D katzen evaluation fibermesh final rpt

FIBERMESH (SUISSE) S.A. FND INDUSTRIES (OVERSEAS) LTD.

Analysis of Damages Relating to

Nicolas Doucakis Individually and as Principal and d/b/a Fibermesh (Suisse) S.A. and F.N.D. Industries, Ltd. vs. Speiser, Krause, Madole,

Kent Krause and Keith Evans as of

January 1, 1991 And Thereafter

Prepared by: KATZEN, MARSHALL & ASSOCIATES, INC.

Dallas, Texas

KATZEN, MARSHALL & ASSOCIATES, INC. BUSINESS APPRAISALS FOR CLOSELY-HELD COMPANIES

14800 QUORUM DRIVE TELEPHONE: (972) 991-8258 L.B. 20, SUITE 450 FAX: (972) 991-0844 DALLAS, TX 75240

December 30, 1999 Ms. Anita J. Anderson The Milam Building Suite 542 115 East Travis San Antonio, Texas 78201 Re: Cause No. 98-07433K Nicolas Doucakis Individually and as Principal and d/b/a

Fibermesh (Suisse) S.A. and F.N.D. Industries, Ltd. vs. Speiser, Krause, Madole, Kent Krause and Keith Evans 192d Judicial District Court, Dallas, Dallas County, Texas

Dear Ms. Anderson: In accordance with your request, we are providing the initial results of our financial analysis and consulting engagement to render an opinion with respect to the estimation of damages relating to the above-cited case. The effective date of our analysis is January 1, 1991 (the “Analysis Date”). We understand that the results of our analysis will be used in evaluating damages in support of litigation. Our analysis should not be used for any other purposes, nor distributed to third parties, without the express written consent of Katzen, Marshall & Associates, Inc.

Our analysis does not constitute a fairness opinion in that we have not conducted all of the steps necessary to issue such an opinion. It should be further noted that our analysis and recommendations should not be construed as a tax opinion.

In arriving at our estimates of damages, we have applied generally accepted financial analysis and valuation procedures based upon economic and market factors. Our conclusions rely on both historical facts and projections of future events looking forward from the effective date.

For the purposes of this analysis:

Fibermesh (Suisse) S.A., a Swiss corporation, and its predecessors, Subil S.A. or Fibermesh Subil S.A., will be referred to as “FMS”.

F.N.D. Industries (Overseas), Ltd. will be referred as “FND”.

“Fibermesh/FND” or “the Company” will be used when necessary to collectively describe Mr. Nicolas Doucakis, FMS, and FND working together as a single business entity.

Our evaluation is based on certain information and facts supplied by the Company and other sources, as cited in the Scope of Analysis and Sources section of this report. We have not independently verified this data and assume no responsibility or liability for any errors or omissions in the information supplied by the Company.

Ms. Anita Anderson December 30, 1999 Page 2

This damage analysis is predicated on the assumption that the majority of the consolidated companies’ decline in sales was a function of the alleged actions of Synthetics Industries, Inc. The valuation analysis of the consolidated companies as of January 1, 1991 is based upon the market trends apparent at that date and upon the reasonable expectation that the consolidated companies would continue to do business as the sole distributors of Fibermesh products in Switzerland, without competition for the sale of Fibermesh products from distributors either within or outside Switzerland.

Based on the facts, assumptions, procedures and limiting conditions contained herein, it is our initial opinion that the damages suffered by the Company, as a result of the alleged actions of Synthetics Industries, Inc., was between SFr. 6,300,000 and SFr. 6,600,000, subject to amendment/supplementation should same be necessary.

All estimates of damages are subject to the attached Statement of Limiting Conditions.

The field notes from which this analysis was prepared are retained in our files and will be available for inspection upon request. If you have any questions concerning this analysis, we would be pleased to discuss them with you at your convenience.

Please find attached as exhibits to this report a copy of my résumé and a list of my deposition and trial experience over the last four years. I have not had any publications in the last ten years.

Respectfully submitted, KATZEN, MARSHALL & ASSOCIATES, INC. By: ________________________________ David M. Katzen

STATEMENT OF LIMITING CONDITIONS

The conclusions reported herein are based on the premises outlined in this report and are valid only for the purposes and date stated.

We have not made a personal visit to the Company’s offices.

No investigation of legal title to the assets of the Company has been made, and the owner’s claim to the assets has been assumed valid. No consideration has been given to liens or encumbrances that may be against the assets except as specifically stated in the appraisal report.

Nothing contained in this report should be construed as either investment, legal, tax, or accounting advice. The user shall hold Katzen, Marshall & Associates, Inc. harmless for any unauthorized use of this report, and in no case shall Katzen, Marshall & Associates, Inc.’s liability, if any, exceed the price of this opinion.

Neither all nor any part of the contents of this report shall be conveyed to the public through advertising, public relations, news, sales, or other media without the written consent and approval of Katzen, Marshall & Associates, Inc.

Testimony or attendance in court, by reason of this valuation, with reference to the property in question shall not be required unless arrangements have previously been made.

All conclusion herein are presented as our considered opinion based on the facts and data set forth in the attached report. During the course of the analysis, we have relied upon information provided by management and other third parties. We believe these sources to be reliable, but no guarantee is made or liability assumed for the accuracy of any data, opinions or estimates supplied by others.

Katzen, Marshall & Associates, Inc. has relied upon the assertion of management that the financial data described in our attached report provide a reasonable representation of the historical operations.

Any projections of future events described in our attached report represent the general expectancy concerning such events as of the analysis date. These future events may not occur as anticipated, and actual results may vary from those described in our report.

APPRAISERS’ CERTIFICATION

The undersigned hereby certify that, to the best of our knowledge and belief:

Neither Katzen, Marshall & Associates, Inc., nor any individuals signing or associated with this report, have any present or prospective interest in the Company or assets analyzed, and we have no personal interest or bias with respect to the parties involved.

Our compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, or the use of, this report.

No one provided significant professional assistance to the person(s) signing this report.

The statements of fact contained in this report are true and correct.

The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, unbiased professional analyses, opinions and conclusions.

The American Society of Appraisers conducts a mandatory recertification program for its designated members. David M. Katzen is currently certified under this program.

_____________________________________ David M. Katzen, ASA - Business Valuation

_____________________________________ Robert Derse, CFA

Fibermesh (Suisse) S.A. and FND (Overseas) Ltd.

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I. SCOPE OF ANALYSIS AND SOURCES

Accordingly, our investigation and analysis included the following elements:

Management interviews: Throughout the course of our project, we relied on information obtained from interviews with various representatives of the Company. These interviews included discussions concerning the history and nature of the business, historic performance, and expectations of future operating results.

Examination of company documents: Actual detailed records that pertain to the entities under appraisement were examined.

Examination of the specific industry: We researched the industry in which the company operated, including its history and outlook.

Application of analysis procedures: Following the collection of pertinent data, appropriate analysis procedures were applied to estimate the market values for the entity being appraised.

The data, records, and information furnished to or obtained by KMA personnel included:

Audited financial statements for FMS for the fiscal years 1987 through 1991.

Non-audited financial statements for FMS for the fiscal years 1985 and 1986 and 1992 through 1994.

Non-audited financial statements for FND for the fiscal years 1985 through 1994.

Various customer lists, sales analyses, and other information provided by the Company.

The November 1995 Bulletin of the Swiss National Bank.

The Report of Members’ Activities: 1994-1995 by the European Ready Mixed Concrete Organization.

Selected financial statements, and other publicly available data, relating to Synthetics Industries, Inc.

Switzerland: Selected Issues and Statistical Appendix, IMF Staff Country Report No. 98/43, April 1998, by the International Monetary Fund.

A Lawyer’s Guide to Switzerland, prepared by Hans Bollman for the Lex Mundi service on the Internet (written around 1990).

The Rapport d’Evaluation of Franchois Cochet, concerning the Company, dated September 14, 1995.

An Analysis of the Economic Damages of Fibermesh (Suisse)/FND/Nicholas Doucakis… by John A. Swiger, Ph.D., dated March 1996.

Expert Economist’s Opinion… concerning the Company by Dov Frishberg, Ph.D., dated June 27, 1996.

Portions of the Transcript of Proceedings of the Arbitration in re: Fibermesh (Suisse), S.A. and Synthetics Industries, Inc. d/b/a Fibermesh Company (the “Arbitration”), July 27, 1996, concerning the testimony of Dr. Swiger and Dr. Frishberg.


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First Amended Statement of Position of Fibermesh (Suisse), S.A. with respect to the Arbitration.

Restated and Amended Statement of Position and Prehearing Statement on Behalf of Synthetic Industries, Inc. d/b/a Fibermesh Company with respect to the Arbitration.

Decision with respect to the Arbitration by William R. Quinlan, Arbitrator, dated September 20, 1996.

Disagreement with Arbitrator’s Decision with Annotations prepared by Nicolas Doucakis (Doucakis Deposition Exhibit No. 24)

Transcript of the Deposition of Kent Krause, taken February 1, 1999.

Agreement, dated September 10, 1985, concerning the distributorship relationship between Synthetic Industries (Texas) Inc., d/b/a Fibermesh Company, and Subil, S.A. (predecessor to FMS).

Conversations with Mr. Nicolas Doucakis, President of FMS and FND.

Various correspondence between Mr. Doucakis and representatives of Synthetics

Various third-party market information sources as necessary.

This damage analysis is predicated on the assumption that the majority of the consolidated companies’ decline in sales was a function of the alleged actions of Synthetics Industries, Inc. The valuation analysis of the consolidated companies as of January 1, 1991 is based upon the market trends apparent at that date and upon the reasonable expectation that the consolidated companies would continue to do business as the sole distributors of Fibermesh products in Switzerland, without competition for the sale of Fibermesh products from distributors either within or outside Switzerland.


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II. HISTORY AND NATURE OF BUSINESS

The Company was involved in the wholesale distribution of “fibermesh”, a polypropylene additive to concrete, which was manufactured by Synthetics Industries, Inc. (“Synthetics”), headquartered in the state of Georgia. The Company held the presumably exclusive distributorship for fibermesh in Switzerland from September, 1985 until the arrangement was formally terminated in August, 1994. The fibermesh product increased the strength of concrete slabs and at the analysis date, the primary use of the product was in residential construction.

FMS was formed prior to September 1985 as a Swiss corporation. FND was an Isle of Man company which had been formed some years earlier as part of a prior business venture of Mr. Doucakis. The use of FND enabled Mr. Doucakis to realize certain tax savings. Mr. Doucakis was the sole shareholder of both FMS and FND.

FND would purchase the fibermesh product from Synthetics, and would then sell it at a marked-up price to FMS, which would then sell it to customers. The Company’s customers included ready-mixed concrete plants and individual builders. Marketing was carried out through direct sales calls, distribution of brochures and other materials, and various promotional events.

Mr. Doucakis alleges that certain actions of Synthetics resulted in unauthorized competition, reduced sales volumes, and reduced prices, leading to significant losses in 1991 through 1993 and to the eventual demise of the business.


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III. FINANCIAL REVIEW

Exhibit 1 presents the consolidated financial statements for the Company. Exhibit 2 presents detailed financial statements for FND, FMS, and the consolidated Company, based on the available information.

Unless otherwise noted, monetary amounts in the discussion below are in Swiss francs and may be rounded to the nearest thousand for ease of reading.

The income statements were consolidated by using the sales (turnover) of FMS as consolidated sales and the purchases by FND as the consolidated cost of sales. This process removes the effect of the internal transfer pricing between FND and FMS.

Certain costs of documentation and conferences were reclassified from offsets to sales to cost of goods sold. This reclassification had no effect on gross margin or net income.

Mr. Doucakis took a salary from FMS and received a draw or dividend from FND. Total compensation for Mr. Doucakis was normalized to SFr. 150,000 for all years that the combined salary and draw exceeded such amount.

The balance sheets for FND were reconstructed from information provided by Mr. Doucakis, including the bank statements of FND. Certain unidentified balancing items were classified as “FND Adjustments” on the FND and consolidated balance sheets. Certain amounts owed to FND by FMS, or vice versa, were eliminated from the combined balance sheet.

Net revenue (turnover) for the Company increased from SFr. 244,000 in 1986 to SFr. 1,837,000 in 1990, displaying a compound annual growth rate (“CAGR”) of 66%. In 1991 net revenue fell by 38% to SFr. 1,232,000. This decline was allegedly a function of the actions of Synthetics as previously described.

Costs of revenue increased from SFr. 77,000 in 1986 to SFr. 580,000 in 1990, and fell slightly to SFr. 545,000 in 1991. As a percentage of revenue, the cost of revenue ranged between 31.6% in 1990 and 44.2% in 1991. Operating expenses, adjusted for a normalized owner compensation, increased steadily in franc terms over the analysis period, and ranged from 31% in 1988 (after the business was established) to 39% in 1990. In 1991 the ratio increased to 71% as the Company increased staffing and marketing expenditures to meet higher anticipated demand, only to face a large decline in sales.

Pretax income increased from SFr. 34,000 (14% of net revenue) in 1986 to SFr. 537,000 (29%) in 1990. However, decreased sales and higher expenses in 1991 resulted in a pretax loss of SFr. 215,000 or 17% of net revenue.

Total assets of the consolidated Companies at December 31, 1991 were SFr. 1,101,000. This includes a property in France, owned by FND, with an approximate cost of SFr. 382,000, which is treated as a non-operating asset.


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IV. ECONOMIC AND INDUSTRY OUTLOOK

Switzerland, founded in 1291, covers 16,000 square miles (about one quarter of which is lakes, glaciers, and high mountains), has few natural resources of its own, and is not agriculturally self-sufficient. Switzerland’s economy is based on high-quality processing of imported semi-finished products, which are then exported, and on a strong service sector highlighting banks, insurance companies, and tourism. The country has high productivity, good labor relations, and is home to a number of large multi-national corporations such as Nestle (food) and Ciba-Geigy (chemicals). However, small and medium-sized firms are the strength of the highly diverse economy, as over 95% of non-agricultural businesses employ less than 50 persons.

Exhibit 3 displays some basic economic data for Switzerland.

The population and labor force increased steadily from 1987, reaching 6.80 and 3.84 million persons, respectively, in 1990. Employment also increased to 3.82 million persons in 1990, resulting in an unemployment rate of .5%. The number of employed persons also increased in 1991, but at a lower rate than the labor force, which resulted in the employment rate rising to 1.1%, still quite low for industrialized nations. By contrast, the unemployment rates for the United States in 1990 and 1991 were 5.5% and 6.7%, respectively.

Inflation, measured by changes in the Swiss consumer price index (“CPI”), had slowly been increasing since 1986, reaching a level of 5.4% in 1990. It would increase to 5.9% in 1991, before declining in the three following years.

The growth of nominal gross national product (“GNP”) for Switzerland peaked at 7.9% in 1989, and remained high in 1990 at 7.3%. Nominal GNP growth declined slightly to 5.4% in 1991, and stayed lower but positive for the next three years. Real GNP growth peaked a year earlier, in 1988 at 3.6%, and stayed at a relatively high 2.6% and 2.5% for 1989 and 1990, respectively. Real GNP growth was flat in 1991 and negative (-.7% and -.5%) in the next two years, before picking up in 1994.

Total investments in the business sector (1980 SFr.) peaked in 1990, both in terms of commercial construction and in machinery and equipment investment. However, they declined, on a real basis, only slightly in 1991, and in 1992, commercial construction decreased only .4%, while investment in machinery and equipment declined by 13%.

In general economic terms, an observer in January 1991 might have expected a slowdown from the previous years’ performance, but signs of a deep recession for the Swiss economy were minimal.

Sales of the fibermesh product would be most closely related to levels of construction activity, especially housing, and particularly sensitive to the levels of production of concrete. The level of investment in private sector construction, including housing, increased steadily from 1995 and peaked in 1990. (An observer at the beginning of 1991, would not have known that the peak had been reached.) In 1991, investment in housing decreased by 7%, and other private sector construction declined by 5%, but an 8% increase in public sector construction limited total construction investment to a 2% decrease.


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The annual rate of change in the prices of construction materials displayed a more volatile pattern than the general CPI, increasing 6.9% in 1998, staying flat in 1989, and increasing by 5.6% in 1990.

Data concerning concrete producers, the direct users of fibermesh, are particularly germane to the Company’s foreseeable performance. Production of ready-mixed concrete represents a substantial portion of total concrete production. The European Ready Mixed Concrete Organization (“ERMCO”) reported that the production of ready-mixed concrete increased by 12% in 1988 and 7% in 1989, before declining by 4.2% in 1990. Production continued to decline or stay flat for the next three years until increasing by 9% in 1994.

However, the use of polypropylene fibers to reinforce concrete was a relatively new technology, and the Company had been successful in introducing the fibermesh product to the French and Italian-speaking parts of Switzerland. In addition, the Company had reportedly not conducted heavy marketing activities in the German-speaking parts of Switzerland, which is the largest part of the country. Therefore, by continuing efforts to develop a market for the product, especially in the unexploited German-speaking region, the Company could expect to increase its sales at a rate faster than the growth of either the general economy or the market for concrete.


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V. VALUATION OF COMPANY AS OF JANUARY 1, 1991

A. INCOME (CAPITALIZED NET CASH FLOW) APPROACH

Net cash flow is defined as cash flow available for the payment of dividends after allowing for the retention of sufficient cash to fund the expansion needs of a growing company.

The analysis developed a “normalized” or “stabilized” estimate of annual debt-free net cash flow for the Company. The net cash flow was then capitalized producing an indicated value for total capital. The current balance of debt was then deducted from the capital value, and the value of any non-operating assets added, resulting in a value of stockholders’ equity.

1. Normalized Debt-Free Net Cash Flow

Exhibit 4 develops two scenarios for normalized debt-free net cash flow, using the following assumptions.

Revenues were estimated based on the 1990 net revenues, plus upward adjustments of 5% for Scenario 1 and 10% for Scenario 2. Through 1990, revenues had increased at a 66% CAGR. The individual-year growth rates had been 47% in 1989 and 9.9% in 1990. In the years prior to 1990, the sale price of the fibermesh product had decreased, as had the purchase price of the product from Synthetics. As related in the Economic Outlook, the production of ready-mixed concrete had increased from 9.1 million cubic meters in 1985 to 12 million in 1990, for a CAGR of 7.2% over that four-year period. Ready-mixed concrete production decreased by 4.2% in 1990, yet the revenues for the Company increased by 9.9%, indicating that the Company was able to increase its market share at a rate sufficient to offset both the declining market and falling prices. Also, in 1990, the Company had reportedly only just begun to market to the German-speaking portion of Switzerland, which is the largest part of the country in size and population with many large cities. Furthermore, fibermesh was a relatively new product that was beginning to become familiar to the construction community both in Switzerland and throughout the world. Therefore, growth rates of 5% and 10% appear to be reasonable, assuming that the Company would continue to enjoy its status as the exclusive distributor for fibermesh in Switzerland.

Cost of Revenues were estimated at 35%, using the approximate average of the cost ratios for 1989 (38.5%) and 1999 (31.6%).

Operating expenses (adjusted for normalized owner compensation and net of depreciation and amortization) were estimated at the approximate average of the ratios for 1988, 1989, and 1990. A 2% allowance was made for depreciation and amortization.

Interest expense is not applicable as this is a “debt-free” analysis.

Other Income was negligible and is excluded from the analysis.

Income taxes are calculated at 10% of pre-tax income.

Depreciation (a non-cash charge on the income statement) and capital expenditures (cash charges not shown on the income statement) are assumed to offset each other, therefore no net adjustment is required.


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Growth in revenue, as discussed above, is assumed to be 5% per year for Scenario 1 and 10% per year for Scenario 2.

Debt-free working capital is estimated using a turnover ratio of 10 times, based on the ratios shown for wholesalers of construction materials in the United States. (Working capital is thus one tenth of sales.) The annual growth in this working capital amount (based on the assumptions above) is treated as a deduction from normalized cash flow.

The resulting estimates of annual normalized debt-free cash flow are SFr. 492,000 for Scenario 1 and SFr. 506,000 for Scenario 2, as shown in Exhibit 4.1.

2. Estimated Cost of Capital

Exhibit 5 provides information on the performance of the Swiss Performance Index (“SPI”) and the Swiss Market Index (“SMI”) maintained by the Swiss Stock Exchange. The SMI is a capital-weighted index of 25 large “blue-chip” stocks (similar to the Dow Industrial Average in the U.S.) while the SPI reflects the performance of a large group of all the top-tier secondary shares listed on the Swiss Exchange (more similar to the S&P 500 Index). Data on the SPI is available from 1987 while the SMI was established in 1988,

The SPI provided indicated returns ranging from –20.2% in 1990 to 22.5% in 1988. The cumulative arithmetic average returns were 7.7% for 1990 and 11.3% for 1992 (five years of return data). The SMI provided indicated returns ranging from –22.2% in 1990 to 26.2% in 1992. The cumulative arithmetic average returns for the SMI were 0.8% for 1990 and 12.1% for 1992 (four years of return data).

For comparative purposes, the average annual returns on United States stocks (traded on the New York Stock Exchange [“NYSE”] as compiled by Ibbotson Associates) over the 1988 through 1992 timeframe were 16.7% for large company stocks and 15.9% for small company stocks. Over the long term (1926 through 1990), returns were 12.1% for large company stocks and 17.1% for small company stocks. Like the Swiss market, the U.S. stock market also had a poor 1990 performance.

Based on our own experience and the available evidence, it is our opinion that investors in the stocks of relatively small publicly-traded Swiss companies would demand a rate of return of 16%.

However, the Company merits a significantly higher equity cost of capital (equity discount rate), for the following reasons:

The Company was significantly smaller than the smaller firms in the American or Swiss stock indexes.

The Company had fewer financial resources and less management depth.

On the positive side, the Company had relatively low level of debt, and was an established competitor with a good track record.

In consideration of these risk factors, we have added a company-specific equity risk premium of 2% to the estimated return for the smallest NYSE and publicly-traded Swiss companies, resulting in a required equity rate of return of 18% for Scenario 1. In Scenario 2, because we


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are projecting a higher level of sales growth, we have used a 6% premium, resulting in a equity rate of return of 22% for the Company. These calculations are shown in Exhibit 4.2.

The appropriate rate of return in valuing the total capital (debt and equity) of a business is the weighted average cost of capital (“WACC”). This rate is the weighted average of the required return on equity capital and the after-tax return on debt capital. The after-tax cost of debt is used since interest is a tax deductible expense. The weights are determined by the projected long-term leverage position (i.e., average amount of debt capital to equity capital). The formula for computing the weighted average cost of capital is:

(Rate of Return on

Equity Capital)

X (Proportion of Equity Capital to

Total Capital)

PLUS

(Rate of Return on Debt Capital)

X (One minus Tax Rate) X (Proportion of Debt Capital

to Total Capital)

EQUALS

Weighted Average Rate of Return on Total Capital (Weighted Average Cost of Capital)

At December 31, 1990, the Company’s ratio of debt to book capital was approximately 15%. A buyer of the Company would have the option of employing more debt, and might have the ability to pledge the French property and other assets as collateral. Therefore we have used a debt to market capital ratio of 25% for the purpose of determining the weighted average cost of capital.

Small businesses of this type typically rely on bank financing at interest rates equal to the prime rate plus some premium. We have used an interest rate of 10% which is probably less favorable than the Company could have obtained. An assumed 10% tax rate is employed to derive the after-tax cost of debt.

Based on the assumptions stated above, we estimated a WACC for the Company of 15.8% for Scenario 1 and 18.8% for Scenario 2. For each Scenario, a capitalization rate for the normalized year cash flow was developed by deducting the expected growth rate of debt-free cash flow from the WACC. For Scenario 1, the WACC of 15.8% and the assumed growth rate of 5% resulted in a capitalization rate of 10.8%, while for Scenario 2, the WACC of 18.8% and the assumed growth rate of 10% resulted in a capitalization rate of 8.8%. The development of the capitalization rates is highlighted in Exhibit 4.2


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3. Calculation of Value and Conclusion

Exhibit 4.3 summarizes the capitalization of the normalized debt free net cash flow into an indicated capital value. Deducting the value of the Company’s debt, and adding the value of non-operating assets, results in the indicated equity value.

We have included the value of the French property, at its cost of approximately SFr. 382,000.

Based on this reasoning it is our opinion that the capitalized net debt-free cash flow form of the income approach indicates a range of value for total stockholders’ equity of SFr. 4,850,000 to SFr. 6,050,000.


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B. INCOME (DISCOUNTED NET CASH FLOW) APPROACH

Net cash flow is defined as cash flow available for the payment of dividends after allowing for the retention of sufficient cash to fund the expansion needs of a growing company. We projected the Company’s net cash flow for five years (1991 through 1995). The terminal year’s income (1996) was capitalized at a growth-adjusted capitalization rate. The annual cash flows and the terminal value were discounted to present value and summed, resulting in a total value for equity capital.

1. Projection of Net Cash Flow

The projection assumptions are shown in Exhibit 6.1. The projected income statements, percentage income statements, balance sheets, cash flow statements, and financial ratios are presented in Exhibits 6.2 through 6.6, respectively. Unless stated otherwise, the rationale for the DCF projection assumptions are the same as those used for the Direct Capitalization Analysis.

Revenues for 1991 and forward were forecasted to increase by 7.5%. This represents a midpoint between the assumptions used for Scenarios 1 and 2 of the Direct Capitalization Analysis.

Cost of revenues is projected at 35% of revenues, on the same basis as the Direct Capitalization Analysis.

Operating expenses (net of depreciation and amortization) are estimated at 34% of sales throughout the projection period.

Depreciation and amortization is estimated at 2% of revenues.

Interest expense is not applicable as this is a debt-free analysis.

Income taxes are calculated at 10% of pre-tax income.

Capital expenditures are estimated at SFr. 40,000 and increase at the same rate as sales. This results in capital expenditures and depreciation/amortization estimates that are roughly equal over the projection period.

Working capital changes were based on estimates for days of receivables, inventories, other current assets, and payables. Days of receivables were estimated at 40 days, days of inventories at 40 days, and days of other current assets at 80 days, roughly equivalent to their December 31, 1990 levels.. Days of payables were forecasted at 60 days, although at December 31, 1990 they actually stood at about 220 days. This results in a substantial reduction of cash in the first year to reduce the payables to a manageable level.

Exhibit 6.5 sets forth our projection of the net cash flows that could be paid out as dividends while maintaining operations. The net cash flows are discounted to present value at the estimated cost of equity capital. Exhibits 6.2 through 6.6 provide supporting information and analysis.


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2. Estimated Cost of Capital

The Direct Capitalization Analysis developed a weighted average cost of capital (“WACC”) or discount rate of 15.8% for Scenario 1 and 18.8% for Scenario 2. The DCF analysis uses a WACC of 17.3%, which is the midpoint of those two estimates.

A capitalization rate for the terminal year cash flow is developed by deducting the expected growth rate of cash flow from the estimated WACC. An expected growth rate of 7.5% is deducted from the WACC of 17.3%, resulting in a 9.8% capitalization rate.

3. Valuation

Exhibit 7 summarizes the capitalization of the annual debt free net cash flow estimates, and the terminal value at the end of the projection period, into an indicated capital value. Deducting the value of the Company’s debt, and adding the value of non-operating assets, results in the indicated equity value.

We have included the value of the French property, at its cost of approximately SFr. 382,000, as a non-operating asset.

Based on the preceding assumptions, the discounted debt-free net cash flow approach indicates a value for equity of SFr. 5,370,000, rounded.


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D. SUMMARY OF DAMAGES

The Direct Capitalization Analysis form of the income approach provided a range of value between SFr. 4,850,000 and SFr. 6,050,000. The midpoint of this range is approximately SFr. 5,450,000. The Discounted Cash Flow Analysis from of the income approach indicated a value of SFr. 5,370,000. After weighing the relative strengths of the two forms of the income approach, a reconciled value of SFr. 5,410,000 is concluded for the market value of the stockholders’ equity in the consolidated Company, as of January 1, 1991. This value conclusion assumes that the rights of the Company as the exclusive distributor of fibermesh in Switzerland were uninfringed by the alleged actions of Synthetics Industries, Inc.

In reality, the Company sustained substantial losses in 1991 through 1993, and made a small profit in 1994 before its distributorship was terminated. These losses are also a part of the damages suffered by the Company and/or Mr. Doucakis.

The loss for 1991 is taken from Exhibit 1.1, and reflects an adjustment to normalize the salary of Mr. Doucakis to a market level of SFr. 150,000, thus reducing the loss. The losses for 1992 and 1993 and the minor profit for 1994 are taken from the report of Mr. Cochet, the accountant for Mr. Doucakis.

The total of the value of the Company as of January 1, 1991, as well as the annual losses/profits for 1991 through 1994, are summarized in Exhibit 8.

Given the variation inherent in the data, we have chosen to express our final estimate of damages as the following range:

SFr. 6,300,000 to SFr. 6,600,000

All conclusions are subject to the Statement of Limiting Conditions and Appraisers’ Certification attached herein. Field notes from which this analysis was prepared are retained in our files and are available for review upon request.

EXHIBIT 1.1FIBERMESH/FND CONSOLIDATED

COMPARATIVE INCOME STATEMENTSYEARS END DECEMBER 31

SWISS FRANCS

COMPOUNDGROWTH

1986 1987 1988 1989 1990 1991 1986-1991

GROSS REVENUE 241,437 452,272 1,135,827 1,665,555 1,832,183 1,143,205 36.5%

NET REVENUE 243,593 456,952 1,135,827 1,671,735 1,836,826 1,231,781 38.3%

COST OF REVENUE 77,115 205,519 499,980 643,390 580,234 544,722 47.8%

GROSS PROFIT 166,478 251,433 635,847 1,028,345 1,256,592 687,059 32.8%

DOUKAKIS SALARY (per Swiger) 42,000 48,000 56,000 86,000 78,000 78,000 13.2%DOUKAKIS DRAW 29,500 60,998 138,244 310,045 226,143 178,280 43.3%OPERATING EXPENSES 52,060 116,424 174,956 418,648 523,483 684,482 67.4%AMORTIZATION 8,713 3,493 30,905 30,387 37,006 41,674 36.8%ADJUSTMENTS 0 0 (44,244) (246,045) (154,143) (106,280) NATOTAL NET OPERATING EXPENSES 132,273 228,915 355,861 599,035 710,489 876,156 46.0%

OPERATING (EBIT) PROFIT 34,205 22,518 279,986 429,310 546,103 (189,097) -240.8%

INTEREST AND BANK FEES 0 5,741 8,364 13,393 9,076 12,182 NAPAID COMMISSIONS 0 8,346 19,393 0 0 13,524 NA

PRETAX INCOME 34,205 8,431 252,229 415,917 537,027 (214,803) -244.4%

INCOME TAXES 0 0 0 0 0 0 NA

NET INCOME 34,205 8,431 252,229 415,917 537,027 (214,803) -244.4%

SUPPLEMENTAL DATA SHARES OUTSTANDING 1,000 1,000 1,000 1,000 1,000 1,000 0.0% EARNINGS PER SHARE 34.21 8.43 252.23 415.92 537.03 (214.80) -244.4% DIVIDENDS 0 0 0 0 0 0 NA UNUSUAL ITEMS NOT INCLUDED ABOVE 0 0 0 0 0 0 NA

COST OF GOODS SOLD: OTHER ITEMS 0 0 0 0 0 0 NA AMORTIZATION 0 0 0 0 0 0 NA OTHER 77,115 205,519 499,980 643,390 580,234 544,722 47.8%

77,115 205,519 499,980 643,390 580,234 544,722 47.8%OPERATING EXPENSES OTHER ITEMS 0 0 0 0 0 0 NA AMORTIZATION 8,713 3,493 30,905 30,387 37,006 41,674 36.8% OTHER 123,560 225,422 324,956 568,648 673,483 834,482 46.5%

132,273 228,915 355,861 599,035 710,489 876,156 46.0%

EBITDA 42,918 26,011 310,891 459,697 583,109 (147,423) -228.0%

TOTAL DEPR & AMORTIZTN 8,713 3,493 30,905 30,387 37,006 41,674 36.8%


PERCENTAGE INCOME STATEMENTSYEARS END DECEMBER 31

5-YEARAVERAGE

1986 1987 1988 1989 1990 1991 1994-1998

REVENUE:GROSS REVENUE 99.1% 99.0% 100.0% 99.6% 99.7% 92.8% 98.2%NET REVENUE 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

COST OF SALES 31.7% 45.0% 44.0% 38.5% 31.6% 44.2% 40.7%

GROSS PROFIT 68.3% 55.0% 56.0% 61.5% 68.4% 55.8% 59.3%

OPERATING EXPENSES 54.3% 50.1% 31.3% 35.8% 38.7% 71.1% 45.4%

OPERATING PROFIT 14.0% 4.9% 24.7% 25.7% 29.7% -15.4% 13.9%

INTEREST EXPENSE 0.0% 1.3% 0.7% 0.8% 0.5% 1.0% 0.9%OTHER (INCOME) EXPENSE 0.0% 1.8% 1.7% 0.0% 0.0% 1.1% 0.9%

PRETAX INCOME 14.0% 1.8% 22.2% 24.9% 29.2% -17.4% 12.1%

INCOME TAXES (EFFECTIVE TAX RATE) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

NET INCOME 14.0% 1.8% 22.2% 24.9% 29.2% -17.4% 12.1%

SUPPLEMENTAL DATA DIVIDENDS 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% UNUSUAL ITEMS NOT INCLUDED ABOVE 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

COST OF GOODS SOLD: OTHER ITEMS 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% AMORTIZATION 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% OTHER 31.7% 45.0% 44.0% 38.5% 31.6% 44.2% 40.7% TOTAL 31.7% 45.0% 44.0% 38.5% 31.6% 44.2% 40.7%

OPERATING EXPENSES OTHER ITEMS 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% AMORTIZATION 3.6% 0.8% 2.7% 1.8% 2.0% 3.4% 2.1% OTHER 50.7% 49.3% 28.6% 34.0% 36.7% 67.7% 43.3% TOTAL 54.3% 50.1% 31.3% 35.8% 38.7% 71.1% 45.4%

EBITDA 17.6% 5.7% 27.4% 27.5% 31.7% -12.0% 16.1%

EXHIBIT 1.3FIBERMESH/FND CONSOLIDATEDCOMPARATIVE BALANCE SHEETS

YEARS END DECEMBER 31SWISS FRANCS

COMPOUNDGROWTH

1986 1987 1988 1989 1990 1991 1986-1991

ASSETS CURRENT ASSETS CASH & EQUIVALENTS (67,371) (68,814) 24,609 (134,983) 50,278 (236,645) 28.6% ACCOUNTS RECEIVABLE 95,036 166,040 206,033 350,888 168,343 124,310 5.5% INVENTORIES 32,800 52,504 0 6,480 61,152 75,000 18.0% PREPAID EXPENSES AND OTHER 24,000 4,000 38,232 49,256 124,134 107,889 35.1% TOTAL CURRENT ASSETS 84,465 153,730 268,874 271,641 403,907 70,554 -3.5%

PROPERTY, PLANT, AND EQUIPMENT LAND 0 0 0 0 0 0 NA BUILDINGS 0 0 0 0 0 0 NA AUTOMOTIVE EQUIPMENT 0 0 0 0 0 0 NA OTHER EQUIPMENT 0 0 0 0 0 0 NA GROSS PROPERTY & EQUIPMENT 54,469 71,500 81,000 140,637 314,621 277,943 38.5% ACCUMULATED DEPRECIATION 0 0 0 0 0 0 NA NET PROPERTY & EQUIPMENT 54,469 71,500 81,000 140,637 314,621 277,943 38.5%

OTHER ASSETS: FRENCH PROPERTY 0 0 0 382,447 382,447 382,447 NA OTHER 0 0 0 0 0 0 NA TOTAL OTHER ASSETS 0 0 0 382,447 382,447 382,447 NA

TOTAL ASSETS 138,934 225,230 349,874 794,725 1,100,975 730,944 39.4%

LIABILITIES & EQUITY CURRENT LIABILITIES ACCOUNTS PAYABLE 150,425 100,271 161,439 311,084 350,671 305,809 15.2% OTHER LIABILITIES 0 0 40,000 30,458 42,587 0 NA CURRENT DEBT 20,627 159,547 87,120 156,667 108,225 227,334 61.6% TOTAL CURRENT LIABILITIES 171,052 259,818 288,559 498,209 501,483 533,143 25.5%

SENIOR LONG TERM DEBT 0 0 0 0 0 0 NASHAREHOLDER DEBT 0 0 0 0 0 0 NADEFERRED INCOME TAXES 0 0 0 0 0 0 NAOTHER LONG-TERM LIABILITIES 0 0 0 0 0 0 NA

STOCKHOLDERS' EQUITY ORIGINAL FND CAPITAL 28,000 28,000 28,000 28,000 27,767 28,694 0.5% ORIGINAL FIBERMESH CAPITAL 50,000 50,000 50,000 50,000 50,000 50,000 0.0% FND ADJUSTMENT (256,260) (502,944) (600,406) (507,888) (664,014) (1,319,874) 38.8% RETAINED EARNINGS 146,142 390,356 583,722 726,404 1,185,739 1,438,981 58.0% TREASURY STOCK 0 0 0 0 0 0 NA TOTAL STOCKHOLDERS' EQUITY (32,118) (34,588) 61,316 296,516 599,492 197,801 -243.8%

TOTAL LIABILITIES & EQUITY 138,934 225,230 349,875 794,725 1,100,975 730,944 0


RATIO ANALYSISYEARS END DECEMBER 31

MONETARY FIGURES IN SWISS FRANCS

AVERAGE1986 1987 1988 1989 1990 1991 1986-1991

LIQUIDITY RATIOSCURRENT RATIO 0.5 0.6 0.9 0.5 0.8 0.1 0.6QUICK RATIO 0.2 0.4 0.8 0.4 0.4 (0.2) 0.3DAYS OF RECEIVABLES (SALES) 142.4 132.6 66.2 76.6 33.5 36.8 81.4DAYS OF INVENTORIES (COGS) 155.2 93.2 0.0 3.7 38.5 50.3 56.8DAYS OF OTHER ASSETS (COGS) 113.6 7.1 27.9 27.9 78.1 72.3 54.5DAYS OF PAYABLES (COGS) 712.0 178.1 117.9 176.5 220.6 204.9 268.3DEBT FREE WORKING CAPITAL (65,960) 53,459 67,435 (69,901) 10,649 (235,255) (39,929)

CREDIT RATIOSTOTAL FUNDED DEBT 20,627 159,547 87,120 156,667 108,225 227,334 126,587INTEREST TO TOTAL DEBT 0.0% 3.6% 9.6% 8.5% 8.4% 5.4% 5.9%INTEREST COVERAGE (EBIT/INT.) NA 3.9 33.5 32.1 60.2 (15.5) 22.8EBITDA TO TOTAL FUNDED DEBT 208.1% 16.3% 356.9% 293.4% 538.8% -64.8% 224.8%FUNDED DEBT TO EQUITY -64.2% -461.3% 142.1% 52.8% 18.1% 114.9% -32.9%FUNDED DEBT TO TOTAL CAPITAL -179.5% 127.7% 58.7% 34.6% 15.3% 53.5% 18.4%

TURNOVER RATIOSSALES/ TOTAL ASSETS 1.8 2.0 3.2 2.1 1.7 1.7 2.1SALES/ WORKING CAPITAL (2.8) (4.3) (57.7) (7.4) (18.8) (2.7) (15.6)SALES/ D-F WORKING CAPITAL (3.7) 8.5 16.8 (23.9) 172.5 (5.2) 27.5SALES/ NET FIXED ASSETS 4.5 6.4 14.0 11.9 5.8 4.4 7.8SALES/ EQUITY (7.6) (13.2) 18.5 5.6 3.1 6.2 2.1

MARGINSGROSS PROFIT MARGIN 68.3% 55.0% 56.0% 61.5% 68.4% 55.8% 60.8%EBITDA MARGIN 17.6% 5.7% 27.4% 27.5% 31.7% -12.0% 16.3%EBIT MARGIN 14.0% 4.9% 24.7% 25.7% 29.7% -15.4% 13.9%PRETAX MARGIN 14.0% 1.8% 22.2% 24.9% 29.2% -17.4% 12.5%NET PROFIT MARGIN 14.0% 1.8% 22.2% 24.9% 29.2% -17.4% 12.5%

RATES OF RETURNEBIT / TOTAL ASSETS 24.6% 10.0% 80.0% 54.0% 49.6% -25.9% 32.1%EBITDA / (DEBT+EQUITY) -373.5% 20.8% 209.4% 101.4% 82.4% -34.7% 1.0%EBIT / (DEBT+EQUITY) -297.7% 18.0% 188.6% 94.7% 77.2% -44.5% 6.1%RETURN ON EQUITY -106.5% -24.4% 411.4% 140.3% 89.6% -108.6% 67.0%

VARIABILITY - % CHANGE INNET SALES NA 87.6% 148.6% 47.2% 9.9% -32.9% 52.1%EBITDA NA -39.4% 1095.2% 47.9% 26.8% -125.3% 201.1%OPERATING (EBIT) INCOME NA -34.2% 1143.4% 53.3% 27.2% -134.6% 211.0%NET INCOME NA -75.4% 2891.7% 64.9% 29.1% -140.0% 554.1%

EXHIBIT 2.1

FINANCIAL STATEMENTS

FIBERMESH (SUISSE) SA, FND INDUSTRIES (OVERSEAS), LTD., AND CONSOLIDATED

SWISS FRANCS

1985 1986 1987 1988FND FM Consol FND FM Total FND FM Total FND FM Total

INCOME STATEMENT

Gross Turnover 5,760 6,128 6,128 220,590 241,437 241,437 479,402 452,272 452,272 752,618 1,135,827 1,135,827Less Returns, etc. (116) (116) 0 0 0

Other Income 0 2,156 2,156 4,680 4,680 0 0Anhydrite Sales 0 0 0 0Sales to France 0 0 0 0

Net Revenue 5,760 6,012 6,012 222,746 241,437 243,593 484,082 452,272 456,952 752,618 1,135,827 1,135,827

Purchases (Synth, FND) 552 4,320 552 31,714 94,067 31,714 175,621 244,284 175,621 427,385 767,237 427,385Purchases (Other) 0 0 0 0 0 0Documentation, Conf. 0 31,721 31,721 24,116 24,116 40,147 40,147Transport, Customs 1,071 1,071 13,680 13,680 5,782 5,782 32,448 32,448

Cost of Turnover 552 5,391 1,623 31,714 139,468 77,115 175,621 274,182 205,519 427,385 839,832 499,980

Gross Profit 5,208 621 4,389 191,032 101,969 166,478 308,461 178,090 251,433 325,233 295,995 635,847

Overhead (See Below) 24 17,551 17,575 35,327 88,233 123,560 70,350 155,072 225,422 141,366 227,834 369,200

Profit before Amort. 5,184 (16,930) (13,186) 155,705 13,736 42,918 238,111 23,018 26,011 183,867 68,161 266,647

Amortization:R&D 2,840 2,840 5,965 5,965 0 0Installations 0 0 0 0OfficeMachines & Furniture 0 0 187 187 2,161 2,161Projection Equipment 0 460 460 1,000 1,000 3,800 3,800Vehicles 0 2,288 2,288 1,306 1,306 9,944 9,944Launching First Installation 0 0 1,000 1,000 15,000 15,000

Total Amortization 0 2,840 2,840 0 8,713 8,713 0 3,493 3,493 0 30,905 30,905

Interest & Bank Fees 0 0 0 0 0 0 0 5,741 5,741 0 8,364 8,364Paid Commissions/Other 0 0 0 0 0 0 0 8,346 8,346 0 19,393 19,393

Net Profit 5,184 (19,770) (16,026) 155,705 5,023 34,205 238,111 5,438 8,431 183,867 9,499 207,985

Expense Detail:Personnel 5,413 5,413 1,285 1,285 17,248 17,248 44,087 44,087Rent and associated Charges 0 0 31,535 31,535 20,387 20,387Doukakis Salary (per Swiger) 0 0 42,000 42,000 48,000 48,000 56,000 56,000Doukakis Draw 0 0 29,500 29,500 60,998 60,998 138,244 138,244Interest 24 40 64 371 1,462 1,833 6,184 6,184 3,122 3,122Computer Lease 0 1,960 1,960 6,649 6,649 6,688 6,688Office Furniture 1,731 1,731 8,519 8,519 5,828 5,828 7,447 7,447Insurance 0 709 709 1,423 1,423 4,425 4,425Maintenance & Repairs 499 499 1,014 1,014 3,762 3,762 719 719Vehicles Expense 0 2,497 2,497 12,581 12,581 29,704 29,704Telephone 439 439 4,927 4,927 4,986 4,986 7,857 7,857Postal & Stamps 0 1,551 1,551 1,231 1,231 1,401 1,401Newspapers, Journals 48 48 66 66 643 643 895 895Fees/Honaraires 4,250 4,250 5,651 5,651 16,344 16,344 18,457 18,457Publicity 3,012 3,012 11,383 11,383 0 0Travel & Appointments 2,119 2,119 5,209 5,209 4,391 4,391 23,195 23,195Taxes & Duties 0 0 0 1,424 1,424Gifts & Contributions 0 0 0 2,855 2,855Other 0 0 0 5,456 0 5,456 3,168 451 3,619 2,293 2,293

Total 24 17,551 17,575 35,327 88,233 123,560 70,350 155,072 225,422 141,366 227,834 369,200

INCOME STATEMENT

Gross TurnoverLess Returns, etc.Other IncomeAnhydrite SalesSales to France

Net Revenue

Purchases (Synth, FND)Purchases (Other)Documentation, Conf.Transport, Customs

Cost of Turnover

Gross Profit

Overhead (See Below)

Profit before Amort.

Amortization:R&DInstallationsOfficeMachines & FurnitureProjection EquipmentVehiclesLaunching First Installation

Total Amortization

Interest & Bank FeesPaid Commissions/Other

Net Profit

Expense Detail:PersonnelRent and associated ChargesDoukakis Salary (per Swiger)Doukakis DrawInterestComputer LeaseOffice FurnitureInsuranceMaintenance & RepairsVehicles ExpenseTelephonePostal & StampsNewspapers, JournalsFees/HonarairesPublicityTravel & AppointmentsTaxes & DutiesGifts & ContributionsOther

Total

EXHIBIT 2.2

FINANCIAL STATEMENTS

FIBERMESH (SUISSE) SA, FND INDUSTRIES (OVERSEAS), LTD., AND CONSOLIDATEDSWISS FRANCS

1989 1990 1991FND FM Total FND FM Total FND FM Total

966,318 1,665,555 1,665,555 1,153,440 1,832,183 1,832,183 824,496 1,143,205 1,143,2050 0 0

6,180 6,180 4,643 4,643 215 2150 0 79,334 79,3340 0 9,027 9,027

972,498 1,665,555 1,671,735 1,158,083 1,832,183 1,836,826 913,072 1,143,205 1,231,781

506,076 993,508 506,076 456,867 1,076,988 456,867 388,023 250,171 388,0230 0 36,952 36,952

41,815 41,815 82,845 82,845 94,490 94,49095,499 95,499 40,522 40,522 25,257 25,257

506,076 1,130,822 643,390 456,867 1,200,355 580,234 424,975 369,918 544,722

466,422 534,733 1,028,345 701,216 631,828 1,256,592 488,097 773,287 687,059

325,340 489,353 814,693 244,351 583,275 827,626 236,216 704,546 940,762

141,082 45,380 213,652 456,865 48,553 428,966 251,881 68,741 (253,703)

0 0 03,280 3,280 5,369 5,369 6,864 6,8642,782 2,782 12,170 12,170 18,731 18,731

465 465 1,179 1,179 2,139 2,1398,860 8,860 8,288 8,288 13,940 13,940

15,000 15,000 10,000 10,000 0 0

0 30,387 30,387 0 37,006 37,006 0 41,674 41,674

0 13,393 13,393 0 9,076 9,076 0 12,182 12,1820 0 0 0 0 0 0 13,524 13,524

141,082 1,600 169,872 456,865 2,471 382,884 251,881 1,361 (321,083)

132,930 132,930 202,883 202,883 336,870 336,87033,969 33,969 74,573 74,573 76,725 76,72586,000 86,000 78,000 78,000 78,000 78,000

310,045 310,045 226,143 226,143 178,280 178,2809,704 9,704 7,603 7,603 11,353 11,353

0 9,169 9,169 19,425 19,42514,769 14,769 14,966 14,966 8,420 8,4201,785 1,785 2,808 2,808 1,919 1,9198,477 8,477 11,323 11,323 15,475 15,475

49,049 49,049 51,138 51,138 41,171 41,1719,553 9,553 16,929 16,929 20,184 20,1844,923 4,923 4,450 4,450 4,115 4,1151,696 1,696 1,870 1,870 1,704 1,704

34,022 34,022 32,119 32,119 32,763 32,76315,264 15,264 28,977 28,977 24,382 24,38252,008 52,008 35,744 35,744 28,234 28,234

296 296 3,747 3,747 5,087 5,0871,270 1,270 5,269 5,269 0

5,591 43,342 48,933 10,605 9,310 19,915 46,583 10,072 56,655

325,340 489,353 814,693 244,351 583,275 827,626 236,216 704,546 940,762

EXHIBIT 2.3FINANCIAL STATEMENTS


1985 1986 1987 1988FND FM Consol FND FM Total FND FM Total FND FM Total

BALANCE SHEETAssetsCash and Credit Suisse Cash 0 2,356 2,356 (67,371) 0 (67,371) (75,944) 7,130 (68,814) 10,461 14,148 24,609Credit Suisse Cash 99 99 0 0 0Receivables/Clients 3,715 3,715 95,036 95,036 166,040 166,040 206,033 206,033Inventory 1,440 1,440 32,800 32,800 52,504 52,504 0 0Actionnaires 20,000 20,000 20,000 20,000 0 0Prepaid Expenses 276 276 0 0 0Warranties / Guarantees 0 4,000 4,000 4,000 4,000 25,000 25,000Publicity Materials 0 0 0 0Certificates 0 0 0 0Loans to Employees 0 0 0 0Advanced Taxes 0 0 0 0Transitional Assets 0 0 0 13,232 13,232Loan/Investment to/in Fibermesh 0 84,000 Eliminated 80,000 Eliminated 0 0French PropertyFixed Assets (See below) 39,767 39,767 54,469 54,469 71,500 71,500 81,000 81,000

Total Assets 0 67,653 67,653 16,629 206,305 138,934 4,056 301,174 225,230 10,461 339,413 349,874

Liabilities

Credit Suisse 0 20,627 20,627Caisse d'Epargne 0 0 159,547 159,547 87,120 87,120Suppliers (Fournisseurs) 5,760 5,760 77,296 77,296 49,212 49,212 in payables 0Payables (Creanciers) 31,563 31,563 73,129 73,129 51,059 51,059 161,439 161,439Due on Amenities (Solde du s/installations) 0 0 0 0Loan from Head Office 0 0 0 25,000 25,000Transitional Debts 0 0 0 15,000 15,000

Total Liabilities 0 37,323 37,323 0 171,052 171,052 0 259,818 259,818 288,559 288,559

EquityOriginal Fibermesh Capital 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000Original FND Capital (USD 20,000) 28,000 28,000 28,000 28,000 28,000 28,000 28,000 28,000FND Adjustment (33,184) (33,184) (172,260) (256,260) (422,944) (502,944) (600,406) (600,406)Prior Retained Earnings 0 0 0 5,184 (19,770) (14,586) 160,889 (14,082) 146,807 399,000 (8,644) 390,356Current Profit 5,184 (19,770) (14,586) 155,705 5,023 160,728 238,111 5,438 243,549 183,867 9,499 193,366Current Retained Earnings 5,184 (19,770) (14,586) 160,889 (14,747) 146,142 399,000 (8,644) 390,356 582,867 855 583,722

Total Equity 0 30,230 30,230 16,629 35,253 (32,118) 4,056 41,356 (34,588) 10,461 50,855 61,316

Total Liabilities & Equity 0 67,553 67,553 16,629 206,305 138,934 4,056 301,174 225,230 10,461 339,414 349,875

Recap: Fixed AssetsR&D 42,607 39,767less Dep/Amort (2,840) (5,965)Machines et Mobilier 3,799 13,273less Dep/Amort (299) (2,273)Materiel de projection 3,070 14,397 17,197less Dep/Amort (460) (2,397) (5,197)Vehicles 20,345 19,684 44,322less Dep/Amort (2,288) (2,684) (11,322)Lancement/lere Installation 39,000 25,000less Dep/Amort 0 0Amenagement installations

Total 39,767 54,469 71,500 81,000

BALANCE SHEETAssetsCash and Credit Suisse CashCredit Suisse CashReceivables/ClientsInventoryActionnairesPrepaid ExpensesWarranties / GuaranteesPublicity MaterialsCertificatesLoans to EmployeesAdvanced TaxesTransitional AssetsLoan/Investment to/in FibermeshFrench PropertyFixed Assets (See below)

Total Assets

Liabilities

Credit SuisseCaisse d'EpargneSuppliers (Fournisseurs)Payables (Creanciers)Due on Amenities (Solde du s/installations)Loan from Head OfficeTransitional Debts

Total Liabilities

EquityOriginal Fibermesh CapitalOriginal FND Capital (USD 20,000)FND AdjustmentPrior Retained EarningsCurrent ProfitCurrent Retained Earnings

Total Equity

Total Liabilities & Equity

Recap: Fixed AssetsR&Dless Dep/AmortMachines et Mobilierless Dep/AmortMateriel de projectionless Dep/AmortVehiclesless Dep/AmortLancement/lere Installationless Dep/AmortAmenagement installations

Total

EXHIBIT 2.4FINANCIAL STATEMENTS


1989 1990 1991FND FM Total FND FM Total FND FM Total

(138,386) 3,403 (134,983) 47,120 3,158 50,278 (240,932) 4,287 (236,645)0 0 0

350,888 350,888 168,343 168,343 124,310 124,3106,480 6,480 61,152 61,152 75,000 75,000

0 0 00 0 0

28,990 28,990 44,781 44,781 27,182 27,1820 56,928 56,928 37,551 37,551

14,000 14,000 14,000 14,000 35,957 35,9576,000 6,000 6,000 6,000 6,750 6,750

48 48 288 288 449 449218 218 2,137 2,137 0

0 0 20,000 Eliminated 0 Eliminated382,447 382,447 382,447 382,447 382,447 382,447

140,637 140,637 115,000 199,621 314,621 277,943 277,943

244,061 550,664 794,725 564,567 556,408 1,100,975 141,515 589,429 730,944

156,667 156,667 108,225 108,225 227,334 227,334186,624 186,624 220,664 220,664 in payables 0124,460 124,460 130,007 130,007 305,809 305,80930,458 30,458 0 0

0 0 00 42,587 42,587 0

0 498,209 498,209 0 501,483 501,483 0 533,143 533,143

50,000 50,000 50,000 50,000 50,000 50,00028,000 28,000 27,767 27,767 28,694 28,694

(507,888) (507,888) (644,014) (664,014) (1,319,874) (1,319,874)582,867 855 583,722 723,949 2,455 726,404 1,180,814 4,925 1,185,739141,082 1,600 142,682 456,865 2,470 459,335 251,881 1,361 253,242723,949 2,455 726,404 1,180,814 4,925 1,185,739 1,432,695 6,286 1,438,981

244,061 52,455 296,516 564,567 54,925 599,492 141,515 56,286 197,801

244,061 550,664 794,725 564,567 556,408 1,100,975 141,515 589,429 730,944

59,811 111,710 143,580(4,859) (17,029) (35,760)3,095 10,695 10,695

(1,470) (2,649) (4,788)44,322 67,616 134,834

(20,182) (25,464) (25,749)10,000 0 0

0 0 051,200 61,391 68,644(1,280) (6,649) (13,513)

140,637 199,621 277,943

EXHIBIT 3SWISS ECONOMIC STATISTICS

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994

Population (millions) IMF 6.62 6.67 6.72 6.80 6.87 6.94 6.99 7.04Labor Force (millions) IMF 3.54 3.63 3.72 3.84 3.91 3.90 3.95 3.96Employment (millions) IMF 3.52 3.61 3.70 3.82 3.87 3.80 3.78 3.79Unemployment Rate IMF 0.7% 0.6% 0.5% 0.5% 1.1% 2.5% 4.5% 4.7%

Gross National Product (SFr mill)Nominal SNB 241,355 254,925 266,090 282,950 305,170 327,585 345,390 352,195 358,405 365,475Nominal (annual rate of change) SNB 5.6% 4.4% 6.3% 7.9% 7.3% 5.4% 2.0% 1.8% 2.0%Real (1980) SNB 194,235 196,590 199,465 206,710 212,010 217,345 217,205 215,600 214,460 215,940Real (annual rate of change) SNB 1.2% 1.5% 3.6% 2.6% 2.5% -0.1% -0.7% -0.5% 0.7%

Consumer Price Index (CPI) SNB 77.5 78.2 79.3 80.8 83.3 87.8 93.0 96.7 99.9 100.8CPI (annual rate of change) SNB 0.9% 1.4% 1.9% 3.1% 5.4% 5.9% 4.0% 3.3% 0.9%

Commercial Construction IMF 14,848 15,483 16,447 17,621 19,098 19,997 19,914 19,843 18,817 18,550Investment in Machinery & Eq IMF 21,223 23,509 24,565 26,762 27,546 29,497 28,830 24,972 23,721 25,104

Total Business Sector Investment IMF 36,071 38,962 40,682 44,383 46,644 49,494 48,744 44,815 45,538 43,653(SFr thsd, 1980 Prices)

Investments in ConstructionPrivate Sector Housing SNB 14,197 14,354 15,045 16,326 18,008 18,331 17,040 16,423 16,934 22,748Private Sector Other SNB 8,770 9,674 10,699 12,455 14,457 15,858 15,042 13,678 11,921 12,992Private Sector Total SNB 22,967 24,028 25,744 28,781 32,465 34,189 32,082 30,101 28,855 35,740Public Sector SNB 10,190 10,786 11,194 12,393 13,606 14,993 16,184 16,561 15,981 18,135Total SNB 33,157 34,814 36,938 41,174 46,071 49,182 48,266 46,662 44,836 53,875

Price Index (Construction Materials) SNB 229.6 235.2 237.5 254.0 254.0 268.1 285.0 297.3 NAV NAVPrice Index (annual rate of change) SNB 2.4% 1.0% 6.9% 0.0% 5.6% 6.3% 4.3%

Ready Mix Concrete DataNumber of Producers ERMI 200 170 260 260 260 250 190 190 190 220Number of Plants ERMI 220 250 320 320 320 350 280 280 300 300Number of Truck Mixers ERMI 250 340 550 600 590 750 750 750 750 750Production (1,000 cu mtrs) ERMI 9,100 9,600 10,000 11,200 12,000 11,500 10,700 10,700 8,900 9,700Production (Pctge Change) ERMI 5.5% 4.2% 12.0% 7.1% -4.2% -7.0% 0.0% -16.8% 9.0%

y: IMF: International Monetary Fund, Switzerland: Selected Issues and Statistical Appendix, April 1998SNB: Swiss National Bank, Bulletin for November 1995ERMI: European Ready Mixed Concrete Organization, Report of Members' Activities, 1994-1995

te: Monetary amounts in thousands of Swiss francs, unless otherwise noted.

EXHIBIT 4.1FIBERMESH (SUISSE)/FND

DEVELOPMENT OF NORMALIZED DEBT FREE CASH FLOW ESTIMATES

Scenario 1 Scenario 2

Sales (Normalized) 1,922SFr. 2,013SFr.

less Cost of Sales 673 705

Gross Profit 1,249 1,308

less Operating Expenses and Depr. (Normalized) 692 725Normalized EBIT 557 584

plus Normalized Other Income 0 0

Normalized Pretax (EBT) 557 584less Taxes at 10% 56 58

Normalized Debt-free Net Income 501 526Capital Expenditures/Depreciation, Net (Note 1) 0 0Working Capital Addition, for specified growth rate (10) (20)

Net Cash Flow 492SFr. 506SFr. Growth Assumption 5.0% 10.0%

Notes:

(1) Depreciation and capital expenditures are expected tooffset each other over the long-term.

(2) Cost of Sales Ratio 35.0% 35.0%

Operating Expense Ratio 34.0% 34.0%Depreciation Ratio 2.0% 2.0%Total Op Exp & Depr. 36.0% 36.0%

(3) Derivation of Debt Free Working Capital:Estimated Revenue 1,922 2,013Debt-Free Working Capital Turnover (Market) 10.0 10.0Debt-Free Working Capital (Rounded) 190 200


DERIVATION OF CAPITALIZATION RATE


Small Stock Return 16.0% 16.0%Industry/Company Specific Risk 2.0% 6.0%

Discount Rate 18.0% 22.0%

After Tax Debt Rate 9.0% 9.0%

Weighted Cost of Capital (Discount Rate) 15.8% 18.8%

Debt-to-Capital Ratio 25.0% 25.0%Cost of Debt 10.0% 10.0%Tax Rate 10.0% 10.0%

Weighted Cost of Capital (Discount Rate) 15.8% 18.8%less Growth Rate 5.0% 10.0%

Capitalization Rate 10.8% 8.8%


CAPITALIZATION OF NET CASH FLOW


Debt Free Net Cash Flow 492SFr. 506SFr. Capitalization Rate 10.8% 8.8%

Indicated Capital Value 4,574SFr. 5,780SFr.

plus Other Investments 382 382less Debt (108) (108)

Indicated Total Value 4,848SFr. 6,054SFr.

Rounded to 4,850SFr. 6,050SFr.

EXHIBIT 5DATA CONCERNING SWISS STOCK MARKET AND RISK PREMIUMS

1987 1988 1989 1990 1991 1992

Swiss Performance Index (SPI) 769.4 942.5 1,137.9 908.3 1,052.8 1,238.6Indicated Return 22.5% 20.7% -20.2% 15.9% 17.6%Annual Average Return (Arithmetic) 22.5% 21.6% 7.7% 9.7% 11.3%

Swiss Market Index (SMI) 1,435.4 1,778.1 1,383.1 1,670.1 2,107.0Indicated Return 23.9% -22.2% 20.8% 26.2%Annual Average Return (Arithmetic) 23.9% 0.8% 7.5% 12.1%

Swiss 3-month Government Obligations 3.18% 3.01% 6.60% 8.32% 7.75% 7.76%

U.S. 3-month Treasury Bills 5.83% 6.69% 8.12% 7.47% 5.36% 3.41%

Risk PremiumsSPI over Swiss 19.5% 14.1% -28.5% 8.2% 9.9%Annual Average Return (Arithmetic) 19.5% 16.8% 1.7% 3.3% 4.6%

SPI over U.S. 15.8% 12.6% -27.6% 10.5% 14.2%Annual Average Return (Arithmetic) 15.8% 14.2% 0.3% 2.8% 5.1%

SMI over Swiss 17.3% -30.5% 13.0% 18.4%Annual Average Return (Arithmetic) 17.3% -6.6% -0.1% 4.5%

SMI over U.S. 15.8% -29.7% 15.4% 22.8%Annual Average Return (Arithmetic) 15.8% -7.0% 0.5% 6.1%

1926 1988 1991 19261995 1992 1995 1990

Total Returns (Arithmetic Mean) on Large Company Stocks 12.5% 16.7% 17.4% 12.1%Small Company Stocks 17.7% 15.9% 25.3% 17.1%Long Term Government Bonds 5.5% 12.3% 13.9% 4.9%Treasury Bills 3.8% 6.3% 4.3% 3.8%

Large minus Small Company Stocks 5.2% -0.8% 7.9% 5.0%Long Term Government minus T-Bills 1.7% 5.9% 9.6% 1.1%

Large Company Stocks minus LTGB 7.0% 4.4% 3.5% 7.3%Large Company Stocks minus T-Bills 8.7% 10.3% 13.1% 8.4%Small Company Stocks minus LTGB 12.2% 3.6% 11.4% 12.3%Small Company Stocks minus T-Bills 13.9% 9.6% 21.0% 13.4%


DISCOUNTED DEBT-FREE NET DISCRETIONARY CASH FLOWPROJECTION ASSUMPTIONS

SWISS FRANCS

FIVEYEAR ACTUAL YEAR YEAR YEAR YEAR YEAR TERMINAL

AVERAGE 1990 1 2 3 4 5 YEAR

REVENUE GROWTH RATES:GROSS REVENUE 36.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5%

38.3% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5%COST OF SALES AS % OF REVENUE: OTHER ITEMS 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% AMORTIZATION 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% OTHER 40.7% 31.7% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0%

40.7% 31.7% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0%

OPERATING EXPENSES AS % OF REVENUE: OTHER ITEMS 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% AMORTIZATION 2.1% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% OTHER 43.3% 36.8% 34.0% 34.0% 34.0% 34.0% 34.0% 34.0%

45.4% 38.8% 36.0% 36.0% 36.0% 36.0% 36.0% 36.0%

FEDERAL & STATE EFFECTIVE TAX RATE 0.0% 0.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%ANNUAL CAPITAL EXPENDITURES 40,000 43,000 46,225 49,692 53,419 57,425DEPRECIABLE LIFE OF CAPITAL EXPENDITURES 5 5 5 5 5 5

WORKING CAPITAL AS % OF REVENUE OR CGS: ACCOUNTS RECEIVABLE (DAYS OF SALES) 81.4 33.5 40.0 40.0 40.0 40.0 40.0 40.0 INVENTORY (DAYS OF COST OF SALES) 56.8 38.5 40.0 40.0 40.0 40.0 40.0 40.0 OTHER CURRENT ASSETS (DAYS OF COST OF SALES) 54.5 78.1 80.0 80.0 80.0 80.0 80.0 80.0 DAYS OF PAYABLES (DAYS OF COST OF SALES) 268.3 220.6 60.0 60.0 60.0 60.0 60.0 60.0 DAYS OF ACCRUALS (DAYS OF COST OF SALES) NA NA 0.0 0.0 0.0 0.0 0.0 0.0 MINIMUM OPERATING CASH BALANCE 53,750 57,781 62,115 66,773 71,781 77,165

DISCOUNT RATE 17.3% 17.3% 17.3% 17.3% 17.3% 17.3%LONG-TERM GROWTH RATE 7.5%


DISCOUNTED DEBT-FREE NET DISCRETIONARY CASH FLOWYEARS END DECEMBER 31

SWISS FRANCS

YEAR YEAR YEAR YEAR YEARACTUAL 1 2 3 4 5 TERMINAL

1990 1991 1992 1993 1994 1995 YEAR

REVENUE:GROSS REVENUE 1,832,183 1,969,597 2,117,316 2,276,115 2,446,824 2,630,336 2,827,611

NET REVENUE 1,832,183 1,969,597 2,117,316 2,276,115 2,446,824 2,630,336 2,827,611

COST OF REVENUE 580,234 689,359 741,061 796,640 856,388 920,617 989,664

GROSS PROFIT 1,251,949 1,280,238 1,376,256 1,479,475 1,590,436 1,709,718 1,837,947

DOUKAKIS SALARY (per Swiger) NA NA NA NA NA NA NADOUKAKIS DRAW NA NA NA NA NA NA NAOPERATING EXPENSES NA NA NA NA NA NA NAAMORTIZATION NA NA NA NA NA NA NAADJUSTMENTS NA NA NA NA NA NA NATOTAL NET OPERATING EXPENSES 710,489 709,055 762,234 819,401 880,857 946,921 1,017,940

OPERATING (EBIT) PROFIT 541,460 571,183 614,022 660,073 709,579 762,797 820,007

INTEREST AND BANK FEES 9,076 0 0 0 0 0 0PAID COMMISSIONS 0 0 0 0 0 0 0

PRETAX INCOME 532,384 571,183 614,022 660,073 709,579 762,797 820,007

INCOME TAXES 0 57,118 61,402 66,007 70,958 76,280 82,001

NET INCOME SFr. 532,384 SFr. 514,065 SFr. 552,620 SFr. 594,066 SFr. 638,621 SFr. 686,518 SFr. 738,006

SUPPLEMENTAL DATA SHARES OUTSTANDING 1,000 1,000 1,000 1,000 1,000 1,000 1,000 EARNINGS PER SHARE 532 514 553 594 639 687 738 DIVIDENDS 0 183,777 523,247 562,491 604,678 650,028 698,781 UNUSUAL ITEMS NOT INCLUDED ABOVE 0 0 0 0 0 0 0

COST OF GOODS SOLD: OTHER ITEMS 0 0 0 0 0 0 0 AMORTIZATION 0 0 0 0 0 0 0 OTHER 580,234 689,359 741,061 796,640 856,388 920,617 989,664

580,234 689,359 741,061 796,640 856,388 920,617 989,664OPERATING EXPENSES OTHER ITEMS 0 0 0 0 0 0 0 AMORTIZATION 37,006 39,392 42,346 45,522 48,936 52,607 56,552 OTHER 673,483 669,663 719,888 773,879 831,920 894,314 961,388

710,489 709,055 762,234 819,401 880,857 946,921 1,017,940

EBITDA 578,466 610,575 656,368 705,596 758,515 815,404 876,559


PROJECTED PERCENTAGE INCOME STATEMENTSYEARS END DECEMBER 31

FIVE-YEAR 1990 YEAR YEAR YEAR YEAR YEAR TERMINAL

AVERAGE 1 2 3 4 5 YEAR

REVENUE:GROSS REVENUE 98.2% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% TOTAL REVENUE 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

COST OF SALES 40.7% 31.7% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0%

GROSS PROFIT 59.3% 68.3% 65.0% 65.0% 65.0% 65.0% 65.0% 65.0%

OPERATING EXPENSES 45.4% 38.8% 36.0% 36.0% 36.0% 36.0% 36.0% 36.0%

OPERATING PROFIT 13.9% 29.6% 29.0% 29.0% 29.0% 29.0% 29.0% 29.0%

INTEREST EXPENSE 0.9% 0.5% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%OTHER (INCOME) EXPENSE 0.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

PRETAX INCOME 12.1% 29.1% 29.0% 29.0% 29.0% 29.0% 29.0% 29.0%

INCOME TAXES 0.0% 0.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%

NET INCOME 12.1% 29.1% 26.1% 26.1% 26.1% 26.1% 26.1% 26.1%

COST OF GOODS SOLD: OTHER ITEMS 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% AMORTIZATION 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% OTHER 40.7% 31.7% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% TOTAL 40.7% 31.7% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0%

OPERATING EXPENSES OTHER ITEMS 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% AMORTIZATION 2.1% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% OTHER 43.3% 36.8% 34.0% 34.0% 34.0% 34.0% 34.0% 34.0% TOTAL 45.4% 38.8% 36.0% 36.0% 36.0% 36.0% 36.0% 36.0%

EBITDA 16.1% 31.6% 31.0% 31.0% 31.0% 31.0% 31.0% 31.0%


PROJECTED BALANCE SHEETSYEARS END DECEMBER 31

SWISS FRANCS

YEAR YEAR YEAR YEAR YEAR TERMINAL12/31/1990 1 2 3 4 5 YEAR

ASSETS CURRENT ASSETS CASH & EQUIVALENTS 50,278 53,750 57,782 62,115 66,773 71,782 77,165 ACCOUNTS RECEIVABLE 168,343 215,846 232,035 249,437 268,145 288,256 309,875 INVENTORIES 61,152 75,546 81,212 87,303 93,851 100,890 108,456 PREPAID EXPENSES AND OTHER 124,134 151,092 162,424 174,606 187,702 201,779 216,913 TOTAL CURRENT ASSETS 403,907 496,235 533,453 573,462 616,471 662,707 712,409

PROPERTY, PLANT, & EQUIPMENT: LAND 0 0 0 0 0 0 0 BUILDINGS 0 40,000 83,000 129,225 178,917 232,336 289,761 AUTOMOTIVE EQUIPMENT 0 0 0 0 0 0 0 OTHER EQUIPMENT 0 0 0 0 0 0 0 GROSS PROPERTY & EQUIPMENT 314,621 354,621 397,621 443,846 493,538 546,957 604,382 ACCUMULATED DEPRECIATION 0 (39,392) (81,738) (127,261) (176,197) (228,804) (285,356) NET PROPERTY & EQUIPMENT 314,621 315,229 315,883 316,585 317,341 318,153 319,026

OTHER ASSETS: FRENCH PROPERTY 382,447 382,447 382,447 382,447 382,447 382,447 382,447 OTHER 0 0 0 0 0 0 0 TOTAL OTHER ASSETS 382,447 382,447 382,447 382,447 382,447 382,447 382,447

TOTAL ASSETS 1,100,975 1,193,911 1,231,783 1,272,494 1,316,259 1,363,307 1,413,882

LIABILITIES & EQUITY CURRENT LIABILITIES ACCOUNTS PAYABLE 350,671 113,319 121,818 130,955 140,776 151,334 162,684 OTHER LIABILITIES 42,587 42,587 42,587 42,587 42,587 42,587 42,587 CURRENT DEBT 108,225 108,225 108,225 108,225 108,225 108,225 108,225 TOTAL CURRENT LIABILITIES 501,483 264,131 272,630 281,767 291,588 302,146 313,496

SENIOR LONG TERM DEBT 0 0 0 0 0 0 0SHAREHOLDER DEBT 0 0 0 0 0 0 0DEFERRED INCOME TAXES 0 0 0 0 0 0 0OTHER LONG-TERM LIABILITIES 0 0 0 0 0 0 0

STOCKHOLDERS' EQUITY ORIGINAL FND CAPITAL 27,767 27,767 27,767 27,767 27,767 27,767 27,767 ORIGINAL FIBERMESH CAPITAL 50,000 50,000 50,000 50,000 50,000 50,000 50,000 FND ADJUSTMENT (664,014) (664,014) (664,014) (664,014) (664,014) (664,014) (664,014) RETAINED EARNINGS 1,185,739 1,516,027 1,545,399 1,576,974 1,610,917 1,647,407 1,686,632 TREASURY STOCK 0 0 0 0 0 0 0 TOTAL STOCKHOLDERS' EQUITY 599,492 929,780 959,153 990,728 1,024,671 1,061,160 1,100,386

TOTAL LIABILITIES & EQUITY 1,100,975 1,193,911 1,231,783 1,272,494 1,316,259 1,363,307 1,413,882


PROJECTED CASH FLOW STATEMENTSYEARS END DECEMBER 31

SWISS FRANCS

YEAR YEAR YEAR YEAR YEAR TERMINAL1 2 3 4 5 YEAR

CASH FROM OPERATIONS NET INCOME 514,065 552,620 594,066 638,621 686,518 738,006 ITEMS NOT REQUIRING CASH: DEPRECIATION & AMORTIZATION 39,392 42,346 45,522 48,936 52,607 56,552 DEFERRED TAXES 0 0 0 0 0 0 OTHER 0 0 0 0 0 0TOTAL CASH FROM OPERATIONS 553,457 594,966 639,588 687,558 739,124 794,559

WORKING CAPITAL CHANGE ACCOUNTS RECEIVABLE (47,503) (16,188) (17,403) (18,708) (20,111) (21,619) INVENTORIES (14,394) (5,666) (6,091) (6,548) (7,039) (7,567) OTHER (26,958) (11,332) (12,182) (13,095) (14,078) (15,133) CURRENT ASSETS EX. CASH (88,856) (33,186) (35,675) (38,351) (41,227) (44,319) ACCOUNTS PAYABLE (237,352) 8,499 9,136 9,822 10,558 11,350 OTHER CURRENT LIABILITIES PAYABLE 0 0 0 0 0 0 CURRENT LIABIL. EXCL.DEBT (237,352) 8,499 9,136 9,822 10,558 11,350

NET WORKING CAPITAL CHANGE (326,207) (24,687) (26,539) (28,529) (30,669) (32,969)

CASH INVESTED ADDITIONS TO PROPERTY (40,000) (43,000) (46,225) (49,692) (53,419) (57,425) OTHER 0 0 0 0 0 0TOTAL CASH INVESTED (40,000) (43,000) (46,225) (49,692) (53,419) (57,425)

FINANCING ISSUE (PURCHASE) OF STOCK 0 0 0 0 0 0 CURRENT BORROWING 0 0 0 0 0 0 LONG TERM DEBT 0 0 0 0 0 0OTHER LONG-TERM LIABILITIES 0 0 0 0 0 0TOTAL FINANCING 0 0 0 0 0 0

CASH AVAILABLE FOR DISTRIBUTION 187,249 527,279 566,824 609,336 655,036 704,164

DIVIDENDS / DISTRIBUTIONS (183,777) (523,247) (562,491) (604,678) (650,028) (698,781)

NET CHANGE IN CASH 3,472 4,032 4,333 4,658 5,008 5,383

BEGINNING CASH 50,278 53,750 57,782 62,115 66,773 71,782

ENDING CASH 53,750 57,782 62,115 66,773 71,782 77,165

CHECH-ACTUAL CASH 53,750 57,782 62,115 66,773 71,782 77,165


PROJECTED RATIO ANALYSISYEARS END DECEMBER 31

MONETARY AMOUNTS IN SWISS FRANCS

1990 YEAR YEAR YEAR YEAR YEAR TERMINAL1 2 3 4 5 YEAR

LIQUIDITY RATIOSCURRENT RATIO 0.8 1.9 2.0 2.0 2.1 2.2 2.3QUICK RATIO 0.4 1.0 1.1 1.1 1.1 1.2 1.2DAYS OF RECEIVABLES (SALES) 33.5 40.0 40.0 40.0 40.0 40.0 40.0DAYS OF INVENTORIES (COGS) 38.5 40.0 40.0 40.0 40.0 40.0 40.0DAYS OF OTHER ASSETS (COGS) 24.7 80.0 80.0 80.0 80.0 80.0 80.0DAYS OF PAYABLES (COGS) 220.6 60.0 60.0 60.0 60.0 60.0 60.0DEBT FREE WORKING CAPITAL 10,649 340,329 369,048 399,920 433,108 468,785 507,138

CREDIT RATIOSTOTAL FUNDED DEBT 108,225 108,225 108,225 108,225 108,225 108,225 108,225INTEREST TO TOTAL DEBT 8.4% 0.0% 0.0% 0.0% 0.0% 0.0% 1.4%INTEREST COVERAGE (EBIT/INT.) 60.2 NA NA NA NA NA NAEBITDA TO TOTAL FUNDED DEBT 538.8% 564.2% 606.5% 652.0% 700.9% 753.4% 809.9%FUNDED DEBT TO EQUITY 0.2 0.1 0.1 0.1 0.1 0.1 0.1FUNDED DEBT TO TOTAL CAPITAL 15.3% 10.4% 10.1% 9.8% 9.6% 9.3% 9.0%

TURNOVER RATIOSSALES/ TOTAL ASSETS 1.7 1.6 1.7 1.8 1.9 1.9 2.0SALES/ WORKING CAPITAL (18.8) 8.5 8.1 7.8 7.5 7.3 7.1SALES/ DEBT-FREE WORKING CAPITAL 172.5 5.8 5.7 5.7 5.6 5.6 5.6SALES/ NET FIXED ASSETS 5.8 6.2 6.7 7.2 7.7 8.3 8.9SALES/ EQUITY 3.1 2.1 2.2 2.3 2.4 2.5 2.6

MARGINSGROSS PROFIT MARGIN 68.4% 65.0% 65.0% 65.0% 65.0% 65.0% 65.0%EBITDA MARGIN 31.7% 31.0% 31.0% 31.0% 31.0% 31.0% 31.0%OPERATING PROFIT MARGIN 29.7% 29.0% 29.0% 29.0% 29.0% 29.0% 29.0%PRETAX MARGIN 29.2% 29.0% 29.0% 29.0% 29.0% 29.0% 29.0%NET PROFIT MARGIN 29.2% 26.1% 26.1% 26.1% 26.1% 26.1% 26.1%

RATES OF RETURNEBIT / TOTAL ASSETS 49.6% 47.8% 49.8% 51.9% 53.9% 56.0% 58.0%EBITDA / (DEBT+EQUITY) 82.4% 58.8% 61.5% 64.2% 67.0% 69.7% 72.5%EBIT / (DEBT+EQUITY) 77.2% 55.0% 57.5% 60.1% 62.6% 65.2% 67.8%RETURN ON EQUITY 89.6% 55.3% 57.6% 60.0% 62.3% 64.7% 67.1%

VARIABILITY - % CHANGE INNET SALES 7.5% 7.5% 7.5% 7.5% 7.5% 7.5%EBITDA 5.6% 7.5% 7.5% 7.5% 7.5% 7.5%OPERATING (EBIT) INCOME 5.5% 7.5% 7.5% 7.5% 7.5% 7.5%NET INCOME -3.4% 7.5% 7.5% 7.5% 7.5% 7.5%

EXHIBIT 7FIBERMESH/FND CONSOLIDATED

DISCOUNTED DEBT-FREE NET DISCRETIONARY CASH FLOWSUMMARY OF VALUE ANALYSIS

SWISS FRANCS

YEAR YEAR YEAR YEAR YEAR TERMINAL1 2 3 4 5 YEAR

DIVIDENDS SFr. 183,777 SFr. 523,247 SFr. 562,491 SFr. 604,678 SFr. 650,028 See Below CAPITALIZED VALUE OF TERMINAL YEAR CASH FLOW 0 0 0 0 0 7,130,418 TOTAL DEBT-FREE NET DISCRETIONARY CASH FLOW 183,777 523,247 562,491 604,678 650,028 7,130,418

DISCOUNT FACTOR 17.3% 0.9233 0.7871 0.6711 0.5721 0.4877 0.4877

DISCOUNTED DEBT-FREE NET DISCRETIONARY CASH FLOW 169,684 411,870 377,460 345,924 317,023 3,477,555

VALUE OF TOTAL INVESTED CAPITAL SFr. 5,099,516 Capitalized Value of Terminal Year Cash Flow

LESS: DEBT (108,225) Terminal Year Cash Flow SFr. 698,781

VALUE OF TOTAL EQUITY SFr. 4,991,291 Discount Rate 17.3%PLUS FRENCH PROPERTY 382,447 Long Term Growth Rate 7.5%

TOTAL SFr. 5,373,738 Capitalization Rate 9.8%

ROUNDED SFr. 5,370,000 Capitalized Value 7,130,418

EXHIBIT 8SUMMARY OF DAMAGES

AmountSwiss Francs

Value of the Company at January 1, 1991

Direct Capitalization Analysis (Average) 5,450,000Discounted Cash Flow Analysis 5,370,000

Reconciled Value 5,410,000

Losses in Subsequent Years1991 214,8031992 349,2811993 502,2991994 (Profit) (20,171)

Total 1,046,212

Total Value and Losses 6,456,212

DAVID M. KATZEN, ASA, ACA

Mr. Katzen is a Principal of Katzen, Marshall & Associates, Inc. Since entering the appraisal profession in 1981, he has been responsible for over 1,000 valuations of securities, business enterprises, real estate, machinery/equipment and intangible assets. Prior to forming Katzen, Marshall & Associates, Inc., Mr. Katzen was a Partner in Ernst & Young’s Valuation Services Group. He was responsible for field investigations, analysis, and report preparation of valuation studies. Before joining Ernst & Young, Mr. Katzen was a senior investigations accountant with the London - based office of Laventhol & Horwath. Mr. Katzen also brings five years’ experience in audit and tax. Experience Mr. Katzen has valued firms ranging in total assets from $200 thousand to $1 billion. The valuations were performed for:

• Allocation of Purchase Price for Tax and Financial Reporting • Estate and Gift Tax Planning and Reporting • Merger and Acquisition Planning • Dissident Shareholder Actions • Arbitration • International Transfer Pricing • Financing • Employee Stock Ownership Plans • Regulatory Reporting • Management Planning • Property Tax Appeals • Divorce

His industry experience includes Agribusiness, Energy, Automotive, Financial Institutions, Telecommunications, Manufacturing, Construction, Publishing, Service Companies, Retail, Distribution, Apparel, High Tech and Computer Software, Health Care, and various special niche industries. Mr. Katzen is also involved in the international financial arena, devoting his experience to the valuation of various firms in the United Kingdom, France, Belgium, Germany, Holland, Italy, Bulgaria, Hungary and Mexico. He is in a position to offer consulting and valuation services to groups desiring such expertise. Court Testimony Mr. Katzen provides consulting and expert testimony for litigation purposes, including dissenting shareholder suits, divorce, lost profit suits, bankruptcy, etc. He has participated in litigation cases in Texas, Arizona and Oklahoma.

DAVID M. KATZEN, ASA, ACA (CONTINUED) Education Mr. Katzen holds a bachelor of science degree in commerce with a concentration in finance from the University of the Witwatersrand, Johannesburg, South Africa. He has also completed the required curriculum to achieve his designation as a member of the Institute of Chartered Accountants in England and Wales. He is also an accredited senior appraiser (ASA) in the American Society of Appraisers in the Business Valuation discipline. Professional Associations Senior Member, American Society of Appraisers, Business Valuation Discipline Past President, D/FW Chapter, American Society of Appraisers Member, Institute of Chartered Accountants in England and Wales Member, The ESOP Association Member, Dallas Estate Planning Council

ROBERT DERSE, CFA Mr. Derse is a senior appraiser with Katzen, Marshall & Associates, Inc. He has been active in the valuation and consulting business since 1979, beginning with Newcombe & Hansen Appraisals in Minneapolis. He joined the Dallas office of Kenneth Leventhal & Company in 1990 and performed and supervised a wide variety of valuation and consulting assignments for real estate and business interests, advancing to the level of Senior Manager. Kenneth Leventhal & Company was merged into Ernst & Young LLP.

Experience

Mr. Derse’s diversified experience includes the following valuation, consulting, and financial analysis assignments:

• Conducted business valuations of a wide variety of manufacturing, distributing, commercial service, and real-estate related companies. Highlights include two large homebuilders, a rapidly growing financial software developer, several construction contractors, a nationwide distributor of telecommunications equipment, a prominent local real estate brokerage, a national real estate developer, and a manufacturer of promotional apparel.

• Performed appraisals of numerous limited and general partnership interests, involving analysis of complex partnership tiering and discount issues. Several assignments for large estates required the valuation of multiple interests in a systematic manner.

• Analyzed partially completed development management contracts and other intangible assets for a developer client undergoing restructuring.

• Valued general partnership interests in publicly traded limited partnerships and real estate investment trust management contracts in a fraudulent conveyance action.

• Created and provided deposition testimony with respect to computerized models to demonstrate distribution of cash flows among creditors in a bankruptcy action.

• Appraised and reviewed appraisals of hundreds of properties including shopping centers, office buildings, condominium and apartment complexes, hotels, industrial facilities, senior housing developments, vacant land parcels and subdivisions, and special use properties.

• Completed feasibility studies and financial analyses of shopping centers, condominium developments, and headquarters office facilities.

• Conducted due diligence for various commercial loan and real estate portfolios.

ROBERT DERSE, CFA (CONTINUED) Litigation Support Mr. Derse has qualified as an expert witness in Federal District and U.S. Bankruptcy courts, and has provided valuation and financial analysis to support litigation in numerous accountant’s liability, divorce, and business dispute cases. Education Mr. Derse holds a Master of Science degree in Business, with majors in Real Estate and Finance and a Bachelor of Business Administration degree from the University of Wisconsin-Madison. He earned the Chartered Financial Analyst (CFA) designation in 1998. Professional Associations

• Member, Dallas Society of Financial Analysts. • Member, CFA Institute. • The Appraisal Institute: MAI Designation No. 7459, awarded November 1986. • Texas General Appraiser Certification No. TX-1322885-G.

COURT TESTIMONY - DAVID M. KATZEN U.S. Bankruptcy Court, Northern District of Texas, Dallas Division - National Gysum Case (Chapter 11)

U.S. Bankruptcy Court, Southern District of Texas, Houston Division - M. Corp. Case (Chapter 7)

Arizona Portland Cement Company vs. Pima County (State of Arizona) Case No. 303265 (1997)

Saber Software Corporation (Divorce)

Case No. 93 - 606 - P3 (A); Carousel Motel, Inc. vs. Peter A. Gerard, et al; Probate Court No. 3 of Dallas County Texas (1997)

Jack T. Macphee vs. Krieger Enterprises, Inc. et al; District Court, Dallas County, Texas Case No. 93 - 4111 - J (1996) Logic Process Corporation vs. Bell & Howell Publication Systems Company District Court, Dallas Division Case No. 3: 96-CV2414-H (1999) Coleman Wood Products, Inc. (Divorce)(1997) Ordrich Gold Reserves (1997)

Documents

D katzen evaluation fibermesh final rpt