Joseph D. & Elizabeth M. Dunne - Page 4




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          remained in that position at all relevant times.  Mr. Dunne and             
          Mr. Marcus were also coguarantors of a $4 million line of credit            
          from FRC’s bank that was set up in connection with a particular             
          contract that FRC had to provide halon to the Government (the               
          halon contract).                                                            
               FRC did not hold any formal shareholder or board of                    
          directors meetings during any relevant period.  Before 1997 Mr.             
          Dunne was living in North Carolina, and he flew to FRC’s office             
          in Holland, Ohio, every 1 or 2 months.  Mr. Dunne exercised only            
          limited managerial control over FRC at that time.                           
          Problems Between Mr. Dunne and Mr. Marcus                                   
               Mr. Dunne and Mr. Marcus began to have disagreements about             
          the operation of FRC in 1995.  They discussed possible buyout               
          arrangements--some where Mr. Marcus would buy Mr. Dunne’s shares            
          and some where the reverse was true.                                        
               On August 1, 1996, Mr. Dunne and Mr. Marcus met at the                 
          Inverness Country Club.  At this meeting, Mr. Dunne agreed                  
          informally to sell Mr. Marcus or FRC his FRC stock on an                    
          unspecified later date, but they anticipated the sale would occur           
          by December 31, 1996 (the Inverness agreement).  The price was to           
          be based upon an independent valuation of FRC.  Mr. Dunne agreed            
          that Mr. Marcus could conduct the business of FRC as he wished.             
          Mr. Dunne and Mr. Marcus did not make a binding agreement or sign           
          a contract at this time, and no sale occurred in 1996.                      







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