Exhibit 10.11

Execution Copy

 

STOCK AND ASSET PURCHASE AGREEMENT

by and between

Albany International Corp.

and

ASSA ABLOY AB

Dated as of October 27, 2011

 

 

  

TABLE OF CONTENTS

  Page Article I
DEFINITIONS
1 Section 1.01. Certain Defined Terms 1 Article II
SALE AND PURCHASE OF ASSETS, LIABILITIES AND SHARES
15 Section 2.01. Sale and Purchase of Acquired Assets; Retention of Retained
Assets 15 Section 2.02. Transfer and Assumption of Assumed Liabilities;
Retention of Retained Liabilities 16 Section 2.03. Sale and Purchase of Target
Shares 16 Section 2.04. Purchase Price; Swedish Cash; Adjustment 16 Section
2.05. Closing; Proceedings at Closing 18 Section 2.06. Accounting 19 Section
2.07. Purchase Price Allocation 20 Section 2.08. Designated Purchaser 20 Article
III
REPRESENTATIONS AND WARRANTIES
21 Section 3.01. Representations and Warranties of Seller 21 Section 3.02.
Representations and Warranties of Purchaser 39 Article IV
COVENANTS AND ADDITIONAL AGREEMENTS
41 Section 4.01. Conduct of Business 41 Section 4.02. Mixed Contracts 44 Section
4.03. Further Assurances; Subsequent Transfers 44 Section 4.04. Appropriate
Action; Consents; Filings 46 Section 4.05. Ancillary Agreements 48 Section 4.06.
Non-Competition 48 Section 4.07. Non-Solicitation 49 Section 4.08. Exclusive
Negotiations 50 Section 4.09. Access to Information and Employees 50 Section
4.10. Confidentiality 51

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TABLE OF CONTENTS
(continued)

    Page Section 4.11. Litigation Cooperation 51 Section 4.12. Retention of
Records 52 Section 4.13. Public Announcements 52 Section 4.14. Intercompany
Accounts 53 Section 4.15. Separation of Data 53 Section 4.16. Deletion of
Non-Transferred Software 53 Section 4.17. Use of Seller’s Trademarks and Logos
53 Section 4.18. Deposits, Guarantees and Other Credit Support of the Business
54 Section 4.19. Notice of Certain Events 54 Section 4.20. Tax Matters 55
Section 4.21. Insurance 59 Section 4.22. Intellectual Property License 60

Article V
EMPLOYEE BENEFITS; LABOR MATTERS
60

Section 5.01. Employment 60 Section 5.02. Post-Closing Benefits 61 Section 5.03.
Participation in Purchaser Benefit Plans 62 Section 5.04. Welfare Plan Liability
62 Section 5.05. Severance and Retention Payments 63 Section 5.06. Union
Employees and Plans 64 Section 5.07. COBRA 64 Section 5.08. Retiree Medical 64
Section 5.09. Tax-Qualified Defined Contribution Plans 64 Section 5.10. Asset
Seller Benefit Plans 65 Section 5.11. WARN Obligations 65 Section 5.12. Update
to Employee Schedule 65 Section 5.13. No Third Party Beneficiaries 65 Section
5.14. Material Information 66 Article VI
INDEMNIFICATION
66

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TABLE OF CONTENTS
(continued)

    Page Section 6.01. Purchaser’s Indemnification Obligation 66 Section 6.02.
Seller’s Indemnification Obligation 67 Section 6.03. Survival 67 Section 6.04.
Limitations of Liability 68 Section 6.05. Net Losses; Set Off 68 Section 6.06.
Procedure for Indemnification 69 Section 6.07. Holdback Matters; Payment of
Indemnifiable Losses 71 Section 6.08. Exclusive Remedy 71 Section 6.09. Purchase
Price Adjustment 72 Section 6.10. Tax Indemnity 72 Article VII
CONDITIONS PRECEDENT TO CLOSING
72 Section 7.01. Conditions to Obligations of Each of the Parties 72 Section
7.02. Conditions to Obligations of Purchaser 73 Section 7.03. Conditions to
Obligations of Seller 74 Article VIII
TERMINATION, AMENDMENT AND WAIVER
74 Section 8.01. Termination 74 Section 8.02. Ability to Terminate; Effect of
Termination 75 Section 8.03. Amendment 75 Section 8.04. Waiver 75 Article IX
GENERAL PROVISIONS
75 Section 9.01. Notices 75 Section 9.02. Interpretation 77 Section 9.03.
Severability 77 Section 9.04. Entire Agreement; Assignment 77 Section 9.05.
Parties in Interest 77 Section 9.06. Submission to Jurisdiction 77 Section 9.07.
Specific Performance 78

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TABLE OF CONTENTS
(continued)

    Page Section 9.08. Governing Law 78 Section 9.09. Headings 78 Section 9.10.
Counterparts 78 Section 9.11. WAIVER OF JURY TRIAL 78 Section 9.12. Expenses 79
Section 9.13. Schedules 79

 

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Annexes

Annex I-A Direct Target Entities     Annex I-B Indirect Target Entities    
Annex II Asset Sellers     Annex III Knowledge     Annex IV Retained Liabilities
    Annex V Working Capital Principles     Annex VI Pre-Closing Allocation

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Exhibits

Exhibit 1.01(A) Intellectual Property Assignment Agreements     Exhibit 1.01(B)
Trademark License Agreement     Exhibit 1.01(C) Transition Services Agreement

vi

  

 

STOCK AND ASSET PURCHASE AGREEMENT, dated as of October 27, 2011 (together with
all annexes, exhibits and schedules hereto, this “Agreement”), by and between
Albany International Corp., a Delaware corporation (“Seller”), and ASSA ABLOY
AB, a stock company (aktiebolag) organized in Sweden (“Purchaser”).

WITNESSETH:

WHEREAS, Seller and certain of its Subsidiaries (as defined below), including
the Subsidiaries listed on Annex I-A hereto (the “Direct Target Entities”), the
Subsidiaries of the Direct Target Entities listed on Annex I-B hereto (the
“Indirect Target Entities” and, collectively with the Direct Target Entities,
the “Target Entities”) and the Subsidiaries listed on Annex II hereto (together
with Seller, the “Asset Sellers”), along with Loading Bay Specialists Ltd., are
engaged in the Business (as defined below);

WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase
from Seller and its Subsidiaries, the Business;

WHEREAS, in order to effect the foregoing, in accordance with the terms and
conditions hereof, (i) Purchaser will purchase from Seller or its Subsidiaries
all of the outstanding Equity Interests of the Direct Target Entities (the
“Target Shares”) in return for cash and (ii) Purchaser will purchase from Seller
and from the other Asset Sellers, and Seller will sell to, and cause the other
Asset Sellers to sell to, Purchaser, the Acquired Assets in return for cash and
the assumption of the Assumed Liabilities; and

WHEREAS, each of Seller and Purchaser has obtained all corporate authorizations
required to approve this Agreement and the transactions provided for herein.

NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:

Article I

DEFINITIONS

Section 1.01.                        Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings:

(a)                 “2010 Balance Sheet” means the unaudited balance sheet of
the Business as at December 31, 2010.

(b)                 “Acquired Assets” means all of the right, title and interest
that the Asset Sellers possess in and to the properties, assets and rights (of
every nature, whether now existing or hereafter acquired), primarily related to
the Business as currently conducted as the same may exist on the Closing Date
(subject to the terms hereof), including, without limitation, Transferred
Intellectual Property; provided, however that the Acquired Assets shall not
include any of the Retained Assets.

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(c)                 “Acquired Employees” means all Asset Seller Employees who
accept offers of employment by Purchaser and become employed by Purchaser, or
whose employment is transferred to Purchaser automatically by operation of Law
upon the Closing or pursuant to the mechanism set forth in Section 5.01

of the Disclosure Schedule.

(d)                 “Action” means any claim, demand, action, cause of action,
suit, countersuit, arbitration, litigation, grievance, inquiry, notice of
violation, proceeding, audit or investigation by or before any Governmental
Authority or any arbitration or mediation tribunal or authority.

(e)                 “Affiliate” has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the U.S. Securities Exchange Act of 1934, as
amended. For the avoidance of doubt, until the Closing, the Affiliates of Seller
shall include the Target Entities; provided, however, that upon Closing, the
Target Entities shall cease to be Affiliates of Seller, and shall commence to be
Affiliates of Purchaser.

(f)                  “Agreed Antitrust Authority” means any Antitrust Authority
in the jurisdictions identified in Section 4.04

.

(g)                 “Ancillary Agreements” means (a) the Transition Services
Agreement, (b) the Intellectual Property Assignment Agreements, (c) the
Trademark License Agreement, (d) the instruments of conveyance and assignment
and assumption contemplated by this Agreement to effect the Closing, and (e)
such other agreements as the parties may mutually agree to enter into
concurrently with the execution of this Agreement or otherwise prior to Closing.

(h)                 “Anti-Bribery Law” means (i) the US Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations issued
thereunder and (ii) any other Law of any applicable jurisdiction that relates to
bribery or corruption.

(i)                   “Antitrust Authority” means any Governmental Authority
with competent jurisdiction for the enforcement of the antitrust or competition
Laws in any jurisdiction.

(j)                  “Asset Seller Benefit Plan” means any “employee benefit
plan” as defined in Section 3(3) of ERISA (whether or not governed by ERISA),
including any Multiemployer Plan, and any written or oral plan, program,
agreement, arrangement, policy or practice providing for employment,
compensation, consulting, severance or separation benefits, insurance coverage
(including any self insured arrangements), disability benefits, medical
benefits, supplemental unemployment benefits, vacation benefits, personal time
off (PTO) days, retirement benefits (including compensation, pension, health,
medical and life insurance), retention or change in control bonuses or payments,
deferred compensation, profit sharing, bonuses, stock options, stock
appreciation rights or other form of equity- or non-equity-based incentive
compensation, fringe benefits, jubilees, early retirement, seniority premiums,
termination indemnities or other form of benefits that in each case is (i)
entered into, sponsored, maintained or contributed to by any Asset Seller and
covering any Business Employee (or a beneficiary, dependent and/or alternate
payee thereof) and/or (ii) with respect to which any Asset Seller has or may
have any Liabilities; and in each case, the term “Asset Seller Benefit Plan”
will include any related trust, insurance contract or fund.

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(k)                 “Asset Seller Employees” means all employees listed in
Section 1.01(k)

of the Disclosure Schedule.

(l)                   “Assumed Liabilities” means any and all Liabilities of the
Asset Sellers to the extent related to the Business as currently conducted or to
the Acquired Assets actually transferred to Purchaser pursuant to this
Agreement, including, but not limited to (A) any and all Liabilities to the
extent arising out of Contracts that constitute part of the Acquired Assets
(other than Liabilities arising from a breach of any such Contract by Seller or
any of its Subsidiaries, or Liabilities for amounts owed under any such Contract
as of the Closing Date where such amounts owed have not been taken into account
(by reduction) in the calculation of Working Capital hereunder), (B) except as
expressly set forth to the contrary in Article V, all Liabilities or commitments
related to the employment, service, termination of employment or termination of
service of all Acquired Employees, including the obligation to make the bonus
payments pursuant to Section 5.02(c) of this Agreement, (C) all obligations to
service or repair Products sold prior to Closing, including claims under
warranty arrangements in respect of such Products, and (D) all other Liabilities
of the Asset Sellers expressly set forth in Section 1.01(k) of the Disclosure
Schedule, but excluding the Retained Liabilities.

(m)               “balance sheet” means, except where expressly provided
otherwise, an unaudited balance sheet of the Business.

(n)                 “Brand” means any Trademarks consisting of or containing the
name, “Albany”; provided that the Brand shall exclude any Trademarks and
Internet domain names that appear in Section 3.01(p)(i)(B) of the Disclosure
Schedule.

(o)                 “Business” means the manufacture, sale and service of
industrial entrance automation products, as conducted by Seller and its
Affiliates.

(p)                 “Business Day” means any day except Saturday, Sunday or any
other day on which commercial banks located either in New York, New York or
Stockholm, Sweden are authorized or required by Law to be closed for business.

(q)                 “Business Employee” means each (i) Asset Seller Employee and
(ii) Target Entity Employee.

(r)                  “Business Key Employee” means the management employees
listed in Section 3.01(t)(i)

of the Disclosure Schedule.

(s)                  “Cash” means cash, cash equivalents (including marketable
securities and short-term investments), uncleared checks, other deposits,
incoming wires and cash in transit, net of any checks outstanding against any
bank accounts in which such cash is held, calculated in accordance with U.S.
GAAP and to the extent in accordance therewith, applied on a basis consistent
with the preparation of the Business Financial Statements, which net balance as
of any date shall be the reconciled book balance on the general ledger of the
Business for such items as of such date.

(t)                  “Closing Adjustment Amount” means the sum, which may be
positive or negative, of the Closing Net Cash, plus the Closing Intercompany
Accounts Balance, plus the

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Final Working Capital Surplus, if any, minus the Swedish Cash Shortfall, if any,
minus the Final Working Capital Shortfall, if any.  

(u)                 “Code” shall mean the Internal Revenue Code of 1986, as
amended, as well as any rules and regulations promulgated thereunder.

(v)                 “Contest” means any audit, court proceeding or other dispute
with respect to any Tax matter that affects the Business, the Target Entities,
or the Acquired Assets, as the case may be.

(w)                “Contract” means any binding contract, agreement,
subcontract, purchase order, work order, sales order, indenture, note, bond,
instrument, lease, license, mortgage, ground lease, commitment, covenant or
undertaking, whether written or oral.

(x)                 “Default Interest” means interest at LIBOR plus two percent
(2%) per annum.

(y)                 “Environmental, Health, and Safety Requirements” means all
Laws concerning public health and safety, worker health and safety, pollution,
or protection of the environment, including all those relating to the presence,
use, production, generation, handling, transportation, treatment, storage,
disposal, distribution, labeling, testing, processing, discharge, Release,
threatened Release, control, or cleanup of or exposure to Hazardous Substances.

(z)                 “Equity Interest” shall mean (as applicable) any shares of
capital stock, partnership interests, limited liability company membership
interests or units, shares, interests (including voting interests) or other
participations in the equity of any Person, or any other security (including
debt securities, options and warrants) or other right that is exercisable or
exchangeable for, or convertible into, any of the foregoing.

(aa)             “ERISA” means the Employee Retirement Income Security Act of
1974, as the same may be amended from time to time, as well as any rules and
regulations promulgated thereunder.

(bb)             “Final Working Capital Shortfall” means the excess, if any, of
the Minimum Target Working Capital over the Closing Working Capital.

(cc)              “Final Working Capital Surplus” means the excess, if any, of
the Closing Working Capital over the Maximum Target Working Capital.

(dd)             “GAAP” means, with respect to any jurisdiction, generally
accepted accounting principles, as in effect from time to time and applied
consistently for such jurisdiction.

(ee)              “Governing Documents” means the charter, organizational and
other documents by which any Person (other than an individual) establishes its
legal existence or which govern its internal affairs, and shall include: (a) in
respect of a corporation, its certificate or articles of incorporation or
association and/or its by-laws; (b) in respect of a partnership, its

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certificate of partnership and its partnership agreement; and (c) in respect of
a limited liability company, its certificate of formation and operating or
limited liability company agreement. 

(ff)               “Governmental Authority” means any supra-national, national,
federal, state, county, local, municipal or other governmental, regulatory or
administrative authority, agency or commission or other instrumentality, or any
court, tribunal or arbitral body with competent jurisdiction.

(gg)              “Hazardous Substances” means any pollutant, contaminant, or
hazardous or toxic substance, material or waste, and any other chemicals or
substances regulated under Environmental, Health, and Safety Requirements,
including but not limited to petroleum or any fraction thereof, asbestos or
asbestos-containing materials, and polychlorinated biphenyls.

(hh)             “Holdback Amount” means $13,000,000, as such amount may be
reduced from time to time in accordance with Section 6.07(a)

hereof, including interest at a rate of two percent (2%) per annum on such
amount (as it may be so reduced) calculated from the Closing Date.

(ii)                 “Holdback Release Date” means the date that is eighteen
(18) months after the Closing Date.

(jj)                “HSR Act” means the United States Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.

(kk)             “Indebtedness” of any Person means the aggregate amount
(without double counting) of the following obligations (whether or not then due
and payable), to the extent they are of such Person or its Subsidiary or
guaranteed by such Person or its Subsidiary, including through the grant of a
security interest upon any assets of such Person: (i) all outstanding
indebtedness for borrowed money owed to third parties, (ii) all obligations
evidenced by notes, bonds, debentures or other similar instruments (whether or
not convertible, but excluding performance bonds) or arising under indentures,
(iii) accrued and unpaid interest payable with respect to Indebtedness referred
to in clauses (i) and (ii), (iv) all obligations arising out of any financial
hedging, swap or similar arrangements, (v) all obligations in connection with
any letter of credit, banker’s acceptance, guarantee, surety, appeal bond, or
similar credit transaction, (vi) any lease obligations that are properly
characterized as capitalized leases under U.S. GAAP, except as expressly set
forth in Section 1.01(kk) of the Disclosure Schedule, (vii) the aggregate amount
of all prepayment premiums, penalties, breakage costs, “make whole amounts,”
costs, expenses and other payment obligations of such Person, if any, that would
arise (whether or not then due and payable) if an item of Indebtedness were
prepaid (or, in the case of hedging, swap or similar arrangements, unwound and
fully settled) in full at such specified time, (viii) to the extent an item of
Indebtedness cannot be repaid at such specified time (e.g., as a result of an
irrevocable advance notice requirement), all interest on and other accretion of
such item or other item that occurs between such specified time and the earliest
date that repayment may occur (e.g., if notice were delivered at such specified
time), (ix) Liabilities with respect to expenses incurred and outstanding in
connection with corporate restructurings prior to the Closing Date of the type
reflected on the balance sheet of the Business as of June 30, 2011 under the
line item “Restructuring reserve,” (x) Liabilities with respect to expenses of
the type reflected

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on the balance sheet of the Business as of June 30, 2011 under the line item
“Early retirement liability,” (xi) Liabilities of the type reflected on the
balance sheet of the Business as of June 30, 2011 under the line item “Minority
interest,” (xii) Liabilities in respect of bank overdrafts as of the Closing,
and (xiii) with respect to any Target Entity, any retention, termination,
severance or change of control payment obligations of such Person that arise on
or after the Closing Date solely as a result of the execution of this Agreement
or the consummation of the transactions contemplated hereby (other than
Liabilities arising under Law), payable to any Business Employee. 

(ll)                 “Indemnifiable Losses” means any and all losses, damages,
obligations, payments, claims, costs and expenses, interest, awards, judgments
and penalties (including expenses of enforcement of obligations and all
reasonable attorneys’ fees and expenses and other fees and expenses incurred in
connection with the investigation, defense or settlement thereof); provided,
that Indemnifiable Losses does not include any losses, Liabilities, claims,
damages, obligations, payments, costs, fees or expenses constituting or arising
out of or relating to any claim for punitive or indirect damages except to the
extent awarded against any Indemnified Party in a Third Party Claim and;
provided, further, that Indemnifiable Losses shall not include incidental or
consequential damages which are not reasonably foreseeable.

(mm)         “Indemnifying Party” means Purchaser, for any indemnification
obligation arising under Section 6.01, and Seller, for any indemnification
obligation arising under Section 6.02

(nn)             “Indemnified Party” means Purchaser Indemnified Parties, for
any right to indemnification arising under Section 6.02 or Section 4.20(b)(v)
(to the extent Seller is the Indemnifying Party) and Seller Indemnified Parties,
for any right to indemnification arising under Section 6.01 or Section
4.20(b)(v) (to the extent Purchaser is the Indemnifying Party).

(oo)             “Initial Cash Payment” means $117,000,000.

(pp)             “Intellectual Property” means all United States and foreign (i)
patents or patent applications and any issuances, reissuances, continuations,
continuations-in-part, divisions, revisions, extensions, reexaminations and
renewals thereof, utility models, rights in inventions (whether patentable or
unpatentable) and rights in designs (whether registered or unregistered); (ii)
registered and unregistered trademarks, service marks, trade dress, logos, and
trade names, all goodwill associated therewith and all renewals therefor
(“Trademarks”); (iii) registered and unregistered copyrights, mask works and
rights in databases and all renewals therefor; (iv) Internet domain names; (v)
trade secrets, confidential business information, data, technology,
manufacturing processes and know-how (“Trade Secrets”); (vii) computer software,
including object code, source code, system build software and instructions,
applets, tools, databases, and associated documentation (“Software”); and (vii)
all other intellectual property rights or proprietary rights whether registered
or unregistered and all rights or forms of protection having equivalent or
similar effect to any of the items listed above anywhere in the world (and
“registered” includes registrations and applications).

(qq)             “Intellectual Property Assignment Agreements” means the Domain
Name Assignment Agreement, the Patent Assignment Agreement, and the Trademark
Assignment

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Agreement to be entered into by Seller, the other Asset Sellers (if applicable)
and Purchaser on the Closing Date in the forms attached hereto as Exhibit
1.01(A). 

(rr)                “Intercompany Accounts Balance” means an amount, which may
be positive or negative, equal to the intercompany receivables of the Target
Entities from Seller or its Subsidiaries (other than the other Target Entities)
less the intercompany payables of the Target Entities to Seller or its
Subsidiaries (other than the other Target Entities).

(ss)               “Inventory” means all finished goods, work-in-process, raw
materials, packaging, labels, supplies and other inventories of the Business
(including any such items described above that are in transit, on consignment or
in the possession of any third party).

(tt)                “IT Systems” means the information and communications
technologies owned by the Target Entities or used in the Business, including
hardware, proprietary software, networks, services, peripherals and associated
documentation.

(uu)             “Knowledge” as to Seller means the actual knowledge, after due
inquiry, of those Persons listed on Annex III(a) hereto and as to Purchaser the
actual knowledge, after due inquiry, of those Persons listed on Annex III(b)
hereto.

(vv)             “Law” means any statute, law, rule, regulation, requirement,
ordinance, decree, directive, order, writ, judgment, interpretation,
stipulation, determination, award, injunction, temporary restraining order,
cease and desist order or other order promulgated by any Governmental Authority.

(ww)           “Leased Real Property” means all leasehold or subleasehold
estates and other rights to use or occupy any land, buildings, structures,
improvements, fixtures, or other interest in real property that is used in the
Business.

(xx)             “Liabilities” means, with respect to any Person, any and all
liabilities and obligations of such Person, whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated and whether due or to become due.

(yy)             “Lien” means, with respect to any property, asset or right, any
mortgage, lien, pledge, charge, security interest, lease, encumbrance,
restriction or other adverse claim of any kind in respect of such property,
asset or right. Without limiting the foregoing, for purposes of this Agreement,
a Person shall be deemed to own subject to a Lien any property, asset or right
that it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such property, asset or right.

(zz)              “Loading Bay” means Loading Bay Specialists Ltd.

(aaa)          “Material Adverse Effect” means any change, effect, circumstance,
development, event or occurrence that, individually or in the aggregate, has or
would reasonably be expected to have a material adverse effect on (1) the
business, assets, liabilities, financial condition or results of operations of
the Business, taken as a whole, excluding any such change,

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effect, event or occurrence resulting from (A) general changes, effects, events
or occurrences in business, industry or economic conditions (B) general changes,
effects, events or occurrences in applicable Law or applicable accounting
regulations or principles or interpretations thereof, (C) the announcement by
Seller of its intention to sell the Business, (D) the completion of the
transactions contemplated by this Agreement (other than events arising solely as
a result of the Closing itself that would constitute a breach of Section
3.01(d)), (E) the execution and delivery of this Agreement (including the
disclosure of the identity of Purchaser) or any of the Ancillary Agreements
(other than events arising solely as a result of the execution and delivery of
this Agreement that would constitute a breach of Section 3.01(d)), (F) any
natural disaster or any acts or threats of terrorism, military action or war or
any escalation or worsening thereof or (G) the failure, in and of itself, of the
Business to meet any internal or external projections, estimates or forecasts,
but not including any of the underlying causes thereof, except, in the cases of
clauses (A), (B) and (F), to the extent that the Business, taken as a whole, is
materially disproportionately affected thereby as compared with other
participants in the industries in which the Business operates (in which case the
incremental materially disproportionate impact or impacts shall be taken into
account in determining whether a Material Adverse Effect has occurred or is
reasonably likely to occur); or (2) the ability of Seller and its Subsidiaries
to consummate the transactions contemplated by this Agreement.

(bbb)          “Maximum Target Working Capital” means the amount that is equal
to Target Working Capital plus $100,000.

(ccc)           “Minimum Target Working Capital” means the amount that is equal
to Target Working Capital minus $100,000.

(ddd)          “Multiemployer Plan” has the meaning assigned to that term in
Section 3(37) of ERISA (whether or not such plan is governed by ERISA).

(eee)           “Net Cash” means the amount (which may be a positive or a
negative number), as of a specified time, equal to the difference of (i) the
Cash of the Target Entities (other than cash that is not in the form of cash
equivalents or marketable securities of Albany Door Systems AB up to four
million U.S. dollars ($4,000,000), which first four million U.S. dollars of such
cash shall not be included in Net Cash), minus (ii) all Indebtedness of the
Target Entities, minus (iii) any Transaction Expenses owed by the Target
Entities, minus (iv) all accrued and unpaid bonus amounts in excess of one
million U.S. dollars ($1,000,000) for the 2011 year under Seller’s or its
Affiliates’ annual incentive plans payable to the Business Employees.
Notwithstanding anything herein to the contrary, “Net Cash” of the Target
Entities as of the Closing shall exclude (1) obligations to the extent repaid or
terminated without further obligation before Closing (or to the extent repaid at
the Closing with funds that are both (x) not included as Cash of the Target
Entities in the Closing Date Net Cash and (y) not provided by Purchaser on
behalf of Seller, any Target Entity or the Business) and (2) the amount of any
Indebtedness to the extent such amount is included in the calculation of Closing
Working Capital in accordance with Section 2.04.

(fff)             “Owned Real Property” means all land, together with all
buildings, structures, improvements, and fixtures located thereon, and all
easements and other rights and interests appurtenant thereto, owned by any of
the Target Entities and used in the Business.

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(ggg)           “Permitted Liens” means, in each case as relates to the
Business, (a) statutory Liens for Taxes, assessments or other charges by
Governmental Authorities not yet due and payable or the amount or validity of
which is being contested in good faith and by appropriate proceedings and for
which adequate reserves have been established on the balance sheet of the
Business as at June 30, 2011 included in the Business Financial Statements,
(b) mechanics’, materialmen’s, carriers’, workmen’s, warehousemen’s,
repairmen’s, landlords’ and similar liens granted or which arise in the ordinary
course of business, (c) pledges or deposits by Seller or any of its Subsidiaries
under workmen’s compensation Laws, unemployment insurance Laws or similar
legislation, or good faith deposits in connection with bids, tenders, Contracts
(other than for the payment of Indebtedness) or leases to which such entity is a
party, or deposits to secure public or statutory obligations of such entity or
to secure surety or appeal bonds to which such entity is a party, or deposits as
security for contested Taxes, in each case, incurred or made in the ordinary
course of business consistent with past practice and for which adequate reserves
have been established on the balance sheet of the Business as at June 30, 2011
included in the Business Financial Statements, (d) gaps in the chain of title
with respect to Owned Real Property evident from the records of the relevant
Governmental Authority maintaining such records, (e) licenses of intellectual
property granted to customers of, distributors for or suppliers of products or
services to, the Business in the ordinary course of business consistent with
past practice by Seller or its Subsidiaries, (f) purchase money liens and liens
securing rental payments under capital lease arrangements, (g) zoning, building
codes, and other land use laws regulating the use or occupancy of real property
used by the Business or the activities conducted thereon, that are imposed by
any Governmental Authority having jurisdiction over such real property, and (h)
easements, covenants, conditions, restrictions, and other similar matters
affecting title to Owned Real Property and other title defects, in each case,
that are listed in Section 1.01(ggg) of the Disclosure Schedule and which do not
or would not, individually or in the aggregate, materially impair the use or
occupancy of such Owned Real Property in the operation of the Business taken as
a whole.

(hhh)          “Permit” means any franchise, approval, permit, license, order,
registration, certificate, variance, or authorization of any Governmental
Authority or other similar right.

(iii)                “Person” means an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any other entity or
organization, including, without limitation, a Governmental Authority.

(jjj)              “Products” means the products of the Business.

(kkk)          “Rapid Quote System” means the .net software application used in
the connection with the Business to produce customer quotes.

(lll)                “Release” means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, migrating,
dumping, disposing, or other release into the environment, including, without
limitation the abandonment or discard of barrels, containers, tanks or other
receptacles.

9

  

(mmm)    “Representatives” means, with respect to a Person, its directors,
officers, partners, members, employees, agents, advisors and other
representatives.

(nnn)          “Retained Assets” means the following assets of the Asset
Sellers: (1) the corporate charter, qualifications to do business as a foreign
corporation, arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers, seals, minute books,
stock transfer books, blank stock certificates, and other documents relating to
the organization, maintenance and existence of any Asset Seller as a corporation
or any other entity, (2) all rights in and to any Intellectual Property other
than the Transferred Intellectual Property, (3) subject to Section 4.11, any
attorney-client privilege of the Asset Sellers or associated with the Business
as a result of legal counsel representing Seller or its Affiliates, including in
connection with the transactions contemplated by this Agreement, (4) subject to
Section 4.11, all files maintained by legal counsel as a result of
representation of the Asset Sellers or the Business, and all files maintained by
the Asset Sellers or the Business, in connection with the transactions
contemplated by this Agreement, (5) all assets of the Asset Sellers that are not
primarily related to the Business, (6) all rights of the Asset Sellers under a
Mixed Contract, subject to Section 4.02, (7) subject to Section 4.21, insurance
policies of the Asset Sellers and (8) any of the rights of any Asset Seller
under this Agreement (or any Ancillary Agreement).

(ooo)          “Retained Liabilities” means, without duplication, (i) those
Liabilities set forth on Annex IV hereto; (ii) Liabilities to the extent that
they arise from the ownership or operation of the Retained Assets; (iii) any
Liability (A) arising out of personal injury and/or death or damage to property
relating to the Products marketed, distributed, sold or otherwise provided by,
or on behalf of, the Business prior to the Closing or (B) arising in connection
with any product recall required by any Governmental Entity of any Products
marketed, distributed, sold or otherwise provided by, or on behalf of, the
Business prior to the Closing; (iv) Liabilities related to any Action existing
or arising out of or relating to facts or events prior to the Closing, including
any Actions by Transferred Business Employees; (v) Liabilities or commitments
relating to current and former employees of Seller and its Subsidiaries,
excluding the Target Entities, other than the Assumed Liabilities identified in
clause (B) of the definition thereof; (vi) Liabilities for Indebtedness of the
Asset Sellers; (vii) all Transaction Expenses of the Asset Sellers; (viii)
Liabilities arising out of the termination of employment of any Asset Seller
Employee by any Asset Seller as a result of this Agreement or the transactions
contemplated hereby as set forth in Section 5.05; (ix) Liabilities with respect
to the payments set forth in Section 5.05(b); and (x) except as expressly set
forth in Article V or with respect to those benefits required to be provided by
Law, and without prejudice to Seller’s rights set forth in Article VI in respect
of any breach, or failure to perform, by Purchaser of its covenants and other
agreements in Article V, Liabilities, obligations or commitments arising out of
or relating to the Asset Seller Benefit Plans.

(ppp)          “Seller Benefit Plans” means collectively, the Asset Seller
Benefit Plans and the Target Entity Benefit Plans.

(qqq)          “Service Planning Tool” .net software application used in the
connection with the Business for tracking, scheduling, logging and planning
customer service visits.

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(rrr)              “Software Documentation” means the user, operations and
training manuals, specifications, instructions, software architecture designs,
layouts and any other designs, plans, drawings, documentation or materials
concerning software applications.

(sss)             “Source Code” means the human readable form of the code for
software applications.

(ttt)              “Subsidiary” means, with respect to any Person, any Person
controlled by such first Person. “Control”, including, with its correlative
meanings, “Controlled by” and “under common Control with”, means, in connection
with a given Person, the possession, directly or indirectly, of the power to
either (i) elect more than fifty percent (50%) of the directors or governing
body of such Person or (ii) direct or cause the direction of the management and
policies of such Person, whether through the ownership of Equity Interests,
contract, credit arrangement or otherwise. The term “Subsidiary” shall include
all Subsidiaries of such Subsidiary. For the avoidance of doubt, until the
Closing, the Subsidiaries of Seller shall include the Target Entities; provided,
however that upon Closing, the Target Entities shall cease to be Subsidiaries of
Seller, and shall commence to be Subsidiaries of Purchaser.

(uuu)          “Swedish Cash Shortfall” means the amount, if any, by which the
amount of Cash (excluding any cash equivalents or marketable securities) held in
one or more Swedish bank accounts by or on behalf of Albany Door Systems AB as
of the effective time of the Closing is less than the Swedish krona equivalent
of four million U.S. dollars ($4,000,000) based on the exchange rate stated in
The Wall Street Journal as of the Business Day preceding the Closing Date (after
giving effect to any amounts actually paid by Seller or its Affiliates to Albany
Door Systems AB in accordance with Section 2.04(b)).

(vvv)          “Target Entity Benefit Plan” means any “employee benefit plan” as
defined in Section 3(3) of ERISA (whether or not such plan is governed by
ERISA), including any Multiemployer Plan, and any written or oral plan, program,
agreement, arrangement, policy or practice providing for employment,
compensation, consulting, severance or separation benefits, insurance coverage
(including any self insured arrangements), disability benefits, medical
benefits, supplemental unemployment benefits, vacation benefits, personal time
off (PTO) days, retirement benefits (including compensation, pension, health,
medical and life insurance), retention or change in control bonuses or payments,
deferred compensation, profit sharing, bonuses, stock options, stock
appreciation rights or other form of equity- or non-equity-based incentive
compensation, fringe benefits, jubilees, early retirement, seniority premiums,
termination indemnities or other form of benefits that in each case is (i)
entered into, sponsored, maintained or contributed to by any Target Entity and
covering any Business Employee (or a beneficiary, dependent and/or alternate
payee thereof), and/or (ii) with respect to which any Target Entity has or may
have any material Liabilities; and in each case, the term “Target Entity Benefit
Plan” will include any related trust, insurance contract or fund.

(www)       “Target Entity Employees” means each current and former individual
employed by the Target Entities or their Subsidiaries.

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(xxx)          “Target Entity Transferring Employees” means all employees
employed by the Target Entities or their Subsidiaries as of the date hereof, as
listed in Section 1.01(xxx) of the Disclosure Schedule.

(yyy)          “Target Entity IP” means all Intellectual Property owned by the
Target Entities.

(zzz)           “Target Working Capital” means an amount equal to 17.2% of the
aggregate net sales of the Business over the period of the last twelve months,
as measured on the month-end closest to the Closing Date (whether prior to or
following the Closing Date).

(aaaa)      “Tax” or “Taxes” means any and all taxes, fees, levies, duties,
tariffs, imposts, and other similar charges (including any and all interest,
penalties and additions to tax) imposed by any Taxing Authority including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers’ compensation,
unemployment compensation, or net worth, and taxes or other charges in the
nature of excise, withholding, ad valorem, stamp, transfer, value added, or
gains taxes.

(bbbb)      “Tax Return” means any return, report and information statement,
including any schedule or attachment thereto, with respect to Taxes required to
be filed with the Internal Revenue Service (“IRS”) or any other Taxing
Authority, domestic or foreign, including consolidated, combined and unitary tax
returns and including any claim for refund or amended return.

(cccc)        “Taxing Authority” means any Governmental Authority responsible
for assessment or collection of any Tax.

(dddd)      “Trademark License Agreement” means the Trademark License Agreement
to be entered into by Seller, the other Asset Sellers (if applicable) and
Purchaser on the Closing Date in the form attached hereto as Exhibit 1.01(B).

(eeee)        “Transaction Expenses” means any fees and expenses of Seller and
its Subsidiaries in connection with the negotiation and consummation of the
transactions contemplated by this Agreement.

(ffff)          “Transferred Business Employees” means (i) all Acquired
Employees, and (ii) all Target Entity Transferring Employees.

(gggg)        “Transferred Intellectual Property” means all rights in any and
all of the following throughout the world: (i) Target Entity IP (including as
set forth in Section 3.01(p) of the Disclosure Schedule); (ii) Intellectual
Property owned by the Asset Sellers exclusively used in the Business (including
as set forth in Section 3.01(p) of the Disclosure Schedule); (iii) any other
Intellectual Property set forth in Section 3.01(p) of the Disclosure Schedule
not otherwise included in (i) or (ii); (iv) all income, royalties, damages and
payments due or payable as of the date first written above or thereafter
relating to any of the foregoing Intellectual Property (including damages and
payments for past,

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present or future infringement, misappropriation, dilution or other violation
thereof and the right to sue, recover and retain damages for past, present or
future infringement, misappropriation, dilution or other violation thereof); (v)
the right to defend against claims made that any of the foregoing Intellectual
Property infringes, misappropriates, dilutes or otherwise violates the
intellectual property rights of any Person; and (vi) the right to prosecute and
maintain all rights included in the foregoing Intellectual Property. For the
avoidance of doubt, the Transferred Intellectual Property excludes any and all
rights in the Brand. 

(hhhh)      “Transition Services Agreement” means the Transition Services
Agreement to be entered into by Seller and Purchaser on the Closing Date in the
form attached hereto as Exhibit 1.01(C), together with such changes to Part 1 of
Schedule B thereto as shall be agreed prior to the Closing Date in accordance
with Section 4.05(b).

(iiii)              “Working Capital” means those current assets related to the
Business of a type identified in Section 1.01(iiii) of the Disclosure Schedule
minus those current Liabilities related to the Business of a type identified in
Section 1.01(iiii) of the Disclosure Schedule, each as calculated in accordance
with the Working Capital Principles, in each case to the extent either (i)
belonging to the Target Entities or (ii) included in the Acquired Assets or
Assumed Liabilities and transferred to Purchaser at the Closing in accordance
with this Agreement; provided, that Working Capital shall not include any
amounts in respect of intercompany receivables of the Business from Seller or
its Subsidiaries or intercompany payables of the Business to Seller or its
Subsidiaries.

(jjjj)            “Working Capital Principles” means the principles set forth in
Annex V, except as otherwise required by GAAP.

The following terms are defined in the section of this Agreement set forth after
such term below:

Defined Term Section Affiliate Contract 3.01(r)(i) Agreed Notifications 4.04(a)
Agreement Preamble Arbitrator 4.20(g) Asset Sellers Recitals Business Financial
Statements 3.01(e)(i) Business Information 3.01(p)(iv) CapEx Budget 4.01(a)(ii)
Claim Threshold 6.04(a) Closing 2.05(a) Closing Date 2.05(a) Closing
Intercompany Accounts Balance 2.04(c)(i) Closing Net Cash 2.04(c)(i) Closing
Working Capital 2.04(c)(i)

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COBRA 3.01(t)(iii) Confidentiality Agreement 4.09(b) Designated Purchaser 2.08
Direct Target Entities Recitals Disclosure Schedule 3.01 Draft Allocation
2.07(b) Employment Terms 5.02(a) Final Allocation 2.07(b) Form 8594 2.07(b)
Indirect Target Entities Recitals Information 4.09(a) Insurance Policies 3.01(q)
IRS 1.01(bbbb) Leases 3.01(o)(ii) Loading Bay Shares 3.01(c)(ii) Material
Contracts 3.01(j)(i) Mixed Contract 3.01(k) Non-Third Party Claim 6.06(d)
Non-U.S. Asset Seller Employee 5.01 Post-Closing Statement 2.04(c)(i)
Post-Closing Tax Period 4.20(c)(ii) Pre-Closing Straddle Period 4.20(c)(iii)
Pre-Closing Tax Period 4.20(c)(i) Purchase Price 2.04(a) Purchaser Preamble
Purchaser Indemnified Parties 6.02 Purchaser Welfare Plans 5.04(b) Retained
Intellectual Property 4.22 Retention Period 4.12(a) Section 2.07 Independent
Accountant 2.07(b)

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Seller Preamble Seller 401(k) Plan 5.09 Seller Indemnified Parties 6.01 Seller’s
Trademarks and Logos 4.17 Significant Customers 3.01(l) Significant Suppliers
3.01(m) Software 1.01(pp) Straddle Period 4.20(c)(iii) Straddle Period Tax
Return 4.20(c)(iii) Target Entity Financial Statements 3.01(e)(i) Target
Entities Recitals Target Shares Recitals Termination Date 8.01(b) Third Party
Claim 6.06(a) Trade Secrets 1.01(pp) Trademarks 1.01(pp) Turkish Subsidiary
3.01(e)(i) Turkish Subsidiary Balance Sheet 3.01(e)(i) Undocumented Target
Entity Benefit Plans 3.01(t)(viii) WARN Act 3.01(u)(ii)

 

Article II

SALE AND PURCHASE OF ASSETS, LIABILITIES AND SHARES

Section 2.01.                        Sale and Purchase of Acquired Assets;
Retention of Retained Assets. (a) On the terms and subject to the conditions set
forth in this Agreement, at the Closing, Seller shall, and shall cause the other
Asset Sellers to, sell, assign, transfer, convey and deliver to Purchaser, and
Purchaser shall purchase and accept from the Asset Sellers, the Acquired Assets
(including in each case, all of the Asset Sellers’ rights, title and interests
in and to, all of the Acquired Assets) free and clear of all Liens other than
Permitted Liens or Liens created by or through Purchaser or any of its
Affiliates.

(b)                 Seller will retain and not transfer, and Purchaser shall not
purchase or accept, any of the Retained Assets.

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Section 2.02.                        Transfer and Assumption of Assumed
Liabilities; Retention of Retained Liabilities. (a) On the terms and subject to
the conditions set forth in this Agreement, at the Closing and with effect from
the Closing, Purchaser shall assume and become obligated to pay, perform and
discharge when due, and Seller shall not have any responsibility for, the
Assumed Liabilities.

(b)                 Seller shall retain and shall be fully responsible for
paying, performing and discharging when due, and Purchaser shall not assume or
have any responsibility for, any and all Retained Liabilities.

Section 2.03.                        Sale and Purchase of Target Shares. On the
terms and subject to the conditions set forth in this Agreement, at the Closing,
Purchaser shall purchase from Seller, and Seller shall sell, or cause its
Subsidiaries to sell, to Purchaser, all of the Target Shares, free and clear of
all Liens.

Section 2.04.                        Purchase Price; Swedish Cash; Adjustment.

(a)                 Purchase Price. Pursuant to the terms and subject to the
conditions hereof, in consideration of the sale of the Target Shares and the
Acquired Assets, Purchaser agrees to pay an amount of cash equal to
$130,000,000, as adjusted in accordance with this Section 2.04 (the “Purchase
Price”).

(b)                 Swedish Cash. As of the Closing, Seller shall cause there to
be at least the Swedish krona-equivalent of four million U.S. dollars
($4,000,000) of Cash (excluding cash equivalents and marketable securities) held
in one or more Swedish bank accounts of Albany Door Systems AB as of the
effective time of the Closing (based on the exchange rate stated in The Wall
Street Journal on the Business Day preceding the Closing Date) it being agreed
and understood that (i) any Cash (excluding cash equivalents and marketable
securities) of Albany Door Systems AB in excess of the Swedish krona-equivalent
of four million dollars ($4,000,000) (based on such exchange rate) as of the
effective time of the Closing (but only such excess) and, without duplication,
(ii) any cash equivalents and marketable securities of Albany Door Systems AB
shall be included in Closing Net Cash.

(c)                 Preparation of Post-Closing Statement.

(i)                   Within sixty (60) days after the Closing Date, Purchaser
will prepare and deliver to Seller a statement setting forth Purchaser’s bona
fide calculation of (A) the Working Capital as of the effective time of the
Closing (the “Closing Working Capital”), (B) the Net Cash as of the effective
time of the Closing (the “Closing Net Cash”), (C) the Swedish Cash Shortfall, if
any, (D) the Intercompany Accounts Balance as of the effective time of the
Closing (the “Closing Intercompany Accounts Balance”), and (E) the Closing
Adjustment Amount (such statement, the “Post-Closing Statement”). Purchaser will
prepare the Post-Closing Statement in accordance with the Working Capital
Principles.

(ii)                 If Seller has any bona fide objections to the Post-Closing
Statement, Seller shall deliver a detailed statement describing its objections
to Purchaser within thirty (30) days after receiving the Post-Closing Statement
and, if Seller does not

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deliver such a statement in accordance with the above, the Closing Adjustment
Amount as set forth in the Post-Closing Statement shall be final and binding on
the parties. Purchaser and Seller shall use commercially reasonable efforts to
resolve any such objections themselves. If the parties do not obtain a final
resolution between themselves within sixty (60) days after Purchaser has
received Seller’s statement of objections, however, Purchaser and Seller shall
select an independent accounting firm mutually acceptable to them to resolve any
remaining objections. If Purchaser and Seller are unable to agree on the choice
of an accounting firm, they will select an internationally-recognized accounting
firm by lot (after excluding their respective regular outside accounting firm,
PricewaterhouseCoopers LLP). Any accounting firm so selected shall be engaged as
expert and not as arbitrator, and its review shall be limited only to such items
in the Post-Closing Statement as are identified by the parties as being in
dispute (it being agreed and understood that under no circumstances shall its
review extend to matters beyond those identified in Seller’s objections referred
to above). The determination of any accounting firm so selected shall be set
forth in writing and shall be conclusive and binding upon the parties, and shall
be the sole and exclusive remedy available to the parties for such dispute
assuming that each of the parties is otherwise in compliance with the terms of
this Section 2.04. The determination of such accounting firm regarding any
disputed item must be within the range of values specified by the parties with
respect to such item in the Post-Closing Statement and the related Seller’s
objections referred to above. The Post-Closing Statement shall be revised as
appropriate to reflect the resolution of any objections thereto pursuant to this
Section 2.04 and as so agreed or so revised shall be final.

(iii)                In the event the parties submit any unresolved objections
to an accounting firm for resolution as provided in Section 2.04(c)(ii) above,
Purchaser and Seller shall share responsibility for the fees and expenses of the
accounting firm as follows: Seller shall pay the portion of such fees and
expenses equal to the total of such fees and expenses multiplied by a fraction,
the numerator of which is the dollar amount of the total items resolved by the
accounting firm in favor of Seller, the denominator of which is the entire
dollar amount of the items submitted for resolution to the accounting firm, and
Purchaser shall be responsible for the remainder of the fees and expenses.

(iv)               Seller shall make available to Purchaser and to Purchaser’s
Representatives, at reasonable times and upon reasonable notice, all
documentation and access to personnel and Seller’s accounting firm as may be
necessary for Purchaser to prepare the Post-Closing Statement. In addition, each
party shall make available to the other party and to such other party’s
Representatives and any independent accounting firm selected to resolve any
disputes relating to the calculation of the Closing Adjustment Amount as set
forth in the Post-Closing Statement, at reasonable times and upon reasonable
notice, access to personnel and to the work papers and other supporting
documentation used by such party in the preparation of the Post-Closing
Statement or in arriving at the objections set forth in the notice of objection
to the Post-Closing Statement, as applicable.

(d)                 The Purchase Price shall be increased or decreased dollar
for dollar by the amount of the Closing Adjustment Amount.

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(i)                   If the Closing Adjustment Amount is positive, Purchaser
shall pay to Seller an amount equal to such Closing Adjustment Amount by wire
transfer or delivery of other immediately available funds within three (3)
Business Days after the date on which the Post-Closing Statement is finally
determined pursuant to Section 2.04(b) above. If any amount due for payment in
accordance with this Agreement is not paid on the due date for payment,
Purchaser shall pay Default Interest on that sum from but excluding the due date
to and including the date of actual payment, calculated on a daily basis.

(ii)                 If the Closing Adjustment Amount is negative, Seller shall
pay to Purchaser an amount equal to such amount by wire transfer or delivery of
other immediately available funds within three (3) Business Days after the date
on which the Post-Closing Statement is finally determined pursuant to Section
2.04(b) above. If any amount due for payment in accordance with this Agreement
is not paid on the due date for payment, Seller shall pay Default Interest on
that sum from but excluding the due date to and including the date of actual
payment, calculated on a daily basis.

Section 2.05.                        Closing; Proceedings at Closing. (a) On the
terms and subject to the conditions of this Agreement (including without
limitation the satisfaction or waiver by the party entitled to the benefit
thereof of the conditions set forth in Article VII) the closing of the
transactions provided for in this Agreement (the “Closing”) shall be held at the
offices of Cleary Gottlieb Steen & Hamilton LLP, One Liberty Plaza, New York, NY
10006, commencing at 10:00 a.m., NYC time, on the fifth Business Day following
the satisfaction or waiver of all conditions to the obligations of the parties
to consummate the transactions contemplated hereby (other than conditions with
respect to actions the respective parties will take at the Closing itself, but
subject to the satisfaction of such conditions at the Closing) (or, if such
fifth Business Day would fall between December 18, 2011 and December 31, 2011
(both inclusive), the Closing shall be held on the first Business Day in January
2012) or such other date as Purchaser and Seller may mutually determine (the
date the Closing actually occurs, the “Closing Date”). The Closing shall be
deemed to be effective as of 12:01 A.M. Eastern Standard Time on the Closing
Date.

(b)                 At the Closing, Purchaser shall deliver:

(i)                   an amount in cash equal to the Initial Cash Payment
payable to Seller or such of Seller’s Subsidiaries and the Asset Sellers as
Seller directs by wire transfer of immediately available U.S. dollars to the
account or accounts specified in writing by Seller at least two (2) Business
Days prior to the Closing Date; provided that such direction shall be consistent
with the allocation set forth in Annex VI;

(ii)                 instruments of acceptance and assumption, properly executed
and acknowledged by Purchaser in a form reasonably satisfactory to Seller as
shall be necessary for the assumption by Purchaser of the Assumed Liabilities
and to relieve Seller of any liability therefor; and

(iii)                a copy of each other Ancillary Agreement duly executed by
Purchaser.

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(c)                 At the Closing, Seller shall deliver or cause to be
delivered to Purchaser:

(i)                   certificates representing the Target Shares or other
written evidence of the transfer thereof in a form reasonably satisfactory to
Purchaser, in each case, free and clear of all Liens, which certificates shall
be duly endorsed in blank or accompanied by duly executed stock powers, or such
other conveyance documents required to convey the Target Shares pursuant to the
applicable Law of any relevant jurisdiction;

(ii)                 instruments of transfer and conveyance, properly executed
and acknowledged by Seller in a form reasonably satisfactory to Purchaser, and
as shall be necessary to transfer and vest in Purchaser all of Seller’s right,
title and interest in and to the Acquired Assets, free and clear of all Liens
other than Permitted Liens and Liens created by or through Purchaser or any of
its Affiliates;

(iii)                a copy of each Ancillary Agreement duly executed by Seller;
and

(iv)               a certificate issued by Seller pursuant to, and otherwise
complying with the requirements of, Treasury regulations section 1.897-2(h) to
the effect that the Target Shares are not U.S. real property interests as of the
date hereof, such certification to be dated the date hereof.

(d)                 For each director (or, for purposes of this clause (d), each
member of a similar governing body) of a Target Entity in office immediately
prior to the Closing (including any directors designated to the board of
directors of Loading Bay by Seller) that has been designated for removal by
Purchaser in writing to Seller at least five (5) Business Days prior to Closing,
Seller shall deliver to Purchaser either a resignation executed by such director
or written evidence of removal of such director, which resignations or removals
shall be effective at the Closing, effective as of the Closing (and, for the
purposes of this clause (d), if any such director so required to resign is also
an officer of, or individual with signing authority on behalf of, any such
Target Entity, the resignation contemplated hereby shall also cover such
positions).

Section 2.06.                         Accounting. To the extent that after the
Closing (a) Purchaser or any of its Affiliates receives any payment that is a
Retained Asset (or that arises out of a Retained Asset) or that is otherwise
properly due and payable to Seller or any of its Affiliates according to the
terms of this Agreement, Purchaser shall promptly deliver or cause to be
delivered such amount to Seller and (b) Seller or any of its Affiliates receives
any payment that is an Acquired Asset (or arises out of an Acquired Asset) or is
otherwise properly due and payable to Purchaser or any of its Affiliates
according to the terms of this Agreement, Seller shall promptly deliver or cause
to be delivered such amount to Purchaser. Notwithstanding the foregoing, to the
extent feasible, each party hereby undertakes to use commercially reasonable
efforts to direct or forward all bills, invoices or like instruments to the
appropriate party. All amounts due and payable under this Section 2.06 shall be
due and payable by the applicable party in immediately available funds, by wire
transfer to the account designated by the other party.

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Section 2.07.                        Purchase Price Allocation. (a) The parties
agree that for purposes of Section 2.05(b)(i), the Purchase Price shall be
allocated among the Asset Sellers and the Target Shares as set forth in Annex VI
hereto (the “Pre-Closing Allocation”).

(b)                 After Closing that portion of the Purchase Price allocable
to the Acquired Assets sold by each Asset Seller in accordance with the
Pre-Closing Allocation shall be further allocated among the Acquired Assets in
accordance with section 1060 of the Code. Seller shall provide Purchaser with
any information reasonably requested and required to complete IRS Form 8594
under section 1060 of the Code (“Form 8594”). Purchaser shall complete Form 8594
and furnish Seller with a copy (the “Draft Allocation”) within sixty (60) days
from the Closing Date. Seller shall review the Draft Allocation and provide any
objections to Purchaser within thirty (30) days after the receipt thereof. In
the event Seller does not object to Purchaser’s Draft Allocation, such Draft
Allocation shall be final (the “Final Allocation”). If Seller raises objections
to the Draft Allocation in the time period provided for above, the parties will
negotiate in good faith to resolve such objections. If the parties are unable to
agree on the Draft Allocation within fourteen (14) days after Seller raises such
objections, the parties shall refer such dispute to an independent nationally
recognized accounting firm (the “Section 2.07 Independent Accountant”), which
Section 2.07 Independent Accountant shall make a final and binding determination
as to all matters in dispute with respect to the Draft Allocation (and only such
matters) within thirty (30) days and promptly shall notify the parties in
writing of its resolution, which resolution shall be the Final Allocation. The
Section 2.07 Independent Accountant shall be engaged as expert and not as
arbitrator, and its determination shall be the sole and exclusive remedy
available to the parties for such dispute assuming that each of the parties is
otherwise in compliance with this Section 2.07. Each party shall bear and pay
one-half of the fees and other costs charged by the Independent Accountant.

(c)                 Seller and Purchaser shall file Form 8594, reflecting the
Final Allocation, with their respective Tax Returns for the taxable year that
includes the date of the Closing.

(d)                 Purchaser and Seller each agree to file (or cause their
respective Affiliates to file) all Tax Returns, and execute such other documents
as may be required by any Taxing Authority, in a manner consistent with the
Pre-Closing Allocation and the Final Allocation and to refrain from taking any
position inconsistent with such agreed allocation with any Taxing Authority,
unless otherwise required by applicable Tax law or to take account of subsequent
adjustments to the Purchase Price. If, contrary to the intent of Seller and
Purchaser, any Taxing Authority makes or proposes an allocation different from
that contemplated in the Pre-Closing Allocation or the Final Allocation, Seller
and Purchaser shall cooperate with each other in good faith to contest such
Taxing Authority’s allocation (or proposed allocation); provided, however, that,
after consultation with Seller or Purchaser, whichever is adversely affected by
such allocation (or proposed allocation), the other may file such protective
claims or returns as may reasonably be required to protect its interest.

Section 2.08.                        Designated Purchaser. Notwithstanding the
foregoing, at any time commencing after the date of this Agreement and
continuing until the date that is two (2) Business Days prior to the Closing
Date, Purchaser may, upon prior written notice to Seller, designate one or more
controlled Affiliates of Purchaser (whether or not existing as of the date
hereof), as a Designated Purchaser hereunder (each such designee, a “Designated
Purchaser”).

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The designation contemplated hereby shall set forth the Acquired Assets or
Target Shares such Designated Purchaser is to acquire at the Closing. Upon the
designation contemplated hereby, each Designated Purchaser shall be deemed a
“Purchaser” for purposes of this Agreement in connection with the acquisition of
the applicable Target Shares and/or the applicable Acquired Assets (and any
reference to Purchaser herein in connection therewith shall automatically be
deemed to be a reference to such Designated Purchaser) and such Designated
Purchaser shall automatically be assigned the rights of the Purchaser under this
Agreement necessary in connection with such designation. Notwithstanding the
foregoing, no such designation of a Designated Purchaser shall relieve Purchaser
of any of its obligations under this Agreement if not performed by such
Designated Purchaser. 

Article III

REPRESENTATIONS AND WARRANTIES

Section 3.01.                        Representations and Warranties of Seller.
Except as set forth in the Disclosure Schedule to this document (the “Disclosure
Schedule”), Seller hereby represents and warrants to Purchaser as follows:

(a)                 Organization and Qualification.

(i)                   Seller is a corporation duly organized, validly existing
and in good standing under the Laws of Delaware. Each of the other Asset Sellers
is duly organized or formed, validly existing and, to the extent applicable in
such jurisdiction, in good standing under the Laws of the jurisdiction of its
incorporation. Seller and each of the other Asset Sellers are duly authorized to
conduct business and are in good standing, or of similar status, to the extent
such status exists under the laws of each jurisdiction where such qualification
is required, except where the lack of such qualification has not had, and would
not reasonably be expected to result in, a Material Adverse Effect.

(ii)                 Each of the Target Entities, their respective Subsidiaries
and, to Seller’s Knowledge, Loading Bay are duly organized, validly existing,
and, to the extent applicable in such jurisdiction, in good standing under the
Laws of the jurisdiction of their incorporation. Each of the Target Entities,
their respective Subsidiaries and, to Seller’s Knowledge, Loading Bay are duly
authorized to conduct business and are in good standing, or of similar status to
the extent such status exists under the laws of each other jurisdiction where
such qualification is required, except where the lack of such qualification has
not had, and would not reasonably be expected to result in, a Material Adverse
Effect. Each Asset Seller, each of the Target Entities, their respective
Subsidiaries and, to Seller’s Knowledge, Loading Bay have full corporate power
and authority to carry on the Business in which they are engaged and to own and
use the properties owned and used by them in connection therewith.

(b)                 Authority; Execution. Each Asset Seller and each of the
Target Entities has (or, in the case of Ancillary Agreements to which a Target
Entity or an Asset Seller will be a party, prior to the execution thereof, will
have) all necessary power and authority to execute and deliver this Agreement
and each Ancillary Agreement to which it is, or will be, a party, to

21

  

perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by
Seller of this Agreement and the execution and delivery by each Target Entity
and Asset Seller of each Ancillary Agreement to which it is, or will be, a
party, the performance by each Target Entity and Asset Seller of its obligations
hereunder and thereunder, and the consummation by the Target Entities and the
Asset Sellers of the transactions contemplated hereby and thereby, have been
(and in the case of each Ancillary Agreement to which an Asset Seller or a
Target Entity is, or will be a party, will be, prior to the execution thereof,)
duly and validly authorized by all necessary corporate action of each Asset
Seller and Target Entity, and no other proceeding on the part of any Asset
Seller or Target Entity is or will be necessary to authorize the execution and
delivery of this Agreement or such Ancillary Agreement, the performance of any
such Person’s obligations hereunder and thereunder and the consummation of the
transactions contemplated hereby and thereby. This Agreement has been, and each
Ancillary Agreement to which any Asset Seller or Target Entity is, or will be, a
party, will be, at the time of its execution and delivery, duly and validly
executed and delivered by such Asset Seller or Target Entity and, assuming the
due authorization, execution and delivery by each other party thereto, will
constitute a legal, valid and binding obligation of such Asset Seller or Target
Entity, enforceable against such party in accordance with its terms (except as
such enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other laws of general applicability
relating to or affecting creditor’s rights, and to general equitable
principles). 

(c)                 Target Shares; Capitalization.

(i)                   Section 3.01(c)(i) of the Disclosure Schedule sets forth
for each of the Target Entities and for Loading Bay (A) its name and
jurisdiction of incorporation, (B) the number of authorized shares for each
class of its capital stock, (C) the number of issued and outstanding shares of
each class of its capital stock, the names of the holders thereof, and the
number of shares held by each such holder, and (D) the number of shares of its
capital stock held in treasury. Seller has prior to the date hereof delivered or
otherwise made available to Purchaser true and complete copies of the Governing
Documents, each as amended to the date hereof, of each Target Entity.

(ii)                 All of the Target Shares and the outstanding capital stock
of the Indirect Target Entities (the “Indirect Target Entity Shares”) have been
duly authorized, are validly issued, fully paid, and non-assessable, or of
similar status to the extent such status exists under the laws of the applicable
jurisdiction, and are held of record by Seller or one of its Subsidiaries, in
each case as set forth in Section 3.01(c)(i) of the Disclosure Schedule. To
Seller’s Knowledge, the shares of outstanding capital stock of Loading Bay owned
by Seller or any of Seller’s Affiliates (the “Loading Bay Shares”), have been
duly authorized, are validly issued, fully paid, and non-assessable, or of
similar status to the extent such status exists under the laws of the United
Kingdom, and are held of record by one of Seller’s Subsidiaries, as set forth in
Section 3.01(c)(i) of the Disclosure Schedule. Each of the Target Shares,
Indirect Target Entity Shares, and the Loading Bay Shares is held of record and
owned beneficially by Seller or one of its Subsidiaries free and clear of any
restrictions on transfer (other than transfer restrictions under the U.S.
Securities Act of 1933, as amended, and state securities laws), Taxes, Liens,
options, warrants, purchase rights, contracts, commitments, equities, claims,
and demands. There are no outstanding

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or authorized options, warrants, purchase rights, subscription rights,
conversion rights, exchange rights, or other contracts or commitments that could
require any of the Target Entities or, to Seller’s Knowledge, Loading Bay, as
the case may be, to issue, sell, or otherwise cause to become outstanding any
Equity Interests. There are no outstanding or authorized stock appreciation,
phantom stock, profit participation, or similar rights with respect to any of
the Target Shares, Indirect Target Entity Shares, or, to Seller’s Knowledge,
Loading Bay Shares. Except for the Target Shares and the Indirect Target Entity
Shares, there are no Equity Interests of the applicable Target Entity issued,
reserved for issuance or outstanding.

(iii)                Except for Equity Interests in an Indirect Target Entity,
no Target Entity owns, directly or indirectly, any Equity Interests in any other
Person, other than the Equity Interests in Loading Bay.

(iv)               Seller is not a party to any option, warrant, purchase right,
or other Contract or commitment (other than this Agreement) that could require
Seller to sell, transfer, or otherwise dispose of the Loading Bay Shares or any
Equity Interests of the Target Entities owned by Seller or its Subsidiaries.
Seller is not a party, and the Target Shares, Indirect Target Entity Shares and
Loading Bay Shares are not subject, to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any Equity Interests of
the Target Entities owned by Seller or its Subsidiaries.

(d)                 No Conflict; Required Filings. (i) The execution and
delivery by Seller of this Agreement does not, and the execution and delivery of
each Ancillary Agreement to which any Asset Seller is, or will be, a party, and
the performance of their respective obligations hereunder and thereunder and the
consummation of the transactions contemplated hereby and thereby will not
conflict with, or result in any violation of or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a benefit under, or
result in the creation of any Liens, other than Permitted Liens, upon any of the
Acquired Assets or any properties or assets of any of the Target Entities under,
or give rise to any requirement to provide any notice under, any provision of
(A) the Governing Documents of any Asset Seller or any of the Target Entities,
(B) assuming the consents, approvals and authorizations specified in Section
3.01(d) of the Disclosure Schedule have been received and the waiting periods
referred to therein have expired and any condition precedent to such consent,
approval, authorization or waiver has been satisfied, any Law applicable to the
Business, the Asset Sellers or any of the Target Entities or by which any
property or asset of any Asset Seller or any of the Target Entities is bound or
affected, (C) any Permit required for Seller and its Subsidiaries to conduct the
Business as currently conducted or for the ownership and use of the Acquired
Assets, or (D) any material Contract to which Seller or any of its Subsidiaries
is a party or by which any Asset Seller or any of the Target Entities or any of
their respective assets or properties are bound or affected.

(ii)                 The execution and delivery of this Agreement, and each
Ancillary Agreement to which any Asset Seller is, or will be, party by Seller or
such Asset Seller does not, and the performance of its obligations hereunder and
thereunder, and the consummation by it of the transactions contemplated hereby
and thereby will not, require any material consent, approval authorization,
waiver or permit of, or filing with or

23

  

notification to, any Governmental Authority, except for applicable recordation
requirements and reporting requirements of the Securities Exchange Act of 1934,
as amended, the HSR Act and any applicable non-U.S. antitrust, competition,
trade regulation or investment Laws.

(e)                 Financial Statements; No Undisclosed Liabilities.

(i)                   The following financial statements are set forth in
Section 3.01(e)(i) of the Disclosure Schedule: (A) the unaudited profit and loss
statements and statements of other income/expense, net, of the Business for the
six-month period ending June 30, 2011 and the years ending December 31, 2010,
December 31, 2009 and December 31, 2008, and the unaudited balance sheet of the
Business as at June 30, 2011, December 31, 2010, December 31, 2009 and December
31, 2008 (the “Business Financial Statements”), (B) the audited statutory
financial statements of each of the Target Entities (with the exception of MDS
Hareketli Kapi Sistemleri Sanayi ve Dis Ticaret Ltd. Sti. (the “Turkish
Subsidiary”) for the year ending December 31, 2010 (the “Target Entity Financial
Statements”)), (C) the unaudited statement of assets and liabilities of the
Turkish Subsidiary (the “Turkish Subsidiary Balance Sheet”) as at August 31,
2011 and (D) the audited balance sheet and statement of shareholders’ equity of
Loading Bay as of December 31, 2010, together with the audited statements of
income and cash flows for the twelve months ending December 31, 2010.

(ii)                 The Business Financial Statements have been derived from
the financial accounting systems used to prepare the consolidated financial
statements of Seller and the Target Entities for the same periods. Except as set
forth in Section 3.01(e)(ii) of the Disclosure Schedule, the Business Financial
Statements have been prepared in a manner consistent, in all material respects,
with the manner in which financial statements relating to the Business have been
prepared by management for the purpose of managing and assessing the performance
of the Business. Except as set forth in Section 3.01(e)(ii) of the Disclosure
Schedule, the Business Financial Statements have been prepared, in all material
respects, in conformity with U.S. GAAP applied on a consistent basis and contain
proper and adequate provisions for all material liabilities, as at the relevant
balance date, in each case to the extent required in accordance with U.S. GAAP.
The Business Financial Statements and Turkish Subsidiary Balance Sheet have been
prepared in accordance with, and can be legitimately reconciled with, the books
and records of the Asset Sellers and the Target Entities. Except as set forth in
Section 3.01(e)(ii) of the Disclosure Schedule, the Business Financial
Statements present fairly, in all material respects, the financial condition and
net assets of the Business (including the Target Entities, the Acquired Assets
and the Assumed Liabilities) as of such dates and the results of operations of
the Business (including the Target Entities, the Acquired Assets and the Assumed
Liabilities) for such periods. The Target Entity Financial Statements, and the
related notes thereto, present fairly, in all material respects, the financial
position and net assets of each of the Target Entities as of December 31, 2010,
and the results of operations and cash flows for such period, in accordance with
the relevant local GAAP, except that the Target Entity Financial Statements may
not contain footnotes.

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(iii)                As of the date hereof, there are no material Liabilities of
or relating to the Business except Liabilities that (A) are reflected or
reserved against in the 2010 Balance Sheet, (B) were incurred in the ordinary
course of business consistent with past practice since the date of the 2010
Balance Sheet, (C) were incurred under this Agreement or contemplated to be
incurred under the Ancillary Agreements in connection with the Transactions, and
(D) Liabilities as expressly set forth in Section 3.01(e)(iii) of the Disclosure
Schedule.

(iv)               The books and records of Seller and its Subsidiaries relating
to the Business accurately and fairly reflect the transactions of Seller and its
Subsidiaries in reasonable detail. Seller and its Subsidiaries maintain a system
of internal accounting controls with respect to the Business sufficient to
provide reasonable assurances that transactions are executed in accordance with
management’s authorization and are recorded as necessary to permit preparation
of financial statements for the Business in accordance with GAAP, consistently
applied.

(f)                  Compliance with Laws; Regulatory Matters; Safety Standards.

(i)                   Since January 1, 2009, (A) Seller, each of its
Subsidiaries, has complied and currently comply with all applicable Laws in all
material respects and (B) none of the Asset Sellers or Target Entities has
received any written communication from a Governmental Authority that alleges
that the Business or any Target Entity is in violation of any applicable Laws or
the subject of any material Action, and, to Seller’s Knowledge, no such Action
has been threatened.

(ii)                 All Permits required for Seller and its Subsidiaries to
conduct the Business as currently conducted or for the ownership and use of the
Acquired Assets have been obtained by Seller and are valid and in full force and
effect in all material respects, and no fees and charges with respect to such
Permits owed as of the date hereof are materially delinquent. Section
3.01(f)(ii) of the Disclosure Schedules lists all current Permits issued to
Seller or its Subsidiaries that are related to the conduct of the Business as
currently conducted or the ownership and use of the Acquired Assets, including
the names of the Permits and their respective dates of issuance and expiration.
No event has occurred that, with or without notice or lapse of time or both,
would reasonably be expected to result in the revocation, suspension, lapse or
limitation of any Permit required to be set forth in Section 3.01(f)(ii) of the
Disclosure Schedules.

(iii)                To Seller’s Knowledge, none of Seller or its Subsidiaries
(or any of their respective employees, consultants, agents, distributors or
other Persons acting on behalf of Seller or a Subsidiary) has, with respect to
the Business, offered, paid, promised or authorized any payment, gift or
transfer of anything of value, directly, indirectly or through any Person,
during the past two years to or for the use or benefit of any government
official, political party or political candidate in violation of any
Anti-Bribery Laws or otherwise taken any action, or failed to take any action,
that, with respect to the Business, would reasonably be expected to violate any
Anti-Bribery Laws.

25

  

(iv)               Since January 1, 2009, (A) each Product distributed, sold,
marketed or otherwise provided by, or on behalf of, the Business in the European
Union is in compliance (where applicable) with the safety standards set forth in
Section 3.01(f)(iv) of the Disclosure Schedule in all material respects and (B)
each Product distributed, sold, marketed or otherwise provided by, or on behalf
of, the Business in the United States is in compliance with the applicable
safety standards set forth by Underwriters Laboratories, Inc. in all material
respects.

(g)                  Absence of Certain Changes. Except for the execution and
performance of this Agreement and the discussions, negotiations and transactions
related thereto, since December 31, 2010, Seller and its Subsidiaries have (i)
conducted the Business in the ordinary course of business consistent with past
practice, (ii) not experienced any event, change, development, effect, state of
facts or occurrence that has had or would reasonably be expected to result in a
Material Adverse Effect, and (iii) not taken any action that would, if taken
after the date hereof without the consent of Purchaser, constitute a breach of
Section 4.01(a)(ii) (D), 4.01(b)(i), 4.01(b)(v), 4.01(b)(vi) (A), 4.01(b)(vii),
4.01(b)(xviii), 4.01(b)(xx) and, solely with respect to the actions described in
the aforementioned Sections, 4.01(b)(xxii) of this Agreement.

(h)                 Absence of Litigation.

(i)                   There is no Action, citation, summons or subpoena of any
nature, civil, criminal, regulatory or otherwise, in law or in equity, pending
or, to Seller’s Knowledge, threatened, against or relating to or otherwise
affecting (A) the Business, (B) Seller or its Subsidiaries in connection with
the Business, the Acquired Assets or the Assumed Liabilities, or (C) the Target
Entities, except, in each case, as has not had, and would not reasonably be
expected to result in, a Material Adverse Effect.

(ii)                 As of the date hereof, there is no Action, citation,
summons or subpoena of any nature, civil, criminal, regulatory or otherwise, in
law or in equity, pending or, to Seller’s Knowledge, threatened, against or
relating to the transactions contemplated by this Agreement.

(iii)                Section 3.01(h)(iii) of the Disclosure Schedule sets forth
a list of all material product liability claims received with respect to the
Business since January 1, 2009 through the date hereof. Seller or its
Subsidiaries have previously delivered or made available to Purchaser copies of
all product liability insurance policies purchased by and currently in place for
Seller or any of its Subsidiaries and relating to the Business, and all such
policies are set forth in Section 3.01(h)(iii) of the Disclosure Schedule.

(i)                   Title; Sufficiency of Acquired Assets. The Asset Sellers
have good title to, or a valid leasehold interest in, all of the Acquired Assets
free and clear of any and all Liens other than Permitted Liens. The Target
Entities have good title to, or a valid leasehold interest in, all of the assets
of the Target Entities free and clear of all Liens (including Liens with respect
to Taxes) other than Permitted Liens. The Acquired Assets, together with the
rights and services granted pursuant to the Ancillary Agreements and the assets
of the Target Entities, comprise all of the assets, rights, properties,
facilities and services that are required or necessary for the continued conduct
by Purchaser immediately following the Closing of the Business as currently

26

  

conducted in all material respects. The Acquired Assets, Assumed Liabilities and
the assets and liabilities of the Target Entities are not employed in any
business of Seller or its Subsidiaries other than the Business. Notwithstanding
the foregoing, this Section 3.01(i) shall not apply to Intellectual Property,
and shall not be interpreted as a non-infringement representation, both of which
are solely addressed in Section 3.01(p). 

(j)                  Contracts.

(i)                   Section 3.01(j)(i) of the Disclosure Schedule sets forth a
list of all written Contracts to which any of the Asset Sellers (in each case,
to the extent related to the Business, but excluding Mixed Contracts, which are
covered by Section 3.01(k) below) or any of the Target Entities or their
Subsidiaries is a party (the Contracts required to be set forth on such section
of the Disclosure Schedule, the “Material Contracts”):

(A)                the performance of which is reasonably expected to involve
annual consideration in excess of $100,000;

(B)                that is an employment, consulting, or agency agreement, or
other instrument or arrangement relating to or for the benefit of any Business
Key Employee;

(C)                that evidences or otherwise relates to Indebtedness or to any
performance bond;

(D)                that is a joint venture, partnership and similar contract
involving a sharing of profits or expenses (including but not limited to joint
research and development and joint marketing contracts);

(E)                that is a stock purchase agreement, asset purchase agreement
or other acquisition or divestiture agreement entered into in the past ten (10)
years, including but not limited to any agreement or letters of intent relating
to the acquisition, sale, lease or disposal of any of the Acquired Assets or the
Target Shares or the assets of any Target Entity (other than sales of Inventory
in the ordinary course of business) or involving continuing indemnity or other
obligations, and in each case involving payments in excess of $250,000;

(F)                 that is a Contract relating to Equity Interests of (i) the
Target Entities or (ii) Loading Bay;

(G)                that is a license or right granted to Seller or any of its
Subsidiaries from a third party to use any Intellectual Property that is
material to the conduct of the Business (other than commercially available
software with a license fee of less than $25,000);

(H)               that is a license or right granted by Seller or its
Subsidiaries to a third party to use any Transferred Intellectual Property other
than non-exclusive licenses of such Intellectual Property granted in the
ordinary course of

27

  

business to customers of, distributors for, or suppliers of products or services
to, the Business;

(I)                  that relates to the IT Systems, is material to the Business
and is not a Contract that is referred to in (G) or (H) above, including without
limitation any material support and maintenance, or outsourcing, Contract;

(J)                  that is a Contract that requires performance by any party
thereto more than one (1) year from the date hereof and that is not terminable
by Seller or one of its Subsidiaries without penalty or notice of ninety (90)
days or less;

(K)               that is a sales agency, manufacturer’s representative,
marketing, representation agent, distribution or distributorship agreement with
an obligation in excess of $250,000 in the aggregate for fiscal year 2011;

(L)                that is a Contract that (i) in any adverse way limits or
restricts the business authority of any Asset Seller or Target Entity or limits
the freedom of any Asset Seller or Target Entity to engage in any line of
business or compete with any Person, (ii) materially restricts the Business from
soliciting or hiring employees, or (iii)  restricts any Target Entity from
taking any corporate action or entering into any material transaction without
the approval of a third party;

(M)              that is a settlement agreement in respect of any material
Action;

(N)                that is a Contract with any labor union or collective
bargaining organization or other labor agreement;

(O)                that is a Contract with a Significant Customer or a
Significant Supplier; or

(P)                 that is a Contract with any director, officer, holder of
Equity Interests or Affiliate of Seller, a Target Entity or their Subsidiaries.

(ii)                 Seller has made available to Purchaser a correct and
complete copy of the Material Contracts.

(iii)                Neither Seller nor any of its Affiliates is in breach of
any material obligations under the Material Contracts and to Seller’s Knowledge,
no other Person is in breach of any material obligations under the Material
Contracts. All Material Contracts are in full force and effect and enforceable
against each party thereto, except where the failure to be valid, binding,
enforceable and in full effect would not reasonably be expected to be material
and adverse to the Business or any of the Target Entities. There does not exist
under any Material Contract any event of default or event or condition that,
after notice or lapse of time or both, would constitute a violation, breach or
event of default thereunder on the part of any Seller or, to Seller’s Knowledge,
any other party

28

  

thereto and except for such events or conditions that, individually or in the
aggregate would not reasonably be expected to be material and adverse to the
Business or any of the Target Entities.

(iv)               Every Contract with a Governmental Authority relates to the
sale of Products that are generally commercially available in the ordinary
course of business.

(v)                 The oral Contracts to which any Asset Seller (in each case
to the extent related to the Business) or any Target Entity is a party are not,
individually or in the aggregate, material to the Business.

(k)                 Mixed Contracts. Section 3.01(k)

of the Disclosure Schedule sets forth a list of all Contracts to which Seller or
any of its Subsidiaries is a party prior to the Closing that inure to the
benefit or burden of both the Business and the Asset Sellers, unrelated to the
Business (a “Mixed Contract”).

(l)                   Customers. Section 3.01(l)

of the Disclosure Schedule lists each of the top 25 customers of the Business
(the “Significant Customers”). None of the Significant Customers has canceled or
substantially reduced or modified the terms of its business with Seller or any
of its Subsidiaries since January 1, 2010, and, to Seller’s Knowledge, no such
Significant Customer has attempted or threatened in writing any cancellation of
or substantial reduction in or modification of the terms of its business with
Seller or any of its Subsidiaries.

(m)               Suppliers. Section 3.01(m)

of the Disclosure Schedule lists each of the top 10 suppliers of the Business
(the “Significant Suppliers”). None of the Significant Suppliers has canceled or
substantially reduced its business with Seller or any of its Subsidiaries since
January 1, 2010, and, to Seller’s Knowledge, no such Significant Supplier has
attempted or threatened in writing any cancellation of or substantial reduction
in its business with Seller or any of its Subsidiaries.

(n)                 Inventory; Accounts Receivable.

(i)                   All Inventory is of good, usable and merchantable quality
in all material respects, and except as reserved on the 2010 Balance Sheet, does
not include obsolete or discontinued items.

(ii)                 All accounts receivable of the Business that are reflected
on the 2010 Balance Sheet and the balance sheet of the Business as at June 30,
2011 included in the Business Financial Statements represent valid obligations
arising from sales actually made or services, in each case, related to the
Business and actually performed by Seller or its Subsidiaries in the ordinary
course of business consistent with past practice. Except to the extent paid
prior to the Closing Date, such accounts receivable are or will be as of the
Closing Date current and collectible net of the respective reserves shown on the
2010 Balance Sheet or the balance sheet of the Business as at June 30, 2011
included in the Business Financial Statements (which reserves are adequate and
calculated consistent with past practice). Subject to such reserves, each of
such accounts receivable either has been or will be collected in full, without
any setoff, within 180 days after the day on which it first becomes due and
payable.

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(o)                 Real Property.

(i)                   Section 3.01(o)(i) of the Disclosure Schedule sets forth
the address and description of each parcel of Owned Real Property. With respect
to each parcel of Owned Real Property, and except for matters that, individually
or in the aggregate, have not had, and would not reasonably be expected to
result in, a Material Adverse Effect:

(A)                one of the Target Entities has good and marketable fee simple
title, free and clear of all Liens, except Permitted Liens;

(B)                none of the Target Entities or their Subsidiaries has leased
or otherwise granted to any Person the right to use or occupy such Owned Real
Property or any portion thereof;

(C)                (i) Seller or one of its Subsidiaries has received all
approvals of Governmental Authorities (including Permits) required in connection
with the ownership or current operation of the buildings and other improvements
located upon such Owned Real Property and the conduct of the Business on such
Owned Real Property, as currently conducted, (ii) the same have been operated
and maintained by Seller or one of its Subsidiaries in accordance with all
applicable Laws, rules and regulations in all material respects and (iii) there
is no pending or, to Seller’s Knowledge, threatened revocation of such
approvals; and

(D)                there are no outstanding options, rights of first offer or
rights of first refusal to purchase such Owned Real Property or any portion
thereof or interest therein.

(ii)                 Section 3.01(o)(ii) of the Disclosure Schedule sets forth
the address of each material parcel of Leased Real Property, and a true and
complete list of all leases (the “Leases”) for each such material parcel of
Leased Real Property. Seller has delivered to Purchaser correct and complete
copies of those Leases listed in Section 3.01(o)(ii)

(iii)                With respect to each of the Leases: (A) such Lease is
legal, valid, binding, enforceable and in full force and effect, subject to
proper authorization and execution of such Lease by the other party thereto and
the application of any bankruptcy or other creditor’s rights laws; (B) the Asset
Seller or the Target Entity party thereto is not in breach or default under such
Lease, and to Seller’s Knowledge, no event has occurred or circumstance exists
which, with the delivery of notice, the passage of time or both, would
constitute such a breach or default; (C) all rents, additional rents and other
payments due to date on each Lease have been paid; and (D) no current waiver,
indulgence or postponement of any tenant’s obligations under a Lease has been
granted, except to the extent, in each case, such circumstance, individually or
in the aggregate, has not had, and would not reasonably be expected to result
in, a Material Adverse Effect.

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(iv)               To Seller’s Knowledge, with respect to each parcel of Leased
Real Property, and with respect to each parcel of Owned Real Property:

(A)                there is (are) no party(ies) (other than Seller and its
Subsidiaries) in possession of any portion of such parcel, other than any
tenant(s) under any lease(s) set forth in Section 3.01(o)(iv)(A) of the
Disclosure Schedule who is (are) in possession only of space to which it is
(they are) entitled;

(B)                all of the buildings and improvements located on such parcel
are supplied with utilities and other services reasonably necessary for the
operation of such buildings and improvements, as currently operated, all of
which services are adequate for the conduct of the business operations on such
parcel, as currently conducted, in accordance with all applicable Laws;

(C)                (1) applicable zoning ordinances permit the conduct of the
Business on such parcel, as currently conducted, and will permit such conduct by
Purchaser after the Closing; (2) there are no zoning violations related to such
parcel or the conduct of the business operations on such parcel; (3) there are
no zoning variances or other special zoning status related to such parcel; and
(4) there is no pending or, to Seller’s Knowledge, threatened change in the
zoning classification of such parcel or any portion thereof that would prohibit,
limit or condition the use of such parcel as currently used;

(D)                there is direct access to and from such parcel for utilities,
drainage and ingress and egress to and from public streets without crossing land
other than such parcel; and

(E)                there is (are) no (1) pending or, to Seller’s Knowledge,
threatened condemnation Actions relating to such parcel or (2) other matters
pending or, to Seller’s Knowledge, threatened, which would adversely and
materially impair the value of such parcel or affect the current use or
occupancy thereof.

(v)                 Together, the Leased Real Property and the Owned Real
Property constitute all real property necessary for the continued operation of
the Business as currently conducted in all material respects.

(p)                 Intellectual Property.

(i)                   Section 3.01(p) of the Disclosure Schedule is a complete
and correct list of: (A) registered Target Entity IP, (B) registered Transferred
Intellectual Property owned by the Asset Sellers, and (C) proprietary Software
material to the Business owned by the Target Entities or the Asset Sellers and
included in the Transferred Intellectual Property. One of the Asset Sellers or
the Target Entities own all right, title and interest in and to the Transferred
Intellectual Property and the Brand. The Asset Sellers and the Target Entities
have taken commercially reasonable steps to protect and maintain the Transferred
Intellectual Property. Each item of Transferred Intellectual Property that is
registered is in material compliance with formal legal requirements

31

  

applicable thereto and, to Seller’s Knowledge, is valid and enforceable. There
have been no oppositions or filed challenges to the validity, registrability or
enforceability of any of the registered Transferred Intellectual Property. No
Liens (except for the Permitted Liens) have been granted over any of the
Transferred Intellectual Property.

(ii)                 The Asset Sellers have the right to grant the licenses that
are to be granted to Purchaser in the Trademark License Agreement on the terms
set out therein.

(iii)                To Seller’s Knowledge, the operation of the Business as
currently conducted is not infringing or misappropriating any Intellectual
Property of any third parties, except as would not reasonably be expected to
have a Material Adverse Effect. To Seller’s Knowledge, no third party is
infringing or misappropriating any Transferred Intellectual Property, except as
would not reasonably be expected to have a Material Adverse Effect. Neither any
Asset Seller nor any Target Entity has, in the twenty-four (24) months prior to
the date of this representation, (A) received a written notice alleging that the
use of Seller’s Trademarks and Logos infringe or misappropriate the Intellectual
Property of a third party, (B) received a written notice alleging that the
operations of the Business materially infringe or misappropriate the
Intellectual Property of a third party; or (C) sent a written notice alleging
that a third party is materially infringing or misappropriating the Transferred
Intellectual Property.

(iv)               Seller has taken reasonable steps to protect the confidential
information of, or that has been used in connection with, the Business,
including, without limitation, any Trade Secrets (“Business Information”). All
material Business Information has been kept confidential and has not been
disclosed to third parties except in the ordinary course of business and subject
to written confidentiality obligations from the third party.

(v)                 Seller has taken reasonable steps to obtain from each
director, manager, employee and independent contractor of Seller or its
Affiliates (including, without limitation, the Target Entities) who has created,
developed or invented any Transferred Intellectual Property, all right, title
and interest in and to such Transferred Intellectual Property, including taking
commercially reasonable steps to cause each of the foregoing who, either alone
or with others, has created, developed or invented any of the registered
Transferred Intellectual Property listed in Section 3.01(p) of the Disclosure
Schedule to enter into a written agreement assigning such Intellectual Property
to the Asset Sellers or Target Entities, except as would not reasonably be
expected to have a Material Adverse Effect.

(vi)               Subject to any non-exclusive rights granted pursuant to the
Contracts described in Section 3.01(j) of the Disclosure Schedule, there are no
agreements or arrangements that restrict the disclosure, use, licensing or
assignment of the Transferred Intellectual Property by Seller or its Affiliates
(including without limitation the Target Entities). To Seller’s Knowledge, the
Transferred Intellectual Property, together with the rights to use Intellectual
Property that are granted to Purchaser pursuant to the Ancillary Agreements,
comprise all of the Intellectual Property owned by Seller or its Affiliates that
is required or necessary to operate the Business as currently

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conducted, in all material respects, immediately following the Closing. Further,
there is no other third party Intellectual Property that is required or
necessary to operate the Business as currently conducted immediately following
the Closing other than as set forth in the Disclosure Schedules or the
Transition Services Agreement, except as would not be reasonably expected to
have a Material Adverse Effect.

(vii)              The Asset Sellers and the Target Entities have taken
commercially reasonable precautions to protect the IT Systems (and the data and
information stored on the IT Systems) used in connection with the operation of
the Business, and have taken reasonable steps to ensure that all personal data
relating to customers of the Business has been collected and used in material
compliance with applicable Law, and (to the extent contemplated herein) such
data has been collected on terms that allow the data to be lawfully transferred
in all material respects to the Purchaser immediately following the Closing;
provided that if any consents from third parties are necessary to transfer such
data, Seller will make commercially reasonable efforts to obtain such consents
and provided further that Seller shall transfer to Purchaser only such data as
is permitted to be transferred by applicable Law and pursuant to such consents.
To Seller’s Knowledge, the IT Systems have not failed to any material extent in
the twenty-four (24) months prior to the date of this representation.

(q)                 Insurance. Section 3.01(q)(i) of the Disclosure Schedule
contains a complete and accurate list of each material insurance policy
currently in place covering the Business, the Asset Sellers (to the extent
related to the Business) or any of the Target Entities or their Subsidiaries or
any of their properties or assets (the insurance policies required to be set
forth on such section of the Disclosure Schedule, collectively, the “Insurance
Policies”), including the underwriter of such policies, the type of coverage,
the limits of coverage thereunder, any deductible and/or retention amount and
whether or not such policies are occurrence-based policies. All of the Insurance
Policies are (i) valid and binding and in full force and effect and all premiums
due thereunder have been paid when due, (ii) of the type and in such amounts,
with such deductibles and insuring against such risks and losses, as are
commercially reasonable for the Business and (iii) with third-party insurance
carriers reasonably believed by Seller to be financially sound and reputable
(and none of such policies are self-insurance policies).

(r)                  Certain Business Relationships with Seller, the Target
Entities and Their Subsidiaries; Business of the Target Entities.

(i)                   As of the Closing, all Contracts between Seller and any of
its Affiliates on the one hand, and the Target Entities or the Business, on the
other (each such Contract an “Affiliate Contract”), shall have been terminated.
Except for the services contemplated by the Transition Services Agreement, none
of the Target Entities currently utilize the services of Seller or its
Affiliates (other than the Target Entities) to conduct their business or
operations in the ordinary course of business. All Contracts between Seller and
its Subsidiaries, on the one hand, and Loading Bay, on the other hand, are set
forth in Section 3.01(r) of the Disclosure Schedule and have been entered on an
arm’s length basis and reflect market terms.

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(ii)                 No Target Entity conducts any business other than the
Business.

(s)                  Tax.

(i)                   (A) All material Tax Returns that are required to be filed
with respect to the Business on or before the date hereof by or on behalf of an
Asset Seller have been filed and all Taxes due and payable with respect to
periods covered by such Tax Returns, the non-payment of which would materially
and adversely affect the Business, have been paid and (B) there are no Liens for
Taxes upon any Acquired Assets, except for Permitted Liens;

(ii)                 (A) All material Tax Returns that are required to be filed
on or before the date hereof by or on behalf of the Target Entities have been
filed, (B) all Taxes due and payable with respect to periods covered by such Tax
Returns, the non-payment of which would have a Material Adverse Effect on the
Target Entities, have been paid or the Target Entities have set up reserves in
accordance with U.S. GAAP in respect of such Taxes (not including reserves for
deferred taxes) and (C) there are no pending audits, examinations,
investigations, litigation, or other proceedings in respect of material Taxes of
the Target Entities;

(iii)                The Target Entities and their respective Subsidiaries (A)
have not received or requested any extension of time to file a Tax Return that
remains unfiled, have not granted or requested a waiver or extension of a
limitation on any period for audit and examination or assessment and collection
of Tax for any taxable period that otherwise would no longer be subject to
audit, exam, assessment or collection and (B) have not granted any currently
effective power of attorney with respect to Tax matters;

(iv)               No Taxing Authority within the previous three years has
audited or examined the Target Entities or their respective Subsidiaries, and
none of the Target Entities or their respective Subsidiaries has received
written notice of an unresolved Tax deficiency or assessment or an intention to
undertake any Tax audit or examination;

(v)                 No Target Entity is bound by any Tax sharing agreement,
indemnity obligation or similar contract, practice or legal requirement, and no
Target Entity will be bound by any such contract, practice or requirement after
the Closing;

(vi)               None of the Assumed Liabilities is an obligation to make a
payment that might not be fully deductible under sections 162(m) or 280G of the
Code (or similar provisions of state, local or non-U.S. law);

(vii)              No Acquired Assets and no property of a Target Entity is
tax-exempt use property within the meaning of section 168(h) of the Code or
subject to a lease described in section 7701(h) of the Code (or similar
provisions of state, local or non-U.S. law);

(viii)            The Target Entities and their respective Subsidiaries are not
and have not been party to any “reportable transactions,” as defined in section
6707A of the Code and section 1.6011-4(b) of the U.S. Treasury Regulations; and

34

  

(ix)               The Asset Sellers and the Target Entities have withheld and
paid all material Taxes required to have been withheld and paid in connection
with any amounts paid or owing to any employee, independent contractor,
creditor, Equity Interest holder, or other third party, and all material Forms
W-2 and 1099 or similar Tax Returns in the relevant jurisdiction required with
respect thereto have been properly completed and timely filed, in each case,
with respect to the Business.

(t)                  Employee Benefits Matters.

(i)                   Section 3.01(t)(i) of the Disclosure Schedule sets forth
the name, current rate of annual base salary or hourly wage rate (as
applicable), and the incentive and bonus compensation paid to each Business Key
Employee for 2010 and the base salary, hourly wage and incentive bonus
compensation paid collectively, to the Business Employees for 2010, which shall
be updated in accordance with the requirements of Section 5.12.

(ii)                 Section 3.01(t)(ii) of the Disclosure Schedule sets forth,
as of the date hereof, a list of the material Seller Benefit Plans (which,
solely for non-U.S. jurisdictions, shall not include offer letters, employment
agreements or other commitments for employment or engagement that do not deviate
in a material way from the standard form template, agreement or arrangement
maintained in the applicable jurisdiction). Seller has provided Purchaser a copy
of the plan document and summary plan description (if applicable) for each
material Seller Benefit Plan that has been reduced to writing, and a written
description of any other material Seller Benefit Plans. No Seller Benefit Plan
is a defined benefit type pension arrangement. No Asset Seller Benefit Plan is a
Multiemployer Plan. No Target Entity or Asset Seller other than Seller maintains
any equity plans or programs.

(iii)                Except as required by the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), or other Law, none of Seller
nor any of its Subsidiaries will provide or is obligated to provide, or has any
material liability in respect of, post-retirement or post-termination of
employment, or health benefits to any Business Employee (or dependents or
beneficiaries thereof).

(iv)               Each Target Entity Benefit Plan was established, and has been
maintained and administered in accordance with the terms thereof and applicable
requirements of applicable Law, except as has not had, and would not reasonably
be expected to have, a Material Adverse Effect. With respect to all Target
Entity Benefit Plans for which Target Entities may reasonably be expected to
incur Liability following Closing, such Target Entity Benefit Plans (including
for any Target Entity Benefit Plan the assets held thereunder or taken into
account in determining the amount of liability associated therewith), shall be
transferred with the appropriate Target Entities upon Closing, so that,
immediately following the Closing, the net Liabilities of the Target Entity
Benefit Plans transferred to Purchaser shall be the same as the net Liabilities
of such plans as of immediately prior to the Closing. All Target Entity Benefit
Plans are maintained exclusively by Target Entities.

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(v)                 Each Target Entity Benefit Plan that is required to obtain
formal approval or qualification by the appropriate tax and other local
authorities has obtained such approval or qualification and, to Seller’s
Knowledge, nothing has been done or omitted to have been done, and there are no
circumstances, that would reasonably be expected to result in the loss of such
approval or qualification.

(vi)               No Seller Benefit Plan exists that, as a result of the
execution of this Agreement, shareholder approval of this Agreement or the
transactions contemplated by this Agreement (whether alone or in connection with
any other event(s)), could reasonably be expected to (i) result in severance pay
(or other compensation or benefits) or any increase in severance pay (or other
compensation or benefits) upon any termination of employment of any Business
Employee, or (ii) accelerate the time of payment or vesting, or result in any
payment or funding (through a grantor trust or otherwise) of any compensation or
benefits under, or an increase of the amount payable under or result in any
other material obligation pursuant to, any of the Seller Benefit Plans in
respect of any Business Employee.

(vii)              Except to the extent arising from Purchaser’s failure to
comply in all material respects with its obligations under Section 5.01 and
Section 5.02, no Business Employee shall be entitled to any severance,
retention, termination or change of control bonus or payment payable by any
Asset Seller or Target Entity that arises solely (and not in connection with any
other event(s)) as a result of the execution of this Agreement or the
transactions contemplated by this Agreement that is not either a Retained
Liability or included in the final determination of Closing Net Cash.

(viii)            The Business Financial Statements reflect the expenses and
liabilities arising under the Target Entity Benefit Plans listed in Section
3.01(t)(ii) of the Disclosure Schedule that have not been provided to Purchaser
prior to October 26, 2011 (the “Undocumented Target Entity Benefit Plans”) in
accordance with and to the extent required by U.S. GAAP as of and for the
periods then ended.

(ix)               The Target Entity Financial Statements with respect to each
Target Entity reflect the expenses and liabilities arising under the
Undocumented Target Entity Benefit Plans of such Target Entity in accordance
with and to the extent required by applicable local GAAP as of and for the
periods then ended.

(x)                 To the Seller's Knowledge, since March 1, 2011, other than
in the ordinary course of business consistent with past practice, no Seller
Benefit Plan related to the Business has been implemented or amended in any
material respect.

(u)                 Labor Matters.

(i)                   No Business Employee is represented by any works councils,
union or labor organization or is otherwise subject to any collective bargaining
agreement or labor contract, and, to Seller’s Knowledge, there has not been any
activity or proceeding of any labor organization or employee group to organize
any such employees and, as of the date hereof, each of the entities or
organizations required to be listed on

36

  

Section 3.01(u)(i) of the Disclosure Schedule has been notified, to the extent
required under applicable Law, of the transactions contemplated by this
Agreement. There are no strikes, work stoppages, slowdowns, lockouts,
grievances, unfair labor practice claims, or material disputes currently
existing or to Seller’s Knowledge, threatened against or involving any of the
Target Entities or Asset Sellers, and none has occurred within the past three
years. Each of the Target Entities and Asset Sellers is each in compliance with
all applicable Laws with respect to labor and employment matters, including, but
not limited to employment and employment practices, terms and conditions of
employment, classification of workers, classification of independent
contractors, wages and hours, overtime, working conditions, hiring, promotion,
affirmative action, equal employment opportunity, occupational safety and health
(including employee training and notice requirements) and the payment and
withholding of Taxes and similar obligations, and none of the Target Entities or
Asset Sellers has received in the year prior to the date hereof any notice or
allegation of any violation of any such applicable Laws, except for such
non-compliance or alleged violation that would not reasonably be expected to
have a Material Adverse Effect.

(ii)                 In the year prior to the date hereof, none of the Target
Entities or the Asset Sellers has effectuated (i) a “plant closing” (as defined
in the Worker Adjustment and Retraining Notification Act (the “WARN Act”) or any
similar state or local law) affecting any site of employment or one or more
facilities or operating units within any site of employment or facility of any
of Seller or any of its Subsidiaries or (ii) a “mass layoff” (as defined in the
WARN Act, or any similar state or local law) affecting any site of employment or
facility of any of Seller or any of its Subsidiaries.

(iii)                There are no Actions (or internal investigations conducted
by Seller or its Subsidiaries) relating to employment or labor Laws pending or,
to Seller’s Knowledge, threatened in writing, against Seller or any Subsidiary
of Seller and brought by, on behalf of, or relating to any Business Employee.

(iv)               The Asset Seller Employees, together with the Target Entity
Transferring Employees, constitute all of the employees that are primarily
engaged in the Business or are necessary to run the Business in the ordinary
course and consistent with past practice immediately after the Closing.

(v)                 No individual who was an actively employed Business Employee
as of June 20, 2011, has been terminated by Seller or is employed as of the date
of this Agreement by Seller or its Subsidiaries other than as a Business
Employee.

(v)                 Environmental.

(i)                   The Asset Sellers (to the extent related to the Business)
and the Target Entities and their Subsidiaries have, for the past three (3)
years complied, and are in compliance, with applicable Environmental, Health,
and Safety Requirements and the Owned Real Property and Leased Real Property
have for the past three (3) years complied, and are in compliance, with
applicable Environmental, Health, and Safety Requirements, except for, in each
case, such non-compliance that would not reasonably be expected to result in a
Material Adverse Effect.

(ii)                 The Asset Sellers, the Target Entities and their
Subsidiaries have obtained and, for the past three (3) years complied, and are
in compliance, with all Permits required for operation of the Business and for
the use and occupancy of the Owned Real Property and the Leased Real Property
pursuant to applicable Environmental, Health, and Safety

37

  

Requirements, except for such non-compliance that would not reasonably be
expected to result in a Material Adverse Effect.

(iii)                None of the Asset Sellers (to the extent related to the
Business) nor any of the Target Entities or their Subsidiaries is the subject of
any Action, citation, summons or subpoena of any nature, civil, criminal,
regulatory or otherwise, in law or in equity, respecting any Environmental,
Health, and Safety Requirements, nor, to Seller’s Knowledge, are any such
Actions, citations, summons or subpoenas pending or threatened, except for such
Actions that would not reasonably be expected to result in a Material Adverse
Effect.

(iv)               None of the Asset Sellers (to the extent related to the
Business) nor any of the Target Entities or their Subsidiaries is subject to any
Liability under Environmental Health, and Safety Requirements, including but not
limited to any obligations to investigate, remediate, and/or take corrective
action related to Releases of Hazardous Substances, or, to Seller’s Knowledge,
potential Liability under Environmental, Health, and Safety Requirements, nor,
to Seller’s Knowledge, are any such Liabilities pending or threatened, except
for such Liabilities that would not reasonably be expected to result in a
Material Adverse Effect.

(v)                 This Section 3.01(v) contains the sole and exclusive
representations and warranties of Seller with respect to any environmental,
health, or safety matters, including without limitation any arising under any
Environmental, Health, and Safety Requirements.

(w)                Brokers’ Fees. Except for J.P. Morgan Securities LLC, whose
fees and commissions will be paid by Seller, none of Seller, any Target Entity,
Purchaser or any of its Affiliates has or shall have any liability or obligation
to pay any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement or the Ancillary Agreements
based on arrangements made by or on behalf of Seller or its Affiliates.

(x)                 Indebtedness and Transaction Expenses. None of the Target
Entities shall have any Indebtedness or any Liabilities for Transaction Expenses
as of the Closing except for Indebtedness or any Liabilities for Transaction
Expenses included in the final determination of Closing Net Cash.

(y)                 No Other Representations or Warranties. Except for the
representations and warranties contained in this Section 3.01, neither Seller
nor any other Person on behalf of Seller makes any express or implied
representation or warranty with respect to Seller, the Target Entities or any of
their respective Subsidiaries, the Business, the Acquired Assets, the Assumed

38

  

Liabilities, or with respect to any other information provided to Purchaser in
connection with the transactions contemplated by this Agreement or any Ancillary
Agreement. Notwithstanding the foregoing, nothing in this Section 3.01(y), the
scope of the representations and warranties set forth in this Agreement, nor the
absence of any representation and warranty from this Agreement shall (or shall
be deemed to) limit, modify or otherwise affect any claim or cause of action of
Purchaser based on fraud. 

Section 3.02.                        Representations and Warranties of
Purchaser. Purchaser hereby represents and warrants to Seller as follows:

(a)                 Organization and Qualification. Purchaser is a stock company
(aktiebolag) organized in Sweden, duly formed, validly existing and in good
standing under the Laws of the jurisdiction of its formation. Each of the
Designated Purchasers is, or will be at the Closing Date, duly organized or
formed, validly existing and, to the extent applicable in such jurisdiction, in
good standing under the Laws of the jurisdiction of its incorporation. Purchaser
and each of the Designated Purchasers are duly authorized to conduct business
and are in good standing, or of similar status, to the extent such status exists
under the laws of each jurisdiction where such qualification is required, except
where the lack of such qualification has not had, and would not reasonably be
expected to result in, a material adverse effect on the ability of Purchaser to
consummate the transactions contemplated by this Agreement.

(b)                 Authority; Execution. Purchaser and each of the Designated
Purchasers has (or, prior to the execution thereof, will have) all necessary
power and authority to execute and deliver this Agreement and each Ancillary
Agreement to which it is, or will be, a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by Purchaser of this Agreement and the
execution and delivery by Purchaser and each Designated Purchaser of each
Ancillary Agreement to which it is, or will be, a party, the performance by
Purchaser and each Designated Purchaser of its obligations hereunder and
thereunder, and the consummation by Purchaser and each Designated Purchaser of
the transactions contemplated hereby and thereby, have been (and in the case of
each Ancillary Agreement to which Purchaser or a Designated Purchaser is, or
will be, a party, will be, prior to the execution thereof), duly and validly
authorized by all necessary corporate action of Purchaser and each Designated
Purchaser and no other proceeding on the part of Purchaser or a Designated
Purchaser is or will be necessary to authorize the execution and delivery of
this Agreement or such Ancillary Agreement, the performance of any such Person’s
obligations hereunder and thereunder and the consummation of the transactions
contemplated hereby and thereby. This Agreement has been, and each Ancillary
Agreement to which Purchaser or a Designated Purchaser is, or will be, a party,
at the time of its execution and delivery will be, duly and validly executed and
delivered by Purchaser and such Designated Purchaser and, assuming the due
authorization, execution and delivery by each other party thereto, will
constitute a legal, valid and binding obligation of Purchaser and each
Designated Purchaser enforceable against Purchaser and the Designated Purchaser
in accordance with its terms (except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other laws of general applicability relating to or affecting creditor’s rights,
and to general equitable principles).

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(c)                 No Conflict; Required Filings. (i) The execution and
delivery by Purchaser and each Designated Purchaser of this Agreement does not,
and the execution and delivery of each Ancillary Agreement to which it is, or
will be, a party, and the performance by Purchaser and, upon designation, each
Designated Purchaser of its obligations hereunder and thereunder and the
consummation of the transactions contemplated hereby and thereby will not,
conflict with, or result in any violation of or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a benefit under, or
result in the creation of any Liens, other than Permitted Liens, upon any of the
properties or assets of Purchaser or any Designated Purchaser, or give rise to
any requirement to provide any notice under, any provision of (A) the Governing
Documents of Purchaser or any Designated Purchaser, (B) assuming the consents,
approvals and authorizations specified in Section 3.01(d) of the Disclosure
Schedule have been received and the waiting periods referred to therein have
expired, and any condition precedent to such consent, approval, authorization or
waiver has been satisfied, any Law applicable to Purchaser and each Designated
Purchaser or by which any property or asset of Purchaser and each Designated
Purchaser is bound or affected or (C) any material Contract to which Purchaser
or any Designated Purchaser is a party or by which Purchaser, any Designated
Purchaser or any of their respective assets or properties is bound or affected.

(ii)                 The execution and delivery of this Agreement, and each
Ancillary Agreement to which Purchaser or any Designated Purchaser is, or will
be party, by Purchaser or such Designated Purchaser does not, and the
performance of their respective obligations hereunder and thereunder, and the
consummation by it of the transactions contemplated hereby and thereby will not,
require any material consent, approval authorization, waiver or permit of, or
filing with or notification to, any Governmental Authority, except for
applicable requirements of the HSR Act and any applicable non-U.S. antitrust,
competition, trade regulation or investment Laws.

(d)                 Absence of Litigation. As of the date hereof, there is no
Action, citation, summons or subpoena of any nature, civil, criminal, regulatory
or otherwise, in law or in equity, pending or, to Purchaser’s Knowledge,
threatened, against or relating to the transactions contemplated by this
Agreement.

(e)                 Brokers’ Fees. Neither Seller nor its Affiliates following
the Closing has or shall have any liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement or the Ancillary Agreements based on arrangements
made by or on behalf of Purchaser or its Affiliates.

(f)                  Adequate Funds. Purchaser’s obligations hereunder are not
subject to any conditions regarding Purchaser’s or any other Person’s ability to
obtain financing for the consummation of the transactions contemplated by this
Agreement or any Ancillary Agreement. Purchaser has cash on hand or funds
available under existing credit facilities sufficient to enable Purchaser to
perform its obligations due at Closing hereunder (including to effect the
Closing and consummate the transactions contemplated by this Agreement to be
consummated at Closing, and pay the Purchase Price).

40

  

(g)                 No Other Representations or Warranties. Except for the
representations and warranties contained in Section 3.01, Purchaser acknowledges
that neither Seller nor any other Person on behalf of Seller makes any express
or implied representation or warranty with respect to Seller, the Target
Entities or any of their respective Subsidiaries, the Business, the Acquired
Assets, the Assumed Liabilities, or with respect to any other information
provided to Purchaser in connection with the transactions contemplated hereby.
Notwithstanding the foregoing, nothing in this Section 3.02(g), the scope of the
representations and warranties set forth in this Agreement, nor the absence of
any representation and warranty from this Agreement shall (or shall be deemed
to) limit, modify or otherwise affect any claim or cause of action of Purchaser
based on fraud.

Article IV

COVENANTS AND ADDITIONAL AGREEMENTS

Section 4.01.                        Conduct of Business. (a) From the date
hereof through the Closing Date, except as disclosed on Section 4.01(a) of the
Disclosure Schedule or otherwise expressly contemplated or permitted by this
Agreement, Seller shall, and shall cause each other Asset Seller (in each case,
to the extent such action or transaction relates to the Business) to, and shall
cause the Target Entities to:

(i)                   conduct the Business and maintain the Acquired Assets in
the ordinary course of business and in substantially the same manner as
currently conducted, including managing Working Capital in the ordinary course
of business consistent with past practice (e.g., collecting accounts receivable
and satisfying accounts payable when due including with respect to timing and
amount) and managing all commercial arrangements with and regarding Loading Bay
on an arm’s length basis in the ordinary course of business consistent with past
practice; and

(ii)                 use commercially reasonable efforts to (A) preserve the
present business operations, organization and goodwill of the Business, (B)
comply with their respective obligations under any Material Contract, (C)
preserve the present relationships with customers, suppliers, third party
manufacturers and employees of the Business and take required actions under
applicable labor Laws with respect to employees of the Business, and (D) make
capital expenditures, or commitments therefor, in accordance with the capital
expenditures budget set forth in Section 4.01(a)(ii) (D) of the Disclosure
Schedule (the “CapEx Budget”).

(b)                 From the date hereof through the Closing Date, except as
required by Law or expressly contemplated or permitted by this Agreement, or as
disclosed on Section 4.01(b) of the Disclosure Schedule or authorized by
Purchaser in writing, such authorization not to be unreasonably conditioned,
withheld or delayed, Seller shall not, and shall cause each other Asset Seller
(in each case, to the extent such action or transaction relates to the Business)
not to, and shall cause the Target Entities not to, take or engage in any of the
following actions:

(i)                   amending or otherwise modifying its Governing Documents
(A) with respect to any Asset Seller in any manner related to or affecting the
Business or

41

  

altering the approvals necessary to authorize the transactions contemplated by
this Agreement and (B) with respect to the Target Entities, in any manner;

(ii)                 (A) redeeming or otherwise acquiring Equity Interests in a
Target Entity other than on a pro rata basis; (B) issuing, selling or granting
any Equity Interests in any Target Entity, any other rights that otherwise
evidence the right to subscribe for any Equity Interests in any Target Entity,
or (C) entering into or becoming bound by any Contract that gives any Person the
right to receive any benefits or rights similar to any rights enjoyed by or
accruing to the holders of Equity Interests in any Target Entity;

(iii)                splitting, combining or reclassifying any of the Equity
Interests in any Target Entity, or issuing any other security in respect of, in
lieu of or in substitution for any Equity Interests in any Target Entity;

(iv)               loaning, advancing, investing or making a capital
contribution to or in any Person;

(v)                 acquiring any material properties or assets that would be
Acquired Assets or assets of the Target Entities or selling, assigning,
licensing, transferring, conveying, leasing or otherwise disposing of any
material Acquired Assets (including any Transferred Intellectual Property) or
any assets of the Target Entities, except for purchases and sales of Inventory
or Products in the ordinary course of business consistent with past practice
(and, with respect to Intellectual Property, expiration pursuant to its natural
lifetime);

(vi)               entering into any agreement that would (A) restrict the
Business or the Acquired Assets after the Closing in any material respect or (B)
constitute a Material Contract required to be disclosed on Section 3.01(j) of
the Disclosure Schedule if it had been entered into prior to the date of this
Agreement;

(vii)              with regard to those Trademarks that are used in and material
to the Business, (i) selling, assigning, transferring, conveying or otherwise
disposing of such Trademarks or entering into any Contract in respect of such
Trademarks, in either case, that would preclude the grant of the license to be
granted in the Trademark License Agreement, or (ii) allowing any registrations
or applications such Trademarks to lapse;

(viii)            incurring any Lien on any Acquired Assets or assets of the
Target Entity, other than (i) Liens that will be discharged at or prior to
Closing without liability to the Business or any Target Entity or (ii) Permitted
Liens;

(ix)               incurring any material Liability that would be included in
the Assumed Liabilities other than in connection with the operation of the
Business in the ordinary course of business consistent with past practice;

(x)                 voluntarily terminating, cancelling or waiving any material
right under, or materially amending any Material Contract or Lease of the
Business, other than in the ordinary course of business;

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(xi)               waiving, releasing, assigning, settling or compromising any
material claim, litigation or arbitration relating to the Business, except to
the extent that such waiver, release, assignment, settlement or compromise
(i) does not impose any binding obligation, whether contingent or realized, on
the Business that will bind Purchaser or its Subsidiaries (including the Target
Entities) after the Closing Date or (ii) is a Retained Liability;

(xii)              establishing, adopting, amending or terminating any Seller
Benefit Plan (or any plan, agreement, program, policy, trust, fund or other
arrangement that would be a Seller Benefit Plan if it were in existence as of
the date of this Agreement) or employee collective bargaining agreement covering
any Business Employee, except (A) as may be required by Law (provided that
Seller shall use its commercially reasonable efforts to first notify Purchaser
of such required change), or (B) where such Seller Benefit Plan is an Asset
Seller Benefit Plan whose terms apply equally to Business Employees and
non-Business Employees alike, and such amendment or adoption is generally
applicable to all participants, or (C) where such amendment or adoption does not
apply to any Business Employees and/or their eligible beneficiaries;

(xiii)            increasing the funding obligation or contribution rate of any
Seller Benefit Plan, other than in the ordinary course of business consistent
with past practice or as may be required by Law (provided that Seller shall use
its commercially reasonable efforts to first notify Purchaser of such required
change);

(xiv)            effecting or permitting a “plant closing” or “mass layoff” as
those terms are defined in the WARN Act without complying with the notice
requirement and all other provisions of the WARN Act;

(xv)             other than as may be required by Law (provided that Seller
shall use its commercially reasonable efforts to first notify Purchaser of such
required change) or under the terms of any existing agreement, or as required
under the terms of any Seller Benefit Plan identified in the Disclosure
Schedule, (A) increasing the present base salary, hourly wage or commission
rate, or accelerating the vesting of, or increasing, any payment or benefits in
respect of any of the Business Employees, or (B) authorizing, guaranteeing or
paying any bonuses or other special payments or equity-related incentive awards
to any Business Employee; provided, however, that following reasonable
consultation with Purchaser, wages, salaries and bonuses of Business Employees
may be increased if such increase is in the ordinary course of business
consistent with past practice and not in excess of the percentage increases
specified in Section 4.01(b)(xv) of the Disclosure Schedule; 1

(xvi)            entering into any new employment Contract with any Business
Employee, except, with respect to Business Employees who are not Business Key
Employees, Contracts in the ordinary course of business consistent with past
practice that

--------------------------------------------------------------------------------

1 Please provide schedule.

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provide for base salary, in the case of any individual Business Employee, less
than $100,000 per year;

(xvii)          making or authorizing any capital expenditure related to the
Business that is materially in excess of the amounts set forth in the Capex
Budget;

(xviii)         making (other than in accordance with past practice), changing,
or rescinding any material election relating to Taxes;

(xix)            changing an annual accounting period, filing any amended Tax
Return of any Target Entity, entering into any material closing agreement by any
Target Entity, settling or compromising any material claim relating to Taxes of
any Target Entity, surrendering any right to claim a material refund for Taxes
of any Target Entity, consenting to any extension or waiver of the limitation
period applicable to any claim relating to Taxes of any Target Entity, or taking
any similar action;

(xx)             making any change in any of the accounting methods, principles
or practices used by it except as required by the relevant local GAAP;

(xxi)            incurring any Indebtedness with respect to the Business, or by
an Asset Seller that otherwise contains restrictions on the Business, the
Acquired Assets or the Target Entities; or

(xxii)          authorizing, or committing or agreeing, whether in writing or
otherwise, to take, any of the foregoing actions.

(c)                 From the date hereof through the Closing Date, except as
required by Law or expressly contemplated or permitted by this Agreement, Seller
shall not take any action within its control to cause the business and
operations of Loading Bay not to be conducted in the ordinary course consistent
with past practice.

Section 4.02.                        Mixed Contracts. Seller shall, and shall
cause each of the other Asset Sellers to, upon the request of Purchaser, use its
and their commercially reasonable efforts to assist Purchaser in obtaining for
the Acquired Assets and/or the Target Entities arrangements with the third
parties to the Mixed Contracts similar in all material respects to those
currently applicable under the Mixed Contracts. For the avoidance of doubt,
Seller shall not be obligated to compromise any right, asset or benefit or to
expend any amount or incur any Liability or provide any other consideration with
regard to the Mixed Contracts pursuant to this Section 4.02.

Section 4.03.                        Further Assurances; Subsequent Transfers.

(a)                 Except as otherwise expressly set forth herein, including as
may be set forth in this Section 4.03 and Section 4.04, and without limitation
and subject to the express terms of this Agreement, each of Seller and Purchaser
shall use their commercially reasonable efforts to (i) take, or procure to be
taken, all such further or other actions as may be reasonably necessary,
desirable or appropriate to consummate the transactions contemplated by this
Agreement and the Ancillary Agreements, including, with respect to Seller, to
notify all entities

44

  

or organizations required to be listed on Section 3.01(u)(i) of the Disclosure
Schedule, to the extent required, of the transactions contemplated by this
Agreement, and (ii) cause the fulfillment at the earliest practicable date of
all of the conditions to their respective obligations to consummate the
transactions contemplated by this Agreement, including without limitation
receiving all authorizations, consents, orders and approvals necessary, proper
or advisable to and make effective consummate the transaction contemplated
hereby. 

(b)                 To the extent that any of the transfers, conveyances,
deliveries or assumptions required to be made pursuant to Article II shall not
have been consummated at or prior to the Closing, each of Purchaser and Seller
shall use its commercially reasonable efforts to effect such consummation as
promptly thereafter as reasonably practicable and to provide the benefit of such
Contract to Purchaser in the manner described in Section 4.03(d) with respect to
Contracts for which consent to assignment has not been obtained prior to
Closing. Each of the parties hereto will execute and deliver such further
instruments of transfer, conveyance and assumption and will take such other
actions as Seller or Purchaser, as the case may be, may reasonably request in
order to effectuate the purposes of this Agreement and to carry out the terms
hereof. Without limiting the generality of the foregoing, at any time and from
time to time after Closing, at the reasonable request of Seller or Purchaser, as
the case may be, the parties will execute and deliver such further assurances,
deeds, assignments, consequences, powers of attorney and other instruments and
papers, and take such action as Seller or Purchaser, as the case may be, may
reasonably request as necessary in order to effectively sell, transfer, convey,
assign and deliver to Purchaser all of Seller’s right, title and interest to or
in, all of the Acquired Assets and the Target Shares, to put Purchaser in actual
possession and operating control thereof and to permit Purchaser to exercise all
rights with respect thereto (including rights under Contracts and other
arrangements as to which the consent of any third party to the transfer thereof
shall not have previously been obtained) and for Purchaser to properly assume,
become obligated to pay and discharge the Assumed Liabilities.

(c)                 Seller hereby constitutes and appoints, effective as of the
Closing Date, Purchaser and its Affiliates, and its and their respective
successors and assigns, as the true and lawful attorney of Seller with full
power of substitution in the name of Purchaser, or in the name of Seller but for
the benefit of Purchaser, (i) to collect for the account of Purchaser any items
of Acquired Assets and (ii) to institute and prosecute all proceedings which
Purchaser may in its sole discretion deem proper in order to assert or enforce
any right, title or interest in, to or under the Acquired Assets or the Target
Shares, and to defend or compromise any and all actions, suits or proceedings in
respect thereof, in each case at the sole expense of Purchaser. Purchaser shall
be entitled to retain for its own account any amounts collected pursuant to the
foregoing powers, including any amounts payable as interest in respect thereof.

(d)                 Notwithstanding anything in this Agreement to the contrary,
this Agreement shall not constitute an agreement to assign any Acquired Asset or
any claim or right or any benefit arising thereunder or resulting therefrom if
such assignment, without the consent of a third party thereto, would constitute
a breach or other contravention of such Acquired Asset or in any way adversely
affect the rights of Purchaser or Seller thereunder. Seller and Purchaser will
use their commercially reasonable efforts to obtain the consent of the other
parties to any such Acquired Asset or any claim or right or any benefit arising
thereunder for the assignment thereof to Purchaser as Purchaser may request. If
such consent is not obtained, or if an attempted

45

  

assignment thereof would be ineffective or would adversely affect the rights of
Seller thereunder so that Purchaser would not in fact receive all such rights,
Seller and Purchaser will cooperate in a mutually agreeable arrangement under
which Purchaser would obtain the benefits and assume the obligations thereunder
in accordance with this Agreement, including sub-contracting, sub-licensing, or
subleasing to Purchaser, or under which Seller would enforce for the benefit of
Purchaser, with Purchaser assuming Seller’s obligations, any and all rights of
Seller against a third party thereto. Seller will promptly pay to Purchaser when
received all monies received by Seller under any Acquired Asset or any claim or
right or any benefit arising thereunder, except to the extent the same
represents a Retained Asset (and pending such payment shall hold all such monies
in trust for Purchaser). 

(e)                 Seller shall reimburse Purchaser for a portion of the actual
license fees for the licenses set forth on Section 4.03(e) of the Disclosure
Schedule equal to the lesser of (i) 50% of the aggregate out-of-pocket fee for
such initial licenses, excluding any maintenance or subscription fees, and (ii)
four hundred thousand dollars ($400,000). In addition, Seller shall reimburse
Purchaser for 50% of the aggregate actual out-of-pocket fees incurred by
Purchaser for the assignment of the License Agreement, dated December 1, 2004,
by and between R-Bac Industries LLC and Epicor Software Corporation, to
Purchaser or one of its Affiliates. With respect to the proprietary Rapid Quote
System and Service Planning Tool software applications, Seller shall deliver to
Purchaser the Source Code in accordance with a mutually agreed upon delivery
method, together with one (1) copy of the relevant Software Documentation in
printed form and one (1) copy in a reproducible electronic form; in each case to
the extent Seller or any of its Affiliates has such documentation within its
possession or control.

Section 4.04.                        Appropriate Action; Consents; Filings.

(a)                 Each of the parties agrees that the only notifications that
will be filed under applicable antitrust or competition Laws in connection with
the transactions contemplated hereby are notifications in (i) the United States
of America, (ii) Germany, (iii) Austria, and (iv) Russia, as well as, subject to
the provisions in Section 4.04(b), (v) Australia, and (vi) New Zealand (the
“Agreed Notifications”). The parties agree that they will not notify the
transactions contemplated by this Agreement in any jurisdiction, other than the
Agreed Notifications, including in jurisdictions in which a merger control
filing or other notification in respect of antitrust or competition Laws is
voluntary or optional, and will also not seek informal guidance from the
Antitrust Authorities in any other jurisdiction with respect to the transactions
contemplated by this Agreement.

(b)                 Purchaser and, where required by Law, Seller shall at their
own expense make each Agreed Notification within ten (10) Business Days after
receipt to local counsels’ reasonable satisfaction of all of Seller’s
information reasonably necessary to proceed with the relevant Agreed
Notification (“Filing Date”); provided, however, that Purchaser shall be
responsible for any filing or other fees payable to any Agreed Antitrust
Authority in connection with such Agreed Notifications. Notwithstanding Section
4.04(a) and the immediately preceding sentence of this Section 4.04(b): (i) for
the purpose of fulfilling the condition in Section 7.01(a)(ii) with regard to
New Zealand, Purchaser shall submit, on or prior to the Filing Date, a courtesy
letter to the New Zealand Commerce Commission (“NZCC”) informing the NZCC of the
transactions contemplated hereby and the parties shall make commercially
reasonable efforts

46

  

to achieve satisfaction of the condition set out in Section 7.01(a)(ii)(x), and
only if the indication referred to in Section 7.01(a)(ii)(x) is not received
from the NZCC to the parties’ mutual reasonable satisfaction within fourteen
(14) working days from the submission of such courtesy letter to the NZCC, or
any longer period reasonably agreed by the parties in light of potential
requests by the NZCC for additional information, then Purchaser shall either
immediately waive the condition in 7.01(a)(ii) or immediately take all
reasonable steps to promptly lodge an application for clearance under Part V of
the Commerce Act of New Zealand 1986 for the implementation of the transactions
contemplated hereby, and (ii) for the purpose of fulfilling the condition in
Section 7.01(a)(iii) with regard to Australia, Purchaser shall, on or prior to
the Filing Date, submit a courtesy letter to the Australian Competition &
Consumer Commission (“ACCC”) informing the ACCC of the transactions contemplated
hereby and the parties shall make commercially reasonable efforts to achieve
satisfaction of the condition set out in Section 7.01(a)(iii)(x) and only if the
condition in Section 7.01(a)(iii)(x) is not satisfied within fourteen (14)
working days from the submission of the courtesy letter to the ACCC, or any
longer period reasonably agreed by the parties in light of potential requests by
the ACCC for additional information, Purchaser shall either immediately waive
the condition in Section 7.01(a)(iii) or promptly take all reasonable steps to
make an application for informal clearance for the implementation of the
transactions contemplated hereby with the ACCC. 

(c)                 Subject to the terms hereof, the parties agree to cooperate
and to use their commercially reasonable efforts to obtain, as promptly as
practicable following the date of this Agreement, all assurances or approvals
sought pursuant to the Agreed Notifications and to respond to any Agreed
Antitrust Authority’s request for information thereunder. Without limiting the
generality of the foregoing, Purchaser agrees to use its commercially reasonable
efforts to avoid or eliminate each and every impediment under any antitrust or
competition Law that may be asserted by any Agreed Antitrust Authority or any
other party so as avoid the issuance of a Request for Additional Information and
Documentary Material under the HSR Act, the opening of phase II or in-depth
examinations (where applicable) or a statement of objections or prohibition
order (or equivalents) by any Agreed Antitrust Authority, and to obtain all
required approvals or statements of non-objection by the Agreed Antitrust
Authorities so as to enable the parties to close the transactions contemplated
hereby as promptly as practicable and in any case prior to the Termination Date.

(d)                 Notwithstanding Section 4.04(c), except as otherwise agreed
between the parties, nothing herein shall require Purchaser to: (a) sell,
license, waive any rights in or to, or to dispose of, divest of or otherwise
hold separate or in trust any part of the assets or business of Purchaser, the
Business, the Target Entities or the Acquired Assets; (b) otherwise enter into
any type of agreement, arrangement or undertaking, including a consent decree,
with any Person (including any Agreed Antitrust Authority); or (c) litigate
against any Person (including any Agreed Antitrust Authority) or otherwise
oppose any motion or action for a temporary, preliminary, or permanent
injunction against the transactions contemplated by this Agreement.

(e)                 Subject to appropriate confidentiality protections, (i)
Purchaser will permit Seller to review in advance drafts of each notification to
be made to the Agreed Antitrust Authorities (including courtesy letters to be
sent to the NZCC and the ACCC) and will consult with counsel for Seller,
consider in good faith the views of Seller and incorporate Seller’s reasonable
comments, (ii) each party will promptly notify the other party of any written or
oral

47

  

communication to that party from any Antitrust Authority and, subject to Law,
permit the other party to review in advance any proposed written communication
to any such Antitrust Authority and will consult with counsel for the other
party, consider in good faith the views of the other and incorporate the other
party’s reasonable comments, (iii) each party will furnish the other party
promptly with copies of all correspondence, filings and written communications
with any Antitrust Authority with respect to this Agreement or the transactions
contemplated hereby, and (iv) each party shall inform the other of any meetings
scheduled with any Antitrust Authority and afford the other the possibility to
attend such meeting; provided, however, that if either Seller or Purchaser
believes that any such communication to or from an Antitrust Authority contains
(or in the case of a meeting is likely to involve discussion of) commercially
sensitive information that it is unwilling to provide to the other party, it
will be sufficient for Seller or Purchaser, as the case may be, to provide a
copy of such communication (or an opportunity to attend such meeting) to the
other party’s outside counsel. 

Section 4.05.                        Ancillary Agreements.

(a)                 At or prior to the Closing, the parties shall execute
(and/or cause their respective Subsidiaries to execute) the Ancillary
Agreements.

(b)                 Between the date hereof and the Closing Date, Seller and
Purchaser shall amend Part 1 of Schedule B of the form of Transition Services
Agreement attached hereto as Exhibit 1.01(C) to reflect: (i) in the case of
Services terminated pursuant to Section 3.2(b) of the Transition Services
Agreement that constitute all of the Services involving the use of the Orange
Network, a monthly cost reduction of $56,768, such that upon termination of such
Services, the monthly fees payable by Purchaser under the Transition Services
Agreement shall be reduced by such amount, and (ii) in the case of any other
Services so terminated, monthly cost reductions related to such Services as
shall be agreed by Purchaser and Seller prior to the Closing Date, following
good faith negotiations, such that upon termination of such other Services, the
monthly fees payable by Purchaser under the Transition Services Agreement shall
be reduced by the applicable monthly cost reductions as so agreed.

Section 4.06.                        Non-Competition.

(a)                 From and after the date hereof until that date that is ten
(10) years after the Closing Date, neither Seller nor its Subsidiaries will
engage directly or indirectly in competition with the Business as conducted as
of the Closing Date anywhere in the world; provided, however, that it shall not
be a violation of this Section 4.06 for Seller or any of its Subsidiaries to (i)
own any Equity Interests of any Person which invests in, manages or operates a
business that competes with the Business, in each case provided that such equity
securities (or securities convertible into equity securities) represent less
than 5% of the Equity Interests of such Person and are publicly traded or listed
in any securities exchange or automated quotation system, (ii) acquire all or a
majority of the Equity Interests or assets of any Person that has a business
which has (A) not more than 20% of its annual sales in a

48

  

business competing with the Business and (B) less than twenty million U.S.
dollars ($20,000,000) of its annual sales in a business competing with the
Business or (iii) acquire all or a majority of the Equity Interests or assets of
any Person that has a business which has (A) more than 20% of its annual sales
in a business competing with the Business or (B) more than twenty million U.S.
dollars ($20,000,000) of its annual sales in a business competing with the
Business; provided, however, that solely in respect of clause (iii), (x) Seller
shall use its commercially reasonable efforts to dispose of competing operations
so acquired within twelve (12) months following the completion of such
acquisition (provided that the expiration of such twelve (12)-month period shall
not relieve Seller of the obligation to use commercially reasonable efforts to
divest such competing business) and (y) Seller agrees (I) to notify Purchaser of
the intended divestiture and (II) to negotiate on a good faith basis for the
period of thirty (30) days immediately following the closing of such acquisition
transaction a sale to Purchaser of the competing operations. After such thirty-
(30-) day period, Seller shall have no obligation to continue negotiations with
Purchaser and shall not be restricted in any manner from selling all or a
portion of such competing operations to any other Person. 

(b)                 If the final judgment of a court of competent jurisdiction
declares that any term or provision of this Section 4.06 is invalid or
unenforceable, the parties agree any court referred to in Section 9.06 shall
have the power to reduce the scope, duration, or area of the term or provision,
to delete specific words or phrases, or to replace any invalid or unenforceable
term or provision with a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or unenforceable
term or provision, and this Agreement shall be enforceable as so modified after
the expiration of the time within which the judgment may be appealed.

Section 4.07.                        Non-Solicitation. (a) From and after the
date hereof until that date that is two (2) years after the Closing Date,
without the prior written consent of Purchaser, each of Seller and its
Subsidiaries shall not and shall cause each of their respective Affiliates not
to, directly or indirectly, employ, solicit or otherwise attempt to employ, or
receive or accept the performance of services by, any Business Employee who is
actively employed as of the date hereof; provided, that, nothing in this Section
4.07(a) shall restrict Seller or any of its Affiliates from (i) offering
employment to or hiring (A) persons who respond to a general solicitation or
advertisement that is not specifically directed to any Business Employees, (B)
persons terminated by Purchaser or any of its Affiliates or that have not worked
for Purchaser or any of its Affiliates for a period of six months, in each of
(A) and (B), prior to the time such persons contact Seller, or (ii) continuing
to employ (A) persons who do not accept Purchaser’s offer of employment pursuant
to Section 5.01 (provided that Seller has not violated its obligations under
Section 5.01), or (B) employees who are not primarily employed in the Business
as of Closing.

(b)                 From and after the date hereof until that date that is two
(2) years after the Closing Date, except as expressly contemplated by Article V
of this Agreement, without the prior written consent of Seller, Purchaser shall
not, and Purchaser shall cause its Affiliates not to, directly or indirectly,
employ, solicit or attempt to employ any employee of Seller or any of its
Affiliates (who is not a Business Employee) with whom Purchaser or any of its
Affiliates (including, after the Closing, the Target Entities) has come into
direct or indirect contact or of whom Purchaser or any of its Affiliates
(including, after the Closing, the Target Entities) becomes aware or otherwise
acquires knowledge (i) in connection with the transactions contemplated by this
Agreement, (ii) through any Transferred Business Employee or (iii) in connection
with any services provided pursuant to the Transition Services Agreement,
provided, that, nothing in this Section 4.07(b) shall restrict Purchaser or any
of its Affiliates from offering employment to or hiring (i) persons who respond
to a general solicitation or advertisement that is

49

  

not specifically directed to any employees of Seller or any of its Affiliates or
(ii) persons terminated by Seller or any of its Affiliates or that have not
worked for Seller or any of its Affiliates for a period of six months, in each
case, prior to the time such persons contact Purchaser. 

Section 4.08.                        Exclusive Negotiations. From and after the
date hereof until the Closing or earlier termination of this Agreement, Seller
shall not, directly or indirectly, (a) solicit, encourage, negotiate, discuss,
accept or approve any offers or proposals from, or enter into any agreement
with, any Person other than Purchaser involving the offer, sale or disposition
of the Business or any Acquired Assets, the merger, consolidation or sale or
disposition of any of the Target Entities or any of their assets (except as
permitted by Section 4.01(b)(v)) or concerning the offer, sale or disposition of
any Target Shares or Indirect Target Entity Shares, (b) provide any nonpublic
information concerning the Business or the Target Entities or their respective
businesses, operations, properties, assets, liabilities, employees, customers,
suppliers or condition (financial or otherwise) to any Person other than
Purchaser, except in the ordinary course of business or as required by any
applicable Law, or (c) waive any provision of any non-disclosure agreement
entered in connection with the sale of the Business.

Section 4.09.                        Access to Information and Employees.

(a)                 Until the Closing Date or earlier termination of this
Agreement, Seller shall, and shall cause its Subsidiaries to, (1) afford to
Purchaser and its Representatives reasonable access (including using
commercially reasonable efforts to give access to third parties possessing
Information) during normal business hours and upon reasonable advance notice to
all records books, contracts, instruments, computer data, processes and
procedures, and other data and information, other than any commercially and
competitively sensitive information, which includes without limitation,
information on prices and pricing, customer lists, customer contracts, detailed
sales and turnover figures, detailed cost figures (collectively, “Information”)
within Seller’s, or its Subsidiaries’, possession, insofar as such Information
relates to the Business and is reasonably requested by Purchaser or any Target
Entity; and (2) allow access during normal business hours, upon reasonable
advance notice and with the prior written consent of Seller, to any employees of
Seller or its Affiliates who currently provide, perform or manage any services,
processes or procedures with respect to the Business that will not be
transferred under this Agreement and that will not be included in the services
provided under the Transition Services Agreement, solely for the purpose of
receiving any instruction or assistance reasonably necessary for the effective
continuation of such services, processes and procedures by Purchaser from and
after the Closing Date; provided that all such access in clauses (1) and (2)
shall be subject to applicable antitrust and merger control rules (including any
restriction on the exchange of commercially and competitively sensitive
information). If this Agreement is terminated for any reason whatsoever,
Purchaser will return to Seller or the applicable Target Entity or Subsidiary
all tangible embodiments (and all copies) of the Information that are in its
possession.

(b)                 The Information or other information provided pursuant to
this Section 4.9 will be subject to the terms of the confidentiality agreement,
dated as of June 1, 2011, by and between Albany International Corp. and ASSA
ABLOY Entrance Systems AB (as may be amended from time to time, the
“Confidentiality Agreement”). Seller and Purchaser hereby agree that upon the
Closing, the Confidentiality Agreement shall be terminated.

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Section 4.10.                        Confidentiality. (a) From and after the
Closing Date, Seller shall hold, and shall cause its Affiliates, officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by Governmental Authority or
other requirements of Law on advice of counsel, all confidential or otherwise
proprietary documents and information with respect to the Business in the
possession of Seller and its Affiliates; provided, however, that such
information shall not include information that is currently or subsequently
becomes generally available to the public other than as a result of a disclosure
by Seller or its Affiliates or its or their Representatives.

(b)                 From and after the Closing Date, Purchaser shall hold, and
shall cause its Affiliates, officers, directors, employees, accountants,
counsel, consultants, advisors and agents to hold, in confidence, unless
compelled to disclose by Governmental Authority or other requirements of Law on
advice of counsel, all confidential or otherwise proprietary documents and
information with respect to the Retained Assets, Retained Liabilities and
Retained Intellectual Property, in the possession of Purchaser and its
Affiliates; provided, however, that such information shall not include
information that is currently or subsequently becomes generally available to the
public other than as a result of a disclosure by Purchaser or its Affiliates or
its or their Representatives.

Section 4.11.                        Litigation Cooperation. With respect to any
Action that involves any of Seller, Purchaser, or a Target Entity or their
respective Subsidiaries (except in the case of an Action in which one or more of
such Persons are adverse parties, in which case such Action shall be governed by
such discovery rules as may be applicable thereto and Article VI and the
applicable provisions hereof) and relates to (x) the transactions contemplated
by this Agreement or (y) any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure to act,
or transaction, in each case occurring on or prior to the Closing Date and
involving any of the Asset Sellers (in each case, to the extent related to the
Business) or any of the Target Entities or their Subsidiaries, whether or not
such Action is subject to indemnification hereunder, Seller, on the one hand,
and Purchaser on the other, shall, upon written request by the party to such
Action, and at the expense of the requesting party (subject to the
indemnification and expense sharing provisions of this Agreement, to the extent
applicable), provide reasonable cooperation and assistance within normal
business hours and without any material disruption of the business of the
providing party and its respective Subsidiaries, including using commercially
reasonable efforts to cause their respective directors, officers, employees and
other personnel to be available as witnesses or to otherwise present evidence or
testimony, and shall furnish such records and information (including providing
to Purchaser or a Purchaser Indemnified Party copies of any such records or
information that may constitute Retained Assets), as may be reasonably requested
by the other in connection therewith, including, by using commercially
reasonable efforts to attend such conferences, discovery proceedings, hearings,
trials and appeals as may be reasonably requested by the other in connection
therewith. In the event that any materials called for by this Section 4.11 to be
shared with Purchaser or Seller or another Indemnified Party, as the case may
be, are attorney-client privileged, Purchaser and Seller shall enter into an
appropriate joint defense or other similar agreement providing for the ability
to share (or have counsel share) oral and written information otherwise covered
by the attorney-client privilege and the attorney-work product privilege without
waiver of those privileges.

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Section 4.12.                        Retention of Records. (a) Except as
otherwise required by Law or agreed in writing, Seller and Purchaser shall each
retain and shall cause their respective Affiliates to retain, for a period of at
least seven years following the Closing Date (the “Retention Period”), all
Information relating to (i) in the case of Purchaser, the Retained Assets or the
Retained Liabilities, and (ii) in the case of Seller, the Target Entities, the
Acquired Assets, the Business and the Assumed Liabilities. Notwithstanding the
foregoing, except as otherwise required by Law, either party may destroy or
otherwise dispose of any of such Information after such time, provided, that
prior to such destruction or disposal, (a) Purchaser or Seller, as applicable,
shall provide no less than 90 days’ prior written notice to the other party,
specifying the Information proposed to be destroyed or disposed of and (b) if
the other party shall request in writing prior to the scheduled date for such
destruction or disposal, that any of the Information proposed to be destroyed or
disposed of be delivered to the other party, Purchaser or Seller, as the case
may be, shall promptly arrange for the delivery of such of the Information as
was requested, at the expense of the requesting party.

(b)                 During the Retention Period, Seller shall afford Purchaser
reasonable access, during Seller’s regular business hours upon reasonable
advance notice and under reasonable circumstances and subject to restrictions
under applicable Law, to the Information retained by Seller pursuant to Section
4.12(a) to the extent necessary for the preparation of financial statements,
regulatory filings or Tax Returns of Purchaser or its Affiliates, or in
connection with any Action (other than an Action between Seller and Purchaser
relating to this Agreement or the transactions contemplated hereby). Purchaser
shall be entitled, at its sole cost and expense, to make copies of any books and
records to which it is entitled access pursuant to this Section 4.12

(c)                 During the Retention Period, Purchaser shall afford Seller
reasonable access, during Purchaser’s regular business hours upon reasonable
advance notice and under reasonable circumstances and subject to restrictions
under applicable Law, to the Information retained by Purchaser pursuant to
Section 4.12(a) to the extent necessary for the preparation of financial
statements, regulatory filings or Tax Returns of Seller or its Affiliates, or in
connection with any Action (other than an Action between Seller and Purchaser
relating to this Agreement or the transactions contemplated hereby). Seller
shall be entitled, at its sole cost and expense, to make copies of any books and
records to which it is entitled access pursuant to this Section 4.12.

(d)                 Subject to Section 4.20(d), Purchaser and Seller shall
cooperate with each other in the conduct of any audit or other proceeding
relating to Taxes involving the Acquired Assets or the Target Entities.

Section 4.13.                        Public Announcements. Seller and Purchaser
shall consult with each other before issuing any press release or otherwise
making any public statements with respect to this Agreement or the transactions
contemplated hereby and shall not issue any such press release or make any such
public statement without the prior consent of the other (which consent shall not
be unreasonably withheld, conditioned or delayed), except as may be required by
Law (upon advice of counsel and after reasonable prior written notice to the
other party).2

--------------------------------------------------------------------------------

2 Note to Draft: Joint press release and coordination of securities filings of
each party to be discussed.

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Section 4.14.                        Intercompany Accounts. Except for this
Agreement, the Transitional Services Agreement and any other relevant Ancillary
Agreement, prior to or as of immediately prior to the Closing, Seller shall, and
shall cause its Affiliates to, use its commercially reasonable efforts to (i)
cancel and terminate all Contracts or other arrangements between Seller or its
Affiliates (other than the Target Entities), on the one hand, and the Target
Entities or which would otherwise bind the Business, on the other hand, that
were entered into prior to the Closing and (ii) settle or extinguish any amounts
payable thereunder so that (A) there shall be no further obligations of any of
the relevant parties thereunder or of the Business after Closing except as
provided in this Agreement, and (B) such settlements and cancellation shall be
completed in a manner that does not have any cash cost or any other material
adverse financial, Tax or other consequences or Liability to Purchaser or its
Affiliates (including the Target Entities) after Closing (other than any
adjustment of the Purchase Price relating to an Intercompany Accounts Balance
contemplated by Section 2.04).

Section 4.15.                        Separation of Data. From and after the date
hereof, the Asset Sellers and the Target Entities shall use their respective
commercially reasonable efforts to separate logically and physically the systems
and data of the Asset Sellers, on the one hand, and the Target Entities, on the
other, as promptly as practicable, in such a manner that the systems and data of
the Asset Sellers, on the one hand, and the systems and data of the Target
Entities, on the other hand, are not accessible to the other, except as and to
the extent otherwise set forth in the Transition Services Agreement. The
foregoing shall not obligate the Asset Sellers or the Target Entities to acquire
any additional hardware, software (licensed or otherwise), employees or assets.
The parties agree that Purchaser shall be responsible for developing a detailed
project plan to accomplish the foregoing in a manner that is satisfactory to
Seller. Seller agrees to provide commercially reasonable advice, assistance and
support to assist Purchaser in developing and implementing such plan.

Section 4.16.                        Deletion of Non-Transferred Software.
Purchaser agrees that, following the Closing Date, Purchaser shall not use and
shall cause each of its Affiliates (including the Target Entities) not to use
software loaded on any hardware included in the Acquired Assets or owned by the
Target Entities as of the Closing Date if such software is not included in the
Acquired Assets unless either Purchaser or the Target Entities otherwise have
sufficient rights to such software. Purchaser shall, as soon as is reasonably
practical, and in any event no later than 45 days following the Closing, delete
all such software from any such hardware on which it is installed.

Section 4.17.                        Use of Seller’s Trademarks and Logos.
Except as expressly provided in the Trademark License Agreement, Purchaser shall
not have the right to use, and shall promptly cease and desist from all use of,
the name “Albany” or any trade names, trademarks, identifying logos or service
marks owned by Seller or any of its Subsidiaries (other than as part of the
Transferred Intellectual Property) or employing the word “Albany” or any part or
variation of any of the foregoing or any confusingly similar trade names,
trademarks or logos to any of the foregoing (collectively, the “Seller’s
Trademarks and Logos”). Without prejudice to Purchaser’s obligation to cease and
desist from the use of Seller’s Trademarks and Logos, Purchaser shall not use
Seller’s Trademarks and Logos in any manner that might dilute, tarnish,
disparage or reflect adversely on Seller or Seller’s Trademarks and Logos or
result in any Liability to Seller.

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Section 4.18.                        Deposits, Guarantees and Other Credit
Support of the Business. Following the Closing, Purchaser shall procure the
return and/or release by the applicable counterparty, as soon as reasonably
practicable, of those obligations of Seller or any Affiliate thereof with
respect to any Acquired Asset (including any guarantee or credit support
provided by, or any letter of credit, performance bond or surety posted by, any
Seller or any of its Affiliates or any third party on behalf of the Asset
Sellers (and with a counter guarantee of the Asset Sellers)) which are
identified (including the amount) on Section 4.18 of the Disclosure Schedule or
which are not material in amount and disclosed by Seller to Purchaser at least
two (2) Business Days prior to Closing and shall indemnify and hold harmless
Seller and its Affiliates from and against any loss resulting from any failure
of Purchaser to comply with the obligations set forth in this Section 4.18.

Section 4.19.                        Notice of Certain Events.

(a)                 From the date hereof until the Closing, Seller shall
promptly notify Purchaser in writing of, and Purchaser shall promptly notify
Seller in writing of:

(i)                   any fact, circumstance, event or action the existence,
occurrence or taking of which (A) has had, or could reasonably be expected to
have, individually or in the aggregate, in the case of Seller, a Material
Adverse Effect or, in the case of Purchaser, a material adverse effect on its
ability to consummate the transactions contemplated by this Agreement, (B) has
resulted in, or could reasonably be expected to result in, any representation or
warranty made by Seller or Purchaser, respectively, hereunder not being true and
correct in all material respects or (C) has resulted in, or could reasonably be
expected to result in, the failure of any of the conditions set forth in Section
7.02 or Section 7.03, respectively, to be satisfied;

(ii)                 any written notice or other written communication from any
Person alleging that the consent of such Person is or may be required in
connection with the execution of this Agreement or any Ancillary Agreement or
the consummation of the transactions contemplated hereby or thereby;

(iii)                any notice or other communication from any Governmental
Authority in connection with the transactions contemplated by this Agreement;
and

(iv)               any Actions commenced or, to Seller’s Knowledge or
Purchaser’s Knowledge, as the case may be, threatened (A) against, relating to
or involving or otherwise affecting the Business, the Target Entities, the
Acquired Assets or the Assumed Liabilities or (B) that relate to the execution
of this Agreement or any Ancillary Agreement or the consummation of the
transactions contemplated hereby or thereby.

(b)                 Purchaser’s or Seller’s receipt of information pursuant to
this Section 4.19 shall not operate as a waiver or otherwise affect any
representation, warranty or agreement given or made by Seller or Purchaser,
respectively, in this Agreement or Purchaser’s or Seller’s respective right to
indemnification hereunder, and shall not be deemed to amend or supplement the
Disclosure Schedule.

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Section 4.20.                        Tax Matters.

(a)                 Transfer Taxes. Seller and Purchaser hereto agree that all
applicable excise, sales, transfer, documentary, filing, recordation and other
similar Taxes, levies, fees and charges, if any (including all real estate
transfer Taxes and conveyance and recording fees, if any), that may be imposed
upon, or payable or collectible or incurred in connection with, this Agreement
and the transactions contemplated hereby, including the conveyance, assignment
and transfer of the Acquired Assets and the Target Shares, shall be borne
equally by Purchaser, on the one hand, and Seller and the other Asset Sellers,
on the other hand, whether levied on Seller, the Target Entities, Purchaser or
their respective Affiliates. Each party hereto hereby agrees to file all
necessary documentation (including, without limitation, all Tax Returns) with
respect to all Taxes mentioned in this Section 4.20(a).

(b)                 Liability for Taxes.

(i)                   Each Asset Seller and, to the extent any Asset Seller is
unable to pay, Seller, shall be liable for and pay any and all Taxes levied or
imposed upon, in connection with, or attributable to, the Acquired Assets, that
accrue or otherwise relate to any taxable year or period (or portion thereof)
ending or deemed to end at or prior to the close of business on the Closing
Date; provided that, each Asset Seller shall not be liable to the extent that
(a) a provision or reserve in respect of that Tax (or loss caused by such Tax)
has been made in the Closing Working Capital, (b) such Tax liability is
expressly and specifically included in the Business Financial Statements, (c)
such Tax liability is a direct result of an action or omission by the Purchaser,
its transferee or their Affiliates outside of the ordinary course of business
after the Closing (other than an action or omission expressly required by
applicable Law) or (d) such Tax liability is a direct result of an action or
omission by Seller or its Affiliates before the Closing at the express written
direction of the Purchaser. Purchaser shall be liable for and pay (x) any and
all Taxes levied or imposed on, in connection with or attributable to the
Acquired Assets that accrue or otherwise relate to any taxable year or period
(or portion thereof) beginning or deemed to begin after the close of business on
the Closing Date and (y) any Taxes described in clauses (a), (b), (c) and (d) of
this Section 4.20(b)(i).

(ii)                 Seller shall be responsible for any Taxes that accrue or
otherwise relate to any taxable year or period (or portion thereof) ending or
deemed to end at or before the close of business on the Closing Date payable by
the Target Entities and their Subsidiaries; provided that, Seller shall not be
liable to the extent that (a) a provision or reserve in respect of that Tax (or
loss caused by such Tax) has been made in the Closing Working Capital, (b) such
Tax liability is expressly and specifically included in the Business Financial
Statements, (c) such Tax liability is a direct result of an action or omission
by the Purchaser, its transferee or their Affiliates outside of the ordinary
course of business after the Closing (other than an action or omission expressly
required by applicable Law) or (d) such Tax liability is a direct result of an
action or omission by Seller or its Affiliates before the Closing at the express
written direction of the Purchaser. Purchaser shall be responsible for (x) any
Taxes payable by the Target Entities or any of their Subsidiaries that accrue or
otherwise relate to any taxable year or period (or portion

55

  

thereof) starting or deemed to start after the close of business on the Closing
Date and (y) any Taxes described in clauses (a), (b), (c) and (d) of this
Section 4.20(b)(ii).

(iii)                Apportionment. For purposes of this Section 4.20(b), in
order to appropriately apportion any Taxes relating to a Straddle Period, the
parties hereto agree that (a) real, personal property, intangible property and
similar ad valorem Taxes for any Taxable period prior to the Closing Date shall
be prorated on a daily basis and (b) all Taxes that are based on net income,
gross receipts, sales, gains, manufactured dividends paid or received, and
similar items for such period shall be computed based on an actual closing of
the books as if such taxable period ended as of the close of business on the
Closing Date with respect to the relevant Tax.

(iv)               Tax Refunds. Any refunds of Tax that are actually received by
the Target Entities or their Subsidiaries after the Closing Date or are allowed
as a credit or offset that satisfies a liability for Tax to which Purchaser or
the Target Entities or any of their Subsidiaries would otherwise be obligated to
pay, in each case, that relate to a Pre-Closing Tax Period, shall be for the
account of Seller; except that (i) any such refund of Tax that is attributable
to the carryback of a loss deduction, credit or other Tax relief arising in a
Post-Closing Tax Period and (ii) any such refund of Tax is included in the
calculation of Closing Working Capital shall be the exclusive account of the
Purchaser. Any refund of Taxes or credits against Taxes with respect to a
Straddle Period shall be apportioned between the Pre-Closing and Post-Closing
Tax Periods in accordance with Section 4.20(b)(iii). Any Tax refunds that are
received by Seller, and any amounts credited against Tax to which Seller becomes
entitled, that relate to Taxes of the Target Entities or their Subsidiaries for
Post-Closing Tax Periods shall be for the account of Purchaser and the Target
Entities. Each Party shall pay over to the other Party (i) any such cash refund
within ten (10) days after receipt thereof and (ii) the amount of Tax savings
realized by the respective party at the time the Tax Return to which such credit
relates is filed by the party responsible for the filing of such Tax Return.

(v)                  Tax Indemnity. Purchaser shall indemnify each Seller
Indemnified Party against and hold it harmless from Taxes for which Purchaser is
liable under Section 4.20(b)(i) and Section 4.20(b)(ii). Seller and each other
Asset Seller shall indemnify each Purchaser Indemnified Party against and hold
it harmless from Taxes for which either Seller or another Asset Seller is liable
or responsible under Section 4.20(b)(i) and Section 4.20(b)(ii). Any amount due
under this Section 4.20(b)(v) shall be paid within ten (10) Business Days after
the Indemnified Party makes written demand on the Indemnifying Party. Any such
payment shall be treated for all relevant Tax purposes as an adjustment to the
Purchase Price. The obligation to indemnify any Indemnified Party under this
Section 4.20(b)(v) shall terminate sixty (60) days after the expiration of the
statute of limitations for assessment of the Tax from which the claim for
indemnification arose unless the party seeking indemnification gives notice of
the claim on or before the date when the obligation otherwise would terminate.
For the avoidance of doubt, the provisions of Article VI of this Agreement,
including the limitations on survival of claims provided for in Section 6.03 and
limitations on liability provided in Section 6.04, shall not apply to any
indemnification obligation under this Section 4.20(b)(v).

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(c)                 Tax Returns.

(i)                   Pre-Closing Returns. Seller shall prepare or shall cause
to be prepared all Tax Returns required by applicable law to be filed (A) by the
Target Entities or any of their Subsidiaries or (B) with respect to the Acquired
Assets, for taxable periods (or portions thereof) ending on or prior to the
Closing Date (the “Pre-Closing Tax Period”) and shall be responsible for the
timely filing (taking into account any extensions received from the relevant
Taxing Authorities) of such Tax Returns.

(ii)                 Post-Closing Returns. Purchaser shall prepare or shall
cause to be prepared all Tax Returns required by applicable law to be filed (A)
by the Target Entities or any of their Subsidiaries or (B) with respect to the
Acquired Assets, for taxable periods (or portions thereof) ending after the
Closing Date (the “Post-Closing Tax Period”) and shall be responsible for the
timely filing (taking into account any extensions received from the relevant
Taxing Authorities) of all such Tax Returns.

(iii)                Straddle Period Tax Returns. In the case of any Tax Return
required to be prepared by Purchaser following the Closing Date pursuant to
Section 4.20(c)(ii) with respect to a taxable period beginning before and ending
after the Closing Date (each a “Straddle Period”), Purchaser shall deliver to
Seller, for its review and comment as soon as reasonably practicable (but in the
case of Income Tax Returns not less than ninety (90) days) prior to the
applicable filing deadline (taking into account applicable extensions), a copy
of the Tax Return proposed to be filed for the Straddle Period (a “Straddle
Period Tax Return”) together with a proposed calculation, in accordance with
Section 4.20(b)(iii) above, of the Taxes allocable to the portion of the
Straddle Period that occurs prior to and including the Closing Date (the
“Pre-Closing Straddle Period”). Such Tax Returns shall be true, correct and
accurate, and shall be prepared on a basis consistent with those prepared for
prior taxable periods unless a different treatment of any item is required by an
intervening change in law. Purchaser shall accept and reflect any comment that
Seller submits to Purchaser no fewer than ten (10) business days prior to the
due date of such Straddle Period Tax Return, so long as such comment is not
manifestly unreasonable and is consistent with the basis on which prior Tax
Returns have been prepared and filed.

(d)                 Contest.

(i)                   Notification. Unless Purchaser has previously received
written notice from Seller of the existence of a Contest, Purchaser shall give
written notice to Seller of the existence of any Contest relating to Taxes that
are or may be Seller’s responsibility under this Agreement within ten (10) days
from the receipt by Purchaser of any written notice of such Contest, but no
failure to give such notice shall relieve Seller of any liability hereunder
except to the extent, if any, that the rights of Seller with respect to such
claim (including pursuant to Section 4.20(d)(ii)) are actually prejudiced.
Unless Seller has previously received written notice from Purchaser of the
existence of such Contest, Seller shall give written notice to Purchaser of the
existence of any Contest within ten (10) days from the receipt by Seller of any
written notice of such Contest, but no failure to give such notice shall relieve
Purchaser of any liability hereunder except to

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the extent, if any, that the rights of Purchaser with respect to such claim
(including pursuant to Section 4.20(d)(ii)) are actually prejudiced.

(ii)                 Control of Contest.

(A)                Seller shall, at its election, have the right to represent
the Target Entities’ interests or any of their Subsidiaries’ interests, as the
case may be, in any Contest relating to a Pre-Closing Tax Period, employ counsel
of its choice at its expense and to control the conduct of such Contest. Seller
shall have the right to settle or dispose of any such Contest, provided that
such settlement shall not have a Material Adverse Effect on Purchaser or the
Target Entities for a Post-Closing Tax Period and shall not authorize a change
in accounting methods or periods that has the effect of shifting an item of
income or gain from a Pre-Closing Tax Period to a Post-Closing Tax Period or of
shifting an item of deduction, credit or loss from a Post-Closing Tax Period to
a Pre-Closing Tax Period, and provided that Seller shall consult with Purchaser
regarding any such Contest and shall allow Purchaser to participate in any such
proceeding (at its own cost and expense).

(B)                Subject to Section 4.20(e) Purchaser shall have the right to
control the conduct of any other Contest in its sole discretion with respect to
any other Tax matter not covered in the foregoing sentence or clause (i) above.
In the case of any Contest with respect to a Straddle Period, Purchaser and
Seller shall jointly represent their interests in any such Contest, each shall
employ counsel of their own choice and shall cooperate with the other and the
other’s Representatives in a prompt and timely manner in connection with any
such Contest. The parties shall mutually agree on any settlement or other
disposition of the Contest. In the event Purchaser and Seller are unable to
agree regarding any aspect of the conduct of any such Contest, such disagreement
shall be considered a dispute for purposes of Section 4.20(f) and shall be
resolved in accordance therewith.

(e)                 Tax Cooperation. Seller and Purchaser agree to take
commercially reasonable efforts to furnish or cause to be furnished to each
other, upon request, as promptly as practicable, such information (including
access to books and records) and assistance relating to the Target Entities,
their Subsidiaries or the Acquired Assets, as is reasonably requested for the
filing of any Tax Returns, for the preparation of, and for the prosecution or
defense of any Contest or any Tax audit, including executing and delivering such
powers of attorney and other documents as are necessary to carry out the
provisions of this Section 4.20(e). Any information obtained under this Section
4.20(e) shall be kept confidential except (i) as may be otherwise necessary in
connection with the filing of Tax Returns or claims for refund or in conducting
an audit or other proceeding or defending any Tax claim, or (ii) with the
consent of Seller or Purchaser, as the case may be. Purchaser shall make
available to Seller such Tax Returns and information as reasonably required by
Seller to comply with its obligations under this Agreement. The Target Entities,
Seller and Purchaser agree (i) to retain all books and records with respect to
Tax matters pertinent to each of the Target Entities and their Subsidiaries
until expiration of the statute of limitations (and, to the extent notified by
Purchaser or Seller, any

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extensions thereof) of the respective taxable periods, and to abide by all
record retention agreements entered into with any Taxing Authority and (ii) to
give the other party reasonable written notice prior to transferring, destroying
or discarding any such books and records and, if the other party so requests,
shall allow the requesting party to take possession of such books and records. 

(f)                  Post-Closing Tax Covenant. Neither Purchaser nor any of its
Affiliates (including, after the Closing, the Target Entities or their
Subsidiaries) shall, without the prior written consent of Seller, take any
action (including, without limitation, making or changing any Tax election of or
with respect to the Target Entities, any of their Subsidiaries or the Acquired
Assets that is attributable to any Pre-Closing Tax Period or Pre-Closing
Straddle Period, amending, re-filing or otherwise modifying (or granting an
extension of any applicable statute of limitations with respect to) any Tax
Return of the Target Entities or any of their Subsidiaries or with respect to
the Acquired Assets, that relates to any Pre-Closing Tax Period or Pre-Closing
Straddle Period) that could result in any increased Tax liability of the Target
Entities or any of their Subsidiaries (or Seller or any of its Affiliates) or a
reduction in any Tax asset in respect of a Pre-Closing Tax Period or Pre-Closing
Straddle Period. Seller shall not, without the prior written consent of
Purchaser, take any action in a Contest that Seller controls pursuant to Section
4.20(d)(ii)(A) that could result in any increased Tax liability of Purchaser,
the Target Entities or any of their Subsidiaries or Affiliates, or a reduction
in any Tax asset in respect of a Post-Closing Tax Period or portion of the
Straddle Period that occurs after the Closing Date. Notwithstanding the
foregoing, no consent (written or otherwise) shall be required for either party
to take an action affecting Tax liability or a Tax asset if that action is
required by applicable Law as finally determined by a court of competent
jurisdiction or the relevant Taxing Authority. Any disputes about the proper
treatment of a Tax liability or Tax asset under applicable Law may be submitted
for arbitration pursuant to Section 4.20(g). For the avoidance of doubt, any
consent to an action under this Section 4.20(f) shall not prejudice a claim for
indemnification under Section 6.02.

(g)                 Tax Matter Dispute. If, after negotiating in good faith,
Purchaser and Seller are unable to reach an agreement relating to any tax matter
under this Section 4.20, the dispute shall be submitted to an independent
nationally recognized accounting firm (the “Arbitrator”), chosen and mutually
acceptable to such parties within five (5) business days of the date on which
the need to select such a Arbitrator arises. The Arbitrator shall resolve any
disputed items within fifteen (15) business days of having the item referred to
it, pursuant to such procedures as it may require. The parties shall promptly
act to implement the decision of the Arbitrator. The costs, fees and expenses of
the Arbitrator shall be borne equally by each Party unless the Arbitrator
determines that a party’s position was unreasonable or not in good faith. For
the avoidance of doubt, this Section 4.20(g) shall govern any dispute related to
a Tax matter.

Section 4.21.                        Insurance. With respect to events or
circumstances occurring prior to the Closing Date, if such event or circumstance
results in a loss in respect of which neither party is entitled to
indemnification under Article VI arising from or relating to the Acquired
Assets, the Business, the Target Entities or the Assumed Liabilities, which loss
is insured under an Insurance Policy, Purchaser shall be entitled (a) to receive
the benefit of any insurance proceeds received by Seller or any of its
Subsidiaries following the Closing in respect of claims filed prior to Closing,
net of actual costs incurred by Seller in connection with such loss and (b) to
require Seller to file post-Closing claims under such Insurance Policy for
losses

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occurring prior to Closing, provided, that Purchaser shall not be entitled to
receive amounts pursuant to this clause (b) in excess of 16% of the coverage
limit under such Insurance Policy for the policy year applicable to such claims.
In the case of clause (b), Purchaser’s recovery under such claim shall be net of
any costs that Seller can reasonably demonstrate would be incurred by Seller or
any of its Affiliates arising from or relating to such claim. 

Section 4.22.                        Intellectual Property License. The Asset
Sellers hereby grant to the Purchaser, and shall cause their Affiliates to grant
(to the extent necessary), with effect from Closing, a non-exclusive, worldwide,
perpetual, irrevocable, non-transferable, non-sublicenseable (except as set
forth below), fully paid-up and royalty-free license to use, modify, or adapt
the Retained Intellectual Property, solely for the purpose of conducting the
Business. Notwithstanding the foregoing, Purchaser may transfer or sublicense
the rights granted under this Section 4.22 to an acquirer of the Business or a
portion thereof and may sublicense to Affiliates and third party contractors;
provided that (x) an assignee or a sublicensee, as applicable, signs a written
sublicense agreement; (y) Purchaser timely provides the identity of each such
assignee or sublicensee and a copy of each sublicense to the Asset Sellers; and
(z) Purchaser shall remain responsible for the performance of all such assignees
and sublicensees as if such performance were conducted by the Purchaser (except
for such assignees who acquire all or substantially all of the assets of the
Business). For purposes of this Section 4.22, “Retained Intellectual Property”
means any Intellectual Property owned by any of the Asset Sellers as of the
Closing that has been used in and is necessary for the conduct of the Business
as it is conducted as of the Closing, other than the Transferred Intellectual
Property and excluding any Trademarks.

Article V

EMPLOYEE BENEFITS; LABOR MATTERS

Section 5.01.                        Employment. No later than 10 days prior to,
and effective as of the Closing Date, Purchaser shall make offers of employment
to each Asset Seller Employee. Seller agrees to use all commercially reasonable
efforts to assist with the communication of offers of employment to and the
hiring of Asset Seller Employees and shall encourage Asset Seller Employees to
accept such offers of employment. Seller shall refrain from taking any action to
dissuade any Asset Seller Employee from accepting an offer of employment with
the Purchaser, including but not limited to making any representation to Asset
Seller Employees, prior to the first Business Day immediately following the
Closing Date, that Asset Seller Employees shall retain employment with Seller or
its Subsidiaries after Closing Date; provided that in no event shall Seller be
required to take any action or refrain from taking any action if and to the
extent that taking or failing to take any such action would reasonably be
expected to cause Seller to be liable for any severance payments to any Business
Employee pursuant to applicable Law. Notwithstanding the foregoing provisions of
this Section 5.01, for Asset Seller Employees located in non-U.S. jurisdictions
for whom the transfer of employment mechanism described above would be
inconsistent with local requirements (each, a “Non-U.S. Asset Seller Employee”),
employment shall transfer through assumption of employment contracts or
otherwise in compliance with such requirements. Section 5.01 of the Disclosure
Schedule sets forth the manner in which the employment of each Non-U.S. Asset
Seller Employee is intended by Purchaser and Seller to be transferred. All Asset
Seller Employees who accept such offers of employment and become employed by
Purchaser or whose employment is transferred to

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Purchaser automatically by operation of Law upon the Closing or pursuant to the
mechanism set forth in Section 5.01 of the Disclosure Schedule, shall be
referred to as “Acquired Employees.” Any Asset Seller Employee, excluding those
Asset Seller Employees who are offered employment by Purchaser pursuant to the
mechanisms described in Section 5.01 of the Disclosure Schedule, who performs
work as directed by Purchaser or its respective Affiliates at his or her then
applicable place of employment in the Business on the first Business Day
immediately following the Closing Date shall be deemed for all purposes of this
Agreement to have accepted the offer of employment and to be an Acquired
Employee for all purposes of this Agreement and Seller shall cause the relevant
Asset Sellers to terminate the employment of each such Asset Seller Employee.
Effective as of the Closing, Seller shall, and shall cause the relevant Asset
Sellers to terminate, effective as of the Closing Date, the employment of each
Asset Seller Employee who accepts Purchaser’s offer of employment and whose
employment does not otherwise transfer automatically by operation of law to
Purchaser. Seller and relevant Asset Sellers shall waive, to the extent
necessary, all rights to enforce any restrictive covenants, including
non-competition agreements, against Asset Seller Employees to the extent that
any such restrictive covenants would impair the ability of Asset Seller
Employees to whom Purchaser has made an offer of employment in compliance with
the terms and conditions of Section 5.02 to accept employment from the Purchaser
or its respective Affiliates and to perform all required job duties. 

Section 5.02.                        Post-Closing Benefits.

(a)                 Except as otherwise required by Section 5.01 of the
Disclosure Schedule in respect of the Non-U.S. Asset Seller Employees or where
it would be inconsistent with local requirements, Purchaser shall cause the
offers of employment pursuant to Section 5.01 or, where applicable, the
continuation of employment with the Target Entities, to provide for base salary
or wages and annual bonus opportunity that are no less favorable than those in
effect for each such Transferred Business Employee immediately prior to the
Closing Date, and employee benefits for the Transferred Business Employees that
are no less favorable in the aggregate than those provided as of the date hereof
by the Seller Benefit Plans set forth in Section 3.01(t)(ii) of the Disclosure
Schedule (excluding for purposes of determining the aggregate value of such
employee benefits, any restricted stock unit and other equity or equity-type
compensation arrangements, any retiree medical or other retiree welfare
arrangements of Seller or its Affiliates, and any change of control, retention,
bonus, success or similar payments arising solely in connection with the
transactions contemplated in this Agreement other than severance benefits
arising in connection with a termination of employment) (collectively, the
“Employment Terms”). The Employment Terms shall be determined exclusively based
on the compensation and benefits documentation provided by Seller to Purchaser
as of the date hereof (and, with respect to compensation, but not benefits
except as expressly set forth below, updated through the Closing Date), and
shall not include any Seller Benefit Plan unless it is still applicable to the
Business Employees immediately prior to the Closing Date. For the avoidance of
doubt, nothing herein requires the provision of any specific benefit or type of
benefit, except as required by Law. In the case of any Transferred Business
Employee whose terms and conditions of employment are subject to collective
bargaining or other collective labor representation, Purchaser shall cause each
such offer of employment (or, where applicable, the continuation of employment)
to have such terms and conditions of employment as may be required under
applicable Law or any applicable collective bargaining or other collective labor
agreement.

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(b)                 From the Closing Date until December 31, 2012, Purchaser
will continue to provide each Transferred Business Employee who remains employed
by Purchaser or its respective Affiliates with Employment Terms that are the
same or more beneficial to such Acquired Employee as those provided in the offer
of employment or, for the Target Entity Transferring Employees, in effect
immediately after the Closing.

(c)                 If and to the extent not paid prior to Closing, Purchaser
shall, or shall cause one or more of its Affiliates to, pay the bonus for the
2011 year under Seller’ or its Affiliates’ annual incentive plans to Transferred
Business Employees who were covered under those plans immediately prior to
Closing and who (i) continue to be employed by Purchaser or its Affiliates as of
March 15, 2012, or (ii) whose employment with Purchaser or its Affiliates is
involuntarily terminated (other than for cause) prior to March 15, 2012. The
amount to be paid by Purchaser or its Affiliates to such Transferred Business
Employees shall be an amount equal to 100% of the annual target bonus applicable
to each such Transferred Business Employee under Seller’s respective annual
incentive plans, as set forth in Section 5.02(c) of the Disclosure Schedule.
Notwithstanding anything to the contrary in this Agreement, Purchaser shall not
be obligated to pay more than one million U.S. dollars ($1,000,000) with respect
to the portion of 2011 bonus accrued as of the Closing Date, unless and to the
extent any additional 2011 bonus amount is included in the adjustment to Closing
Net Cash.

(d)                 Notwithstanding anything herein to the contrary, this
Agreement shall not alter the at-will nature of any Transferred Business
Employee’s employment (with the exception of Transferred Business Employees
whose terms and conditions of employment are provided for in any collective
bargaining agreement). Nothing in this Agreement shall restrict, limit or
interfere with the ability (after the Closing Date) of Purchaser or its
respective Affiliates to terminate the employment or, except as specifically set
forth in Section 5.02(a), to modify the terms, conditions or duties of
employment of any Transferred Business Employee.

Section 5.03.                        Participation in Purchaser Benefit Plans.

(a)                 Effective as of the Closing Date, except as otherwise
provided in this Article V, each Transferred Business Employee shall cease to
participate in any Asset Seller Benefit Plan. Effective from and after the
Closing, Purchaser shall, or shall cause its applicable Subsidiaries to,
establish or have in effect employee benefit plans for the benefit of the
Transferred Business Employees (and their dependents and beneficiaries) in
accordance with the requirements of this Article V.

(b)                 Purchaser shall credit the Transferred Business Employees
for their service with Seller and its Affiliates to the same extent recognized
by Seller or its Affiliates immediately prior to the Closing Date for all
purposes (including eligibility, vesting, and eligibility waiting periods, but
excluding benefit accruals) under the employee benefit plans, agreements,
policies or other arrangements or, to the extent required by Law, any statutory
benefit entitlements maintained, contributed to or required to be provided by
Purchaser or any of its Affiliates in which any such Transferred Business
Employees participate post-Closing, except to the extent such credit would
result in duplication of benefits.

Section 5.04.                        Welfare Plan Liability.

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(a)                 Seller shall be responsible for providing those welfare
benefits (including workers’ compensation) in effect for Transferred Business
Employees as of the Closing Date, to Acquired Employees for all claims incurred
and unpaid and benefits earned on or prior to the Closing Date, under and
subject to the generally applicable terms and conditions of the employee benefit
plans, programs and arrangements in which such employees were entitled to
participate prior to the Closing Date, as amended from time to time. Purchaser
shall be responsible for providing welfare benefits (including workers’
compensation) to Transferred Business Employees for claims incurred and benefits
earned after the Closing Date under and subject to the generally applicable
terms and conditions of Purchaser’s employee benefit plans, programs and
arrangements, as amended from time to time. For purposes of this Section 5.04, a
claim shall be deemed to be incurred on the date that the event that gives rise
to such claim occurs, except that any claim that relates to a continuous period
of hospitalization shall be deemed to be incurred at the commencement of such
period of hospitalization. Without limiting the generality of the foregoing, and
for purposes of clarification, a claim for disability benefits (or workers’
compensation) shall be deemed to be incurred at the time that the event that
gives rise to the disability (or compensable injury) occurs, and the
responsibility for all future benefits payable with respect to such disability
(or compensable injury) shall be determined based on the date on which such
event occurs.

(b)                 With respect to any Purchaser employee benefit plan that is
a medical, dental, other health, life insurance or disability plan
(collectively, the “Purchaser Welfare Plans”), to the extent permitted by the
applicable Purchaser Welfare Plan, Purchaser shall, (i) waive or cause to be
waived any pre-existing condition exclusions and requirements that would result
in a lack of coverage of any pre-existing condition of a Transferred Business
Employee (or any dependent thereof) that would have been waived or covered under
the Seller Benefit Plan in which such Transferred Business Employee (or any
dependent thereof) was a participant immediately prior to the Closing Date, and
credit or cause to be credited any time accrued against applicable waiting
periods relating to such pre-existing conditions and (ii) waive any health
eligibility, actively at work or medical examination requirements under the
Purchaser Welfare Plans to the same extent such requirements would have been
waived or satisfied under the applicable Seller Benefit Plan in which the
Transferred Business Employee was a participant immediately prior to the
Closing.

Section 5.05.                  Severance and Retention Payments

(a)                 Seller shall be responsible for any liabilities or
obligations relating to any severance payments, solely arising as a result of
the execution of this Agreement and the consummation of the transactions
contemplated hereby, to Asset Seller Employees who do not accept Purchaser’s
offer of employment, provided that Purchaser’s offers of employment follow the
mechanism and contain the terms and conditions set forth in Sections 5.01 and
5.02 of this Agreement for those Asset Seller Employees whose employment does
not transfer to Purchaser automatically by operation of Law. Purchaser will take
all necessary action, in consultation with Seller, to avoid the imposition of
severance in any jurisdiction where Asset Sellers are located.

(b)                 With respect to each Business Employee, Seller shall be
responsible for any liabilities or obligations relating to the items set forth
on Section 5.05(b) of the Disclosure Schedule; provided that Seller shall not be
responsible for any such liabilities or obligations after

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the Closing Date to the extent any such liabilities or obligations are included
in the calculation of the Indebtedness.  

Section 5.06.                  Union Employees and Plans

(a)                 Effective as of the Closing Date, with respect to any of the
non-U.S. Transferred Business Employees, Purchaser shall, or shall cause one of
its Subsidiaries to, (i) recognize each collective bargaining or other labor
representative then representing any such Transferred Business Employees, and
(ii) assume each such collective bargaining or other collective labor agreement
covering such Transferred Business Employees or the terms and condition of
employment of such Transferred Business Employees. From and after the Closing
Date, with respect to any of the non-U.S. Transferred Business Employees,
Purchaser shall assume, honor, pay and perform all of the Liabilities and
obligations under or in respect of each such collective bargaining or other
collective labor agreement in accordance with the terms thereof as in effect
immediately prior to the Closing Date or as the same may thereafter be amended
in accordance with its terms, including all such Liabilities and obligations of
Seller.

(b)                 Seller and Purchaser shall cooperate and take all reasonably
necessary or appropriate actions with respect to any requirement under
applicable Law or any applicable agreement to notify the collective bargaining
or other labor representatives of the non-U.S. Transferred Business Employees of
this Agreement and/or the transactions contemplated hereby, including any
applicable works council, and to provide such information and engage in such
notifications, discussions or negotiations with such representatives as may be
required by applicable Law or any applicable agreement.

Section 5.07.                        COBRA. Seller shall be responsible for all
legally mandated continuation of health care coverage for all Transferred
Business Employees and any of their covered dependents who experience a
qualifying event occurring on or prior to the Closing Date. Purchaser shall be
responsible for all legally mandated continuation of health care coverage for
all Transferred Business Employees and any of their covered dependents who
experience a qualifying event occurring following the Closing Date.

Section 5.08.                        Retiree Medical. Seller and its Affiliates
shall continue to provide benefits under the retiree medical or other retiree
welfare arrangements of Seller or its Affiliates to any Acquired Employee
located in the United States who became eligible for such benefits prior to the
Closing Date in accordance with the terms of such arrangements as in effect as
of immediately prior to the Closing Date, or would have become eligible for such
benefits during the three (3) year period following the Closing Date assuming
such Acquired Employee remained employed in eligible service by Seller or its
Affiliates and provided that any such Acquired Employee in fact continues in
employment with Purchaser for the period that would have been sufficient had
such Acquired Employee been employed by Seller or its Affiliates to receive such
benefits, subject to changes or amendments of such terms, or termination of such
benefits, which apply to all similarly-situated employees of Seller who receive
such benefits.

Section 5.09.                        Tax-Qualified Defined Contribution Plans.
Seller and the other Asset Sellers shall vest each Transferred Business Employee
in his or her account under the Albany International Corp. Prosperity Plus
Savings Plan (the “Seller 401(k) Plan”), effective

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as of the Closing Date. After the Closing Date, Purchaser will cause its
tax-qualified defined contribution plan for U.S. employees to allow each
Transferred Business Employee who has one or more account balances in the Seller
401(k) Plan to make a “direct rollover” of such account balances (including
promissory notes evidencing any outstanding loans but otherwise in cash) from
the Seller 401(k) Plan if such Transferred Business Employee elects to make such
a rollover. 

Section 5.10.                        Asset Seller Benefit Plans. Seller shall
retain all of the obligations and liabilities under all Asset Seller Benefit
Plans (including for clarity any equity plan or program), except for any
benefits required to be provided by Law. All Transferred Business Employees
shall cease participation in the Asset Seller Benefit Plans (other than as
required by Law) effective as of the Closing Date. Seller shall remain
responsible for ensuring the payment of benefits to the Transferred Business
Employees pursuant to the terms of the applicable plan documents.

Section 5.11.                        WARN Obligations. On the Closing Date,
Seller shall notify Purchaser of any “employment loss” (as that term is defined
in the WARN Act or applicable state Laws) of any Transferred Business Employees
in the 90-day period prior to the Closing. Purchaser shall notify Seller of any
“employment loss” (as that term is defined in the WARN Act or applicable state
Laws) of any Transferred Business Employees in the 90-day period following
Closing.

Section 5.12.                        Update to Employee Schedule. As of a
reasonable date prior to the Closing, to be determined by Seller, but in no
event later than five (5) Business Days prior to Closing, Seller shall provide
to Purchaser revised Sections 1.01(k), 1.01(xxx) and 3.01(t)(i) of the
Disclosure Schedule to reflect hiring or other status changes and attrition as
it relates to Asset Seller Employees, Target Entity Transferring Employees and
Business Key Employees, setting forth, as of the most recent date practicable,
each Asset Seller Employee, Target Entity Transferring Employee and Business Key
Employee; provided that Purchaser’s receipt of such revised Disclosure Schedules
shall not shall not operate as a waiver or otherwise affect any representation,
warranty or agreement given or made by Seller or Purchaser, respectively, in
this Agreement or Purchaser’s or Seller’s respective right to indemnification
hereunder, and shall not be deemed to amend or supplement the Disclosure
Schedule.

Section 5.13.                        No Third Party Beneficiaries.

(a)                 Notwithstanding anything to the contrary contained in this
Agreement, no provision under this Agreement, whether express or implied, shall
(i) constitute or create an employment agreement with any employee of Purchaser,
Seller or any of their respective Affiliates, (ii) be construed to establish,
amend, or modify any benefit plan, program, agreement or arrangement or (iii)
except as set forth in Section 4.01(b)(xii) and 4.01(b)(xv), alter or limit
Purchaser’s, Seller’s or any of their respective Affiliates’ ability to amend,
modify or terminate any benefit plan, program, agreement or arrangement.
Purchaser and Seller acknowledge and agree that all provisions contained in this
Agreement with respect to the Acquired Employees are included for the sole
benefit of Purchaser, Seller and their respective Affiliates, and that nothing
in this Agreement, whether express or implied, shall create any third-party
beneficiary or other rights (i) in any other Person, including, any current or
former employee, any participant in any

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existing benefit plan or arrangement of Purchaser, Seller or their respective
Affiliates or any dependent or beneficiary thereof or (ii) to continued
employment with Purchaser, Seller or any of their respective Affiliates.

(b)                 If (i) a Person other than the parties hereto makes a claim
or takes other action to enforce any provision in this Agreement as an amendment
to any employee benefit plan, program, agreement or arrangement of Purchaser,
Seller or any of their respective Affiliates and (ii) such provision is deemed
to be an amendment to such employee benefit plan, program, agreement or
arrangement of any Purchaser, Seller or any of their respective Affiliates, even
though not explicitly designated as such in this Agreement, then, solely with
respect to such plan, program, agreement or arrangement, such provision shall
lapse retroactively and shall have no amendatory effect with respect thereto.

Section 5.14.                        Material Information. All material data,
plan documentation and other relevant information necessary for Purchaser to
discharge the obligations set forth in this Article V

shall be delivered to Purchaser at least thirty (30) days prior to Closing, and
supplemented as reasonably appropriate thereafter.

Article VI

INDEMNIFICATION

Section 6.01.                        Purchaser’s Indemnification Obligation.
Subject to the terms and conditions set forth herein, Purchaser shall indemnify,
defend and hold harmless Seller, its Affiliates and each of its and their
respective shareholders, members, partners, directors, managers, officers,
employees, agents and representatives (collectively, the “Seller Indemnified
Parties”) from and against any and all Indemnifiable Losses incurred by the
Seller Indemnified Parties arising out of or resulting from:

(a)                 any breach or inaccuracy, and, with respect to Third Party
Claims, any alleged breach or inaccuracy, of any representation or warranty of
Purchaser set forth in Section 3.02(a) and (b), Section 3.02(c)(ii), and Section
3.02(e) and (f), or any Schedule, Annex, Exhibit or certificate delivered by
Purchaser pursuant to this Agreement and related thereto (disregarding in each
case all qualifications and exceptions contained therein relating to
materiality, material adverse effect or words of similar import or effect for
purposes of determining the amount of Indemnifiable Losses hereunder);

(b)                 any breach or inaccuracy, and, with respect to Third Party
Claims, any alleged breach or inaccuracy, of any representation or warranty of
Purchaser (other than those described in Section 6.01(a)) set forth in this
Agreement, or any Schedule, Annex, Exhibit or certificate delivered by Purchaser
pursuant to this Agreement (disregarding in each case all qualifications and
exceptions contained therein relating to materiality, material adverse effect or
words of similar import or effect for purposes of determining the amount of
Indemnifiable Losses hereunder);

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(c)                 any breach or failure to perform and, with respect to Third
Party Claims, any alleged breach or failure to perform, by Purchaser of any of
its covenants or other agreements contained in this Agreement;

(d)                 Purchaser’s ownership or operation of the Business from and
after the Closing Date; or

(e)                 the Assumed Liabilities.

Section 6.02.                        Seller’s Indemnification Obligation.
Subject to the terms and conditions set forth herein, Seller shall indemnify,
defend and hold harmless Purchaser, its Affiliates and each of its and their
respective shareholders, members, partners, directors, managers, officers,
employees, agents and representatives (collectively, the “Purchaser Indemnified
Parties”) from and against any and all Indemnifiable Losses of the Purchaser
Indemnified Parties, directly or indirectly, arising out of or resulting from:

(a)                 any breach or inaccuracy, and, with respect to Third Party
Claims, any alleged breach or inaccuracy, of any representation or warranty of
Seller set forth in Section 3.01(a) through (c), Section 3.01(d)(ii), the first
sentence of Section 3.01(i), Section 3.01(r), Section 3.01(t)(vii), Section
3.01(w) and Section 3.01(x)

or any Schedule (including the Disclosure Schedule), Annex, Exhibit or
certificate delivered by Seller pursuant to this Agreement and related thereto
(disregarding in each case all qualifications and exceptions contained therein
relating to materiality, Material Adverse Effect or words of similar import or
effect for purposes of determining the amount of Indemnifiable Losses
hereunder);

(b)                 any breach or inaccuracy, and, with respect to any Third
Party Claims, any alleged breach or inaccuracy, of any representation or
warranty of Seller (other than those described in Section 6.02(a)

) set forth in this Agreement or any Schedule (including the Disclosure
Schedule), Annex, Exhibit or certificate delivered by Seller pursuant to this
Agreement and related thereto (disregarding in each case all qualifications and
exceptions contained therein relating to materiality, Material Adverse Effect or
words of similar import or effect for purposes of determining the amount of the
amount of Indemnifiable Losses hereunder);

(c)                 any breach or failure to perform and, with respect to Third
Party Claims, any alleged breach or failure to perform, by Seller of any of its
covenants or other agreements contained in this Agreement; or

(d)                 the Retained Liabilities.

Section 6.03.                        Survival. The representations and
warranties contained herein (and in any Schedule, Annex, Exhibit or certificate
delivered pursuant to this Agreement related thereto) and the applicable party’s
related right to indemnification hereunder shall survive until the date that is
eighteen (18) months from the Closing Date, except that the representations and
warranties described in Section 6.02(a), in Section 3.01(s) and with respect to
Taxes in Section 3.01(t) (and any Schedule, Annex, Exhibit or certificate
delivered pursuant to this Agreement related thereto) and a party’s related
right to indemnification hereunder shall survive until the day that is sixty
(60) days following the expiration of the applicable statute of limitations. All
covenants of Seller and Purchaser that are to be performed or complied with on

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or before the Closing Date, and a party’s related right to indemnification
hereunder, shall survive until the date that is eighteen (18) months from the
Closing Date. Neither Purchaser nor Seller shall have any obligation to
indemnify the Seller Indemnified Parties or the Purchaser Indemnified Parties,
as the case may be, with respect to claims for any breach of representation or
warranty first properly asserted after the expiration of the applicable survival
period, provided, that to the extent that notice of a claim for Indemnifiable
Losses is communicated to an Indemnifying Party in accordance with this
Agreement prior to the expiration of the applicable survival period, the
applicable representation, warranty or covenant, and the related right to
indemnification hereunder shall survive beyond the expiration of any applicable
survival period until final determination thereof in accordance with this
Agreement.

Section 6.04.                        Limitations of Liability.

(a)                 Notwithstanding any other provision of this Agreement,
Seller shall not be liable under (i) Section 6.02(a) or Section 6.02(b) hereof
for any individual claim if the Indemnifiable Loss thereunder is less than
$50,000 (the “Claim Threshold”), (ii) Section 6.02(b) hereof until the aggregate
amount of Indemnifiable Losses recoverable under Section 6.02(b) exceeds
$1,000,000 (the “Deductible”) and then only for amounts over the Deductible, and
(iii) Section 6.02(b) hereof for any Indemnifiable Losses where Seller’s
aggregate liability under Section 6.02(b) exceeds $19,500,000.

(b)                 Notwithstanding any other provision of this Agreement,
Purchaser shall not be liable under (i) Section 6.01(a) or Section 6.01(b)
hereof for any individual claim if the Indemnifiable Loss thereunder is less
than the Claim Threshold, (ii) Section 6.01(b) hereof until the aggregate amount
of Indemnifiable Losses recoverable under Section 6.01(b) exceeds the Deductible
and then only for amounts over the Deductible, and (iii) Section 6.01(b) hereof
for any Indemnifiable Losses where Purchaser’s aggregate liability under Section
6.01(b) exceeds $19,500,000.

Section 6.05.                        Net Losses; Set Off. Notwithstanding
anything contained herein to the contrary, the amount of any Indemnifiable
Losses incurred or suffered by an Indemnified Party shall be calculated after
giving effect to (i) any insurance proceeds received by the Indemnified Party
(or any of its Affiliates) from an unaffiliated insurance carrier with respect
to such Indemnifiable Losses, (ii) any net Tax benefits (taking into account any
Tax costs) actually recognized by the Indemnified Party (or any of its
Affiliates) arising from the incurrence or payment of any such Indemnifiable
Loss by the Indemnified Party and (iii) any actual recoveries obtained by the
Indemnified Party (or any of its Affiliates) from any third party in respect of
such Indemnifiable Loss. The Indemnified Party shall use commercially reasonable
efforts to obtain proceeds, benefits and recoveries referred to in clause (i) of
the preceding sentence. If any such proceeds, benefits or recoveries are
received by an Indemnified Party (or any of its Affiliates) with respect to any
Indemnifiable Losses after an Indemnifying Party (or such Affiliate) shall have
made a payment to the Indemnified Party under this Article VI, the Indemnified
Party shall return the amount of such proceeds, benefits or recoveries to the
Indemnifying Party (up to the amount of the Indemnifying Party’s payment and
taking into account any net Tax cost to the Indemnified Party of the receipt of
such proceeds, benefits or recoveries and the return of such payment (or a
portion thereof) to the Indemnifying Party). No Indemnified Party will be
entitled to recover from an Indemnifying Party more than once in

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respect of the same Indemnifiable Loss. Neither Purchaser nor Seller shall have
any right to set off any indemnification claim pursuant to this Article VI
against any payment due pursuant to Article II or any Ancillary Agreement,
except as set forth in Section 6.07.

Section 6.06.                        Procedure for Indemnification.

(a)                 Notice of Third Party Claims. Any Indemnified Party seeking
indemnification for any Indemnifiable Loss or potential Indemnifiable Loss
arising from an Action by a third Person against such Indemnified Party (a
“Third Party Claim”) shall give written notice to the relevant Indemnifying
Party thereof specifying in detail the nature of such Third Party Claim and the
amount of related Indemnifiable Losses. Written notice to the relevant
Indemnifying Party of a Third Party Claim shall be given by the Indemnified
Party reasonably promptly after notice to such Indemnified Party of the
potential claim; provided, however, that the Indemnified Party shall not be
foreclosed from seeking indemnification pursuant to this Article VI by any
failure to provide such reasonably prompt notice of the existence of a Third
Party Claim to the Indemnifying Party and such failure shall not relieve the
Indemnifying Party of any liability which the Indemnifying Party may have to the
Indemnified Party, except to the extent that such Indemnifying Party has been
materially damaged or prejudiced as a result of such delay.

(b)                 Defense. Except as otherwise provided herein, an
Indemnifying Party may elect to defend, at the Indemnifying Party’s own cost and
expense and by the Indemnifying Party’s own counsel (which counsel shall be
reasonably satisfactory to the Indemnified Party), any Third Party Claim. If the
Indemnifying Party elects to defend such Third Party Claim, the Indemnifying
Party shall, within ten (10) days after receiving notice of the Third Party
Claim, notify the Indemnified Party of its intent to do so, and the Indemnified
Party shall cooperate, at the cost and expense of the Indemnifying Party, in the
defense of such Third Party Claim; provided that the Indemnified Party is hereby
authorized (but not obligated) at any time after giving notice to the
Indemnifying Party of such Third Party Claim but prior to receiving such notice
from the Indemnifying Party to file any motion, answer or other pleading and to
take any other action which the Indemnified Party or its counsel deem reasonably
necessary to protect the Indemnified Party’s interests. If any Indemnifying
Party elects not to defend the Third Party Claim, or fails to notify the
Indemnified Party of its election to do so as herein provided, or otherwise
abandons the defense of such Third Party Claim, (and during any other period in
which an Indemnifying Party has been given a reasonable opportunity to assume,
but has not assumed, the defense of such Third Party Claim) then (i) the
Indemnified Party may (without prejudice to any of its rights against an
Indemnifying Party), compromise or defend such Third Party Claim and (ii) the
reasonable costs and expenses of the Indemnified Party incurred in connection
therewith shall be indemnifiable as “Indemnifiable Losses” by the Indemnifying
Party pursuant to this Article VI. If the Indemnifying Party assumes the defense
of a Third Party Claim, the Indemnified Party shall be required to agree to any
settlement, compromise or discharge of a Third Party Claim (1) that relates to
the imposition of monetary damages only, (2) that the Indemnifying Party has
recommended, (3) that by its terms obligates the Indemnifying Party to pay the
full amount of the liability in connection with such Third Party Claim (without
regard to any limitations otherwise applicable hereunder), (4) that releases the
Indemnified Party completely and (5) that would not otherwise adversely affect
the Indemnified Party. Notwithstanding the foregoing, the Indemnifying Party
shall not be entitled to assume the

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defense of any Third Party Claim (but shall nonetheless remain liable for the
fees and expenses of counsel incurred by the Indemnified party in defending such
Third Party Claim as part of the “Indemnified Losses” hereunder) if the Third
Party Claim is reasonably likely to result in the imposition of: (i) monetary
damages in excess of 200% of the Indemnifying Party’s then remaining maximum
liability hereunder or (ii) an order, injunction or other equitable relief or
relief for other than money damages against the Indemnified Party. An
Indemnified Party shall not settle or compromise any Action (to the extent such
Indemnified Party is seeking indemnification in respect thereof) without the
prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld, conditioned or delayed. If the Indemnifying Party elects
to defend any Action, the Indemnified Party shall make available to the
Indemnifying Party any Representatives or Information that are reasonably
necessary or appropriate for such defense and such Representatives shall, when
appropriate, furnish evidence, testimony and other assistance in connection with
any such claim. In any event, except as otherwise provided herein, the
Indemnified Party and the Indemnifying Parties may each participate, at its or
their own expense, in the defense of such Third Party Claim; provided that if in
the reasonable opinion of counsel to the Indemnified Party, there exists an
actual or potential conflict of interest or differing defenses between the
Indemnifying Party and the Indemnified Party with respect to such Third Party
Claim, the Indemnifying Party shall be liable for the reasonable fees and
expenses of counsel to the Indemnified Party in each jurisdiction for which the
Indemnified Party determines counsel is required (and such amounts shall be
deemed “Indemnifiable Losses” hereunder).

(c)                 Certain Third Party Claims. Without limiting the foregoing,
if at any time, in the reasonable opinion of the Indemnified Party, notice of
which shall be given in writing to the Indemnifying Party, any such Third Party
Claim is asserted by a Person that is a customer or supplier of the Business or
seeks injunctive relief which relates to the business, operations, properties,
assets, liabilities, profits or financial condition of the Indemnified Party
(including, in the case of the Purchaser Indemnified Parties, the Acquired
Assets, the Target Shares and the Assumed Liabilities from the Closing Date),
the Indemnified Party shall have the right to control or assume (as the case may
be) the defense of any such Third Party Claim and the amount of any judgment or
settlement and the reasonable costs and expenses of defense (with the reasonable
attorneys’ fees and expenses of one counsel) shall be included as “Indemnifiable
Losses” hereunder, provided that in such event no settlement in respect of such
Third Party Claim shall be entered into without the prior written consent of the
Indemnifying Party. If the Indemnified Party elects to exercise such right, the
Indemnifying Party shall have the right to participate in, but not control, the
defense of such Third Party Claim at the sole cost and expense of the
Indemnifying Party.

(d)                 Miscellaneous. The procedures set forth in Section 6.06(c)
shall apply solely with respect to Third Party Claims and shall not be deemed to
apply to, or otherwise affect or limit, an Indemnified Party’s rights under this
Article VI with respect to any claim other than a Third Party Claim.

(e)                 Notice of Non-Third Party Claims. Any Indemnified Party
seeking indemnification for any Indemnifiable Loss or potential Indemnifiable
Loss arising from a claim for indemnification asserted by such Indemnified Party
against an Indemnifying Party other than a Third Party Claim (a “Non-Third Party
Claim”) shall give written notice to the relevant

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Indemnifying Party specifying in detail the nature of such Indemnifiable Loss or
potential Indemnifiable Loss and the reasons such Indemnified Party believes it
is entitled to indemnification hereunder. Written notice to the Indemnifying
Party of the existence of a Non-Third Party Claim shall be given by the
Indemnified Party reasonably promptly after the Indemnified Party becomes aware
of the potential claim; provided, however, that the Indemnified Party shall not
be foreclosed from seeking indemnification pursuant to this Article VI and by
any failure to provide such reasonably prompt notice of the existence of a
Non-Third Party Claim to the relevant Indemnifying Parties and such failure
shall not relieve the Indemnifying Party of any liability which the Indemnifying
Party may have to the Indemnified Party, except and only to the extent that such
Indemnifying Party actually incurs an incremental out-of-pocket expense or
otherwise has been damaged or prejudiced as a result of such failure.

Section 6.07.                        Holdback Matters; Payment of Indemnifiable
Losses.

(a)                 To the extent that any Indemnifiable Losses of a Purchaser
Indemnified Party are not paid by Seller within ten (10) Business Days of the
date that such amounts become payable following a Final Resolution, Purchaser
shall be entitled to recover such amount from the Holdback Amount, in which case
the Holdback Amount, to the extent sufficient, shall be deemed reduced in an
amount equal to such Indemnifiable Loss and such Indemnifiable Loss shall be
discounted to the extent of the reduction of the Holdback Amount. For purposes
of this Section 6.07, “Final Resolution” means (i) a final, non-appealable order
or judgment from a court of competent jurisdiction that resolves the particular
dispute, including any such final, non-appealable order or judgment from a court
of competent jurisdiction that orders that Purchaser is entitled to recover
monetary damages under the terms of this Agreement or (ii) a written agreement
executed by Purchaser and Seller that resolves any dispute arising under, in
connection with or relating to this Agreement or the transactions contemplated
hereby, including any such written agreement that specifies that Purchaser is
entitled to recover monetary damages under the terms of this Agreement.

(b)                 Release at Release Date. On the Holdback Release Date,
Purchaser shall pay in immediately available funds by wire transfer to an
account designated by Seller the then-remaining Holdback Amount (after taking
into account any reduction thereof made pursuant to Section 6.07(a) above) minus
the aggregate of: (i) amounts then agreed upon by Purchaser and Seller with
respect to any claims for Indemnifiable Losses asserted by the Purchaser
Indemnified Parties in accordance with this Agreement in respect of which
payment has not yet been made (or the Holdback Amount has not yet been reduced)
and (ii) the aggregate amount, if any, of all Indemnifiable Losses claimed in
good faith by any Purchaser Indemnified Party that are either unresolved (as
between Purchaser and Seller for the purposes of this Agreement) or disputed by
Seller, as set forth in any written notice from Seller to Purchaser. Upon a
final determination that any portion of the Holdback Amount retained pursuant to
clause (ii) above did not constitute Indemnifiable Losses due to be paid to the
Purchaser Indemnified Parties hereunder, Purchaser shall pay such amount to
Seller in accordance with the first sentence of this Section 6.07(b), together
with Default Interest on such amount.

Section 6.08.                        Exclusive Remedy. Purchaser and Seller
acknowledge and agree that, following the Closing, except in the case of fraud
or intentional misrepresentation, the foregoing indemnification provisions in
this Article VI shall be the exclusive remedy of

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Purchaser and Seller. Nothing in this Section 6.08 shall limit the right of
either party to seek equitable remedies to enforce any covenant of a party to be
performed after the Closing. 

Section 6.09.                        Purchase Price Adjustment. The parties
agree that any indemnification payments made pursuant to this Agreement will be
treated for Tax purposes as an adjustment to the Purchase Price, unless
otherwise required by applicable Law.

Section 6.10.                        Tax Indemnity. For the avoidance of doubt,
the provisions of this Article VI shall not apply to either party’s rights and
obligations under Section 4.20(b)(v).

Article VII

CONDITIONS PRECEDENT TO CLOSING

Section 7.01.                        Conditions to Obligations of Each of the
Parties. The obligations of the parties to effect the Closing shall be subject
to the satisfaction at or prior to the Closing Date of each of the following
conditions (unless satisfaction of any such condition is expressly waived in
writing by each of the parties):

(a)                 Antitrust.

(i)                   The Agreed Antitrust Authorities, other than the Antitrust
Authorities in Australia and New Zealand, either will have approved the
transactions contemplated hereby or applicable waiting periods (and any
extensions thereof) will have expired or been terminated without objections of
such Agreed Antitrust Authorities with the effect that the transactions
contemplated by this Agreement are no longer subject to a suspension requirement
and can be consummated.

(ii)                 the NZCC: (x) shall have indicated, in writing or orally,
to the mutual satisfaction of the Parties, acting reasonably, in response to the
courtesy letter informing the NZCC of the transactions contemplated hereby that
it has no objection to, or does not propose to take any further action in
respect of, the transactions contemplated hereby, or (y) shall have granted
clearance under Part V of the Commerce Act of New Zealand 1986 for the
implementation of the transactions contemplated by this Agreement.

(iii)                the ACCC: (x) shall have indicated, in writing or orally,
to the mutual satisfaction of the Parties, acting reasonably, in response to the
courtesy letter informing the ACCC of the transactions contemplated hereby, that
the ACCC has no objection to, or does not propose to take any further action in
respect of, the transactions contemplated hereby either unconditionally or on
terms acceptable to Purchaser, acting reasonably, or (y) shall have provided
written advice, in response to a request for informal merger clearance, that the
ACCC has no objection to, or does not propose to take any further action in
respect of, the transactions contemplated by this Agreement either
unconditionally or on terms acceptable to Purchaser, acting reasonably.

(b)                 No Injunctions or Restraints. No Law, injunction, judgment
or ruling enacted, promulgated, issued, entered, amended or enforced by any
Governmental Authority

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shall be in effect enjoining, restraining, preventing, or prohibiting
consummation of the transactions contemplated hereby or making consummation of
such transactions illegal.

Section 7.02.                        Conditions to Obligations of Purchaser. The
obligations of Purchaser to effect the Closing shall be subject to the
satisfaction at or prior to the Closing Date of each of the following conditions
(unless satisfaction of any such condition is expressly waived by Purchaser in a
writing delivered to Seller):

(a)                 Seller shall have, in all material respects, performed or
complied with its agreements and covenants contained in this Agreement required
to be performed or complied with at or prior to the Closing Date;

(b)                 (i) The representations and warranties of Seller contained
in Section 3.01(g) (ii) and the first sentence of Section 3.01(c)(ii) shall be
true, correct and complete in all respects as of the date hereof and as of the
Closing Date with the same force and effect as if made on and as of such date;
(ii) the representations and warranties of Seller contained in Sections ‎3.01(a)
through (c) (excluding the first sentence of Section 3.01(c)(ii) and all such
representations and warranties as they relate to Loading Bay or the Loading Bay
Shares), and the first sentence only of 3.01(i) shall, to the extent qualified
by “materiality” or “Material Adverse Effect,” be true, correct and complete in
all respects as of the date hereof and as of the Closing Date with the same
force and effect as if made on and as of such date (except in the case of any
representation or warranty that by its terms is made solely as of a specific
date, which shall be true and correct only as of such date) and, to the extent
not so qualified, shall be true, correct and complete in all material respects
as of the date hereof and as of the Closing Date with the same force and effect
as if made on and as of such date (except in the case of any representation or
warranty that by its terms is made solely as of a specific date, which shall be
true and correct only as of such date); and (iii) the representations and
warranties of Seller (other than those described in (i) and (ii) of this Section
7.02(b)) shall be true and correct as of the date hereof and as of the Closing
Date with the same force and effect as if made on and as of such date (except in
the case of any representation or warranty that by its terms is made solely as
of a specific date, which shall be true and correct only as of such date),
without giving effect to any materiality qualifications contained therein,
except for any failure to be true and correct as has not had, and would not
reasonably be expected to result in, a Material Adverse Effect;

(c)                 Seller, each of its Affiliates, and each other Asset Seller,
as the case may be, shall have executed and delivered to Purchaser each
Ancillary Agreement to which Seller or such Asset Seller is a party;

(d)                 Purchaser shall have received a certificate dated the
Closing Date signed by a duly authorized officer of Seller, certifying as to the
satisfaction of the conditions contained in Sections 7.02(a) and (b).

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Section 7.03.                        Conditions to Obligations of Seller. The
obligations of Seller to effect the Closing shall be subject to the satisfaction
at or prior to the Closing Date of each of the following conditions (unless
satisfaction of any such condition is expressly waived by Seller in a writing
delivered to Purchaser):

(a)                 Purchaser shall have performed in all material respects or
complied with its agreements and covenants contained in this Agreement required
to be performed or complied with at or prior to the Closing Date;

(b)                 the representations and warranties of Purchaser contained in
this Agreement shall be true and correct as of the date hereof, and as of the
Closing Date with the same force and effect as if made on and as of such date,
without giving effect to any materiality qualifications contained therein
(except in the case of any representation or warranty that by its terms is made
solely as of a specific date, which shall be true and correct only as of such
date) except for any failure to be true and correct as has not had, and would
not reasonably be expected to result in, a material adverse effect on the
ability of Purchaser to effect the Closing and consummate the transactions
contemplated hereby;

(c)                 Purchaser shall have executed and delivered to Seller each
Ancillary Agreement to which Purchaser is a party; and

(d)                 Seller shall have received a certificate dated the Closing
Date signed by a duly authorized officer of Purchaser, certifying as to the
satisfaction of the conditions contained in Sections 7.03(a) and (b).

Article VIII

TERMINATION, AMENDMENT AND WAIVER

Section 8.01.                        Termination. Notwithstanding anything
contained in this Agreement to the contrary, this Agreement shall be terminated
and the transactions contemplated hereby abandoned, as follows:

(a)                 by mutual written consent of each of Seller and Purchaser to
terminate this Agreement;

(b)                 by either Purchaser or Seller if the Closing has not been
consummated prior to April 27, 2012 (the “Termination Date”);

(c)                 by written notice of Seller, if Purchaser shall have
breached or failed to perform in any material respect any of its
representations, warranties, covenants or other agreements set forth in this
Agreement, which breach or failure to perform (1) would result in a failure of a
condition set forth in Section 7.03 and (2) is not cured within thirty (30) days
following written notice to Purchaser, or which by its nature or timing cannot
be cured within such time period;

(d)                 by written notice of Purchaser, if Seller shall have
breached or failed to perform in any material respect any of its
representations, warranties, covenants or other

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agreements set forth in this Agreement, which breach or failure to perform (1)
would result in a failure of a condition set forth in Section 7.02 and (2) is
not cured within thirty (30) days following written notice to Seller, or which
by its nature or timing cannot be cured within such time period; or

(e)                 by either Purchaser or Seller if any Governmental Authority
having jurisdiction over any party hereto shall have issued any order, decree,
ruling or injunction or taken any other action permanently restraining,
enjoining or otherwise prohibiting the consummation of the transactions
contemplated hereby and such order, decree, ruling or injunction or other action
shall have become final and nonappealable or if there shall be adopted any law
or regulation that makes consummation of the transactions contemplated hereby
illegal or otherwise prohibited.

Section 8.02.                        Ability to Terminate; Effect of
Termination. Notwithstanding anything herein to the contrary, (a) neither
Purchaser nor Seller may terminate the Agreement if such party’s failure to
perform in any material respect any of its obligations or covenants, or the
inaccuracy of any of its representations or warranties under this Agreement has
been the principal cause of the event or condition giving rise to the right of
termination and (b) Purchaser shall not be permitted to terminate the Agreement
(i) under Section 8.01(b) unless, at the time of such termination, the condition
contained in Section 7.01(a) shall have been satisfied or (ii) under Section
8.01(e) if the basis for such order, decree, ruling or injunction or other
action shall be applicable antitrust, competition or trade regulation Laws. If
this Agreement is terminated in accordance with Section 8.01, this Agreement
shall become null and void and of no further force and effect, except that
(x) Section 4.09, Section 4.13, this Article VIII and Article IX shall remain in
full force and effect and (y) any termination of this Agreement shall not
relieve any party hereto from liability for fraud or any intentional breach of
its obligations hereunder.

Section 8.03.                        Amendment. This Agreement may not be
amended except by an instrument in writing signed by each of the parties hereto.

Section 8.04.                        Waiver. At any time prior to the Closing
Date, any party hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto, and (c) waive compliance with any of the agreements
or conditions contained herein. Any such extension or waiver shall be valid only
if set forth in an instrument in writing signed by the party or parties to be
bound thereby. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of such
rights.

Article IX

GENERAL PROVISIONS

Section 9.01.                        Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing and shall be
given and shall be deemed to have been duly given (a) when delivered personally
to the recipient, (ii) one Business Day after being

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sent by overnight courier, (iii) one Business Day after being sent by facsimile
transmission or e-mail (in each case, with confirmation) or (iv) four Business
Days after being mailed to the recipient by certified or registered mail, return
receipt requested, to the respective parties at the following addresses (or at
such other address for a party as shall be specified by like notice):

if to Purchaser:

ASSA ABLOY AB
Box 70340, 107 23 Stockholm, Sweden

Attention: Jacob Wahlberg
Fax: +46 (0) 8-506-485-50

Email: jacob.wahlberg@assaabloy.com

with an additional copy (which shall not constitute notice) to:

Freshfields Bruckhaus Deringer US LLP
601 Lexington Avenue, 31st Floor
New York, New York 10022

Attention: Matthew F. Herman
                   Doug Bacon
Fax: (212) 277-4001

Email: matthew.herman@freshfields.com
           doug.bacon@freshfields.com

if to Seller:

Albany International Corp.
216 Airport Drive
Rochester, New Hampshire 03867

Attention: Charles J. Silva, Jr.
Fax: (518) 447-6575

Email: Charles.Silva@albint.com

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with an additional copy (which shall not constitute notice) to:

Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, New York 10006

Attention: William A. Groll
                    Glenn P. McGrory
Fax: (212) 225-3999

Email: wgroll@cgsh.com
           gmcgrory@cgsh.com

Section 9.02.                        Interpretation. In the event an ambiguity
or question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the parties and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement.

Section 9.03.                        Severability. If any term or other
provision of this Agreement is invalid, illegal or incapable of being enforced
by any rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the fullest extent possible.

Section 9.04.                        Entire Agreement; Assignment. This
Agreement constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior agreements and undertakings, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof other than the Confidentiality Agreement. Subject to Section 2.08,
neither this Agreement nor any rights, interests or obligations hereunder shall
be assigned by either of the parties hereto without the prior written consent of
the other party.

Section 9.05.                        Parties in Interest. This Agreement shall
be binding upon and inure solely to the benefit of each party hereto, and,
except as set forth in Article VI, nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement.

Section 9.06.                        Submission to Jurisdiction. All Actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined in the Federal Courts in the Southern District of New York and the
state courts of the State of New York, County of New York, and the parties
hereto hereby irrevocably submit to the exclusive jurisdiction and venue of such
courts in any such Action or proceeding and irrevocably waive the defense of an
inconvenient forum or lack of jurisdiction to the maintenance of any such Action
or proceeding. The consents to jurisdiction and venue set forth in this Section
9.06 shall not constitute general

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consents to service of process in the State of New York and shall have no effect
for any purpose except as provided in this paragraph and shall not be deemed to
confer rights on any Person other than the parties hereto. Each party hereto
agrees that service of process upon such party in any Action or proceeding
arising out of or relating to this Agreement shall be effective if notice is
given by overnight courier at the address set forth in Section 9.01 of this
Agreement. The parties hereto agree that a final judgment in any such Action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by applicable Law;
provided, however, that nothing in the foregoing shall restrict any party’s
rights to seek any post-judgment relief regarding, or any appeal from, such
final trial court judgment.

Section 9.07.                        Specific Performance. The parties hereto
agree that irreparable damage for which monetary damages, even if available,
would not be an adequate remedy, would occur in the event that the parties
hereto do not perform their obligations under the provisions of this Agreement
(including failing to take such actions as are required of them hereunder to
consummate this Agreement) in accordance with its specified terms or otherwise
breach such provisions. Subject to the following sentence, the parties
acknowledge and agree that the parties shall be entitled to seek an injunction
or injunctions, specific performance, or other equitable relief, to prevent
breaches of this Agreement and to seek to enforce specifically the terms and
provisions hereof in the courts described in Section 9.06 without proof of
damages or otherwise, this being in addition to any other remedy to which they
are entitled under this Agreement. Each of the parties hereto agrees that it
will not oppose the granting of an injunction, specific performance and other
equitable relief on the basis that the other Party hereto has an adequate remedy
at law. The parties hereto acknowledge and agree that any party seeking an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in accordance with this
Section 9.07 shall not be required to provide any bond or other security, and
each party irrevocably waives any right it may have to require such bond or
security, in connection with any such order or injunction.

Section 9.08.                        Governing Law. This Agreement and any
dispute arising out of, relating to or in connection with this Agreement shall
be governed by, and construed in accordance with the laws of the State of New
York.

Section 9.09.                        Headings. The descriptive headings
contained in this Agreement are included for convenience of reference only and
shall not affect in any way the meaning or interpretation of this Agreement.

Section 9.10.                        Counterparts. This Agreement may be
executed and delivered (including by facsimile transmission) in two (2) or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed and delivered shall be deemed to be an original but all
of which taken together shall constitute one and the same agreement.

Section 9.11.                        WAIVER OF JURY TRIAL. EACH OF SELLER AND
PURCHASER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS

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AGREEMENT OR THE ACTIONS OF PURCHASER OR SELLER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.

Section 9.12.                        Expenses. Except as otherwise expressly set
forth in this Agreement, as between Seller and Purchaser, Seller shall be solely
responsible for all of its own costs and expenses and those of its Subsidiaries
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby, and Purchaser shall be solely
responsible for all of its own costs and expenses (including legal fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby.

Section 9.13.                        Schedules. There may be included in the
Disclosure Schedule items and information that are not “material,” and inclusion
in the Disclosure Schedule will not be deemed to be an acknowledgement or
agreement that any such item or information (or any non-disclosed item or
information of comparable or greater significance) is “material,” or to affect
the interpretation of such term for purposes of this Agreement. Matters
reflected in the Disclosure Schedule are not necessarily limited to matters
required by this Agreement to be disclosed therein. The Disclosure Schedule sets
forth items of disclosure with specific reference to the particular Section or
subsection of this Agreement to which the information in such Disclosure
Schedule relates; provided, that any information set forth in one section of the
Disclosure Schedule pertaining to one section or subsection of the
representations and warranties will be deemed to apply to each other section or
subsection of the representations and warranties only to the extent it is
reasonably apparent on the face of such disclosure that such information is
relevant to such other section or subsection of the representations and
warranties.

[Signature page follows.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first written above.

  ASSA ABLOY AB       By: /s/ Juan Vargues     Name: Juan Vargues     Title:
Executive Vice President         ALBANY INTERNATIONAL CORP.       By: /s/ John
Cozzolino     Name: John Cozzolino      Title: Chief Financial Officer and
Treasurer

 

  

Annex I-A
Direct Target Entities

Entity Jurisdiction of Incorporation Percentage Owned Albany Door Systems Sp
z.o.o. Poland 100% Albany Door Systems GmbH Germany 100% Albany Door Systems AB
(including Norway Branch) Sweden 100%

Annex I-B
Indirect Target Entities

Entity Jurisdiction of Incorporation Percentage Owned AKTOR Industrietore GmbH
Germany 100% MDS Hareketli Kapi Sistemleri Sanayi ve Dis Ticaret Ltd. Sti.
Turkey 100% Albany Door Systems AG Switzerland 100% Albany Door Systems BV
Netherlands 100% Albany Door Systems SAS France 100% SA Alfadoor NV Belgium 100%
Albany Door Systems New Zealand New Zealand 100% Albany Door Systems GmbH
Austria 100% Albany Door Systems A/S Denmark 67%

I-1

  

Annex II
Asset Sellers

Entity Jurisdiction Albany International Canada Corp. Canada Albany
International (China) Co., Ltd. China Albany International Italia S.r.l. Italy
Albany International de Mexico S.A. de C.V. Mexico Albany International Pty.,
Ltd. Australia Albany International Asia Pty., Ltd. (includes Malaysia Branch)
Australia Albany International Oy Finland Albany International Corp. Delaware
(US)

I-2

  

 

Annex III

(a) Joseph Morone   John Cozzolino   Joerg Lehman   David Pinion   Charles Silva
  Dawne Wimbrow   Bonita Lindberg   Bob Johnson (b) Jacob Wahlberg   Henrik
Zetterberg

2

  

Annex IV

Retained Liabilities

Any Liabilities relating to failure of Ultralite doors as described in Section
3.01(h)(i) of the Disclosure Schedule.

3

  

Annex V

Working Capital Principles

Working Capital Accounting Principles Used by ADS

Prepaid Expenses:

A prepaid expense is an item paid and recorded in advance of its use or
consumption in the business, part of which represents expense of the current
period and part of which represents an asset on hand at the end of the period.

The portion of prepaid items in excess of 12 months should be classified as
Other Assets.

Accounts Payable:

Accounts payable includes all liabilities for goods received from or services
performed by non-AI companies and for which an invoice has been received. These
liabilities include amounts withheld from employee wages and salaries, and
employer liabilities which are based on wages and salaries.

Examples include but are not limited to:

Accounts payable - trade

Amounts withheld from employees pay:

Contributions

Savings (401-K)

Taxes

Employer liabilities relative to wages and salaries paid

Commissions payable

Value added tax

Advance payments from customers Nonfunctional currency payables must be revalued
at the end of each month using the current exchange rate issued by AI
Headquarters. It is AI policy to make an accrual at each quarter-end for routine
expenses (i.e. office supplies, subscriptions, travel, electricity, telephone,
etc) in cases where the invoices have not been received before the quarter-end.
These accruals are considered accrued AP and should be reversed after the
quarter-end and then analyzed and made again during the next quarterly close.

Accrued Liabilities:

This balance represents estimated liabilities recorded for income statement
timing purposes and are expected to be paid within 12 months. Accrued
liabilities should not include items for which invoices have been received.

Examples of accrued liabilities include but are not limited to:

Advertising

Bonuses

Commissions

Holiday pay

Payrolls

Property taxes

Social costs, other than those withheld from employee's pay

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Travel expenses

Turnover/sales tax

Vacation pay

Medical and dental

Interest

Fees

Profit sharing

Returns and allowances

Warranties

Customer discounts and rebates

Customer volume bonuses

Restructuring

Restructuring is a program that is planned and controlled by management, and
materially changes either the scope of a business undertaken by an entity, or
the manner in which that business is conducted.

Restructuring costs include, but are not limited to, the following:

a. Involuntary employee termination benefits pursuant to a one-time benefit
arrangement that, in substance, is not an ongoing benefit arrangement or an
individual deferred compensation contract

b. Costs to terminate a contract that is not a capital lease

c. Other associated costs, including costs to consolidate or close facilities,
relocate employees, and non-capitalizable equipment relocation costs.

d. Defined benefit pension plan-related items, such as curtailments, settlements
or special termination benefits.

Accounts receivable:

Trade accounts and notes receivable are amounts due from customers for shipments
or services rendered on or before the balance sheet date with terms of less than
12 months. Unless a customer has specifically authorized billing and requested
that merchandise be held for future delivery, amounts should be recorded after
shipment. Trade receivables denominated in currencies other than an entity's
functional currency must be revalued at the end of each month at the current
exchange rate issued by AI Headquarters.

Other receivables include amounts due within 12 months from entities and
individuals other than customers and other AI operations. Other receivables
include but are not limited to items such as interest, dividends, rent, claims
against transportation companies and insurance companies, scrap sales, income
taxes, royalties, value added tax, etc.

 

A reserve for doubtful accounts represents an amount determined to be
potentially uncollectible from customers. The balance should be comprised of
specific and general reserves. Specific reserves are calculated on individual
customer accounts based on past experience and the customer's current financial
condition. General reserves are calculated excluding the accounts that relate to
specific reserves and applying an historical loss rate to the remaining balance.

Inventories:

Inventory balances (raw material, work-in-process, and finished goods) are
required to be stated at the lower of cost or market value.

5

  

Work in process and finished goods inventories must be valued on a full
absorption of fixed manufacturing costs (FMC), unless there are special
circumstances. The allocation of FMC to inventory should be accomplished by
developing a rate by work center in relationship to labor and setup rates. The
burden percentage rate should normally be used to apply Fixed Manufacturing
Costs. In some exceptional instances it may be appropriate to use the item
overhead absorbtion method as an alternative.

Inventories are fully reserved for items that have not had any movement in two
years.

Revenue Recognition

Generally accepted accounting principles require that the earnings process be
complete prior to recognition of a sale. The earnings process is complete:

evidence of an arrangement (contract) exists

delivery has occured

selling price is fixed

collectibility is reasonably assured

if acceptance by the customer is not conditional and there are no contingencies

if there is a definitive payment plan, for example

-net 30, 60, 90 days

-30 days after installation

-payment due a specified number of months from invoice date if the fabric is not
installed

if title has been transferred and the customer bears the risk of loss if the
product is damaged or destroyed

if the customer is able to and will confirm the amount due as an account
receivable

If all of the above requirements are met, a sale should be recorded.

Quarterly closing procedures must include a review to determine whether revenue
recognition must be delayed on any shipments. Any adjustment needed must be
recorded in the general ledger before submission of the Day 4 financial
statements.

Effective January 2011, in instances where installation or similar services (eg.
Door Division) are included in the contract for the sale of goods, revenue and
related gross profit must be allocated to those separate revenue elements and
recognized as each deliverable is completed. The amount of revenue recognized
for each revenue element (door delivery/installation) must be based on the fair
value.

 

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Annex VI

Pre-closing Allocation

Albany International Corp     Allocation of Purchase Price     2011   Revised  
      % of PP  $    130,000,000      US$ Allocation of Proceeds to Asset Sales  
              AIC (US) - Door Division 20.0%             26,000,000 Albany
International Pty. Ltd. (Australia) 3.7%               4,810,000 Albany
International Canada Corp. 2.1%               2,730,000 Albany International
Italia SrL 0.1%                 130,000 Albany International China Co LTD 1.6%
              2,080,000 Albany International Finland 0.0%
                        -         Allocation of Proceeds to Share Sales        
  Albany Door Systems (Germany)  (1)             60,840,000 Aktor (Germany)  
              1,040,000 Moving Door Systems (Turkey)                   650,000
Albany Doors System (Denmark)                 3,770,000       Total Proceeds to
AI BV (Holland) 51.0%             66,300,000       Albany Door Systems AB
(Sweden)                 6,760,000 Albany Door Systems- Norway Branch  
                650,000 Albany Door Systems S.A.R.L. (France)                
2,600,000 Albany Door Systems GmbH (Austria)                 8,450,000 SA
Alfadoor NV (Belgium)                 1,040,000 Albany Door Systems BV
(Netherlands)                 4,680,000 Albany Door Systems AG (Switzerland)  
              1,040,000 Albany Door Systems (New Zealand)                
1,300,000 Total Proceeds to AI Holding AB (Sweden) 20.4%             26,520,000
      Abany Door Systems Sp z oo (Poland)                 1,430,000 Total
Proceeds to AIC-US 1.1%               1,430,000       Total Proceeds 100.0%
          130,000,000        (2) - Considers 49.99% ownership interest in
Loading Bay Specialist (UK)

7