Exhibit 10.1

 
ACQUISITION AGREEMENT
 
 
DATED AS OF JULY 26, 2011
 
 
BY AND AMONG
 
 
INSITUFORM TECHNOLOGIES, INC.,
 
 
INFRASTRUCTURE GROUP HOLDINGS, LLC,
 
 
FIBRWRAP CONSTRUCTION SERVICES, INC.,
 
 
FIBRWRAP CONSTRUCTION SERVICES USA, INC.,
 
 
0916268 B.C. LTD.,
 
 
FYFE GROUP, LLC,
 
 
R.D. INSTALLATIONS INC.,
 
 
FIBRWRAP CONSTRUCTION, INC.,
 
 
FIBRWRAP CONSTRUCTION, L.P.,
 
 
FIBRWRAP CONSTRUCTION CANADA LIMITED
 
 
FYFE HOLDINGS, LLC
 
 
AND
 
 
THE MEMBERS OF FYFE GROUP, LLC
 

 
 

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TABLE OF CONTENTS
List of Schedules
 
v
List of Exhibits
 
vi
ARTICLE I
Definitions
     
ARTICLE II
Purchase and Sale of Assets
     
Section 2.1
Purchase of Asset
15
Section 2.2
Excluded Assets
17
Section 2.3
Liabilities
18
Section 2.4
Purchase Price
20
Section 2.5
Option to Purchase Equity Securities or Assets of Foreign Entities
21
Section 2.6
Working Capital Adjustment
22
Section 2.7
Prorations
24
Section 2.8
Allocation of Purchase Price
24
Section 2.9
Closings
24
Section 2.10
Deliveries and Actions at Closing
24
Section 2.11
Subscriptions to Purchase ITI Common Stock
24
     
ARTICLE III
Representations and Warranties of Fyfe Members
     
Section 3.1
Authorization of Transaction
25
Section 3.2
Non-contravention
25
     
ARTICLE IV
Representations and Warranties of Fyfe Members and Sellers
     
Section 4.1
Organization; Related Entities
26
Section 4.2
Authorization of Transaction
27
Section 4.3
Non-contravention
27
Section 4.4
Subsidiaries and Affiliates
28
Section 4.5
Sufficiency of Assets
28
Section 4.6
Certain Assets
29
Section 4.7
Real Property
29

 
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 TABLE OF CONTENTS
Section 4.8
Material Contracts
32
Section 4.9
Intellectual Property and Technology
33

Section 4.10
Inventories
35
Section 4.11
Customers and Suppliers
35
Section 4.12
Warranties
35
Section 4.13
Compliance with Anti-Corruption Laws
36
Section 4.14
Financial Information
37
Section 4.15
Absence of Certain Changes; Conduct of Business
37
Section 4.16
Employees
38
Section 4.17
Labor Issues
38
Section 4.18
Benefit Plans
39
Section 4.19
Litigation
40
Section 4.20
Compliance With Laws
41
Section 4.21
Permits
42
Section 4.22
Environmental Matters
42
Section 4.23
Taxes
45
Section 4.24
Insurance
47
Section 4.25
Accounts Receivable
47
Section 4.26
Transactions with Affiliates
48
Section 4.27
Records
48
Section 4.28
Broker’s Fee
48
Section 4.29
Disclosure
48
Section 4.30
No Other Representations or Warranties
48
     

 
ARTICLE V
Representations and Warranties of the ITI Entities
     
Section 5.1
Organization of the ITI Entities
49
Section 5.2
Authorization of Transaction
49
Section 5.3
Non-contravention
49
Section 5.4
Litigation
50
Section 5.5
Experience; Investment Intent
50
Section 5.6
Brokers’ Fees
50
Section 5.7
No Other Representations or Warranties
50
     
ARTICLE VI
Pre-Closing Covenants; Certain Post-Closing Covenants
     
Section 6.1
General
51

 
 
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 TABLE OF CONTENTS
Section 6.2
Notices, Assignments and Consents
51
Section 6.3
Operation of Business
51
Section 6.4
Antitrust Approvals
55
Section 6.5
Access to Information; Environmental Diligence
56
Section 6.6
Exclusivity
57

Section 6.7
Notification; Disclosed Matters; Indemnification
57
Section 6.8
Transferred Employees; Employee Agreements; 401(k) Plan
57
Section 6.9
Nontransferability of Assets
60
Section 6.10
Fibrwrap NC and Fibrwrap SE
61
Section 6.11
Post Closing Name Changes
62
Section 6.12
Duties With Respect to Withdrawal Liability; Release of Escrow
62
Section 6.13
Bulk Sales Waiver
62
     
ARTICLE VII
Additional Post-Closing Covenants
     
Section 7.1
General
63
Section 7.2
Noncompetition; Nonsolicitation; Confidentiality
63
Section 7.3
Taxes; Prorations
64
Section 7.4
Further Assurances
67
Section 7.5
Environmental Matters
67
     
ARTICLE VIII
Conditions to Obligation to Close; Financing and Diligence
     
Section 8.1
Conditions to the ITI Entities’ Obligation
67
Section 8.2
Conditions to Sellers’ Obligation
69
     
ARTICLE IX
Remedies for Breaches of this Agreement
     
Section 9.1
Survival of Representations and Warranties
70
Section 9.2
Indemnification by Fyfe Members and Sellers
71
Section 9.3
Indemnification by the ITI Entities
72
Section 9.4
Certain Limitations on Indemnification
72
Section 9.5
Indemnification Procedures
75
Section 9.6
Escrow Fund
76

 
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TABLE OF CONTENTS
 
ARTICLE X
Termination
     
Section 10.1
Termination of Agreement
77
Section 10.2
Termination Fee; Effect of Termination
77

 
 
ARTICLE XI
Miscellaneous
     
Section 11.1
Press Releases and Public Announcements
78
Section 11.2
Expenses
78
Section 11.3
No Third-Party Beneficiaries
78
Section 11.4
Entire Agreement
78
Section 11.5
Succession and Assignment
79
Section 11.6
Counterparts
79
Section 11.7
Headings
79
Section 11.8
Notices
79
Section 11.9
Governing Law; Venue
80
Section 11.10
Amendments and Waivers
80
Section 11.11
Severability
81
Section 11.12
Construction
81
Section 11.13
Incorporation of Exhibits and Schedules
81
Section 11.14
Specific Performance
81

 
 
 

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List of Schedules
 
Schedule No.
Name of Schedule
1.1
Permitted Liens
1.2
Contracts included in Sub 3 Assets
1.3
List of Financial Statements
2.2(b)
Excluded Contracts
2.6(a)
Target Working Capital Calculations
2.8
Allocation of Purchase Price
3.1
Authorization of Transaction
3.2
Non-contravention
4.1(a)-(b)
Organization; Related Entities
4.2
Authorization of Transaction
4.3
Non-contravention
4.4(a), (c)
Subsidiaries and Affiliates
4.5
Sufficiency of Assets
4.6(a), (c), (e)-(g)
Certain Assets
4.7(a)-(r)
Real Property
4.8
Material Contracts
4.9(a)-(e)
Intellectual Property
4.10
Inventory Matters
4.11(a)
Top 20 Customers and Suppliers
4.11(b)
Customer and Supplier Matters
4.12(a)-(b)
Warranties
4.14
Financial Statement Exceptions
4.15
Absence of Changes
4.16
Employees
4.17
Labor Issues
4.18
Benefit Plans
4.19
Litigation
4.20
Compliance with Laws
4.21(a)
Business Governmental Approvals
4.21(b)
Business Governmental Approval Issues
4.21(c)
Applications for Governmental Approvals
4.22
Environmental Matters
4.23
Taxes
4.24
Insurance
4.25
Accounts Receivable Matters
4.26
Transactions with Affiliates
5.2
ITI Entities Required Governmental Approvals
6.8
Procedures to Correct 401(k) Plan Deficiencies
6.8(l)
Transaction Bonuses
8.1(o)
Leases to be Terminated
   

 
 
v

 
 

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List of Exhibits
 
 Exhibit  Name of Exhibit  A  Form of Transitional Services Agreement    

                       
 
                                      

 
 
vi

 
 

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ACQUISITION AGREEMENT

 
THIS ACQUISITION AGREEMENT (this “Agreement”) is entered into as of July 26,
2011 (“Effective Date”), by and among Insituform Technologies, Inc., a Delaware
corporation (“Insituform”), Infrastructure Group Holdings, LLC, a Delaware
limited liability company (“ITI Sub 1”), Fibrwrap Construction Services, Inc., a
Delaware corporation (“ITI Sub 2”), Fibrwrap Construction Services USA, Inc., a
Delaware corporation (“ITI Sub 3,”) and 0916268 B.C. LTD., a Canadian
corporation (“ITI Sub 4”  and together with Insituform, ITI Sub 1, ITI Sub 2 and
ITI Sub 3 each an “ITI Entity” and collectively, the “ITI Entities”), Fyfe
Group, LLC, a Delaware limited liability company (“Fyfe Group”), R.D.
Installations Inc., a California corporation (“RD Installations”), Fibrwrap
Construction, Inc., a California corporation (“FCI”), Fibrwrap Construction,
L.P., a Delaware limited partnership (“FCLP”), Fyfe Holdings, LLC, a Delaware
limited liability company (“Fyfe Holdings”) Fibrwrap Construction Canada
Limited, a Canadian corporation (“Fibrwrap Construction Canada” and together
with Fyfe Group, RD Installations, FCI, FCLP and Fyfe Holdings, each a “Seller”
and collectively, the “Sellers”), Edward R. Fyfe, in his individual capacity
(“Ed Fyfe”), Fyfe-Carr Corporation, a California corporation (“Fyfe-Carr”),
Edward R. Fyfe and Rolande Dalati Fyfe, Trustees of the Edward R. Fyfe and
Rolande Dalati Fyfe Family Trust a/k/a the Fyfe Family Trust (“Fyfe Family
Trustees”), Edward R. Fyfe, Trustee the Fyfe Irrevocable Grantor’s Trust U.D.T.
Dated December 18, 2008 (“Fyfe Irrevocable Trustee”), Robert Fyfe, Trustee of
the Robert J. Fyfe 2008 Irrevocable Trust (“Robert Fyfe Trustee”), Heath Carr,
Trustee of the Heath Carr 2008 Irrevocable Trust (“Heath Carr Trustee”) and in
his individual capacity (“Heath”), Bison Capital Equity Partners II-A, L.P., a
Delaware limited partnership (“Bison II-A”) and Bison Capital Equity Partners
II-B, L.P., a Delaware limited partnership (“Bison II-B,” and together with FCI,
Fyfe-Carr, Fyfe Family Trustees, Fyfe Irrevocable Trustee, Robert Fyfe Trustee,
Heath Carr Trustee, Heath and Bison II-A, each a “Fyfe Member,” and
collectively, the “Fyfe Members”).  The ITI Entities, the Sellers and the Fyfe
Members are collectively referred to herein as the “Parties” and each
individually as a “Party.”
 
WHEREAS, Fyfe Members own all of the issued and outstanding limited liability
company membership interests in Fyfe Group; and
 
WHEREAS, Insituform, through ITI Sub 1, ITI Sub 2, ITI Sub 3 and ITI Sub 4,
wishes to purchase from the Sellers certain assets and liabilities, all upon the
terms and subject to the conditions set forth in this Agreement.
 
NOW, THEREFORE, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties and covenants
herein contained, the Parties agree as follows.
 
 
 

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ARTICLE I
Definitions
 
“4.4(a) Rep” means the representations set forth in Section 4.4(a) as they
relate to the North American Subsidiaries.
 
“Acquired Foreign Entity” has the meaning set forth in Section 2.5(c).
 
“Acquisition Date” has the meaning set forth in Section 2.5(c).
 
“Acquisition Transaction” has the meaning set forth in Section 6.6(a).
 
“Affiliate” of a Person means, with respect to any Person, any other Person
that, directly or indirectly, through one or more intermediaries, Controls, is
Controlled by, or is under common Control with that first Person.
 
“Agreement” has the meaning set forth in the preface above.
 
“Ancillary Agreements” means the following agreements to be entered into between
the ITI Entities, Sellers and/or Key Employees, as applicable, as of the
Closing: the Escrow Agreement, the Assignment Agreements, the Standstill
Agreement, the Transitional Services Agreement and the New Employment
Agreements.
 
“Antitrust Laws” has the meaning set forth in Section 6.4.
 
“Asset/Liability Transfer” has the meaning set forth in Section 6.9(a).
 
“Assigned Contracts” has the meaning set forth in Section 2.1(b)(i)(D).
 
“Assignment Agreements” has the meaning set forth in Section 8.1(d).
 
“Assumed Liabilities” has the meaning set forth in Section 2.3(a).
 
“Base Amount” has the meaning set forth in Section 2.4(b).
 
“Benefit Plan” means each employment, bonus, deferred compensation, incentive
compensation, stock purchase, stock option, stock appreciation right or other
stock-based incentive, severance, salary continuation, retention,
change-in-control, or termination pay, hospitalization or other medical, welfare
benefits, disability, life or other insurance, supplemental unemployment
benefits, profit-sharing, pension, or retirement plan, program, agreement or
arrangement and each other employee benefit plan, program, agreement or
arrangement sponsored, maintained or contributed to or required to be
contributed to by any Person for the benefit of its employees.
 
“Bison II-A” has the meaning set forth in the preface above.
 
“Bison II-B” has the meaning set forth in the preface above.
 
 
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“Bison Parties” means Bison II-A and Bison II-B.
 
“Bodily Injury” means physical injury, sickness, disease, mental anguish, fear
or emotional distress sustained by any person, including death resulting there
from.
 
“Business” means the development, production, sale and installation of fiber
reinforced polymer composite systems for infrastructure projects and the
condition assessment of such infrastructure.
 
 “Business Day” means any day other than a Saturday, Sunday or a day on which
banks in New York, New York are authorized or obligated by applicable Law or
executive Order to close or are otherwise generally closed.
 
“Business Governmental Approvals” has the meaning set forth in Section 4.21(a).
 
“Business Insurance Policies” has the meaning set forth in Section 4.24.
 
“Cash” means cash, cash equivalents, certificates of deposit and marketable
securities less outstanding checks and plus deposits in transit.
 
“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. § 9601 et seq., and the rules and regulations
promulgated thereunder, as amended.
 
“Claim” means any and all Liabilities, losses, damages, deficiencies, demands,
claims, fines, penalties, interest, assessments, judgments, Liens, charges,
Orders, dues, assessments, Taxes and Proceedings of whatever kind and nature and
all costs and expenses relating thereto, including fees and expenses of counsel,
accountants and other experts, and other expenses of investigation and
litigation.
 
“Cleanup” means all actions required to (a) identify, investigate, contain,
characterize, cleanup, monitor, remove, remediate, transport, treat or otherwise
address any Hazardous Substances present in the Environment, (b) prevent the
Release of Hazardous Substances into the Environment so that they do not
migrate, endanger or threaten to endanger public health or welfare or the
Environment, (c) perform pre-remedial studies and investigations and post
remedial monitoring and care, or (d) respond to any government directives,
orders, requests for information or other documents in any way relating to
investigation, cleanup, removal, treatment, monitoring or remediation of
Hazardous Substances in the Environment.  The term includes, but is not
necessarily limited to, the definitions of “removal,” “remedial action,” and
“respond” as set forth in CERCLA, 42 U.S.C. § 9601 (23), (24) and (25), as
amended, and “corrective action” as used in the Resource Conservation and
Recovery Act, 42 U.S.C. § 6928(h), as amended.
 
“Cleanup Costs” means all costs, fees, expenses (including attorneys’ fees and
expenses), settlements, judgments, fines, penalties and other remuneration
incurred for Cleanup, including response costs incurred and oversight fees
imposed or assessed by any Governmental Authority with jurisdiction over the
Cleanup.
 
 
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“Closing” has the meaning set forth in Section 2.9.
 
            “Closing Date” has the meaning set forth in Section 2.9.
 
“Closing Pay-Offs” has the meaning set forth in Section 2.4(b).
 
“Closing Working Capital” has the meaning set forth in Section 2.6(a).
 
“Closing Working Capital Report” has the meaning set forth in Section 2.6(b).
 
“Code” means the Internal Revenue Code of 1986, as amended.
 
“Confidential Information” has the meaning set forth in Section 7.2(c).
 
“Confidentiality Agreement” means that certain Confidentiality Agreement, dated
as of October 13, 2010, between Insituform and Fyfe Group.
 
“Consent” means any consent, approval, waiver or authorization of a Person,
including any Governmental Approval.
 
“Contract” means any agreement, contract, obligation, promise, or undertaking,
whether written or oral and whether express or implied, that is legally binding.
 
“Control” means the power to direct, or cause the direction of, directly or
indirectly, the management or policies of the specified Person, whether through
the ownership of more than 50% of the voting equity ownership of such Person (or
securities convertible or exchangeable into more than 50% of such voting equity
ownership interest), by Contract or otherwise.
 
“Designated Period” has the meaning set forth in Section 6.3.
 
“DOJ” means the United States Department of Justice.
 
“Ed Fyfe” has the meaning set forth in the preface above.
 
“Effective Date” has the meaning set forth in the preface above.
 
“Employee” means an employee of any North American Company.
 
“Employment Agreement” means a Contract of a North American Company with or
addressed to any current or former Employee pursuant to which any Person has any
actual or contingent Liability or obligation to provide compensation and/or
benefits in consideration for past, present or future services.
 
“Environment” means surface or subsurface soil or strata, surface waters and
sediments, navigable waters, wetlands, groundwater, sediments, drinking water
supply, ambient air, plants, wildlife, animals and natural resources.  The term
also includes indoor air, structures and building materials to the extent
regulated under Environmental Laws.
 
 
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      “Environmental Claim” means a claim or demand by, or notice from, a third
party, including any Governmental Authority, Person or citizens’ group, seeking
a remedy or alleging Liability or responsibility for or with respect to any
Environmental Condition or violation of or Liability under Environmental Law or
Environmental Permits, whether due to negligence, strict Liability or
otherwise.  The term includes administrative investigations, hearings and
proceedings, court actions, arbitrations, orders, notices of violation, notice
of potential responsibility, claims, actions (including contribution actions),
demands and notices by third parties for or with respect to Bodily Injury,
Environmental Property Damage, Cleanup, Cleanup Costs and violations of
Environmental Laws, regardless of whether the claim at issue is false,
fraudulent or has no basis in fact and regardless of whether the party against
who the claim is asserted has a legal or equitable defense to such claim.
 
            “Environmental Condition” means the intentional or unintentional
presence, Release, or Threatened Release of any Hazardous Substances in or into
the Environment.  The term includes the presence of abandoned or closed
containers, tanks or receptacles that contain or formerly contained Hazardous
Substances and exposure or alleged exposure of the Environment, persons, or
property to Hazardous Substances.
 
“Environmental Laws” means any federal, state or local statute, Law, regulation,
rule,  ordinance, guidance document and policy statement dealing with the
pollution or protection of the Environment and natural resources, including
indoor and ambient air, and includes, but is not necessarily limited to CERCLA,
the Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act, 42 U.S.C. § 6901 et seq., the Clean Water Act, 33 U.S.C. § 1251 et
seq., the Clean Air Act, 42 U.S.C. § 7401 et seq., the Toxic Substances Control
Act, 15 U.S.C. § 2601 et seq., the Safe Drinking Water Act, 42 U.S.C. § 300f et
seq., the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001
et seq., the Oil Pollution Act, 33 U.S.C. § 2701 et seq., the Hazardous Material
Transportation Act, 49 U.S.C. § 1801 et seq., and the Occupational Safety and
Health Act, 29 U.S.C. § 651 et seq., as amended.
 
“Environmental Permits” means any authorizations, licenses, permits, plans or
registrations required by or issued pursuant to any Environmental Law by any
Governmental Authority in connection with activities and operations at a
Facility and on any real property.
 
“Environmental Property Damage” means physical damage, injury to or destruction
of tangible real property or personal property or the Environment.
 
“Equity Securities” of any Person means (a) shares of capital stock, limited
liability company interests, partnership interests or other equity securities of
such Person, (b) subscriptions, calls, warrants, options or commitments of any
kind or character relating to, or entitling any Person to purchase or otherwise
acquire, any capital stock, limited liability company interests, partnership
interests or other equity securities of such Person, (c) securities convertible
into or exercisable or exchangeable for shares of capital stock, limited
liability company interests, partnership interests or other equity securities of
such Person, and (d) equity equivalents, interests in the ownership or earnings
of, or equity appreciation, phantom stock or other similar rights of, or with
respect to, such Person.
 
 
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“ERISA” means the United States Employee Retirement Income Security Act of 1974
and the rules and regulations promulgated thereunder, as amended.
 
“ERISA Affiliates” means with respect to any Person, any other Person which is
(or at any relevant time was) a member of a “controlled group of corporations”
with, under “common control” with, or a member of an “affiliated service group”
with, or otherwise required to be aggregated with, such first Person or any of
its subsidiaries as set forth in Section 414(b), (c), (m) or (o) of the Code.
 
“Escrow Agent” means an escrow agent selected by Sellers and approved by
Insituform in its reasonable discretion prior to Closing.
 
“Escrow Agreement” means the Escrow Agreement in a form reasonable acceptable to
the Parties and the Escrow Agent.
 
“Escrow Fund” has the meaning set forth in Section 2.4(a).
 
“Escrowed Purchase Price” has the meaning set forth in Section 2.4(a).
 
“Excluded Assets” has the meaning set forth in Section 2.2.
 
“Excluded Liabilities” has the meaning set forth in Section 2.3(b).
 
“Facility” means buildings, plants and structures owned or leased by a North
American Company.
 
“FCI” has the meaning set forth in the preface above.
 
“FCLP” has the meaning set forth in the preface above.
 
“Fibrwrap Construction Canada” has the meaning set forth in the preface above.
 
“Fibrwrap Europe” has the meaning set forth in Section 2.2(a).
 
“Fibrwrap LatinAmerica” has the meaning set forth in Section 2.2(a).
 
“Fibrwrap South Africa” has the meaning set forth in Section 2.2(a).
 
“Fibrwrap NC” means Fibrwrap Construction N.C., LLC, a Delaware limited
liability company.
 
“Fibrwrap SE” means Fibrwrap Construction S.E., LLC, a Delaware limited
liability company.
 
“Financial Statements” means (a) the combined financial statements of Fyfe Co.,
FCLP, Fibrwrap SE, Fibrwrap NC and Fibrwrap Construction Canada as of December
31, 2010 and the combined statement of operations and statements of owners’
equity and cash flows of such Persons for the year ended December 31, 2010, (b)
any audited balance sheets of the North American Companies as of December 31,
2008, 2009 and 2010 and income statements and statements of cash flows of the
North American Companies  for the three years ended December 31, 2010, (except
to the extent any entity was not in existence or did not prepare financial
statements during the applicable period) together with the notes thereto, and
(c) the unaudited balance sheets of the North American Companies (other than
Fyfe Group and Fyfe Holdings) as of May, 2011 and the income statements of the
North American Companies for the five-month period then ended.  A list of the
Financial Statements is set forth on Schedule 1.3.
 
 
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“Financing Termination Fee” shall have the meaning set forth in Section 10.2(a).
 
“FTC” means the United States Federal Trade Commission.
 
“Foreign Entity” means any Person (a) which is organized, formed or incorporated
in a jurisdiction outside of the United States or Canada, and (b) in which any
Seller or Ed Fyfe holds, directly or indirectly, any interest in the Equity
Securities of such Person.
 
“Fundamental Representation” has the meaning set forth in Section 9.1.
 
“Fyfe BVI” has the meaning set forth in Section 2.2(a).
 
“Fyfe-Carr” has the meaning set forth in the preface above.
 
“Fyfe Co.” means Fyfe Co., LLC, a Delaware limited liability company.
 
“Fyfe Europe” has the meaning set forth in Section 2.2(a).
 
“Fyfe Family Trustees” has the meaning set forth in the preface above.
 
“Fyfe Group” has the meaning set forth in the preface above.
 
“Fyfe Holdings” has the meaning set forth in the preface above.
 
“Fyfe Indemnified Parties” has the meaning set forth in Section 9.3.
 
“Fyfe Irrevocable Trustee” has the meaning set forth in the preface above.
 
“Fyfe Latin America C.V.” has the meaning set forth in Section 2.2(a).
 
“Fyfe LatinAmerica S.A.” has the meaning set forth in Section 2.2(a).
 
“Fyfe Member” has the meaning set forth in the preface above.
 
“GAAP” means accounting principles generally accepted in the United States as in
effect from time to time and consistently applied through the periods involved.
 
“Governmental Approval” means any grant, credit, concession, Permit, ruling,
Order, tariff or rate of, filing or registration with, or declaration, report or
notice to, any Governmental Authority required under any applicable Law
(including any Environmental Permit).
 
 
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“Governmental Authority” means any national, state, regional, county, municipal,
local or foreign court, arbitral tribunal, agency, board, bureau or commission
or other governmental or other regulatory authority or instrumentality.
 
“Hazardous Substances” means any solid, liquid, gaseous or thermal pollutant,
element, chemical, compound, irritant, substance, vapor or waste regulated as a
“contaminant,” “hazardous material,” “hazardous substance,” “hazardous waste” or
“pollutant” under any applicable Environmental Law, including but not
necessarily limited to: explosives, radioactive materials, mold, solid waste,
hazardous waste, asbestos-containing material, polychlorinated biphenyls,
pesticides, lead-based paint, petroleum, petroleum-based products and
constituents thereof, radiation, noise, and any other material, substance or
waste to which liability or standards of conduct may be imposed under any
applicable Environmental Law.
 
“Heath” has the meaning set forth in the preface above.
 
“Heath Carr Trustee” has the meaning set forth in the preface above.
 
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
 
“Income Tax” means any federal, state, local, or foreign income tax measured by
or imposed on net income, including any interest, penalty, or addition thereto,
whether disputed or not.
 
“Income Tax Return” means any return, declaration, report, claim for refund, or
information return or statement relating to Income Taxes, including any schedule
or attachment thereto.
 
“Indemnified Party” has the meaning set forth in Section 9.5(a).
 
“Indemnifying Party” has the meaning set forth in Section 9.5(a).
 
“Indemnity Notice” has the meaning set forth in Section 9.5(f).
 
“Independent Accountant” means a nationally recognized public accounting firm
that does not currently represent any ITI Entity, Seller or Fyfe Member in any
substantial capacity.
 
“Insituform” has the meaning set forth in the preface above.
 
“Intellectual Property” means domain names and rights of any kind available
(including with respect to Technology), under patent, trademark, service mark,
utility model, copyright or trade secret Law or any other statutory provision or
common law doctrine in the United States or other country, irrespective of
whether such rights are registered, and including without limitation,
utilization rights.
 
 
 
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“Inventory” means inventory held for sale and all raw materials, work in process
and finished products, including such as are located at the Facilities and any
of the foregoing located at any third party warehouse or storage location.
 
“IRS” means the United States Internal Revenue Service and, to the extent
relevant, the United States Department of Treasury.
 
“ITI Entities” has the meaning set forth in the preface above.
 
“ITI Indemnified Parties” has the meaning set forth in Section 9.2.
 
“ITI Sub 1” has the meaning set forth in the preface above.
 
“ITI Sub 2” has the meaning set forth in the preface above.
 
“ITI Sub 3” has the meaning set forth in the preface above.
 
“ITI Sub 4” has the meaning set forth in the preface above.
 
“Key Employee” has the meaning set forth in Section 6.8(g).
 
“Know-How” means proprietary trade secrets, formulae, invention records,
specifications, quality control procedures, manufacturing processes and other
know-how.
 
“Knowledge” means, with respect to an individual and a given fact or matter,
that either (i) such individual is actually aware of such fact or matter, or
(ii) a prudent individual in such individual’s position could reasonably be
expected to discover or otherwise become aware of such fact or other matter in
the course of conducting a reasonable investigation concerning the existence of
such fact or matter.
 
“Knowledge” with respect to the ITI Entities for purposes of Section 6.7, shall
mean the Knowledge of Lori Knudson, Roger Damon, Tod O’Donoghue and John Huhn.
 
“Knowledge of Sellers,” “Sellers’ Knowledge,” and similar phrases mean the
Knowledge of any member, shareholder, director or officer of a Seller, including
without limitation Edward R. Fyfe, Heath Carr, Rob Fyfe, Roxine Lukens, Douglas
Trussler and Jason Alexander.
 
 
 “Law” means any federal, state, local or foreign statute, rule, code,
regulation, ordinance, Order, Permit or directive of, or issued by, any
Governmental Authority, including any Environmental Law.
 
“Lease” has the meaning set forth in Section 4.7(b).
 
 
 
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        “Leased Real Property” means the real property and the buildings thereon
which are leased or subleased by a North American Company.
 
“Liability” means any debt, liability or obligation (whether known or unknown,
whether absolute or contingent, whether liquidated or unliquidated, and whether
due or to become due).
 
“Lien” means any mortgage, deed of trust, lien, pledge, claim, charge, security
interest, option, restriction, limitation, easement, title defect or other
adverse claim of ownership or use, or other encumbrance of any kind, character
or description, whether or not of record (including any deposit, conditional or
installment sale, other title retention Contract or capital lease), any lease in
the nature thereof, or any filing of, or agreement to give, any financing
statement.
 
“Material Adverse Effect” or “Material Adverse Change” means any effect or
change that would be materially adverse to (i) the assets, liabilities, results
of operations, business, prospects or condition (financial or otherwise) of the
North American Companies taken as a whole, except any such effect resulting from
or arising in connection with (A) the execution or announcement of this
Agreement, or (B) any change in the financial markets or general economic
conditions generally affecting the industry in which the North American
Companies operate, or (ii) the ability of the Fyfe Members or Sellers to
consummate timely the transactions contemplated hereby.
“New Employment Agreements” means Employment Agreements with each Key Employee
in forms reasonably acceptable to Insituform.
 
“NLRB” means the National Labor Relations Board.
 
“North American Company” means (a) any Seller, and (b) any Person which is
organized, formed or incorporated in a jurisdiction within the United States or
Canada and in which any Seller holds, directly or indirectly, any interest in
the Equity Securities of such Person, including, without limitation, Fyfe Co.,
Fibrwrap NC, Fibrwarp SE and Specialized Fabrics.
 
“North American Subsidiaries” has the meaning set forth in Section 4.1(b).
 
“Order” means any award, decision, injunction, judgment, stipulation, order,
ruling, subpoena, writ, determination, decree, consent decree or verdict
entered, issued, made or rendered by any arbitrator or Governmental Authority.
 
“Ordinary Course of Business” means the ordinary course of business of a Person,
consistent with past custom and practice (including with respect to quantity and
frequency).
 
“Outside Closing Date” has the meaning set forth in Section 10.1(c).
 
“Party” has the meaning set forth in the preface above.
 
 
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“Permit” means any permit, authorization, approval, registration, license,
certificate, exemption, waiver or variance issued or granted by or obtained from
any Governmental Authority.
 
“Permitted Liens” means:  (a) Liens for Taxes and other governmental charges and
assessments which are not yet due and payable or are being contested in good
faith in accordance with applicable Law and for which adequate reserves have
been recognized in the Financial Statements; (b) zoning, entitlement, building,
land use and environmental Laws, ordinances, Orders, decrees, restrictions and
conditions imposed by any Governmental Authority, provided no such Laws are
being violated in any material respect by the current use or occupancy or
ownership of the assets of the North American Companies subject thereto; (c)
other imperfections of title or encumbrances with respect to the assets of the
North American Companies which arise in the Ordinary Course of Business and do
not materially detract from the value of or materially and adversely interfere
with the present use of the assets of the North American Companies subject
thereto or affected thereby; (d) purchase money Liens disclosed to the ITI
Entities and Liens securing rental payments under lease arrangements; (e) Liens
incurred in the Ordinary Course of Business in respect of pledges or deposits
under workers’ compensation, unemployment insurance or social security laws or
similar legislation, carriers, landlord’s, workmen’s, warehousemen’s,
mechanic’s, laborer’s, materialmen’s or other similar Liens, if the obligations
secured by such Liens are not delinquent; (f) Liens specifically reflected or
reserved against in the Financial Statements; (g) Liens occurring as a result of
surety bond obligations that the parties agree will remain in place on the
Closing Date; and (h) such additional Liens as listed on Schedule 1.1.
 
“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, any other business entity or a Governmental
Authority (or any department, agency, or political subdivision thereof).
 
“Personal Property” means all machinery and other mobile and immobile equipment,
tools, tooling, parts, spare parts (whether capitalized or depreciated); supply
and packaging materials, any other supplies, stores, furniture, furnishings,
personal property, vehicles, vessels, computers, materials and all other
tangible personal property.
 
“Post-Closing Period” has the meaning set forth in Section 7.3(b).
 
“Pre-Closing Environmental Liabilities” means any accrued or unaccrued, absolute
or contingent Claim, Liability (whether due to negligence, strict liability or
otherwise), responsibility,  obligation or economic loss arising from or
associated with (i) actual or alleged violations of or Liability under any
existing or former lease or other contract, any Environmental Laws and any
Environmental Permits, (ii) any Environmental Claims, (regardless of when
asserted or initiated), and (iii) any Environmental Conditions at, on, under, or
emanating to or from the Leased Real Property or any real property or assets
formerly owned, leased, occupied or otherwise used for any purpose by a North
American Company or any predecessor and/or the Business; in each case (i)
through (iii) arising from facts, conditions or events first existing or first
occurring on or before the Closing Date, whenever, however and by whomever the
fact, condition, or event giving rise to any such Claim, Liability,
responsibility or obligation is caused, and whether or not the fact, condition,
event, Claim, Liability, responsibility or obligation is, at the time of this
Agreement or the Closing Date, known, suspected or unknown, disclosed or
undisclosed, latent or patent and whether or not arising pursuant to or in
connection with any existing or future Environmental Law or common law.  The
term includes, but is not limited to, any such Claim, Liability, responsibility,
obligation or economic loss arising from or associated with (a) the
transportation, treatment or disposal of Hazardous Substances by or on behalf of
a North American Company at any time at any property; (b) the failure of a North
American Company or its Affiliates to obtain and comply with any Environmental
Permits; and (c) the exposure of the Environment, persons, or any real or
personal property to Hazardous Substances.
 
 
 
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“Pre-Closing Period” has the meaning set forth in Section 7.3(b).
 
“Proceeding” means any Claim, assertion, notice of Claim or assertion,
complaint, action, litigation, suit, proceeding, formal investigation, inquiry,
audit or review of any nature, civil, criminal, regulatory, administrative or
otherwise, or any grievance, arbitration or arbitration demand.
 
“Purchase Price” has the meaning set forth in Section 2.4.
 
“Purchased Assets” means the Sub 1 Assets, the Sub 2 Assets, the Sub 3 Assets
and the Sub 4 Assets.
“RD Installations” has the meaning set forth in the preface above.
 
“Records” means all books, books of account, engineering plans, designs,
documents, records, drawings and similar record-keeping materials, regardless of
the type of medium on which stored.
 
“Regulations” means the final and temporary Treasury Regulations promulgated
under the Code.
 
“Release” means any releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, leaking, dispersing, depositing, injecting, escaping,
leaching, disposing, migrating or dumping into the Environment, whether
intentional or unintentional, foreseen or unforeseen.  The term also includes
the abandonment or discarding of barrels, containers or closed receptacles
containing or previously containing any amount of Hazardous Substances, or
abandonment or speculative accumulation of any Hazardous Substance for recycling
as well as the definition of “disposal” at 42 U.S.C. §6903(3). The term
“Threatened Release” means a substantial likelihood of a Release which warrants
action to prevent a Release or mitigate damage to the Environment which may
result from such Release
 
“Relevant Competition Authorities” means (i) the relevant Governmental Authority
with legal authority to make a decision pursuant to antitrust, competition or
similar laws granting or refusing to consent to any merger or acquisition
falling within its jurisdiction and within whose jurisdiction the transactions
contemplated by this Agreement actually falls, and (ii) the relevant
Governmental Authority in each jurisdiction in which additional mandatory
filings may be required in connection with the transactions contemplated by this
Agreement by reason of a change in legislation after the date of this Agreement.
 
 
 
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“Representatives” has the meaning set forth in Section 6.6(a).
 
“Restricted Period” has the meaning set forth in Section 7.2(a).
 
“Robert Fyfe Trustee” has the meaning set forth in the preface above.
 
“Sellers” has the meaning set forth in the preface above.
 
“Software” means any and all computer programs, whether in source code or object
code; databases and compilations, whether machine readable or otherwise;
descriptions, flow-charts and other work product used to design, plan, organize
and develop any of the foregoing; and all documentation including user manuals
and other training documentation related to any of the foregoing.
 
“Specialized Fabrics” means Specialized Fabrics, LLC, a limited liability
company organized under the laws of the state of Washington.
 
“Standstill Agreement” has the meaning set forth in Section 2.5(d).
 
“Straddle Period” has the meaning set forth in Section 7.3(b).
 
“Sub 1 Assets” has the meaning set forth in Section 2.1(a).
 
“Sub 2 Assets” has the meaning set forth in Section 2.1(b).
 
“Sub 2 Assumed Liabilities” has the meaning set forth in Section 2.3(a).
 
“Sub 3 Assets” means those customer Contracts set forth on Schedule 1.2 and any
other of the Purchased Assets which the ITI Entities identify prior to Closing
will be transferred to ITI Sub 3.
 
“Sub 3 Assumed Liabilities” has the meaning set forth in Section 2.3(a).
 
“Sub 4 Assets” has the meaning set forth in Section 2.1(b).
 
“Sub 4 Assumed Liabilities” has the meaning set forth in Section 2.3(a).
 
“Target Working Capital” has the meaning set forth in Section 2.6(a).
 
“Tax” or “Taxes” means (i) all net income, gross income, gross receipts, sales,
use, ad valorem, franchise, profits, license, lease, service, service use,
withholding, employment, payroll, earnings, net worth, unemployment insurance,
Social Security, Medicare, excise, severance, transfer, value added,
documentary, mortgage, registration, stamp, occupation, real or personal
property, environmental, premium, property, windfall profits, customs, duties
and other taxes, fees, levies, assessments or charges of any kind whatsoever,
together with any interest, penalties, fines and other additions with respect
thereto, imposed by any federal, territorial, state, provincial, local or
foreign government; and (ii) any penalties, interest, fines or other additions
to tax for the failure to collect, withhold, or pay over any of the foregoing,
or to accurately file any Tax Return; and the term “Tax” shall mean any one of
the foregoing Taxes (including, without limitation, any obligation in connection
with a duty to collect, withhold or pay over any Tax, any obligation to
contribute to the payment of any Taxes determined on a consolidated, combined,
or unitary basis, any Liability as a transferee, or any Liability as a result of
any express or implied obligation to indemnify or pay the Tax obligations of
another Person).
 
 
 
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“Tax Reporting Documentation” has the meaning set forth in Section 2.4(c).
 
“Tax Return” means collectively, (i) all reports, declarations, filings,
questionnaires, estimates, returns, information statements and similar documents
relating to, or required to be filed in respect of any Taxes, including, without
limitation, any amendments thereof; and (ii) any statements, returns, reports,
or similar documents required to be filed pursuant to Part III of Subchapter A
of Chapter 61 of the Code or pursuant to any similar income, excise or other Tax
provision of federal, territorial, state, provincial, local or foreign Law,
including, without limitation, any amendments thereof; and the term “Tax Return”
means any one of the foregoing Tax Returns.
 
“Technology” means, collectively, designs, formulae, methods, techniques, ideas,
data, improvements, inventions, Software and Know-How, and all recordings,
graphs, drawings, reports, analyses and other writings embodying any of the
foregoing, in any form whether or not specifically listed herein.
 
“Territory” has the meaning set forth in Section 7.2(a).
 
“Third Party Claim” has the meaning set forth in Section 9.5(a).
 
“Transaction Documents” means this Agreement, the Ancillary Agreements and the
other agreements, instruments and documents delivered or caused to be delivered
in accordance with ARTICLE VIII and such other documents and instruments of
transfer or assignment that are reasonably requested by a Party to carry out the
intent of the Parties hereunder or thereunder.
 
“Transferred Employees” has the meaning set forth in Section 6.8(b).
 
“Transitional Services Agreement” has the meaning set forth in Section 6.9(d).
 
“WARN Act” means the United States Worker Adjustment and Retraining Notification
Act and the rules and regulations promulgated thereunder, as amended.
 
“Working Capital Entities” means Fyfe Co., FCLP, Fibrwrap Construction Canada
and Specialized Fabrics.  
 
 
 
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ARTICLE II
Purchase and Sale of Assets
 
Section 2.1      Purchase of Assets.
 
         (a)    Subject to the terms and conditions of this Agreement, at the
Closing, those Sellers which have any right, title or interest in any of the Sub
1 Assets shall sell, assign, transfer, convey and deliver to ITI Sub 1, free and
clear of all Liens, all of Fyfe Group’s right, title and interest in and to 100%
of the Equity Securities of Fyfe Co (collectively, the “Sub 1 Assets”).
 
(b)    Subject to the terms and conditions of this Agreement, at the Closing
those Sellers set forth below shall sell, assign, transfer, convey and deliver,
free and clear of all Liens and Liabilities, other than Permitted Liens and the
Assumed Liabilities, all right, title and interest in, to and under the
following assets as the same shall exist on the Closing Date (collectively, with
all assets transferred to ITI Sub 2, the “Sub 2 Assets,” and with all assets
transferred to ITI Sub 4, the “Sub 4 Assets”):
 
         (i)     To ITI Sub 2, all of FCI’s right, title and interest in and to
(A) all Intellectual Property and Technology of FCI, and (B) Contracts with
customers of the Business, including without limitation those described on
Schedule 2.2(b)(i) (the “FCI Contracts”), including all rights to receive goods
and services purchased pursuant to such Contracts and to assert claims and take
other actions in respect of breaches or other violations thereof, except to the
extent related to Excluded Assets or Excluded Liabilities;
 
                    (ii)   FCLP shall transfer to ITI Sub 2, and Fibrwrap
Construction Canada shall transfer to ITI Sub 4,  all the properties, assets,
rights, business, claims and Contracts (other than Sub 1 Assets, Sub 3 Assets
and Excluded Assets), of every kind and description, wherever located, real,
personal or mixed, tangible or intangible, of such Sellers as the same shall
exist on the Closing Date, including without limitation the following assets:
 
       (A)           All Facilities and the Leased Real Property;
 
       (B)           All Personal Property;
 
 (C)           All Inventory;
 
                   (D)           Subject to receipt of any required Consent, all
right, title and interest of such Sellers in and under the Contracts of such
Sellers (the “FCLP and Canada Contracts,” and together with the FCI Contracts,
the “Assigned Contracts”), including all rights to receive goods and services
purchased pursuant to such Contracts and to assert claims and take other actions
in respect of breaches or other violations thereof, except to the extent related
to Excluded Assets or Excluded Liabilities;
 
 
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          (E)           All Records (subject in each case to the right of
Sellers to retain copies of same for their use);
 
       (F)           All Intellectual Property;
 
       (G)           All Technology;
 
       (H)           All accounts receivable of Sellers, including intercompany
receivables between a Seller, on the one hand, and any Foreign Entity, on the
other hand, but not including those accounts and notes receivable listed as
Excluded Assets in Section 2.2(i);
 
       (I)            All credits, prepaid expenses, deferred charges, advance
payments and security deposits (other than those relating to Taxes);
 
       (J)            The list of Sellers’ customers and the potential customers
with which any Seller is, as of the Closing, in discussions regarding future
Contracts;
 
       (K)           All sales, promotional, advertising and other literature,
catalogues, price lists and other sales-related materials (in any medium);
 
       (L)           All rights under express or implied warranties from third
parties, except to the extent related to the Excluded Liabilities;
 
       (M)           Subject to the receipt of any required Consent and provided
that the same capable of assignment to ITI Sub 2 or ITI Sub 4, as applicable,
all Governmental Approvals held by Sellers that are used, required or necessary
for the lawful ownership or operation of the Sub 2 Assets or the Sub 4 Assets,
as applicable (including the Governmental Approvals (and applications therefor))
listed on Schedules 4.21(a) and 4.21(c), and the Environmental Permits listed on
Schedule 4.22, and all certifications, registrations and similar rights, if any,
held by Sellers that are capable of assignment and are necessary to allow ITI
Sub 2 or ITI Sub 4, as applicable, to fulfill its obligations under Assigned
Contracts;
 
       (N)           All goodwill; and
 
       (O)           All e-mail addresses, website addresses, domain names and
Internet Universal Resource Locators and all telephone and telecopier numbers
and post office boxes.
 
(c)   Subject to the terms and conditions of this Agreement, at the Closing, RD
Installations and such other Sellers which have any right, title or interest in
any of the Sub 3 Assets shall sell, assign, transfer, convey and deliver to ITI
Sub 3, free and clear of all Liens and Liabilities, other than Permitted Liens
and the Assumed Liabilities, all of its right, title and interest in, to and
under the Sub 3 Assets.  To the extent that any Contracts are included in the
Sub 3 Assets, such Contracts shall be deemed to be “Assigned Contracts.”
 
 
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Section 2.2      Excluded Assets.    Except with respect to the purchase of
Equity Securities in accordance with Section 2.1(a)(i) above, nothing in this
Agreement will constitute or be construed as conferring on the ITI Entities, and
no ITI Entity is acquiring, any right, title or interest in or to any of the
following assets of Sellers (collectively, the “Excluded Assets”):
 
(a)   Any right, title and interest held by any Seller in and to the Equity
Securities of any Person other than Fyfe Co. and Specialized Fabrics, including,
without limitation the Equity Securities of FCI, FCLP, Fibrwrap Construction
Canada, Fibrwrap SE, Fibrwrap NC, Fyfe Holdings, Fibrwrap South Africa (PTY)
LTD, a limited company organized under the laws of South Africa (“Fibrwrap South
Africa”), Fibrwrap Construction Europe Limited, a limited company organized
under the laws of Cypress (“Fibrwrap Europe”), Fibrwrap Construction Latin
America S.A., a company organized under the laws of Panama (“Fibrwrap
LatinAmerica”), Fyfe Company Limited British Virgin Islands, a limited company
organized under the laws of the British Virgin Islands (“Fyfe BVI”), Fyfe
LatinAmerica S.A., a company organized under the laws of Panama (“Fyfe
LatinAmerica S.A.”), Fyfe – Latin America S.A. DE C.V., a company organized
under the laws of El Salvador (“Fyfe Latin America C.V.”), Fyfe Europe S.A., a
company organized under the laws of Greece (“Fyfe Europe”).
 
(b)   Those assets and Contracts set forth on Schedule 2.2(b);
 
(c)   All Cash of Sellers;
 
(d)   Except to the extent expressly provided in Section 6.8(h) and Section
6.8(i), all rights of Sellers under, and all funds and property held in trust
pursuant to, any Benefit Plan maintained or sponsored by a Seller or to which a
Seller makes any contributions;
 
(e)   All insurance policies or insurance coverage of Sellers (or assumed
coverage) and all refunds or proceeds related thereto;
 
(f)   All refunds, rebates or similar payments of Taxes to the extent such Taxes
were paid by or on behalf of any Seller or by Fyfe Group with respect to a North
American Company or Foreign Entity;
 
(g)   All Tax Returns of Sellers;
 
(h)   The organizational documents, the minute and stock record books, the
corporate seals and the accounting, Tax, litigation and insurance Records of
Sellers; and
 
(i)   Any (i) intercompany receivable between a Seller, on the one hand, and any
North American Company, on the other hand, to the extent not otherwise
extinguished prior to Closing pursuant to Section 2.6(a), and (ii) any notes
receivable of Sellers;
 
 
 
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(j)   All other assets of Fyfe Group, FCI, Fyfe Holdings and RD Installations
other than the assets expressly listed in Section 2.1.
 
For the avoidance of doubt, Section 2.1 and Section 2.2 do not list the assets
of Fyfe Co. or Specialized Fabrics, as such assets are retained by such entities
and only the Equity Securities of such entities are transferred to the ITI
Entities.  Fibrwrap Holdings, although listed as a “Seller” for other purposes
of this Agreement, is not conveying any assets to the ITI Entities on the
Closing Date.  No assets of Fibrwrap SE or Fibrwrap NC are being sold pursuant
to Section 2.1.
 
Section 2.3      Liabilities.
 
(a)   Assumed Liabilities. At the Closing, subject to the terms and conditions
of this Agreement, including without limitation, ARTICLE IX of this Agreement,
those Sellers which have any right, title or interest in any Sub 2 Assets shall
assign, and ITI Sub 2 shall assume and agree to pay, perform and discharge: (i)
all Liabilities of Sellers under any Assigned Contract included in the Sub 2
Assets that arise after the Closing Date; and (ii) current Liabilities related
to the Sub 2 Assets to the extent accrued in the Closing Working Capital as
finally determined pursuant to Section 2.6, which shall expressly include,
without limitation, accruals for vacation benefits and bonuses with respect to
Transferred Employees  (collectively, the “Sub 2 Assumed Liabilities”).   At the
Closing, subject to the terms and conditions of this Agreement, including
without limitation, ARTICLE IX of this Agreement, those Sellers which have any
right, title or interest in any Sub 4 Assets shall assign, and ITI Sub 4 shall
assume and agree to pay, perform and discharge: (i) all Liabilities of Sellers
under any Assigned Contract included in the Sub 4 Assets that arise after the
Closing Date; and (ii) current Liabilities related to the Sub 4 Assets to the
extent accrued in the Closing Working Capital as finally determined pursuant to
Section 2.6, which shall expressly include, without limitation, accruals for
vacation benefits and bonuses with respect to Transferred Employees
(collectively, the “Sub 4 Assumed Liabilities”).  At the Closing, subject to the
terms and conditions of this Agreement, including without limitation, ARTICLE IX
of this Agreement, those Sellers which have any right, title or interest in any
Sub 3 Assets shall assign, and ITI Sub 3 shall assume and agree to pay, perform
and discharge (i) all Liabilities of Sellers under any Assigned Contract
included in the Sub 3 Assets that arise after the Closing Date and (ii) current
Liabilities related to the Sub 3 Assets to the extent accrued in the Closing
Working Capital as finally determined pursuant to Section 2.6,  which shall
expressly include, without limitation, accruals for vacation benefits and
bonuses with respect to Transferred Employees (collectively, the “Sub 3 Assumed
Liabilities,” and together with the Sub Assumed Liabilities, the “Assumed
Liabilities”).
 
(b)    Excluded Liabilities.  No ITI Entity nor any of their Affiliates has
agreed to pay, discharge or assume any Liability of Sellers, any of Sellers’
Affiliates or any other Person other than as expressly set forth in this
Agreement and other than with respect to Liabilities of those Affiliates of
Sellers which an ITI Entity acquires through a purchase of Equity
Securities.  Without limiting the generality of the foregoing, except for the
Assumed Liabilities or as otherwise expressly provided for in this Agreement or
by applicable Law, no ITI Entity shall assume, be liable for, or otherwise
become responsible for (i) any Liability of any nature of Sellers or any of
their Affiliates or (ii) any Liability arising from, or in connection with, the
ownership, holding, use or operation by Sellers of the Business of such Sellers
or the Purchased Assets on or prior to the Closing Date (collectively, the
“Excluded Liabilities”), including without limitation:
 
 
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(i)    any intercompany Liability between a Seller, on the one hand, and any
North American Company, on the other hand, to the extent not otherwise
extinguished prior to Closing pursuant to Section 2.6(a);
 
(ii)    any Liability under, with respect to, or in connection with, any
Contract of Sellers or any of their Affiliates other than the Liabilities
assumed under the Assigned Contracts under Section 2.3(a);
 
(iii)    any Liability associated with products sold or manufactured by Sellers
on or prior to the Closing Date and any other Liability relating to events or
circumstances arising on or prior to the Closing Date;
 
          (iv)    any Liability that arises, whether before, on or after, the
Closing Date, out of, or in connection with, the Excluded Assets;
 
(v)    (A) any and all Pre-Closing Environmental Liabilities or any other
Release, act or omission, event or condition set forth on Schedule 4.22, and (B)
any and all other Liabilities, under Environmental Laws, affecting or related in
any way to any portion of, the Facilities, the Leased Real Property or the
Purchased Assets, or any other property or assets related to or used by Sellers,
their Affiliates or any predecessor thereof, whether arising from Releases, acts
or omissions or events or conditions in existence or occurring on or prior to
the Closing Date or arising from Releases, acts or omissions of Sellers or any
of their Affiliates, any respective predecessor thereof, or any of their
respective employees, agents, representatives or contractors, including
Liabilities related to any off-site transportation, treatment, storage or
disposal of Hazardous Substances;
 
(vi)    any Liability in connection with any compensation or benefit obligation
or other Liability relating to events or circumstances arising on or prior to
the Closing Date, including under the WARN Act or other local or state plant
closing Law, in connection with any Employee of Sellers or any other employee,
former employee or independent contractor of Sellers;
 
          (vii)    except for any Liability included in the Sub 3 Assets or
expressly assumed pursuant to Sections 6.8(h) and 6.8(i), any Liability under or
with respect to any Benefit Plan;
 
(viii)    any Liability in connection with any Proceeding that (A) on the
Closing Date is in progress, pending or threatened against or affecting any
North American Company, the Purchased Assets, the Business of the North American
Companies or this Agreement, in each case at law or in equity, by or before any
Governmental Authority or any other Person or (B) arises prior to, on, or
following the Closing Date against or affecting any Seller or the Purchased
Assets at law or in equity, by or before any Governmental Authority or other
Person, to the extent relating to the period on or prior to the Closing Date;
 
 
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(ix)   the outstanding and unaccrued expenses of Sellers at the Closing Date;
 
(x)    any Tax obligation of Sellers to the extent that such obligation relates
to any Tax period or portion thereof ending on or prior to the Closing Date;
 
(xi)    any Tax arising from (A) the ownership of the Purchased Assets, or (B)
the operation and conduct by Sellers of the Business, in each case to the extent
any such Tax relates to any Tax period or portion thereof ending on or prior to
the Closing Date; and
 
(xii)    any Liability under, with respect to, or in connection with, any Tax
sharing agreement of Sellers.
 
For the avoidance of doubt, Section 2.3 does not address the Liabilities of Fyfe
Co. or Specialized Fabrics, as such Liabilities are retained by such entities
and only the Equity Securities of such entities are transferred to the ITI
Entities.
 
Section 2.4   Purchase Price.    The ITI Entities shall pay or deliver the
following to Sellers at the Closing, as adjusted pursuant to Section 2.6 (the
“Purchase Price”):
 
(a)    the sum of Ten Million Dollars ($10,000,000) (the “Escrowed Purchase
Price” or the “Escrow Fund”) to the Escrow Agent pursuant to the terms of the
Escrow Agreement, to be held and disbursed thereafter in accordance with Section
6.12.
 
(b)    the sum of (i) One Hundred Five Million Seven Hundred Eighty-Six Thousand
Dollars ($105,786,000) (the “Base Amount”) by wire transfer of immediately
available federal funds to a bank account designated by Sellers, less (ii) the
aggregate amount of Sellers’ Liabilities (other than Assumed Liabilities) that
are required to be paid to obtain the release of Liens (other than Permitted
Liens) on the Purchased Assets or that are otherwise required to be paid at or
prior to the Closing pursuant to the terms of this Agreement (the “Closing
Pay-Offs”), less (iii) 1/2 of the filing fee for filings made under the HSR Act
pursuant to Section 6.4, and less (iv) an amount for the payment of transaction
bonuses pursuant to Section 6.8(l).  Such Liabilities in subpart (ii) shall be
paid to the appropriate party by the ITI Entities at the Closing as directed in
the letters evidencing the Closing Pay-Offs for such Liabilities, which letters
Sellers agree to deliver to the ITI Entities at least three (3) days prior to
the Closing Date.
 
(c)    Sellers shall provide the ITI Entities and the Escrow Agent with (i) a
certified tax identification number by furnishing an appropriate Form W-9, (ii)
each Seller’s date of acquisition and each Seller’s cost basis of each “Covered
Security” and “Noncovered Security,” within the meaning of Code sections 6045,
6045A and 6045B, acquired by the ITI Entities under the terms of this Agreement,
and (iii) such other forms and documents that the ITI Entities or the Escrow
Agent may reasonably request in connection with Closing (collectively, the “Tax
Reporting Documentation”).  Sellers understand that if such Tax Reporting
Documentation is not provided, the ITI Entities or the Escrow Agent, as
applicable, may be required by the Code to withhold a portion of any payment of
Purchase Price or interest or other income earned on the investment of monies or
other property held by the Escrow Agent pursuant to the terms of the Escrow
Agreement.
 
 
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Section 2.5    Option to Purchase Equity Securities or Assets of Foreign
Entities.
 
                        (a)   For the period beginning on the Effective Date and
ending on the first anniversary of the Effective Date (the “Option Period”), Ed
Fyfe and those Sellers holding, directly or indirectly, any Equity Securities of
the Foreign Entities (the “Foreign Sellers”) hereby grant to the ITI Entities
(or any Affiliate wholly owned directly or indirectly by ITI), to the extent
within the control of Ed Fyfe or the Foreign Sellers, options to elect to
purchase some or all of (i) the Equity Securities of the Foreign Entities held
directly or indirectly by Ed Fyfe and/or the Foreign Sellers and/or (ii) the
assets of the Foreign Entities.  Nothing contained in this Section 2.5 shall
require the ITI Entities to acquire any Equity Securities or assets of any
Foreign Entities and such options shall be exercisable in the sole discretion of
the ITI Entities.  For the purpose of clarification and not for purposes of
limitation of the rights granted to the ITI Entities in this Section, such
options shall include the right to elect to purchase the Equity Securities or
assets of any Foreign Entity and to elect not to purchase the Equity Securities
or assets of any other Foreign Entity as determined by the ITI Entities in their
sole discretion.  During the Option Period, Ed Fyfe and the Foreign Sellers
shall, and shall use commercially reasonable efforts to cause their respective
Affiliates to: (a) cooperate in and facilitate discussions between the ITI
Entities and the other holders of the Equity Securities of the Foreign Entities
with respect to the potential acquisition by the ITI Entities of some or all of
the Equity Securities of the Foreign Entities, the acquisition of some or all of
the assets of the Foreign Entities or such other transactions and agreements
regarding ownership and operation of the Foreign Entities after Closing as shall
be advisable or acceptable to the ITI Entities in their sole discretion; (b)
take all reasonable actions (or decline to take and prevent all actions) as
shall be within their power (including, without limitation, the exercise of all
approval and voting rights held directly or indirectly by Ed Fyfe, the Foreign
Sellers or their Affiliates in any Foreign Entity), to procure full observance
and compliance with this Section, and to secure and maintain for the benefit of
the ITI Entities the rights granted to the ITI Entities in this Section 2.5; and
(c) enter into, or cause a Foreign Entity to enter into, one or more definitive
agreements and such other documents as the ITI Entities shall deem reasonably
necessary transferring the Equity Securities and/or assets of the Foreign
Entities.
 
(b)    Prior to any purchase of the Equity Securities and/or assets of any
Foreign Entity, the ITI Entities shall have completed, and shall be satisfied
with the results of, its due diligence review of such Foreign Entity, in its
sole discretion, and the Parties shall have agreed in good faith on the terms of
the transactions contemplated by this Section 2.5 (including the purchase price
and any requirements for an escrow and a level of working capital or net assets)
as a result of such diligence.
 
 
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(c)    If the ITI Entities elect to exercise an option granted in Section 2.5(a)
to purchase the Equity Securities or assets of any Foreign Entity, then the ITI
Entities shall: (i) deliver written notice of such election (each, an “Election
Notice”) to the Sellers identifying the applicable Equity Securities and/or
assets of the Foreign Entity (the “Acquired Foreign Entity”) with respect to
which such option is exercised, and (ii) the Equity Securities and/or assets
will be transferred to the ITI Entities on a designated date not more than
thirty (30) days after the date of such Election Notice (the “Acquisition Date”)
pursuant to separate purchase agreements containing representations, warranties,
covenants, escrows, indemnities and other terms substantially similar to the
terms set forth in this Agreement.
 
(d)    At Closing, certain Sellers and certain ITI Entities shall enter into a
Standstill Agreement in a form mutually acceptable to the Parties (“Standstill
Agreement”) with respect to the obligation of the ITI Entities to provide
products and certain services to the Foreign Entities following the Closing.
 
Section 2.6  Working Capital Adjustment.
 
                 (a)       “Working Capital” as of a given date means
current assets (excluding Cash and Excluded Assets) less current liabilities
(excluding the Excluded Liabilities), determined in accordance with GAAP
consistent with past practices, and prepared based on the principles set forth
in Schedule 2.6(a).  Prior to the Closing Date, Sellers shall cause all North
American Companies to settle all intercompany receivables and payables which are
owed by and received by the North American Companies.  These intercompany
receivables and payables do not include receivables and payables owned to or by
any Foreign Entities.
 
(b)    The Parties have agreed to a target Working Capital amount for the North
American Companies equal to $16,500,000 (“Target Working Capital”).  Sellers
shall use their best efforts to deliver to the ITI Entities actual consolidated
Working Capital at the close of business on the Closing Date computed in
accordance with the principles set forth on Schedule 2.6(a) (“Closing Working
Capital”) in an amount as close as possible to the Target Working Capital.  No
later than ninety (90) days following the Closing Date, the ITI Entities shall
deliver to Sellers a written report setting forth in reasonable detail the
computation of the Closing Working Capital (the “Closing Working Capital
Report”), prepared by the ITI Entities based on the principles set forth in
Schedule 2.6(a).
 
(c)    If the Closing Working Capital exceeds an amount equal to the Target
Working Capital, then the ITI Entities shall, together with delivery of the
Closing Working Capital Report, remit payment of the amount of such excess by
wire transfer of immediately available funds to the bank account designated by
Sellers.  If the Target Working Capital exceeds the Closing Working Capital,
Sellers shall remit payment of the amount of such deficiency to the ITI Entities
within five (5) Business Days following the earlier of:  (i) Sellers’ approval
of the Closing Working Capital Report, or (ii) issuance of a determination by
the independent accountant in accordance with Section 2.6(g) below.  If the
Sellers do not entirely approve the Closing Working Capital but do agree that
the Target Working Capital exceeds the Closing Working Capital, Sellers shall
notwithstanding remit payment of the undisputed amount of such excess by wire
transfer of immediately available funds to the bank account designated by the
ITI Entities.
 
 
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(d)    The Sellers or a Representative of the Sellers (which shall be a
nationally recognized public accounting firm) shall have the right, upon written
notice to the ITI Entities within thirty (30) days after receipt of the Closing
Working Capital Report, to review the financial books and records related to the
ITI Entity’s Calculation of Closing Working Capital and the preparation of the
Closing Working Capital Report, including all working papers prepared with
respect to the ITI Entities’ calculation of the Closing Working Capital for the
purpose of auditing the calculation.  Sellers and Sellers’ Representative shall
keep confidential such information reviewed as part of Sellers’ exercise of its
audit rights, and such information shall not be used by Sellers for any purpose
other than confirming or evaluating the Closing Working Capital.  Sellers’ costs
of reviewing the books and records shall be borne by the Sellers.
 
(e)    If the Sellers disagree with the ITI Entities’ computation of the Closing
Working Capital, then, within thirty (30) days after receipt of the Closing
Working Capital report, Sellers shall provide the ITI Entities with written
objections and Sellers’ calculation of the Closing Working Capital (“Sellers’
Objections”); provided, however, if the Sellers elect to perform a review
pursuant to Section 2.6(d) above, then Sellers shall provide Sellers’ Objections
within sixty (60) days of the ITI Entities making all financial books and
records available to Seller.  Within thirty (30) days of the ITI Entities’
receipt of Sellers’ Objections, the ITI Entities and Sellers shall promptly
commence good faith negotiations with a view to resolving any such dispute,
which negotiations shall continue for a period of thirty (30) days.  If the ITI
Entities and Sellers are unable to resolve all disputes regarding Closing
Working Capital by mutual consent, such dispute shall be referred to the
Independent Accountant
 
(f)    The ITI Entities and Sellers shall (i) use commercially reasonable
efforts to cause the Independent Accountant to render a timely determination
within sixty (60) days following submission of the dispute to the Independent
Accountant, (ii) cooperate with the Independent Accountant, and (iii) provide
the Independent Accountant with the Closing Working Capital Report, Sellers’
Objections and each party’s working papers and supporting documentation.  The
ITI Entities and Sellers shall instruct the Independent Accountant to base its
determination on Schedule 2.6(a), this Agreement and the information and
documents submitted by each party.
 
(g)    The determination of the Closing Working Capital by the Independent
Accountant shall be (i) prepared in accordance with GAAP and Schedule 2.6(a),
(ii) rendered in writing and delivered to the ITI Entities and Sellers within
sixty (60) days after submission of such dispute or as soon thereafter as
reasonably practicable as determined by the Independent Accountant, (iii) final
and binding upon the ITI Entities and Sellers, and (iv) enforceable in any court
of competent jurisdiction in the United States, in the same manner as an
arbitration award.  The Independent Accountant’s fees, costs and expenses shall
be borne equally by the ITI Entities and Sellers.
 
(h)    Any payment due under this Section 2.6 shall be made by wire transfer of
immediately available funds to the bank account designated by the payee.
 
 
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Section 2.7     Prorations.  With respect to (i) the accrued real property,
personal property and other Taxes, utility and similar payments arising from the
ownership or use of the Purchased Assets, (ii) the accrued rents and other
payments under Assigned Contracts, and (iii) similar accrued items, all as
relating to a Straddle Period, the applicable ITI Entities shall be responsible
for the pro rata portion thereof based upon the number of days in such Straddle
Period following the Closing Date as a percentage of the total number of days in
such Straddle Period.
 
Section 2.8  Allocation of Purchase Price.  Prior to the Closing Date, the
Parties shall agree and shall include, as Schedule 2.8, to be attached hereto,
the principles for allocation of the Purchase Price among the Purchased Assets,
including the assets of Fyfe Co.  Such allocation shall be in accordance with
section 1060 of the Code.  Sellers and the ITI Entities agree following the
Closing Date to promptly finalize the allocation of the Purchase price among the
Purchased Assets and the assets of Fyfe Co, with a separate valuation for the
assets of Fibrwrap Construction Canada, for all Income Tax purposes (including
financial accounting and Tax purposes) in accordance with the principles set
forth on Schedule 2.8.  Except with respect to any subsequent adjustments to the
Purchase Price (which shall be allocated in the same manner for allocating the
Purchase Price as provided in such Schedule 2.8), the ITI Entities and Sellers
covenant to prepare and file their respective Tax Returns in a manner consistent
with such allocation and not to take any position in any Tax Return, or
examination or other administrative or judicial Proceeding relating to any Tax
Return, or for financial accounting purposes that is inconsistent with such
allocation.  The ITI Entities and Sellers each shall file with their federal
Income Tax Returns an appropriate IRS Form 8594 reflecting such allocation.
 
Section 2.9     Closings.  The closing of the transactions contemplated by this
Agreement with respect to the North American Companies (the “Closing”) shall
take place at a location or locations mutually satisfactory to the Parties
commencing at 10:00 a.m. local time (i) on a date mutually agreeable to the ITI
Entities and Sellers that is at least three (3) Business Days but not more than
then (10) Business Days after the ITI Entities have notified Sellers of 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), or
(ii) on such other date as the ITI Entities and Sellers may mutually agree in
writing (the “Closing Date”).
 
Section 2.10   Deliveries and Actions at Closing.  At the Closing,
 
(a)    Sellers will deliver to the ITI Entities the various certificates,
instruments and documents referred to in Section 8.1;
 
(b)    The ITI Entities will deliver to Sellers the various certificates,
instruments and documents referred to in Section 8.2; and
 
(c)    The ITI Entities will deliver to Sellers and the Escrow Agent, as
applicable, the Purchase Price.
 
Section 2.11    Subscriptions to Purchase ITI Common Stock.  On the Effective
Date, Ed Fyfe and Heath Carr have executed subscription agreement in favor of
ITI for their purchase on the Closing Date of common stock of ITI on terms
acceptable to the parties.
 
 
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ARTICLE III
Representations and Warranties of Fyfe Members
 
As of the Effective Date and on the Closing Date, Fyfe Members represent and
warrant to the ITI Entities as follows:
 
Section 3.1     Authorization of Transaction.
 
            (a)   Each Fyfe Member has full power and authority (including full
corporate, limited liability company and limited partnership power and
authority) to execute, deliver and perform its obligations under this Agreement
and the other Transaction Documents.
 
(b)   The execution, delivery and performance of this Agreement and the other
Transactions Documents have been duly authorized by each Fyfe Member. This
Agreement has been duly executed by each Fyfe Member.
 
(c)   This Agreement and each other Transaction Document to which each Fyfe
Member is a party, assuming the due authorization, execution and delivery by
each other Party hereto and thereto, constitutes a valid and legally binding
obligation of Fyfe Members, enforceable in accordance with its terms and
conditions, subject to the effect of any applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance or similar laws affecting
creditors’ rights generally and to general principles of equity, including
concepts of materiality, reasonableness, good faith and fair dealing, regardless
of whether considered in a proceeding in equity or at law.
 
(d)   Except as set forth on Schedule 3.1, Fyfe Members are not required by
applicable Law to give any notice to, make any filing with, or obtain any
Governmental Approval of any Governmental Authority in order to consummate the
transactions contemplated by this Agreement.
 
Section 3.2     Non-contravention.  Except as set forth on Schedule 3.2, neither
the execution and the delivery of this Agreement and the other Transaction
Documents nor the consummation of the transactions contemplated hereby or
thereby, will:
 
(a)   violate any Law;
 
(b)   violate any provision of any Fyfe Members’ articles of organization,
articles of incorporation, limited liability company agreement, bylaws, trust
agreement or other governing or organizational documents, as applicable, or
 
(c)   conflict with, result in a breach of, constitute a default under, result
in the acceleration of, create in any Person the right to accelerate (whether
after the giving of notice or lapse of time or both), terminate, modify or
cancel, or require any notice or Consent under any Contract or Governmental
Approval to which any Fyfe Member is a party or by which any Fyfe Member is
bound.
 
 
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ARTICLE IV
Representations and Warranties of Fyfe Members and Sellers
 
As of the Effective Date and the Closing Date, Fyfe Members and Sellers
represent and warrant to the ITI Entities as follows:
 
Section 4.1    Organization; Related Entities.
 
(a)    Fyfe Group, Fibrwrap SE, Fibrwrap NC and Fyfe Holdings are limited
liability companies duly organized, validly existing and in good standing under
the laws of the State of Delaware.  RD Installations and FCI are corporations
duly organized, validly existing and in good standing under the laws of the
State of California.  FCLP is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of
Delaware.  Specialized Fabrics is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Washington.  Each North American Company is duly organized, validly existing and
in good standing in the jurisdiction set forth beside its name on Schedule
4.1(a).  Except as set forth on Schedule 4.1(a), the North American Companies:
(i) have all requisite organizational power and authority to own, lease and
operate their respective properties and to carry on their respective businesses
as now conducted, and (ii) are duly qualified or authorized to do business and
are in good standing under the laws of each jurisdiction in which the conduct of
their respective businesses or the ownership of their properties requires such
qualification or authorization.
 
(b)    Schedule 4.1(b) sets forth a true, correct and complete list of all North
American Companies who are not also Sellers (collectively, the “North American
Subsidiaries”) and all Foreign Entities.  Schedule 4.1 also sets forth any
Person the Equity Securities of which were owned, directly or indirectly, by any
North American Company that have been dissolved or divested within the 5 year
period prior to the date hereof and the jurisdictions of their incorporation or
organization and date of dissolution or divestiture, as the case may be.  None
of the North American Companies hold any Equity Securities in any Person other
than the North American Companies and the Foreign Entities.  Except as set forth
in Schedule 4.1, Sellers are the direct or indirect owner of all of the issued
and outstanding Equity Securities of the North American Companies and the
Foreign Entities.  All Equity Securities of the North American Subsidiaries are
duly authorized, validly issued, fully paid and nonassessable.  All of the
issued and outstanding Equity Securities of the North American Companies and the
Foreign Entities that are held directly by the Sellers are free and clear of all
Liens and Liabilities.  The North American Companies conduct no business other
than the Business.
 
(c)    To the extent the same are within their possession or control, Sellers
have made available to the ITI Entities copies of all certificates or articles
of incorporation, certificate or articles of organization, bylaws, operating or
limited liability company agreements, partnership agreements and any other
organizational documents of the North American Companies and Foreign Entities as
currently in effect.
 
 
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Section 4.2     Authorization of Transaction.
 
(a)    Sellers have full power and authority (including full limited liability
company power and authority) to execute, deliver and perform their obligations
under this Agreement and the other Transaction Documents.
 
(b)    The execution, delivery and performance of this Agreement and the other
Transactions Documents have been duly authorized by Sellers.  This Agreement has
been duly executed by each applicable Seller.
 
(c)    This Agreement and each other Transaction Document to which Sellers are
or shall be a party, assuming the due authorization, execution and delivery by
each other Party hereto and thereto, constitutes a valid and legally binding
obligation of Sellers, enforceable in accordance with its terms and conditions,
subject to the effect of any applicable bankruptcy, reorganization, insolvency,
moratorium, fraudulent conveyance or similar laws affecting creditors’ rights
generally and to general principles of equity, including concepts of
materiality, reasonableness, good faith and fair dealing, regardless of whether
considered in a proceeding in equity or at law.
 
(d)    Except as set forth on Schedule 4.2, Sellers are not required by
applicable Law to give any notice to, make any filing with, or obtain any
Governmental Approval of any Governmental Authority in order to consummate the
transactions contemplated by this Agreement.
 
Section 4.3  Non-contravention.  Except as set forth on Schedule 4.3, neither
the execution nor the delivery of this Agreement and the other Transaction
Documents to which any  Seller is a party, nor the consummation of the
transactions contemplated hereby or thereby, will:
 
(a)    violate any Law;
 
(b)    violate any provision of any Seller’s articles of organization, articles
of incorporation, limited liability company agreement, bylaws, trust agreement
or other governing or organizational documents;
 
(c)    conflict with, result in a breach of, constitute a default under, result
in the acceleration of, create in any Person the right to accelerate (whether
after the giving of notice or lapse of time or both), terminate, modify or
cancel, or require any notice or Consent under any Contract or Governmental
Approval to which any North American Company is a party or by which any North
American Company is bound or to which any North American Company’s assets are
subject; or
 
(d)    result in the imposition, loss, or creation of a Lien upon, or with
respect to, the Purchased Assets or the assets of any North American Company,
other than Permitted Liens.
 
 
 
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Section 4.4    Subsidiaries and Affiliates.
 
(a)    Schedule 4.4(a) sets forth for each North American Subsidiary and each
Foreign Entity the Equity Securities of which are held directly by the Sellers,
each Person who is a shareholder, member or other holder of any Equity
Securities and the Equity Securities or percentage interest held by such
Person.  Schedule 4.4(a) sets forth to Sellers’ Knowledge for each Foreign
Entity the Equity Securities of which are held indirectly by the Sellers, each
Person who is a shareholder, member or other holder of any Equity Securities and
the Equity Securities or percentage interest held by such Person.  Except as set
forth on Schedule 4.4(a), there are no subscriptions, calls, warrants, options
or commitments of any kind or character relating to, or entitling any Person to
purchase or otherwise acquire, any capital stock or other Equity Securities of
any North American Subsidiary, and to Sellers’ Knowledge, any Foreign
Entity.  Except as set forth on Schedule 4.4(a), there are no commitments or
agreements providing for (i) the issuance of additional Equity Securities of any
North American Subsidiary and, to Sellers’ Knowledge, any Foreign Entity, or
(ii) the repurchase or redemption of Equity Securities of a North American
Subsidiary or, to Sellers’ Knowledge, a Foreign Entity.  There are no agreements
of any kind that may obligate a North American Subsidiary, or to Sellers’
Knowledge a Foreign Entity, to issue, purchase, register for sale, redeem or
otherwise acquire any Equity Securities of such North American Subsidiary or
Foreign Entity.  Except as set forth on Schedule 4.4(a), there are no voting
trusts, partner or member agreements, proxies or other agreements in effect to
which any North American Company,  or to Sellers’ Knowledge any Foreign Entity,
is a party or by which any of them may be bound with respect to the voting or
transfer of Equity Securities of a North American Subsidiary or Foreign Entity.
 
(b)    Except as set forth in Schedule 4.1, no North American Company owns of
record or beneficially any Equity Securities of any Person or any right
(contingent or otherwise) to acquire the same.
 
(c)    Except as set forth in Schedule 4.4(c), no Seller, North American Company
or to Sellers’ Knowledge, Foreign Entity, is a member of or participant in (nor
are any part of their respective businesses conducted through) any joint venture
or similar arrangement.  With respect to any joint venture or similar
arrangement listed on Schedule 4.4(c), copies of all agreements or other
documents in Sellers’ or Fyfe Members’ possession or control governing such
joint venture or arrangement have been provided or made available to the ITI
Entities and, to Sellers’ Knowledge, such agreements and documents are accurate
and complete as of the date hereof.
 
Section 4.5  Sufficiency of Assets.  Except as disclosed on Schedule 4.5, the
Purchased Assets constitute all of the material assets used or held for use by
Sellers, and no other assets are necessary to operate or conduct the Business of
the North American Companies as currently conducted.
 
 
 
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Section 4.6     Certain Assets.
 
(a)    Except as set forth in Schedule 4.6(a), the North American Companies own,
lease or have the legal right to use all their respective assets, whether owned
or leased, including but not limited to any and all buildings, plants,
structures, equipment and other tangible assets necessary for the continued
conduct of the Business of the North American Companies after the Closing in
substantially the same manner as conducted prior to the Closing.
 
(b)    With respect to each Assigned Contract, Sellers enjoy the right to the
benefits of such Assigned Contract in accordance with its terms. Sellers own and
have good and marketable title to the Purchased Assets, free and clear of all
Liens, except for Permitted Liens.  Fyfe Co. and Specialized Fabrics own and
have good and marketable title to their assets, free and clear of all Liens,
except for Permitted Liens.
 
(c)    Subject to obtaining required Consents set forth on Schedule 4.6(c),
Sellers have the full right to convey, transfer, assign and deliver the
Purchased Assets as provided herein. Without limiting the generality of the
foregoing, Sellers (A) have not granted, or agreed to grant, (1) any ownership
interest or right in, or with respect to, any Purchased Asset or (2) any right
to acquire or receive any Purchased Asset or any interest or right therein or
with respect thereto, and (B) are not a party to, or bound by, any Contract,
other than the Transaction Documents, affecting or relating to a right to
transfer any Purchased Asset (or any interest or right therein or with respect
thereto) that, in the case of either of foregoing clause (A) or (B), have had,
or could reasonably be expected to result in, a Material Adverse Effect on the
ability of the ITI Entities to utilize the Purchased Assets as contemplated by
this Agreement and the other Transaction Documents.
 
(d)    At the Closing, Sellers shall transfer and deliver to the ITI Entities
the interests and rights of Sellers in all Purchased Assets (other than with
respect to the Assigned Contracts requiring any required Consent), free and
clear of any Lien, except for Permitted Liens.
 
(e)    Schedule 4.6(e) sets forth a true, correct and complete list of all
Facilities and all Personal Property with a value in excess of $10,000 of the
North American Companies.
 
(f)    Except as set forth on Schedule 4.6(f), the Facilities and all Personal
Property of the North American Companies are in good operating condition and
repair, subject to ordinary wear and tear.
 
(g)    Except for the leases set forth on Schedule 4.6(g), none of the assets
described on Schedule 4.6(e) are subject to any material Contract pursuant to
which any North American Company or any another Person is a lessee or lessor of,
or holds, manages or operates, any Purchased Asset.
 
Section 4.7  Real Property.  Except as set forth on Schedule 4.7,
 
(a)    No North American Company currently owns any fee ownership interest in
any real property.  Except as set forth on Schedule 4.7(a), no North American
Subsidiary has owned any fee ownership interest in any real property in the past
10 years.
 
 
 
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(b)    All of the Leased Real Property of the North American Companies is
described on Schedule 4.6(g).  Schedule 4.6(g) sets forth a true and correct
description of all leases and subleases with respect to such Leased Real
Property (“Lease”) and the interest of a North American Company in such Leased
Real Property.  Except as set forth on Schedule 4.7(b), no North American
Company occupies any real estate other than the Leased Real Property.  No North
American Company has any interest in the Leased Real Property other than as set
forth on Schedule 4.6(g).  No party other than a North American Company uses or
occupies any part of the Leased Real Property.  Each Lease grants the North
American Companies the current right of occupancy or use of the Leased Real
Property and each Lease is legal, valid, binding, enforceable and in full force
and effect.
 
(c)    There is no pending or, to the Knowledge of Sellers, threatened
Proceeding against a North American Company or any other party that could
materially adversely affect (i) the interest of a North American Company in any
of the Leased Real Property, (ii) the use, occupancy or operation of the Leased
Real Property by a North American Company, the Leased Real Property or any
portion thereof, or (iii) the value or utility of any Facility or any portion
thereof, including without limitation, in eminent domain, for rezoning or
otherwise.
 
(d)    The use and occupancy of the Leased Real Property by a North American
Company comply in all material respects with all Laws, including without
limitation the Americans with Disabilities Act, and all private covenants and
indentures and Contracts affecting such Leased Real Property, and no North
American Company has received any written notice that any of the Leased Real
Property does not so comply.  To the Knowledge of Sellers, the use and occupancy
of the Leased Real Property by the North American Companies is permitted by Laws
and all material private covenants and indentures and Contracts affecting such
Leased Real Property or a North American Company.  To the Knowledge of Sellers,
the North American Companies’ use or occupancy of the Leased Real Property or
any portion thereof and the operation of the Business of the North American
Companies as currently conducted is not dependent on a “permitted non-conforming
use” or “permitted nonconforming structure” or similar variance, exemption or
approval from any Governmental Authority.
 
(e)    To the Knowledge of Sellers, there is no public improvement or special
assessment affecting, or that could affect, the Leased Real Property, or any
portion thereof that is or could be payable by any North American Company.
 
(f)    To the Knowledge of Sellers, the North American Companies have rightful
access and rights of ingress and egress to and from all of the Leased Real
Property as is necessary to conduct the Business, including to and from each
Facility.
 
(g)    To the Knowledge of Sellers, there is no commitment or agreement with any
Governmental Authority or public or private utility with respect to any of the
Leased Real Property or any portion of the foregoing that has not been disclosed
in writing by Sellers to the ITI Entities.
 
 
 
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(h)    To the Knowledge of Sellers, the Leased Real Property and all
improvements, buildings, structures, fixtures, building systems and equipment
(including the mechanical, plumbing, heating, sprinkler and fire suppression,
electrical and air conditioning systems), and all components thereof, are in
good condition and repair and sufficient for the operation of their Business and
there are no defects in any of the foregoing.  To the Knowledge of Sellers,
there is no defect or condition of the soil that could materially impair the
operation or structural integrity of the Facilities or any portion thereof.
 
(i)    To the Knowledge of Sellers, all water, oil, gas, electrical, steam,
compressed air, telecommunications, sewer, storm and waste water systems and
other utility services or systems for the Leased Real Property and the current
operations of the North American Companies are connected to the improvements and
Facilities and are operational and sufficient for the operation of their
Business as currently conducted thereon.
 
(j)    To the Knowledge of Sellers, the Facilities and other improvements on the
Leased Real Properties are located wholly within the boundaries of the Leased
Real Property and no part thereof encroaches onto any adjoining land.
 
(k)    To the Knowledge of Sellers, there are no improvements, fixtures,
buildings, structures or fences that are not included as part of the Facilities
that are located within or encroach upon the Leased Real Property.
 
(l)    The North American Company identified in Schedule 4.6(g) as the lessee of
such parcel of Leased Real Property has good and marketable leasehold title to
the Leased Real Property, free and clear of all Liens, other than Permitted
Liens, and to Sellers’ Knowledge, there are no outstanding options, rights of
first offer or rights of first refusal to purchase such Leased Real Property or
any portion thereof or interest therein.
 
(m)    All accounts for work and services performed and materials provided or
furnished upon or in respect of the Leased Real Property have been fully paid
and satisfied and no Person is entitled to claim a Lien against the Leased Real
Property or any part thereof.  Except as set forth on Schedule 4.7(m),
no material alteration, repair, improvement or other work has been ordered,
directed or requested in writing to be done or performed to or in respect of the
Leased Real Property or any Facility which (i) has not been completed and (ii)
is not in the Ordinary Course of Business.  
 
(n)    There is no default under any Lease by any North American Company, or to
the Knowledge of Sellers, any other party thereto, and to the Knowledge of
Sellers there is no dispute or event that with the passage of time or giving of
notice would be a default under any Lease by any party thereto.
 
(o)    Except as set forth on Schedule 4.7(o), neither the execution and
performance of this Agreement nor the transfer or conveyance of any rights to
the Leased Real Property requires the Consent of any other party, including
without limitation, any landlord or lender.  Subject to obtaining all required
Consents set forth on Schedule 4.7(j), neither the execution and performance of
this Agreement nor the transfer or conveyance of any rights to the Leased Real
Property will result in a breach of or default under such Lease or any other
agreement or Law affecting such Leased Real Property, or the loss of a North
American Company’s right or ability to use or occupy such Leased Real
Property.  No security deposit or portion thereof deposited with respect to such
Lease has been applied in respect of a breach or default under such Lease which
has not been redeposited in full.
 
 
 
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(p)    The North American Companies do not owe, and will not owe in the future,
any brokerage commissions or finder’s fees with respect to any Lease, and do not
owe and will not owe in the future any sums or reimbursements for any
improvements or allowances under any Lease.
 
(q)    Except as set forth on Schedule 4.7(q), no landlord under any Lease is an
Affiliate of any North American Company.
 
(r)    None of the North American Companies have pledged, mortgaged,
hypothecated, assigned, sublet, transferred, or granted any interest in any
Lease or Sublease, or any Leased Real Property or any of the improvements
thereon.
 
Section 4.8  Material Contracts.
 
(a)    Except for Contracts listed on Schedule 4.8, there is no Contract to
which a North American Company is a Party which is:
 
                     (i)     a Contract with any labor union or association;
 
         (ii)     a note, loan, credit agreement or other Contract relating to
the borrowing of money (including derivative or hedging instruments) by a North
American Company or to the direct or indirect guarantee or assumption by a North
American Company of the obligation of any other Person of more than $50,000;
 
                     (iii)       a Contract involving future payment for goods
or services by a North American Company of more than $50,000 annually;
 
                           (iv)       a Contract involving the obligation of a
North American Company to deliver in the future goods or services for payment of
more than $50,000 annually;
 
         (v)     a Contract evidencing any Lien on any of the assets owned by a
North American Company, other than the Permitted Liens;
 
         (vi)    an executory Contract for the sale of any of the assets owned
by a North American Company other than Inventory in the Ordinary Course of
Business or for the grant to any Person of any preferential rights to purchase
any of the assets owned by a North American Company other than Inventory in the
Ordinary Course of Business;
 
 
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             (vii)         a Contract relating to a licensing arrangement or
sharing of proprietary information involving a North American Company outside of
the Ordinary Course of Business;
 
                (viii)        a Contract containing covenants of a North
American Company not to compete in any line of business or with any Person in
any geographical area or not to solicit or hire any Person with respect to
employment or covenants of any other Person not to compete with any North
American Company in any line of business or in any geographical area or not to
solicit or hire any Person with respect to employment;
 
          (ix)       a Contract relating to the acquisition (by merger, purchase
of Equity Securities or assets or otherwise) by a North American Company
(excluding goods and services acquired in the Ordinary Course of Business) of
any other Person or of another Person’s operating business or material assets;
 
          (x)     a Contract relating to the sale or divestiture within the five
year period prior to the date hereof of any Affiliate or subsidiary of a North
American Company (by dissolution, merger, sale of stock or all or substantially
all assets or otherwise); or
 
              (xi)            a Tax sharing agreement.
 
(b)    Except as set forth on Schedule 4.8, each Contract (i) constitutes a
valid and binding obligation of the North American Company thereto, (ii) is in
full force and effect and (iii) is not terminable by the other party thereto by
reason of the transaction contemplated by this Agreement.  Neither a North
American Company, nor to Sellers’ Knowledge, any third party, is in default
under any Contract.
 
Section 4.9  Intellectual Property and Technology.
 
(a)    Schedule 4.9(a) sets forth an accurate and complete list, as of the date
of this Agreement, of all registered Intellectual Property used in the Business
of the North American Companies as well as applications for registration of
Intellectual Property, including, without limitation, all Intellectual Property
used in the Business owned by Ed Fyfe.  The Intellectual Property on Schedule
4.9(a) is adequate for the conduct of the business of the North American
Companies as conducted on the date hereof.  Except as set forth on Schedule
4.9(a), (i) all registrations for Intellectual Property are valid and in full
force and effect and subsisting, and, to Sellers’ Knowledge, there is no
information, materials, facts or circumstances, including any information or
fact that would constitute prior art, or would adversely affect any pending
application for any Intellectual Property; (ii) the Intellectual Property will
not cease to be valid and in full force and effect by reason of the execution,
delivery and performance of this Agreement or any related document or the
consummation of the transactions contemplated hereby and thereby; and (iii) all
registration, issue, maintenance and renewal fees for any Intellectual Property
are fully paid for the appropriate period in time, up to and including the
Effective Date. All steps have been taken to maintain the registrations or to
pursue applications for registration, including filing all necessary documents
and certificates with the appropriate Governmental Authority in the respective
jurisdictions for the purpose of maintaining the Intellectual Property and there
are no outstanding challenges of any nature by any Person to any of the
Intellectual Property. No North American Company has misrepresented, or failed
to disclose, any fact or circumstance in any application for any Intellectual
Property that would constitute fraud or a misrepresentation with respect to such
application that would affect the validity or enforceability of such
application.
 
 
 
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(b)    Except as set forth on Schedule 4.9(b), Sellers have the sole and
exclusive right, title and interest in and to, or have valid and continuing
rights to use and sell to the ITI Entities, all of their Intellectual Property
and Technology, free and clear of all Liens (other than Permitted Liens).  The
North American Subsidiaries each have the sole and exclusive right, title and
interest in and to, or have valid and continuing rights to use, all of their
respective Intellectual Property and Technology, free and clear of all Liens
(other than Permitted Liens).
 
(c)    Except as set forth in in Schedule 4.9(c), (i) there is no action, suit,
proceeding, investigation, notice or complaint pending or, to the Knowledge of
Sellers, threatened, by any Person before any court or tribunal relating to any
Technology or Intellectual Property, nor has any claim or demand been made to
the North American Companies that (A) challenges the validity, enforceability,
use or ownership of any Technology or Intellectual Property or (B) alleges that
any use of the Intellectual Property or Technology infringes or otherwise
violates any Person’s right in or to its own intellectual property, nor, to
Sellers’ Knowledge, is there any basis for any such claim or demand; (ii) to
Sellers’ Knowledge, the Intellectual Property and Technology does not infringe
the rights of any Person; and (iii) to Sellers’ Knowledge, no Person is
infringing any of the Intellectual Property or Technology.
 
(d)    At the Closing, Sellers will convey to the ITI Entities the sole and
exclusive right, title and interest in and to, or the valid and continuing
rights to use, sell and license, all of the Intellectual Property and Technology
of Sellers.
 
(e)    Schedule 4.9(e) sets forth a complete and accurate list of: (a) all
agreements pursuant to which the North American Companies have licensed or
granted any right to use any of the Intellectual Property or Technology to a
third party for any purpose; and (b) all agreements pursuant to which any North
American Company receives a license from any third party of any intellectual
property rights or technology (excluding off-the-shelf Software and other
off-the-shelf Technology acquired by the North American Companies in the
Ordinary Course of Business).  Except as set forth on Schedule 4.9(e) and to the
Knowledge of Sellers, the consummation of the transactions contemplated by this
Agreement will not give rise to a right of any counterparty to terminate or
limit the rights of the North American Companies, or the ITI Entities with
respect to any Intellectual Property and/or Technology.  Except as set forth on
Schedule 4.9(e), the North American Companies are not required to pay any
royalties or other compensation to any third parties in respect to their
ownership or use of any third-party intellectual property, other than payments
in the ordinary course of business for so-called “off-the-shelf” products or
“shrink wrap” software.  The North American Companies are in compliance with all
of their obligations pursuant to any license or agreement relating to use of any
intellectual property owned by a third party.
 
 
 
 
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(f)    The North American Companies have taken reasonable measures, consistent
with practices in their industry, to protect the confidentiality of all trade
secrets included in the Intellectual Property and Technology.  Except for
disclosures made to customers, clients, partners, co-owners, prospects,
accountants and attorneys or agents who are all under obligations not to
disclose the information, no North American Company has disclosed or provided to
any Person (other than an employee under enforceable obligations of confidence)
any confidential or secret material concerning the Intellectual Property or
Technology.
 
(g)    Fibrwrap SE and Fiberwrap NC own no Intellectual Property or Technology
used in the Business.
 
Section 4.10   Inventories.  All of the Inventory of the North American
Companies, whether raw materials, work in process, finished products or supply
and packaging materials, are usable or saleable in the Ordinary Course of
Business without discount from the stated value on the Financial Statements of
the North American Companies. None of the Inventory is obsolete, damaged or
defective, subject only to the reserve for Inventory write-off set forth in the
Financial Statements or any notes thereto, as adjusted for the passage of time
through the Closing Date in accordance with the past custom and practice of the
North American Companies.  Such Inventory is fairly reflected in all material
respects in the Financial Statements of the North American Companies, including
all appropriate reserves, and except as set forth in Schedule 4.10, the
Inventory has been valued at the lower of cost or market.  At the Closing, the
Inventory will be at levels sufficient for the ITI Entities to conduct the
Business of the North American Companies in the Ordinary Course of Business,
consistent with past practice.
 
Section 4.11   Customers and Suppliers.

 
(a)    Schedule 4.11(a) sets forth a list of the 20 largest customers and the 20
largest suppliers of the North American Companies, as measured by the dollar
amount of purchases therefrom or thereby, during the year ended December 31,
2010.
 
(b)    Except as set forth on Schedule 4.11(b), no North American Company is
engaged in any material dispute with any customer or supplier and, to the
Knowledge of Sellers, no customer or supplier representing revenues in excess of
$100,000 per year or expenses in excess of $100,000 per year to the North
American Companies has indicated that it intends to terminate any Contract, not
renew any Contract that provides for automatic renewal, materially reduce its
future purchases from or sales to a North American Company or otherwise
adversely modify its arrangements with a North American Company.
 
Section 4.12   Warranties.

 
(a)    Except as set forth on Schedule 4.12(a), no material warranty or similar
Claim is currently pending against a North American Company.
 
 
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        (b)    Except as set forth in Schedule 4.12(b), no material amount of
goods manufactured, sold and delivered within the past three years by a North
American Company has failed to be in conformity in all material respects with
all product specifications and warranties provided to customers thereof.
 
    Section 4.13    Compliance with Anti-Corruption Laws.
 
        (a)    The North American Companies and, to Sellers’ Knowledge, the
Foreign Entities, and each of their respective owners, members, officers,
directors, managers, employees, and agents thereof:
 
               (i)    have complied with:  (A) the provisions of the U.S.
Foreign Corrupt Practices Act as if its foreign payments provisions were fully
applicable to the North American Companies and the Foreign Entities and such
owners, members, officers, directors, managers, employees, and agents, and (B)
the provisions of the anti-corruption laws of each jurisdiction in which a North
American Company, a Foreign Entity or any agent of a North American Company or a
Foreign Entity is conducting or has conducted its business;
 
                (ii)   specifically, the North American Companies and, to
Sellers’ Knowledge, the Foreign Entities, and each of their respective owners,
members, officers, directors, managers, employees, or agents have not paid,
offered or promised to pay, or authorized or ratified the payment directly or
indirectly, of any monies or anything of value to any national, provincial,
municipal, or other government official or employee or any political party or
candidate for political office for the purpose of influencing any act or
decision of such official or of the government to obtain or retain business, or
direct business to any Person or to secure any other improper benefit or
advantage (any such payment is a “Prohibited Payment”).  For purposes of this
provision, an “official or employee” includes any official or employee of any
directly or indirectly government-owned or government-controlled entity, and any
officer or employee of a public international organization, as well as any
person acting in an official capacity for or on behalf of any such government or
department, agency, or instrumentality, or for or on behalf of any such public
international organization.  A Prohibited Payment does not include modest
facilitating payments to low-level government employees for the purpose of
expediting or securing a routine administrative action ordinarily performed by
such employees, provided the recipient of such service or action is entitled to
receive such service or action, and the payment is customary and appropriate in
the jurisdiction where made; and
 
                 (iii)    has made and kept books, Records, and accounts that,
in reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of such North American Company or Foreign Entity, as
applicable, and has devised and maintained a system of internal accounting
controls sufficient to provide reasonable assurances that: (A) transactions are
executed in accordance with management’s general or specific authorization; (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles or any
other criteria applicable to such statements, and to maintain accountability for
assets; (C) access to assets is permitted only in accordance with management’s
general or specific authorization; and (D) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
 
 
 
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Section 4.14   Financial Information.  Complete and accurate copies of the
Financial Statements have been provided to the ITI Entities and are listed on
Schedule 1.3.  Except as set forth on Schedule 4.14, the Financial Statements
have been prepared in accordance with GAAP, accurately reflect the books and
Records of the North American Companies in all material respects and present
fairly the financial condition of the North American Companies as of the dates
and for the periods set forth therein, except with respect to the unaudited
Financial Statements for the absence of footnote disclosures required by GAAP
and subject to customary year end adjustments. Fyfe Group and Fyfe Holdings do
not own or hold any assets of the Business other than Equity Securities of
certain North American Companies and Foreign Entities.
 
Section 4.15   Absence of Certain Changes; Conduct of Business.  Since May 31,
2011, the Business has been conducted by the North American Companies in the
Ordinary Course of Business and there has not been any Material Adverse Change.
Except as set forth on Schedule 4.15, since May 31, 2011, the North American
Companies have not:
 
(a)    failed to duly comply in all material respects with all applicable Laws
and Governmental Approvals, including all Environmental Laws, applicable to the
Business of the North American Companies;
 
(b)    failed to maintain and repair any assets of the North American Companies
(including the making of scheduled capital expenditures) in the Ordinary Course
of Business and consistent with past practice;
 
(c)    created any new Lien on any of the assets of the North American
Companies, other than Permitted Liens;
 
(d)    except in the Ordinary Course of Business, waived or released any
material right;
 
(e)    except as required by Law, this Agreement or any Benefit Plan disclosed
on Schedule 4.18, (i) granted any severance or termination pay to any Employee
of the North American Companies, (ii) entered into any Employment Agreement (or
any amendment to any such existing agreement) with any Employee of the North
American Companies, (iii) increased benefits payable under or, except as
expressly required or permitted by this Agreement, conditions concerning
eligibility to receive benefits under any existing severance or termination pay
policies or employment agreements with respect to any Employee of the North
American Companies, (iv) established, amended or terminated any Benefit Plan, or
(v) increased compensation, bonus or other benefits payable to any Employee of
the North American Companies, other than, in the case of clauses (i) through (v)
above, in the Ordinary Course of Business;
 
 
 
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(f)    sold, assigned or otherwise transferred, or agreed to sell, assign or
otherwise transfer, any of the assets owned by a North American Company, or any
of the North American Companies’ interests therein (except for sales of
Inventory in the Ordinary Course of Business);
 
(g)    made any change in any accounting principle or costing methodology with
respect to the assets owned by any North American Company or the Business of the
North American Companies, except to the extent required by GAAP;
 
(h)    made any Tax election or settled or compromised (or agreed to settle or
compromise) any Liability for Taxes that would reasonably be expected to
materially and adversely affect a North American Company, the Business of the
North American Companies or the Purchased Assets after the Closing;
 
(i)    committed to make a capital expenditure or other addition or improvement
to property, buildings and equipment, in each case that is anticipated to have
an outstanding balance in excess of $100,000;
 
(j)    settled any Proceedings involving payment of more than $100,000;
 
(k)    suffered any damage, destruction or other casualty loss (whether or not
covered by insurance) which, individually or in the aggregate, has had, or could
reasonably be expected to result in, a Material Adverse Effect; or
 
(l)    written off any accounts receivable of a North American Company without
adequate consideration.
 
Section 4.16   Employees.  Schedule 4.16 sets forth a correct and complete list
of each current Employee of a North American Company and such Employee’s name,
title, position, hire date, salary or wage rate, target bonus amount and work
location.  In addition, Schedule 4.16 includes any Employee or former Employee
of a North American Company who, in the past ninety days, has been laid off or
whose employment has otherwise ended, or whose hours have been reduced by more
than 25% compared to the average hours worked by such Employee or former
Employee during the six (6) months prior to the diminution of hours.  For each
such Employee or former Employee encompassed within the second sentence of this
Section 4.16, Schedule 4.16 includes the date of any layoff, ending of
employment, or diminution of hours, and the reason(s) therefor.
 
Section 4.17   Labor Issues.  Except as set forth on Schedule 4.17, there is no
strike, work stoppage, walkout, handbilling, bannering, picketing or, to the
Knowledge of Sellers, work slowdown or other “concerted action” involving any
Employee. Schedule 4.17 sets forth all union, labor organization or collective
bargaining representative, whether or not certified by the NLRB or any other
U.S. government agency, representing any Employees of the North American
Companies and the applicable geographic locations associated therewith.  Except
as set forth on Schedule 4.17, to the Knowledge of Sellers, no representation
election petition has been filed by any Employee or is pending with the NLRB or
other government agency, and no union organizing campaign involving or affecting
any Employee has
 
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occurred, is in progress or is threatened.  No unfair labor practice charge (or
litigation alleging such claim) has been filed or, to the Knowledge of Sellers,
is threatened or is presently pending against a North American
Company.  No administrative charge has been filed or, to the Knowledge of
Sellers, is threatened or is pending alleging any violation of any Laws relating
to labor or employment practices, including but not limited to charges of
discrimination or complaints of alleged violations of wage and hour, plant
closing, occupational safety and health, immigration, workers’ compensation, or
employee leave laws.  No North American Company has taken any action that could
constitute a “mass layoff” or “plant closing” within the meaning of the WARN Act
or that could otherwise trigger any notice requirement or material Liability
under any local or state plant closing notice Law with respect to the Business
of the North American Companies, and no such actions are contemplated.  Except
as set forth in Schedule 4.17, there is no Employment Agreement between (i) a
North American Company and (ii) any Employee. Except as set forth in Schedule
4.17, the North American Companies, with respect to the Employees, have complied
and are in compliance in all material respects with all Laws relating to labor
and employment practices, including all Laws relating to terms and conditions of
employment, wages, hours, minimum wages, overtime, employee leave, collective
bargaining, workers’ compensation, occupational safety and health, equal
employment opportunity and immigration.
 
Section 4.18   Benefit Plans.

 
(a)    Schedule 4.18 contains a complete list of all Benefit Plans of the North
American Companies and their ERISA Affiliates.  
 
(b)     Except as set forth on Schedule 4.18:
 
          (i)   No North American Company maintains or has ever maintained,
contributed to or has had an obligation to contribute to a Benefit Plan that is
a defined benefit plan, as defined in Section 3(35) of ERISA, a plan subject to
Title IV of ERISA or Section 412 of the Code, or a multiple employer plan as
described in Section 210(a) of ERISA;
 
                  (ii)   No North American Company nor any of their ERISA
Affiliates has ever contributed to, withdrawn in a partial or complete
withdrawal from, or had an obligation to contribute to any “multiemployer plan”
as defined in Section 4001(a)(3) or Section 3(37) of ERISA or has any fixed or
contingent Liability under Section 4204 of ERISA with respect to any of their
current or former employee, except for any withdrawal with respect to which
there was no withdrawal liability or to the extent that withdrawal liability has
been reflected on the Financial Statements;
 
 
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          (iii)   Each Benefit Plan of the North American Companies has been
maintained, operated and administered in compliance in all material respects
with its terms and all applicable Law, including ERISA and the Code;
 
            (iv)   The IRS has issued and not revoked a favorable determination
and/or opinion letter (as applicable) with respect to each Benefit Plan, and
each related trust agreement, annuity contract or other funding instrument,
which is intended to be qualified and tax-exempt under the provisions of Code
Sections 401(a) or 501(a), and each such Benefit Plan and related agreement,
contract or instrument has been so qualified during the period from its adoption
to the Closing Date and to Sellers’ Knowledge, no fact or circumstance exists
that could adversely affect the qualified status of any such Benefit Plan;
 
            (v)   As of and including the Closing Date, the North American
Companies shall have made all contributions and payments required to be made up
to and including the Closing Date with respect to each Benefit Plan or shall
have accrued such contribution and payments in the Financial Statements;
 
            (vi)   No North American Company or ERISA Affiliate thereof, nor any
Benefit Plan, has any present or future obligation to make any payment to, or
with respect to, any present or former employee nor any ERISA Affiliate pursuant
to any retiree medical benefit plan or other retiree welfare plan except as
required under Section 4980B of the Code;
 
            (vii)   There is no action, order, writ, injunction, judgment or
decree outstanding or claim (other than claims for benefits in the ordinary
course), suit, litigation, proceeding, arbitral action, governmental audit or
investigation relating to or seeking benefits under any Benefit Plan that is
pending, or, to the Knowledge of Sellers, threatened against a North American
Company or any of their ERISA Affiliates or any Benefit Plan, and to the
Knowledge of Sellers, there exist no facts or circumstances that could give rise
to any such action, writ injunction, judgment, decree, claim, suit, litigation,
proceeding, arbitral action, audit or investigation;
  
          (viii)   No North American Company nor any of their ERISA Affiliates
have announced any plan made a legally binding commitment to create any
additional Benefit Plans or to amend or modify any existing Benefit Plan, except
as required by applicable Law;
 
          (ix)   Except as required by applicable Law, neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will trigger a termination of employment entitling any employee of any
North American Company to any additional benefits or result in the acceleration
or creation of any rights of any person to benefits under any Benefit Plan
(including, without limitation, the acceleration of the accrual or vesting of
any benefits under any Benefit Plan or the acceleration or creation of any
rights under any severance, parachute or change in control agreement);
 
 
 
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          (x)   Neither the execution and delivery of this Agreement nor any
other Transaction Documents nor the consummation of the transactions
contemplated hereby will result in any Liability for the ITI Entities under or
with respect to any Benefit Plan;
 
             (xi)   The North American Companies and the Benefit Plans have
properly classified individuals providing services as independent contractors or
employees based on applicable standards under applicable Law, including without
limitation the Code and federal, state, local and foreign labor laws and
regulations, as the case may be, for all purposes, including but not limited to
payroll and employee benefits purposes;
 
             (xii)   No “leased employee,” as that term is defined in
Section 414(n) of the Code, performs services for any North American Company;
 
             (xiii)   Each contract, agreement, plan or arrangement that covers
any employee, former employee, independent contractor, former independent
contractor, director or consultant of a North American Company or an ERISA
Affiliate that constitutes a nonqualified deferred compensation plan, as defined
in Section 409A of the Code, complies in all material respects in both form and
operation with the requirements of such Section;
 
             (xiv)   There have been no Prohibited Transactions, as defined in
ERISA section 406 and Code section 4975, with respect to any Benefit Plan of the
North American Companies, and no fiduciary, as defined in ERISA section 3(21),
has any liability for any material breach of fiduciary duty or any other
material failure to act or comply in connection with the administration or
investment of the assets of any such Benefit Plan; and
 
             (xv)   No asset of any North American Company is subject to a lien
under ERISA or the Code.
 
Section 4.19   Litigation.  Except as set forth on Schedule 4.19, there is no
pending or, to Sellers’ Knowledge, threatened Proceeding, by any Governmental
Authority or other Person against a North American Company which has resulted or
if threatened would be reasonably expected to result, in (i) the institution of
Proceedings to prohibit, enjoin or restrain the performance in any material
respect by Sellers of this Agreement or any of the Transaction Documents to
which any Seller is to be a party, or (ii) a Claim for damages, except for any
matter involving a Claim for damages less than $100,000.
 
Section 4.20   Compliance With Laws.  Except as set forth on Schedule 4.20 and
except with respect to Environmental Laws, which are covered in Section 4.22,
the North American Companies (i) have during the five-year period prior to the
date hereof been in material compliance with all Laws, (ii) have not received
any notice of or been charged with the violation of any Laws which has not been
resolved; and (iii) have not received notice that a North American Company is
under investigation with respect to the violation of any Laws.
 
 
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Section 4.21   Permits.

 
(a)    Schedule 4.21(a) sets forth a true, correct and complete list of all
material Governmental Approvals (other than Environmental Permits, which are
covered in Section 4.22), held by any North American Company and required for
the operation of the Business of the North American Companies, including the
Facilities, as conducted, owned, leased, held, utilized and operated on the date
hereof (the “Business Governmental Approvals”).  To Sellers’ Knowledge, except
for the Business Governmental Approvals set forth on Schedule 4.21(a), there are
no Governmental Approvals that are necessary for the lawful operation of the
Business of the North American Companies or the ownership or utilization or
operation of the assets of the North American Companies, including the
Facilities.  All of the Business Governmental Approvals have been issued to the
North American Companies and are in full force and effect, and, to Sellers’
Knowledge, except as a result of the consummation of the transactions
contemplated by this Agreement, there are no reasonable grounds to believe that
any such Business Governmental Approval shall not be renewed upon expiration.
The North American Companies have fulfilled and performed all of their
respective material obligations with respect to the Business Governmental
Approvals.  To Sellers’ Knowledge, no event has occurred that allows, or after
notice or lapse of time could allow, revocation or termination of any Business
Governmental Approval or results, or after notice or lapse of time could result,
in any Material Adverse Effect with respect to the holder of any Business
Governmental Approval.
 
(b)     Except as set forth in Schedule 4.21(b), (i) no Business Governmental
Approval (other than Environmental Permits, which are covered in Section 4.22)
has been revoked or suspended within the preceding five years, (ii) no North
American Company has been involved in a Proceeding or, to the Knowledge of
Sellers, investigation, whether formal or informal, to revoke, suspend, limit or
restrict any Business Governmental Approval (other than Environmental Permits,
which are covered in Section 4.22) within the preceding five years, (iii) no
North American Company has been notified by any Governmental Authority or other
Person that there is cause to revoke, suspend, limit or restrict any Business
Governmental Approval (other than Environmental Permits, which are covered in
Section 4.22) which has not been adequately addressed or cured and (iv) to
Sellers’ Knowledge, no such revocation, suspension, limitation or restriction is
threatened by any Governmental Authority.
 
(c)     Attached hereto as Schedule 4.21(c) is a list of all currently pending
applications of the North American Companies for material Governmental Approvals
(other than Environmental Permits, which are covered in Section 4.22) with
respect to the Business or assets of the North American Companies, and the
current status of all such applications, which list is true, correct and
complete.
 
Section 4.22   Environmental Matters.
 
(a)     Except as set forth on Schedule 4.22:
 
 
 
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          (i)    The North American Companies have complied in all material
respects with all applicable Environmental Laws and contractual obligations
(including lease provisions applicable to the Leased Real Property) concerning
public health and safety, worker health and safety, Hazardous Substances and the
Environment.
 
          (ii)   The North American Companies have obtained and are in
compliance with all Environmental Permits necessary for the lawful operation of
their Business and the Leased Real Property and all such Environmental Permits
are listed in Schedule 4.22.
 
          (iii)   No investigation or proceeding is pending or, to the Knowledge
of Sellers, threatened to modify, revoke or limit any Environmental
Permit.  Where necessary to obtain timely renewal of any such Environmental
Permit, the North American Companies have applied for renewal of such
Environmental Permit.
 
             (iv)   The North American Companies have never been subject to any
Environmental Claim, have not received any written or oral notice, report, or
other information regarding any pending or threatened Environmental Claim, and
to Sellers’ Knowledge there is no basis in law or in fact for any Environmental
Claim.
 
          (v)   There are no Environmental Conditions at, on, under or emanating
to or from the Leased Real Property, any formerly owned or operated property or
any other property for which a North American Company could be liable or
responsible under Environmental Laws, the leases, contract or otherwise.
 
          (vi)   The North American Companies have never treated, stored,
manufactured, processed, distributed, disposed of, arranged for, caused or
permitted the dumping, disposal or other release of any Hazardous Substances at
the Leased Real Property, at any formerly owned, leased or operated property or
at any other property that has or could give rise to any Environmental Claim or
require Cleanup under Environmental Laws.
 
          (vii)   The North American Companies have not, either expressly or by
operation of law, assumed or undertaken any Liability or responsibility of
another Person, (whether or not affiliated with the North American Companies or
their predecessors or Affiliates) for Cleanup, any Environmental Claim or other
Liability or responsibility under Environmental Laws.
 
          (viii)   Neither this Agreement nor the consummation of the
transaction contemplated by this Agreement will trigger or result in any
responsibility or obligation for investigation, Cleanup or notification to or
Consent of Governmental Authority or any other Person.
 
 
 
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          (ix)   There are no underground or above ground tanks containing, or
previously containing Hazardous Substances at any Leased Real Property and the
North American Companies did not own or operate any such tanks at any property
formerly owned, leased or occupied by a North American Company.
 
          (x)   There are no asbestos-containing materials, PCB-containing
transformers, capacitors, hydraulic lifts or other equipment and no landfills,
surface impoundments, or waste disposal areas, located at or on the Leased Real
Property.
 
                  (xi)    There are no Pre-Closing Environmental Liabilities of
the North American Companies that are not identified on Schedule 4.22.
 
          (xii)   There are no Liens filed or recorded against any Leased Real
Property arising under any Environmental Law and neither Sellers or any Related
Entity have received any notice that any such Lien is threatened to be recorded
or filed against any Leased Real Property.
 
          (xiii)   To Sellers’ Knowledge, there are no recorded or unrecorded
restrictions on activities or use of the Leased Real Property or the groundwater
beneath the Leased Real Property and there are no recorded or unrecorded
covenants or requirements that would obligate any North American Company to
install or maintain engineered barriers (such as a concrete or asphalt cap over
contaminated media) arising from any Environmental Condition or pursuant to
Environmental Laws.
 
          (xiv)   Sellers have provided the ITI Entities with true and correct
copies of all environmental assessments, audits, evaluations, studies, and tests
in their possession or within their reasonable control relating to the Business
of the North American Companies, the Leased Real Property, and any real property
previously owned, leased, or operated by or on behalf of a North American
Company.
 
(b)     No North American Company has been identified or listed as a potentially
responsible party or a responsible party for Clean or Cleanup Costs under CERCLA
or any other applicable Environmental Law, nor has a North American Company
received any information request pursuant to any applicable Environmental Law
from any Governmental Authority, and, to Sellers’ Knowledge, no portion of the
Leased Real Property is listed or proposed for listing on the National
Priorities List or any similar listing under any other Environmental Law.
 
(c)     No North American Company has received any written or oral communication
from a Governmental Authority, Person or any citizens’ group, employee or
otherwise within the past five years, alleging (i) that any North American
Company or any Leased Real Property has violated or is in violation of any
Environmental Law or is liable for any Cleanup of Hazardous Substances or
(ii) that the Sellers have any Pre-Closing Environmental Liability.
 
 
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(d)     The North American Companies have timely filed all material reports,
obtained all material Consents and Permits and generated and maintained, and
currently generates and maintains, all material Consents, Permits, data,
documentation and records required under applicable Environmental Laws.
 
Section 4.23   Taxes.

 
(a)   Except as set forth on Schedule 4.23, the North American Companies have
duly filed or caused to be filed, on or before the due date thereof (taking into
account applicable extensions), with the appropriate taxing authority all Tax
Returns that the North American Companies were required to file in respect of
any North American Company.  All such Tax Returns (including any amendment
thereto) were correct and complete in all respects, and there is no position
taken on any Tax Return with respect to the North American Companies for which
there is not substantial authority within the meaning of Code Section 6662.  All
Taxes owed by a North American Company (whether or not shown on any Tax Return),
and subsequent assessment with respect thereto, have been timely paid.  Except
as set forth in Schedule 4.23, no North American Company is currently the
beneficiary of any extension of time within which to file any non-Income Tax
related Tax Return.  Each of the North American Companies have withheld and paid
all Taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor, creditor, stockholder,
partner, member or other third party, and all Forms W-2 and 1099 required with
respect thereto have been properly completed and timely filed.
 
(b)     There are no Liens, attachments, or similar encumbrances on the North
American Companies or their respective assets with respect to any Taxes, other
than any Liens for Taxes not yet due and payable.  There are no pending or, to
Sellers’ Knowledge, threatened audits, investigations, claims, proposals or
assessments for or relating to any Taxes of the North American Companies.  There
are no matters under discussion with any Governmental Authorities with respect
to Taxes of any North American Company that could result in any additional
amount of Taxes with respect such North American Company.
 
(c)     Sellers have made available to the ITI Entities correct and complete
copies of all federal, state, local, and foreign Income Tax Returns filed with
respect to the North American Companies or the Purchased Assets for taxable
periods ended on or after December 31, 2006, indicates those Income Tax Returns
that have been audited, and indicates those Income Tax Returns that currently
are the subject of audit.  None of the North American Companies have waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.  There are no requests for
rulings or determinations, or applications requesting permission for a change in
accounting practices, in respect of Taxes of the North American Companies,
pending with any Governmental Authority.
 
(d)     Sellers have made available to the ITI Entities correct and complete
copies of all federal Income Tax Returns and amendments thereto filed by the
North American Companies since December 31, 2006 and all examination reports and
statements of deficiencies received by or agreed to by any of them with respect
to federal Income Tax Returns since December 31, 2006.
 
 
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(e)   No North American Company has made any payments, are obligated to make any
payments, or are a party to any agreement that under certain circumstances could
obligate them to make any payments that will not be deductible under Code
section 280G.  No North American Company is a party to any Tax allocation or
sharing agreement, except any Tax allocation or sharing agreement that will be
terminated on or prior to the Closing Date.  No North American Company (i) has
been a member of an affiliated group filing a consolidated federal Income Tax
Return or (ii) has any Liability for the Taxes of any Person under Regulation
section 1.1502-6 (or any similar provision of state, local, or foreign law), as
a transferee or successor, by contract, or otherwise.
 
(f)   Except as set forth on Schedule 4.23, the North American Companies are not
a party or subject to any joint venture, partnership, sharing of profits or
other arrangement or contract that could be treated as a partnership for federal
Income Tax purposes.  No North American Company has been a United States real
property holding corporation within the meaning of Code section 897(c)(2) during
the applicable periods specified in Code section 897(c)(1)(A)(ii).  None of the
assets of the any North American Company (i) are property required to be treated
as being owned by another Person for federal Income Tax purposes,
(ii) constitute “tax-exempt use property” within the meaning of Code section
168(h)(1); (iii) are tax-exempt bond financed property within the meaning of
Code section 168(f); (iv) are subject to a section 467 rental agreement as
defined in Code section 467.  No Seller is a foreign person within the meaning
of Code section 1445.
 
(g)   No ITI Entity will be required to include any item of income in, or
exclude any item of deduction from, taxable income for any taxable period (or
portion thereof) ending after the Closing Date as a result of any (i) change in
method of accounting for a taxable period ending on or prior to the Closing Date
under Code section 481(c) (or any corresponding or similar provision of state,
local or foreign Income Tax Law); (ii) “closing agreement” as described in Code
section 7121 (or any corresponding or similar provision of state, local or
foreign Income Tax Law) entered into on or prior to the Closing Date; or (iii)
installment sale made on or prior to the Closing Date, in each case by the North
American Companies.
 
(h)   Schedule 4.23 accurately sets forth a list of all states, counties, cities
and other taxing jurisdictions (whether foreign or domestic) to which any Tax is
properly payable by a North American Company (other than income Taxes or other
Taxes for less than $1,000).  No claim has ever been made by a Governmental
Authority in a jurisdiction where a North American Company does not file Tax
Returns that any North American Company is or may be subject to taxation by that
jurisdiction.
 
(i)   The unpaid Taxes of the North American Companies (i) did not, as of the
end of the most recently completed fiscal year, exceed the reserve for Tax
Liability (rather than any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) set forth on the face of the
balance sheets of such entity included in the Financial Statements as of such
date (including in any notes thereto) and (ii) will not exceed that reserve as
adjusted for operations and transactions through the Closing Date in accordance
with the past custom and practice of such entities in filing their Tax Returns.
 
 
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(j)   Schedule 4.23 properly identifies the proper tax status, as corporation or
partnership for federal, state and foreign income tax purposes of Fyfe Co. and
Specialized Fabrics and each such entity has been characterized as such since
its formation.  Except as set forth in Schedule 4.23, each North American
Company that is currently properly treated as a partnership for federal income
tax purposes, has in place an effective Code section 754 election.   Each North
American Company treated as a partnership for federal income tax purposes
provides for an allocation of taxable income and loss in the event of any
purchase of an interest in such Related Entity as contemplated by this Agreement
using the closing of the books method.
 
(k)     No North American Company has engaged in a “listed transaction” as
defined in Regulations section 1.6011-4(b)(2) or a “reportable transaction”
within the meaning of Code section 6707A.
 
(l)   No North American Company has distributed stock of another Person, or has
had its stock distributed by another Person, in a transaction that was purported
or intended to be governed in whole or in part by Code section 355 or section
361.  There are no elections made by any North American Comapny in effect
pursuant to Code section 338.
 
(m)    For purposes of this Section 4.23 and Section 7.3, any reference to
Sellers or any North American Company shall include any predecessor thereto.
 
Section 4.24   Insurance.  Schedule 4.24 sets forth a true and correct list of
the commercial general liability and product liability and all risk property
policies (the “Business Insurance Policies”) held or maintained by or for the
benefit of any North American Company.  The Business Insurance Policies are held
or maintained as of the date hereof.  Schedule 4.24 sets forth, for each
Business Insurance Policy, the type of policy, the name of the insurer, the
amount of coverage, and the effective dates of the policy through which coverage
shall continue by virtue of premiums already paid.  To the Knowledge of Sellers,
there is no claim by any North American Company pending under any Business
Insurance Policy as to which coverage has been denied or disputed by the
underwriters of such policies.  Each Business Insurance Policy is in full force
and effect and constitutes the valid and binding obligation of, and is
enforceable against, the parties thereto in accordance with its terms. All
premiums with respect to the Business Insurance Policies covering all periods up
to and including the Closing Date have been paid and no notice of cancellation
or termination has been received with respect to any such policies.
 
Section 4.25   Accounts Receivable.  The accounts receivable of the North
American Companies reflected on the books and Records of the North American
Companies (except to the extent of the allowance for doubtful accounts reflected
on the Financial Statements): (a) are valid and existing; (b) represent monies
due as a result of transactions in the Ordinary Course of Business, including
but not limited, to amounts attributable to goods sold and delivered or services
rendered; (c) are subject to no refunds or other valid adjustments or to any
valid defenses or rights of set-off enforceable by third parties on or affecting
any thereof; and (d) are fully collectible.
 
 
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Section 4.26   Transactions with Affiliates.  Schedule 4.26 describes all
intercompany services and other arrangements, if any, provided to or on behalf
of the Business or any portion thereof by a North American Company or any
Affiliate of any North American Company, including services or products provided
to the Foreign Entities.  Except as disclosed on Schedule 4.26 and except with
respect to the services and arrangements that are referenced in or will
otherwise be addressed by this Agreement and the other Transaction Documents,
the Business does not share any facilities or equipment with, or purchase assets
or services from, or provide products or services to, any other businesses of
any North American Company or any Affiliate of a North American Company.
 
Section 4.27   Records.  The copies of the Records of the North American
Companies which have been made available to the ITI Entities are correct and
complete copies.
 
Section 4.28   Broker’s Fee.  Neither the ITI Entities nor any of their
respective Affiliates has or shall have any Liability or otherwise suffer or
incur any loss as a result of, or in connection with, any brokerage or finder’s
fee or other commission of any Person retained by Sellers or any of their
Affiliates in connection with this Agreement or the other Transaction Documents
or any of the transactions contemplated thereby.
 
Section 4.29   Disclosure.  No representation or warranty by Sellers in this
Agreement or in any Schedule or Exhibit to this Agreement, or in any statement,
list, certificate, agreement or other document prepared by Sellers and furnished
or to be furnished by Sellers in writing to the ITI Entities pursuant to this
Agreement, contains or will contain any untrue statement of material fact, or
omits or will omit to state a material fact required to be stated therein or
necessary to make the statements contained therein not misleading in light of
the circumstances under which they were made.  Without limiting the generality
of the foregoing, the information set forth in the Schedules is accurate and
complete in all material respects.
 
Section 4.30   No Other Representations or Warranties.  Except for the
representations and warranties in ARTICLE III and this ARTICLE IV, neither
Sellers, Fyfe Members, nor any other Person on behalf of Sellers or Fyfe Members
or any of their respective Affiliates has made any express or implied
representation or warranty either written or oral with respect to the North
American Companies or the Business or with respect to any other information
disclosed to the ITI Entities or their Affiliates or Representatives in
connection with the transactions contemplated hereby.  Sellers and Fyfe Members
disclaim any and all other representations and warranties, whether express or
implied.
 
 
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ARTICLE V
Representations and Warranties of the ITI Entities
 
On the Effective Date and as of the Closing Date, the ITI Entities represent and
warrant to Fyfe Members and Sellers as follows:
 
Section 5.1   Organization of the ITI Entities.  Insituform is a corporation,
duly organized, validly existing and in good standing under the laws of the
State of Delaware.  ITI Sub 1 is a limited liability company, duly organized,
validly existing and in good standing under the laws of the State of
Delaware.  ITI Sub 2 and ITI Sub 3 are corporations, duly organized, validly
existing and in good standing under the laws of the State of Delaware.  ITI Sub
4 is a corporation, duly organized, validly existing and in good standing under
the laws of Canada.
 
Section 5.2   Authorization of Transaction.

 
(a)   The ITI Entities have full power and authority (including full corporate
power and authority) to execute, deliver and perform their respective
obligations under this Agreement and the other Transaction Documents.
 
(b)   The execution, delivery and performance of this Agreement and the other
Transaction Documents have been duly authorized by the ITI Entities. This
Agreement has been duly executed by the ITI Entities.
 
(c)   This Agreement and each other Transaction Document to which the ITI
Entities are or shall be a party, assuming the due authorization, execution and
delivery by each other Party hereto and thereto, constitute  valid and legally
binding obligations of the respective ITI Entities, as applicable, enforceable
in accordance with their terms and conditions, subject to the effect of any
applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance or similar laws affecting creditors’ rights generally and to general
principles of equity, including concepts of materiality, reasonableness, good
faith and fair dealing, regardless of whether considered in a proceeding in
equity or at law.
 
(d)   Except as set forth on Schedule 5.2, the ITI Entities are not required by
applicable Law to give any notice to, make any filing with, or obtain any
Governmental Approval of any Governmental Authority in order to consummate the
transactions contemplated by this Agreement.
 
Section 5.3   Non-contravention.  Neither the execution and the delivery of this
Agreement and the other Transaction Documents, nor the consummation of the
transactions contemplated hereby or thereby, will (i) violate any Law to which
the ITI Entities are subject or any provision of their certificate of
incorporation, certificate of organization, bylaws, operating agreement or other
governing documents, or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any Person the right to
accelerate (whether after the giving of notice or lapse of time or both),
terminate, modify, or cancel, or require any notice under any Contract to which
the ITI Entities are a party or by which the ITI Entities are bound or to which
any of their respective assets are subject, except those breaches, defaults,
violations or conflicts that individually have not had, and would not reasonably
be likely to have a material adverse effect on the ability of the ITI Entities
to consummate timely the transactions contemplated hereby.
 
 
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Section 5.4   Litigation.  There is no pending or, to the knowledge of the ITI
Entities, threatened Proceeding, by any Governmental Authority or other Person
which has resulted in (i) the institution of Proceedings to prohibit or restrain
the performance by the ITI Entities of this Agreement or any other Transaction
Document to which the ITI Entities are a party, or (ii) a Claim for damages as a
result of this Agreement or any of the other Transaction Documents.
 
Section 5.5   Experience; Investment Intent.  ITI Sub 1 is acquiring the Equity
Securities of Fyfe Co. with its own funds and for its own account and not with a
view to, or for resale in connection with, any distribution of the Purchased
Assets within the meaning of Section 2(11) of the Securities Act of 1933, as
amended (the “Securities Act”).  The ITI Entities are experienced in evaluating
companies such as Fyfe Co. and Fibrwarp Installations, and have such knowledge
and experience in financial and business matters to enable the ITI Entities to
evaluate the merits and risks of the prospective acquisition of such Equity
Securities.  ITI Sub 1 is not obligated to transfer such Equity Securities to
any other Person nor does ITI Sub 1 have any agreement or understanding to do
so.  ITI Sub 1 understands that the Equity Securities have not been registered
under the Securities Act or any state securities laws.  ITI Sub 1 understands
that Sellers are relying in part on the representations and warranties in this
Section 5.5 for purposes of claiming such exemptions and that the basis for such
exemptions.
 
Section 5.6   Brokers’ Fees.  Neither Sellers, Fyfe Members, nor any of their
respective Affiliates have or shall have any Liability or otherwise suffer or
incur any Loss as a result of, or in connection with, any brokerage or finder’s
fee or other commission of any Person retained by the ITI Entities or any of
their Affiliates in connection with this Agreement or the other Transaction
Documents or any of the transactions contemplated thereby.  For avoidance of
doubt, Sellers and Fyfe Members shall have no Liability for payment of any
commission or finder’s fee due or owing to CW Downer & Co. in connection with
the transactions contemplated hereby. The ITI Entities shall indemnify and hold
Sellers, Fyfe Members, and their respective officers, directors, managers,
members, employees and agents harmless from any such payment alleged to be due
by or through the ITI Entities as a result of the action of ITI Entities or
their Affiliates or Representatives.
 
Section 5.7   No Other Representations or Warranties.  Except for the
representations and warranties in this  Article V, neither the ITI Entities nor
any other Person on behalf of the ITI Entities or any of their respective
Affiliates has made any express or implied representation or warranty with
respect to the ITI Entities or any of its Affiliates or with respect to any
other information provided to the Sellers, Fyfe Members, their Affiliates or
Representatives in connection with the transactions contemplated hereby.  The
ITI Entities disclaim any and all other representations or warranties, whether
express or implied.
 

 
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ARTICLE VI
Pre-Closing Covenants; Certain Post-Closing Covenants
 
The Parties agree as follows with respect to the period between the date of
execution of this Agreement and the Closing:
 
Section 6.1   General.  Each Party will use commercially reasonable efforts to
take all actions and to do all things necessary, proper, appropriate or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
conditions set forth in ARTICLE VIII) or that are reasonably requested by the
other Party to carry out the intent of the Parties hereunder and thereunder
(including, Sellers permitting the ITI Entities to discuss and meet, and
cooperating in such discussions and meetings (and the preparation therefor),
with any of the customers and suppliers of the North American Companies as the
ITI Entities so reasonably request).
 
Section 6.2   Notices, Assignments and Consents.  If a Contract included in the
Purchased Assets is assignable to the ITI Entities without third-party Consent,
at the Closing, Sellers shall assign (or cause the assignment of) such Contract
to the ITI Entities pursuant to the Assignment Agreement.  If the assignment to
the ITI Entities of any Contract included in the Purchased Assets requires
third-party Consent, Sellers shall use commercially reasonable efforts to obtain
any required third-party Consents.  The assignment at the Closing of any
Contract that is not assignable without the Consent of a third-party shall be
handled in accordance with Section 6.9.
 
Section 6.3   Operation of Business. 

 
(a)    During the period beginning on the date of this Agreement and ending: (i)
with respect to the North American Companies, on the earlier to occur of (A) the
Closing and (B) the termination of this Agreement, and (ii) with respect to the
Foreign Entities, on the earlier to occur of (A) the first anniversary of the
Effective Date, and (B) the termination of this Agreement (the “Designated
Period”), Sellers shall and shall cause each North American Company and, to the
extent such Sellers’ control such activities, cause each Foreign Entity to:
 
           (i)   conduct the Business of the North American Companies and the
Foreign Entities only in the Ordinary Course of Business; and
 
              (ii)   use its commercially reasonable efforts to preserve the
present business operations, organization (including Employees) and goodwill of
the North American Companies and the Foreign Entities and preserve the present
relationships with Persons having business dealings with the North American
Companies and the Foreign Entities (including customers and suppliers).
 
(b)   Without limiting the generality of the foregoing, during the Designated
Period, except as otherwise provided in this Agreement or as the ITI Entities
shall otherwise Consent, Sellers covenant and agree that, with respect to each
North American Company and, to the extent such is in Sellers’ control, each
Foreign Entity, such Person shall:
 
 
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          (i)            preserve and maintain its corporate existence and
exercise all reasonable efforts to preserve and maintain all of its rights,
privileges and franchises necessary or desirable in the ordinary conduct of its
business, including preserving the relationships with third parties to the
Business;
 
          (ii) not acquire by merging or consolidating with or by purchasing a
substantial portion of the Equity Securities or assets of, or by any other
manner, any business, corporation, partnership, association or other business
organization or division thereof or enter into any agreement providing for any
merger, acquisition or similar transaction;
 
          (iii)            utilize its assets and conduct the Business as
currently utilized and conducted in the Ordinary Course of Business (including
with respect to all interactions with Governmental Authorities);
 
          (iv)            exercise all reasonable efforts to keep available to
it the goodwill of its customers, suppliers and other Persons with whom business
or other relationships exist (including Governmental Authorities) to the end
that its goodwill, ongoing business or other relationships shall not be impaired
at or prior to Closing;
 
          (v) exercise all reasonable efforts to maintain its existing
relationships with its employees;
 
          (vi) continue to (1) make marketing, advertising, promotional and
other similar expenditures and (2) collect accounts receivable and pay accounts
payable and similar obligations, in each case relating to the Business and in
the Ordinary Course of Business;
 
          (vii)   duly comply in all material respects with all applicable Laws
and Governmental Approvals, including all Environmental Laws;
 
          (viii)   maintain its Records in the Ordinary Course of Business;
 
          (ix) maintain and repair its asset (including the making of scheduled
capital expenditures) in the Ordinary Course of Business consistent with past
practice;
 
          (x) maintain in effect insurance with respect to its asset in the
Ordinary Course of Business and against risks, with carriers and in amounts
(including deductibles) consistent with past practice;
 
          (xi) maintain Inventory and equipment related to the Business at
levels consistent with past practice;
 
 
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          (xii)   not grant any new Lien on any of its assets, other than
Permitted Liens or any other Liens expressly authorized or permitted by this
Agreement;
 
          (xiii)   not enter into any material Contract or any material
amendment, modification or waiver of any existing material Contract outside the
Ordinary Course of Business (except for technical amendments to substitute the
name of the appropriate ITI Entity for the name of Sellers);
 
(xiv)   except in the Ordinary Course of Business, not waive or release any
material right relating to its assets;
 
          (xv)   except in the Ordinary Course of Business or as required by
applicable Law or this Agreement, not (A) grant any severance or termination pay
to any employee, (B) enter into any employment agreement (or any amendment to
any existing employment agreement) with any employee, (C) increase benefits
payable under or, except as expressly required by this Agreement, conditions
concerning eligibility to receive benefits under any existing Benefit Plans or
employment agreements, (D) establish, amend or terminate any Benefit Plan or (E)
increase compensation, bonus or other benefits payable to any employee;
 
          (xvi)   not take or fail to take any action that could reasonably be
expected to constitute a material default or an event of default with respect to
any Contracts of such  Person;
 
          (xvii)   not sell, assign or otherwise transfer, or agree to sell,
assign or otherwise transfer, any of its assets or interests therein (except for
sales of Inventory thereof in the Ordinary Course of Business);
 
          (xviii)   not make any change in any accounting principle or costing
methodology with respect to its assets, except as may be appropriate to conform
to changes in GAAP during such period;
 
          (xix)   not make any Tax election or settle or compromise (or agree to
settle or compromise) any Liability for Taxes that would reasonably be expected
to materially and adversely affect its assets after the Closing;
 
       (xx)   subject to Subsection (xxi) below, make in a timely fashion all
planned capital expenditures with respect to the Facilities and otherwise;
 
          (xxi)   not commit to make or make any capital expenditure or other
addition or improvement to property, buildings and equipment, in excess of
$100,000;
 
          (xxii)   not grant a license with respect to any of its Intellectual
Property and not enter into any agreement or arrangement that would limit or
restrict the Business from engaging or competing in any line of business or in
any geographic area;
 
 
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          (xxiii)   except in the Ordinary Course of Business, not create any
material Liability with respect to any of its assets or that would be an Assumed
Liability;
 
          (xxiv)   not settle or commit to settle any Proceeding involving
payment of more than $100,000;
 
          (xxv)   except as required by GAAP, not write off any accounts
receivable without adequate consideration;
 
          (xxvi)   not collect a receivable or pay or fail to pay a payable
outside the Ordinary Course of Business;
 
          (xxvii)   not enter into any Contract or commitment with any other
North American Company or Foreign Entity or any of their Affiliates;
 
          (xxviii)   with respect to the North American Subsidiaries and the
Foreign Entities, not sell, transfer, assign any Equity Securities of the North
American Subsidiaries or the Foreign Entities, or allow such Persons to issue
any Equity Securities to any Person;
 
          (xxix)   not form, organize or incorporate, or engage in discussions
with any Person to form, organize or incorporate, any joint venture or other
Person; and
 
          (xxx)   not agree, whether in writing or otherwise, to act or omit to
act in violation of any of the foregoing.
 
For the avoidance of doubt, Sellers will have no responsibility for any
violations or failure to comply with the covenants in this Section 6.3(b) which
violations or failures result from any actions that are outside of the control
of Sellers or that are done without the Knowledge of Sellers or the Consent of
Sellers.
 
(c)   Sellers and Fyfe Members have the right, on or before the Closing, to make
and receive, and nothing herein shall be construed to prevent or restrict
Sellers or Fyfe Members from making or receiving, distributions or transfers of
Cash of the North American Companies and Foreign Entities which are necessary in
order for Sellers and Fyfe Members to pay applicable taxes.   All other
distributions and transfers of Cash shall only be done with the consent of the
ITI Entities, which consent will not be unreasonably withheld, conditioned or
delayed.  Sellers have the right, on or before the Closing, to distribute or
otherwise transfer notes payable and long term debt which will not be
transferred to the ITI Entities at Closing.
 
 
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Section 6.4   Antitrust Approvals.  The Parties have, prior to the date of this
Agreement filed, or cause to be filed by their respective “ultimate parent
entities,” with the FTC and the DOJ the notifications and other information (if
any) required to be filed under the HSR Act with respect to the transactions
contemplated in this Agreement and the Transaction Documents.  The ITI Entities
and Sellers shall promptly proceed to prepare and file with the Relevant
Competition Authority such additional requests, reports or notifications as may
be required or, in the opinion of the ITI Entities or Sellers, advisable, in
connection with this Agreement.  With respect to each of the above filings, the
Parties shall diligently and expeditiously prosecute, and shall cooperate fully
with each other in the prosecution of, such matters including by permitting
counsel for the other to review in advance, and consider in good faith the views
of the other in connection with any such filings or any proposed written
communication with any Relevant Competition Authority and by providing counsel
for the other with copies of all filings and submissions made by such Party and
all correspondence between such Party (and its advisors) with any Relevant
Competition Authority and any other information supplied by such Party and such
Party’s Affiliates to a Governmental Authority or received from such a
Governmental Authority in connection with the transactions contemplated by this
Agreement; provided, however, that (a) materials may be redacted before being so
provided (i) to remove (A) references concerning the valuation of Sellers or any
of the Related Entities, and (B) individual customer pricing information, (ii)
as necessary to comply with contractual arrangements, and (iii) as necessary to
avoid disclosure of other competitively sensitive information or to address
reasonable privilege or confidentiality concerns, (b) copies of documents filed
by a Party pursuant to Item 4(c) of the Notification and Report Form filed with
the FTC and the DOJ shall not be required to be provided to any other Party, and
(c) no Party shall be required to supply the other (or its counsel) with copies
(or in case of oral presentations, a summary) of any information, documents or
materials to the extent that any Law requires such Party to restrict or prohibit
access to any such properties or information.  The ITI Entities shall be solely
responsible for payment all fees and expenses (other than Sellers’ and Fyfe
Members’ legal, accounting, consulting and internal costs) of filings under the
HSR Act and with any other Relevant Competition Authority; provided, however, if
the Closing occurs, Sellers shall reimburse the ITI Entities for ½ of the filing
fee (without regard to any of the legal, accounting, consulting or preparation
fees and expenses incurred by the ITI Entities) paid by the ITI Entities to the
Relevant Competition Authority, which reimbursement shall be made as an
adjustment to the Purchase Price.
 
In the event an administration action or suit is threatened or instituted
challenging the transactions contemplated by this Agreement as violative of the
HSR Act, as amended, the Sherman Act, as amended, the Clayton Act, as amended,
the Federal Trade Commission Act, as amended or any other federal, state or
foreign law or regulation or decree designed to prohibit, restrict or regulate
actions for the purpose or effect of foreign ownership, monopolization or
restraint of trade (collectively, “Antitrust Laws”), the Parties shall use their
reasonable efforts to resolve such administrative action or suit.  The Parties
agree to cooperate in good faith and jointly determine the strategy and
coordinate all activities with respect to seeking any actions, consents,
approvals or waivers of any Governmental Authority as contemplated by this
Section 6.4.  Notwithstanding the foregoing, no Party shall be required take any
action with respect to satisfying any Antitrust Laws which would bind such Party
irrespective of whether the Closing occurs.  Notwithstanding the foregoing or
any other provision of this Agreement, nothing in this Section 6.4 shall
require, or be construed to require, a Party to take or to refrain from taking
any action, to agree to any disposition or restriction with respect to any
assets or operations of such Party or any of its Affiliates, or to cause any of
its Affiliates to do or agree to do any of the foregoing.  Notwithstanding the
foregoing or any other provision of this Agreement, nothing in this Section 6.4
shall limit a Party’s right to terminate the Agreement pursuant to Section
10.1(c) or Section 10.1(d) so long as such Party has until such date complied in
all material respects with its obligations under this Section 6.4.  Each of the
ITI Entities and Sellers agree to request early expiration or termination of the
waiting or notice periods under the HSR Act or other Antitrust Laws with respect
to such transactions contemplated hereby.
 
 
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Section 6.5   Access to Information; Environmental Diligence.

 
(a)   Subject to the Confidentiality Agreement and to the extent permitted by
applicable Law, for the Designated Period, Sellers shall and shall cause the
North American Companies and, to the extent in the Sellers’ control, the Foreign
Entities, and the respective officers, Employees, accountants, auditors and
agents of the North American Companies and Foreign Entities to, (i) from time to
time, upon the reasonable notice of the ITI Entities, afford the officers,
employees and authorized agents and representatives of the ITI Entities
reasonable access, during normal business hours, to (A) the offices, Facilities,
properties and the financial, accounting and other books and Records of such
Persons regarding the Business, the Purchased Assets and the Assumed Liabilities
or the transactions contemplated by the Transaction Documents and (B) the
appropriate personnel of such Persons and their respective accountants, auditors
and agents and (ii) promptly furnish to the officers, employees and authorized
agents and representatives of the ITI Entities such additional financial and
operating data and other information as the ITI Entities may from time to time
reasonably request.  Subject to applicable Law, the officers, employees or
authorized agents or representatives of the ITI Entities shall be permitted to
make extracts and copies from the financial, accounting and other books and
Records of the North American Entities and Foreign Entities in connection with
conducting such due diligence.
 
(b)   During the Designated Period, the ITI Entities and their respective
employees, agents and independent contractors shall have the right to enter the
Leased Real Property during normal business hours and upon reasonable prior
notice to Sellers to inspect the same, to perform additional due diligence and
to perform (or have any applicable Governmental Authority perform) such
inspections as the ITI Entities shall determine in their sole discretion with
respect to any Leased Real Property or Environmental Permit, including, without
limitation, Phase I environmental assessments, and to the extent suggested by
any Phase I environmental assessment, a Phase II environmental assessment.
 
Section 6.6   Exclusivity.  During the Designated Period:
 
(a)   Sellers and Fyfe Members shall not, and shall not permit any of their
directors, officers, Employees, representatives or agents (collectively, the
“Representatives”) to, and shall use their best efforts not to permit their
Affiliates to, directly or indirectly, (i) discuss, encourage, negotiate,
undertake, initiate, authorize, recommend, propose or enter into, either as the
proposed surviving, merged, acquiring or acquired corporation, any transaction
involving a merger, consolidation, business combination, purchase or disposition
of any material amount of the Purchased Assets or sale of the Equity Securities
of the North American Companies or the Foreign Entities other than the
transactions contemplated by this Agreement (an “Acquisition Transaction”),
(ii) facilitate, encourage, solicit or initiate discussions, negotiations or
submissions of proposals or offers in respect of an Acquisition Transaction,
(iii) furnish or cause to be furnished, to any Person, any information
concerning the Purchased Assets or Equity Securities of the North American
Companies or the Foreign Entities in connection with an Acquisition Transaction,
or (iv) otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage, any effort or attempt by any other Person to do or seek
any of the foregoing.
 
 
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(b)   Sellers and Fyfe Members shall (and shall cause their Representatives to)
immediately cease and cause to be terminated any existing discussions or
negotiations with any Persons (other than the ITI Entities) conducted heretofore
with respect to any Acquisition Transaction.  Sellers agree not to release any
third party from the confidentiality and standstill provisions of any agreement
to which any Seller is a party.
 
Section 6.7   Notification; Disclosed Matters; Indemnification.  Sellers shall
give prompt written notice to the ITI Entities of the occurrence, or failure to
occur, of any event of which Sellers’ have Knowledge that has caused or would be
reasonably likely to cause any representation or warranty of Sellers or Fyfe
Members contained in ARTICLE III or ARTICLE IV to be untrue or inaccurate as of
the Effective Date or any time from the Effective Date to the Closing determined
as if such representation or warranty were made at such time or on the Closing
Date.  The disclosures in such written notice shall be deemed to automatically
supplement any Schedule specifically referenced in such notice and any other
Schedule to which the disclosure in such notice is readily apparent; provided,
that such disclosures must include reasonably detailed information with respect
to such disclosure.  The disclosures in any such written notice shall not
qualify or cure any breach of or inaccuracy in any representation or warranty in
this Agreement made by Sellers or Fyfe Members on or as of the Effective Date
hereof for purposes of any rights or remedies of the ITI Entities prior to
Closing or for purposes of determining whether the condition set forth in
Section 8.1(a) has been satisfied; however, if the Closing occurs, the
disclosures in any such written notice shall qualify and cure any breach or
inaccuracy in any representation or warranty in this Agreement (or certificate
furnished to the ITI Entities hereunder) for purposes of ARTICLE IX.  Sellers
and Fyfe Members shall not be liable under ARTICLE IX for any breach or
inaccuracy in any representation or warranty in this Agreement if the ITI
Entities have Knowledge of a fact, circumstance or condition and have Knowledge
that such fact, circumstance or condition renders the representation or warranty
materially untrue or inaccurate.
 
Section 6.8   Transferred Employees; Employee Agreements; 401(k) Plan.

 
(a)   Prior to Closing, Sellers shall permit the ITI Entities to interview those
Employees of the North American Companies as the ITI Entities may desire to
interview for a position of employment with the ITI Entities as of and following
the Closing.  It is understood that the ITI Entities shall not be obligated to
extend offers of employment to any Employees.  All employment interviews and
other evaluations (e.g., medical examinations, drug testing and other processes
normally conducted by the ITI Entities in the employment of new employees) shall
be at the sole expense of the ITI Entities.  Sellers will reasonably cooperate
with such processes to the extent permitted under applicable Law.  The ITI
Entities shall give reasonable notice to Sellers of their intentions to conduct
such interviews or evaluations and the ITI Entities shall endeavor to conduct
such interviews and evaluations so as to not unreasonably interfere with the
North American Companies operations of their Business prior to the Closing.
 
 
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(b)   Prior to the Closing, the ITI Entities will prepare a list of Employees of
the North American Companies which the ITI Entities desire to hire for
employment with the ITI Entities as of and following the Closing.  On or prior
to the Closing Date, (a) the ITI Entities will make offers of employment on an
“at will” basis to, and will hire as of the Closing Date, all of such Employees
who accept the ITI Entities’ offer of employment (subject to the ITI Entities’
learning of information that, in their sole discretion, makes such employment
unsuitable), and (b) the Sellers will cause the North American Subsidiaries to
terminate those Employees which the ITI Entities determine will not continue
employment after Closing.  Employees of Sellers who accept such offers of
employment from the ITI Entities shall become employees of the applicable ITI
Entity as of the Closing Date (and together with the remaining employees of the
North American Subsidiaries, the “Transferred Employees”).  Nothing herein shall
require the ITI Entities to employ any Transferred Employee for any length of
time unless otherwise provided in a written employment agreement.
 
(c)   Except as expressly set forth in subsection (h) or (i), the ITI Entities
are not assuming any Benefit Plans in which any Employee participates or any
assets or liabilities thereunder.  Effective as of the date an Employee becomes
a Transferred Employee, such Transferred Employee shall cease to be covered by
Sellers’ Benefit Plans, except to the extent a Transferred Employee elects
continuation coverage in accordance with the requirements of Part 6 of Subtitle
B of Title I of ERISA and Section 4980B of the Code or of any similar state
law.  Sellers shall retain responsibility for all medical benefit claims with
respect to any Employee prior to the date such Employee becomes a Transferred
Employee.  For purposes of this subsection, a claim shall be deemed to have been
incurred on the date the medical service giving rise to the claim is
performed.  As soon as administratively practicable following the date an
Employee becomes a Transferred Employee, the ITI Entities shall provide medical
and dental coverage, life and accident insurance, and disability or similar
coverage under the ITI Entities’ current plans (collectively, “ITI Welfare
Plans”), subject to the terms of such ITI Welfare Plans.  Transferred Employees
shall be given credit for years of service with the North American Companies for
purposes of participating in ITI’s Benefit Plans.
 
(d)   Sellers shall provide to the ITI Entities access to employee records of
the North American Companies and, to the extent within the control of Sellers,
the Foreign Entities, as needed for the ITI Entities to comply with this Section
6.8.  Sellers and the ITI Entities shall cooperate with each other and shall
provide to the ITI Entities such documentation, information and assistance as is
reasonably necessary to effect the provisions of this Section 6.8.  As soon as
practicable following the Closing, Sellers will furnish to the ITI Entities all
employment records and employee data relating to Transferred Employees, except
to the extent the disclosure of such information is prohibited by applicable Law
or would result in any Liability to or Claims against the Sellers or Fyfe
Members.
 
 
 
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(e)   Nothing herein shall be deemed to grant to any Employee or union
third-party beneficiary rights or claims of any kind or nature.
 
(f)   If requested by the ITI Entities in writing, Sellers shall consent to the
designation of the ITI Entities or one or their Affiliates as successor employer
for payroll tax and income tax withholding purposes.
 
(g)   Sellers will use reasonable commercial efforts to cooperate with the ITI
Entities in the negotiation and execution of New Employment Agreements with Ed
Fyfe, Heath Carr and such other Employees of the North American Companies
identified by the ITI Entities (each a “Key Employee” and collectively, the “Key
Employees”).  Sellers shall use best efforts to cause a New Employment Agreement
for each Key Employee will be signed and delivered at Closing.
 
(h)   Prior to Closing, Sellers shall amend the Fibrwrap Construction, Inc.
401(k) Savings Plan to transfer sponsorship of such plan to Fyfe Co., to limit
participation in such plan to eligible employees of FCLP, and, as of the last
day of the payroll period immediately preceding the Closing Date, freeze
participation by each North American Company and all ERISA Affiliates.
 
(i)   Prior to Closing, Sellers shall amend the Fyfe Co., LLC 401(k) Savings
Plan to limit participation in such plan to eligible employees of Fyfe Co. and,
as of the last day of the payroll period immediately preceding the Closing Date,
freeze participation by each North American Company and all ERISA Affiliates.
 
(j)   From and after the Closing, the ITI Entities will initiate and complete
the procedures set forth on Schedule 6.8 (the “Procedures”) to correct defects
in the Fibrwrap Construction, Inc. 401(k) Savings Plan and the Fyfe Co., LLC
401(k) Savings Plan (the “Deficiencies”).  Sellers and the Fyfe Members agree to
indemnify, defend and hold harmless the ITI Entities and their Affiliates after
the Closing for any penalties, fines or costs (including attorney fees of
outside counsel, but not including internal costs within the ITI Entities such
as overhead costs) relating to the Deficiencies and to any correction necessary
or appropriate to maintain and assure the qualified status of such plans,
including, but not limited to, correcting discrimination testing failures, plan
document failures, and any other qualification defects reasonably identified by
the ITI Entities.
 
(k)   The ITI Entities shall be responsible for any employment Liabilities
resulting from any ITI Entity terminating the employment of any Transferred
Employee after the Closing Date.
 
(l)   At the Closing, the Parties shall reduce the Purchase Price by an amount
which will be paid by the ITI Entities to Employees of the North American
Companies after Closing as transactional bonuses (plus any applicable employment
taxes), with the amount and the timing of such payments to be as directed by
Sellers.
 
 
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Section 6.9   Nontransferability of Assets.

 
(a)   To the extent that any Purchased Asset is not capable of being sold,
assigned, transferred, delivered, granted or conveyed or any Assumed Liability
is not capable of being assumed, all as contemplated herein (each, an
“Asset/Liability Transfer”), without the Consent of any Person (other than
Sellers, the ITI Entities or an Affiliate of Sellers or the ITI Entities),
including any Governmental Authority, if the ITI Entities are unable to acquire
the requisite Governmental Approvals to receive any Purchased Asset, or if such
Asset/Liability Transfer or attempted Asset/Liability Transfer would be invalid,
would destroy or would eliminate any Purchased Asset or would constitute a
breach of any Assigned Contract or a violation of any Law, (i) this Agreement
shall not constitute a sale, assignment, transfer, delivery, grant, conveyance
or assumption thereof, or an attempted sale, assignment, transfer, delivery,
grant, conveyance or assumption thereof, in the absence of such Consent, and
(ii) Sellers shall, to the extent practicable, take all reasonable, lawful and
appropriate steps to provide the ITI Entities (or their Affiliates) the
respective benefits and burdens of any such sale, assignment, transfer,
delivery, conveyance, grant or assumption of the Purchased Assets or the Assumed
Liabilities in accordance with the terms hereof and the other applicable
Transaction Documents.  Each Party shall use reasonable efforts to obtain any
such Consent.
 
(b)   Each Party undertakes to cooperate in good faith to ensure that it does
such acts and things as may be reasonably necessary to complete the transactions
contemplated hereby in accordance with the terms hereof, including securing as
promptly as practicable all Consents required to assign any Assigned Contracts,
and each Party, on behalf of itself and its applicable Affiliates, shall execute
such Consents or other documents as may be necessary. At all times after the
date hereof, the Parties shall do such acts and things as may be reasonably
required for the purpose of giving to the ITI Entities in accordance with the
terms hereof and the other applicable Transaction Documents the benefit and
burden of the Purchased Assets and the Assumed Liabilities, including using
reasonable efforts in order to obtain the Consent of any necessary third party
to such documents and do such acts and things as may be reasonably required for
such purpose. Each Party shall be responsible for all costs incurred by it in
connection with or otherwise relating to obtaining a Consent for any
Asset/Liability Transfer.
 
(c)   In the event that as of Closing, a Consent is unable to be obtained, the
ITI Entities are unable to acquire the requisite Governmental Approvals to
receive any Purchased Assets, or an Asset/Liability Transfer would be invalid,
would destroy or eliminate a Purchased Asset or would constitute a breach of an
Assigned Contract or a violation of any Law, Sellers shall continue to be bound
by and perform the applicable Assigned Contract or Assumed Liability after
Closing and, unless prohibited by Law or the terms thereof, the ITI Entities
shall,  pay and discharge, to the extent the ITI Entities receive the benefits
of such Contract, the obligations of the North American Companies thereunder as
if such Assigned Contract or Assumed Liability had been transferred or assumed
in accordance with the terms hereof and to the extent such obligations would
have constituted an Assumed Liability if such Assigned Contract or Assumed
Liability had been transferred to or assumed by the ITI Entities at the Closing.
Sellers shall, as consideration for the performance of such services, promptly
pay and remit to the ITI Entities all money, rights and other consideration
received by Sellers in respect of such performance by the ITI Entities. If and
when after Closing, any such Consent shall be obtained or such Assigned Contract
or Assumed Liability shall otherwise become saleable, assignable, transferable,
deliverable, grantable, conveyable or assumable, as applicable, such
Asset/Liability Transfer shall become effective automatically as of the Closing
Date in accordance with ARTICLE II or other applicable Transaction Documents
without further action on the part of Sellers, the ITI Entities or any of their
respective Affiliates, and without payment of further consideration.
 
 
 
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     (d)         In furtherance of this Section 6.9, the parties agree to enter
into a Transitional Services Agreement in the form attached hereto as Exhibit A
(the “Transitional Services Agreement”).
 
Section 6.10   Fibrwrap NC and Fibrwrap SE.
 
(a)   Promptly following the Closing Date, Fyfe Group as the owner of Equity
Securities of Fibrwrap NC and Fibrwrap SE shall take all actions to dissolve and
wind up the Business of Fibrwrap NC and Fibrwrap SE except that Fibrwrap NC and
Fibrwrap SE shall continue to be bound by and perform in the Ordinary Course of
Business all Contracts for the provision of products and services to customers
of their Business (the “SE and NC Contracts”) for the benefit of the ITI
Entities.  As part of the dissolution process and to make provision for their
current outstanding obligations under the SE and NC Contracts, Fyfe Group shall
cause Fibrwrap NC and Fibrwrap SE, to the extent practicable, to take all
reasonable, lawful and appropriate steps to provide the ITI Entities (or their
Affiliates) the respective benefits and burdens of any such Contracts and such
services shall be performed pursuant to the Transitional Services
Agreement.  The ITI Entities shall, pay and discharge, to the extent the ITI
Entities receive the benefits of the SE and NC Contracts, the obligations of the
North American Companies thereunder as if such SE and NC Contracts had been
transferred or assumed in accordance with the terms hereof.  Fibrwrap SE and
Fibrwrap NC shall, as consideration for the performance of such services,
promptly pay and remit to the ITI Entities all money, rights and other
consideration received by Fibrwrap SE and Fibrwrap NC in respect of such
performance by the ITI Entities.
 
(b)   Promptly following the completion of the SE and NC Contracts, if so
elected by the ITI Entities, Fyfe Group shall cause Fibrwrap NC and Fibrwrap SE
to transfer and assign to ITI Sub 2 for consideration reasonably agreed upon by
the Parties, the Personal Property, Records and goodwill of the Business and
such additional Contracts of Fibrwrap NC and Fibrwrap SE as shall be mutually
agreed upon by the Parties (including, without limitation, existing real
property lease agreements).  Sellers and the Fyfe Members agree to indemnify,
defend and hold harmless the ITI Entities and their Affiliates after the Closing
for any Claims associated with the liquidation and dissolution of the Business
of Fibrwrap NC and Fibrwrap SE.
 
(c)   Promptly following the completion of the SE and NC Contracts, Fibrwrap NC
and Fibrwrap SE shall complete the liquidation and dissolution process and cease
using the name “Fibrwrap.”
 
 
 
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Section 6.11   Post Closing Name Changes.  Promptly following the Closing Date,
Sellers shall take all actions required to change the name of all North American
Companies (other than Fyfe Co. and Specialized Fabrics) to remove all references
to “Fyfe” and “Fibrwrap;” provided, however, any Seller providing services
pursuant to Section 6.9 or under the Transition Services Agreement shall be
authorized to continue use of such names solely during the term of the
Transition Services Agreement for the purpose of providing such services.
 
Section 6.12   Duties With Respect to Withdrawal Liability; Release of Escrow.  
 
(a)   Promptly following the Closing Date, but in no event later than thirty
days after the Closing Date, Sellers shall notify the trustees of the applicable
multi-employer pension funds (the “Trustees”) that, as a result of the
transactions contemplated by this Agreement, Sellers no longer have any
obligation to contribute to such funds and Sellers request information on the
amount of any withdrawal liabilities owed by the North American Companies
(“Seller Withdrawal Liability”).  Upon receipt by Sellers of correspondence
notifying Sellers of the amount of any Seller Withdrawal Liability, Sellers
shall promptly pay any undisputed amount of the Seller Withdrawal
Liability.  Sellers shall promptly provide the ITI Entities with copies of all
such correspondence.
 
(b)   Upon the date which is 18 months after the Closing Date, the following
amounts shall be released from the Escrow Fund and paid to the Sellers: (i) the
amount of the Escrowed Purchase Price, less (ii) any claims made or pending
against the Escrowed Purchase Price pursuant to ARTICLE IX, less (iii) the
amount, if any, of any Seller Withdrawal Liability which is disputed by Sellers
and/or which has not been paid, or, if Sellers have not then received notice
from the Trustees of the amount of the Seller Withdrawal Liability, an amount
equal to a reasonable estimate of the Seller Withdrawal Liability not to exceed
$5,000,000 (the “Estimated Liability”).  After the date of this initial release
of funds from the Escrow Fund, when Sellers receive notice of the amount of the
Seller Withdrawal Liability or resolves any dispute over the amount with a
Trustee, amounts retained as the Estimated Liability shall be paid to the
applicable Trustee and all other amounts (less any claims made or pending
described in (ii) or any other disputed amount of the Seller Withdrawal
Liability) shall be paid out of the Escrowed Purchase Price to Sellers.  Upon
the date which is 30 months after the Closing Date, if Sellers still have not
received notice of the amount of the Seller Withdrawal Liability, the amount of
the Estimated Liability shall be paid to Sellers (less any claims made or
pending described in (ii)).  Prior to the date that is 18 months after the
Closing Date, no amounts will be released from the Escrow Fund to pay any Seller
Withdrawal Liability, which amounts shall be paid by Sellers directly.
 
Section 6.13   Bulk Sales Waiver.  The ITI Entities shall waive compliance with
any bulk sales Laws applicable to the Purchased Assets and Assumed Liabilities.
 
 
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ARTICLE VII
Additional Post-Closing Covenants
 
The Parties agree as follows with respect to the period following the Closing:
 
Section 7.1   General.  In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this Agreement, each
Party will take such further action (including the execution and delivery of
such further instruments and documents) as the othter Party reasonably may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under ARTICLE IX below
and except as otherwise provided herein).
 
Section 7.2   Noncompetition; Nonsolicitation; Confidentiality.

 
(a)   Except to the extent permitted by the Transitional Services Agreement,
each of the Sellers, Fyfe Members and Ed Fyfe agrees that, during the period
beginning on the Closing Date and ending on the fifth anniversary of the Closing
Date (the “Restricted Period”), neither it nor any of its Affiliates, Fibrwrap
NC or Fibrwrap SE shall, directly or indirectly, (i) in any manner engage in the
Business anywhere in the United States, Canada and, as of the Acquisition Date
of any Foreign Entity, any other country where such Acquired Foreign Entity does
business on the Acquisition Date (the “Territory”) or (ii) participate as a
stockholder, member, partner, agent or representative or other independent
contractor of, or have any direct or indirect financial interest in, any
enterprise that is engaged, or, to the knowledge of such Seller or Fyfe Member,
plans to engage, in the Business anywhere in the Territory.  For the avoidance
of doubt, as of the Closing Date, the Territory shall only include the United
States and Canada, and on the Acquisition Date of any Acquired Foreign Entity,
the Territory shall be expanded to include the country where such Acquired
Foreign Entity does business.  Nothing contained in this Section 7.2(a) shall
prohibit any Party from owning any securities of any Person (other than a
natural Person) whose securities are traded on a recognized securities exchange,
so long as such ownership interest does not exceed five percent (5%) of the
Equity Securities of such Person.  For purposes of this Section 7.2, the term
“Affiliates” shall not include any partners of any Bison Party or any Affiliates
of such partners.
 
(b)   Sellers and Fyfe Members agree that, during the Restricted Period, neither
they nor any of their Affiliates, Fibrwrap SE or Fibrwrap NC shall:  (i) cause,
solicit, induce or encourage any employees to leave employment with an ITI
Entity, provided, however, this prohibition shall not apply to any employee who
responds to a public solicitation not targeted directly at such employee, an ITI
Entity or their Affiliates or the Business; (ii) cause, induce or encourage any
material customer or supplier to terminate or modify any relationship with an
ITI Entity; or (iii) make or otherwise publish statements that disparage the ITI
Entities or any of their Affiliates.
 
 
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(c)   From and after the date hereof, Sellers and Fyfe Members and their
Affiliates, and their respective officers and directors shall not directly or
indirectly, and Fyfe Group shall cause Fibrwrap NC and Fibrwrap SE not to
directly or indirectly, (i) disclose, reveal, divulge or communicate to any
Person other than authorized officers, directors, attorneys, accountants and
advisors of the Sellers or Fyfe Members, or (ii) use or otherwise exploit for
its own benefit or for the benefit of anyone other than the ITI Entities, any
Confidential Information (as defined below) except as required to allow the
Foreign Entities to operate their Business after the Closing in the Ordinary
Course of Business.  Sellers, Fyfe Members, their Affiliates and their
respective officers, directors and Affiliates shall not have any obligation to
keep confidential any Confidential Information if and to the extent disclosure
thereof is specifically required by Law; provided, however, that in the event
disclosure is required by applicable Law, Sellers and Fyfe Members shall, to the
extent reasonably possible, provide the ITI Entities with prompt notice of such
requirement prior to making any disclosure so that the ITI Entities may seek an
appropriate protective order.  For purposes of this Section 7.2(c),
“Confidential Information” means any information with respect to the Business,
the Purchased Assets, the North American Companies and the Foreign Entities,
including methods of operation, customers, customer lists, products, prices,
fees, costs, Technology, inventions, trade secrets, Know-How, Software,
marketing methods, plans, personnel, suppliers, competitors, markets or other
specialized information or proprietary matters.  Confidential Information does
not include, and there shall be no obligation hereunder with respect to,
information that (i) is generally available to the public on the date of this
Agreement; (ii) becomes generally available to the public other than as a result
of a disclosure not otherwise permissible hereunder after the date of this
Agreement; (iii) information or techniques that are independently developed by
any Seller, Fyfe Member or any of their Affiliates or Representatives without
the use or application of Confidential Information; (iv) information that is or
becomes available to any Seller or Fyfe Member or any of their Affiliates from a
third party who is under no confidential or fiduciary obligation to the ITI
Entities or any Affiliate of the ITI Entities with respect to such information;
and  (vi) information in connection with submitting proof or evidence in any
Proceeding to enforce any Seller’s or Fyfe Member’s rights and remedies under
this Agreement or any of the Transaction Documents.
 
(d)   The Parties acknowledge and agree that the time, scope, and other
provisions of this Section 7.2 have been specifically negotiated by
sophisticated commercial parties and specifically hereby agree that such time,
scope and other provisions are reasonable under the circumstances.  The Parties
further agree that if, at any time, despite the express agreement of the
Parties, a court of competent jurisdiction holds that any portion of this
Section 7.2 is unenforceable because any of the restrictions therein are
unreasonable, or for any other reason, such decision shall not affect the
validity or enforceability of any of the other provisions of this Agreement, and
the maximum restrictions of time or scope reasonable under the circumstances, as
determined by such court, will be substituted for any such restrictions which
are held unenforceable.
 
Section 7.3    Taxes; Prorations.

 
(a)   Tax Returns and Audits.  Sellers shall cause to be timely paid, before the
same shall become delinquent and before penalties accrue thereon, all Taxes
(i) shown (or required to be shown) to be due on any Tax Return (or amendment
thereto) filed (or required to be filed) by the North American Companies with
respect to taxable periods ending on or before the Closing Date or portions of
all taxable periods beginning prior to the Closing Date and ending after the
Closing Date for that portion of such taxable period up to and including the
Closing Date whether such Tax Returns are required to be filed on, before or
after the Closing Date and (ii) that become due from, or payable by, the North
American Companies with respect to such periods.  All such Tax Returns shall be
filed or caused to be filed by the North American Companies and shall be
prepared using accounting methods that were used in preparing the relevant Tax
Returns for prior taxable periods.
 
 
 
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(b)   Tax Convention.  Whenever it is necessary for purposes of the Closing, any
indemnification required under this Section 7.3 or any other provision of this
Agreement to determine any liability for Taxes attributable to a taxable period
that begins before the Closing Date and ends after the Closing Date (a “Straddle
Period”), the determination as to the portion of such Taxes payable for the
period ending on the Closing Date, other than any ad valorem or property Taxes,
shall be made by treating the Closing Date as the end of a short taxable year of
Sellers based on an interim closing of the books.  In making this computation,
exemptions, allowances, or deductions calculated on an annual basis, such as the
deduction for depreciation, shall be apportioned as provided in the Code.  All
personal property Taxes which are past due upon any Purchased Assets or the
assets of any North American Company prior to the Closing Date shall be paid by
Sellers (or if any Seller has objected to such Taxes, such Seller shall assume
responsibility for such Taxes), together with any penalty or interest
thereon.  Current personal property Taxes attributable to the Purchased Assets
or the assets of Fyfe Co. or Specialized Fabrics, for any Straddle Period shall
be prorated and adjusted between Sellers and the ITI Entities as of the Closing
Date on a per diem basis based on the number of days in the portion of such
Straddle Period ending on the Closing Date (“Pre-Closing Period”) and the number
of days of such taxable period beginning on the day after the Closing Date
(“Post-Closing Period”).  Sellers shall be liable for the proportionate amount
of such Taxes that is attributable to the Pre-Closing Period, and the ITI
Entities shall be liable for the proportionate amount of such Taxes that is
attributable to the Post-Closing Period.  If current Tax bills are unavailable
at the Closing Date, the prior year’s Tax bills shall be used for proration
purposes and when the current year’s Tax bills are received, the proration shall
be recalculated and the appropriate payment shall be made forthwith.
 
(c)   Post-Closing Audits and Other Proceedings.  From and after the Closing
Date, the Sellers and the ITI Entities shall give prompt notice to each other of
any proposed adjustment by any taxing authority to Taxes of the North American
Companies for any Pre-Closing Periods and any Straddle Period.  Sellers, at
their expense, shall have the right to assume control of any audit, claim for
refund or administrative or judicial proceeding involving any asserted Tax
adjustment with respect to any Pre-Closing Period; provided, that Sellers shall
not settle any such Tax Liability without the prior written consent of the ITI
Entities (which consent shall not be unreasonably withheld),  The ITI Entities,
at their expense, shall control all proceedings taken in connection with any Tax
Liability relating to Taxes of the Business of the North American Companies or
the Purchased Assets for any Straddle Period taxable period (or portion thereof)
beginning after the Closing Date; provided that if there is a tax Proceeding in
which there is a possibility that the Sellers may become liable under this
Section 7.3 or ARTICLE IX, the ITI Entities shall not settle any such Tax
Liability without the prior written consent of Sellers, which consent shall not
be unreasonably withheld.  If there is a settlement or other disposition of the
Tax proceeding and the Taxes owed on account of any Taxes in respect of any
Pre-Closing Period or that portion of any Straddle Period ending on the Closing
Date exceed the Taxes shown on any such Tax Return for such Tax period, the ITI
Entities shall be entitled to receive from the Sellers, at least ten (10) days
in advance of any payment of any such additional Taxes that they, Fyfe Co. or
Specialized Fabrics or any Affiliate thereof pays to any Governmental Authority
in connection with the settlement or other disposition of such proceeding, the
portion of any such additional Taxes attributable to such Taxes.
 
 
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(d)   Cooperation and Assistance.  From time to time after the Closing, each
Party shall permit reasonable access, and shall cause their respective
accountants and other representatives to permit reasonable access to each other,
the information that they or their accountants or other representatives have
within their control and that may be reasonably necessary in connection with the
preparation of any Tax Return relating to the North American Companies or the
examination by any taxing authority or other administrative or judicial
proceeding relating to any Tax Return relating to the North American
Companies.  The North American Companies shall retain or cause to be retained,
until the applicable statutes of limitations (including any extensions) have
expired, copies of all Tax Returns relating to the North American Companies for
all taxable periods beginning before the Closing Date, together with supporting
work schedules and other records or information that may be relevant to such Tax
Returns.
 
(e)   Certain Tax Matters.  Prior to Closing, Sellers shall not make or permit
to be made in respect of the North American Companies any change in any
election, annual accounting period, adoption of any accounting method, filing of
any amended Tax Return, entering into of any closing agreement, settlement of
any Tax claim or assessment, surrender of any claim to a refund of Taxes, or
take or permit any other similar action, or omit to take any action relating to
the filing of any Tax Return or the payment of any Tax, if such election,
change, amendment, agreement, settlement, surrender, Consent or other action or
omission would have the effect of increasing the present or future Tax Liability
or decreasing any present or future Tax benefit relating to the ITI Entities or
the Purchased Assets, as the case may be.
 
(f)   Amended Returns.  Following the Closing, Sellers shall not amend, cause to
be amended, or permit to be amended, any Tax Return relating to any North
American Company which could affect the amount of any Taxes for which the ITI
Entities or the North American Companies could be liable subsequent to the
Closing, without the prior approval of the ITI Entities, which approval shall
not be unreasonably withheld.
 
(g)   Transfer Taxes.  The ITI Entities, on the one hand, and Sellers, on the
other hand, shall each bear one half the cost of all stamp, transfer,
documentary, sales, use, registration and other such Taxes and fees, including
any Taxes and fees related to the transfer of the Purchased Assets to the ITI
Entities (including any penalties and interest) incurred in connection with this
Agreement and the transactions contemplated hereby.
 
(h)   Termination of Tax Allocation Agreements.     Any Tax allocation or
sharing agreement or arrangement, whether or not written, that may have been
entered into between Sellers, the Related Entities and any other Person shall be
terminated as of the Closing Date and after the Closing Date neither the ITI
Entities or their respective Affiliates shall be bound thereby or have any
Liability thereunder.
 
 
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(i)   Sellers and the ITI entities agree to jointly elect not to have Canadian
GST/HST apply to the sale of the assets of Fibrwrap Construction Canada, and in
furtherance of such agreement, the applicable Seller of such assets and ITI Sub
4 agree to sign a Form GST-44 at Closing, which shall be filed immediately after
Closing by the ITI entities.
 
(j)   Miscellaneous. To the extent applicable in respect of any of Sellers’
Employees, the ITI Entities and Sellers agree to use the alternate procedure set
forth in IRS Revenue Procedure 2004-53 with respect to wage reporting.
 
(k)   Conflict.  In the event of any conflict between the provisions of this
Section 7.3 and the provisions of ARTICLE IX, the provisions of this Section 7.3
shall control.
 
Section 7.4   Further Assurances.  Sellers and the ITI Entities agree that after
the Closing Date they will hold in trust and will promptly transfer and deliver
to the proper recipient thereto, from time to time as and when received by them,
any cash, checks with appropriate endorsements (using their commercially
reasonable efforts not to convert such checks into cash), correspondence,
documents or other property that they may receive on or after the Closing that
properly belongs to the other party, including without limitation, any insurance
proceeds, and will account to the other for all such receipts.  Each Party shall
deliver on the Closing Date and thereafter all other documents, assignments,
instruments and certificates as the other Parties shall reasonably request to
affect the transactions contemplated by this Agreement.
 
Section 7.5   Environmental Matters.  Prior to and following the Closing, the
Parties agree to cooperate and take all actions reasonably necessary to
effectuate the transfer of Permits issued pursuant to Environmental Laws or, if
the transfer of such Permits is not allowed under Environmental Laws, the
Parties agree to cooperate and take all actions reasonably necessary to obtain
new Permits required pursuant to Environmental Laws.
 
ARTICLE VIII
Conditions to Obligation to Close; Financing and Diligence
 
Section 8.1   Conditions to the ITI Entities’ Obligation.  The ITI Entities’
obligations to consummate the transactions to be performed by any of them in
connection with the Closing are subject to satisfaction of each of the following
conditions:
 
(a)   The representations and warranties set forth in ARTICLE III and ARTICLE IV
shall be true and correct at and as of the Closing Date, as if made on and as of
such date;
 
(b)   Fyfe Members and Sellers shall have performed and complied with all of
their covenants hereunder in all material respects through the Closing, except
to the extent that such covenants are qualified by terms such as “material,”
“Material Adverse Change” or “Material Adverse Effect,” in which case Fyfe
Members and Sellers shall have performed and complied with all of such covenants
in all respects through the Closing;
 
 
 
 
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(c)     There shall not be any injunction, judgment, Order, decree, ruling, or
charge in effect preventing consummation of any of the transactions contemplated
by this Agreement;
 
(d)   Fyfe Members and Sellers shall have delivered to the ITI Entities
certificates duly executed by authorized representatives to the effect that each
of the conditions specified in Section 8.1(a) and Section 8.1(b) are satisfied
in all respects;
 
(e)   Sellers shall have delivered to the ITI Entities a Bill of Sale and
Assignment and assignments evidencing assignment of Intellectual Property in
forms reasonably acceptable to Sellers and the ITI Entities (the “Assignment
Agreements”) and other appropriate transfer instruments with respect to the
Purchased Assets, each duly executed by Sellers and evidencing the transfer of
the Purchased Assets and the Assumed Liabilities to the ITI Entities;
 
(f)   Fyfe Members and Sellers shall have delivered to the ITI Entities the
other Transaction Documents, duly executed by Fyfe Members, the Key Employees
and Sellers, as the case may be;
 
(g)   Fyfe Members and Sellers shall have executed and delivered to the ITI
Entities certificates as to:  (i) resolutions (or other corporate instruments as
applicable) embodying all limited liability company, corporate and partnership
actions taken by and on behalf of such Person to authorize the execution,
delivery and performance of the Transaction Documents by such Person; and (ii)
the incumbency of each officer signing this Agreement or any agreement, document
or instrument executed in connection with this Agreement or the transactions
contemplated by this Agreement on behalf of such Person;
 
(h)   The Consent of each Relevant Competition Authority shall have been
obtained;
 
(i)   The Consent of each Person to Fyfe Members’ or Sellers’ completion of the
transactions contemplated by this Agreement to the extent required in order for
Fyfe Members and Sellers to consummate the transactions contemplated by this
Agreement shall have been obtained;
 
(j)   The ITI Entities shall have obtained financing to consummate the
transactions contemplated by this Agreement from lending institutions and upon
terms acceptable to the ITI Entities;
 
(k)   The landlords of the Leased Real Property will have approved the
transactions contemplated by this Agreement to the extent such consent is
required by such Leases;
 
 
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(l)   Sellers shall have paid, or directed the ITI Entities to make such payment
at the Closing directly from the Purchase Price, all Liabilities for borrowed
money (including Liabilities pursuant to capital leases), that are not otherwise
included in the calculation of Target Working Capital or Closing Working Capital
pursuant to Section 2.6;
 
(m)    To the extent the same may be issued by the applicable state agencies
prior to Closing, Sellers shall provide the ITI Entities with a clearance
certificate or similar document(s) dated as of a date within 10 days of the
Closing Date certifying that the North American Companies do not owe taxes to
their states of formation or incorporation, as the case may be;
 
(n)   There shall not have occurred any event which, or any combination of
events which collectively, would or, with the passage of time, would reasonably
be expected to have a Material Adverse Effect;
 
(o)   the Leases identified on Schedule 8.1(o) shall have been amended upon
terms reasonably acceptable to the ITI Entities and, (ii) those Contracts listed
on Schedule 8.1(o) shall have been terminated or modified as further set forth
on the Schedule 8.1(o); and
 
(p)   Sellers shall use best efforts to obtain and deliver to the ITI Entities
an updated Schedule 4.4(a) setting forth, for each Foreign Entity, each Person
who is a shareholder, member or other holder of any Equity Securities and the
Equity Securities or percentage interest held by such Person.
 
The ITI Entities may waive any condition specified in this Section 8.1 if they
execute a writing so stating at or prior to the Closing.
 
Section 8.2   Conditions to Sellers’ Obligation.  Sellers’ obligations to
consummate the transactions to be performed by any of them in connection with
the Closing are subject to satisfaction of each of the following conditions:
 
(a)   The representations and warranties set forth in ARTICLE V shall be true
and correct at and as of the Closing Date, as if made on and as of such date;
 
(b)   The ITI Entities shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing, except to the
extent that such covenants are qualified by terms such as “material,” in which
case the ITI Entities shall have performed and complied with all of such
covenants in all respects through the Closing;
 
(c)   There shall not be any injunction, judgment, Order, decree, ruling, or
charge in effect preventing consummation of any of the transactions contemplated
by this Agreement;
 
(d)   The ITI Entities shall have delivered to Sellers certificates duly
executed by authorized representatives to the effect that each of the conditions
specified in Section 8.2(a) and Section 8.2(b) are satisfied in all respects;
 
 
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(e)   The ITI Entities shall have delivered to Sellers the Assignment Agreement,
evidencing the acceptance of the Purchased Assets and the assumption of the
Assumed Liabilities by the ITI Entities;
 
(f)   The ITI Entities shall have delivered to Sellers the Transaction
Documents, duly executed by the applicable ITI Entity;
 
(g)   The ITI Entities shall have delivered the Purchase Price to Sellers and
the Escrowed Purchase Price to the Escrow Agent;
 
(h)   The ITI Entities shall have executed and delivered to Sellers certificates
as to:  (i) resolutions embodying all corporate or limited liability company
actions taken by and on behalf of the ITI Entities to authorize the execution,
delivery and performance of this Agreement; and (ii) the incumbency of each
officer signing this Agreement or any agreement, document or instrument executed
in connection with this Agreement or the transactions contemplated by this
Agreement on behalf of the ITI Entities; and
 
(i)   The Consent of each Relevant Competition Authority shall have been
obtained.
 
Sellers may waive any condition specified in this Section 8.2 if they execute a
writing so stating at or prior to the Closing.
 
ARTICLE IX
Remedies for Breaches of this Agreement
 
Section 9.1   Survival of Representations, Warranties and Covenants.
 
(a)   The representations and warranties of the Parties made or provided for in
this Agreement shall survive the Closing for a period of 18 months; provided,
however, that
 
          (i)            the representations and warranties in Section 3.1(a),
(b) and (c), Section 3.2(b), Section 4.1(a), Section 4.2(a), (b) and (c),
Section 4.3(b), the 4.4(a) Rep, Section 5.1, Section 5.2 and Section 5.3 shall
survive the Closing indefinitely;

          (ii)           the representations and warranties in Section 4.6(a),
Section 4.9(g) and Section 4.22 shall survive the Closing (A) with respect to
the Bison Parties, until the date which is the earlier to occur of (1)
dissolution of the Bison Parties, or (2) five years, and (B) with respect to all
Parties other than the Bison Parties, five years; and
 
       (iii)            the representations and warranties in Section 4.18 and
Section 4.23 shall survive the Closing (A) with respect to the Bison Parties,
until the date which is the earlier to occur of (1) dissolution of the Bison
Parties, or (2) expiration of the applicable statute of limitations plus six
months, and (B) with respect to all Parties other than the Bison Parties,
expiration of the applicable statute of limitations plus six months.
 
 
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(b)           The covenants contained in this Agreement shall survive until
fully discharged or until they expire in accordance with their stated terms.

(c)            Claims for indemnification pursuant to Sections 9.2(a)(iii) -
(viii) or pursuant to Section 9.3(iii) and (iv) or pursuant to Section 5.6,
Section 6.8(j) and Section 6.10(b) shall survive the Closing (i) with respect to
the Bison Parties, until the date which is the earlier to occur of (A)
dissolution of the Bison Parties, or (B) seven years, and (ii) with respect to
all Parties other than the Bison Parties, for seven years.

(d)           No Claim for indemnification for breaches of any representation,
warranty or covenant or other provision may be asserted after the expiration of
the applicable survival period set forth in this Section 9.1.  So long as the
Indemnified Party asserts a Claim for indemnification under and in accordance
with this ARTICLE IX for a breach by another Party of any of its
representations, warranties or covenants contained in this Agreement prior to
the expiration of the applicable survival period set forth in this Section 9.1,
such Indemnified Party shall be deemed to have preserved its rights to
indemnification under this ARTICLE IX regardless of when such Claim is
ultimately liquidated or resolved.

(e)           The provisions of this ARTICLE IX set forth the Parties’ sole and
exclusive remedy after the Closing for any breach of this Agreement; provided
that a Party shall be entitled to pursue any injunctive or other equitable
relief to which a Party is entitled without restriction, including, without
limitation the remedies set forth in Section 11.14.

Section 9.2   Indemnification by Fyfe Members and Sellers.
 
(a)           Subject to the provisions of this ARTICLE IX, Sellers and Fyfe
Members agree to indemnify, defend and hold harmless the ITI Entities, their
respective Affiliates and their officers, directors, representatives, agents and
employees (the “ITI Indemnified Parties”) from and after the Closing, against
any and all Claims to the extent such Claims are based upon, arise out of or are
related to (i) a breach of any representation or warranty of Fyfe Members or
Sellers set forth in this Agreement, (ii) any failure to perform or comply with
any of the covenants, conditions or agreements of Fyfe Members or Sellers set
forth in this Agreement or, (iii) the conduct of the Business by the North
American Companies and ownership of the Purchased Assets prior to Closing, (iv)
the Excluded Liabilities and Excluded Assets, (v) any Liability in connection
with any compensation or benefit obligation or other Liability relating to
events or circumstances arising on or prior to the Closing Date, including under
the WARN Act or other local or state plant closing Law, in connection with any
Employee of Sellers or any other employee, former employee or independent
contractor of Sellers, (vi) except as expressly set forth in Section 6.8(h) and
Section 6.8(i), any liability with respect to any Benefit Plan of a North
American Company, including without limitation, any withdrawal liability; (vii)
any violation or breach by the North American Companies prior to the Closing
Date of a Law or Contract governing the terms and conditions of employment, or
qualifications or status of any employee or any order or judgment of any
Governmental Authority with respect thereto including, without limitation Laws
or Contract provisions in respect of employment practices, employee
documentation, terms and conditions of employment and wages and hours, equal
employment opportunity, nondiscrimination, immigration, benefits, collective
bargaining, the payment of social security and similar taxes, occupational
safety, and health and plant closings, and (viii) that certain Proceeding called
Laborers’ Pension Fund, et al. v. R.D. Installations, Inc., et al., Case No.
1:11-cv-1889 (N.D. Ill.).
 
 
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(b)           The liability of the Sellers for Claims for indemnification under
any provision of this Agreement shall be on a joint and several basis.  The
liability of the Fyfe Members for claims for indemnification under this
Agreement shall be on a several and not joint basis and, as among the Fyfe
Members, a Fyfe Member shall be liable only for its proportionate share of such
Claims pro rata based on its percentage ownership of Fyfe Group as of the
Closing Date.  Notwithstanding the foregoing sentences of this subsection, with
respect to any representation, warranty or covenant which is made by a Fyfe
Member with respect to itself (in the case of a representation or warranty) or
which is to be performed personally by a Fyfe Member or which is within such
Fyfe Member’s control (with respect to a covenant), such Fyfe Member shall be
solely responsible for all Claims for indemnification which arise as a result of
its breach of such representation, warranty or covenant.  By way of example and
not for purposes of limitation, if a particular Fyfe Member breaches the
representation contained in Section 3.1(a) with respect to itself or breaches
the covenant contained in Section 7.2, such Fyfe Member shall be solely
responsible for all Claims for indemnification in connection with such breach
and the other Fyfe Members and Sellers shall have no liability for such breach.
 
Section 9.3   Indemnification by the ITI Entities.  Subject to the provisions of
this ARTICLE IX, the ITI Entities jointly and severally agree to indemnify,
defend and hold harmless Sellers, Fyfe Members and their respective Affiliates
and their officers, directors, representatives, agents and employees (the “Fyfe
Indemnified Parties”) from and after the Closing, against any and all Claims to
the extent such Claims are based upon, arise out of or are related to (i) a
breach of any representation or warranty of the ITI Entities set forth in this
Agreement, (ii) any failure to perform or comply with any of the covenants,
conditions or agreements of the ITI Entities set forth in this Agreement, (iii)
the Assumed Liabilities, and (iv) the conduct of the Business and ownership of
the Purchased Assets and the Assumed Liabilities from and after the Closing,
provided, that the ITI Entities shall not be obligated to indemnify the Fyfe
Indemnified Parties to the extent that Claims under (iv) occur as a result of
the ITI Entities operating the Business in the manner conducted prior to Closing
in reasonable reliance on any representation or warranty of Sellers or the Fyfe
Members in Article IV.
 
Section 9.4  Certain Limitations on Indemnification.  Notwithstanding anything
to the contrary contained anywhere in this Agreement:
 
(a)   Basket.
 
          (i)   Sellers and Fyfe Members shall have no obligation to indemnify
the ITI Indemnified Parties pursuant to Section 9.2 until the ITI Indemnified
Parties have a Claim or Claims in the aggregate (combined for all Sellers and
Fyfe Members) in excess of Five Hundred Thousand Dollars ($500,000) (the
“Basket”), at which point the Fyfe Members’ and Sellers’ obligation to indemnify
shall apply to the amount of all such Claims, including the full amount of the
Basket.  Notwithstanding the foregoing, the limitation of the Basket shall not
apply to (A) Claims for indemnification pursuant to Section 9.2(a)(ii) where the
breach is by a Fyfe Member of a covenant which is to be performed personally by
such Fyfe Member or which is within the control of such Fyfe Member, and (B)
Claims for indemnification involving actual fraud or intentional misconduct on
the part of a Seller or Fyfe Member; and (C) Claims for indemnification pursuant
to Section 4.25, Section 6.8(j) and Section 6.10(b); and
 
 
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          (ii)   The ITI Entities shall have no obligation to indemnify the Fyfe
Indemnified Parties pursuant to Section 9.3 until the Fyfe Indemnified Parties
have a Claim or Claims in excess of the amount of the Basket, at which point the
ITI Entities’ obligation to indemnify shall apply to the amount of all such
Claims, including the full amount of the Basket.  Notwithstanding the foregoing,
the limitation of the Basket shall not apply to (A) Claims for indemnification
pursuant to Section 9.3(ii), and (B) Claims for indemnification involving actual
fraud or intentional misconduct on the part of the ITI Entities.
 
(b)   Cap.
 
          (i)   Sellers’ and Fyfe Members’ obligation to indemnify the ITI
Indemnified Parties pursuant to Section 9.2 shall be limited as follows:
 
    (A)    with respect to Claims for indemnification for a breach of the
representations and warranties in Section 3.1(a), (b) and (c), Section 3.2(b),
Section 4.1(a), Sections 4.2(a), (b) and (c), Section 4.3(b) and the 4.4(a) Rep,
such Claims shall not be subject to any maximum Liability limitation;
 
    (B)    with respect to Claims for (1) a breach of any of the representations
and warranties in Section 4.6(a), Section 4.9(g), Section 4.18, Section 4.22,
Section 4.23 and Section 4.25, and (2) Claims for indemnification pursuant to
Section 9.2(a)(ii) - (viii), Section 9.3(iii) and (iv), Section 5.6, Section
6.8(j), and Section 6.10(b), such Claims shall be limited, in the aggregate with
all other such Claims (1) with respect to the Bison Parties, $10,000,000 in the
aggregate, and (2) with respect to all Sellers and Fyfe Members other than the
Bison Parties, $30,000,000 in the aggregate;
 
          (C)    with respect to Claims for a breach of all representations and
warranties other than those set forth in subsection (B) above, such Claims shall
be limited to $15,000,000 in the aggregate with all other such Claims;
 
            (D)    notwithstanding subsection (B) above, with respect to a Fyfe
Members’ liability for Claims for indemnification pursuant to Section 9.2(a)(ii)
where the breach is by a Fyfe Member of a covenant which is to be performed
personally by such Fyfe Member or which is within the control of such Fyfe
Member,  such Claims shall not be subject to any maximum Liability limitation;
and
 
 
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    (E)    with respect to Claims involving actual fraud or intentional
misconduct on the part of a Seller or Fyfe Member, such Seller’s or Fyfe
Member’s liability such Claims shall not be subject to any maximum Liability
limitation.
 
    (F)    For the avoidance of doubt, Claims for indemnification addressed in
subsections (A) - (D) shall be aggregated in meeting the applicable thresholds
in subsections (B) and (C).
 
          (ii)   The ITI Entities obligation to indemnify the Fyfe Indemnified
Parties pursuant to Section 9.3 shall be limited, in the aggregate, to Fifteen
Million Dollars ($15,000,000); provided, that the limitations set forth in this
Section 9.4 shall not apply (A) with respect to Claims for indemnification for a
breach of the representations and warranties in Section 5.2 and Section 5.3, (B)
Claims involving actual fraud or intentional misconduct on the part of an ITI
Entity, and (C) Claims pursuant to Section 9.3(ii).
 
(c)   De Minimis Threshold.
 
          (i)   Sellers and Fyfe Members shall not be required to indemnify the
ITI Indemnified Parties pursuant to Section 9.2 with respect to any individual
matter or group of substantially related matters unless the Claims based on,
attributable to or arising from such matter or group of substantially related
matters equals or exceeds $10,000 (the “De Minimis Threshold”). Notwithstanding
the foregoing, the limitation of the De Minimis Threshold shall not apply to
Claims for indemnification pursuant to Section 6.8(j) and Section 6.10(b).
 
          (ii)   The ITI Entities shall not be required to indemnify the Fyfe
Indemnified Parties pursuant to Section 9.3 with respect to any individual
matter or group of substantially related matters unless the Claims based on,
attributable to or arising from such matter or group of substantially related
matters equals or exceeds the De Minimis Threshold.
 
(d)   Section 4.25 Claims.  The ITI Entities shall not compromise an accounts
receivable transferred by Sellers pursuant to this Agreement without Sellers’
prior consent.  In connection with any Claim for indemnification, to the extent
that the ITI Entities are indemnified for such Claim with respect to any
uncollected receivable, the ITI Entities shall assign or reconvey the
uncollected receivable to Sellers.
 
 
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(e)   For purposes of this ARTICLE IX, all references with respect to a Party’s
obligation to indemnify shall be interpreted to include obligations under
Sections 9.2 and 9.3 to defend and hold harmless.
 
(f)   NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE CONTRARY, NO
PARTY SHALL HAVE ANY LIABILITY TO ANY OTHER PARTY FOR SUCH OTHER PARTY’S LOST
PROFITS, LOST OPPORTUNITY, LOSS OF BUSINESS REPUTATION OR DIMINUTION IN VALUE,
INTERRUPTION OF BUSINESS, SPECULATIVE, SPECIAL, CONSEQUENTIAL, INCIDENTAL,
INDIRECT OR PUNITIVE DAMAGES.  THE RESTRICTION SET FORTH IN THE FOREGOING
SENTENCE DOES NOT APPLY, HOWEVER, TO A THIRD PARTY CLAIM FOR LOST PROFITS, LOST
OPPORTUNITY, LOSS OF BUSINESS REPUTATION OR DIMINUTION IN VALUE, INTERRUPTION OF
BUSINESS, SPECULATIVE, SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT OR PUNITIVE
DAMAGES.
 
Section 9.5   Indemnification Procedures.

 
(a)   If any third party shall notify any Party (the “Indemnified Party”) with
respect to any matter (a “Third Party Claim”) which may give rise to a Claim for
indemnification against any other Party (the “Indemnifying Party”) then the
Indemnified Party shall promptly (and in any event within 15 Business Days after
receiving notice of the Third Party Claim) notify each Indemnifying Party
thereof in writing.  The failure to notify the Indemnifying Party promptly of a
Third Party Claim shall not relieve the Indemnifying Party from its
indemnification obligation hereunder, except to the extent that the Indemnifying
Party is actually prejudiced thereby.
 
(b)   Any Indemnifying Party will have the right at any time to assume and
thereafter conduct the defense of the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party; provided, however, that
the Indemnifying Party shall not waive any defense, cause of action or
counterclaim or consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the prior written
consent of the Indemnified Party, which consent shall not be unreasonably
conditioned, delayed or withheld.  In the event that the Indemnifying Party
assumes the defense as provided in this Section 9.5, the Indemnified Party shall
have the right to participate in such defense (including with counsel of its
choice), at its own expense, and the Parties shall reasonably cooperate with one
another in connection with such defense and participation.  In the event that
the Indemnified Party shall in good faith determine that the Indemnifying Party
may have a conflict of interest as a result of defenses or counterclaims that
are inconsistent with one or more of those that may be available to the
Indemnified Party and the Indemnifying Party or its counsel may control the
outcome on the defense or counterclaim, the Indemnified Party shall have the
right to:  (i) Independent counsel at the sole cost of the Indemnifying Party,
subject to the limitations on Claims for indemnification set forth in Section
9.4; or (ii) with the consent the Indemnifying Party, shall take over and assume
control over the defense, settlement, negotiations or litigation relating to any
such Third Party Claim.  In the event the Indemnified Party does so take over
and assume control, the Indemnified Party shall not consent to the entry of any
judgment or enter into a settlement with respect to such Third Party Claim
without the prior written consent of the Indemnifying Party.  In all cases, the
consent shall not be unreasonably withheld, conditioned or delayed.  
 
 
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(c)   Unless and until an Indemnifying Party assumes the defense of the Third
Party Claim as provided in Section 9.5(b) above, however, the Indemnified Party
may defend against the Third Party Claim in any manner it reasonably may deem
appropriate, on behalf of and for the risk of the Indemnifying Party and the
Indemnifying Party shall be liable for the reasonable fees and expenses of
counsel employed by the Indemnified Party for any period during which the
Indemnifying Party has not assumed the defense thereof, subject to the
limitations on Claims for indemnification set forth in Section 9.4.
 
(d)   In no event will the Indemnified Party consent to the entry of any
judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnifying Party, which consent shall
not be unreasonably withheld, conditioned or delayed.
 
(e)   The Party assuming the defense under this Section 9.5 shall keep the
appropriate Parties reasonably informed regarding the progress and status
thereof.
 
(f)   In the event any Indemnified Party should have a Claim against any
Indemnifying Party hereunder which does not involve a Third Party Claim, the
Indemnified Party shall promptly transmit to the Indemnifying Party a written
notice (the “Indemnity Notice”) describing in reasonable detail the nature of
the Claim and the basis of the Indemnified Party’s request for indemnification
under this Agreement, provided, however, that failure of the Indemnified Party
to give the Indemnity Notice will not relieve the Indemnifying Party from
Liability hereunder unless and solely to the extent that the Indemnifying Party
did not otherwise learn of such Claim and such failure results in the forfeiture
by the Indemnifying Party of substantial rights and defenses, and will not in
any event relieve the Indemnifying Party from any obligations to the Indemnified
Party other than the indemnification obligation provided herein.
 
Section 9.6   Escrow Fund.  All liabilities of Fyfe Members and Sellers under
this ARTICLE IX shall first be paid or reimbursed out of the Escrow Fund by
release of the Escrowed Purchase Price to the ITI Entities.  After exhaustion of
the Escrow Fund or upon the release of the Escrow Fund in accordance with the
terms of the Escrow Agreement, any claim for indemnification by the ITI
Indemnified Parties shall be satisfied by Fyfe Members and Sellers on a joint
and several basis.
 
ARTICLE X
Termination
 
Section 10.1   Termination of Agreement.  The Parties may terminate this
Agreement as provided below:
 
(a)   The ITI Entities, Fyfe Members and Sellers may terminate this Agreement by
mutual written consent at any time prior to the Closing;
 
(b)   The ITI Entities or Sellers may terminate this Agreement if any
Governmental Authority shall have enacted, promulgated or issued any statute,
rule, regulation, ruling, writ or injunction, or taken any other action,
restraining, enjoining or otherwise prohibiting the transactions contemplated
hereby and all appeals and means of appeal therefrom have been exhausted;
 
 
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(c)   The ITI Entities may terminate this Agreement by giving written notice to
Sellers at any time prior to the Closing (i) if Sellers or the Fyfe Members have
breached any representation, warranty or covenant contained in this Agreement,
such breach would result in a condition set forth in Section 8.1(a) or Section
8.1(b) not being met, the ITI Entities have notified Sellers of the breach in
writing, and the breach has continued without cure for a period of 30 days after
written notice of breach or is incapable of being cured, or (ii) if the Closing
shall not have occurred on or before September 30,, 2011 (the “Outside Closing
Date”), by reason of the failure of any condition precedent under Section 8.1
hereof (unless the failure results primarily from the ITI Entities’ materially
breaching any representation, warranty or covenant contained in this Agreement);
and
 
(d)   Sellers may terminate this Agreement by giving written notice to the ITI
Entities at any time prior to the Closing (i) if the ITI Entities have breached
any representation, warranty or covenant contained in this Agreement, such
breach would result in the Closing condition set forth in Section 8.2(a),
Section 8.2(b) not being met, Sellers have notified the ITI Entities of the
breach in writing, and the breach has continued without cure for a period of 30
days after written notice of breach or is incapable of being cured, or (ii) if
the Closing shall not have occurred on or before September 30, 2011, by reason
of the failure of any condition precedent under Section 8.2 or Section 8.1(j)
hereof (unless the failure results primarily from any Seller or any Fyfe Member
materially breaching any representation, warranty or covenant contained in this
Agreement).
 
Section 10.2   Termination Fee; Effect of Termination.
 
(a)   The ITI Entities shall pay to Sellers a termination fee in the amount of
$2,000,000 (the “Financing Termination Fee”) in the event that this Agreement is
terminated by Sellers pursuant to Section 10.1(d) and the reason that the
Closing shall not have occurred on or before the Outside Closing Date is the
failure of the condition set forth in Section 8.1(j).  All payments under this
Section 10.2(a) shall be made by wire transfer of immediately available funds to
an account designated by Sellers.  Notwithstanding anything to the contrary in
this Agreement, if the Closing fails to occur as a result of the failure of the
condition set forth in Section 8.1(j), then the Sellers’ and the Fyfe Members’
sole and exclusive remedy (whether at law, in equity, in contract, in tort or
otherwise) against the ITI Entities for any breach, loss or damage shall be to
terminate this Agreement and receive payment of the Financing Termination Fee in
accordance with this Section 10.2(a); and upon payment of the Financing
Termination Fee, no Person shall have any rights or claims against the ITI
Entities under this Agreement or otherwise, whether at law or equity, in
contract, in tort or otherwise, including, without limitation, any right to
specific performance pursuant to Section 11.14.
 
(b)   The ITI Entities shall pay to Sellers a fee in the amount of $100,000 in
the event that the Closing has not occurred by August 31, 2011 and the reason
that the Closing shall not have occurred on or before such date is the failure
of the condition set forth in Section 8.1(j).
 
 
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(c)   Except as set forth in this Section 10.2, if any Party terminates this
Agreement pursuant to Section 10.1 above, all rights and obligations of the
Parties hereunder shall terminate without any Liability of any Party to any
other Party (except for any Liability of a Party then in
breach).  Notwithstanding any other term of this Agreement, the Confidentiality
Agreement and the provisions of this Section 10.2 and ARTICLE XI shall survive
any termination of this Agreement in accordance with their terms.
 
(d)   THE PARTIES REALIZE THAT IT WOULD BE EXTREMELY DIFFICULT AND
IMPRACTICABLE, IF NOT IMPOSSIBLE, TO ASCERTAIN WITH ANY DEGREE OF CERTAINTY THE
AMOUNT OF DAMAGES THAT WOULD BE SUFFERED BY SELLERS AND FYFE MEMBERS IN THE
EVENT OF THE ITI ENTITIES FAILURE TO OBTAIN FINANCING SUFFICIENT TO CONSUMMATE
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  THE PARTIES, HAVING MADE
DILIGENT BUT UNSUCCESSFUL ATTEMPTS TO ASCERTAIN THE ACTUAL COMPENSATORY DAMAGES
THE SELLERS AND FYFE MEMBERS WOULD SUFFER IN THE EVENT OF SUCH DEFAULT, HEREBY
AGREE THAT THE REASONABLE ESTIMATE OF SAID DAMAGES IS THE AMOUNT OF THE FYFE
TERMINATION FEE.   THE AMOUNT OF THE FINANCING TERMINATION FEE HAS BEEN
DETERMINED BY THE PARTIES TO BE A REASONABLE SUM AS LIQUIDATED DAMAGES.

 
ARTICLE XI
Miscellaneous
 
Section 11.1   Press Releases and Public Announcements.  Prior to the Closing,
except as required by applicable Law, including the U.S. federal securities
laws, or listing agreement with any securities exchange, no Party shall, nor
shall any Party permit its Affiliates to, make any public announcement in
respect of this Agreement or the transactions contemplated hereby without the
prior written consent of the other Parties, which consent shall not be
unreasonably withheld or delayed.

Section 11.2   Expenses.  Except as otherwise set forth herein or in the other
Transaction Documents, whether or not the transactions contemplated by this
Agreement and the other Transaction Documents shall be consummated, all fees,
costs and expenses incurred by or on behalf of a Party or its Affiliate in
connection with this Agreement and the other Transaction Documents and the
transactions contemplated hereby and thereby shall be borne by such Party
(including all fees of counsel, actuaries, accountants and other consultants and
advisors).
 
Section 11.3   No Third-Party Beneficiaries.  This Agreement shall not confer
any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns, and nothing contained herein,
express or implied, is intended to or shall confer upon any other Person any
third-party beneficiary right or any other legal or equitable rights, benefits
or remedies of any nature whatsoever under or by reason of this Agreement.
 
Section 11.4   Entire Agreement.  This Agreement (including the Confidentiality
Agreement and the other Transaction Documents) constitutes the entire agreement
between the Parties and supersedes any prior understandings, agreements, or
representations by or between the Parties, written or oral, to the extent they
relate in any way to the subject matter hereof.
 
 
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Section 11.5   Succession and Assignment.  This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns.  No Party may assign either this Agreement or
any of its rights, interest or obligations hereunder without the prior written
approval of the other Parties; provided, however, that the ITI Entities may
assign any of its rights or obligations under this Agreement to any of its
Affiliates upon written notice to Sellers, but such assignment shall not
constitute a release of the ITI Entities, which shall remain responsible for
performing any assigned obligation in the event the assignee fails to perform
such obligation.  Any purported assignment or delegation in violation of this
Section 11.5 shall be null and void.
 
Section 11.6   Counterparts.  This Agreement may be executed in one or more
counterparts (including by means of facsimile), each of which shall be deemed an
original but all of which together will constitute one and the same
instrument.  Delivery of an executed counterpart of a signature page to this
Agreement by facsimile, e-mail PDF or other electronic signature shall be
effective as delivery of an originally executed counterpart to this Agreement.
 
Section 11.7   Headings.  The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
 
Section 11.8   Notices.  Any notice, request, demand or other communication
required or permitted under this Agreement (each a “notice” for purposes of this
Section) shall be in writing and shall be deemed to have been duly given to and
received by a Person (i) on the day such notice is personally delivered to such
Person, (ii) on the first Business Day after the day on which the notice is
deposited with an internationally recognized overnight courier service (delivery
charges prepaid), or (iii) when received at the applicable facsimile number set
forth below when sent by facsimile (with confirmation of transmission), provided
that in each case, the notice is addressed to the intended recipient as set
forth below:
 
 
         If to Fyfe Members
 

 
or Sellers:
Fyfe Group, LLC
8380 Miralani Drive

 
San Diego, CA 92126

 
Attention:  Heath Carr

 
Fax: (858) 642-0694 Ext. 12

 
With a copy to:
Gibbs, Giden, Locher, Turner & Senet LLP

 
1880 Century Park East, 12th Floor

 
Los Angeles, CA 90067

 
Attention:  William D. Locher, Esq.

 
 
Fax: (310) 552-0805

 
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If to the ITI Entities:
Insituform Technologies, Inc.

 
17988 Edison Avenue

 
Chesterfield, Missouri 63005

 
Attention: General Counsel

 
Fax: (636) 530-8700

 
With a copy to:
Thompson Coburn LLP

 
One US Bank Plaza

 
St. Louis, Missouri 63101

 
Attention: Robert LaRose, Esq.

 
Fax: (314) 552-7068

Any Party may change the address to which notices, requests, demands, Claims,
and other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
 
Section 11.9   Governing Law; Venue.  This Agreement shall be governed by and
construed and interpreted in accordance with the substantive Laws of the State
of Delaware, without giving effect to any choice of law or conflicts of law
provision that would cause the application of the laws of a jurisdiction other
than Delaware; provided that the transfer of real estate and other assets shall
be governed by the Law that mandatorily applies thereto.  Each Party hereby
irrevocably submits to the exclusive jurisdiction of the federal or state courts
of Delaware (and any court to which an appeal may be taken therefrom) for the
purposes of any suit, action or other proceeding arising out of this Agreement
or the subject matter hereof or any of the transactions contemplated hereby
brought by any Party.  Each Party irrevocably agrees that all Claims in respect
of such action or proceeding may be heard and determined in such federal court
and hereby irrevocably waives, and agrees not to assert, by way of motion, as a
defense, or otherwise, in any such suit, action or proceeding any claim that it
is not personally subject to the jurisdiction of the above-named court, that the
suit, action or proceeding is brought in an inconvenient forum, that the venue
of the suit, action or proceeding is improper or that this Agreement or the
subject matter hereof may not be enforced in or by such court.  Each Party
consents to the service of process in any suit, action or proceeding by the
mailing, by certified mail, return receipt requested, of copies thereof to such
Party at any time at its address to which notices are to be given pursuant to
Section 11.8.  Each Party agrees that its submission to jurisdiction and consent
to service of process by mail is made for the express benefit of the other
Parties.  Final judgment against any Party in any such suit, action or
proceeding shall be conclusive, and may be enforced in any other jurisdiction
(i) by suit, action or proceeding on the judgment, a certified or true copy of
which shall be conclusive evidence of the fact and the amount of Liability of
the party therein described or (ii) in any other manner provided by or pursuant
to the Laws of such other jurisdiction.
 
Section 11.10   Amendments and Waivers.  No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by each
of the Parties, and appropriately notarized to the extent required by applicable
law.  No waiver by any Party of any provision of this Agreement or any default,
misrepresentation or breach of warranty or covenant hereunder, whether
intentional or not, shall be valid unless the same shall be in writing and
signed by the Party making such waiver, nor shall such waiver be deemed to
extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
 
 
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Section 11.11   Severability.  Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
 
Section 11.12   Construction.  The Parties have participated jointly in the
negotiation and drafting of this Agreement.  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.  Any reference to any federal, state or local
or foreign statute or Law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.  The
word “including” shall mean including without limitation.
 
Section 11.13   Incorporation of Exhibits and Schedules.  The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
 
Section 11.14   Specific Performance.  Each Party acknowledges and agrees that
the other Parties would be irreparably injured if any of the provisions of this
Agreement are not performed in accordance with their specific terms and that
money damages may not or would not be an adequate remedy in such
event.  Therefore, the non-breaching Party will be entitled to specific
performance of this Agreement and injunctive or other equitable relief to
prevent breaches of this Agreement and to specifically enforce the provisions
hereof.
 
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
 

THE ITI ENTITIES     SELLERS:             INSITUFORM TECHNOLOGIES, INC.     FYFE
GROUP, LLC            
By:  /s/ David F. Morris
   
By: /s/ Heath Carr
 
Name:  David F. Morris
   
Name:  Heath Carr 
 
Title:  SVP, G.C. and CAO 
   
Title:  CEO
 

 
 

INFRASTRUCTURE GROUP HOLDINGS, LLC     R.D. INSTALLATIONS, INC.            
By:  /s/ David F. Morris
   
By:  /s/ Rolande Dalati Fyfe
 
Name:  David F. Morris
   
Name:  Rolande Dalati Fyfe 
 
Title:  SVP and CAO  
   
Title:  President
 

 
FIBRWRAP CONSTRUCTION SERVICES,
INC.
    FIBRWRAP CONSTRUCTION, INC.            
By:  /s/ David F. Morris
   
By: /s/ Edward R. Fyfe                         /s/ Heath Carr
 
Name:  David F. Morris
   
Name:  Edward R. Fyfe                        Heath Carr
 
Title:  SVP and CAO 
   
Title:  Secretary                                     President
 

 
FIBRWRAP CONSTRUCTION SERVICES
USA, INC.
 
       
By:  /s/ David F. Morris
   
/s/ Edward F. Fyfe
 
Name:  David F. Morris
   
Edward R. Fyfe, individually
 
Title:  SVP and CAO 
   
 
 

 

     
FIBRWRAP CONSTRUCTION, L.P.
 
 
 
   
By: /s/ Heath Carr
 
 
   
Name:  Heath Carr 
 
 
   
Title:  CEO
 

 
 
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0916268 B.C. LTD.
 
    FYFE HOLDINGS, LLC  
By:  /s/ David F. Morris
   
By: /s/ Edward R. Fyfe
 
Name:  David F. Morris
   
Name:  Edward  R. Fyfe
 
Title:  SVP and CAO 
   
Title:  Managing Member
 

 
FYFE MEMBERS:
                 
FIBRWRAP CONSTRUCTION, INC.
   
FIBRWRAP CONSTRUCTION CANADA
LIMITED
 
 
By: /s/ Edward R. Fyfe
   
By: /s/ Edward R. Fyfe
 
Name: Edward  R. Fyfe
   
Name:  Edward  R. Fyfe
 
Title: Secretary
   
Title:  President
 

 
FYFE-CARR CORPORATION
 
       
By: /s/ Heath Carr
   
/s/ Edward R. Fyfe
 
Name:  Heath Carr
Title:  Member
 
/s/ R. Fyfe
   
Edward R. Fyfe, as Trustee of the Edward R.
Fyfe and Rolande Dalati Fyfe Family Trust
a/k/a the Fyfe Family Trust and the Fyfe
Irrevocable Grantor’s Trust U.D.T. Dated
December 18, 2008
 

Rob Fyfe - Member
 
 
/s/ Rolande Dalati Fyfe
 
 
 
BISON CAPITAL EQUITY PARTNERS II-A, L.P.
 
Rolande Dalati Fyfe, as Trustee of the Edward
R. Fyfe and Rolande Dalati Fyfe Family Trust
a/k/a the Fyfe Family Trust
 

 
By: /s/ Douglas B. Tressler
   
 
/s/ R. Fyfe
 
Name:  Douglas B. Tressler
Title:  Managing Member
   
Robert Fyfe, as Trustee of the Robert J. Fyfe
2008 Irrevocable Trust
 
 
   
 
 

BISON CAPITAL EQUITY PARTNERS II-B, L.P.
 
       
By: /s/ Douglas B. Tressler
   
/s/ Heath Carr
 
Name:  Douglas B. Tressler
Title:  Managing Member
   
Heath Carr, individually and as Trustee of the
Heath Carr 2008 Irrevocable trust
 
 
   
 
 

 

 
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