base salary at
time of termination multiplied by years of service up to a maximum total
of twenty-four (24) months. At the employee's option, severance pay may
be paid in a lump sum or installments.

10.3 Long-Term Disability Benefit. Prior to the time that the
Employee receives a retirement benefit, the company will provide a
long-term disability benefit if he suffers a disability as herein defined.
The amount of the long-term disability benefit payment will be 66-2/3% of
base pay, less the sum of the following, but only for the period payments
under (a), (b) or (c) or any combination thereof, are being made
subsequent to the time the Employee is entitled to a disability benefit:

(a) Any Workers compensation payment (except fixed statutory
payments for the loss of any bodily member);

(b) Social Security disability benefits; and

(c) Any other disability benefit he may receive because of such
disability as a result of any other disability program
sponsored by the Company, to the extent that such benefits
have been provided for by premiums or other payments paid
by or at the expense of the Company.

If the disability ceases prior to his 65th birthday, long-term
disability benefit payments shall cease, and if he is not re-employed by
the Company upon such cessation, he shall be entitled to an early
retirement benefit beginning on the date disability ceases, computed as
provided in subsection 5.2 hereof upon."Average Compensation" and
"Service" on the date of the beginning of his disability.

In no event will long-term disability benefits extend beyond the
Employee's 65th birthday.

10.4 Application for Retirement. When the Employee becomes eligible
for a retirement benefit and wishes to retire, he shall apply for such
benefits by signing an application form furnished by the Company and shall
also furnish the Company with such documents, evidence, data, or
information in support of such application as the Company considers
necessary or desirable.

IN WITNESS WHEREOF, the parties hereto have caused these presents to
be executed the day and year first above written, and in the case of
LADISH CO., INC., the same has been signed and its corporate seal affixed
by authority of its Board of Directors.

LADISH CO., INC.

By ____________________________
President
(AFFIX CORPORATE SEAL)

Attest:

________________________________
Secretary

______________________________ ________________________________
Witness Employee

AMENDED PAYMENT AND SECURITY AGREEMENT

This AMENDED PAYMENT AND SECURITY AGREEMENT is made this 14th day of
October, 1997, by and between LADISH CO., INC., a Wisconsin corporation
(the "Company"), and the PENSION BENEFIT GUARANTY CORPORATION ("PBGC"),
acting on behalf of itself and on behalf of the defined benefit plans
sponsored by the Company and listed in Exhibit A hereto (the "Plans").

WITNESSETH:

WHEREAS, the Company is the sponsor of the defined benefit pension
plans set forth in Exhibit A hereto, which plans are covered by Title IV
of the Employee Retirement Security Act of 1974, as amended ("ERISA"); and

WHEREAS, the Company applied for and received conditional waivers of
the minimum funding standards for the Plans ("Funding Waivers") for plan
year 1995 from the United States Internal Revenue Service ("IRS") under
section 412(d) of the Internal Revenue Code of 1986, as amended (the
"Code"), and section 303 of ERISA.

WHEREAS, as a condition of those Funding Waivers the Company was
required to provide security to the Plans and entered into that Payment
and Security Agreement, dated June 17, 1997, with the PBGC (the "Prior
Agreement").

WHEREAS, the Company has applied under section 412(d) of the Code and
section 303 of ERISA to the IRS for Funding Waivers for plan year 1996;
and

WHEREAS, the Company and PBGC have reached an understanding on
additional funding payments to the Plans during the 1997 calendar year and
for the 1996 and 1997 plan years, which payments will satisfy Company's
obligations under the Prior Agreement, satisfy minimum funding for the
1996 and 1997 plan years, and allow the Company to withdraw its
application for Funding Waivers for plan year 1996.

NOW, THEREFORE, IT IS AGREED THAT:

1. Definitions.

(a) Unless otherwise defined herein, the following terms, which are
defined in the Prior Agreement, have the meaning given them in the Prior
Agreement: "Collateral", "Intercreditor Agreement", "PBGC Liens", "Senior
Liens", and "Secured Obligations". Further, the following terms which are
defined in the Intercreditor Agreement and used herein shall have the
meaning given to them in that document: Lender Agent; Noteholder Agent.

(b) In addition, the following terms shall have the following
meanings, unless the context otherwise requires:

"Agreement": this Amended Payment and Security Agreement as the
same may from time to time be amended or supplemented.

"Event of Default": an Event of Default as defined in section 8
of this Agreement.

"1998 Funding Goal": minimum funding requirements for the 1998
plan year for Plans 001,006 and 013 of zero, and for Plans 004 and
016 of $6,000,000 and $900,000, respectively.

"Plan 003": the Ladish Hourly Employees Plan.

"Plan 014": the Ladish Kentucky Steelworkers Local No. 7513 and
8054 Plan.

"Required Credit Balance": for each of the Plans, as of the end
of the plan year ending after December 31, 1997, the credit balance
in the funding standard account maintained for each such plan
pursuant to section 412 of the Code and 302 of ERISA as of December
31, 1997, adjusted for interest to the end of the plan year.

2. Grant of Security Interest.

The security interests under the Uniform Commercial Code in and to
certain of the Collateral, in favor of the Plans and the PBGC, granted by
the Company under the Prior Agreement to secure the timely payment of the
Secured Obligations, shall continue after the execution of this Agreement.
As provided in the Prior Agreement and the Intercreditor Agreement, these
PBGC Liens are subordinate to the Senior Liens, and PBGC's rights with
respect to the Collateral are subject to the terms of that Intercreditor
Agreement.

3. Actions by the Company with respect to the Plans.

(a) Payments. The Company agrees to make the following contributions
to the Plans:

(i) During calendar year 1997, the Company will contribute
Three Million One Hundred Ninety-Seven Thousand Seven Hundred
and Seventy-Two Dollars ($3,197,772) to the Plans;

(ii) In addition to the above payments, during the fourth
quarter of calendar year 1997, the Company will contribute Ten
Million Dollars ($10,000,000) to the Plans; and

(iii) On or before January 15, 1998, the Company will contribute
an additional Seven Hundred Fourteen Thousand Five Hundred and
Fifty-One Dollars ($714,551) to the Plans.

(b) Plan Mergers. Before December 31, 1997, the Company will merge
certain of the Plans as follows:

(i) Plan 006 and Plan 019 will merge with Plan 003. (Plan 006
will be the surviving plan)

(ii) Plan 001 will merge with Plan 014. (Plan 001 will be the
surviving plan)

(c) Allocation of Payments. The payments described in (a), above,
shall be allocated among the Plans (including the merged plans as
described in (b)) as determined by the Company in order to meet its 1998
Funding Goal.

4. PBGC Release.

Upon completion of the actions contemplated in section 3(a) and (b),
and the receipt by PBGC of a certified statement from the Plans' actuary
stating that the minimum funding requirements for 1998 will meet the 1998
Funding Goal, PBGC agrees to release the PBGC Liens on the Collateral,
including the Third Mortgage and Security Agreement PBGC filed against the
real property of the Company in Milwaukee County in the State of
Wisconsin. PBGC will execute and deliver to the Company all termination
statements and mortgage releases as the Company deems necessary to effect
said release.

5. Intercreditor Agreement.

In conjunction with the Company and PBGC entering into the Prior
Agreement, PBGC entered into the Intercreditor Agreement with the Lender
Agent and the Noteholder Agent. The Company, though not a party to the
Intercreditor Agreement, agreed to be bound by its terms. The
Intercreditor Agreement set forth the respective positions and rights of
the parties thereto to the Collateral. Upon release of the PBGC Lien, PBGC
agrees (a) that the Intercreditor Agreement is no longer necessary; (b)
that the Intercreditor Agreement should be terminated; and (c) that PBGC
will take all actions necessary to terminate that agreement. The Company
agrees to obtain the consent of the Lender Agent and Noteholder Agent to
the termination of the Intercreditor Agreement.

6. Representations and Warranties of the Company.

The Company represents and warrants, to the best of its knowledge,
that:

(a) the Company is duly organized and validly existing under the law
of the State of Wisconsin, and the chief place of business of the Company
is located within the State of Wisconsin;

(b) the Company has all necessary corporate authority to execute,
deliver and perform the obligations under this Agreement;

(c) the Company is the lawful owner of all of the Collateral and had
complete authority to grant a security interest in this Collateral;

(d) all information supplied and statements made in any financial or
credit statements or application for credit prior to the execution of this
Agreement are true and correct as of the date furnished and as of the date
hereof in all material respects.

7. Covenants of the Company.

(a) Credit Balance Requirements. The Company agrees that it will
preserve the Required Credit Balance for each of the Plans for four
consecutive plan years, starting with the plan year ending December 31,
1998, provided, however, that the Required Credit Balance may be taken
into account for purposes of calculating the "deficit reduction
contribution" described in section 412(l) of the Code.

(b) Annual Informational Requirements. The Company will furnish to
PBGC annual audited financial statements (including a balance sheet,
income statement, statement of operation and cash flow, and statement of
retained earnings) of the Company, accompanied by the opinion thereon of
its independent certified public accountant, within 120 days after the
close of each fiscal year. The Company also will provide PBGC with annual
actuarial valuation reports for all defined benefit pension plans
sponsored by the Company within 60 days after becoming available, and the
annual Form 5500's with all schedules and attachments for each Plan when
available.

(c) Other Informational Requirements. The Company shall furnish to
PBGC copies of quarterly financial statements (unaudited). Additionally,
the Company will notify' PBGC whether it has made required contributions
for its two largest plans, such notice to be given within 10 days of the
date the contribution is due. The Company also will furnish to PBGC such
other financial statements or reports it has generated as PBGC may
reasonably request.

8. Events of Default.

If one or more of the following events or conditions shall occur,
PBGC shall have the remedies provided below in section 9:

(a) the Company fails to make any payment required under this
Agreement, and such failure continues for 5 days;

(b) the Company otherwise fails to satisfy any term or condition of
this Agreement;

(d) there is a material and adverse change in the business or
financial condition of the Company;

(e) a trustee, receiver or custodian is appointed over all or
substantially all of the property of the Company;

(f) any proceeding in bankruptcy or reorganization is instituted by
or against the Company;

(g) the Company makes a general assignment for the benefit of
creditors;

(h) any representation, warranty or certification made by the
Company, in this Agreement, or in any document furnished in connection
therewith by the Company, shall prove to have been materially false or
misleading as of the time made or furnished in any materially adverse
respect; and

(i) PBGC shall have instituted proceedings under Section 4042 of
ERISA seeking termination or appointment of a trustee in respect of any
defined benefit plan sponsored by the Company; or the Company shall have
furnished to PBGC or any participant in the Plans a notice of intent to
terminate the Plan under Section 4041(c) of ERISA;

9. Rights and Remedies.

PBGC, in its sole discretion, may elect to pursue one or more of the
following remedies. PBGC may waive any default, or remedy any default in
any reasonable manner, without waiving any other prior or subsequent
default.

(a) General Remedies. If one or more of the Events of Default
occurs, PBGC may pursue any remedy available in law or equity;

(b) Specific Remedies. Should an Event of Default described in
subsection (a) or (b) of Section 8 occur, a lien in the Collateral of the
Company in favor of PBGC shall arise on the date said default occurs in
the amount of any missed payment or due contribution.

(c) No remedy recited in this Agreement shall limit PBGC in any
manner from pursuing any and all additional remedies provided by
applicable law.

10. Indemnity.

The Company assumes liability for, and agrees to indemnify the Plans
and PBGC against, and on written demand to pay, or to reimburse the Plans
and PBGC (and each of their employees, directors, and agents) against the
payment of any or all liabilities, obligations, losses, damages,
penalties, claims, suits, actions, costs, expenses and disbursements,
including legal fees and expenses of any kind and nature imposed on,
incurred by, or asserted against the Plans or PBGC relating to or arising
out of this Agreement.

11. Termination.

This Agreement shall terminate upon receipt by PBGC of a
certification from the actuary for the Plans that the Required Credit
Balance has been preserved, as provided in section 7(a), for each of the
Plans through the end of the plan year that ends during the calendar year
2001.

12. Miscellaneous.

(a) Amendments. The Company understands that this Agreement cannot
be changed or terminated orally, can only be modified upon the written
consent of the parties hereto, and that it is for the benefit of and
binding upon the Company and its respective successors and assigns.

(b) Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one and the
same instrument.

(c) Governing Law. This Agreement, and the rights and obligations of
the parties hereunder shall be governed by and construed in accordance
with the laws of the State of Wisconsin except to the extent such laws are
superseded by Federal law.

(d) Notices. All notices and other communications hereunder shall be
in writing and shall be delivered to the intended recipient at the Address
for Notices specified below or at such other address as shall be
designated by any of them in a notice to each other party set forth
therein. All notices and other communications shall be deemed to have been
duly given, in the case of transmission by telecopy, when sent; in the
case of hand delivery, when received; or in the case of mail, three
business days after the date deposited in the mail addressed as described
above.

Address for Notices:

If to the Company: Ladish Co. Inc.
5481 South Packard Avenue
Cudahy, Wisconsin 53110
Attn: Wayne E. Larsen

If to PBGC: Pension Benefit Guaranty Corp.
1200 K Street, N.W.
Washington, D.C. 20005
Attention: Executive Director

(With a copy to the Office of the General Counsel)

(e) Anti-waiver and severability. PBGC's failure to exercise any
right, remedy or option under this Agreement, or any delay by PBGC in
exercising any of them, will not operate as a waiver. The Company
understands that the only way PBGC may waive its rights is in writing
signed by an authorized agent of PBGC. All of PBGC's rights and remedies
under this Agreement are cumulative and not exclusive of each other. If
any provision of this Agreement is unenforceable for any reason, it shall
not affect the enforceability of the other provisions of this Agreement.

IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered as of the day stated above.

PENSION BENEFIT GUARANTY CORPORATION

By: /s/ Ellen Hennessy
Ellen Hennessy
Deputy Executive Director and Chief
Negotiator

LADISH CO., INC.

By: /s/ Wayne E. Larsen
Wayne E. Larsen
Vice President of Law/Finance & Secretary

<PAGE>

EXHIBIT A

LADISH PENSION PLANS

Plan 004 International Association of Machinists and Aerospace Workers,
Local #1862

Plan 001 Blacksmiths Subordinate Lodge No. 1509

Plan 006 International Brotherhood of Firemen and Oilers, Local #125

Plan 013 International Brotherhood of Electrical Workers, Local #633

Plan 016 International Die Sinkers Conference, Local #140

Plan 019 Blacksmiths Subordinate Lodge No. 1510

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
report and to all references to our firm included in or made a part of this
registration statement.

ARTHUR ANDERSEN LLP

Milwaukee, Wisconsin
February 3, 1998

Exhibit 23.2

Consent of Independent Auditors

We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated March 24, 1997, with respect to the financial
statements of Stowe Machine Company Incorporated, included in Amendment No. 1
to the Registration Statement (Form S-1 No. 333-43011) and related Prospectus
of Ladish Co., Inc. for the Registration of shares of its common stock.

ERNST & YOUNG LLP

Hartford, Connecticut
February 2, 1998