EXHIBIT 2.2

                                DATED APRIL 6, 1998
                                          
                                          
                                          
                                          
                                          
                                          
        PHILLIP MONTAGUE WRIGHT, MALCOLM ARTHUR BRAND AND DAVID FLETCHER (1)
                                          
                                          
                                        and
                                          
                                          
                            ATCHISON CASTING UK LTD (2)
                                          
                                          
                                          
                                          
                                          
      _______________________________________________________________________
                                          
                  DEED OF WARRANTY AND UNDERTAKING in respect of 
                                          
             SHEFFIELD FORGEMASTERS GROUP LIMITED AND ITS SUBSIDIARIES
                                          
      _______________________________________________________________________
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                   WALKER MORRIS
                                    KINGS COURT
                                   12 KING STREET
                                       LEEDS
                                      LS1 2HL
                                     REF: PDE 

                                      CONTENTS
                                          


PART/
PARAGRAPH      HEADING                                                  PAGE

PART A         Principal provisions

A1             Interpretation                                           2

A2             Consideration                                            10

A3             Acceptance of the Offer                                  10

A4             Completion                                               13

A5             Warranties                                               15

A6             Protection for the Covenantors                           17

A7             Non-competition covenants                                17

A8             Books and records, tax returns and computations          18

A9             Committee                                                19

A10            Publicity                                                24

A11            Costs                                                    25

A12            Miscellaneous                                            25

A13            Termination                                              26

A14            Notices                                                  27

A15            Choice of law                                            28


PART B         Details of the Covenantors and the Committed Shares      29

PART C         List of the Group Companies                              30

PART D         Property                                                 32

PART E         Warranties                                               35

PART F         Protection for the Covenantors                           75

PART G         Details of the Pension Schemes                           83


ANNEXURES:


1              Group Companies List

2              Shareholder List


AGREED FORM DOCUMENTS:


1              Agreed Costs List

2              Certificates of Title

3              Deed of Acknowledgement

4              Deed of Covenant

5              Offer Document

6              Directors' resignation letters

7              Letter of credit


THIS AGREEMENT is made on                                       1998

PARTIES:

(1)  PHILLIP MONTAGUE WRIGHT, MALCOLM ARTHUR BRAND AND DAVID FLETCHER, whose
     addresses are set out in part B of this agreement (the "COVENANTORS"); and 


(2)  ATCHISON CASTING UK LTD (company number 3514183) whose registered office is
     at 12 King Street, Leeds, LS1 2HL ("ATCHISON").


RECITALS:


(1)  Atchison wishes to acquire all the Shares.


(2)  Atchison has entered into the Roll-Over Agreement to acquire 1,267,476 of
     the Shares, such Shares comprising 1.64 per cent of the Shares.


(3)  Atchison intends to make the Offer for the remainder of the Shares (the
     "REMAINING SHARES").


(4)  The Covenantors hold in aggregate 4,188,898 Shares, such Shares comprising
     5.53 per cent of the Remaining Shares.


(5)  Atchison has received irrevocable undertakings from further holders of
     Shares amounting in aggregate to an additional                per cent of
     the Remaining Shares.


(6)  The Covenantors have agreed to undertake to accept the Offer and Atchison
     has agreed to make the Offer on the terms and conditions set out in this
     document.


(7)  The Offer and Offer Document have been approved by the board of directors
     of SFGL.




OPERATIVE PROVISIONS:

                                        PART A

                                 PRINCIPAL PROVISIONS


A1   INTERPRETATION


A1.1 In this agreement:


     "ATCHISON'S SOLICITORS" means Walker Morris of Kings Court, 12 King Street,
     Leeds LS1 2HL;


     "ACCOUNTS" means the UK Accounts and the Non-UK Accounts or, as relevant,
     any of them;


     "ACCOUNTS DATE" means 31 March 1997;


     "THE ACT" means the Companies Act 1985;


     "AEROSPACE AGREEMENTS" means the agreement dated 6 February 1998 and made
     between Sheffield Forgemasters Limited (1), the Covenantors (2), Teledyne
     Holdings Limited (3), Teledyne Industries Inc (4) and Allegheny Teledyne
     Incorporated relating to the sale of the issued share capitals of the
     Aerospace Group (the "FIRST AEROSPACE AGREEMENT") and the agreement dated 6
     February 1998 and made between Forgemasters Realisations (1998) Limited
     (then called Commercial Testing Services Limited) (1) and Teledyne Holdings
     Limited (2) relating to the sale of the business and assets of Forgemasters
     Realisations (1998) Limited;


     "AEROSPACE GROUP" means Jessop Saville Limited, Special Melted Products
     Limited,  Forgemasters Inc and SMP Metals Inc;


     "AGREED COSTS LIST" means a list of the costs to be paid or procured to be
     paid by


                                       -2-

     Atchison in the agreed form;


     "BUSINESS DAY" means any day (other than Saturday or Sunday) on which
     clearing banks are open in the UK for a full range of banking transactions;


     "CERTIFICATES OF TITLE" means certificates from the Covenantors' Solicitors
     and Shepherd & Wedderburn in the agreed form as to the title of SFGL or
     another Group Company to certain of the UK Properties; 


     "COMPETING BUSINESS" means any business engaged, interested or involved in
     the manufacture or supply of any of the Restricted Goods or Services where
     such business is carried on or conducted at or from any premises located
     within the Restricted Area;


     "COMPLETION" means the carrying out of the matters described in paragraph
     A4;


     "COMPUTER KNOW-HOW" means all information (including that comprised in or
     derived from data, discs, tapes, manuals, source codes, flow charts and
     specifications) relating to the use or programming of any computer and any
     computer software in whatever form held;


     "COVENANTORS' SOLICITORS" means Dibb Lupton Alsop of Fountain Precinct,
     Balm Green, Sheffield, S1 1RZ;


     "CUSTOMER" means any person who was, at any time during the period of 12
     months before Completion, a customer of any Group Company or a person with
     whom, at any time during that period, any Group Company had dealings with a
     view to obtaining business;


     "DATA ROOM INDEX" means the version of the index of documents and
     information relating to the Group headed "Data Room Information" in the
     form annexed to the Disclosure Letter;


                                       -3-

     "DEED OF ACKNOWLEDGEMENT" means a deed in the agreed form signed by each of
     the Covenantors in respect of claims which he may have against SFGL or any
     other Group Company; 


     "DEED OF COVENANT" means a deed of covenant in respect of taxation between
     the Covenantors and Atchison in the agreed form;


     "DISCLOSURE LETTER" means the letter of disclosure of today's date written
     by the Covenantors to Atchison, the information annexed to it and the
     documents set out in any indexes attached to it;


     "ENCUMBRANCE" means any mortgage, charge, pledge, lien, assignment or other
     security, interest or any equity of any person (including, without
     limitation, any right to acquire, option or right of pre-emption);


     "EUROPEAN COMMISSION" means the Commission of the European Community or the
     relevant Directorate of it;


     "EUROPEAN UNION" means the European Community and the European Coal and
     Steel Community established under the Treaty of Rome 1957, the Treaty of
     Paris 1951 and the Treaty of Maastricht;


     "EXEMPTION ORDER" means the Financial Services Act 1986 (Investment
     Advertisements) (Exemptions) (No 2) Order 1995 (1995/1536);
     

     "GROUP" means SFGL and each other company (or other body corporate),
     details of which are set out in part C of this agreement and the Group
     Companies List;


     "GROUP COMPANY" means a company (or other body corporate) within the Group;


                                       -4-

     "GROUP COMPANIES LIST" means the list containing details of SFGL and the
     other Group Companies as at the date of, and in the form annexed to, this
     agreement;

     "INFORMATION MEMORANDUM" means the information memorandum dated 12
     September 1997 which was issued in relation to the proposed sale of the
     entire issued share capitals of certain Group Companies, a copy of which is
     attached to the Disclosure Letter;


     "INTELLECTUAL PROPERTY" means all patents, trade marks, service marks,
     registered designs or any applications for any of the foregoing, copyright,
     design right, topographical rights, unregistered trade marks or other
     intellectual or industrial property rights, and all know how whether
     subsisting in the United Kingdom or anywhere else in the world;


     "IN THE AGREED FORM" means in the form of a draft agreed between the
     parties on or prior to today's date and initialled by or on behalf of them
     for the purposes of identification;


     "MANAGEMENT ACCOUNTS" means the unaudited consolidated balance sheet of the
     SFG Group as at 31 January 1998 in the form attached to the Disclosure
     Letter;


     "MARKETING INFORMATION" means all information relating to the marketing of
     any products or services (including customer names and lists, sales
     targets, sales statistics, market share statistics, marketing surveys and
     reports, marketing research and any advertising or other promotional
     materials);


     "NON-UK ACCOUNTS" means the audited financial statements of each Group
     Company which is a Non-UK Company for the financial year ended on the
     Accounts Date; the term "RELEVANT NON-UK ACCOUNTS" shall be construed
     accordingly;


     "NON-UK COMPANIES" means those Group Companies whose names are listed in


                                       -5-

     paragraph 2 of part C of this agreement;


     "NON-UK PROPERTIES" means the properties short particulars of which are set
     out in paragraph 2 of part D of this agreement and includes any part or
     parts of them;


     "OFFER" means the offer by Atchison for the Shares (other than the 
     Roll-Over Shares), as described in the Offer Document;


     "OFFER DOCUMENT" means the document in the agreed form containing the
     Offer;


     "PENSION SCHEMES"means the pension schemes of the Group, details of which
     are set out in part G of this agreement;


     "PROPERTIES" means the UK Properties and the Non-UK Properties or, as
     relevant, any of them;


     "RESTRICTED AREA" means the United Kingdom of Great Britain and Northern
     Ireland the United States of America, China, Taiwan, Italy, Canada and the
     Federal Republic of Germany and any other countries in which the Group
     achieved sales of L1,000,000 or more in one or more of the three calendar
     years prior to the date of this agreement;


     "RESTRICTED EMPLOYEE" means any person who is at Completion, or was at any
     time during the period of six months before Completion, a director of any
     Group Company or employed by any Group Company in a senior management,
     sales, research or development function;


     "RESTRICTED GOODS OR SERVICES" means any goods or services the same as or
     competitive with any of those manufactured or supplied by any Group Company
     at any time during the period of 12 months before Completion;


     "RESTRICTED PERIOD" means the period from Completion to 31 December 1998;


                                       -6-

     "ROLL-OVER AGREEMENT" means an agreement of today's date between Atchison
     and certain holders of Shares relating to the acquisition of the Roll-Over
     Shares by Atchison from such holders;


     "ROLL-OVER SHARES" means the 1,267,476 Shares agreed to be acquired by
     Atchison pursuant to and on the terms of the Roll-Over Agreement;


     "SFGL" means Sheffield Forgemasters Group Limited, further information in
     relation to which is set out in the Group Companies List;


     "SFL" means Sheffield Forgemasters Limited, further information in relation
     to which is set out in the Group Companies List;


     "SHAREHOLDER LIST" means the list of shareholders of SFGL as at the date
     of, and in the form annexed to, this agreement;


     "SHARES" means the whole of the allotted equity share capital of SFGL
     details of which are contained in the Group Companies List and the
     Shareholder List or, as the context may require, any of the shares
     comprised in that share capital;


     "SUPPLIER" means any person who, to the knowledge of the Covenantors, was
     at any time during the period of 12 months before Completion, a supplier to
     any Group Company;


     "TAX" means (a) within the United Kingdom: corporation tax, advance
     corporation tax, income tax (including income tax required to be deducted
     or withheld from or accounted for in respect of any payment), capital gains
     tax, development land tax, capital transfer tax, inheritance tax, VAT,
     PAYE, national insurance contributions, capital duty, stamp duty, stamp
     duty reserve tax, duties of customs and excise, any amount recoverable
     under section 601 of the Taxes Act and any other taxes, levies, 


                                       -7-

     duties, charges, imposts or withholdings corresponding to, similar to, 
     replaced by or replacing any of them, together with all penalties, charges
     and interest relating to any of them; and (b) outside the United Kingdom:
     all taxes, levies, duties, imposts, charges and withholdings of any nature
     whatever, including (without limitation) taxes on gross or net income,
     profits or gains and taxes on receipts, sales, use, occupation, franchise,
     value added, and personal property, together with all penalties, charges 
     and interest relating to any of them, regardless (in either case) of 
     whether any such taxes, levies, duties, imposts, charges, withholdings,
     penalties, and interest are chargeable directly or primarily against or
     attributable directly or primarily to any Group Company, or any other 
     person and of whether any amount in respect of any of them is recoverable
     from any other person;


     "TAX AUTHORITY" means any taxing or other authority (whether within or
     outside the United Kingdom) competent to impose any liability to Tax;


     "TAXES ACT" means the Income and Corporation Taxes Act 1988; 


     "TCGA" means the Taxation of Chargeable Gains Act 1992;


     "UK" means the United Kingdom;


     "UK ACCOUNTS" means the audited financial statements of SFGL and each other
     Group Company which is a UK Company for the financial year ended on the
     Accounts Date, comprising in each case a balance sheet, profit and loss
     account, notes, auditors' and directors' reports the term "RELEVANT UK
     ACCOUNTS" shall be construed accordingly;


     "UK COMPANIES" means those Group Companies whose names are listed in
     paragraph 1 of part C of this agreement;


     "UK PROPERTIES" means the properties short particulars of which are set out
     in


                                       -8-

     paragraph 1 of part D of this agreement and includes any part or parts
     of them;


     "VAT" means value added tax;


     "VATA" means the Value Added Tax Act 1994;


     "WARRANTIES" means those warranties on the part of the Covenantors
     contained or referred to in paragraph A5 and part E of this agreement and
     "WARRANTY" shall be construed accordingly.


A1.2 References to the Covenantors and Atchison shall include their respective
     personal representatives and successors.


A1.3 Reference to any statutory provision shall be deemed to include reference
     to all relevant statutory modifications, re-enactments and extensions and
     any orders, instruments, rules or regulations or other subordinate
     legislation made under such provision or in relation to such provision now
     in force and (so far as liability may exist or can arise) shall include
     also any past statutory provisions (as from time to time modified, extended
     or re-enacted prior to the date of this agreement) which such provision has
     directly or indirectly replaced, amended, consolidated or extended and any
     definitions contained in any statutory provisions shall be used in
     construing any part of this agreement which refers to such or any other
     relevant statutory provision.


A1.4 Unless the context otherwise requires words importing the singular only
     shall include the plural and vice versa.


A1.5 Words importing the masculine gender only shall include the feminine gender
     and words importing natural persons shall also include corporations,
     unincorporated persons and partnerships.


A1.6 Unless otherwise stated, references to paragraphs and parts are references
     to paragraphs 


                                       -9-

     of and parts of this agreement.  Any headings or sub-headings are inserted
     for convenience only and shall not affect the construction of this
     agreement or any part of it.


A1.7 Any question as to whether a person is connected with another shall be
     determined in accordance with section 839 of the Taxes Act which shall
     apply in relation to this agreement as it applies in relation to that Act.


A2   CONSIDERATION


A2.1 In consideration of the covenants on Atchison's part contained in paragraph
     A2.2, the Covenantors agree and undertake with and to Atchison in the terms
     of the remainder of this agreement.


A2.2 Atchison agrees and undertakes with each of the Covenantors as follows:


     A2.2.1    to make the Offer and issue the Offer Document to all holders of
               Shares (as detailed on the Shareholder List) in respect of all of
               the Shares (other than the Roll-Over Shares) within one Business
               Day of exchange of this agreement;


     A2.2.2    not to withdraw the Offer prior to 30 April 1998;


     A2.2.3    not to vary the Offer or waive any condition of the Offer;


     A2.2.4    not extend the time for acceptance of the Offer at any time prior
               to the date on which the Offer is declared or becomes
               unconditional in all respects.


A3   ACCEPTANCE OF THE OFFER


A3.1 Each of the Covenantors severally and irrevocably undertakes and warrants
     that: 


                                       -10-

     A3.1.1    except pursuant to the Offer and/or the Roll-Over Agreement, he
               will not, prior to the Offer becoming or being declared
               unconditional in all respects, sell, transfer, encumber, grant
               any option over or otherwise dispose of all or any of the Shares
               registered in his name (as set against his name in part B of this
               agreement) and/or any other shares in SFGL which are otherwise
               acquired by him subsequent to the date of this undertaking
               (collectively and severally in respect of each Covenantor, his
               "COMMITTED SHARES"), otherwise than to Atchison, or enter into
               any agreement or arrangement which could result in their sale or
               other disposal (except under the Offer and/or the Roll-Over
               Agreement) or which would or might restrict their disposal;


     A3.1.2    he will on the same day as the Offer Document is despatched
               accept or procure the acceptance of the Offer in respect of all
               of the Committed Shares and will (if not already delivered to
               Atchison) at the same time forward or procure the forwarding of
               the relevant share certificate(s) or other documents of title and
               all other relevant documents in accordance with the terms of the
               Offer Document;


     A3.1.3    he will supply or procure the supply of all information relating
               to him or SFGL required for the purposes of the Exemption Order
               to be included in the Offer Document and immediately notify
               Atchison in writing of any material change in the accuracy or
               import of any information previously supplied by him and (if and
               so long as such Covenantor is a director of SFGL and subject to
               his duties as a director) otherwise provide or procure the
               provision of such information and do or procure to be done (in
               each case so far as he is able by the exercise of the votes
               attaching to his Committed Shares but not otherwise) such acts as
               may be reasonably necessary to expedite the preparation and
               despatch of the Offer Document;


     A3.1.4    he will not directly or indirectly initiate any approach to any
               party with a view to soliciting any offer for any or all of the
               Shares from any third party.


                                       -11-

A3.2 Each of the Covenantors severally and irrevocably undertakes and warrants
     that by the exercise of the votes attaching to his Committed Shares and (if
     and for so long as such Covenantor is a director and subject to his duties
     as a director) the exercise of his votes at any meeting of the board of
     directors of any Group Company, he will (in so far as he is able by such
     exercise (but not further or otherwise)) unless and until the Offer becomes
     or is declared unconditional in all respects:


     A3.2.1    procure that there are convened such meetings of directors or
               members of SFGL (if so requested by Atchison) as may be necessary
               to pass such resolutions as may be required to enable the Offer
               to be implemented;


     A3.2.2    procure that all transfers of shares made pursuant to or in
               connection with the Offer (subject to the transfers being duly
               stamped) are registered in the register of members of SFGL;


     A3.2.3    procure that SFGL does not allot, or grant options over, any
               shares in the capital of SFGL nor issue any debt or other
               securities convertible into shares in the capital of SFGL nor
               agree to do any such thing;


     A3.2.4    procure that no dividend is declared by SFGL;


     A3.2.5    procure that no Group Company disposes of any material assets or
               assumes or incurs any material liabilities (including contingent
               liabilities) other than in the ordinary course of business;


     A3.2.6    procure that no Group Company undertakes any material commitments
               or enters into any material contract or agrees to the amendment
               of any existing material contract (including any service
               contract) otherwise than in the ordinary course of business; and


                                       -12-

     A3.2.7    procure that each Group Company will carry on business in the
               ordinary and normal course.


A3.3 Each Covenantor warrants and undertakes that the number of Shares set
     against his name in part B of this agreement are both legally and
     beneficially owned by him and neither the whole nor any part of his
     interest in those Shares is subject to any Encumbrance and, upon the Offer
     being made, he will be able and entitled to accept or procure acceptance of
     the Offer in respect of those Shares and to transfer those Shares with full
     title guarantee and free from all Encumbrances and together with all rights
     attaching to those Shares, including the right to all dividends and other
     distributions (if any) declared, made or paid after the date on which the
     Offer becomes or is declared unconditional in all respects and otherwise
     perform his obligations under this paragraph A3.


A3.4 In order to secure the performance of this undertaking, each of the
     Covenantors irrevocably appoints Hugh Aiken or, in his absence, any other
     director for the time being of Atchison, to be his attorney in his name and
     on his behalf to execute a form or forms of acceptance and such other
     documents and to do such other acts and things as may be necessary to
     accept the Offer in respect of the Committed Shares, provided however that
     such appointment shall not take effect until the expiry of two Business
     Days from the date of despatch of the Offer Document and only then if he
     shall have failed to comply with his obligations in paragraph A3.1.2.  Such
     appointment shall be irrevocable in accordance with section 4 of the Powers
     of Attorney Act 1971 until the earlier of the date on which the Offer
     lapses and the date on which the Shares are registered in the name of
     Atchison or its nominees following the Offer having become or been declared
     unconditional in all respects.


A3.5 Each of the Covenantors recognises and acknowledges that if he should fail
     to accept or procure the acceptance of the Offer in accordance with his
     obligations under paragraph A3.1.2 damages in the form of a liquidated sum
     would not be an adequate remedy and that an order for specific performance
     would be the only adequate remedy for such


                                       -12-

     failure or breach.


A4   COMPLETION


A4.1 Completion shall take place at the offices of the Covenantors' Solicitors
     on the  Business Days following the Offer having become or been declared
     unconditional in all respects.


A4.2 The Covenantors undertake to procure that on Completion the following shall
     be delivered or caused to be delivered to Atchison at the offices of the
     Covenantors' Solicitors (or as Atchison may direct): 


     A4.2.1    duly executed transfers of any shares in any Group Company not
               held in the name of SFGL or another Group Company duly executed
               in favour of Atchison (or as it shall direct) together with the
               relative share certificates or other documents of title (or in
               the case of any lost certificate an indemnity satisfactory to
               Atchison in relation to it);


     A4.2.2    written resignations in the agreed form from Mr S M Wallis, Mr M
               A Brand and Dr F Fitzgerald as directors of SFGL and each other
               Group Company of which any of such persons is a director, each of
               whom shall resign from his respective office(s) with immediate
               effect after the appointment of Atchison's nominees as provided
               in paragraph A4.4.2; 


     A4.2.3    a release duly executed by the Bank of Scotland of any charges,
               guarantees or other security in its favour given by or subsisting
               over any of the assets of the Group Companies;


     A4.2.4    the Certificates of Title and all documents of title to the UK
               Properties; 


     A4.2.5    the statutory books, share certificate books, common seals,
               certificate of incorporation, any certificate(s) of incorporation
               on change of name and a


                                       -14-

               copy of the memorandum and articles of association of SFGL and 
               each other Group Company (other than the Non-UK Companies) all,
               where appropriate, duly written up to date;


     A4.2.6    all credit cards, keys and other property of each Group Company
               which are in the possession or under the control of any
               Covenantor in his capacity as a director who resigns as an
               officer of SFGL and each other Group Company in accordance with
               this paragraph.



A4.3 Each of the Covenantors undertakes that on Completion he shall deliver or
     cause to be delivered to Atchison at the offices of the Covenantors'
     Solicitors:


     A4.3.1    the Deed of Covenant duly executed by him;


     A4.3.2    a Deed of Acknowledgement signed by him;


     A4.3.3    in the case of Mr M A Brand his written resignation in the agreed
               form from his office as a director of any Group Company.


A4.4 The Covenantors shall procure the passing of resolutions of the directors
     of each Group Company to:


     A4.4.1    register Atchison or its nominee(s) as the holders of the Shares
               which by Completion have been the subject of valid acceptances of
               the Offer and any other shares in each Group Company referred to
               in paragraph A4.2.1 above, subject only to the proper stamping of
               the transfers;


     A4.4.2    appoint such persons as Atchison shall nominate as directors of
               each Group Company and accept the resignations of those directors
               and secretaries who are resigning; and


                                       -15-

     A4.4.3    revoke of all existing authorities to the bankers of and each
               Group Company in respect of the operation of each Group Member's
               bank accounts giving authority in favour of such persons as
               Atchison may nominate to operate those accounts.


A5   WARRANTIES


A5.1 The Covenantors severally (but not jointly) warrant to Atchison in the
     terms set out in part E of this agreement, subject to all matters fairly
     disclosed in the Disclosure Letter (with sufficient detail to enable a
     purchaser with reasonable knowledge of the sectors in which the Group
     operates to assess the nature and import of each matter disclosed) and each
     of the Covenantors agrees and acknowledges that Atchison has agreed to make
     the Offer in reliance on the Warranties. 


A5.2 The Warranties and Atchison's rights in respect of the Warranties shall not
     in any respect be extinguished or affected by Completion. 


A5.3 Unless expressly stated in this agreement, no information (other than that
     fairly disclosed in the Disclosure Letter (with sufficient detail to enable
     a purchaser with reasonable knowledge of the sectors in which the Group
     operates to assess the nature and import of each matter disclosed))
     relating to SFGL or any other Group Company of which Atchison has knowledge
     (whether actual or constructive) shall prejudice any claim made by Atchison
     under the Warranties or operate to reduce any amount recoverable in respect
     of any breach of any of the Warranties.


A5.4 Each of the Covenantors undertakes that, in the event of any claim being
     made against that Covenantor in connection with this agreement, he will not
     make any claim against any Group Company or any director or employee of any
     Group Company on which or on whom he may have relied before agreeing to any
     of the Warranties or the Deed of Covenant or authorising any statement in
     the Disclosure Letter.


                                       -16-

A5.5 The Covenantors agree and acknowledge that each of the Warranties shall be
     construed as a separate and independent warranty and shall not be limited
     or restricted by reference to, or inference from, the terms of any other
     Warranty or (other than as set out in this paragraph A5 or part F of this
     agreement) any other term of this agreement.


A5.6 Where any of the Warranties is qualified by an expression such as "so far
     as the Covenantors are aware" or "to the best of the knowledge, information
     and belief of the Covenantors" or any similar expression, it shall be
     deemed to include an additional statement that it has been made after
     reasonable enquiry by the Covenantors of each of the directors of each of
     the Group Companies and after having made inspection of all relevant
     documentation under the ownership or control of the Group or to which any
     Group Company may have access. 


A6   PROTECTION FOR THE COVENANTORS


     The provisions of part F of this agreement shall have effect.


A7   NON-COMPETITION COVENANTS


A7.1 Each of the Covenantors undertakes to Atchison that he or it will not
     (except as required by law or any regulatory authority) divulge or
     communicate to any person (other than to any officer or employee of any
     Group Company who needs that knowledge in the discharge of his duties) any
     confidential information concerning the business, customers, accounts,
     financial or contractual arrangements, transactions or affairs of the Group
     which may be within or come to his or its knowledge to the extent and so
     long as that information is confidential and not in the public domain.


A7.2 Each of the Covenantors (other than Mr David Fletcher) severally covenants
     with Atchison that he will not during the Restricted Period directly or
     indirectly, and either solely or jointly on behalf of himself or any other
     person:


                                       -17-

     A7.2.1    for the purposes of a Competing Business, solicit or canvas or
               endeavour to solicit or canvas the custom of any Customer in
               respect of the supply of any of the Restricted Goods or Services;


     A7.2.2    for the purposes of a Competing Business, entice away or
               endeavour to entice away from any of the Group Companies any
               Supplier in respect of the supply or provision of any of the
               Restricted Goods or Services or any component part of any of
               them;


     A7.2.3    employ, solicit or entice away or endeavour to employ, solicit or
               entice away any Restricted Employee (whether or not any such
               person would, as a result, commit a breach of his terms of
               employment or his contract).


A7.3 The parties consider that the restrictions in paragraphs A7.1 and A7.2
     taken separately and together, are not more onerous or extensive than is
     reasonable and necessary for the protection of the legitimate business
     interests of Atchison.  If any restriction is held to be void or otherwise
     unenforceable but would be valid and enforceable if some part of that
     restriction were deleted, such restriction shall apply with such deletions
     as are necessary to make it valid and enforceable.


A8   BOOKS AND RECORDS, TAX RETURNS AND COMPUTATIONS


A8.1 Atchison shall procure that each Group Company:


     A8.1.1    shall preserve all of its books and records existing at
               Completion for a period of not less than three years from
               Completion or, in the case of books and records relating to Tax,
               seven years from Completion; and


     A8.1.2    shall at any reasonable time or times and upon reasonable notice
               allow the Covenantors (or their duly authorised representatives)
               access to and the right


                                       -18-

               to take copies of such books and records.

A8.2 Atchison (on behalf of the Group Companies) or its duly authorised agents
     shall prepare the computations and returns relating to corporation tax in
     respect of all accounting periods beginning before Completion to the extent
     not prepared before Completion and shall submit such computations to the
     Covenantors or their duly authorised agents for comment.  Atchison shall be
     obliged to take account of the Covenantors' reasonable comments in relation
     to any such return, save to the extent that to do so would materially
     increase the liability to Tax of any of the Group Companies in respect of
     any accounting period beginning after Completion.


A8.3 Atchison shall procure that the returns of SFL deal with the capital losses
     of SFL on the basis and in the form requested by the Covenantors (or their
     agents) and shall provide copies of all correspondence with the Inland
     Revenue relating to such losses to the Covenantors (or their agents) and
     shall not agree any matter relating to the amount or manner of set-off of
     such capital losses with the Inland Revenue save in accordance with the
     instructions of the Covenantors (or their agents).


A8.4 Atchison shall procure that the relevant UK Companies make (to the extent
     legally possible) the claims for the surrender by them for no consideration
     of advance corporation taxes (pursuant to section 240 Taxes Act) and/or
     group relief (pursuant to section 402 Taxes Act) in respect of the
     accounting periods commencing 1 April 1995, 1 April 1996 and 1 April 1997
     as provided in clause 14.4 of the First Aerospace Agreement.


A8.5 Atchison agrees to procure the making (to the extent legally possible) by
     Teledyne Holdings Limited of a joint election with Special Melted Products
     Limited ("SMP") pursuant to section 158 of the Capital Allowances Act 1990
     in respect of the disposal to SFL by SMP of the land and buildings at
     Staybrite works in occupation by SMP.


A8.6 Atchison agrees to procure compliance of each of the Group Companies of its


                                       -19-

     obligations pursuant to clauses 14.1 and 14.2 of the First Aerospace
     Agreement.


A9   COMMITTEE


A9.1 Atchison undertakes and covenants to procure that forthwith upon the Offer
     being made each of SFL and Forgemasters Realisations (1998) Limited and (in
     the case of clause A9.1.3 only) relevant Group Companies irrevocably and
     unconditionally appoints the Committee as its agent:


     A9.1.1    to exercise all and any rights, powers, privileges and
               discretions vested in or conferred upon SFL and/or Forgemasters
               Realisations (1998) Limited  in relation to the preparation,
               review agreement and/or determination of the Completion Accounts
               (as defined in the First Aerospace Agreement) for the purposes of
               the Aerospace Agreements;


     A9.1.2    to take, after the date of the Offer, all and any steps as the
               Committee thinks fit (in its absolute discretion) to seek payment
               and enforce recovery of all or any of the Aerospace Additional
               Payment (as defined in the Offer Document) including, without
               limitation, the commencement of legal proceedings (in the name of
               SFL and/or Forgemasters Realisations (1998) Limited) against
               Teledyne Holdings Limited and/or Teledyne Industries Inc and/or
               Allegheny Teledyne Incorporated (as guarantor under each of the
               Aerospace Agreements) or any other person; and


     A9.1.3    to surrender, after Completion, to any UK company within the
               Aerospace Group up to L3,000,000 of tax losses available for
               group relief (pursuant to section 402 Taxes Act) on such terms as
               the Committee may, in its absolute discretion, determine;


     and Atchison acknowledges and agrees that the Committee shall have full
     power and


                                       -20-

     authority to exercise all the rights and authorities set out in or given
     or delegated to it pursuant to the Offer Document.


A9.2 Atchison undertakes and covenants to procure that each of SFL and
     Forgemasters Realisations (1998) Limited:


     A9.2.1    confirms to the Committee in writing, upon the Offer being made,
               its appointment on the terms of this clause A9 in the agreed
               terms;


     A9.2.2    will not after the date of the Offer undertake any of the matters
               detailed in clause 9.1 nor waive, release or suspend or agree to
               waive, release or suspend any rights under or pursuant to, or
               vary, or agree to vary any Aerospace Agreement or direct that
               payment or discharge of the Aerospace Additional Payment be made
               other than to the Vendor's Solicitors under the terms of the
               relevant Aerospace Agreement;


     A9.2.3    issues a letter in the agreed terms upon the Offer being made to
               the other parties to the Aerospace Agreements (informing them,
               inter alia, of the irrevocable authorities and delegation
               contained in this clause A9); and


     A9.2.4    allows unrestricted access to all documentation in its possession
               or under its control relating to or affecting the Completion
               Accounts and procure that its relevant personnel and, so far as
               it is lawfully able to do so, Coopers & Lybrand provide such
               assistance in relation to the Completion Accounts and the
               exercise of rights under this clause A9 as the Committee
               reasonably requests from time to time.


A9.3 Atchison undertakes to procure that the Committee is provided upon demand
     with all information necessary to enable it to calculate the Additional
     Consideration (as defined in the Offer Document) and to notify the
     Committee immediately upon receipt by


                                       -21-

     SFGL, SFL or any other third parties on their behalf of any monies in
     respect of (or upon any discharge of all or any of) the Aerospace 
     Additional Payment or any relevant documents (providing copies thereof).


A9.4  Atchison agrees (on behalf of itself and SFL and Forgemasters Realisations
      (1998) Limited) that the Committee shall:


      A9.4.1   not be obliged to take any action or proceedings on behalf of SFL
               and/or Forgemasters Realisations (1998) Limited pursuant to the
               Aerospace Agreements (whether for payment or recovery of the
               Aerospace Additional Payment (as defined in the Offer Document)
               or otherwise); and


      A9.4.2   be entitled to rely on the advice of any professional advisers
               selected by it and shall not be liable to SFL or Forgemasters
               Realisations (1998) Limited for any of the consequences of such
               reliance.


A9.5  Atchison agrees (on behalf of itself and SFL and Forgemasters Realisations
      (1998) Limited) that no member of the Committee shall be liable to
      Atchison and/or SFL and/or Forgemasters Realisations (1998) Limited for
      any action taken or omitted to be taken by the Committee under the terms
      of or in connection with this clause and Atchison shall indemnify each
      member of the Committee on demand for any and all liabilities, losses,
      damages, penalties, actions, judgements, costs, expenses or disbursements
      of any kind whatsoever which may be imposed on, incurred by or asserted
      against him or it by Atchison, SFL and/or Forgemasters Realisations (1998)
      Limited in any way relating to or arising out of him or it acting as a
      member of the Committee or performing his/its duties in connection
      therewith or any action taken or omitted by such member thereunder.


A9.6  The Committee shall consist of not more than three persons, two being
      appointed by the Covenantors (the first such appointees being M A Brand
      and D Fletcher) and one being appointed by NatWest Ventures (Nominees)
      Limited.  The relevant appointor(s) may


                                       -22-

      remove their appointee to the Committee and appoint another in his/her
      place by giving written notice to Atchison and (in the case of removal)
      to the person being removed.  For the purposes of clause A9.5, "MEMBER
      OF THE COMMITTEE" includes all members from time to time together with
      NatWest Ventures (Nominees) Limited.


A9.7  A vacancy in the members of the Committee need not be filled if the
      relevant appointor(s) so agree, provided that the total number of members
      does not fall below two.


A9.8  The Committee shall act unanimously but shall otherwise transact its
      business in such manner as it thinks fit.


A9.9  Notwithstanding clause A9.8, all acts done by the Committee or by any
      person acting as a member of the Committee shall (notwithstanding that it
      is afterwards discovered that there was some defect in the appointment of
      any member of the Committee or person so acting or his authority to act or
      that they or any of them had vacated office) be as valid and effectual as
      if each such member or person had been properly appointed, had appropriate
      authority and had continued to be a member of the Committee.


A9.10 SFL shall be responsible for all costs, charges and expenses incurred
      (including, without limitation, professional advice and the costs of any
      Independent Accountants appointed pursuant to the First Aerospace
      Agreement) by or on behalf of the Committee in carrying out its functions
      under this clause A9.  Atchison undertakes to procure that SFL promptly
      discharges all such costs, charges and expenses when due and payable.


A9.11 Atchison undertakes to the Covenantors to:


      A9.11.1  procure the issue to DLA Nominees Limited of a letter of credit
               from Harris Trust and Savings Bank in the agreed form upon
               exchange of this agreement;


      A9.11.2  procure that upon receipt by or on behalf of the SFG Group of all
               or any part


                                       -23-

               of the Aerospace Additional Payment, such sums will
               be promptly placed on deposit with the Bank of Scotland
               accompanied by a direction that they be held on terms that will
               result in it earning the best rate of interest then available
               from Bank of Scotland for such sums for a minimum deposit period
               of six weeks or, if earlier, to the date that is seven days prior
               to the due date for payment of the Additional Consideration (as
               defined in the Offer Document) and that the authority of the
               Committee shall be required to withdraw the money from that
               account within such minimum deposit period;


      A9.11.3  consult the Committee prior to implementation of any such deposit
               arrangements; and


      A9.11.4  procure that Bank of Scotland is authorised to provide full
               details of all and any interest accrued on sums deposited with
               them pursuant to clause A9.11 (such authorisation to be provided
               upon the date of such deposit).


A9.12 Any notice to be given to the Committee shall be given to all Committee
      members in accordance with clause A14, save that the addresses and fax
      numbers for service shall (unless and until otherwise notified by the
      relevant appointors) be:


      M A Brand (as per clause A14.4)


      D Fletcher (as per clause A14.4)  


      NatWest Ventures (Nominees) Limited

      For the attention of Michael Davy

      Fenchurch Exchange

      London

      EC3M 4TE


                                       -24-

      Fax No: 0171 374 3580


A10   PUBLICITY


      No announcement or disclosure in respect of the making or terms of this
      agreement or the Offer shall be made or disclosed by a party to this
      agreement without the prior written consent of the others (which consent
      may be given by any of the Covenantors on behalf of all of them) except to
      the extent disclosure is required by law or the rules of a recognised
      investment exchange (as defined by the Financial Services Act 1986 and
      including the New York Stock Exchange), or the rules of the Securities and
      Exchange Commission which disclosure shall then only be made:


      A10.1    after prior consultation between the parties to this agreement as
               to its terms (which consultation may be held with any of the
               Covenantors on behalf of all of them);


      A10.2    strictly in accordance with any agreement as to the terms of
               disclosure; and



      A10.3    only to the persons and in the manner required by law or the
               rules of the relevant recognised investment exchange or the
               Securities and Exchange Commission or as otherwise agreed.


A11   COSTS


      Atchison shall pay its own costs of and incidental to the negotiation and
      preparation of this agreement, the preparation of the Offer Document and
      the making of the Offer and shall pay or procure the payment of the costs
      of the Covenantors if and to the extent that such costs are listed in the
      Agreed Costs List.  Subject to clause A9, all other costs of the
      Covenantors will be borne by the Covenantors.


                                       -25-

A12   MISCELLANEOUS


A12.1 Save in the case of any fraudulent misrepresentation, Atchison agrees that
      it will have no remedy against the Covenantors, and the Covenantors shall
      not have any liability of whatever nature to Atchison, in respect of any
      statement of fact or opinion whatsoever, including any untrue or
      misleading statement, warranty or representation, express or implied, made
      to Atchison or its agents, officers or employees upon which Atchison
      relied or may have relied in entering into this agreement (unless repeated
      in this agreement) and that Atchison's sole remedy (save in the case of
      any fraudulent misrepresentation) is for breach of contract in respect of
      the warranties, undertakings, covenants or indemnities expressly set out
      in this agreement and the Deed of Covenant, subject to the limitations
      contained in this agreement and the Deed of Covenant.


A12.2 No variation of this agreement shall be effective unless made in writing
      and signed by or on behalf of the parties to this agreement and no waiver
      of any term, provision or condition of this agreement shall be effective
      except to the extent made in writing and signed by the waiving party.



A12.3 Atchison may freely assign the benefit of this agreement and/or the Deed
      of Covenant to any company within the Atchison Group (as defined in the
      Offer Document) provided that the Covenantors' liability under this
      agreement and Deed of Covenant shall be no greater following any such
      assignment than it would have been had such assignment not taken place. 
      Save as set out above, this agreement and the Deed of Covenant shall not
      be assignable.


A12.4 The invalidity, illegality or unenforceability of any provision of this
      agreement shall not affect the other provisions of this agreement.


A12.5 The provisions of this agreement shall continue in full force and effect
      notwithstanding Completion.

                                       -26-

A12.6 This agreement may be executed in any number of counterparts by the
      different parties or separate counterparts, each of which when executed
      and delivered shall constitute an original but all of which shall together
      constitute one and the same instrument.


A12.7 No failure or delay in exercising or enforcing any right or remedy under
      this agreement shall constitute a waiver of such right or remedy and no
      single or partial exercise or enforcement of any right or remedy under
      this agreement shall preclude or restrict the further exercise or
      enforcement of any such right or remedy.  The rights and remedies provided
      in this agreement are cumulative and not exclusive of any rights and
      remedies provided by law.


A13   TERMINATION


      The obligations of the Covenantors under this agreement shall cease and
      determine on the withdrawal or lapsing of the Offer without liability on
      the part of any of the Covenantors save for the liability of any
      Covenantor for his prior breaches of paragraph A3.3.


A14   NOTICES


A14.1 Any notice or document to be served under this agreement shall (if sent to
      Atchison) be sent by:


      A14.1.1  facsimile transmission; followed by


      A14.1.2  courier


      and, if sent to the Covenantors, be sent by first class recorded delivery
      post in each case at its or their address specified in paragraph A14.4 or
      at any other address which the 


                                       -27-

      party to be served may have notified to the other parties in accordance
      with this paragraph.


A14.2 Any such notice or document shall be deemed to have been served one hour
      after the time of despatch by facsimile transmission in accordance with
      paragraph A14.1, provided that it is despatched before 4:00p.m. on any
      Business Day and, in any other case, at 10:00a.m. on the Business Day
      following the date of such despatch (and for this purpose, such times
      shall be construed as United Kingdom time in respect of documents served
      on a Covenantor and central United States time in respect of documents
      served on Atchison).


A14.3 In proving service it shall be enough to prove that delivery was made,
      that the envelope containing the notice or document was properly addressed
      and posted as a prepaid first class recorded delivery letter or that the
      facsimile transmission was properly addressed and despatched (as
      appropriate).


A14.4 The following are the addresses of the Covenantors and the address and fax
      number of Atchison for the purposes of paragraph A14.1:




      THE COVENANTORS


      Mr P M Wright

      Address as stated in part B of this agreement


      Mr M A Brand

      Address as stated in part B of this agreement


      Mr D Fletcher

      Address as stated in part B of this agreement


                                       -28-

      ATCHISON

      c/o Atchison Casting Corporation

      400 South Fourth Street

      Atchison

      Kansas 66002-0188

      United Stated of America

      Fax number: 001 913 367 2155

      Marked for the attention of the Chief Executive Officer


A15   CHOICE OF LAW


      This agreement shall be governed by and construed in accordance with
      English Law and the parties irrevocably agree that the English courts
      shall have exclusive jurisdiction to settle any dispute which may arise
      out of or in connection with this agreement and that, accordingly, any
      proceedings, suit or action arising out of this agreement shall be brought
      in such courts.


IN WITNESS of which the parties have executed this agreement as a deed and
delivered it on the day and year first above written.

                                       -29-


                                        PART B

                 DETAILS OF THE COVENANTORS AND THE COMMITTED SHARES 




(1)                      (2)            (3)                      (4)

NAME AND ADDRESS         NUMBER         RELEVANT PERCENTAGE OF   CASH LIMITATION
                         OF COMMITTED   ANY CLAIM UNDER THE      ON LIABILITY (L)
                         SHARES         WARRANTIES AND
                                        DEED OF COVENANT

                                                        
Phillip Montague Wright  2,040,353      67.39                    235,865

Fern House

11 Tivydale

Cawthorne

Nr Barnsley

South Yorkshire

S75 4EJ



Malcolm Arthur Brand     1,207,500      16.08                      56,280

1A Lindrick Road

Woodsetts

Worksop

Nottinghamshire

S81 8RD



David Fletcher             941,045      16.53                      57,855

Dearne Mill House

19A Cuckstool Road

Denby Dale

Huddersfield HD8 8RF


                                       -30-

                                        PART C

                             LIST OF THE GROUP COMPANIES


C1    THE UK COMPANIES


      Sheffield Forgemasters Group Limited

      British Rollmakers Corporation Limited

      C Akrill Limited

      Engineering Technologies Group Limited

      Firth Vickers Special Steels Limited

      Forgealert Limited

      Forgemasters Realisations (1998) Limited 

      Forged Rolls (UK) Limited

      Forgemasters Engineering Limited

      Forgemasters Steel and Engineering Limited

      Gibson Engineering Company Limited

      Hadura Products Limited

      Johnson's Rolls Limited

      Midland Rollmakers Limited

      Miller and Company Limited

      Offshore Castings Limited

      River Don Castings Limited

      Sheffield Forgemasters Holdings Limited

      Sheffield Forgemasters Limited

      Sheffield Forgemasters Share Trustees Limited

      Sheffield Forgemasters Trustees Limited

      R B Tennent Limited

      Talos Group Limited

      Thomas Perry Limited


                                       -31-


                                        PART C

                          LIST OF THE GROUP COMPANIES (CON)


C2    THE NON-UK COMPANIES


      Sheffield Forgemasters (Canada) Limited

      Euro SFM Edelstahl GmbH


                                       -32-

                                        PART D

                                       PROPERTY


D1    THE UK PROPERTY


      D1.1     All that land and buildings at Brightside Lane, Carbrook Street,
               Hawke Street and Upwell Street, Sheffield, South Yorkshire
               collectively known as River Don Works, part of which is
               registered with Freehold Title Absolute under title numbers
               SYK356783, SYK389861 and SYK381599 and the remaining part is
               leasehold being demised by a lease dated 22 January 1993 and is
               registered at H M Land Registry under title number SYK328360.


      D1.2     All that freehold land lying to the north west of Sandstone Road,
               Sheffield, South Yorkshire registered at H M Land Registry with
               Freehold Title Absolute under title numbers SYK204372 and
               SYK377124.


      D1.3     All that land and buildings known as the Old Rectory, School
               Hill, Whiston, Rotherham, South Yorkshire as is registered at H M
               Land Registry with Freehold Title Absolute under title number
               SYK247462.


      D1.4     All that land and buildings at Shirecliffe Road, Sheffield as is
               registered at H M Land Registry with Freehold Title Absolute
               under title number SYK168119.


      D1.5     All that land known as Aston Ponds, Aston cum Aughton, Rotherham
               as is registered at H M Land Registry with Freehold Title
               Absolute under title numbers SYK204378 and SYK354602.


      D1.6     All that land and buildings at Weston Road, Crewe comprising the
               remainder of the land in a conveyance dated 8 June 1948 made
               between the Mayor, Alderman and Burgesses of the Borough of Crewe
               (1) and Midland Rollmakers Limited (2) and as the same is shown
               for identification purposes only edged in


                                       -33-

               red on the plan annexed to the relevant Certificate of Title.


      D1.7     A former boiler house situate at Princess Street, Sheffield being
               part of the land registered at H M Land Registry with Freehold
               Title Absolute under title number SYK169835 and presently
               occupied by Graham Crossland by virtue of a lease dated 6
               December 1996 between (1) Sheffield Forgemasters Limited and (2)
               Graham Crossland.


      D1.8     All that leasehold land situate at No 6, 12 O' Clock Court,
               Attercliffe Road, Sheffield all more fully described in a lease
               dated 21 November 1997 between (1) Osborne Assets Limited and (2)
               Sheffield Forgemasters Limited.


      D1.9     All and whole the subjects known as Whifflet Foundry, Whifflet
               Street, Coatbridge registered in the Land Register of Scotland
               under title number LAN 101911.


      D1.10    All and whole the subjects known as Meadow Foundry, Calder
               Street, Coatbridge comprising those several plots or areas of
               ground lying in the County of Lanark more particularly described
               in and disponed by and shown delineated and partly hatched in red
               on the plan annexed to the relevant Certificate of Title and
               subscribed as relative to the Disposition by R.B. Tennent Limited
               in favour of Sheffield Forgemasters Limited dated 16 December
               1982 and recorded in the Division of the General Register of
               Sasines for the County of Lanark on 22 December 1983 (Book 7371,
               Folio 65); but excepting therefrom all and whole those subjects
               registered in the Land Register of Scotland under title number
               LAN 21451; which said subjects under the aforesaid exception are
               presently under application for registration in the Land Register
               of Scotland under title number LAN 101910.


                                       -34-


D2    THE NON-UK PROPERTY


      D2.1     Leasehold property at Suite 525, 155 James Street, South
               Hamilton, Ontario, Canada occupied by Sheffield Forgemasters
               (Canada) Limited.


      D2.2     Leasehold property at Schumanstrasse 55, 40237 Dusseldorf,
               Germany occupied by Euro SFM Edelstahl GmbH


                                       -35-

                                       PART E
                                          
                                     WARRANTIES
                                          

E1    BOOKS AND RECORDS


      Each of the Group Companies have kept all accounts, books, ledgers,
      financial, statutory and other records required by law to be kept by them
      and these:


      E1.1     have been accurately maintained in all material respects and are
               up to date;


      E1.2     are in the possession or under the control of the relevant Group
               Company;


      and no notice or allegation that any of them is incorrect or should be
      rectified has been received by the relevant Group Company.


E2    ACCOUNTS


E2.1  THE UK ACCOUNTS:


      E2.1.1   have been prepared in accordance with the requirements of all
               relevant statutes and generally accepted accounting principles;


      E2.1.2   comply with all applicable accounting standards; 


      E2.1.3   show a true and fair view of the financial position of the
               relevant UK Company at the Accounts Date and of the profits and
               losses of the relevant UK Company for the financial period ended
               on the Accounts Date; and


      E2.1.4   adopt bases and apply accounting policies which have been adopted
               or applied in the UK Companies audited accounts for the two
               financial years before the Accounts Date.


                                       -36-

E2.2  THE NON-UK ACCOUNTS:


      The Non-UK Accounts fairly present the financial condition and the results
      of operations, changes in stockholder's equity and cashflows of the Non-UK
      Companies as at the respective dates of, and for the periods referred to
      in the Non-UK Accounts.


E2.3  THE MANAGEMENT ACCOUNTS


      The Management Accounts have been prepared in good faith and in accordance
      with the accounting policies adopted in the preparation of the UK Accounts
      (or, as appropriate, the Non-UK Accounts) and on bases and principles
      consistent with those used in the preparation of the management accounts
      of the Group for the financial year which ended on the Accounts Date.


E3    THE GROUP COMPANIES' ASSETS


E3.1  ASSETS AND CHARGES


      E3.1.1   Each of the Group Companies owns all assets included in its
               relevant Accounts and all assets which have been acquired by it
               since the Accounts Date (except for assets disposed of by it in
               the ordinary course of its business).


      E3.1.2   Save for liens and suppliers' retentions of title no assets of
               any of the Group Companies, nor any of their undertakings,
               goodwill or uncalled capitals are subject to any Encumbrance or
               any agreement or commitment to give or create any Encumbrance.


      E3.1.3   Since the Accounts Date each of the Group Companies has been in
               possession or control of all its assets (except those disposed of
               in the ordinary course of


                                       -37-

               business for an amount less than L25,000).


      E3.1.4   No asset is shared by any of the Group Companies with any other
               person (other than other Group Companies) and none of the Group
               Companies depend for their respective businesses upon, or use,
               any assets, facilities or services owned or supplied by the
               Aerospace Group.


E3.2  DEBTS DUE TO THE GROUP COMPANIES


      E3.2.1   So far as the Covenantors are aware the debts owed to each of the
               Group Companies have or will realise the value at which they are
               shown in the relevant Accounts for that company (net of the
               provisions made in the Accounts).


      E3.2.2   None of the Group Companies have factored or discounted any of
               their debts or agreed to do so or waived any right of set off
               against a third party.


E3.3  TITLE RETENTION


      None of the Group Companies have acquired or agreed to acquire any asset
      on terms that property in them does not pass until full payment is made.


E3.4  STOCK


      So far as the Covenantors are aware each of the Group Companies' stock in
      trade was valued for the purposes of its relevant Accounts at the lower of
      cost and net realisable value and such valuation was made in accordance
      with the relevant company's normal method for valuing stock.


E3.5  PLANT


                                       -38-

      So far as the Covenantors are aware each major item of machinery and plant
      necessary to carry on the business of each of the Group Companies:


      E3.5.1   is (having regard to its age and current use) in satisfactory
               working order; and


      E3.5.2   complies in all material respects with all material legal
               requirements relating to it and its use.


E4    THE GROUP COMPANIES' BUSINESS SINCE THE ACCOUNTS DATE


E4.1  Since the Accounts Date, each of the Group Companies has carried on
      business:


      E4.1.1   in the ordinary and usual course;


      E4.1.2   without entering into any transaction, assuming any liability or
               making any payment (not provided for in the relevant Accounts)
               which is not in the ordinary course of its business;


      E4.1.3   without any material interruption or material alteration in the
               nature, scope or manner of its business.


E4.2  Since the Accounts Date:


      E4.2.1   none of the Group Companies has made or paid, nor is now
               proposing to make or pay, any dividend or distribution;


      E4.2.2   no resolution of the shareholders of any of the Group Companies
               has been passed other than resolutions relating to the routine
               business of annual general meetings;


      E4.2.3   no change in the accounting reference period of any member of the
               Group has


                                       -39-

               been made and no change has been made in the accounting
               policies or accounting methods adopted by any member of the
               Group; and


      E4.2.4   no Group Company has waived repayment, in whole or in part, of
               any indebtedness owing to it or agreed to the discharge of any
               charge or other security in its favour.


E5    TAX WARRANTIES


E5.1  THE UK COMPANIES


      E5.1.1   ADMINISTRATION AND RETURNS


          E5.1.1.1  So far as the Covenantors are aware each of the UK Companies
                    has, within the requisite time limits specified by statute,
                    made all returns, given all notices, made all applications
                    and supplied all other information required by law to be
                    supplied to the Inland Revenue or other Tax Authorities, all
                    such information, applications, returns and notices were and
                    remain, so far as the Covenantors are aware, complete, true
                    and accurate in all material respects and so far as the
                    Covenantors are aware are not the subject of any dispute
                    with the relevant authorities. 


          E5.1.1.2  The Disclosure Letter contains details, so far as they
                    affect the UK Companies, of all concessions, arrangements
                    and agreements (whether formal or informal) negotiated with
                    any Tax Authority. 


      E5.1.2   PAYMENT OF TAX


          E5.1.2.1  Each of the UK Companies has paid all Tax which it has
                    become


                                       -40-

                    liable to pay and so far as the Covenantors are aware
                    are under no liability to pay nor are there any
                    circumstances by virtue of which any of the UK Companies is
                    likely to become liable to pay, any fine, penalty, surcharge
                    or interest in connection with any claim for Tax.


          E5.1.2.2  Each of the UK Companies have properly deducted Tax as
                    required by law from all payments made and have accounted to
                    the appropriate Tax Authority for all Tax so deducted.


      E5.1.3   PAYE AND NATIONAL INSURANCE


          E5.1.3.1  So far as the Covenantors are aware each of the UK Companies
                    have properly operated the Pay As You Earn and National
                    Insurance system deducting Tax as required by law from all
                    payments made, or treated as made to, employees and 
                    ex-employees of the UK Companies and have accounted to the
                    Inland Revenue, DSS or Contributions Agency (as the case may
                    be) for all Tax so deducted and all Tax chargeable on
                    benefits provided for employees of the UK Companies.


          E5.1.3.2  So far as the Covenantors are aware, each of the UK
                    Companies have complied in all material respects with all
                    reporting requirements and has kept books and records
                    relating to all payments and benefits made or provided, or
                    treated as made or provided to its directors, employees or
                    officers or former directors, employees or officers.


          E5.1.3.3  None of the UK Companies participate in a scheme registered
                    under chapter III of part V of the Taxes Act and no
                    application for registration of such a scheme has been made
                    by any of the UK Companies.


                                       -41-

      E5.1.4   CAPITAL GAINS


          None of the UK Companies have made a claim under section 23, sections
          152 to 156 (inclusive), section 158, section 162 or section 247 of the
          TCGA and no such claim has been made by any other company which
          affects or could affect the amount or value of the consideration for
          the acquisition of any asset by any of the UK Companies taken into
          account in calculating liability to corporation tax on chargeable
          gains on a subsequent disposal.


      E5.1.5   STAMP DUTY AND STAMP DUTY RESERVE TAX


          All documents necessary to establish title of each of the UK Companies
          to their respective assets held at Completion and which attract stamp
          duty have been duly stamped.


      E5.1.6   DISTRIBUTIONS AND PAYMENTS


          E5.1.6.1  Since the Accounts Date no dividend or other distribution
                    within the meaning of part VI chapter II of the Taxes Act
                    has been made by any of the UK Companies nor are any of the
                    UK Companies bound to make any such distribution.


          E5.1.6.2  No rents, interest, annual payments or other sums of an
                    income nature which any of the UK Companies is under an
                    existing obligation to pay in the future, are wholly or
                    partially disallowable as deductions or charges in computing
                    profits for the purposes of corporation tax. 


          E5.1.6.3  None of the UK Companies have made or received any
                    distribution which is, or is treated as, an exempt
                    distribution within sections 213


                                       -42-

                    to 218 (inclusive) of the Taxes Act.

      E5.1.7   VAT


          E5.1.7.1  Each of the UK Companies is a registered and taxable person
                    for the purposes of VAT and no such registration is subject
                    to any condition imposed by or agreed with HM Customs and
                    Excise.


          E5.1.7.2  So far as the Covenantors are aware each of the UK Companies
                    have complied in all material respects with all statutory
                    provisions and regulations and made all necessary returns
                    required by law in relation to VAT and, within the
                    prescribed time limits, has provided all necessary
                    information and documents required by law to be provided to
                    H M Customs and Excise, or other appropriate Tax Authorities
                    and paid all amounts due by law to the proper person.


          E5.1.7.3  So far as the Covenantors are aware, each of the UK
                    Companies have at all times kept materially complete,
                    correct and up-to-date records, invoices and other documents
                    required by law to be kept for the purposes of the VATA.


          E5.1.7.4  None of the UK Companies have been required by H M Customs
                    and Excise to give security under paragraph 4 of schedule 11
                    to the VATA.


          E5.1.7.5  So far as the Covenantors are aware, all VAT payable upon
                    the importation of goods and all duties of customs and
                    excise payable in respect of any assets (including trading
                    stock) imported or owned by each of the UK Companies has
                    been paid in full.


          E5.1.7.6  None of the UK Companies are liable and will not (in respect
                    of


                                       -43-

                    anything done before Completion) be liable to any interest,
                    penalty or surcharge in respect of VAT.


      E5.1.8   VAT ON PROPERTY


          E5.1.8.1  None of the UK Companies owns the fee simple in any building
                    or civil engineering work which is uncompleted or which was
                    completed (within the meaning of note (2) to group 1 of
                    schedule 9 to the VATA) less than three years before the
                    date of this agreement or was completed before 1 April 1989
                    but (in the case of a building) was not fully occupied or
                    (in the case of a civil engineering work) not fully used
                    before 1 April 1989.


          E5.1.8.2  None of the UK Companies have made any election under
                    paragraph 2 of schedule 10 to the VATA to waive exemption
                    from VAT in relation to any land or building and no such
                    election has been made in relation to any land or building
                    by any member or former member of any group of companies of
                    which the UK Companies is or was a member for VAT purposes.


      E5.1.9   CUSTOMS DUTIES


          E5.1.9.1  Each of the UK Companies has complied in all material
                    respects with all statutory provisions and regulations and
                    made all necessary returns in relation to the collection and
                    payment of customs duties, excise duties and other charges
                    having an equivalent effect; and the UK Companies have
                    provided all necessary information and documents and paid
                    all amounts due to HM Customs and Excise, or other
                    appropriate Tax Authority in relation to such charges within
                    the prescribed time limits.


                                       -44-

          E5.1.9.2  Details of all bonds, recognisance and guarantees given to
                    HM Customs and Excise, or other appropriate Tax Authority by
                    or in relation to the UK Companies are set out in the
                    Disclosure Letter.


      E5.1.10  CLOSE COMPANY


          E5.1.10.1 None of the UK Companies is a close company within the
                    meaning of section 414 of the Taxes Act.



          E5.1.10.2 No distribution within section 418 of the Taxes Act has been
                    made by any of the UK Companies and no such distribution
                    will be made before Completion.


          E5.1.10.3 None of the UK Companies have made (and will not be deemed
                    to have made) any loan or advance to a participator or an
                    associate of a participator so as to become liable to make
                    any payment under section 419 of the Taxes Act.


      E5.1.11  RESIDENCE


          Each of the UK Companies are and always have been resident in the
          United Kingdom for the purposes of any Tax and are not a dual resident
          company for Tax purposes.


      E5.1.12  GROUPS


          E5.1.12.1  All assets currently owned by each of the UK Companies in
                     respect of which a charge may arise on any of the UK
                     Companies ceasing to be a member of the same group of
                     companies as any other company in the six years following
                     Completion under section 179 TCGA 


                                       -45-

                     (company ceasing to be a member of the group) are listed
                     in the Disclosure Letter.


          E5.1.12.2  Details of all claims for group relief and all claims for
                     or agreements relating to the surrender of surplus advance
                     corporation tax or repayments of Taxation to which any of
                     the UK Companies is or was a party before Completion where
                     such claim has not been finally accepted by the Inland
                     Revenue are contained in the Disclosure Letter.



      E5.1.13  INHERITANCE TAX


          E5.1.13.1  There is no unsatisfied liability to capital transfer tax
                     or inheritance tax attached or attributable to the assets
                     or shares of the UK Companies and neither the assets nor
                     the shares are subject to any Inland Revenue charge as
                     mentioned in section 237 of the Inheritance Tax Act 1984
                     ("ITA").


          E5.1.13.2  No person has the power under section 212 of the ITA to
                     raise any capital transfer tax or inheritance tax by the
                     sale or mortgage of or by a terminable charge on any of the
                     UK Companies' assets.


E5.2  THE NON-UK COMPANIES


      E5.2.1   ADMINISTRATION AND RETURNS


          E5.2.1.1   So far as the Covenantors are aware each of the Non-UK
                     Companies has, within the requisite time limits specified
                     by statute, made all returns, given all notices, made all
                     applications and supplied all other information required by
                     law to be supplied to the appropriate


                                       -46-

                     Tax Authorities, all such information, applications,
                     returns and notices were and remain, so far as the 
                     Covenantors are aware, complete, true and accurate in all
                     material respects and so far as the Covenantors are aware 
                     are not the subject of any dispute with the relevant 
                     authorities. 


          E5.2.1.2   The Disclosure Letter contains details, so far as they
                     affect the Non-UK Companies, of all concessions,
                     arrangements and agreements (whether formal or informal)
                     negotiated with any Tax Authority. 


      E5.2.2   PAYMENT OF TAX


          E5.2.2.1   Each of the Non-UK Companies has paid all Tax which it has
                     become liable to pay and so far as the Covenantors are
                     aware are under no liability to pay nor are there any
                     circumstances by virtue of which any of the Non-UK
                     Companies is likely to become liable to pay, any fine,
                     penalty, surcharge or interest in connection with any claim
                     for Tax.


          E5.2.2.2   Each of the Non-UK Companies have properly deducted Tax as
                     required by law from all payments made and have accounted
                     to the appropriate Tax Authority for all Tax so deducted.


E6    PROPERTY AND ENVIRONMENTAL WARRANTIES


E6.1  WARRANTIES RELATING TO ALL OF THE PROPERTIES


      E6.1.1   The particulars of the Properties shown in part D are true and
               correct.


      E6.1.2   The Properties comprise all the land and premises of any tenure
               owned, used or


                                       -47-

               occupied by the Group Companies.


      E6.1.3   The Certificates of Title are true, complete and accurate in all
               material respects.


E6.2  WARRANTIES RELATING TO THE NON-CERTIFICATED PROPERTIES


      The following warranties apply to the properties listed in part D which
      are not covered by the Certificates of Title, namely those properties
      whose details are contained in paragraphs D1.4, D1.5, D1.7 and D1.8 (the
      "Non-Certificated Properties"):


      E6.2.1   TITLE


        (i)    The information contained in part D as to the tenure of the
               Non-Certificated Properties, is true and accurate in all
               respects.


        (ii)   Where the title to any of the Non-Certificated Properties is
               registered,  a member of the Group is shown on the register
               thereof at HM Land Registry as the Proprietor and the Land or
               Charge Certificate in respect of each of such Non-Certificated
               Properties is in the possession or under the control of the
               Group.


        (iii)  The title to each of the freehold Non-Certificated Properties is
               good and, so far as the Covenantors are aware, the 
               Non-Certificated Properties have the benefit of easements and 
               rights to allow the activities and use presently carried on.


      E6.2.2   ENCUMBRANCES


        (i)    So far as the Covenantors are aware, the Non-Certificated
               Properties are free from any mortgage, debenture or other
               financial charge 


                                       -48-

               (whether specific or floating, legal or equitable) or rent charge
               securing the repayment of monies or other obligation or liability
               whether of the Group or any other party.


        (ii)   So far as the Covenantors are aware, no formal notices have been
               received that the Non-Certificated Properties are subject to any
               covenants, restrictions, stipulations, easements, rights of way
               or wayleaves materially affecting their present use.


        (iii)  Save as disclosed in the Disclosure Letter, the Group has vacant
               possession of each of the Non-Certificated Properties so far as
               the Covenantors are aware.


        (iv)   So far as the Covenantors are aware, no compulsory purchase
               notices have been received affecting the Non-Certificated
               Properties.


      E6.2.3   PLANNING MATTERS


        (i)    For the purposes of this paragraph 6.2.3 "THE PLANNING ACTS"
               means:


               (a)   The Town and Country Planning Act 1990;


               (b)   The Planning (Listed Buildings and Conservation Areas) Act
                     1990;


               (c)   The Planning (Hazardous Substances) Act 1990;


               (d)   The Planning (Consequential Provisions) Act 1990; and


               (e)   The Planning and Compensation Act 1991;


                                       -49-

               as the same are from time to time varied or amended and any
               other statute or subordinate legislation relating to planning
               matters.


        (ii)   So far as the Covenantors are aware, no formal notices have been
               received that the use of each of the Non-Certificated Properties
               is not the permitted or lawful use for the purposes of the
               Planning Acts.


E6.3 ENVIRONMENTAL


     E6.3.1    So far as the Covenantors are aware each of the Group Companies
               holds (in its name) all authorisations, permissions, consents,
               licences and agreements necessary to enable it to carry on its
               business lawfully and effectively in the places and in the manner
               in which that business is now carried on and in particular (but
               without limitation): to make all relevant abstractions of water;
               to keep, store or hold all relevant substances whether as raw
               materials, products or wastes; to carry on all relevant
               processes; and to hold, treat, manage, consign and dispose of all
               waste materials, substances, gases and effluents in the relevant
               manner.


     E6.3.2    So far as the Covenantors are aware all such authorisations,
               permissions, consents, licences and agreements have been lawfully
               obtained and are in full force and effect.


     E6.3.3    So far as the Covenantors are aware no further authorisations,
               permissions, consents, licences and agreements are necessary to
               enable any of the Group Companies to carry on its business as now
               conducted or as conducted in the period covered by the Accounts.


     E6.3.4    Without prejudice to paragraphs E6.3.1, E6.3.2 and E6.3.3,
               details of authorisations, permissions, consents, licences and
               agreements of the types referred to in paragraph E6.3.1 are set
               out in the Disclosure Letter.


                                       -50-

     E6.3.5    So far as the Covenantors are aware each of the Group Companies
               has complied in all material respects with all conditions
               attaching to the authorisations, permissions, consents, licences
               and agreements referred to in paragraph E6.3.1 and held by it
               (whether such conditions are imposed expressly or are implied by
               law) and, so far as the Covenantors are aware, there are no
               circumstances which would render it impracticable for the
               relevant Company to comply with those conditions in the future.


     E6.3.6    So far as the Covenantors are aware none of the Group Companies
               have received any notice, correspondence or communication in any
               other form in respect of any of the authorisations, permissions,
               consents, licences or agreements referred to above revoking,
               suspending, modifying or varying any of them and there are no
               circumstances which might give rise to such notice being received
               or of any intention on the part of any relevant authority to give
               any such notice.


     E6.3.7    So far as the Covenantors are aware none of the Group Companies
               have received any notice, order or other communication from any
               relevant environmental authority in respect of their respective
               businesses, failure to comply with which would constitute breach
               of any legal requirements for the protection of the environment
               or of human health or amenity (or compliance with which could be
               secured by further proceedings).


     E6.3.8    The Warranties set out in paragraphs E6.3.1 to E6.3.7 above
               (inclusive) are the only Warranties given in respect of the
               environment and each of the other Warranties shall be deemed not
               to be given in relation to the environment.
          

E7   SALE OF SHARES


                                       -51-

E7.1 COMMISSION


     No one is entitled to receive from any of the Group Companies any finder's
     fee, brokerage, or other commission in connection with the sale or purchase
     of the Shares and any commission payable by the Covenantors (or any of
     them) in connection with the sale or purchase of the Shares will be paid by
     the relevant Covenantors prior to Completion.


E7.2 CONSEQUENCE OF SHARE ACQUISITION BY ATCHISON


     So far as the Covenantors are aware, neither the acquisition of the Shares
     by Atchison nor compliance with the terms of this agreement:


     E7.2.1    will cause any of the Group Companies to lose the benefit of any
               material right it presently enjoys;



     E7.2.2    will relieve any person of any contractual obligation to the
               Group Companies or enable any person to determine any obligation
               by or to any of the Group Companies or any right or benefit
               enjoyed by the UK Companies or to exercise any right under any
               agreement with or otherwise in respect of the Group Companies in
               any such case which would have a material adverse effect on the
               financial position of any of the Group Companies;


     E7.2.3    will result in any present or future indebtedness of any of the
               Group Companies becoming due or capable of being declared due and
               payable earlier than otherwise;


     E7.2.4    will give rise to or render exercisable any right of pre-emption
               or termination; or


                                       -52-

     E7.2.5    will conflict with or result in the breach of or a default under
               or give rise to any obligation of any of the Group Companies
               (whether under its articles of association or equivalent
               constitution documents, or under any deed agreement, trust,
               charter, decree, lease, mortgage, indenture or other instrument
               or the judgment, award or order of any authority) or give rise to
               any increased liability of any of the Group Companies under any
               such obligation in any such case which would have a material
               adverse effect on the financial position of any of the Group
               Companies.


E7.3 OPTIONS ETC


     No person has the right (whether exercisable now or in the future and
     whether contingent or not) to call for the allotment, issue, sale or
     transfer of any share or loan capital of the Group Companies under any
     option or other agreement (including conversion rights and rights of 
     pre-emption).


E7.4 THIRD PARTY CONSENT


     No consent or permission of any third party is required in connection with
     the sale of the Shares by any of the Covenantors.


E8   TRANSACTIONS AT AN UNDERVALUE


     None of the Shares have ever been the subject of a transaction at an
     undervalue.


E9   THE GROUP COMPANIES' CONSTITUTIONS


                                       -53-

E9.1 DUE INCORPORATION


     Each UK Company is a company duly incorporated and validly existing under
     English law.  Each Non-UK Company is a company duly incorporated and
     validly existing under the laws of the jurisdiction specified in respect of
     that Company in the Group Companies List.


E9.2 REGISTERED AND OTHER PARTICULARS


     The particulars of the Group Companies in the Group Companies List are
     accurate. 


E9.3 SHARE CAPITAL


     E9.3.1    All the issued shares in the Company are fully paid and are
               beneficially owned and registered in the names of the persons
               listed as shareholders of the Company in the Shareholder List.


     E9.3.2    The Shares represent the entire issued share capital of the
               Company and there are no options or other agreements (conditional
               or unconditional) outstanding which call for the issue of or
               accord to any person the right to call for the issue of any
               shares in the capital of any of the Group Companies (other than
               SFGL).


     E9.3.3    None of the Group Companies have:


          E9.3.3.1  repaid or redeemed any shares of any class of its share
                    capital or otherwise reduced its issued share capital or any
                    class of it or purchased any of its own shares or carried
                    out any transaction having the effect of a reduction of
                    capital; 
          

          E9.3.3.2  made or resolved to make any issue of shares or other
                    securities by


                                       -54-

                    way of capitalisation of profits or reserves; 


          E9.3.3.3  (in the case of the UK Companies) given any financial
                    assistance as defined in section 152 of the Act;


          E9.3.3.4  offered any shares or securities to the public except in
                    accordance with the provisions as to authority and
                    pre-emption contained in the Act; or


          E9.3.3.5  agreed to do any such thing specified in this paragraph E9.


E9.4 MEMORANDUM AND ARTICLES OF ASSOCIATION


     E9.4.1    THE UK COMPANIES


          The copy of the memorandum and articles of association of each of the
          UK Companies attached to the Disclosure Letter is true and complete
          and includes or has attached to it a copy of every such resolution or
          agreement as is referred to in section 380 of the Act.


     E9.4.2    THE NON-UK COMPANIES


          The copy of the articles of incorporation and the bylaws of each of
          the Companies attached to the Disclosure Letter is true and complete.


E9.5 COMPANY AUTHORITY


     E9.5.1    Each of the Group Companies have at all times carried on their
               respective business and affairs in accordance with their
               respective memorandum and


                                       -55-

               articles of association or equivalent documents.


     E9.5.2    None of the UK Companies have given any power of attorney or any
               other authority (express, implied or ostensible) to any person to
               enter into any contract or commitment or do anything on its
               behalf which is still outstanding or effective (other than any
               authority of directors or employees to enter into routine trading
               contracts in the normal course of their duties).


E10  LICENCES AND LITIGATION


E10.1     COMPLIANCE WITH LAWS


     E10.1.1   THE UK COMPANIES


          So far as the Covenantors are aware each of the UK Companies has
          conducted its business in all material respects in accordance with all
          laws, statutes and regulations and all regulations and directives of
          the European Union applicable in the United Kingdom (including those
          made or issued pursuant to the Treaties of Rome, Paris and Maastricht)
          and any relevant foreign country (excluding laws, statutes and
          regulations for the protection of the environment or of human health
          or amenity), and there is no order or judgment of any court or any
          governmental agency of the United Kingdom, the European Union or any
          foreign country outstanding against any of the UK Companies (or any of
          its officers or employees in their capacities as such) which may have
          an adverse and material effect upon the assets or businesses of any of
          the UK Companies.


     E10.1.2   THE NON-UK COMPANIES


          So far as the Covenantors are aware, each of the Non-UK Companies has
          conducted its business in all material respects in accordance with all
          applicable


                                       -56-

          Legal Requirements and neither of the Non-UK Companies nor
          any of its officers, agents or employees (during the course of their
          duties in relation to the Non-UK Companies) have committed, or omitted
          to do, any act or thing the commission or omission of which is, or
          could be, a breach or contravention of any of the applicable Legal
          Requirements. For the purposes of this paragraph, "LEGAL REQUIREMENTS"
          means federal, state, local, municipal, foreign, international,
          multinational or other administrative order, constitution, law,
          ordinance, principle of common law, regulation, statute or treaty.


E10.2     LICENCES ETC


     So far as the Covenantors are aware all necessary licences, consents,
     permits, and authorities (public and private) (excluding any required under
     any laws for the protection of the environment or of human health or
     amenity) have been obtained by each of the Group Companies to enable them
     to carry on their respective business effectively in the places and in the
     manner in which that business is now carried on and so far as the
     Covenantors are aware they are all valid and subsisting and, so far as the
     Covenantors are aware, there is no reason why any of them should be
     suspended, cancelled or revoked.


E10.3     LITIGATION AND CONTRACTUAL PERFORMANCE


     E10.3.1   Neither any of the Group Companies nor so far as the Covenantors
               are aware any of their officers or employees (in relation to
               their duties with the Group Companies or for which they may be
               vicariously liable) are engaged in any criminal prosecution or
               civil litigation or arbitration proceedings or dispute resolution
               procedures in which the amount claimed in any case exceeds
               L20,000 (or its equivalent in any relevant foreign currency as at
               today's date).


     E10.3.2   So far as the Covenantors are aware no criminal prosecution or
               civil litigation or arbitration proceedings or dispute resolution
               procedures are pending or


                                       -57-

               threatened by or, so far as the Covenantors are aware, against
               any of the Group Companies (or any of their officers or employees
               in relation to their duties with the Group Companies or for which
               they may be vicariously liable) which could involve the 
               imposition of penalties, fines or liabilities on any of the Group
               Companies in any case exceeding L20,000 (or its equivalent in any
               relevant foreign currency as at today's date) and, so far as the
               Covenantors are aware, there are no facts likely to give rise to
               any litigation, arbitration or dispute.


     E10.3.3   None of the Group Companies are or have been a party to any
               undertaking or assurance (which is still in force) given to any
               court or governmental agency or other regulatory body.


     E10.3.4   So far as the Covenantors are aware, no governmental or official
               investigation or inquiry concerning any of the Group Companies is
               in progress or pending and so far as the Covenantors are aware,
               there are no facts or circumstances likely to give rise to any
               such investigation or inquiry.


E10.4     RETURNS


     All returns, particulars, resolutions and other documents required under
     applicable legislation affecting companies to be delivered by or on behalf
     or in respect of any of the Group Companies or sent to the Registrar of
     Companies (or its equivalent in any foreign jurisdiction) have been made
     and delivered.


E11  FINANCE


E11.1     FINANCE OBLIGATIONS


     None of the Group Companies have outstanding:


                                       -58-

     E11.1.1   any loan, loan capital or other liability (actual or contingent)
               in the nature of borrowings (including but not limited to
               acceptance credits, unmatured bills or other commercial paper) or
               any long term or interest bearing obligation which will or may
               result in any of the Group Companies being liable to make any
               payment or incur any other liability;


     E11.1.2   any guarantee, indemnity, suretyship or other arrangement under
               which any of the Group Companies is or may become liable for any
               obligation of any other person; 


     E11.1.3   any obligations under any factoring or similar agreement;


     E11.1.4   any indebtedness except trade creditors in the ordinary course of
               business;


     E11.1.5   any bond or other interest bearing indebtedness; or


     E11.1.6   any liabilities under contracts for hire or rent or hire purchase
               or purchase by way of credit or instalment payment, in respect of
               which the annual amounts payable by any Group Company exceeds
               L20,000 (or its equivalent in a relevant foreign currency as at
               today's date), other than contracts in respect of motor vehicles
               used in the ordinary course of business.


E11.2     REPAYMENT REQUIREMENTS


     None of the Group Companies have received any notice to repay any monies or
     liabilities which are repayable on demand and no default or event has
     occurred entitling any person (with or without giving any formal notice and
     whether immediately or after expiry of any notice) to demand or accelerate
     repayment, appoint a receiver or take other action to protect security
     granted to it by any of the Group Companies.


                                       -59-

E11.3     GRANTS


     E11.3.1   None of the Group Companies have applied for or received any
               financial assistance from any supra-national, national or local
               authority or governmental agency within the last five years or
               any financial assistance which is or may be or become repayable
               (whether in whole or in part) as a result of any act or omission
               of any of the Group Companies, the transfer of the Shares
               pursuant to the Offer or for any other reason.


     E11.3.2   Where any Group Company has received financial assistance and a
               notification to or the consent, permission or waiver of any
               supra-national, national or local authority or governmental
               agency is required to the transfer of the Shares in order that
               such financial assistance is not, or may not be, required to be
               repaid in whole or in part, such notification, consent,
               permission or waiver has been made or obtained and a copy of it
               is attached to the Disclosure Letter.


E11.4     INSOLVENCY


     E11.4.1   THE UK COMPANIES


       E11.4.1.1    No receiver or administrative receiver has been appointed in
                    respect of any of the UK Companies or any of the assets or
                    undertaking of any of the UK Companies.


       E11.4.1.2    No administration order has been made and no petition has
                    been presented for such an order in respect of any of the UK


                                       -60-

                    Companies.


       E11.4.1.3    No meeting has been convened at which a resolution will be
                    proposed, no resolution has been passed, no petition has
                    been presented and no order has been made for the winding-up
                    of any of the UK Companies.


       E11.4.1.4    None of the UK Companies have stopped or suspended payment
                    of its debts, become unable to pay its debts (within the
                    meaning of section 123 of the Insolvency Act 1986) or
                    otherwise become insolvent.
     

       E11.4.1.5    No unsatisfied judgment, order or award is outstanding
                    against any of the UK Companies.


       E11.4.1.6    No written demand under section 123(1)(a) of the Insolvency
                    Act 1986 has been made against any of the UK Companies.


       E11.4.1.7    No distress or execution has been levied on, or other
                    process commenced against, any asset of any of the UK
                    Companies.


       E11.4.1.8    No voluntary arrangement has been proposed under section 1
                    of the Insolvency Act 1986 in respect of any of the UK
                    Companies.


       E11.4.1.9    So far as the Covenantors are aware, no circumstances have
                    arisen which entitle any person to take any action, appoint
                    any person, commence proceedings or obtain any order of the
                    type mentioned in any part of this paragraph E11.


     E11.4.2   THE NON-UK COMPANIES


                                       -61-


       No meeting has been convened at which a resolution will be proposed, no
       resolution has been passed, no petition has been presented and no order
       has been made for the winding-up of any of the Non-UK Companies.


E12  INSURANCE


E12.1  Particulars of all the insurance policies maintained by each of the
       Group Companies at the date of this agreement are disclosed in the
       Disclosure Letter.


E12.2  All premiums due in respect of those insurance policies have been fully
       paid; and the next renewal date for each of such insurances is as
       specified in the Disclosure Letter; 


E12.3  No claim is outstanding under any of the insurances and, so far as the
       Covenantors are aware, no circumstances exist which are likely to give
       rise to any such claim.


E12.4  There are no outstanding claims against any of the Group Companies, by
       any employee or other person, in respect of any accident, injury or
       damage, which are not fully covered by insurance.


E12.5  There have been no material claims against insurers by any of the Group
       Companies in the twelve months ending on the date of this agreement.


E13  CONTRACTS


E13.1  None of the Group Companies are party to any material agreement:


     E13.1.1   entered into otherwise than by way of bargain at arms length in
               the ordinary and proper course of its business;


     E13.1.2   which so far as the Covenantors are aware:


                                       -62-

     E13.1.3   cannot be fulfilled by the relevant Company without undue or
               unusual expenditure of money using only fixed assets presently
               owned by it and current assets of the types presently held by it
               and in quantities requiring a level of purchase of current assets
               not materially greater than during the period covered by the
               relevant Accounts and finance within the existing facilities of
               the relevant Company.


     E13.1.4   is for the supply to or by the relevant Company of goods or
               services which may last longer then twelve months;


     E13.1.5   is for the supply of goods or services by the relevant Company of
               a type not manufactured or supplied by it in the period covered
               by the relevant Accounts.


E13.2  So far as the Covenantors are aware, none of the Group Companies is in
       breach of any contract to which it is a party, and no other party to any
       such contract is in breach of it.  So far as the Covenantors are aware,
       all agreements, rights, commitments, obligations, arrangements and
       understandings to which each Group Company is a party are valid and
       enforceable.  The Covenantors are not aware of any grounds for the
       termination, rescission, avoidance or repudiation of any contract by any
       Group Company or another party to such contract.


E13.3  The Covenantors are not aware of any fact, matter or circumstance which
       is reasonably likely to result in any claim being made under or pursuant
       to any guarantee, warranty or penalty provision in any contract entered
       into by any of the UK Companies.


E14  COMPETITION


E14.1  RESTRICTIVE AGREEMENTS


                                       -63-

     There are no agreements:


     E14.1.1   which have or will have the effect of restricting the freedom of
               any of the Group Companies to provide or take goods or services
               or to otherwise conduct its trade or business by such means and
               from or to such persons at such prices (and otherwise in such
               manner) as the Group Companies may from time to time think fit;


     E14.1.2   which will or may restrict the use or disclosure of information
               by any of the Group Companies or oblige them to disclose
               information; 


     E14.1.3   limiting or excluding any of the Group Companies' right to do
               business and/or compete in any area or field with any other
               person;


     E14.1.4   to which any of the UK Companies are party which contravene any
               of the provisions of the Treaty of Rome 1957 or the Treaty of
               Paris 1951 or the Treaty of Maastricht.


E14.2  CONSUMER, TRADE, ANTI-COMPETITIVE AND OTHER RESTRICTIVE PRACTICES


     E14.2.1   None of the practices or arrangements of any of the UK Companies
               is or has been or, so far as the Covenantors are aware, is likely
               to be the subject of any investigation, reference, report or
               order made under the Fair Trading Act 1973, the Competition Act
               1980, and no undertaking has been given by any of the UK
               Companies pursuant to any action taken under any of those Acts.


     E14.2.2   None of the Group Companies have received any process, notice or
               communication (formal or informal) by or on behalf of, in the
               case of the UK Companies, the Office of Fair Trading, the
               Monopolies and Mergers Commission, the Secretary of State for
               Trade and Industry, the European Commission or, in the case of
               all Group Companies, any other authority of any


                                       -64-

               country or supra-national organisation having jurisdiction in
               competition or anti-trust matters, in relation to any aspect of 
               the business of any of the Group Companies or any agreement or 
               arrangement to which any of the Group Companies are or were a 
               party and (so far as the Covenantors are aware) none of the
               Group Companies is likely to receive any such process, notice
               or communication.


E14.3  RELATIONSHIPS WITH THIRD PARTIES


     E14.3.1   Neither more than 10 per cent of the aggregate amount of all the
               purchases nor more than 10 per cent of the aggregate amount of
               all the sales of the Group Companies during the period covered by
               the Accounts were obtained from or made to the same supplier or
               customer (or connected suppliers or customers).


     E14.3.2   There is no embargo or trade boycott on the business of any of
               the Group Companies or any of their products or suppliers nor so
               far as the Covenantors are aware is it likely that any material
               source of supply to any of the Group Companies or any material
               outlet for the sales of any of the Group Companies will be put in
               jeopardy by an embargo or trade boycott (whether as a result of
               political action or trade dispute or otherwise).


     E14.3.3   The Disclosure Letter contains details of any industry, trade or
               professional organisation, regulatory body or quality control
               organisation of which any of the Group Companies is a member, to
               which it is affiliated, to whose regulation it is subject or in
               respect of which it has any continuing liability (including
               details of any shares held, fees payable and rules governing
               membership).


     E14.3.4   Each of the Group Companies has complied in all material respects
               with the rules (whether or not legally binding) of any
               organisation or body of the types specified in paragraph E14.3.3
               of which it is a member or to which it is


                                       -65-

               subject. 


     E14.3.5   So far as the Covenantors are aware, none of the Group Companies
               are subject to or threatened with any disciplinary action or
               penalty by any such organisation or body as is specified in
               paragraph E14.3.3.


E15  DEFECTIVE PRODUCTS


     So far as the Covenantors are aware none of the Group Companies have
     received notice alleging that any goods manufactured, sold or supplied by
     them are or were, in any material respect, faulty or defective that remains
     unsettled.


E16  INFORMATION


E16.1  SECRET OR CONFIDENTIAL INFORMATION


     So far as the Covenantors are aware, none of the Group Companies have at
     any time (except in the ordinary course of business or to persons under
     duties to it to maintain confidentiality or to its professional advisers)
     disclosed to any person other than Atchison:


     E16.1.1   any information relating to any of its confidential information;


     E16.1.2   any other information relating to its business or affairs the
               disclosure of which might or could cause loss or damage to or
               adversely affect the relevant Company; nor


     E16.1.3   any secret or confidential information relating to its
               manufacturers, suppliers, customers, clients and agents or to any
               other person who has or has had any dealings with it.


                                       -66-


E16.2  COMPUTER KNOW-HOW AND MARKETING INFORMATION


     E16.2.1   All Computer Know-how and Marketing Information used by each of
               the Group Companies is owned by it or is the subject of a valid
               grant of rights to the relevant Company (as the case may be) and
               is not subject to any restriction which materially and adversely
               affects the relevant Company's ability to use it for the purpose
               of its business.


     E16.2.2   So far as the Covenantors are aware, none of the Group Companies
               have disclosed (other than to its own employees under obligations
               of confidence to it), nor is it obliged to disclose, any Computer
               Know-how or Marketing Information of a confidential nature to any
               person.


     E16.2.3   So far as the Covenantors are aware, none of the Group Companies
               are in breach to an extent which is material of any agreement
               under which any Computer Know-how or Marketing Information was or
               is to be made available to it.

E16.3  DATA AND RECORDS


     E16.3.1   All the records and systems (including but not limited to
               computer systems), data and information of the Group Companies
               are recorded, stored, maintained or operated or otherwise held by
               the Group Companies and are not wholly or partly dependent on any
               facilities or means (including any electronic, mechanical or
               photographic process, computerised or otherwise) which are not
               under the exclusive ownership and control of the relevant
               Company.


     E16.3.2   None of the Group Companies have disclosed to any third party any
               such records, control and other systems, data and information as
               is referred to in paragraph E16.3.1.


                                                                     -67-

     E16.3.3   The UK Companies have complied with all relevant requirements of
               the Data Protection Act 1984, including:


       E16.3.3.1    the data protection principles established in that Act;


       E16.3.3.2    requests from data subjects for access to data held by it;
                    and


       E16.3.3.3    the requirements relating to the registration of data users.


     E16.3.4   None of the UK Companies have received any notice or allegation
               from either the Data Protection Registrar or a data subject
               alleging non-compliance with the data protection principles or
               prohibiting the transfer of data to a place outside the United
               Kingdom.


     E16.3.5   No individual has claimed compensation from any of the UK
               Companies under that Act for loss or unauthorised disclosure of
               data.


E16.5  INFORMATION SUPPLIED TO ATCHISON


     All information contained or referred to in the Information Memorandum was
     when given and remains and will at Completion be, true and accurate in all
     respects and is not misleading because of any omission or ambiguity or for
     any other reason.


E17  INTELLECTUAL PROPERTY RIGHTS 


E17.1  INTELLECTUAL PROPERTY RIGHTS


     E17.1.1   The Disclosure Letter sets out details of all:


       E17.1.1.1    registered Intellectual Property owned or used by the Group


                                       -68-

                    Companies in their business;


       E17.1.1.2    unregistered trademarks, service marks and design rights
                    owned by them or used by the Group Companies in their
                    business;


       E17.1.1.3    Intellectual Property licensed to the Group Companies by
                    others; and


       E17.1.1.4    Intellectual Property the Group Companies have licensed to
                    others.


     E17.1.2   The Group Companies are the sole beneficial owners of the
               Intellectual Property used by them in their business and (where
               such property is capable of registration) its registered
               proprietor.


     E17.1.3   Except for copyrights, the Group Companies own no Intellectual
               Property other than that detailed in the Disclosure Letter.


     E17.1.4   Except as specified in the agreements disclosed in the Disclosure
               Letter:


       E17.1.4.1    no person has been authorised to make any use whatever of
                    any Intellectual Property owned by the Group Companies;


       E17.1.4.2    the Group Companies have not been authorised to make any use
                    of any Intellectual Property owned by any other person.


     E17.1.5   So far as the Covenantors are aware, none of the processes or
               products of any of the Group Companies infringe any right of any
               other person relating to Intellectual Property or involve the
               unlicensed use of confidential information disclosed in
               circumstances which might give rise to a claim against any of the
               Group Companies, and none of the Intellectual Property owned or
               used by


                                       -69-

               the Group Companies is being used, claimed, opposed or
               challenged by any person.


E18  THE UK COMPANIES AND THEIR EMPLOYEES


E18.1  EMPLOYMENT TERMS


     E18.1.1   None of the Group Companies have any contract of employment with
               any employee (including any director) of the relevant Company
               which cannot be terminated at any time by giving three months'
               notice without giving rise to any claim for damages or
               compensation (other than a statutory redundancy payment or
               statutory compensation for unfair dismissal).


     E18.1.2   No director or senior employee of any of the Group Companies has
               given notice terminating his contract of employment or is under
               notice of dismissal.


     E18.1.3   There are no arrears of remuneration due to any director or
               employee of any of the Group Companies.


     E18.1.4   There is no agreement or understanding (contractual or otherwise)
               between any of the Group Companies and any employee or 
               ex-employee with respect to his employment, his ceasing to be
               employed or his retirement which is not included in the written
               terms of his employment or previous employment (as the case may
               be).


E18.2  COMPLIANCE WITH LEGISLATION ETC.


     E18.2.1   So far as the Covenantors are aware, each of the Group Companies
               has, in relation to each of its employees (and so far as relevant
               to each of its former


                                        -70-

               employees):


       E18.2.1.1    complied in all material respects with all obligations
                    imposed on it by all statutes and regulations relating to
                    employment;


       E18.2.1.2    maintained adequate records regarding its employees;


       E18.2.1.3    complied in all material respects with all collective
                    agreements for the time being having effect as regards
                    relations with or the conditions of service of its employees
                    or the trade unions representing them; and


       E18.2.1.4    (in the case of the UK Companies) complied with its
                    obligations with respect to statutory sick pay as defined in
                    the Social Security Contributions and Benefit Act 1992.
     

     E18.2.2   None of the Group Companies have in existence, or have undertaken
               to introduce:


       E18.2.2.1    any share incentive scheme, share option scheme or profit
                    sharing scheme, corporate personal equity plan, 
                    profit-related pay scheme or similar scheme for any of its
                    directors, officers or employees; or


                                       -71-

       E18.2.2.2    any scheme under which any director, officer or employee of
                    any of the UK Companies is entitled to a commission or
                    remuneration of any other sort calculated by reference to
                    the whole or part of the turnover, profits or sales of the
                    relevant Company.


E18.3  PAYMENTS ON TERMINATION


     Except to the extent (if any) to which provision or allowance has been made
     in the relevant Accounts:


     E18.3.1   no liability has been incurred by any of the UK Companies as a
               result of the decision in the case of R V SECRETARY OF STATE FOR
               EMPLOYMENT EX PARTE EQUAL OPPORTUNITIES COMMISSION AND ANOTHER,
               or for breach of any contract of service or for services, for
               redundancy payments, protective awards or for compensation for
               wrongful dismissal or unfair dismissal or for failure to comply
               with any order for the reinstatement or re-engagement of any
               employee or for any other liability accruing from the termination
               of any contract of employment or for services;


     E18.3.2   no gratuitous payment has, during the twelve months ending on the
               date of this agreement been made or promised by any of the UK
               Companies (whether or not pursuant to any legally binding
               obligation) in connection with the actual or proposed termination
               or suspension of employment or variation of any contract of
               employment of any present or former director or employee of any
               of the Group Companies;


     E18.3.3   none of the Group Companies have made or agreed to make any
               payment to or provided or agree to provide any benefit for any
               present or former director or former employee or any dependant of
               any such director, former director or former employee.


                                       -72-

E18.4  REDUNDANCIES AND TRANSFER OF BUSINESS


     None of the UK Companies have within the period of twelve months preceding
     the date of this agreement: 


     E18.4.1   given notice of any redundancies to the relevant Secretary of
               State or started consultations with any trade union under
               sections 188 to 198 (inclusive) of the Trade Union and Labour
               Relations (Consolidations) Act 1992 nor failed to comply with any
               such obligations under those sections of that Act; and


     E18.4.2   been a party to any relevant transfer (as defined in the Transfer
               of Undertakings (Protection of Employment) Regulations 1981) nor
               failed to comply with any duty to inform and consult any
               independent trade union under those regulations.


E18.5  TRADE UNIONS AND DISPUTES


     E18.5.1   Save as set out in the Disclosure Letter, none of the Group
               Companies have any material agreement or other arrangement
               (binding or otherwise) with any trade union or other body
               representing its employees or any of them.


     E18.5.2   None of the Group Companies are involved in any industrial or
               trade disputes or any dispute or negotiation regarding a claim
               with any trade union or association of trade unions or
               organisation or body of employees and has not been involved in
               any such dispute within the last twelve months. 


                                       -73-

E18.6  VARIATION OF TERMS


     None of the Group Companies have entered into, agreed to or undertaken any
     obligation (whether or not legally binding) to take effect at any time on
     or after the Accounts Date to alter the rates of remuneration of or to make
     any bonus or incentive payments or provide any benefits in kind or any
     payments under a profit sharing scheme to or on behalf of any of their
     directors or employees at any future date.


E18.7  OUTSTANDING CLAIMS


     There is no outstanding claim which has been notified to any of the Group
     Companies for breach of any contract of service or for services or for
     compensation for unfair or wrongful dismissal or redundancy or for failure
     to comply with any order for the re-engagement or reinstatement of any
     former employee or for any other liability accruing from the termination of
     any contract of employment or for services by any former employee and (so
     far as the Covenantors are aware) no such claim could now be made by any
     former employee of any of the Group Companies.


E19  THE GROUP COMPANIES


E19.1  SUBSIDIARIES AND SUBSIDIARY UNDERTAKINGS


     None of the Group Companies has any subsidiary company or subsidiary
     undertaking.


E19.2  INVESTMENTS, ASSOCIATIONS AND BRANCHES


     None of the Group Companies:


                                       -74-

     E19.2.1   is the holder or beneficial owner of, or has agreed to acquire,
               any share or other capital of any company or corporation (whether
               incorporated in the United Kingdom or elsewhere);


     E19.2.2   is or has agreed to become a member of any partnership, joint
               venture, consortium or other unincorporated association; 


     E19.2.3   has any branch, agency or place of business outside the United
               Kingdom or any permanent establishment (as that expression is
               defined in the respective Double Taxation Relief Orders current
               at the date of this agreement) outside the United Kingdom; and


     E19.2.4   has outstanding or potential liability in respect of any of the
               matters specified in this paragraph E19.2.


E19.3  AUTHORITIES TO ALLOT SHARES


     There are no valid authorities granted to the directors of any of the UK
     Companies under section 80 of the Act nor have the provisions of section
     89(1) of the Act been disapplied in respect of any UK Company.


E19.4  BUSINESS NAME


     E19.4.1   None of the Group Companies carry on business under any name
               other than its own corporate name.


     E19.4.2   No third party has been permitted to use the name "Sheffield
               Forgemasters" by any Group Company or any other name under which
               any Group Company carries on business.


                                       -75-

E20  PENSIONS 


E20.1  True and accurate copies of the Trust Deeds, Rules and Memoranda
       governing the Pension Schemes, the booklet and any other announcements
       (detailing matters not incorporated in the booklet or formal governing
       documents of the Pension Schemes) issued to employees and officers of
       the UK Companies who are members of it have been delivered to Atchison.


E20.2  The Pension Schemes are exempt approved schemes (within the meaning of
       chapter I of part XIV of the Taxes Act) and, so far as the Covenantors
       are aware, there are no circumstances which will result in the
       withdrawal of the Schemes' exempt approved status.


E20.3  A current contracting-out certificate under part III of the Pension
       Schemes Act 1993 is in force in respect of the employments of the
       employees and officers of the UK Companies whose employments are
       intended to be contracted-out and employments by reference to the
       Pension Schemes and so far as the Covenantors are aware there are no
       circumstances which will result in the withdrawal or revocation of that
       certificate.  

E20.4  Since the date of the last actuarial valuation of the Pension Schemes,
       contributions have been paid at the rate (or rates) recommended in that
       valuation.


E20.5  All contributions due to the Pension Schemes have been promptly paid and
       each of the UK Companies has duly accounted for any deductions made by
       it in respect of the contributions payable by or in respect of the
       members of the Pension Schemes.


E20.6  No claim (other than routine claims for benefits) has been made against
       any of the UK Companies or the trustees or administrators of the Pension
       Schemes in relation to the Pension Schemes and the Covenantors are not
       aware of any circumstances which may result in any such claim.


                                       -76-

E20.7  Other than the Pension Schemes and the national insurance scheme there
       is no legally binding arrangement under which any of the UK Companies
       is, or will become, under an obligation to provide or contribute towards
       the provision of, relevant benefits (within the meaning of the Taxes
       Act) for or in respect of the employees or officers or former employees
       or officers of any of the UK Companies.


                                       -77-


                                        PART F

                            PROTECTION FOR THE COVENANTORS


F1   The provisions of this part F are in addition to and without prejudice to
     Atchison's general legal obligation to mitigate any loss or damage it may
     suffer.  In this part F, unless specifically otherwise stated, "Claim"
     shall mean a claim under the Warranties.


F2   Atchison:


     F2.1 confirms that, in entering into this agreement, it relies on no
          warranties, representations, covenants, undertakings or indemnities
          except the Warranties, the Deed of Covenant and as otherwise set out
          in this agreement;


     F2.2 agrees that no information, advice or assurances it or anyone on its
          behalf may have received from the Covenantors, the Covenantors'
          advisors or anyone else on the Covenantors' behalf in relation to the
          Group or otherwise in relation to the Offer or this agreement or its
          negotiation may be legally relied upon in any manner, save in each
          case for any information, advice or assurances which are expressly set
          out or referred to in the Warranties, the Deed of Covenant and this
          agreement; 


     F2.3 waives any rights it may have in respect of any such information,
          advice or assurance it may have received other than that expressly set
          out or referred to in the Warranties, the Deed of Covenant and this
          agreement; 


     F2.4 agrees that rescission shall not be available as a remedy for any
          breach of this agreement (including for any breach of Warranty) or the
          Deed of Covenant and agrees not to claim that remedy.


F3   Atchison shall not be entitled to make a Claim if and to the extent that
     the facts or information upon which it is based are fairly disclosed (with
     sufficient detail to enable a


                                       -78-

     purchaser with a reasonable knowledge of the sectors in which the Group
     operates to assess the nature and import of each matter disclosed):


     F3.1 in the Disclosure Letter; or


     F3.2 in the Information Memorandum; or


     F3.3 in any document or information listed in the Data Room Index,


     provided that a disclosure that there exists an agreement under which
     representations, warranties, covenants, undertakings or indemnities have
     been given by any Group Company is not by itself a disclosure that a claim
     has been or is likely to be made against that Group Company (or any other
     Group Company) in respect of any such representations, warranties,
     covenants, undertakings or indemnities.


F4   Atchison shall not be entitled to make a Claim to the extent that:


     F4.1 specific provision or reserve in respect of the matter to which the
          Claim relates has been made in the Accounts;


     F4.2 it relates to Tax and it arises or is increased (or any specific
          provision or reserve for Tax made in the Accounts is insufficient) by
          reason only of any increase in rates of Tax or change in the law or in
          published practice of any Tax Authority occurring after the date of
          those accounts having retrospective effect;


     F4.3 it would not have arisen but for either the failure or omission by any
          Group Company to make any claim, election, surrender or disclaimer,
          give any notice or consent or do any other thing in relation to Tax,
          the making, giving or doing of which was assumed in computing the Tax
          liabilities of any Group Company for the purposes of the Accounts and
          details of which are given in writing to


                                       -79-

          the Purchaser within a reasonable time so as to enable the Purchaser 
          to make such claim, election, surrender or disclaimer, give such 
          notice or consent or do such thing prior to the expiry of any 
          applicable time limit; 


     F4.4 it would not have arisen but for the voluntary making of any claim,
          election, surrender or disclaimer or voluntary giving of any notice or
          consent by Atchison or any Group Company after Completion, the giving,
          making or doing of which was not assumed in computing the Tax
          liabilities of any Group Company for the purposes of the Accounts and
          which the Purchaser knew or ought reasonably to have known would give
          rise to such Tax liabilities;


     F4.5 it is due to any change after Completion in the accounting principles
          adopted by any Group Company from those used in the preparation of the
          Accounts unless such change is necessary to comply with generally
          accepted accounting principles subsisting at Completion; and


     F4.6 the matter to which it relates arises as a result of the passing or
          amendment of any legislation (including any subsidiary legislation)
          after Completion with retrospective effect.


F5   Atchison shall have no right to recover in respect of any Claim under the
     Warranties and the Deed of Covenant unless and until the aggregate
     liability of the Covenantors (but for this paragraph) in respect of all
     such Claims would exceed L25,000, but, if such aggregate liability should
     exceed that sum, the Covenantors shall be liable for the full aggregate
     amount of such Claims and not only for the amount by which the amount of
     such Claims exceeds that sum.  Atchison shall have no right to recover in
     respect of any individual Claim under the Warranties or the Deed of
     Covenant in respect of which liability of the Covenantors (but for this
     paragraph) would not exceed L1,000 and any such Claim should be discounted
     in calculating the aggregate liability of the Covenantors for the L25,000
     limit in this paragraph F5.


                                       -80-

F6   Subject to paragraph F9, the maximum liability of each Covenantor in
     respect of all Claims shall not exceed the figure set against his name in
     column (4) of part B (including interest and costs) and the liability of
     the Covenantors in respect of each Claim shall be several and in relation
     to any and each Claim capable of being made against the Covenantors the
     individual liabilities of each of the Covenantors in respect of that Claim
     shall not exceed that proportion of the total liability of all the
     Covenantors under such Claim as is set opposite his name in column (3) of
     part B.  In this paragraph, "Claim" shall mean any claim under the
     Warranties or the Deed of Covenant.


F7   Subject to paragraph F9, Atchison shall not be entitled to make any Claim:


     F7.1 unless and until Completion has occurred; and


     F7.2 subject to paragraph F9, unless particulars of that Claim (with
          sufficient detail to enable the Covenantors to identify the basis of
          the Claim and Atchison's best estimate of the quantum of the Claim and
          how this has been quantified) are given in writing to the Covenantors
          in respect of any Claim not later than 30 September 1999.  


     In this paragraph, "Claim" shall mean any claim under the Warranties or the
     Deed of Covenant.


F8   Any Claim shall be unenforceable and be deemed waived unless proceedings in
     respect of it are issued and served within 12 months of the date of service
     of notice of that Claim under paragraph F7, unless the Covenantors
     otherwise agree.


F9   In the event of fraud on the part of a Covenantor, the provisions of
     paragraph F6 and F7.2 shall not apply in relation to such fraudulent
     Covenantor in relation to the Claim  arising as a result of his fraud.  For
     the avoidance of doubt, any fraud on the part of one Covenantor shall not
     affect the application of paragraphs F6 and F7.2 in relation to the


                                       -81-

     other non-fraudulent Covenantors.


F10  The Covenantors shall not be liable to make any payment in respect of any
     Claim based upon a contingent liability of any of the Group Companies
     (without prejudice to Atchison's right to establish the Covenantors'
     liability in respect of that Claim pursuant to paragraph F7.2 above) until
     the liability becomes an actual liability provided that if the Claim
     relating to such a contingent liability is notified to the Covenantors
     prior to the expiry of the period referred to in paragraph F7.2 above,
     Atchison shall not be prevented from pursuing a Claim in respect of that
     liability by reason of anything contained in that paragraph. 


F11  If any of the Group Companies or Atchison is or becomes entitled to recover
     any sum from any person in respect of the subject matter of any Claim under
     the Warranties or the Deed of Covenant in respect of which the Covenantors
     make or have made any payment to Atchison, Atchison shall:


     F11.1     procure that the Covenantors are notified as soon as practicable
               after Atchison becomes aware of the possible entitlement;


     F11.2     (unless to do so would, in the reasonable opinion of Atchison,
               cause material damage or material further damage to the business
               or goodwill of any Group Company) procure that all steps are
               taken which the Covenantors request to enforce the indemnity or
               right of recovery or (but only if the Covenantors so choose) the
               Covenantors are permitted to enforce the indemnity or right of
               recovery (in the name of the relevant Group Company or other
               person entitled to do so) and are given all authorities and
               assistance as they may request to enable them to do so and
               Atchison shall pay to the Covenantors immediately upon receipt by
               Atchison of the amount recovered (or permit the Covenantors to
               retain) a sum equal to the lesser of:


          F11.2.1   any amount any of the Group Companies or Atchison recovers


                                       -82-

                    (less all costs and expenses reasonably and properly
                    incurred by Atchison or any of the Group Companies in
                    pursuing the claim against the other person which are not
                    reimbursed by such other person and less any Taxation
                    suffered by Atchison or any of the Group Companies in
                    respect of such recovered amount); and 


          F11.2.2   the amount paid by the Covenantors in respect of the Claim,
                    less any part of that amount which represents interest for
                    late payment.


F12  In so far as the payments made by the Covenantors to Atchison in respect of
     Claims under the Warranties or the Deed of Covenant are less than the
     consideration paid to them under the Offer they shall constitute a
     repayment of and a reduction in such consideration.


F13  If any matter or circumstance which may give rise to a Claim comes to the
     attention of any of the Group Companies or Atchison, Atchison shall
     (without prejudice to paragraph F10):


     F13.1     (unless to do so would, in the reasonable opinion of Atchison,
               cause material damage or material further damage to the business
               or goodwill of any Group Company) ensure that no admission of
               liability or agreement or compromise in relation to the matter or
               circumstance is made without the written consent of the
               Covenantors (not to be unreasonably withheld or delayed);


     F13.2     notify the Covenantors of such matter or circumstance as soon as
               practicable after it comes to the attention of any of the Group
               Companies or Atchison and such notification (with sufficient
               detail to enable the Covenantors to identify the basis of the
               potential Claim which may result from such matter or circumstance
               and including a statement that such notification constitutes a
               Claim for the purposes of paragraphs F7.2 and F10 giving rise to
               a contingent liability) shall constitute notification of any
               Claim which does arise in


                                       -83-

               connection with such matter or circumstance;



     F13.3     give the professional advisers of the Covenantors such access to
               the premises and personnel of each of the Group Companies as they
               may request, and afford them any opportunity they request to
               examine any accounts, documents, records and other things in the
               possession or control of any of the Group Companies which are
               relevant to the Claim;


     F13.4     subject to the Covenantors indemnifying Atchison to its
               reasonable satisfaction against the costs incurred, and unless to
               do so would, in the reasonable opinion of Atchison, cause
               material damage or material further damage to the business or
               goodwill of any Group Company, take all steps which the
               Covenantors request to avoid, dispute, resist, appeal, compromise
               or defend any matter which may otherwise result in a Claim and
               give the Covenantors all authorities and assistance as may be
               requested by the Covenantors to enable them to do so.


     For the purposes of this paragraph F13, a matter or circumstance shall not
     be treated as having come to the attention of any of the Group Companies or
     Atchison unless it has come to the attention of a director of the relevant
     company.


F14  The provisions of clauses 3.1.6, 3.1.7, 3.1.8 and 3.1.10 and clause 4 of
     the Deed of Covenant shall apply mutatis mutandis in respect of Claims
     relating to Tax.


F15  Atchison shall not be at liberty to bring more than one Claim in respect of
     the same facts or subject matter.  Any liability of the Covenantors in
     respect of a Claim shall be in satisfaction of its liability under any
     claim under the Deed of Covenant in respect of the same facts or
     circumstances and vice versa.


F16  Atchison shall procure that the Group Companies shall observe and perform
     the


                                       -84-

     provisions of this part F.


F17  Atchison represents to the Covenantors that it is not aware at the date of
     this agreement of any facts, information or circumstances which it is aware
     constitutes the basis for any claim under the Warranties or the Deed of
     Covenant.  For the purposes of this paragraph F17, "awareness" of Atchison
     shall be construed as the actual knowledge of Mr Hugh Aiken.


                                       -85-

                                        PART G

                            DETAILS OF THE PENSION SCHEMES


The Sheffield Forgemasters Pension Scheme established by an interim trust deed
dated 30 December 1993 and the Sheffield Forgemasters Senior Executive Pension
Scheme established by an interim trust deed dated 30 March 1986.


                                       -86-


EXECUTED AS A DEED by    )

PHILLIP MONTAGUE WRIGHT  )    /s/ P M Wright

in the presence of:      )


Witness signature:       /s/ J. Wood


Witness address:         Dibb Lupton Alsop


Witness occupation:      Solicitor



EXECUTED AS A DEED by    )

MALCOLM ARTHUR BRAND     )    /s/ M A Brand

in the presence of:      )


Witness signature:       /s/ J. Wood


Witness address:         Dibb Lupton Alsop


Witness occupation:      Solicitor



EXECUTED AS A DEED by    )

DAVID FLETCHER           )    /s/ M A Brand

in the presence of:      )


Witness signature:       /s/ J. Wood


Witness address:         Dibb Lupton Alsop


Witness occupation:      Solicitor


                                       -87-



EXECUTED AS A DEED       )

by ATCHISON CASTING      )

UK LTD acting by:        )



                                  Director            /s/ Hugh H Aiken


                                  Director/Secretary  /s/ P J Barrett


                                       -88-