Exhibit 10.1
ASSET PURCHASE AGREEMENT
between
DESERT FABCO ACQUISITION, LLC
and
ALEXCO, L.L.C.
Dated as of October 12, 2010

 

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TABLE OF CONTENTS

                      Page  
 
            ARTICLE I DEFINITIONS     1  
 
           
1.1
  Defined Terms     1  
1.2
  Interpretation     13  
 
            ARTICLE II PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES  
  13  
 
           
2.1
  Purchase and Sale of Assets     13  
2.2
  Excluded Assets     15  
2.3
  Assumption of Liabilities     15  
2.4
  Excluded Liabilities     16  
 
            ARTICLE III CONSIDERATION     16  
 
           
3.1
  Total Consideration     16  
3.2
  Payment of Estimated Cash Purchase Price     16  
3.3
  Adjustment of Cash Purchase Price for Pre-Closing Seller Transaction Expenses
    17  
3.4
  Purchase Price Allocation     19  
 
            ARTICLE IV CLOSING     19  
 
           
4.1
  Closing Date     19  
4.2
  Seller’s Closing Deliveries     19  
4.3
  Purchaser’s Closing Deliveries     20  
 
            ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER     21  
 
           
5.1
  Organization and Related Matters     21  
5.2
  Authorization of Agreement     21  
5.3
  Conflicts and Consents     22  
5.4
  Certain Financial Matters     22  
5.5
  No Undisclosed Liabilities     23  
5.6
  Absence of Certain Developments     23  
5.7
  Title to Purchased Assets; Sufficiency     23  
5.8
  Real Property     24  
5.9
  Intellectual Property     26  
5.10
  Material Contracts     28  
5.11
  Employee Benefit Plans     30  
5.12
  Labor     33  
5.13
  Taxes     34  
5.14
  Litigation; Compliance with Law     36  
5.15
  Permits     36  
5.16
  Environmental Matters     37  
5.17
  Insurance     38  
5.18
  Inventories     39  
5.19
  Accounts Receivable     39  

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TABLE OF CONTENTS
(continued)

                      Page  
 
           
5.20
  Accounts Payable     39  
5.21
  Absence of Related Party Transactions     39  
5.22
  Customers; Suppliers     40  
5.23
  Product Warranty and Liability     40  
5.24
  Absence of Improper Payments     41  
5.25
  Absence of Certain Indebtedness     41  
5.26
  Absence of Certain Change-in-Control Payments     41  
5.27
  Absence of Financial Advisors     41  
 
            ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER     41  
 
           
6.1
  Organization and Good Standing     41  
6.2
  Authorization of Agreement     41  
6.3
  Conflicts and Consents     42  
6.4
  Financial Capacity     42  
6.5
  Absence of Financial Advisors     43  
 
           
ARTICLE VII CERTAIN COVENANTS
    43  
 
           
7.1
  Access to Information     43  
7.2
  Conduct of the Business Pending the Closing     43  
7.3
  Consents of Third Parties     47  
7.4
  Regulatory Approvals     47  
7.5
  Reasonable Efforts     48  
7.6
  Location of Assets     49  
7.7
  No Shop     49  
7.8
  Environmental Matters     50  
7.9
  Real Property Title Work     50  
7.10
  Casualty; Condemnation     51  
7.11
  Publicity     52  
7.12
  Non-Competition; Non-Solicitation     52  
7.13
  Preservation of Records; Confidentiality     53  
7.14
  Use of Name     54  
7.15
  Accounts Receivable     54  
7.16
  Insurance     54  
7.17
  Possible True-Up for Estimated Tax Payments     54  
7.18
  Repayment of Credit Facility     55  
7.19
  Repayment of Related Party Note Payable     55  
7.20
  Continuation of Payment Card Policy     55  
7.21
  Possible True-Up for Estimated Pre-Purchased Prime Value Distribution     55  
 
            ARTICLE VIII EMPLOYEES AND EMPLOYEE BENEFITS     55  
 
           
8.1
  Hired Employees     55  
8.2
  Employee Benefits     56  

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TABLE OF CONTENTS
(continued)

                      Page  
 
            ARTICLE IX CONDITIONS TO CLOSING     56  
 
           
9.1
  Conditions Precedent to Obligations of Each Party     56  
9.2
  Conditions Precedent to Obligations of Purchaser     57  
9.3
  Conditions Precedent to Obligations of Seller     58  
 
            ARTICLE X INDEMNIFICATION     59  
 
           
10.1
  Survival     59  
10.2
  Indemnification of Purchaser Indemnified Parties     59  
10.3
  Indemnification of Seller Indemnified Parties     60  
10.4
  Indemnification Procedures     61  
10.5
  Limitations on Indemnification for Breaches of Representations and Warranties
    62  
10.6
  Indemnity Escrow     63  
10.7
  Knowledge     63  
10.8
  Exclusive Remedy     63  
10.9
  Tax Treatment of Certain Payments     63  
 
            ARTICLE XI TAXES     64  
 
           
11.1
  Transfer Taxes     64  
11.2
  Property Taxes     64  
11.3
  Cooperation on Tax Matters     64  
 
            ARTICLE XII TERMINATION     64  
 
           
12.1
  Termination of Agreement     64  
12.2
  Notice of Termination     66  
12.3
  Effect of Termination     66  
12.4
  Confidentiality and Non-Disclosure Agreement     66  
 
            ARTICLE XIII MISCELLANEOUS     66  
 
           
13.1
  Expenses     66  
13.2
  Specific Performance     66  
13.3
  Further Actions     66  
13.4
  Notices     67  
13.5
  Binding Effect     68  
13.6
  Assignment; Third-Party Beneficiaries     68  
13.7
  Amendment; Waivers     68  
13.8
  Entire Agreement     68  
13.9
  Severability     68  
13.10
  Counterparts; Effectiveness     69  
13.11
  Passage of Title; Risk of Loss     69  
13.12
  Governing Law; Venue     69  
13.13
  No Other Representations and Warranties     69  

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EXHIBITS*

     
Exhibit 2.2(e)
  Excluded Assets
Exhibit 2.4(e)
  Excluded Liabilities
Exhibit 3.2(b)
  Form of Escrow Agreement
Exhibit 4.2(a)
  Form of Lease Assignments
Exhibit 4.2(b)
  Form of Bill of Sale
Exhibit 4.2(c)
  Form of Assignment and Assumption Agreement
Exhibit 4.2(e)
  Forms of Estoppel Certificate
Exhibit 4.2(g)
  Form of Power of Attorney
Exhibit 4.2(i)
  Form of Memorandum of Lease
Exhibit 9.2(e)
  Required Consents

 

*   Pursuant to Item 601(b)(2) of Regulation S-K, all exhibits hereto, as well
as the Disclosure Letter referred to herein, have been omitted. Kaiser Aluminum
Corporation agrees to furnish supplementally a copy of such exhibits and the
Disclosure Letter to the Securities and Exchange Commission upon request.

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ASSET PURCHASE AGREEMENT
     This ASSET PURCHASE AGREEMENT (the “Agreement”) is made and entered into as
of October 12, 2010, between Desert Fabco Acquisition, LLC, a Delaware limited
liability company (“Purchaser”), and Alexco, L.L.C., an Arizona limited
liability company (“Seller”).
WITNESSETH:
     A. Seller owns and operates a manufacturing facility located at 6520 West
Allison Road, Chandler, Arizona, at which Seller produces high strength light
and intermediate alloy aluminum extrusions, primarily for the aerospace end use
market (the “Business”).
     B. Seller desires to sell to Purchaser, and Purchaser desires to purchase
from Seller, all of Seller’s right, title and interest in, to and under the
Purchased Assets, all as more specifically provided herein.
     C. Seller desires that Purchaser assume, and Purchaser is willing to
assume, from Seller, the Assumed Liabilities, all as more specifically provided
herein.
     D. Concurrently with the execution and delivery of this Agreement,
Purchaser has entered into employment agreements with the Key Employees
(collectively, the “Employment Agreements”), and Purchaser has entered into a
consulting agreement with Robert Fraley (the “Consulting Agreement”), each of
which will become effective as of the Closing.
     E. Seller and Purchaser desire to make certain representations, warranties,
covenants and agreements in connection with this Agreement.
     NOW, THEREFORE, in consideration of the premises and of the
representations, warranties, covenants and agreements set forth in this
Agreement, the receipt and sufficiency of which are hereby acknowledged, and on
the terms and subject to the conditions set forth in this Agreement, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
     1.1 Defined Terms. For purposes of this Agreement, the following terms
shall have the meanings specified in this Section 1.1:
     “Accountants” has the meaning set forth in Section 3.3(c).
     “Acquisition Transaction” has the meaning set forth in Section 7.7(a).
     “Adjustment Request” has the meaning set forth in Section 3.3(c).
     “Affiliate” means, with respect to any Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person, and the term
“control” (including the terms “controlled by” and “under common control with”)
means the possession, directly or

 

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indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through ownership of voting securities, by
Contract or otherwise.
     “Agreement” has the meaning set forth in the introductory paragraph hereof.
     “Antitrust Division” has the meaning set forth in Section 7.4(a).
     “Antitrust Laws” has the meaning set forth in Section 7.4(b).
     “Assignment and Assumption Agreements” has the meaning set forth in Section
4.2(c).
     “Assumed Liabilities” has the meaning set forth in Section 2.3.
     “Balance Sheet” has the meaning set forth in Section 5.4(a).
     “Balance Sheet Date” has the meaning set forth in Section 5.4(a).
     “Business” has the meaning set forth in the Recitals.
     “Business Day” means any day on which the Federal Reserve Bank of New York
is open.
     “Business Documents” means all files, documents, instruments, papers,
books, reports, records, tapes, microfilms, photographs, letters, budgets,
forecasts, ledgers, journals, title policies, lists of past, present and/or
prospective customers (including credit information), supplier lists, regulatory
filings, operating data and plans, technical documentation (including design
specifications, functional requirements, operating instructions, logic manuals
and flow charts), user documentation (including installation guides, user
manuals, training materials, release notes and working papers), marketing
documentation (including sales brochures, flyers, pamphlets and web pages) and
other similar materials, in each case whether or not in electronic form, used in
connection with, or relating to, the Business as currently conducted by Seller,
the Purchased Assets or the Assumed Liabilities.
     “Cash Purchase Price” has the meaning set forth in Section 3.1.
     “Casualty” has the meaning set forth in Section 7.10(a).
     “CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, and all rules and regulations promulgated
thereunder.
     “CERCLIS” means the Comprehensive Environmental Response, Compensation and
Liability Information System, as provided for by 40 C.F.R. § 300.5, as amended,
and all rules and regulations promulgated thereunder.
     “Closing” has the meaning set forth in Section 4.1.

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     “Closing Date” the meaning set forth in Section 4.1.
     “Closing Date MW Transaction Price” means the MW Transaction Price on the
Closing Date.
     “Closing Date Pre-Purchased Prime Value” means an amount equal to the
product of (a) the Closing Date MW Transaction Price and (b) the Pre-Purchased
Prime Volume.
     “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended.
     “Code” means the Internal Revenue Code of 1986, as amended.
     “Condemnation” has the meaning set forth in Section 7.10(a).
     “Confidentiality Agreement” has the meaning set forth in Section 12.4.
     “Consulting Agreement” has the meaning set forth in the Recitals.
     “Contract” means any contract, agreement, indenture, note, bond, mortgage,
loan, insurance policy, instrument, lease, license, commitment or other
arrangement, understanding or undertaking, commitment or obligation, whether
written or oral.
     “Copyrights” has the meaning set forth in the definition of Intellectual
Property.
     “Credit Facility” means the Business Loan Agreement (Asset Based), dated
April 21, 2010, by and between Seller and National Bank of Arizona and all
related agreements, and all amendments, modifications and supplements thereto.
     “Credit Facility Pay-Off Amount” has the meaning set forth in Section 7.18.
     “Credit Facility Pay-Off Letter” has the meaning set forth in Section 7.18.
     “Disclosure Letter” has the meaning set forth in Article V.
     “Dispute Notice” has the meaning set forth in Section 3.3(c).
     “Employee Benefit Plans” has the meaning set forth in Section 5.11(a).
     “Employees” means all individuals who are employed by Seller in connection
with the Business.
     “Employment Agreements” has the meaning set forth in the Recitals.
     “Environmental Law” means all Laws, Orders and contractual obligations
concerning pollution or protection of the environment, sanitation, public and
worker health and safety, including Laws relating to wetlands, emissions,
discharges, releases, or threatened releases of Hazardous Materials, pollutants,
contaminants, or chemical,

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industrial, hazardous, or toxic materials or wastes into ambient air, surface
water, groundwater, or lands or otherwise relating to the manufacture,
generation, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials, substances or wastes, including CERCLA, CERCLIS,
the Solid Waste Disposal Act, the Clean Air Act, the Federal Water Pollution
Control Act, the Toxic Substance Control Act, the Occupational Safety and Health
Act, the Emergency Planning and Community Right to Know Act and similar federal,
state, provincial, municipal or local Laws.
     “Environmental Liabilities” means any and all Liabilities or Remedial
Actions arising in connection with or in any way relating to the Real Property,
the Purchased Assets, the Business or any activities or operations at any time
occurring or conducted at the Real Property, the presence of any Hazardous
Materials on, about or under the Real Property or migrating thereto or
therefrom, or any Releases or threatened Releases of Hazardous Materials from
the Real Property (including any removal and offsite disposal of Hazardous
Materials from the Real Property), which in each case arise under or in
connection with any applicable Environmental Law, including any and all
Liabilities arising in connection with or relating to any investigation,
remediation or other response or any Legal Proceeding, including any Legal
Proceeding relating to actual, suspected or alleged personal injury, property
damages or damages to natural resources.
     “Environmental Permit” means any Permit required by Environmental Laws for
the operation of the Business.
     “ERISA” means the Employment Retirement Income Security Act of 1974, as
amended.
     “ERISA Affiliate” means any Person that, together with Seller, would be
considered a single employer within the meaning of Section 4001 of ERISA or
Section 414 of the Code or was so considered at any time during the six years
preceding the date of this Agreement.
     “Escrow Agent” has the meaning set forth in Section 3.2(b).
     “Escrow Agreement” has the meaning set forth in Section 3.2(b).
     “Estimated Cash Purchase Price” has the meaning set forth in Section
3.3(a).
     “Estimated Closing Date MW Transaction Price” means the MW Transaction
Price on the day on which Seller delivers the Pre-Closing Statement to Purchaser
in accordance with Section 3.3(a).
     “Estimated Closing Date Pre-Purchased Prime Value” means an amount equal to
the product of (a) the Estimated Closing Date MW Transaction Price and (b) the
Pre-Purchased Prime Volume.

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     “Estimated Pre-Closing Seller Transaction Expenses” has the meaning set
forth in Section 3.3(a).
     “Estimated Pre-Purchased Prime Value Distribution” has the meaning set
forth in Section 7.2(n)(iii).
     “Estimated Related Party Notes Receivable Amount” has the meaning set forth
in Section 3.3(a).
     “Exceptions” has the meaning set forth in Section 7.9(a).
     “Excluded Assets” has the meaning set forth in Section 2.2.
     “Excluded Contracts” has the meaning set forth in Section 2.2(e).
     “Excluded Liabilities” has the meaning set forth in Section 2.4.
     “Fabrication and Extrusion Lease” means the sublease, dated as of July 9,
1997, by and between Lone Butte Industrial Development Corporation and Seller
(Lease No. B-GR-61-221), and all amendments, modifications and supplements
thereto.
     “Financial Statements” has the meaning set forth in Section 5.4(a).
     “Former Employees” means all individuals who were employed by Seller in
connection with the Business but who are no longer so employed.
     “FTC” has the meaning set forth in Section 7.4(a).
     “Governmental Entity” means any government or governmental or regulatory
body thereof, or political subdivision thereof, whether foreign, federal, state
or local, or any agency, instrumentality or authority thereof, or any court or
arbitrator (public or private).
     “Hardware” means any and all computer and computer-related hardware,
including computers, file servers, facsimile servers, scanners, color printers,
laser printers and networks.
     “Hazardous Material” means any substance, material or waste that is
regulated, classified, or otherwise characterized under or pursuant to any
Environmental Law as “hazardous,” “toxic,” “pollutant,” “contaminant,”
“radioactive,” or words of similar meaning or effect, including petroleum and
its by-products, asbestos, polychlorinated biphenyls, radon, mold or other fungi
and urea formaldehyde insulation.
     “Hired Employees” has the meaning set forth in Section 8.1.
     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.

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     “Indebtedness” means, without duplication: (a) the principal, accreted
value, accrued and unpaid interest, prepayment or redemption premiums or
penalties (if any), unpaid fees or expenses and other monetary obligations in
respect of (i) indebtedness of Seller for money borrowed and (ii) indebtedness
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which Seller is responsible or liable; (b) all obligations of Seller
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of Seller and all obligations of Seller under any title
retention agreement (but excluding trade accounts payable and other accrued
current liabilities arising in the Ordinary Course of Business) (other than the
current liability portion of any indebtedness referred in clause (a) above);
(c) all obligations of Seller under leases; (d) all obligations of Seller for
the reimbursement of any obligor on any letter of credit, banker’s acceptance or
similar credit transaction; (e) all obligations of Seller under interest rate or
currency swap transactions; (f) all obligations of the type referred to in
clauses (a) through (e) of other Persons for the payment of which Seller is
responsible or liable, directly or indirectly, as obligor, guarantor, surety or
otherwise, including guarantees of such obligations; and (g) all obligations of
the type referred to in clauses (a) through (f) of other Persons secured by (or
for which the holder of such obligations has an existing right, contingent or
otherwise, to be secured by) any Lien on any property or asset of Seller.
     “Indemnified Party” has the meaning set forth in Section 10.4(a).
     “Indemnifying Party” has the meaning set forth in Section 10.4(a).
     “Indemnity Escrow Account” has the meaning set forth in Section 3.2(b).
     “Indemnity Escrow Amount” means $5,000,000.
     “Individual Related Party Note Receivable Amount” means, for each Related
Party Note Receivable, an amount equal to the unpaid principal balance thereof
as of the day immediately preceding the Closing Date, plus accrued and unpaid
interest through and including such day.
     “Intellectual Property” means all intellectual property, whether protected,
created or arising under the laws of the United States or any other
jurisdiction, including: (a) all patents (including utility patents, industrial
designs and design patents) and applications therefor, including all
continuations, divisions, provisionals and continuations-in-part thereof and
patents issuing thereon, along with all reissues, revisions, renewals,
reexaminations and extensions thereof (collectively, “Patents”); (b) all
trademarks, service marks, common law trademarks and service marks, trade names,
service names, brand names, trade dress rights, logos, corporate names, trade
styles, logos and other source or business identifiers and general intangibles
of a like nature, together with the goodwill associated with any of the
foregoing, along with all applications, registrations, renewals and extensions
thereof (collectively, “Marks”); (c) all Internet domain names and registrations
thereof; (d) all copyrights, copyrightable works and “moral” rights, and all
mask work, database and design rights, whether or not registered or published,
all registrations and recordations thereof and all applications in

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connection therewith, along with all reversions, extensions and renewals thereof
(collectively, “Copyrights”); (e) trade secret rights and corresponding rights
in confidential and proprietary information and other non-public information
(whether or not patentable), including inventions, invention disclosures,
improvements, know-how, manufacturing and production processes and techniques,
testing information, research and development information, unpatented
blueprints, drawings, specifications, plans, proposals and technical data,
business and marketing plans, market surveys, market know-how and customer lists
and information (“Trade Secrets”); (f) all other intellectual property rights
arising from or relating to Technology, and (g) all Contracts granting any right
relating to or under the foregoing.
     “Intellectual Property Licenses” means (a) any grant by Seller to another
Person of any right relating to or under the Purchased Intellectual Property and
(b) any grant by another Person to Seller of any right relating to or under any
third Person’s Intellectual Property.
     “IRS” means the United States Internal Revenue Service.
     “Key Employees” means collectively Perry Fraley, Greg Fraley, Michael
Fraley and Robert Jackson.
     “Knowledge of Seller” means the knowledge, after due inquiry, of Robert
Fraley or any of the Key Employees.
     “Law” means any foreign, federal, state or local law (including common
law), statute, code, ordinance, rule, regulation or other requirement.
     “Lease Assignments” has the meaning set forth in Section 4.2(a).
     “Legal Proceeding” means any judicial, administrative or arbitral actions,
suits, mediations, investigations, inquiries, proceedings or claims (including
counterclaims) by or before a Governmental Entity.
     “Liability” means any debt, loss, damage, adverse claim, fines, penalties,
liability or obligation (whether direct or indirect, known or unknown, asserted
or unasserted, absolute or contingent, accrued or unaccrued, matured or
unmatured, determined or determinable, disputed or undisputed, liquidated or
unliquidated, or due or to become due, and whether in contract, tort, strict
liability or otherwise), and including all costs and expenses relating thereto
(including all fees, disbursements and expenses of legal counsel, experts,
engineers, consultants and other professionals and costs of investigation).
     “Lien” means any lien, encumbrance, pledge, mortgage, deed of trust,
security interest, claim, lease, charge, option, right of first refusal,
easement, servitude, proxy, voting trust or agreement, transfer restriction,
encumbrance or any other restriction or limitation whatsoever.

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     “Losses” has the meaning set forth in Section 10.2.
     “Marks” has the meaning set forth in the definition of Intellectual
Property.
     “Material Adverse Effect” means (a) an adverse effect, whether short-term
or long-term, on the results of operations or condition (financial or otherwise)
of the Business or on the Purchased Assets which involves $100,000 or more or
(b) a material adverse effect on the ability of Seller to consummate the
transactions contemplated by this Agreement or perform its obligations under
this Agreement or the Seller Documents.
     “Material Contracts” has the meaning set forth in Section 5.10(a).
     “Memorandum of Lease” has the meaning set forth in Section 4.2(j).
     “Multiemployer Plans” has the meaning set forth in Section 5.11(f).
     “Multiple Employer Plans” has the meaning set forth in Section 5.11(f).
     “MW Transaction Price” means, on a particular day, the price of a pound of
P1020 as reported in Platt’s Metals Week for such day.
     “Order” means any order, injunction, judgment, doctrine, decree, ruling,
writ, assessment or arbitration award of a Governmental Entity.
     “Ordinary Course of Business” means the ordinary and usual course of normal
day-to-day operations of the Business, as conducted by Seller, through the date
hereof consistent with past practice.
     “Outside Date” means December 31, 2010; provided, however, that, if based
on U.S. federal Tax law in effect at December 31, 2010 the occurrence of the
Closing in 2011 rather than 2010 would not have material adverse U.S. federal
income Tax consequences for the members of Seller, such date shall automatically
be extended to February 8, 2011.
     “Patents” has the meaning set forth in the definition of Intellectual
Property.
     “Permits” means any approvals, authorizations, consents, licenses, permits
or certificates of a Governmental Entity.
     “Permitted Encumbrances” means (a) exceptions, agreements, claims, defects,
easements, rights of way, encroachments, encumbrances, covenants, reservations,
restrictions, leases, tenancies and the like, of record or otherwise, made known
or available to Purchaser, or ascertainable by an inspection of the Purchased
Assets, other than those matters as to which Purchaser objects in accordance
with Section 7.9 that are not ultimately waived by Purchaser or cured by Seller,
(b) encumbrances that relate to zoning, land use, building code and similar laws
and ordinances, (c) special assessments or other local realty charges (whether
or not registered before the date of this Agreement) and matters capable of
registration as special assessments or other local realty charges,

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(d) notices, Orders, demands, proposals or requirements of any Governmental
Entity, whether made before, on or after the date of this Agreement, and
(e) Permitted Liens; provided, however, that none of the foregoing, individually
or in the aggregate, materially interfere with the use of the Purchased Assets
in the conduct of the Business in the Ordinary Course of Business.
     “Permitted Liens” means (a) Liens discussed in Section 5.10(a)(viii) of the
Disclosure Letter and (b) such of the following as to which (i) no enforcement,
collection, execution, levy or foreclosure proceeding shall have been commenced,
and (ii) assessments or other charges are not yet due and payable or are due but
are not delinquent or are being contested in good faith by appropriate
proceedings: (A) statutory liens for Taxes or other governmental charges,
provided that an appropriate reserve has been established therefor in the
Financial Statements in accordance with past practices of Seller; and
(B) mechanics’, carriers’, workers’ and repairers’ Liens arising or incurred in
the Ordinary Course of Business that are not, individually or in the aggregate,
material to the Business or the Purchased Assets and that do not result from a
breach, default or violation by Seller of any Contract, Law or Order.
     “Person” means any individual, corporation, limited liability company,
partnership, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Entity or other entity.
     “Post-Closing Statement” has the meaning set forth in Section 3.3(b).
     “Pre-Closing Seller Transaction Expenses” means an amount equal to all
Seller Transaction Expenses paid by Seller prior to the Closing.
     “Pre-Closing Statement” has the meaning set forth in Section 3.3(a).
     “Pre-Purchased Prime Volume” means an amount equal to 3,252,360.
     “Purchase Price” has the meaning set forth in Section 3.1.
     “Purchased Assets” has the meaning set forth in Section 2.1.
     “Purchased Intellectual Property” has the meaning set forth in Section
2.1(d).
     “Purchased Technology” has the meaning set forth in Section 2.1(e).
     “Purchaser” has the meaning set forth in the Introductory Paragraph.
     “Purchaser Documents” has the meaning set forth in Section 6.2.
     “Purchaser’s Environmental Assessment” has the meaning set forth in Section
7.8(a).
     “Purchaser Indemnified Parties” has the meaning set forth in Section 10.2.

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     “Real Property” has the meaning set forth in Section 5.8(c).
     “Real Property Leases” means the Fabrication and Extrusion Lease and the
Storage Lease.
     “Reduction Amount” has the meaning set forth in Section 3.3(b).
     “Related Party Note Payable” means the note payable by Seller to Robert R.
Fraley and Barbara E. Fraley Family Trust UTA dated November 9, 1990, as
amended, described in Section 5.21 of the Disclosure Letter.
     “Related Party Note Payable Pay-Off Amount” has the meaning set forth in
Section 7.19.
     “Related Party Note Payable Pay-Off Letter” has the meaning set forth in
Section 7.19.
     “Related Party Notes Receivable” means all of the notes receivable by
Seller from various Related Persons described in Section 5.21 of the Disclosure
Letter.
     “Related Party Notes Receivable Amount” means the sum of the Individual
Related Party Note Receivable Amounts.
     “Related Persons” means (a) any Employee or Former Employee, (b) any
current or former officer, director, manager or member of Seller, (c) any member
of the immediate family of any of the Persons described in clause (a) or (b), or
(d) any Affiliate of, or trust for the benefit of, any of the Persons described
in clause (a), (b) or (c).
     “Release” means any release, spill, emission, leaking, pumping, pouring,
injection, deposit, dumping, emptying, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment, or into or out of any
property.
     “Remedial Action” means all actions including any capital expenditures
undertaken to (a) clean up, remove, treat or in any other way address any
Hazardous Material, (b) prevent the Release or threat of Release, or minimize
the further Release of any Hazardous Material, (c) perform pre-remedial studies
and investigations or post-remedial monitoring and care, or (d) to correct a
condition of noncompliance with any Environmental Law.
     “Representatives” means, with respect to any Person, its directors,
officers, managers, employees, agents, accountants, legal and financial advisers
and other representatives.
     “Security Agreement” has the meaning set forth in Section 4.2(h).
     “Seller” has the meaning set forth in the Introductory Paragraph.
     “Seller Documents” has the meaning set forth in Section 5.2.

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     “Seller Indemnified Parties” has the meaning set forth in Section 10.3.
     “Seller Marks” has the meaning set forth in Section 7.14.
     “Seller Permits” has the meaning set forth in Section 5.15.
     “Seller Transaction Expenses” means all fees, costs and expenses (including
fees, costs and expenses of legal counsel, accountants, investment bankers,
brokers or other representations and consultants and appraisal fees, costs and
expenses but excluding the fees, costs and expenses of the Persons identified in
Section 5.27 of the Disclosure Letter) incurred by Seller in connection with the
negotiation of this Agreement and the other agreements contemplated hereby, the
performance of obligations hereunder or thereunder and the consummation of the
transactions contemplated hereby and thereby, including any change-in-control,
“success fees,” bonuses or other payments arising from or otherwise triggered by
the transactions contemplated by this Agreement.
     “Software” means any and all (a) computer programs, including assemblers,
applets, compilers and any and all software implementations of algorithms,
models and methodologies, whether in source code or object code, (b) databases
and compilations, including any and all data and collections of data, whether
machine readable or otherwise, (c) descriptions, flow-charts and other work
product used to design, plan, organize and develop any of the foregoing,
screens, user interfaces, report formats, firmware, development tools, design
tools, templates, menus, buttons and icons, and (d) all documentation, including
user manuals and other training documentation, related to any of the foregoing.
     “Storage Lease” means the sublease (Lease No. BL00000049) by and between
Champion Home Builders, Inc and Seller (under which Seller sublets part of
Champion Home Builders, Inc.’s leasehold estate under the sublease, dated
September 30, 1998, by and between Lone Butte Industrial Development Corporation
and Champion Home Builders, Inc. (Lease No. B-GR-61-235)), and all amendments,
modifications and supplements thereto.
     “Survey” has the meaning set forth in Section 7.9(a).
     “Survey Defect” means any matter disclosed on a Survey that would, or would
reasonably be expected to, materially interfere with the present or continued
use of any parcel of Real Property or have a Material Adverse Effect on the
value of any parcel of Real Property.
     “Target Pre-Purchased Prime Value” means $3,349,930.80, computed as the
product of (a) $1.03 and (b) the Pre-Purchased Prime Volume.
     “Tax” or “Taxes” means all federal, state, local and foreign taxes, fees,
levies or other assessments, including income, gross receipts, excise, real and
personal property, municipal, capital, sales, use, transfer, license,
unemployment, fuel, payroll, capital stock, net worth, withholding, stamp,
occupation, premium, value added, environmental,

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severance and franchise taxes, escheat or unclaimed property claims, customs
duties and like charges, and any interest, penalties or additions to tax
attributable to such taxes, fees, levies or other assessments, imposed by any
Tax Authority.
     “Taxing Authority” means the IRS and any other Governmental Entity
responsible for the administration of any Tax.
     “Tax Returns” all federal, state, local, and foreign Tax returns,
declarations, statements, reports, claims for refund, forms, and information
returns required to be filed with any Taxing Authority, including any schedule
or attachment thereto, and including any amendments, modifications or
supplements thereof.
     “Technology” means, collectively, all Software, information, designs,
formulae, algorithms, procedures, methods, techniques, ideas, know-how, research
and development, technical data, programs, subroutines, tools, materials,
specifications, processes, inventions (whether patentable or unpatentable and
whether or not reduced to practice), apparatus, creations, improvements, works
of authorship and other similar materials, and all recordings, graphs, drawings,
reports, analyses, writings and other tangible embodiments of the foregoing, in
any form whether or not specifically listed herein, and all related technology,
that are used in or in connection with, incorporated in, embodied in, displayed
by or relate to any of the foregoing.
     “Third Party Claim” has the meaning set forth in Section 10.4(b).
     “Title Commitment” has the meaning set forth in Section 7.9(a).
     “Title Company” has the meaning set forth in Section 7.9(a).
     “Title Defects” means all Liens, all Survey Defects and all other defects
or exceptions to title that materially adversely affect the use or value of the
Real Property, in each case other than Permitted Encumbrances.
     “Title Policy” has the meaning set forth in Section 7.9(a).
     “Total Consideration” has the meaning set forth in Section 3.1.
     “Trade Secrets” has the meaning set forth in the definition of Intellectual
Property.
     “Transfer Taxes” has the meaning set forth in Section 11.1.
     “Unadjusted Cash Purchase Price” has the meaning set forth in Section 3.1.
     “WARN Act” means the Worker Adjustment and Retraining Notification Act of
1988, as amended, and the rules and regulations promulgated thereunder.

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     1.2 Interpretation.
          (a) Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
          (b) Certain Rules of Construction. If a term is defined as one part of
speech (such as a noun), it shall have a corresponding meaning when used as
another part of speech (such as a verb). Whenever the context so requires, the
singular shall include the plural, the plural shall include the singular, and
the use of a gender shall include all genders.
          (c) Meanings of Certain Terms. The terms “hereof,” “herein” and
“hereunder” and terms of like import used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Whenever the terms “include,” “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation,” whether or not they are in fact followed by those words or words of
like import. The terms “writing” and “written” and terms of like import used in
this Agreement shall refer to printing, typing and other means of reproducing
words (including electronic media) in a visible form.
          (d) Use of Certain References. All article, section and exhibit
references used in this Agreement are to articles, sections or exhibits to this
Agreement unless otherwise specified.
          (e) Exhibits Part of Agreement. All exhibits attached to this
Agreement constitute a part of this Agreement and are incorporated herein for
all purposes.
          (f) Applicable Currency. All references to currency herein shall be
to, and all payments required hereunder shall be paid in, lawful currency of the
United States.
          (g) No Presumption Against Party Drafting. This Agreement shall be
construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be
drafted.
ARTICLE II
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
     2.1 Purchase and Sale of Assets. On the terms and subject to the conditions
set forth in this Agreement, at the Closing Purchaser shall purchase, acquire
and accept from Seller, and Seller shall sell, transfer, convey, assign and
deliver to Purchaser, all of Seller’s right, title and interest in, to and under
the assets used or held for use by Seller in connection with, or relating to,
the Business, wherever such assets are situated and of whatever kind or nature,
real or personal, tangible or intangible, whether or not reflected on the books
and records of Seller (collectively, the “Purchased Assets”), as the same may
exist on the Closing Date, including the following assets but excluding the
Excluded Assets:
     (a) Real Property Leases. All Real Property Leases and all improvements,
fixtures and other appurtenances located on or attached to the Real Property;

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     (b) Tangible Personal Property. All tangible personal property used or held
for use in connection with, or relating to, the Business, including all
inventory, supplies, furniture, fixtures, equipment, vehicles, artwork, desks,
chairs, tables, Hardware, copiers, telephone lines and numbers, telecopy
machines and other telecommunication equipment, cubicles and miscellaneous
office furnishings;
     (c) Intellectual Property. All Intellectual Property used or held for use
in connection with, or relating to, the Business (the “Purchased Intellectual
Property”);
     (d) Technology. All Technology used or held for use in connection with, or
relating to, the Business (the “Purchased Technology”);
     (e) Contracts. All Contracts relating to the Business or the Purchased
Assets to which Seller is a party or by which Seller or its properties or assets
are bound, including all claims or causes of action with respect to such
Contracts (excluding, for the avoidance of doubt, this Agreement and the Escrow
Agreement);
     (f) Permits. To the extent assignable or transferable, all Permits,
including Environmental Permits, used in connection with, or relating to, the
Business;
     (g) Business Documents. All Business Documents, including personnel files
for Hired Employees, whether or not physically located at any Real Property;
     (h) Cash. All cash and cash equivalents of Seller (excluding, for the
avoidance of doubt, cash delivered to Seller in the manner specified in Section
3.2(a));
     (i) Accounts Receivable. All accounts receivable and notes receivable
arising in connection with, or relating to, the Business;
     (j) Deposits. All deposits (including security deposits for rent,
electricity, telephone or otherwise) and prepaid charges and expenses (including
prepaid rent) made or paid in connection with, or relating to, the Business;
     (k) Supplier Warranties. All representations, warranties and guarantees
made by suppliers, manufacturers and contractors in connection with products
sold or services provided to Seller in connection with, or relating to, the
Business;
     (l) Causes of Action. All claims and causes of action arising in connection
with, or relating to, the Business, including all interests in and claims under
insurance policies;
     (m) Goodwill. All goodwill and other intangible assets associated with the
Business, including the goodwill associated with the Purchased Intellectual
Property; and
     (n) Other Assets. All other assets used or held for use in connection with,
or relating to, the Business.

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     2.2 Excluded Assets. Notwithstanding anything to the contrary contained in
this Agreement, the property and assets described below are expressly excluded
from the transactions contemplated by this Agreement and do not constitute
Purchased Assets being transferred hereunder (collectively, the “Excluded
Assets”):
     (a) Agreement. This Agreement;
     (b) Cash Purchase Price. The cash delivered to Seller in the manner
specified in Section 3.2(a);
     (c) Escrow Agreement. The Escrow Agreement;
     (d) Corporate Records. All minute books, organizational documents, stock
registers and such other books and records of Seller as pertain to ownership,
organization or existence of Seller;
     (e) Scheduled Excluded Assets. All property and assets, including Contracts
(together with this Agreement and the Escrow Agreement, the “Excluded
Contracts”), listed or described on Exhibit 2.2(e) and the Business Records
primarily relating thereto; and
     (f) Related Causes of Action. All claims and causes of action arising in
connection with the Business that are primarily related to (i) property or
assets contemplated by the foregoing clauses (a) through (e) or (ii) the
Excluded Liabilities.
     2.3 Assumption of Liabilities. On the terms and subject to the conditions
set forth in this Agreement, at the Closing Purchaser shall assume, effective as
of the Closing, all of the Liabilities of Seller arising in connection with, or
relating to, the operation of the Business or the ownership or use of any of the
Purchased Assets, whether prior to, at or after the Closing (collectively, the
“Assumed Liabilities”), including the following Liabilities, but only to the
extent arising in connection with, or relating to, the operation of the Business
or the ownership or use of any of the Purchased Assets, and excluding the
Excluded Liabilities:
     (a) Balance Sheet Liabilities. All Liabilities, including Liabilities
arising in connection with, or relating to Indebtedness, that would be shown on
a balance sheet of Seller, prepared in a manner consistent with the past
practice of Seller, immediately prior to the Closing;
     (b) Product Liabilities. All Liabilities arising in connection with, or
relating to, any products sold or services performed;
     (c) Environmental Liabilities. All Environmental Liabilities;
     (d) Contract Liabilities. All Liabilities arising or accruing under Real
Property Leases or other Contract;
     (e) Legal Proceedings. All Liabilities arising in connection with, or
relating to, Legal Proceedings; and

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     (f) Other Business Liabilities. All other Liabilities arising in connection
with, or relating to, the operation of the Business or the ownership or use of
any of the Purchased Assets.
     2.4 Excluded Liabilities. Notwithstanding anything to the contrary
contained in this Agreement, Purchaser shall not assume pursuant to this
Agreement or the transactions contemplated hereby, and shall have no liability
for, any of the following Liabilities of Seller or any of its
predecessors-in-interest (collectively, the “Excluded Liabilities”), whether
arising prior to, at or after the Closing, all of which shall continue to be
Liabilities of Seller:
     (a) Liabilities Under Excluded Contracts. All Liabilities under, or in
connection with the execution, delivery or performance of, this Agreement or any
other Excluded Contract;
     (b) Liabilities for Seller Transaction Expenses. All Liabilities for Seller
Transaction Expenses not paid prior to the Closing;
     (c) Liabilities for Certain Claims and Causes of Action. All Liabilities
with respect to (i) any rights, claims or causes of action of Related Persons,
including those under Seller’s limited liability company operating agreement, or
(ii) any workers’ compensation claims;
     (d) Liabilities for Certain Taxes. All Liabilities of Seller for Taxes,
whether or not related to the Business, including for the avoidance of doubt
such Taxes payable by any direct or indirect owner of equity interests in
Seller, any Person related to any such owner or any predecessor-in-interest to
any such owner or other Person;
     (e) Liabilities Relating to Excluded Assets; Scheduled Excluded
Liabilities. All Liabilities (i) arising in connection with, or relating to, any
Excluded Assets or (ii) listed or described on Exhibit 2.4(e); and
     (f) Related Legal Proceedings. All Liabilities arising in connection with,
or relating to, any Legal Proceeding relating to (i) Liabilities contemplated by
foregoing clauses (a) through (e) or (ii) the Excluded Assets.
ARTICLE III
CONSIDERATION
     3.1 Total Consideration. The aggregate consideration for the Purchased
Assets shall be (a) an amount in cash equal to $90,000,000 (the “Unadjusted Cash
Purchase Price”), subject to adjustment as provided in Section 3.3 (as so
adjusted, the “Cash Purchase Price”), and (b) the assumption of the Assumed
Liabilities (together with the Cash Purchase Price, the “Total Consideration”).
     3.2 Payment of Estimated Cash Purchase Price.
          (a) Closing Date Payment to Seller. On the Closing Date, Purchaser
shall pay the Estimated Cash Purchase Price, less the Indemnity Escrow Amount
(which amount shall be

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deposited into the Indemnity Escrow Account by Purchaser pursuant to
Section 3.2(b)), to Seller via wire transfer of immediately available funds into
an account designated by Seller in writing not fewer than three Business Days
prior to the Closing Date, which account shall be a newly created account not
used by Seller in the Ordinary Course of Business.
          (b) Deposit of Indemnity Escrow Amount. At or prior to the Closing,
Purchaser and Seller shall enter into an Escrow Agreement, in substantially the
form attached hereto as Exhibit 3.2(b) (the “Escrow Agreement”), with Wells
Fargo Bank, National Association, as Escrow Agent (the “Escrow Agent”). In
accordance with the terms of the Escrow Agreement, at the Closing Purchaser
shall deposit into an account (the “Indemnity Escrow Account”) via wire transfer
of immediately available funds the Indemnity Escrow Amount, which shall be held
and distributed in accordance with the terms of the Escrow Agreement.
     3.3 Adjustment of Cash Purchase Price for Pre-Closing Seller Transaction
Expenses.
          (a) Seller’s Pre-Closing Estimation of Cash Purchase Price. At least
three Business Days prior to the Closing Date, Seller shall deliver to Purchaser
a statement in form and substance reasonably acceptable to Purchaser (the
“Pre-Closing Statement”) setting forth, in reasonable detail, (i) the estimated
Pre-Closing Seller Transaction Expenses (the “Estimated Pre-Closing Seller
Transaction Expenses”), (ii) the estimated Related Party Notes Receivable Amount
(the “Estimated Related Party Notes Receivable Amount”), (iii) the Estimated
Closing Date Pre-Purchased Prime Value, and (iv) based thereon, the Estimated
Cash Purchase Price. For purposes of this Agreement, the “Estimated Cash
Purchase Price” shall be the Unadjusted Cash Purchase Price adjusted as follows:
          (i) decreased by the Estimated Pre-Closing Seller Transaction
Expenses; and
          (ii) decreased by the Estimated Related Party Notes Receivable Amount.
Seller shall prepare the Pre-Closing Statement in good faith based upon Seller’s
review of financial information then available to it.
          (b) Purchaser’s Post-Closing Review of Estimated Cash Purchase Price.
Within 60 days after the Closing Date, Purchaser shall prepare and deliver to
Seller a written statement (the “Post-Closing Statement”) setting forth in
reasonable detail the (i) the Pre-Closing Seller Transaction Expenses, (ii) the
Related Party Notes Receivable Amount, (iii) the Closing Date Pre-Purchased
Prime Value, and (iv) based thereon, the Cash Purchase Price. During such 60-day
period, Seller shall provide Purchaser and its Representatives reasonable access
to any Business Documents included in the Excluded Assets relating to the
Pre-Closing Seller Transaction Expenses or the Related Party Notes Receivable,
as Purchaser may reasonably request. If Purchaser does not timely deliver a
Post-Closing Statement to Seller, the final Cash Purchase Price for purposes of
Section 3.3(f) shall be as set forth on the Pre-Closing Statement.

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          (c) Seller’s Right to Dispute the Post-Closing Statement. If Purchaser
timely delivers a Post-Closing Statement to Seller, then, within 30 days after
the date of such delivery, Seller may deliver to Purchaser a written notice (a
“Dispute Notice”) of any disagreement with the Post-Closing Statement,
specifying any proposed adjustment thereto (an “Adjustment Request”). During
such 30-day period, Purchaser shall provide Seller and its Representatives
reasonable access, during normal business hours and in such manner as not to
unreasonably interfere with normal operation of the Business, to any Business
Documents included in the Purchased Assets relating to the Pre-Closing Seller
Transaction Expenses or the Related Party Notes Receivable, as Seller may
reasonably request. If no Dispute Notice is timely delivered by Seller to
Purchaser, the final Cash Purchase Price for purposes of Section 3.3(f) shall be
as set forth on the Post-Closing Statement.
          (d) Resolution of Seller Dispute by Purchaser’s Acceptance of Seller’s
Adjustment Request. If Seller timely delivers to Purchaser a Dispute Notice and
Purchaser agrees to the Adjustment Request in writing, the final Cash Purchase
Price for purposes of Section 3.3(f) shall be as set forth on the Post-Closing
Statement as adjusted in accordance with the Adjustment Request.
          (e) Resolution of Seller Dispute by Mutually Agreed Accounting Firm.
If Seller timely delivers to Purchaser a Dispute Notice and Purchaser does not
agree to the Adjustment Request in writing, Purchaser and Seller shall use their
respective commercially reasonable efforts for 30 days after the delivery of the
Dispute Notice to agree in writing upon an adjustment to the Cash Purchase Price
set forth in the Post-Closing Statement. If no such agreement is reached during
such 30-day period, the matter shall be submitted for resolution to a mutually
acceptable independent accounting firm, the cost of which shall be divided
equally between Purchaser, on the one hand, and Seller, on the other hand. The
decision of such firm as to the appropriate adjustment, if any, to the
Post-Closing Statement shall be final and binding on Purchaser and Seller. Upon
a definitive determination of the adjustment, if any, to the Post-Closing
Statement pursuant to this Section 3.3(e), the final Cash Purchase Price for
purposes of Section 3.3(f) shall be as set forth on the Post-Closing Statement
as so adjusted.
          (f) Post-Closing True-Up Payment. If (i) the Estimated Cash Purchase
Price exceeds (ii) the Cash Purchase Price as finally determined in accordance
with this Section 3.3, Seller shall pay to Purchaser an amount equal to such
excess by wire transfer of immediately available funds to an account specified
by Purchaser in the Post-Closing Statement within 10 days after the first date
on which the Cash Purchase Price has been finally determined in accordance with
this Section 3.3. If (i) the Cash Purchase Price as finally determined in
accordance with Section 3.3 exceeds (ii) the Estimated Cash Purchase Price,
Purchaser shall pay to Seller an amount equal to such excess by wire transfer of
immediately available funds to the account designated by Seller in accordance
with Section 3.2(a) within 10 days after the first date on which the Cash
Purchase Price has become finally determined in accordance with this
Section 3.3. For purposes of this Agreement, the Cash Purchase Price shall be
the Undisputed Cash Purchase Price adjusted as follows:
               (i) decreased by the Pre-Closing Seller Transaction Expenses; and
               (ii) decreased by the Related Party Notes Receivable Amount.

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     3.4 Purchase Price Allocation. The Total Consideration shall be allocated
among the Purchased Assets in accordance with their relative market values in
accordance with the Code as mutually agreed by Purchaser and Seller prior to the
Closing. Purchaser and Seller shall each report the purchase and sale of the
Purchased Assets, including in all Tax Returns and in all federal, state, local,
municipal, foreign and other reports prepared and filed by or for Purchaser or
Seller in accordance with the mutually agreed allocation. For purposes of this
Section 3.4, the Purchased Assets include the covenant not to compete as set
forth in Section 7.12(a).
ARTICLE IV
CLOSING
     4.1 Closing Date. The consummation of the transactions contemplated hereby
(the “Closing”) shall take place at the offices of Seller, 6520 West Allison
Road, Chandler, Arizona, at 10:00 a.m., local time, on the third Business Day
after the satisfaction or waiver of the conditions set forth in Article IX
(other than those conditions that by their terms are to be satisfied at the
Closing, but subject to the satisfaction or waiver of such conditions), or at
such other place, time and date as Purchaser and Seller may agree. The “Closing
Date” shall be the date upon which the Closing occurs. The Closing shall be
deemed effective at 12:01 a.m., Mountain Standard Time, on the Closing Date for
tax, accounting and computational purposes. All actions taken at the Closing
shall be considered as having been taken simultaneously and no such actions will
be considered to be completed until all such actions have been completed.
     4.2 Seller’s Closing Deliveries. At the Closing, Seller shall deliver to
Purchaser the following (in each case, duly executed by or on behalf of each of
the parties thereto other than Purchaser):
     (a) Real Property Lease Assignments. One or more assignment and assumption
agreements (the “Lease Assignments”), in substantially the form attached hereto
as Exhibit 4.2(a) as such form may be revised in connection with obtaining the
consents referenced in Exhibit 9.2(e), assigning to Purchaser the lessee
interest under the Real Property Leases;
     (b) Bills of Sale. One or more bills of sale in substantially the form
attached hereto as Exhibit 4.2(b), conveying to Purchaser title to the Purchased
Assets not otherwise addressed in this Section 4.2;
     (c) Assignment and Assumption Agreements. One or more assignment and
assumption agreements in substantially the form attached hereto as
Exhibit 4.2(c) (“Assignment and Assumption Agreements”), assigning to Purchaser
all of Seller’s right, title and interest in, to and under the Contracts
(excluding the Real Property Leases) included in the Purchased Assets;
     (d) Intellectual Property Assignments. Assignments of the registrations and
applications included in the Purchased Intellectual Property, in a form
reasonably acceptable to Purchaser and suitable for recording in the U.S. Patent
and Trademark Office, U.S. Copyright Office or equivalent foreign agency, as
applicable, and general assignments of all other Purchased Intellectual
Property;

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     (e) Estoppel Certificates. Estoppel certificates in substantially the
applicable form attached hereto as Exhibit 4.2(e) (or in the form required
pursuant to the applicable Real Property Lease) from, with respect to both the
Fabrication and Extrusion Lease and the Storage Lease, Lone Butte Industrial
Development Corporation, and with respect to the Storage Lease, Champion Home
Builders, Inc. (or such other entity as may be its successor or assignee, if
applicable);
     (f) Non-Foreign Status Affidavit. An affidavit of non-foreign status of
Seller and/or other appropriate Persons that complies with section 1445 of the
Code;
     (g) Power of Attorney. A power of attorney in substantially the form
attached hereto as Exhibit 4.2(g), authorizing Purchaser or its attorney-in-fact
to endorse and deposit all checks and other evidences of indebtedness received
by Purchaser after the Closing on account of the Purchased Assets;
     (h) Escrow Agreement. The Escrow Agreement;
     (i) Memoranda of Lease. If requested by Purchaser, a memorandum of lease
for each Real Property Lease (each, a “Memorandum of Lease”), in substantially
the form attached hereto as Exhibit 4.2(i) as such form may be revised in
connection with obtaining the consents referenced in Exhibit 9.2(e);
     (j) Bring-Down Certificate. The closing certificate referred to in Section
9.2(d);
     (k) Title Affidavit. If requested by Purchaser, an affidavit and indemnity
in favor of the Title Company in such form as shall be reasonably be required by
the Title Company in order to issue the Title Policy; and
     (l) Other Documents. All other documents and instruments necessary or
reasonably required by Purchaser to consummate the transactions contemplated by
this Agreement upon the terms set forth in this Agreement, all of which shall be
in form and substance reasonably satisfactory to Purchaser.
     4.3 Purchaser’s Closing Deliveries. At the Closing, Purchaser shall deliver
to Seller the following (in the case of each document or instrument, duly
executed on behalf of Purchaser):
     (a) Estimated Cash Purchase Price. The Estimated Cash Purchase Price, less
the Indemnity Escrow Amount (which shall deposited into the Indemnity Escrow
Account by Purchase pursuant to Section 3.2(b)) in the manner specified in
Section 3.2(a);
     (b) Escrow Agreement. The Escrow Agreement;
     (c) Assignment and Assumption Agreements. The Assignment and Assumption
Agreements;

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     (d) Lease Assignments. The Lease Assignments;
     (e) Bring-Down Certificate. The closing certificate referred to in Section
9.3(c); and
     (f) Other Documents. All other documents and instruments necessary or
reasonably required by Seller to consummate the transactions contemplated by
this Agreement upon the terms set forth in this Agreement, all of which shall be
in form and substance reasonably satisfactory to Seller.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
     Subject to the exceptions set forth in the letter from Seller, dated the
date of this Agreement, addressed to Purchaser (the “Disclosure Letter”), each
of which exceptions in order to be effective shall expressly indicate the
Section and, if applicable, subsection of this Article V to which it relates
(unless the applicability of such exception to such Section or subsection is
otherwise readily apparent on the face of the text contained in the Disclosure
Letter setting forth such exception), Seller hereby represents and warrants to
Purchaser that:
     5.1 Organization and Related Matters.
          (a) Organization and Good Standing. Seller is a limited liability
company duly organized, validly existing and in good standing under the Laws of
its state of formation and has all requisite power and authority to own, lease
and operate its properties and assets and to carry on its business as currently
conducted.
          (b) Qualification. Seller is duly qualified or authorized to do
business and is in good standing under the Laws of each jurisdiction in which it
owns or leases real property and each other jurisdiction in which the conduct of
its business or the ownership of its properties or assets requires such
qualification or authorization.
          (c) Organizational Documents Delivered. Seller has delivered to
Purchaser true, complete and correct copies of its articles of organization and
limited liability company agreement, or comparable organizational documents, in
each case as in effect on the date hereof.
          (d) No Subsidiaries. Seller does not own, directly or indirectly,
beneficially or of record, any capital stock of or other equity interests in any
other Person.
     5.2 Authorization of Agreement.
          (a) Power and Authority. Seller has all requisite power, authority and
legal capacity to execute and deliver this Agreement and to execute and deliver
each other agreement, document, instrument or certificate contemplated by this
Agreement to be executed by Seller in connection with the consummation of the
transactions contemplated hereby (collectively, the “Seller Documents”), to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby.

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          (b) Approvals. The execution, delivery and performance of this
Agreement and each of the Seller Documents and the consummation of the
transactions contemplated hereby and thereby have been duly authorized and
approved by all requisite action on the part of Seller.
          (c) Enforceability. This Agreement has been, and each of the Seller
Documents will be at or prior to the Closing, duly and validly executed and
delivered by Seller and (assuming the due authorization, execution and delivery
by the other parties hereto and thereto) this Agreement constitutes, and each of
the Seller Documents when so executed and delivered will constitute, legal,
valid and binding obligations of Seller, enforceable against Seller in
accordance with their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar Laws affecting creditors’ rights and
remedies generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
     5.3 Conflicts and Consents.
          (a) Absence of Conflicts. The execution and delivery by Seller of this
Agreement or the Seller Documents, the performance of its obligations hereunder
or thereunder or the consummation of the transactions contemplated hereby or
thereby will not (i) conflict with, or result in any violation or breach of, or
default under (with or without notice or lapse of time, or both), (ii) give rise
to a right of termination, cancellation or acceleration of any obligation or the
loss of a benefit under, or give rise to any obligation of Seller to make any
payment under, or (iii) result in the creation of any Liens upon any of the
properties or assets of Seller under, any provision of (w) Seller’s articles of
organization and limited liability company agreement, or comparable
organizational documents, (x) any Contract or Permit to which Seller is a party
or by which its properties or assets are bound, (y) any Order applicable to
Seller or by which Seller or its properties or assets are bound, or (z) any
applicable Law.
          (b) Third-Party Consent Requirements. No consent, waiver, approval,
Order, Permit or authorization of, or declaration or filing with, or
notification to, any Person is required on the part of Seller in connection with
(i) the execution and delivery by Seller of this Agreement or the Seller
Documents, the performance by Seller of its obligations hereunder or thereunder,
the consummation of the transactions contemplated hereby or thereby or the
taking by Seller of any other action contemplated hereby or thereby, or (ii) the
continuing validity and effectiveness immediately after the Closing of any
Contract or Permit of Seller, except for compliance with the applicable
requirements of the HSR Act.
     5.4 Certain Financial Matters.
          (a) Financial Statements Delivered. Seller has delivered to Purchaser
true, complete and correct copies of (i) the unaudited balance sheet of Seller
as of December 31, 2007, 2008 and 2009 and the related unaudited statements of
income and of cash flows of Seller for the years then ended and (ii) the
unaudited balance sheet of Seller as of July 31, 2010 and the related statements
of income and cash flows of Seller for the seven-month period then ended (such
financial statements, including the related notes and schedules thereto, are
referred to herein as the “Financial Statements”). For the purposes hereof, the
unaudited balance sheet of Seller as

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of July 31, 2010 is referred to as the “Balance Sheet” and July 31, 2010 is
referred to as the “Balance Sheet Date.”
          (b) Financial Statements Internally Prepared. Each of the Financial
Statements (i) has been internally prepared by Seller consistent with past
practices consistently applied throughout the periods presented (except, with
respect to the unaudited interim financial statements, for normal recurring
year-end adjustments that, individually or in the aggregate, would not be
material), and (ii) presents fairly the financial position, results of
operations and cash flows of Seller as of the dates and for the periods
indicated.
          (c) Internal Accounting Controls. Seller makes and keeps books,
records and accounts which, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of its assets. Seller maintains systems of
internal accounting controls sufficient to provide reasonable assurances that:
(i) transactions are executed in accordance with management’s general or
specific authorization; and (ii) access to assets is permitted only in
accordance with management’s general or specific authorization.
     5.5 No Undisclosed Liabilities. To the Knowledge of Seller, Seller has no
Indebtedness or other Liabilities other than (a) those specifically reflected
in, fully reserved against or otherwise described in the Balance Sheet or the
notes thereto, (b) those incurred in the Ordinary Course of Business since the
Balance Sheet Date (none of which relates to breach of Contract, breach of
warranty, tort, infringement, violation of Law or Environmental Liabilities),
and (c) Seller Transaction Expenses.
     5.6 Absence of Certain Developments. Except as expressly contemplated by
this Agreement, since the Balance Sheet Date, (a) Seller has conducted the
Business only in the Ordinary Course of Business, (b) there has not been any
damage or destruction, whether or not covered by insurance, with respect to the
assets or properties of Seller, that, individually or in the aggregate has had
or could reasonably be expected to have a Material Adverse Effect, (c) there has
not been any event, change, occurrence or circumstance that, individually or in
the aggregate with any other events, changes, occurrences or circumstances, has
had or could reasonably be expected to have a Material Adverse Effect, and
(d) Seller has not taken any action or agreed to take any action which, if taken
after the date of this Agreement, would be prohibited by Section 7.2 absent the
consent of Purchaser.
     5.7 Title to Purchased Assets; Sufficiency.
          (a) Title to Owned Purchased Assets. Seller has good, marketable and
exclusive title to, and the valid and enforceable power and unqualified right to
use and sell, transfer, convey, assign and deliver to Purchaser, each of the
Purchased Assets (excluding the Real Property, which is governed by
Section 5.8), free and clear of all Liens other than Permitted Liens. The
delivery to Purchaser at the Closing of the Seller Documents will vest in
Purchaser good, marketable and exclusive title to such Purchased Assets, free
and clear of all Liens other than Permitted Liens.
          (b) Interest in Purchased Assets Not Owned. Seller has a valid,
binding and enforceable leasehold interest in, or other valid, binding and
enforceable right to possess and use,

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each of the Purchased Assets which is not owned by Seller (excluding the Real
Property, which is governed by Section 5.8). The delivery to Purchaser at the
Closing of the Seller Documents will vest in Purchaser a valid, binding and
enforceable leasehold interest in, or other valid binding and enforceable right
to possess and use, such Purchased Assets in accordance with the Contracts
applicable thereto.
          (c) Sufficiency of Purchased Assets. The Purchased Assets constitute
all of the properties and assets used or held for use in the Business and are
sufficient for Purchaser to conduct the Business from and after the Closing Date
in the Ordinary Course of Business.
          (d) Condition of Tangible Personal Property. To the Knowledge of
Seller, (i) all of the items of tangible personal property included in the
Purchased Assets are in good operating condition and repair (ordinary wear and
tear excepted) and are suitable and sufficient for the purposes for which such
items are used in the conduct of the Business in the Ordinary Course of
Business, (ii) none of the items of tangible personal property included in the
Purchased Assets has any material defect or is in need of maintenance or repair
other than ordinary and routine maintenance and repairs which are not material
in nature or cost, and (iii) all of the items of tangible personal property
leased by Seller are in the condition required of such property by the terms of
the Contract applicable thereto.
     5.8 Real Property.
          (a) List of Real Property. Section 5.8(a) of the Disclosure Letter
sets forth a true, complete and correct list of all leases (and all amendments,
modifications and supplements thereto) of real property under which Seller is a
lessee or sublessee. Seller has no fee ownership in any real property.
          (b) Real Property Documents Delivered. Seller has delivered to
Purchaser true, complete and correct copies of (i) the Real Property Leases and,
to the extent not set forth therein, a legal description of all Real Property
covered thereby, and (ii) title policies and commitments (where no policy was
issued) naming Seller as the insured party, documents evidencing the exceptions
to title shown thereon and surveys for the Real Property, in each case that are
in the possession or control of Seller or any of its Affiliates.
          (c) Sufficiency of Real Property. The real property subject to the
Real Property Leases (the “Real Property”) constitutes all real property
(i) currently used, occupied or held for use in connection with the Business and
(ii) necessary for the continued operation of the Business in the Ordinary
Course of Business.
          (d) Condition of Real Property. To the Knowledge of Seller, (i) the
Real Property, including all buildings, fixtures and other improvements
constituting a part thereof, is in good operating condition without material
structural defects and is suitable, sufficient and appropriate for its current
use in connection with the Business in the Ordinary Course of Business, (ii) all
mechanical and other systems located at the Real Property are in good operating
condition, and no condition exists requiring repairs (other than routine
maintenance) or alterations thereof, and (iii) none of such improvements
constitute a legal non-conforming use or

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otherwise require any special dispensation, variance or permit under any Laws.
No Real Property is subject to any lease or right of occupancy in favor of any
third party.
          (e) Interest in Real Property. Seller has a valid, binding and
enforceable leasehold interest under each of the Real Property Leases, the valid
and enforceable power and unqualified right to use the Real Property, and,
subject to the consents referenced in Exhibit 9.2(e), the valid and enforceable
power and right to assign the lessee interest under the Real Property Leases to
Purchaser, free and clear of all Liens other than Permitted Encumbrances. Each
Real Property Lease is in full force and effect and is the valid, binding and
enforceable obligation of each party thereto in accordance with its terms.
Neither Seller nor, to the Knowledge of Seller, any other Person is in breach or
violation of, or default under, any Real Property Lease and no event has
occurred and no circumstance exists which, if not remedied, would result in such
a breach, violation or default (with or without notice or lapse of time, or
both). No party to any Real Property Lease has exercised any termination rights
with respect thereto, and no such party has given notice of any outstanding
dispute with respect to any Real Property Lease. The delivery to Purchaser at
the Closing of the Seller Documents will vest in Purchaser a valid, binding and
enforceable leasehold interest under each of the Real Property Leases, free and
clear of all Liens other than Permitted Encumbrances, and full right to possess
and use the Real Property in accordance with the Real Property Leases.
          (f) Permits. Seller has all certificates of occupancy and Permits of
any Governmental Entity necessary for the current use and operation of the Real
Property.
          (g) Code Compliance. To the Knowledge of Seller, the Real Property is
in compliance in all material respects with all applicable fire, health,
building, use, occupancy, subdivision and zoning Laws.
          (h) Condemnation; Eminent Domain. There do not exist any actual or, to
the Knowledge of Seller, threatened condemnation or eminent domain proceedings
that affect any Real Property or any part thereof, and Seller has not received
any notice, oral or written, of the intention of any Governmental Entity or
other Person to take or use any Real Property or any part thereof.
          (i) Insurer Notices. Seller has not received any notice from any
insurance company that has issued a policy with respect to any Real Property
requiring performance of any structural or other repairs or alterations to such
Real Property that have not been completed.
          (j) Assessments. Seller has not received any notice of any increase in
the current assessed valuation of any Real Property or any notice of any
contemplated special assessment.
          (k) Utilities. All buildings, structures and other improvements
constituting a part of the Real Property are supplied with utilities and other
services necessary for the operation of such buildings, structures or other
improvements in the Ordinary Course of Business.
          (l) Water Damage. To the Knowledge of Seller, there is no water
diffusion or other intrusion into any buildings, structures or other
improvements constituting a part of any

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Real Property which would materially impair the value thereof or prevent the use
thereof in connection with the conduct of the Business in the Ordinary Course of
Business.
          (m) Options. Seller does not own or hold, and is not obligated under
or a party to, any option, right of first refusal or other contractual right to
purchase, acquire, lease, sell, assign or dispose of any portion of or interest
in the Real Property or any other real estate.
          (n) Materialman’s Liens. No work has been done at the Real Property,
and no materials have been supplied to the Real Property, that have not been
paid for, and there are no materialman’s liens or mechanic’s liens affecting the
Real Property other than Permitted Liens.
     5.9 Intellectual Property.
          (a) List of Registered Intellectual Property. Section 5.9(a) of the
Disclosure Letter sets forth a true, complete and correct list of all Patents,
registered Marks, pending applications for registration of Marks, unregistered
Marks, registered Copyrights, and pending applications for registration of
Copyrights included in the Purchased Intellectual Property, specifying the
jurisdictions in which each such item of Purchased Intellectual Property has
been issued, registered or filed and the registration, application or filing
date, as applicable.
          (b) Interest in Purchased Intellectual Property. Seller is the sole
and exclusive owner of, or has valid and continuing rights to use, sell and
license, as the case may be, all of the Purchased Intellectual Property as the
same is used, sold and licensed in the Business as currently conducted in the
Ordinary Course of Business, free and clear of all Liens or rights of third
parties. Seller has taken all reasonable steps to establish, protect, preserve
and maintain Seller’s interest in the Purchased Intellectual Property. The
consummation of the transactions contemplated hereby will not result in the loss
or impairment of Purchaser’s right to own, use, sell or license any of the
Purchased Intellectual Property to the same extent that Seller owned, used or
had the right to sell or license the Purchased Intellectual Property in the
conduct of the Business in the Ordinary Course of Business, immediately prior to
the Closing.
          (c) Intellectual Property Infringement. To the Knowledge of Seller,
the operation of the Business as currently conducted in the Ordinary Course of
Business does not infringe on or constitute an unauthorized use,
misappropriation or violation of any Intellectual Property rights of any Person,
and no Legal Proceeding is pending or, to the Knowledge of Seller, threatened
alleging that the operation of the Business as conducted by Seller on or prior
to the Closing Date infringes or infringed on or constitutes an unauthorized
use, misappropriation or violation of any Intellectual Property rights of any
Person. Seller has not made any claim against a Person alleging that such Person
has infringed, misused, misappropriated or violated Seller’s rights in any
Purchased Intellectual Property, and to the Knowledge of Seller, no Person is
infringing, misusing, misappropriating or violating any rights in any Purchased
Intellectual Property.
          (d) Sufficiency of Intellectual Property. The Purchased Intellectual
Property constitutes all of the Intellectual Property necessary to enable Seller
to conduct the Business in the manner in which such Business is currently being
conducted in the Ordinary Course of Business.

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          (e) Royalties and License Fees. Except with respect to licenses of
commercial off-the-shelf Software available for an annual or one-time license
fee of no more than $10,000, Seller is not obligated to make any royalty or
other payments to any Person with respect to any Purchased Intellectual
Property, and, to the Knowledge of Seller, none shall become payable as a result
of the consummation of the transactions contemplated by this Agreement.
          (f) Protection of Trade Secrets. To the Knowledge of Seller, no Trade
Secret that is Purchased Intellectual Property has been authorized to be
disclosed or has been actually disclosed by Seller to any of its Former
Employees, Employees or any other Person other than in the Ordinary Course of
Business. Seller has taken adequate security measures to protect the
confidentiality and value of all the Trade Secrets included in the Purchased
Intellectual Property and any other non-public, proprietary information included
in the Purchased Technology, which, at a minimum, protects the nature of the
Trade Secret.
          (g) Employee Non-Disclosure and Invention Assignment Agreements
Delivered. Seller has delivered to Purchaser true, complete and correct copies
of all non-disclosure and invention assignment agreements entered into by any
Employee or Former Employee with Seller.
          (h) Adverse Orders and Judgments Relating to Purchased Intellectual
Property. There are no Orders to which Seller is a party or by which Seller or
its properties or assets are bound which restrict or affect any rights to any
Purchased Intellectual Property. None of Seller’s rights in Purchased
Intellectual Property has been adjudicated invalid or unenforceable, in whole or
in part, and Seller’s rights in the Purchased Intellectual Property are valid
and enforceable.
          (i) Rights of Universities and Others. No Governmental Entity,
university, college or other educational institution or research center has any
right to (other than license rights for internal purposes), ownership of or
right to royalties from the Purchased Intellectual Property.
          (j) List of Software. Section 5.9(j) of the Disclosure Letter sets
forth a true, complete and correct list of (i) all Software used in the Business
that is owned by Seller and (ii) all Software used in the Business that is not
owned by Seller, excluding commercial-off-the-shelf Software available for an
annual or one-time license fee of no more than $10,000.
          (k) Certain Employee-Related Intellectual Property Matters. To the
Knowledge of Seller, no Employee or Former Employee: (i) is or has been in
material violation of any term or covenant of any employment contract relating
to Intellectual Property, patent disclosure agreement, invention assignment
agreement, non-disclosure agreement or non-competition agreement with any Person
by virtue of such Employee or Former Employee being employed by, or performing
services for, or having been employed by, or retained to provide services for,
Seller; or (ii) has any right, license, claim or interest whatsoever in or with
respect to any Purchased Intellectual Property.

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          (l) Acquisitions of Intellectual Property. To the Knowledge of Seller,
in each case in which Seller intended to acquire ownership of Intellectual
Property from any third party, Seller obtained a valid and enforceable
assignment of all rights in such Intellectual Property, including the right to
seek past and future damages with respect thereto, to Seller and, to the extent
necessary under applicable Laws, Seller has recorded such assignment with the
relevant Governmental Entities in a timely manner.
     5.10 Material Contracts.
          (a) List of Material Contracts. Section 5.10(a) of the Disclosure
Letter sets forth, by reference to the applicable subsection of this
Section 5.10(a), a true, complete and correct list of all of the following
Contracts relating to the Business as currently conducted by Seller, the
Purchased Assets or the Assumed Liabilities to which Seller is a party or by
which Seller or any of the Purchased Assets are bound (collectively, the
“Material Contracts”):
          (i) Product Sale Contracts. Contracts for the sale of products or
services by Seller (other than purchase orders made in the Ordinary Course of
Business);
          (ii) Related-Party Contracts. Contracts with any Related Person;
          (iii) Asset Sale Contracts. Contracts for (A) sale of any of the
assets of Seller other than in the Ordinary Course of Business or (B) the grant
to any Person of any preferential rights to purchase any of its assets;
          (iv) Capital Expenditure Contracts. Contracts for capital expenditures
in excess of $100,000;
          (v) Joint Venture and Similar Contracts. Contracts for joint ventures,
strategic alliances, partnerships, licensing arrangements or sharing of profits
or proprietary information;
          (vi) Non-Competition and Non-Solicitation Contracts. Contracts
containing (A) covenants of Seller not to compete in any line of business or
with any Person in any geographical area or not to solicit for employment or
hire any Person or (B) covenants of any other Person not to compete with Seller
in any line of business or in any geographical area or not to solicit for
employment or hire any employee of Seller;
          (vii) Acquisition Contracts. Contracts relating to the acquisition (by
merger, purchase of stock or assets or otherwise) by Seller of any operating
business or substantially all of the material assets or the capital stock of any
other Person;
          (viii) Contracts Relating to Indebtedness. Contracts relating to the
incurrence, assumption or guarantee of any Indebtedness or imposing a Lien on
any of the Purchased Assets of Seller, including indentures, guarantees, loan or
credit agreements, sale and leaseback agreements, purchase money obligations
incurred in connection with the acquisition of property, mortgages, pledge
agreements, security agreements, or conditional sale or title retention
agreements;

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          (ix) Intellectual Property Contracts. Contracts (A) granting any
Intellectual Property License, (B) limiting Seller’s ability to exploit fully
any of the Purchased Intellectual Property, or (C) containing an agreement to
indemnify any other Person against any claim of infringement, unauthorized use,
misappropriation, dilution or violation of Intellectual Property;
          (x) Requirements Contracts. Contracts obligating Seller to provide or
obtain products of services for a period of more than 30 days or requiring
Seller to purchase or sell a stated portion of requirements or outputs;
          (xi) Contracts Relating to Loans to Others. Contracts not covered
under 5.10(a)(ii) above under which Seller has made advances or loans to any
other Person;
          (xii) Severance and Similar Contracts. Contracts providing for
severance, retention, change in control or other similar payments;
          (xiii) Employment Contracts. Contracts for the employment of any
individual on a full-time, part-time or other basis;
          (xiv) Labor Contracts. Labor or collective bargaining Contracts;
          (xv) Management Contracts. Management or support services Contracts
and Contracts with independent contractors or consultants;
          (xvi) Barter and Similar Contracts. Contracts providing for an offset,
countertrade or barter arrangement;
          (xvii) Contracts with Special Provisions. Customer or supplier
Contracts containing a “most favored nations” pricing arrangement, special
warranties, agreements to take back or exchange goods or similar arrangements;
          (xviii) Distributorship and Similar Contracts. Distributorship,
franchise, consignment, sales agency or sales representative Contracts;
          (xix) Powers of Attorney. Contracts granting a power of attorney;
          (xx) Guaranties and Similar Contracts. Contracts of guaranty, surety
or indemnification, direct or indirect, by Seller; and
          (xxi) Other Material Contracts. Contracts not covered by any of the
foregoing clauses (i) through (xx) providing for payments by or to Seller in
excess of $100,000 after the date of this Agreement that cannot be terminated by
Seller upon 30 days or less notice without payment or penalty in excess of
$100,000.
          (b) Material Contracts Delivered. Seller has delivered to Purchaser
true, complete and correct copies of all of the Material Contracts, together
with all amendments, modifications or supplements thereto.

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          (c) Status of Material Contracts. Each Material Contract is in full
force and effect and is the valid, binding and enforceable obligation of each
party thereto in accordance with its terms. Neither Seller nor, to the Knowledge
of Seller, any other Person is in breach or violation of, or default under, any
Material Contract, and no event has occurred and no circumstance exists which,
if not remedied, would result in such a breach, violation or default (with or
without notice or lapse of time, or both). Seller has not, and, to the Knowledge
of Seller, no other party to any Material Contract has, exercised any
termination rights with respect thereto, and no such party has given notice of
any dispute with respect to any Material Contract.
     5.11 Employee Benefit Plans.
          (a) List of Employee Benefit Plans. Section 5.11(a) of the Disclosure
Letter sets forth a true, complete and correct list of: (i) all “employee
benefit plans,” as defined in Section 3(3) of ERISA; (ii) all other payroll
practices, bonus plans, consulting or other compensation agreements, incentive,
equity or equity-based compensation, retirement, pension, profit sharing or
deferred compensation arrangements, stock purchase plans or programs, severance
pay, sick leave, vacation pay, salary continuation, disability, hospitalization,
medical insurance, life insurance, scholarship programs or other fringe
benefits; and (iii) all other employee benefit plans, Contracts, programs or
funds (whether written or oral, qualified or nonqualified, funded or unfunded,
foreign or domestic, currently effective or terminated) and any trust, escrow or
similar agreement related thereto, whether or not funded, maintained by Seller
or any ERISA Affiliate or to which Seller or any ERISA Affiliate has contributed
or is obligated to contribute thereunder for Employees or Former Employees,
directors, officers or stockholders, managers or members of Seller or any ERISA
Affiliate (all of the above hereinafter collectively referred to as “Employee
Benefit Plans”). Seller has no Liability with respect to any plan, arrangement
or practice of the type described in the preceding sentence other than the
Employee Benefit Plans.
          (b) Employee Benefit Plan Documents Delivered. Seller has delivered to
Purchaser true, complete and correct copies of the following documents with
respect to each of the Employee Benefit Plans (as applicable): (i) any plans and
related trust documents, and all amendments, modifications or supplements
thereto; (ii) Forms 5500 for the past three years and schedules thereto;
(iii) financial statements and actuarial valuations for the past three years;
(iv) the most recent IRS determination or opinion letter; (v) the most recent
summary plan description (including letters or other documents updating such
descriptions); and (vi) written descriptions of all non-written agreements
relating to the Employee Benefit Plans.
          (c) Section 401 Qualification. Each of the Employee Benefit Plans
intended to qualify under section 401 of the Code is so qualified and has been
determined by the IRS to be so qualified, and the trusts maintained pursuant
thereto are exempt from federal income taxation under section 501 of the Code
and have been determined by the IRS to be so exempt, and, to the Knowledge of
Seller, nothing has occurred with respect to the operation of any such plan
which could cause the loss of such qualification or exemption or the imposition
of any Liability, penalty or tax under ERISA or the Code.
          (d) Employee Benefit Plan Contributions. All contributions and
premiums required by Law or by the terms of any Employee Benefit Plan or any
agreement relating thereto

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have been timely made (without regard to any waivers granted with respect
thereto) to any funds or trusts established thereunder or in connection
therewith, and no accumulated funding deficiencies exist in any of such plans
subject to Section 412 of the Code, and all contributions for any period ending
on or before the Closing Date which are not yet due will have been paid or
accrued on Seller’s balance sheet on or prior to the Closing Date.
          (e) Inapplicability of Certain ERISA and Code Provisions. No Employee
Benefit Plan is or ever has been subject to Title IV of ERISA, Section 302 or
303 of ERISA or Sections 412 or 430 of the Code.
          (f) Absence of Multiemployer Plans. No Employee Benefit Plan is or
ever has been a multiemployer plan as defined in Section 3(37) of ERISA (a
“Multiemployer Plan”) and no event could cause Seller or any ERISA Affiliate to
incur withdrawal liability with respect to a Multiemployer Plan. No Employee
Benefit Plan is or ever has been a multiple employer plan within the meaning of
Section 210(a) of ERISA or Section 413(c) of the Code or subject to
Sections 4063 or 4064 of ERISA (“Multiple Employer Plans”).
          (g) Absence of Deferred Compensation Plans. No Employee Benefit Plan
is a “nonqualified deferred compensation plan” within the meaning of
Section 409A(d) of the Code. Each Employee Benefit Plan which is a “nonqualified
deferred compensation plan” within the meaning of Section 409A of the Code has
been maintained in compliance in all material respects with Section 409A of the
Code, and no Taxes are payable thereunder.
          (h) Absence of Reportable Events. To the Knowledge of Seller, there
has been no “reportable event” as that term is defined in Section 4043 of ERISA
and the regulation thereunder with respect to any of the Employee Benefit Plans
subject to Title IV of ERISA that would require the giving of notice, or any
event requiring notice to be provided, under Section 4041(c)(3)(C) or 4063(a) of
ERISA.
          (i) Absence of Certain Transactions. To the Knowledge of Seller,
neither Seller nor any ERISA Affiliate, or any organization to which Seller or
any ERISA Affiliate is a successor or parent corporation within the meaning of
Section 4069(b) of ERISA, has engaged in a transaction described in Section 4069
of ERISA.
          (j) Absence of Certain Liabilities Under ERISA and the Code. To the
Knowledge of Seller, neither Seller nor any ERISA Affiliate has incurred or
could have a Liability under Title IV of ERISA or Section 4971 of the Code that
in either case could become a Liability of the Purchaser after the Closing Date,
and no fact exists or is threatened that could result in such Liability.
          (k) Absence of Post-Employment Benefits. None of the Employee Benefit
Plans that are “welfare benefit plans” within the meaning of Section 3(1) of
ERISA provide for continuing benefits or coverage for any participant or any
beneficiary of a participant following termination of employment except as may
be required under COBRA and at the expense of the participant or the
participant’s beneficiary.

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          (l) Absence of Filing and Notice Violations. To the Knowledge of
Seller, there has been no violation of ERISA or the Code with respect to the
filing of applicable returns, reports, documents and notices regarding any of
the Employee Benefit Plans with the Secretary of Labor or the Secretary of the
Treasury or the furnishing of such notices or documents to the participants or
beneficiaries of the Employee Benefit Plans.
          (m) Absence of Plan-Related Legal Proceedings. There are no pending
Legal Proceedings which have been asserted or instituted against any of the
Employee Benefit Plans, the assets of any such plans or Seller or any ERISA
Affiliate, or the plan administrator or any fiduciary of any Employee Benefit
Plan, with respect to the operation of such plans (other than routine,
uncontested benefit claims), and, to the Knowledge of Seller, there are no facts
or circumstances which could form the basis for any such Legal Proceeding.
          (n) Maintenance of Employee Benefit Plans. Each of the Employee
Benefit Plans has been maintained all material respects in accordance with its
terms and all provisions of applicable Law. All amendments and actions required
to bring each of the Employee Benefit Plans into conformity with all of the
applicable provisions of ERISA and other applicable Laws have been timely made
or taken. Seller and each ERISA Affiliate have reserved all rights necessary to
amend or terminate each of the Employee Benefit Plans without the consent of any
other Person.
          (o) Group Health Plan Compliance. Seller and each ERISA Affiliate that
maintains a “group health plan” within the meaning of Section 5000(b)(1) of
ERISA have complied with the notice and continuation requirements of section
4980B of the Code or Part 6 of Title I of ERISA and the applicable regulations
thereunder.
          (p) Absence of Divestitures Involving Unfunded Benefit Liabilities.
Neither Seller nor any ERISA Affiliate or organization to which any of Seller or
any ERISA Affiliate is a successor or parent corporation has divested any
business or entity maintaining or sponsoring a defined benefit pension plan
having unfunded benefit liabilities (within the meaning of Section 4001(a)(18)
of ERISA) or transferred any such plan to any Person other than Seller or an
ERISA Affiliate during the five-year period ending on the Closing Date.
          (q) Absence of Non-Exempt Prohibited Transactions. Neither Seller nor
any ERISA Affiliate or “party in interest” or “disqualified person” with respect
to an Employee Benefit Plan has engaged in a non-exempt “prohibited transaction”
within the meaning of Section 4975 of the Code or Section 406 of ERISA.
          (r) Absence of Termination of Certain Employee Benefit Plans. Neither
Seller nor any ERISA Affiliate has terminated any Employee Benefit Plan subject
to Title IV of ERISA, or incurred any Liability under Section 4062 of ERISA to
the Pension Benefit Guaranty Corporation or to a trustee appointed under
Section 4042 of ERISA.
          (s) Absence of Effects of Agreement. Neither the execution and
delivery of this Agreement or the Seller Documents nor the consummation of the
transactions contemplated hereby or thereby will (i) result in any payment
becoming due to any individual, (ii) increase any benefits otherwise payable
under any Employee Benefit Plan, or (iii) result in the acceleration of

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the time of payment or vesting of any such benefits. Seller is not a party to
any Contract that would result, separately or in the aggregate, in the payment
of any “excess parachute payment” within the meaning of Section 280G of the
Code.
          (t) Absence of Additional Employment Benefit Plans and Plan
Modifications. Neither Seller nor any ERISA Affiliate is a party to any
Contract, plan or commitment, whether legally binding or not, to establish any
additional Employee Benefit Plan or to modify any existing Employee Benefit
Plan. No written or oral representations have been made by Seller to any
Employee regarding the employee benefits of Purchaser.
          (u) Absence of Certain Securities as Employee Benefit Plan Assets. No
equity or other security issued by Seller or any ERISA Affiliate forms or has
formed a part of the assets of any Employee Benefit Plan.
          (v) Treatment of Non-Employees. Each individual who performs services
for Seller or any ERISA Affiliate (other than through a Contract with an
organization other than such individual) and who is not treated as an employee
for federal income tax purposes by Seller or the applicable ERISA Affiliate is
not an employee of Seller or the applicable ERISA Affiliate for such purposes.
     5.12 Labor.
          (a) Absence of Labor Agreements. Seller is not a party to any labor or
collective bargaining Contract, and there are no labor or collective bargaining
Contracts (including side agreements, letters agreements, memoranda of
understanding, settlement agreements, grievance settlements or any form of
binding agreement within the scope of 29 U.S.C. § 185) which pertain to
Employees.
          (b) Absence of Labor Organizing Activity. No labor organization or
group of Employees has made a pending demand for recognition, and there are no
representation proceedings or petitions seeking a representation proceeding
presently pending or, to the Knowledge of Seller, threatened to be brought or
filed, with the National Labor Relations Board or other labor relations tribunal
involving Seller. To the Knowledge of Seller, there is no organizing activity
involving Seller pending or threatened by any labor organization or group of
Employees. Seller has not entered into any neutrality, card check, consent
election or recognition agreement with any labor organization.
          (c) Absence of Strikes and Grievances. There are no, and there have
not been in the past five years any, (i) strikes, work stoppages, slowdowns,
lockouts or arbitrations or (ii) grievances or other labor disputes pending or,
to the Knowledge of Seller, threatened against or involving Seller. There are no
unfair labor practice charges, grievances or complaints pending or, to the
Knowledge of Seller, threatened by or on behalf of any Employee or Former
Employee.
          (d) Absence of Employment-Related Claims. There are no complaints,
charges or claims against Seller pending or, to the Knowledge of Seller,
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Governmental Entity based on, arising out of, in connection with or otherwise
relating to the employment or termination of employment of, or the failure to
employ, any individual.
          (e) Compliance with Employment Laws. To the Knowledge of Seller,
Seller is in compliance in all material respects with all Laws relating to
employment, equal employment opportunity, non-discrimination, affirmative
action, civil rights, terms and conditions of employment, wages, hours,
benefits, family and medical leave rights, payment of wages, employee privacy
rights, immigration, work eligibility, labor relations, occupational safety and
health, the WARN Act and any similar state or local “mass layoff” or “plant
closing” Laws, employee and independent contractor classifications, workers’
compensation and the collection and payment of withholding and/or social
security Taxes and any similar Taxes. All Employees of Seller are legally
eligible to work in the jurisdictions where they currently are employed. There
has been no “mass layoff” or “plant closing” (as defined by the WARN Act) with
respect to Seller in the past five years. Seller is not liable for the payment
of any compensation, damages, taxes, fines, penalties or other amounts, however
designated, for failure to comply with the foregoing. Seller is not subject to
any consent decree or settlement agreement with any Governmental Entity relating
to compliance with Laws pertaining to labor or employment issues.
          (f) List of Employees. Section 5.12(f) of the Disclosure Letter sets
forth a true, complete and correct list, as of the date hereof, of all
Employees, indicating (i) each such Employee’s present base salary or hourly
wage and, to the extent already paid in 2010, bonus, (ii) each such Employee’s
accrued time off, (iii) each such Employee’s hire date, and (iv) whether such
Employee is currently on a leave of absence for any reason. Except for the
Employees identified in Section 8.1(a) of the Disclosure Letter, all Employees
are directly involved in the operation of the Business.
          (g) Employee Manuals, Handbooks and Policies. True, complete and
correct copies of all written personnel manuals, employee handbooks and
personnel policies applicable to Employees have been provided to Purchaser.
     5.13 Taxes.
          (a) Tax Returns Filed; Taxes Paid. All Tax Returns required to be
filed by or on behalf of Seller relating to the Business or the Purchased Assets
have been (or will be) duly and timely filed with the appropriate Taxing
Authority in all jurisdictions in which such Tax Returns are required to be
filed, and all such Tax Returns are (or will be) true, complete and correct. All
Taxes relating to the Business or the Purchased Assets have been fully and
timely paid.
          (b) Absence of Audits. All deficiencies asserted or assessments made
as a result of any examinations by any Taxing Authority of the Tax Returns
relating to the Business or the Purchased Assets have been fully paid, and there
are no other audits or investigations by any Taxing Authority in progress, nor
has Seller received any notice from any Taxing Authority that it intends to
conduct such an audit or investigation relating to the Business or the Purchased
Assets.

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          (c) List of Applicable Taxes. Section 5.13(c) of the Disclosure Letter
lists (i) all types of Taxes paid, and all types of Tax Returns filed, by or on
behalf of Seller relating to the Business or the Purchased Assets and (ii) all
of the jurisdictions that impose such Taxes or with respect to which Seller has
a duty to file such Tax Returns.
          (d) Tax Returns Delivered. Seller has delivered to Purchaser true,
complete and correct copies of all Tax Returns relating to the Business or the
Purchased Assets for all taxable periods ending after December 31, 2006.
          (e) Compliance with Tax Laws. Seller has complied with all applicable
Laws relating to the payment and withholding of Taxes and has duly and timely
withheld and paid over to the appropriate Taxing Authorities all amounts
required to be so withheld and paid over under all applicable Laws.
          (f) Claims by Taxing Authorities. No claim has been made by a Taxing
Authority in a jurisdiction in which Seller does not currently file a Tax Return
such that Seller is or may be subject to taxation by that jurisdiction.
          (g) Absence of Extensions. No agreement, waiver or other document or
arrangement extending or having the effect of extending the period for
assessment or collection of Taxes (including any applicable statute of
limitation) or the period for filing any Tax Return, in each case with respect
to the Business or the Purchased Assets, has been executed or filed with any
Taxing Authority by or on behalf of Seller. Seller has not requested any
extension of time within which to file any Tax Return relating to the Business
or the Purchased Assets, which Tax Return has since not been filed.
          (h) Absence of Non-Deductible Payments. No Purchased Asset is a
Contract, plan or arrangement covering any Person that, individually or
collectively, could give rise to the payment of any amount that would not be
deductible by Purchaser or Seller or on which a penalty or excise tax could be
imposed pursuant to Sections 162(m), 280G, 404, 409A or 4999 of the Code.
          (i) Absence of Tax Liens. There are no Liens for Taxes upon the
Purchased Assets, except for Permitted Liens.
          (j) Absence of Foreign Persons. Seller is not a “foreign person”
within the meaning of section 1445 of the Code.
          (k) Absence of Interests in Taxable Entities. None of the Purchased
Assets is an interest (other than indebtedness within the meaning of section 163
of the Code) in an entity taxable as a corporation, partnership, trust or real
estate mortgage investment conduit for federal income tax purposes.
          (l) Absence of Tax Issues Raised by Governmental Entities. No issue
has been raised by any Governmental Entity which, by application of the same
principles, would reasonably be expected to affect the Tax treatment of the
Business or the Purchased Assets in any taxable period (or portion thereof)
ending after the Closing Date.

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          (m) Absence of Tax-Related Powers of Attorney. No power of attorney
with respect to any Tax matter is currently in force with respect to the
Business or the Purchased Assets that would, in any manner, bind, obligate or
restrict Purchaser.
          (n) Absence of Binding Tax Positions. Seller has not executed or
entered into any Contract with, or obtained any consents or clearances from, any
Taxing Authority, or has been subject to any ruling guidance specific to Seller,
that would be binding on Purchaser for any taxable period (or portion thereof)
ending after the Closing Date.
          (o) Absence of Tax-Exempt Assets. No Purchased Asset is (i)
“tax-exempt use property” within the meaning of section 168(h)(1) of the Code,
(ii) “tax-exempt bond financed property” within the meaning of section 168(g)(5)
of the Code, (iii) “limited use property” within the meaning of Rev. Proc.
2001-28, (iv) property described in section 168(g)(1)(A) of the Code with
respect to which any Seller or any of its Affiliates has claimed depreciation
deductions in determining its U.S. federal income tax liability, or (v) subject
to any provision of Law comparable to any of the provisions listed above.
          (p) Not a Listed Transaction. The transaction contemplated by this
Agreement is not part of a listed transaction within the meaning of
Section 6707A of the Code, or any transaction requiring disclosure under a
corresponding or similar provision of state, local or foreign Law.
     5.14 Litigation; Compliance with Law.
          (a) Absence of Legal Proceedings. There is no Legal Proceeding pending
or, to the Knowledge of Seller, threatened against Seller or any Employee or
Former Employee or any current or former officer, director or manager of Seller
with respect to their business activities on behalf of Seller, and, to the
Knowledge of Seller, there are no facts or circumstances which could form the
basis for any such Legal Proceeding. Seller is not engaged in any Legal
Proceeding to recover monies due it or for damages sustained by it.
          (b) Absence of Applicable Orders. Seller is not subject to any Order,
and Seller is not in breach or violation of any Order.
          (c) Compliance with Laws. To the Knowledge of Seller, Seller is and
has been in compliance in all material respects with all Laws applicable to the
Business and the Purchased Assets. Seller has not received any written or other
notice of or been charged with the violation of any Laws. To the Knowledge of
Seller, (i) Seller is not under investigation with respect to the violation of
any Laws, (ii) there are no facts or circumstances which could form the basis
for any such investigation, and (iii) Seller does not need to make any unusual
expenditure in order to achieve or maintain compliance in all material respects
with any Laws.
     5.15 Permits.
          (a) List of Permits. Section 5.15(a) of the Disclosure Letter sets
forth a true, complete and correct list of all Permits necessary for the
operation of the Business as currently conducted (“Seller Permits”).

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          (b) Permits Delivered. Seller has delivered to Purchaser true,
complete and correct copies of all Seller Permits.
          (c) Status of Permits. All Seller Permits are currently held by Seller
are in full force and effect. To the Knowledge of Seller, (i) Seller is and has
been in compliance in all material respects with all Seller Permits, (ii) Seller
is not in breach or violation of, or default under, any Seller Permit, and
(iii) no event has occurred or circumstance exists which, if not remedied, would
result in such a breach, violation or default (with or without notice or lapse
of time, or both). No Legal Proceeding is pending or, to the Knowledge of
Seller, threatened to suspend, revoke or modify any Seller Permit, and, to the
Knowledge of Seller, no facts or circumstances exist which could form the basis
for any such Legal Proceeding.
          (d) Permits Transferable. To the extent allowed by the issuing
Governmental Entity or applicable Law, each of the Seller Permits will be sold,
transferred, conveyed, assigned and delivered to Purchaser upon delivery of the
Seller Documents to Purchaser at the Closing.
     5.16 Environmental Matters.
          (a) Compliance with Environmental Laws and Permits. To the Knowledge
of Seller, Seller is and has been in compliance in all material respects with
all applicable Environmental Laws, which compliance includes obtaining,
maintaining in good standing and complying with all Environmental Permits
necessary to operate the Business as currently operated. No Legal Proceeding is
pending or, to the Knowledge of Seller, threatened to revoke, modify or
terminate any such Environmental Permit, and, to the Knowledge of Seller, no
facts or circumstances exist which could form the basis for any such Legal
Proceeding. To the Knowledge of Seller, Seller does not need to make any unusual
expenditure in order to achieve or maintain compliance with any Environmental
Law or any Environmental Permit.
          (b) Absence of Environmental Orders. Seller is not the subject of any
Order or party to any Contract with respect to any Environmental Law, Remedial
Action or Release or threatened Release of a Hazardous Material.
          (c) Absence of Environmental Claims. No claim has been made or is
pending or, to the Knowledge of Seller, threatened against Seller, alleging that
Seller may be in violation of any Environmental Law or any Environmental Permit
or may have any Environmental Liability.
          (d) Absence of Exposure to Environmental Liabilities. To the Knowledge
of Seller, no facts, circumstances or conditions exist with respect to the
Business as currently operated, the Purchased Assets or any property currently
or formerly owned, operated or leased by Seller or any property to which Seller
arranged for the disposal or treatment of Hazardous Materials that could result
in Environmental Liabilities.
          (e) Absence of Environmental Investigations. There are no pending or,
to the Knowledge of Seller, threatened investigations under Environmental Laws
relating to the Business as currently operated or the Purchased Assets.

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          (f) Absence of Exposure to Asbestos-Related Liabilities. Seller has
not designed, manufactured, distributed or sold products or articles containing
asbestos, and, to the Knowledge of Seller, Seller has no Liability with respect
to the presence of asbestos in any product or article or at any property or
facility.
          (g) Absence of Certain Items from the Real Property. To the Knowledge
of Seller, there is not located at the Real Property any (i) underground or
above ground storage tank, (ii) landfill, (iii) surface impoundment,
(iv) asbestos-containing material, or (v) equipment containing polychlorinated
biphenyls.
          (h) Real Property Not Listed as a Contaminated Site. No Real Property
(including any buildings, structures or materials constituting a part thereof)
is included or, to the Knowledge of Seller, proposed for inclusion on the
National Priorities List, CERCLA, CERCLIS or any similar list maintained under
any Environmental Law.
          (i) Environmental Reports Delivered. Seller has provided to Purchaser
all environment-related audits, studies, reports, analyses and results of
investigations that have been performed with respect to the Real Property and
that are in Seller’s actual possession.
          (j) List of Disposal Sites. Section 5.16(j) of the Disclosure Letter
set forth a true, complete and correct list of all sites at which Seller has
treated, recycled, stored, disposed of, arranged for or permitted the disposal
of, transported, handled or released any Hazardous Material.
     5.17 Insurance.
          (a) Sufficiency of Insurance. Seller has insurance policies in full
force and effect (a) for such amounts as are sufficient for all requirements of
Law and all Contracts to which Seller is a party or by which Seller or its
properties or assets are bound and (b) which are in such amounts, with such
deductibles and against such risks and losses, as are reasonable for the
Business as currently operated and the Purchased Assets.
          (b) List of Insurance Policies. Section 5.17(b) of the Disclosure
Letter sets forth a true, complete and correct list of all insurance policies
and all fidelity bonds held by or applicable to Seller relating to the Business
as currently operated or the Purchased Assets setting forth, in respect of each
such policy (other than those constituting Employee Benefit Plans), the policy
name, policy number, carrier, names of insureds and co-insureds, names of policy
owners, term, type and amount of coverage and annual premium.
          (c) Status of Insurance Policies. All insurance contemplated by
Section 5.17(b) is in full force and effect and, to the Knowledge of Seller,
there is no default under any such policies that could result in cancellation
thereof or a refusal by the insurer to pay any claim thereunder. To the
Knowledge of Seller, no event has occurred which could result in a retroactive
or prospective upward adjustment in premiums under any such policies. No
insurance policy held by or applicable to Seller relating to the Business or the
Purchased Assets has been cancelled since December 31, 2007 and, to the
Knowledge of Seller, no threat has been made to cancel any such insurance policy
during such period.

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          (d) Insurance Policies Transferable. To the extent allowed by the
issuing insurer or the terms thereof, each of the insurance policies
contemplated by Section 5.17(b) (other than those listed as Excluded Assets in
Exhibit 2.2(e)) will be sold, transferred, conveyed, assigned and delivered to
Purchaser upon delivery of the Seller Documents to Purchaser at the Closing.
     5.18 Inventories.
          (a) Condition of Inventories. The inventories of Seller are in good
and marketable condition and are usable or saleable in the Ordinary Course of
Business.
          (b) Balance Sheet Treatment of Inventories. The inventories of Seller
set forth in the Balance Sheet were valued at the lower of cost or market in a
manner consistent with past practice of Seller.
          (c) Sufficiency of Inventories. The inventories of Seller are
sufficient for the operation of the Business in the Ordinary Course of Business.
     5.19 Accounts Receivable.
          (a) Absence of Unusual Transactions. All accounts and notes receivable
of Seller arising in connection with, or relating to the Business, and included
in the Purchased Assets have arisen from bona fide transactions in the Ordinary
Course of Business and are payable on ordinary trade terms.
          (b) Collectible Net of Reserves. To the Knowledge of Seller, all
accounts and notes receivable of Seller arising in connection with, or relating
to the Business, and included in the Purchased Assets (whether reflected on the
Balance Sheet or arising after the Balance Sheet Date) are good and collectible
no later than 120 days after the Closing Date at the aggregate recorded amounts
thereof, net of any applicable reserve for returns or doubtful accounts, which
reserves are adequate and were calculated in a manner consistent with past
practice of Seller.
          (c) Not Subject to Setoff or Returns. None of the accounts or notes
receivable of Seller arising in connection with, or relating to the Business,
and included in the Purchased Assets (i) are subject to any setoffs or
counterclaims or (ii) represent obligations for goods sold on consignment, on
approval or on sale-or-return basis or subject to any other repurchase or return
arrangement.
     5.20 Accounts Payable. All accounts payable of Seller arising in connection
with, or relating to the Business and included in Assumed Liabilities (whether
reflected on the Balance Sheet or arising after the Balance Sheet Date) are the
result of bona fide transactions in the Ordinary Course of Business and have
been paid or are not yet due and payable.
     5.21 Absence of Related Party Transactions. Except as set forth in
Section 5.21 of the Disclosure Letter, no Related Person (a) owes any amount to
Seller, (b) is involved in any business arrangement or other relationship with
Seller (whether written or oral), (c) owns any property or right, tangible or
intangible, that is used by Seller, (d) has any claim or cause of

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action against Seller, or (e) owns any direct or indirect interest of any kind
in, or controls or is an employee, officer, director, stockholder, manager,
member or partner of, or consultant to, or lender to or borrower from, or has
the right to participate in the profits of, any Person which is a competitor,
supplier, customer, landlord, tenant, creditor or debtor of Seller. Seller does
not owe any amount to, and has not committed to make any loan or extend or
guarantee credit to or for the benefit of, any Related Person.
     5.22 Customers; Suppliers.
          (a) Lists of Largest Customers and Suppliers. Section 5.22(a) of the
Disclosure Letter sets forth for each of the fiscal years ended December 31,
2008 and December 31, 2009 and the seven-months ended July 31, 2010, a true,
complete and correct list of the 10 largest customers and the 10 largest
suppliers of Seller (without disclosing the identities of such customers or
suppliers), as measured by the dollar amount of purchases therefrom or thereby,
during such period, showing the approximate total sales by Seller to each such
customer and the approximate total purchases by Seller from each such supplier
during each such period.
          (b) Customer and Supplier Relations. Since December 31, 2009, no
customer covered by the list on Section 5.22(a) of the Disclosure Letter has
terminated its relationship with Seller or reduced its purchase volume with
Seller by more than 20% (based on average monthly purchase volume during the
seven-month period ended July 31, 2010 as compared to the average monthly
purchase volume during the fiscal year ended December 31, 2009), or has notified
Seller that it intends to do so. Seller is not otherwise involved in any claim
or controversy with any customer or supplier.
     5.23 Product Warranty and Liability.
          (a) Conformity of Products with Specifications. To the Knowledge of
Seller, each product manufactured, sold or delivered by Seller in conducting the
Business has been in conformity in all material respects with all product
specifications, all express and implied warranties and all applicable Laws.
          (b) Absence of Liability for Replacement or Repair. To the Knowledge
of Seller, Seller has no Liability for replacement or repair of, or refund in
respect of, any products, or any other customer or product obligations, that,
individually or in the aggregate with all other such Liabilities, exceed
$100,000.
          (c) Absence of Express Warranties. Seller has not sold any products or
delivered any services that included an express warranty.
          (d) Absence of Liability for Injuries. To the Knowledge of Seller,
Seller has no Liability arising out of any injury to individuals or property as
a result of the ownership, possession or use of any product designed,
manufactured, assembled, repaired, maintained, delivered, sold or installed, or
services rendered, by or on behalf of Seller, and there is no basis for any such
Liability.

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          (e) Absence of Other Product-Related Liability. To the Knowledge of
Seller, Seller has not committed any act or failed to commit any act which would
result in, and, to the Knowledge of Seller, no event has occurred or
circumstance exists which could give rise to or form the basis of, any product
Liability or Liability for breach of warranty (whether covered by insurance or
not) on the part of Seller with respect to products designed, manufactured,
assembled, repaired, maintained, delivered, sold or installed, or services
rendered, by or on behalf of Seller that, individually or in the aggregate with
all other such Liabilities, exceed $100,000.
     5.24 Absence of Improper Payments. Neither Seller nor, to the Knowledge of
Seller, any of Seller’s Representatives or any other Person associated with or
acting on behalf of any of them, has directly or indirectly made any
contribution, gift, bribe, rebate, payoff, influence payment, kickback or other
payment to any Person, whether in money, property or services, (a) to obtain
favorable treatment in securing business for, or for favorable treatment for
business already secured by, Seller, (b) to obtain special concessions for, or
for special concessions already obtained in respect of, Seller, or (c) in
violation of any Law.
     5.25 Absence of Certain Indebtedness. Section 5.25 of the Disclosure Letter
sets forth a true, complete and correct list of all material Indebtedness of
Seller.
     5.26 Absence of Certain Change-in-Control Payments. No Employee, or any
other Person (excluding, for the avoidance of doubt, any broker, finder or
financial advisor which are the subject of Section 5.27), shall be entitled to
receive any change-in-control, “success fee,” bonus or other payment arising
from or otherwise triggered by the transactions contemplated by this Agreement
(excluding, for the avoidance of doubt, the payment of the Cash Purchase Price).
     5.27 Absence of Financial Advisors. Except as disclosed in Section 5.27 of
the Disclosure Letter, no Person has acted, directly or indirectly, as a broker,
finder or financial advisor for Seller in connection with the transactions
contemplated by this Agreement, and except as disclosed in Section 5.27 of the
Disclosure Letter, no Person is or will be entitled to any fee or commission or
like payment in respect thereof.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
     Purchaser hereby represents and warrants to Seller that:
     6.1 Organization and Good Standing. Purchaser is a limited liability
company duly organized, validly existing and in good standing under the Laws of
the State of Delaware.
     6.2 Authorization of Agreement.
          (a) Power and Authority. Purchaser has all requisite power, authority
and legal capacity to execute and deliver this Agreement and each other
agreement, document, instrument or certificate contemplated by this Agreement to
be executed by Purchaser in connection with the consummation of the transactions
contemplated hereby (collectively, the

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“Purchaser Documents”), to perform its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby.
          (b) Approvals. The execution, delivery and performance by Purchaser of
this Agreement and each Purchaser Document and the consummation of the
transactions contemplated hereby and thereby have been duly authorized and
approved by all requisite action on the part of Purchaser.
          (c) Enforceability. This Agreement has been, and each of the Purchaser
Documents will be at or prior to the Closing, duly and validly executed and
delivered by Purchaser and (assuming the due authorization, execution and
delivery by the other parties hereto and thereto) this Agreement constitutes,
and each of the Purchaser Documents when so executed and delivered will
constitute, legal, valid and binding obligations of Purchaser, enforceable
against Purchaser in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting
creditors’ rights and remedies generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
     6.3 Conflicts and Consents.
          (a) Absence of Conflicts. None of the execution and delivery by
Purchaser of this Agreement and of the Purchaser Documents, the performance of
its obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby will conflict with, or result in any violation or
breach of, or default under (with or without notice or lapse of time, or both),
or give rise to a right of termination or cancellation under, any provision of
(i) the certificate of formation and limited liability company agreement of
Purchaser, (ii) any Order applicable to Purchaser or by which it or any of its
properties or assets are bound, or (iii) any applicable Law.
          (b) Third-Party Consent Requirements. No consent, waiver, approval,
Order, Permit or authorization of, or declaration or filing with, or
notification to, any Person is required on the part of Purchaser in connection
with the execution and delivery of this Agreement or the Purchaser Documents,
the performance by Purchaser of its obligations hereunder or thereunder, the
consummation of the transactions contemplated hereby or thereby or the taking by
Purchaser of any other action contemplated hereby or thereby, except for
(i) compliance with the applicable requirements of the HSR Act, (ii) compliance
with the applicable requirements of the Securities Exchange Act of 1934, as
amended, and (iii) such other consents, waivers, approvals, Orders, Permits,
authorizations, declarations, filings or notifications that, if not obtained,
made or given, would not, individually or in the aggregate, have a material
adverse effect on the ability of Purchaser to consummate the transactions
contemplated by this Agreement and the Purchaser Documents or perform its
obligations hereunder or thereunder.
     6.4 Financial Capacity. Purchaser has currently available to it, or will
have available to it at and after the Closing, funds sufficient to consummate
the transactions contemplated by this Agreement and the Purchaser Documents, to
perform its obligations hereunder and thereunder and to pay all related costs
and expenses.

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     6.5 Absence of Financial Advisors. No Person has acted, directly or
indirectly, as a broker, finder or financial advisor for Purchaser in connection
with the transactions contemplated by this Agreement, and no Person is entitled
to any fee or commission or like payment in respect thereof.
ARTICLE VII
CERTAIN COVENANTS
     7.1 Access to Information.
          (a) Full Access. From the date hereof until the Closing, Seller shall
afford to Purchaser and its Representatives, with respect to the Business as
currently conducted, the Purchased Assets and the Assumed Liabilities, during
normal business hours and in a manner as not to unreasonably interfere with
normal operation of the Business: (i) upon reasonable notice, full access to the
properties and assets (including all real property and the buildings,
structures, fixtures, appurtenances and improvements erected, attached or
located thereon), financial records (including working papers and data in the
possession of Seller or Seller’s accountants), Contracts and other Business
Documents, Employees of Seller at the manager level or above, and suppliers and
accountants of Seller and (ii) upon reasonable request, with the consent of
Perry Fraley, access to Employees of Seller below the manager level and
customers of Seller in such manner as he may prescribe; provided, however, that,
notwithstanding the foregoing, Seller will have no obligation to provide
Purchaser or its Representatives with access to Seller’s extrusion processing
and finishing know-how prior to the Closing.
          (b) Operating and Management Reports to Be Provided. From the date
hereof until the Closing, Seller shall generally keep Purchaser informed as to
all material matters involving the Business and the Purchased Assets. Without
intending to limit the generality or effect of the immediately preceding
sentence, as promptly as practicable, during the period from the date hereof
until the Closing, Seller shall provide to Purchaser all management reports as
are prepared by Seller and provided to any of the Key Employees in the Ordinary
Course of Business.
          (c) Other Requested Information to Be Provided. From the date hereof
until the Closing, Seller shall promptly furnish or make available to Purchaser
and its Representatives such information concerning the Business or the
Purchased Assets as Purchaser shall reasonably request.
          (d) No Effect on Purchaser’s Remedies. No information provided to or
obtained by Purchaser pursuant to this Section 7.1 shall limit or otherwise
affect the remedies available hereunder to Purchaser (including Purchaser’s
right to seek indemnification pursuant to Article X), or the representations or
warranties of, or the conditions to the obligations of, the parties hereto,
except to the extent specifically provided in Section 9.3(c).
     7.2 Conduct of the Business Pending the Closing. From the date hereof until
the Closing, Seller shall conduct the Business in the Ordinary Course of
Business, including using commercially reasonable efforts to (a) maintain
inventory of a quantity, quality and mix consistent with past practices,
(b) maintain all of the properties and assets of, or used by, Seller

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in connection with the Business in their current condition and consistent with
past practices, ordinary wear and tear excepted, (c) maintain insurance upon all
of the properties and assets of Seller used in connection with the Business in
such amounts and of such kinds comparable to that in effect on the date of this
Agreement, (d) maintain the validity of existing Permits consistent with past
practice, and (e) preserve the present business operations, organization and
goodwill of Seller and relationships with Persons having business dealings with
Seller (including Employees, customers and suppliers) consistent with past
practices. Without limiting the generality or effect of the foregoing but
subject to applicable Law, from the date hereof until the Closing except as
otherwise expressly provided by this Agreement or with the prior written consent
of Purchaser, Seller shall not:
     (a) Employees and Employee Benefits. (i) Hire or terminate any Employee
except in the Ordinary Course of Business, (ii) enter into or amend any
employment, consulting or similar Contract, (iii) increase the salary or other
compensation of any Employee or any officer, director or manager of Seller
except for normal scheduled increases in the Ordinary Course of Business,
(iv) grant any unusual or extraordinary bonus, benefit or other direct or
indirect compensation to any Employee or any officer, director or manager, or
(v) increase the coverage or benefits available under, or otherwise modify or
amend, any Employee Benefit Plan, create any new Employee Benefit Plan or
terminate any Employee Benefit Plan;
     (b) No New Indebtedness or Repayment or Modification of Indebtedness. (i)
Except for borrowings under the Credit Facility in the Ordinary Course of
Business, create, incur, assume, guarantee, endorse or otherwise become liable
or responsible with respect to (whether directly, contingently or otherwise) any
Indebtedness that would be included in the Assumed Liabilities, (ii) except in
the Ordinary Course of Business in accordance with the terms thereof, pay,
repay, discharge, purchase, repurchase or satisfy any Indebtedness issued or
guaranteed by Seller that would be included in the Assumed Liabilities, or (iii)
modify the terms of any Indebtedness or other Liability that would be included
in the Assumed Liabilities in a manner which may adversely affect Purchaser;
     (c) No New Liens on Purchased Assets. Subject to any Lien or otherwise
encumber or, except for Permitted Liens and, in the case of the Real Property,
Permitted Encumbrances, any of the Purchased Assets (whether tangible or
intangible);
     (d) No Loans or Investments. Make any loans, advances or capital
contributions to, or investments in, or otherwise acquire the securities of, any
Person;
     (e) No Accounting Changes. Make any change in its financial accounting
methods, practices or procedures.
     (f) No Tax Changes or Filing of Tax Returns. (i) Make, change or revoke any
Tax election, settle or compromise any Tax claim or Liability or enter into a
settlement or compromise, or change (or make a request to any Taxing Authority
to change) any aspect of its method of accounting for Tax purposes if such
change could affect Purchaser, or (ii) prepare or file any Tax Return (or any
amendment, modification or supplement thereof) unless such Tax Return shall have
been prepared in a manner consistent with

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past practice and Seller shall have provided Purchaser a copy thereof (together
with supporting papers) at least three Business Days prior to the due date
thereof for Purchaser to review and approve (such approval not to be
unreasonably withheld, conditioned or delayed);
     (g) No Unusual Purchase or Sale of Assets. Acquire any properties or assets
other than in the Ordinary Course of Business, or sell, assign, license,
transfer, convey, lease or otherwise dispose of any of the Purchased Assets,
other than finished goods sold in the Ordinary Course of Business;
     (h) No Merger or Consolidation. Enter into or agree to enter into any
merger or consolidation with any Person;
     (i) No Unusual Transactions. Enter into any transaction which, by reason of
its size or otherwise, is not in the Ordinary Course of Business;
     (j) No Change to Real Property. Demolish or remove any existing
improvements, or erect any new improvements, on the Real Property or any portion
thereof;
     (k) No Delay in Capital Expenditures. Delay or fail to make any capital
expenditures that were reflected in the capital expenditure plan delivered by
Seller to Purchaser prior to the date hereof;
     (l) No New Lines of Business. Enter into any new lines of business;
     (m) No Unusual Change in Products or Services. Introduce any change in the
types, nature, composition or quality of products or services offered by the
Business, or make any change in product specifications or prices or terms of
distribution of such products, in each case except in the Ordinary Course of
Business;
     (n) No Distributions. Declare, set aside, make or pay any distribution in
respect of the membership interests of Seller, or repurchase, redeem or
otherwise acquire any outstanding membership interests or other securities of,
or interests in, Seller except that (i) Seller may distribute cash to its
members in the Ordinary Course of Business in connection with their funding of
estimated U.S. federal income Tax payments attributable to the operations of the
Business, provided that such distribution, together with previous distributions
in respect of the same Tax year, if any, shall not exceed in the aggregate an
amount equal to 42% of the taxable income attributable to the operations of the
Business for the applicable Tax year through the date of such distribution, as
estimated by Seller in good faith (in consultation with Purchaser), to be
allocated to the members of Seller under the Code (ii) prior to, and in
anticipation of, the Closing, Seller may distribute cash to its members, in a
manner consistent with Seller’s past practices, in connection with the funding
of their estimated U.S. federal income Tax payments attributable to the
operations of the Business through the Closing Date, provided that such
distribution, together with previous distributions in respect of the same Tax
year, if any, shall not exceed in the aggregate an amount equal to 42% of the
taxable income attributable to the

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operations of the Business for the Tax year during which the Closing occurs
through the Closing Date, as estimated by Seller in good faith (in consultation
with Purchaser), to be allocated to the members of Seller under the Code and
(iii) following delivery by Seller to Purchaser of the Pre-Closing Statement in
accordance with Section 3.2(a) and prior to, and in anticipation of, the
Closing, Seller may distribute cash to its members equal to 42% of the amount,
if any, by which (x) the Estimated Closing Date Pre-Purchased Prime Value
exceeds (y) the Target Pre-Purchased Prime Value, provided that Seller shall
simultaneously therewith provide Purchaser written notice of the amount of such
distribution (which notice shall be accompanied by reasonable supporting
documentation)(any distribution pursuant to this clause (iii), the “Estimated
Pre-Purchased Prime Value Distribution”);
     (o) No Release or Waiver of Rights. Release or waive any right of Seller
that is included in the Purchased Assets;
     (p) No New Capital Expenditure Commitments. Enter into any commitment for
capital expenditures not reflected in the capital expenditure plan delivered by
Seller to Purchaser prior to the date hereof;
     (q) No New Labor Contracts. Enter into any labor or collective bargaining
Contract or, through negotiation or otherwise, make any commitment or incur any
Liability to any labor organization;
     (r) No Entry Into, Termination or Amendment of Material Contracts. Except
as set forth in Section 7.2 (r) of the Disclosure Letter, enter into any new
real property lease or any new Contract of a type listed in Section 5.10(a) or
terminate or amend, or waive any rights under, any Real Property Lease or any
Material Contract;
     (s) No Settlement of Legal Proceedings. Settle or compromise any pending or
threatened Legal Proceeding or any claim against Seller relating to the Business
or the Purchased Assets;
     (t) No Change in Credit, Collection or Payment Policies. Change or modify
its credit, collection or payment policies, procedures or practices, including
acceleration of collections of accounts receivable (whether or not past due), or
fail to pay or delay payment of payables or other Liabilities;
     (u) No Actions Interfering with this Agreement. Take any action which would
materially adversely affect the ability of the parties hereto to consummate the
transactions contemplated by this Agreement; or
     (v) No Agreements as to Certain Actions. Agree to do (i) anything
prohibited by this Section 7.2, (ii) anything that would make any of the
representations and warranties of Seller in this Agreement or any Seller
Document untrue or incorrect in any material respect, or could be reasonably
expected to result in any of the conditions to the Closing not being satisfied,
or (iii) anything that would, at the time of such action, reasonably be expected
to have a Material Adverse Effect.

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     7.3 Consents of Third Parties.
          (a) Efforts to Obtain Consents. Seller shall use its commercially
reasonable efforts to obtain or make as promptly as practicable all consents,
waivers, approvals and notices required to consummate the transactions
contemplated by this Agreement, including the consents, waivers, approvals and
notices referred to in Section 5.3(b) of the Disclosure Letter. All such
consents, waivers, approvals and notices shall be in writing and in form and
substance reasonably satisfactory to Purchaser. Executed counterparts of such
consents, waivers and approvals shall be delivered to Purchaser promptly after
receipt thereof, and copies of such notices shall be delivered to Purchaser
promptly after the making thereof. Notwithstanding anything to the contrary in
this Agreement, neither Purchaser nor any of its Affiliates shall be required to
pay any amounts or grant any material accommodations (financial or otherwise) in
connection with obtaining any consent, waiver or approval.
          (b) Treatment of Non-Assignable Contracts. Nothing in this Agreement
or any Seller Document, nor the consummation of the transactions contemplated
hereby or thereby, shall be construed as an attempt or agreement to assign any
Contract which by its terms or by Law is nonassignable without the consent of a
third party or a Governmental Entity or is cancelable by a third party in the
event of an assignment unless and until such consent shall have been obtained.
Subject to Section 9.2(e), if any such consent is not obtained prior to Closing,
Purchaser and Seller shall cooperate to implement a mutually agreeable
arrangement under which Purchaser would obtain the benefits and perform and
discharge the obligations under the applicable Contract, including
subcontracting, sublicensing or subleasing to Purchaser, and under which Seller
would enforce for the benefit of Purchaser, with Purchaser being responsible for
the performance and discharge of the obligations of Seller, any and all rights
of Seller against a third party.
     7.4 Regulatory Approvals.
          (a) Efforts to Obtain Approvals. Each of Purchaser and Seller shall
use their respective commercially reasonable efforts to (i) make or cause to be
made all filings required of each of them or any of their respective
subsidiaries or Affiliates under the HSR Act or other Antitrust Laws with
respect to the transactions contemplated hereby as promptly as practicable and,
in any event, within ten Business Days after the date of this Agreement in the
case of all filings required under the HSR Act and within four weeks in the case
of all other filings required by other Antitrust Laws, (ii) comply at the
earliest practicable date with any request under the HSR Act or other Antitrust
Laws for additional information, documents or other materials received by each
of them or any of their respective subsidiaries or Affiliates from the U.S.
Federal Trade Commission (“FTC”), the Antitrust Division of the U.S. Department
of Justice (the “Antitrust Division”) or any other Governmental Entity in
respect of such filings or such transactions, and (iii) cooperate with each
other in connection with any such filing (including, to the extent permitted by
applicable Law, providing copies of all such documents to the non-filing party
prior to filing and considering all reasonable additions, deletions or changes
suggested in connection therewith) and in connection with resolving any
investigation or other inquiry of any of the FTC, the Antitrust Division or
other Governmental Entity under any Antitrust Laws with respect to any such
filing or any such transaction. Purchaser shall be responsible for and shall pay
all filing fees required under the HSR Act and other Antitrust Laws. Each of
Purchaser and

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Seller shall use commercially reasonable efforts to furnish to the other all
information required for any application or other filing to be made pursuant to
any applicable Law in connection with the transactions contemplated by this
Agreement. From the date hereof until the Closing, each of Purchaser and Seller
shall promptly inform the other of any oral communication with, and provide
copies of written communications with, any Governmental Entity regarding any
such filings or any such transaction and permit the other to review in advance
any proposed communication by such party to any Governmental Entity. From the
date hereof until the Closing, neither Purchaser nor Seller shall independently
participate in any meeting, whether in person or by telephone, with any
Governmental Entity in respect of any such filings, investigation or other
inquiry without giving the other prior notice of the meeting and, to the extent
permitted by such Governmental Entity, the opportunity to attend and/or
participate in the meeting. Subject to applicable Law, each of Purchaser and
Seller shall consult and cooperate with the other in connection with the matters
described in this Section 7.4, including in connection with any analyses,
appearances, presentations, memoranda, briefs, arguments, opinions and proposals
made or submitted relating to proceedings under the HSR Act or other Antitrust
Laws.
          (b) Resolution of Objections. In furtherance and not in limitation of
the foregoing, from the date hereof until the Closing each of Purchaser and
Seller shall use commercially reasonable efforts to resolve such objections, if
any, as may be asserted by any Governmental Entity with respect to the
transactions contemplated by this Agreement under the HSR Act, the Sherman Act,
as amended, the Clayton Act, as amended, the Federal Trade Commission Act, as
amended, and any other Laws that are designed to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or restraint of trade
(collectively, the “Antitrust Laws”). In connection therewith, if any Legal
Proceeding is instituted (or threatened to be instituted) challenging any
transaction contemplated by this Agreement as in violation of any Antitrust Law,
each of Purchaser and Seller shall use commercially reasonable efforts, and
shall cooperate with the other, to contest and resist any such Legal Proceeding,
and to have vacated, lifted, reversed or overturned any Order, whether
temporary, preliminary or permanent, that is in effect and that prohibits,
prevents or restricts consummation of the transactions contemplated by this
Agreement, including by pursuing all available avenues of administrative and
judicial appeal. Notwithstanding anything to the contrary provided herein,
neither Purchaser nor any of its Affiliates shall be required, in connection
with the matters covered by this Section 7.4, to (i) pay any amounts (other than
the payment of filing fees and expenses and fees of counsel), (ii) commence
litigation (as opposed to defend litigation), (iii) hold separate (including by
trust or otherwise) or divest any of its or its Affiliates’ businesses, product
lines or assets, or any of the Purchased Assets, (iv) agree to any limitation on
the operation or conduct of Purchaser’s business or the Business, or (v) waive
any of the conditions to this Agreement set forth in Section 9.2.
     7.5 Reasonable Efforts.
          (a) Efforts to Satisfy Conditions and Consummate the Contemplated
Transactions. Subject to, and not in limitation of, Section 7.4, from the date
hereof until the Closing each of Purchaser and Seller shall use its commercially
reasonable efforts to (i) take, or cause to be taken, all actions necessary or
appropriate to consummate the transactions contemplated by this Agreement and
(ii) cause the fulfillment as promptly as practicable of all of

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the conditions to their respective obligations to consummate the transactions
contemplated by this Agreement; provided, however, that neither Purchaser nor
Seller shall be required to take or cause to be taken any action, or to do or
cause to be done anything, contemplated by this Agreement to be taken or done or
caused to be taken or done by the other party hereto.
          (b) Notification as to Certain Related Matters. From the date hereof
until the Closing, Seller shall give notice to Purchaser and Purchaser shall
give notice to Seller, as promptly as practicable upon becoming aware, of
(i) any notice or other communication from any Governmental Entity in connection
with this Agreement or the transactions contemplated hereby, (ii) any fact,
change, condition, circumstance, event, occurrence or non-occurrence that has
caused or could reasonably be expected to cause any representation or warranty
in this Agreement made by either Seller or Purchaser to be untrue or inaccurate
in any material respect (or, if such representation or warranty contains a
materiality or Material Adverse Effect qualification, in all respects) at any
time from the date hereof until the Closing, (iii) any failure on its part to
comply in all material respects with any covenant or agreement to be complied
with by it hereunder, (iv) the institution of or the threat of institution of
any Legal Proceeding against it or any of its Affiliates related to this
Agreement or the transactions contemplated hereby, (v) any assertion by any
third party that any consent of or other action by such third party is required
in connection with this Agreement or the transactions contemplated hereby, or
(vi) any event, change, condition, occurrence, non-occurrence or circumstance
that could reasonably be expected to delay or impede its ability to fulfill its
obligations set forth herein or, in the case of Seller, has had or could
reasonably be expected to have a Material Adverse Effect. The delivery of any
notice pursuant to this Section 7.5(b) shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice, or the
representations or warranties of, or the conditions to the obligations of, the
parties hereto, except to the extent specifically provided in Section 9.3(c).
     7.6 Location of Assets. Seller shall cause all of the Purchased Assets,
including original copies of all Real Property Leases and other Contracts and
all other Business Documents included therein, to be located on the Real
Property at the time of the Closing.
     7.7 No Shop.
          (a) No Encouragement or Facilitation of Any Other Acquisition
Transaction. Seller shall not, and shall not permit any of its Affiliates or any
of its or their respective Representatives, 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 the Business, any material
amount of the Purchased Assets or any ownership interests in Seller 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 Business or the Purchased Assets 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) Notice to Purchaser of Other Proposals. Seller shall notify
Purchaser orally and in writing promptly (but in no event later than 24 hours)
after receipt by Seller or any of its Affiliates or any of its or their
respective Representatives of any proposal or offer from any Person other than
Purchaser to effect an Acquisition Transaction or any request for non-public
information relating to Seller or for access to the properties, books or records
of Seller by any Person other than Purchaser. Such notice shall indicate the
identity of the Person making the proposal or offer or requesting non-public
information or access to the properties, books or records, the material terms of
any such proposal or offer, or amendment, modification or supplement thereto,
and copies of any written proposals or offers or amendments, modifications or
supplements thereto. Seller shall keep Purchaser informed, on a current basis,
of any material changes in the status or terms of any such proposal, offer or
request.
          (c) Other Discussions to be Terminated. Seller shall, and shall cause
its Affiliates and its and their respective Representatives to, immediately
cease and cause to be terminated any existing discussions or negotiations with
any Persons other than Purchaser conducted heretofore with respect to any
Acquisition Transaction. Seller shall not release any third party from the
confidentiality provisions of any Contract to which Seller is a party.
     7.8 Environmental Matters.
          (a) Purchaser’s Environmental Assessment. In further of and not in
limitation of Section 7.1(a), from the date hereto until the Closing, Seller
shall, at Purchaser’s sole cost and expense, permit Purchaser and Purchaser’s
environmental consultant to conduct such investigations (including
investigations known as “Phase I” and “Phase II” environmental site assessments)
of the environmental conditions of the Real Property and the operations thereat
(subject to any limitations contained in valid, previously executed leases) as
Purchaser, in its sole discretion, shall deem necessary or prudent (“Purchaser’s
Environmental Assessment”). Purchaser’s Environmental Assessment shall be
conducted by a qualified environmental consulting firm, possessing reasonable
levels of insurance, in compliance with applicable Laws and in a manner that
minimizes the disruption of the operations of Seller, and the results of
Purchaser’s Environmental Assessment shall be provided to Seller.
          (b) Actions Required for Transfer or Re-Issuance of Environmental
Permits. Promptly following the date hereof, Purchaser shall promptly file all
materials required by Environmental Laws in connection with the transactions
contemplated by this Agreement and all requests required for the transfer or
re-issuance of Environmental Permits required for Purchaser to conduct the
Business. Seller shall cooperate in all reasonable respects with Seller with
respect to such filings and requests.
     7.9 Real Property Title Work.
          (a) Title Commitment and Survey. Following the date hereof, Purchaser
may obtain (i) a commitment for title insurance (“Title Commitment”) issued by
Republic Title of Texas, Inc., located at 2626 Howell Street, 10th Floor,
Dallas, Texas, or such other title company as may be selected by Purchaser (the
“Title Company”), for the issuance of a leasehold policy of title insurance with
respect to each Real Property Lease (collectively, the “Title Policy”) and
(ii) an as-built survey of each parcel of Real Property, prepared in accordance
with the current

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Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys, by a
surveyor registered in the State of Arizona, reasonably acceptable to Purchaser
and the Title Company (the “Survey”), and, if obtained, shall cause a copy of
the Title Commitment and Survey to be delivered to Seller. Any Title Commitment
shall list as exceptions all easements, covenants, restrictions, Liens,
encumbrances, tenancies and other exceptions to title affecting title to the
applicable parcel of Real Property (collectively, the “Exceptions”) and include
copies of all instruments creating such Exceptions. Any Title Policy shall
insure Purchaser’s leasehold title with respect to the Real Property Leases, at
standard rates with extended coverage and such endorsements as may reasonably be
required by Purchaser, in an amount to be determined by Purchaser (with standard
exceptions deleted based on affidavits of title of Seller, the Survey and other
Seller Documents) and free and clear of all Liens, Title Defects and other
exceptions to or exclusions from coverage except only the Permitted
Encumbrances. If obtained, Purchaser shall bear the cost and expense of the
Title Commitment, Title Policy and Survey, including any cancellation fees
resulting from termination of this Agreement.
          (b) Treatment of Title Defects. If obtained, Purchaser shall review
the Title Commitment and Survey, including copies of all instruments creating
Exceptions in the Title Commitment, and shall provide Seller with a written
notice of objection to any Title Defect within 10 Business Days after receipt of
the Title Commitment (and all related documents) and Survey. With respect to any
Title Defect to which Purchaser timely objects, Seller may at its option and in
its sole and absolute discretion elect to attempt to cure, remove or otherwise
satisfy such Title Defect.
          (c) Purchaser’s Rights in Respect of Title Defect Not Cured. In the
event Seller is unable or unwilling to cure any such Title Defect at or prior to
the Closing, or fails to notify Purchaser in writing within 10 Business Days of
receipt of Purchaser’s objection notice of Seller’s election to attempt the
cure, removal or satisfaction of such Title Defect, Purchaser shall have the
right to either (i) proceed to the Closing and waive such Title Defect, or (ii)
terminate this Agreement, in which event the parties shall have no further
obligations to each other except as otherwise set forth in Section 12.3.
     7.10 Casualty; Condemnation.
          (a) Real Property. In the event that, between the date hereof and the
Closing, any facility or location of Seller included in the Purchased Assets is
subject to damage or destruction to the buildings or other improvements thereon
(a “Casualty”) or condemnation or partial condemnation by a Governmental Entity
(a “Condemnation”), Seller shall give notice to Purchaser as promptly as
practicable upon becoming aware thereof, and Purchaser shall have the right to
either (i) terminate this Agreement, in which event the parties shall have no
further obligations to each other except as otherwise set forth in Section 12.3,
or (ii) proceed to the Closing, in which case all proceeds from any insurance
claims, condemnation awards, compensation or other reimbursements relating to
such Casualty or Condemnation received by Seller, whether before, on or after
the Closing Date, shall be paid over to Purchaser on the Closing Date, or
promptly after Seller’s receipt thereof if received by Seller after the Closing
Date.

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          (b) Equipment. In the event that, between the date hereof and the
Closing, any equipment included in the Purchased Assets is damaged or destroyed,
Seller shall give notice to Purchaser as promptly as practicable upon becoming
aware thereof. All proceeds from any insurance claims relating to such damage or
destruction received by Seller, whether before, on or after the Closing Date,
shall be paid over to Purchaser on the Closing Date, or promptly after Seller’s
receipt thereof if received by Seller after the Closing Date, and if such damage
or destruction is not covered under Seller’s insurance policies, Seller shall
pay to Purchaser an amount reasonably sufficient to allow Purchaser to repair,
replace and restore the equipment so damaged or destroyed to its pre-damage
condition.
     7.11 Publicity. Prior to the Closing, neither Purchaser nor Seller shall
issue any press release or public announcement concerning this Agreement or the
transactions contemplated hereby without obtaining the prior written approval of
the other party hereto, which approval will not be unreasonably withheld,
conditioned or delayed; provided, however, that nothing herein shall prevent
Purchaser from making such disclosure as Purchaser determines in good faith to
be necessary to satisfy its obligations under applicable Law or the applicable
rules of any stock exchange.
     7.12 Non-Competition; Non-Solicitation.
          (a) No Competition. As a material inducement to Purchaser to enter
into this Agreement and consummate the transactions contemplated hereby,
commencing with the Closing Date Seller shall not, and shall cause its
Affiliates not to, for a period of five years after the Closing Date, directly
or indirectly through any Person, engage in, or own, acquire, manage, operate,
control or participate in the ownership, management, operation or control of any
Person engaged in, the production of hard alloy aluminum extrusions or any
business that otherwise competes with the Business, anywhere in the United
States. Notwithstanding the foregoing, Seller and its Affiliates may, without
violating this Section 7.12, own a passive investment not in excess of 5% of the
outstanding capital stock of a corporation which engages in such a business, if
such capital stock is a security actively traded on an established securities
exchange.
          (b) No Solicitation. For a period from the Closing Date to the third
anniversary of the Closing Date, Seller shall not, and shall cause its
Affiliates and its and their respective Representatives not to: (i) cause,
solicit, induce or encourage any employee or consultant of Purchaser or any of
its Affiliates to leave such employment or hire, employ or otherwise engage any
such individual; or (ii) cause, induce or encourage any material actual or
prospective customer, supplier or licensor of the Business (including any
existing or former customer of Seller and any Person that becomes a customer of
the Business after the Closing), or any other Person who has a material business
relationship with the Business, to terminate or modify any such actual or
prospective relationship. The foregoing restrictions shall not preclude general
solicitations in newspapers or similar mass media not targeted toward employees
or consultants of Purchaser or any of its Affiliates.
          (c) Purchaser’s Rights and Remedies for Violations. The covenants and
undertakings contained in this Section 7.12 relate to matters which are of a
special, unique and extraordinary character and a violation of any of the terms
of this Section 7.12 would cause irreparable injury to Purchaser, such that
money damages or other legal remedies would not be

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an adequate remedy for such violation. Therefore, Purchaser shall be entitled to
an injunction, restraining order or other equitable relief from any court of
competent jurisdiction in the event of any breach of this Section 7.12 without
the necessity of proving actual damages or posting any bond. The rights and
remedies provided by this Section 7.12 are cumulative and in addition to any
other rights and remedies which Purchaser may have hereunder or at law or in
equity. In the event that Purchaser were to seek damages for any breach of this
Section 7.12, the portion of the Purchase Price which is allocated by the
parties to the foregoing covenant shall not be considered a measure of or limit
on such damages.
          (d) Calculation of Restricted Periods. Notwithstanding anything
contained in this Agreement to the contrary, (i) if Seller breaches
Section 7.12(a) and Purchaser seeks and obtains an injunction, restraining order
or other equitable relief from any court of competent jurisdiction, the
five-year period referred to in such Section 7.12(a) shall be computed from the
date relief is granted to Purchaser instead of from the Closing Date and reduced
by any time following the Closing Date during which Seller complied with its
obligations thereunder and (ii) if Seller breaches Section 7.12(b) and Purchaser
seeks and obtains an injunction, restraining order or other equitable relief
from any court of competent jurisdiction, the three-year period referred to in
such Section 7.12(b) shall be computed from the date relief is granted to
Purchaser instead of the Closing Date and reduced by any time following the
Closing during which Seller complied with its obligations thereunder.
          (e) Reformation of Restrictions in Certain Circumstances. If any court
of competent jurisdiction in a final nonappealable judgment determines that a
specified time period, geographical area, business limitation or any other
relevant feature of this Section 7.12 is unreasonable, arbitrary or against
public policy, then the maximum time period, geographical area, business
limitation or other relevant feature which is determined by such court to be
reasonable, not arbitrary and not against public policy shall be enforced
against the applicable party.
     7.13 Preservation of Records; Confidentiality.
          (a) Preservation of Records. Purchaser and Seller shall, and shall
cause their respective Affiliates to, preserve and keep records relating to the
Business for a period of six years from the Closing Date and to make such
records and such party’s personnel available to Purchaser or Seller, as the case
may be, as may be reasonably required by such party (i) in connection with,
among other things, any insurance claims by or Legal Proceedings against
Purchaser, Seller or any of their respective Affiliates, or (ii) in order to
enable Purchaser and Seller to comply with its obligations under this Agreement,
any Seller Document or any Purchaser Document. In the event that Purchaser or
Seller (or, in either case, one of its Affiliates) wishes to destroy such
records after that time, Purchaser or Seller, as the case may be, shall first
give 90 days prior written notice to the other and such other party shall have
the right at its option and expense, upon prior written notice given to such
party within that 90-day period, to take possession of the records within
180 days after the date of such notice.
          (b) Confidentiality. From and after the Closing, Seller shall hold,
and shall cause its Affiliates and its and their respective Representatives to
hold, in confidence, unless compelled to disclose by judicial, administrative or
other legal process or by other requirements

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of Law or disclosed in a Legal Proceeding brought by a party hereto to enforce
its rights or in the exercise of its remedies hereunder, all proprietary and
confidential documents and information of or concerning the Business and the
Purchased Assets, except to the extent that such information is or becomes
generally available to the public other than as a direct result of the
disclosure of any such information by Seller, its Affiliates or its or their
respective Representatives.
     7.14 Use of Name. From and after the Closing, Purchaser shall have the sole
right to the use of the name “Alexco” or similar names, and any service marks,
trademarks, trade names, d/b/a names, fictitious names, identifying symbols,
logos, emblems or signs containing or comprising the foregoing, or otherwise
used in the Business, including any name or mark confusingly similar thereto
(collectively, the “Seller Marks”) and Seller shall not, and shall not permit
any of its Affiliate to, use the Seller Marks.
     7.15 Accounts Receivable. After the Closing Date, in the event that Seller
or any of its Affiliates receives any payment in respect of any accounts
receivable that are included in the Purchased Assets, Seller shall immediately
forward and remit, or cause such Affiliate to forward and remit, such payment to
Purchaser.
     7.16 Insurance.
          (a) Treatment of Assignable Insurance Policies. Subject to
Section 7.3(b), at the Closing Seller shall transfer its assignable insurance
policies to Purchaser and cause Purchaser to thereupon become the named insured
under such insurance policy.
          (b) Treatment of Non-Assignable Insurance Policies. With respect to
any nonassignable insurance policy (other than those listed as Excluded Assets
on Exhibit 2.2(e)), from and after the Closing, at the request of Purchaser,
Seller shall, or shall cause its applicable Affiliate to, use its commercially
reasonable efforts to ensure that Purchaser shall have the right to make, or, if
made prior to the Closing, to continue to pursue, directly any claim under such
insurance policy for any Losses relating to the Business or the Purchased
Assets. If, notwithstanding the foregoing, Purchaser itself does not have the
right to make or continue to pursue any such claim directly, at the request of
Purchaser, Seller shall, or shall cause its applicable Affiliate to, use its
commercially reasonable efforts to make or continue to pursue such claim under
such insurance policy for the benefit of Purchaser. Purchaser acknowledges that
any such right of Purchaser shall be subject to any deductibles, exclusions and
other terms of the applicable insurance policy.
     7.17 Possible True-Up for Estimated Tax Payments. If, subsequent to the
Closing Date and prior to the day that is 10 Business Days prior to the due date
for estimated U.S. federal income tax payments next following the Closing Date,
Seller determines in good faith (in consultation with Purchaser) that the amount
of taxable income attributable to the operations of the Business through the
Closing Date was greater than the estimated amount thereof used for any
distribution made as contemplated by such Section 7.2(n)(ii) and notifies
Purchaser in writing of such difference, then, not later than the fifth Business
Day prior to the due date for estimated U.S. federal income tax payments next
following the Closing Date, Purchaser shall return to Seller via wire transfer
of immediately available funds into the account designated by Seller in
accordance with Section 3.2(a) an amount equal to 42% of such difference.

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     7.18 Repayment of Credit Facility. At least three Business Days prior to
the Closing, Seller shall deliver to Purchaser a letter signed by the lender
under the Credit Facility (the “Credit Facility Pay-Off Letter”) indicating the
amount required to satisfy all Indebtedness and other obligations under the
Credit Facility as of the Closing Date (the “Credit Facility Pay-Off Amount”)
and authorizing the filing of the UCC-3 termination statements necessary to
terminate all Liens securing the obligations under the Credit Facility upon
delivery of the Credit Facility Pay-Off Amount to the lender under the Credit
Facility on the Closing Date. On the Closing Date, Purchaser shall deliver the
Credit Facility Payoff Amount to the lender under the Credit Facility.
     7.19 Repayment of Related Party Note Payable. At least three Business Days
prior to the Closing, Seller shall deliver to Purchaser a letter signed by the
obligee under the Related Party Note Payable (the “Related Party Note Payable
Pay-Off Letter”) indicating the amount required to satisfy all Indebtedness and
other obligations under the Related Party Note Payable as of the Closing Date
(the “Related Party Note Payable Pay-Off Amount”) and authorizing the filing of
the UCC-3 termination statements necessary to terminate all Liens securing the
obligations under the Related Party Note Payable upon delivery of the Related
Party Note Payable Pay-Off Amount to the obligee under the Related Party Note
Payable on the Closing Date. On the Closing Date, Purchaser shall deliver the
Related Party Note Payable Pay-off Amount to Robert Fraley.
     7.20 Continuation of Payment Card Policy. From the date hereof until the
Closing, Seller may continue to make payments in respect of the personal payment
card accounts of Robert Fraley and the Key Employees as it has done in the
Ordinary Course of Business; provided, however, that, in connection with any
such payments, Seller shall cause Robert Fraley and the Key Employees, as
applicable, to reimburse Seller prior to the Closing for any payment card
charges satisfied by such payments that do not constitute legitimate business
expenses of Seller.
     7.21 Possible True-Up for Estimated Pre-Purchased Prime Value Distribution.
If (i) the Estimated Closing Date Pre-Purchased Prime Value exceeds (ii) the
Closing Date Pre-Purchased Prime Value, Seller shall pay to Purchaser an amount
equal to 42% of such excess by wire transfer of immediately available funds to
an account specified by Purchaser within 10 days after the Closing Date. If
(i) the Closing Date Pre-Purchased Prime Value exceeds (ii) the Estimated
Closing Date Pre-Purchased Prime Value, Purchaser shall pay to Seller an amount
equal to 42% of such excess by wire transfer of immediately available funds to
the account designated by Seller in accordance with Section 3.2(a) within
10 days after the Closing Date.
ARTICLE VIII
EMPLOYEES AND EMPLOYEE BENEFITS
     8.1 Hired Employees.
          (a) Offers of Employment. At least two (2) Business Days prior to the
Closing, Purchaser shall deliver a written offer of employment to all Employees
(other than Robert Fraley, the Key Employees and the Employees identified in
Section 8.1(a) of the Disclosure Letter) to commence such employment immediately
after the Closing. Each such

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offer of employment shall be (i) at not less than the salary or hourly wage in
effect for such Employee immediately prior to the Closing Date, (ii) for the
same position held by such Employee immediately prior to the Closing Date, and
(iii) for a package of salary or wages and benefits that provides substantially
the same economic value to such Employee as the package of salary or wages and
benefits in effect for such Employee immediately prior to the Closing Date,
viewing each such package as a whole. Such individuals who accept such offer by
the Closing Date are hereinafter referred to as the “Hired Employees.” Nothing
in this Agreement is intended to, or shall, affect the “at-will” status of any
Employee, or serve as a guarantee of employment for any Employee for any period
of time.
          (b) Seller to Provide Assistance. Prior to the Closing, Seller shall
provide reasonable assistance to the Purchaser in connection with the transition
of ownership of the Business and the hiring and employment of the Employees.
          (c) Purchaser’s Post-Closing Rights. The parties hereto acknowledge
that, subject to applicable Laws, on and after the Closing Date Purchaser shall
have the right to dismiss any or all Hired Employees at any time, with or
without cause, and to change the terms and conditions of their employment
(including compensation and employee benefits provided to them).
          (d) Robert Fraley and the Key Employees. Notwithstanding anything to
the contrary contained in this Agreement, the employment relationship between
Purchaser and Robert Fraley shall be governed by the Consulting Agreement and
the employment relationship between Purchaser and the Key Employees shall be
governed by the Employment Agreements.
     8.2 Employee Benefits. Notwithstanding anything to the contrary contained
in this Agreement, nothing in this Agreement shall be construed as requiring any
particular compensation or employee benefit plans, programs or arrangements to
be provided or maintained by Purchaser with respect to the Hired Employees at or
for any specified period after the Closing Date. The provisions of this
Section 8.2 are not intended to and do not constitute an amendment to any
Employee Benefit Plan and have been included in this Agreement for the sole
benefit of the parties hereto and their permitted successors and assigns, and
nothing herein, expressed or implied, shall give or be construed to give any
Person, other than the parties hereto and such permitted successors and assigns,
any legal or equitable rights hereunder.
ARTICLE IX
CONDITIONS TO CLOSING
     9.1 Conditions Precedent to Obligations of Each Party. The obligations of
Purchaser and Seller to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, on or prior to the Closing Date, of
each of the following conditions:
     (a) No Legal Impediment. No Governmental Entity of competent jurisdiction
shall have enacted, issued or promulgated any Law that is in effect and has the
effect of making the consummation of the transactions contemplated hereby
illegal or of prohibiting or otherwise preventing the consummation of the
transactions contemplated hereby; and

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     (b) No Injunction. No Governmental Entity of competent jurisdiction shall
have issued or entered any Order (whether temporary, preliminary or permanent)
that is in effect and has the effect of making the consummation of the
transactions contemplated hereby illegal or of prohibiting or otherwise
preventing the consummation of the transactions contemplated hereby (and no
Legal Proceeding seeking any such Order shall be pending or threatened).
     (c) HSR. The applicable waiting period under the HSR Act shall have expired
or been terminated.
     9.2 Conditions Precedent to Obligations of Purchaser. The obligation of
Purchaser to consummate the transactions contemplated by this Agreement is
subject to the satisfaction (or written waiver by Purchaser), on or prior to the
Closing Date, of each of the following conditions:
     (a) Representations and Warranties. Each of the representations and
warranties of Seller contained in this Agreement shall be true and correct in
all material respects (or, if such representation or warranty contains a
materiality or Material Adverse Effect qualification, in all respects) at and as
of the Closing as if made at and as of that time (except to the extent that any
representation or warranty speaks expressly as of an earlier date, in which case
it must be true and correct only as of that earlier date).
     (b) Performance by Seller. Seller shall have performed and complied in all
material respects with all agreements and covenants required by this Agreement
to be performed or complied with by Seller on or prior to the Closing Date.
     (c) No Material Adverse Effect. There shall not have been or occurred any
event, change, condition, occurrence, non-occurrence or circumstance that,
individually or in the aggregate with any other such events, conditions,
changes, occurrences, non-occurrences or circumstances, has had or could
reasonably be expected to have a Material Adverse Effect, and, if the
materiality and Material Adverse Effect qualifications in the representations,
warranties, covenants and agreements of Seller are disregarded, at and as of the
Closing the failure of the representations and warranties of Seller contained in
this Agreement to be true and correct and the failure of Seller to have
performed and complied with all agreements and covenants required by this
Agreement to be performed or complied with by Seller on or prior to the Closing
Date, when such failures are considered together, shall not have had, and would
not reasonably be expected to have, a Material Adverse Effect.
     (d) Closing Certificate. Purchaser shall have received a certificate signed
by an executive officer of Seller, in form and substance reasonably satisfactory
to Purchaser, dated the Closing Date, to the effect that each of the conditions
specified above in Sections 9.2(a)-(c) have been satisfied.
     (e) Required Consents. Purchaser shall have received evidence that Seller
has received the consents identified in Exhibit 9.2(e).

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     (f) Environmental Conditions. Purchaser’s Environmental Assessment at the
properties shall not have revealed any circumstances that could reasonably be
expected to result in (i) any suspension or closure of operations at properties
or facilities of Seller or the revocation or termination of any Environmental
Permits, (ii) the incurrence of a material capital expenditure in order to bring
the Business or Purchased Assets into, or to maintain, compliance with
Environmental Laws, or (iii) Purchaser incurring any material Environmental
Liabilities.
     (g) Employment Agreements and Consulting Agreement. No Employment
Agreement, nor the Consulting Agreement, shall have been amended or terminated.
     (h) Certain Documents. Seller shall have delivered to Purchaser each of the
documents and instruments set forth in Section 4.2.
          (i) Pay-Off Letters. Seller shall have delivered to Purchaser the
Credit Facility Pay-Off Letter and the Related Party Note Payable Pay-Off
Letter.
     9.3 Conditions Precedent to Obligations of Seller. The obligations of
Seller to consummate the transactions contemplated by this Agreement are subject
to the satisfaction (or written waiver by Seller), on or prior to the Closing
Date, of each of the following conditions:
     (a) Representations and Warranties. Each of the representations and
warranties of Purchaser contained in this Agreement shall be true and correct in
all material respects (or, if such representation or warranty contains a
materiality qualification, in all respects) at and as of the Closing as if made
at and as of that time (except to the extent that any representation or warranty
speaks expressly as of an earlier date, in which case it must be true and
correct only as of that earlier date).
     (b) Performance by Purchaser. Purchaser shall have performed and complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by Purchaser on or prior to the
Closing Date.
     (c) Closing Certificate. Seller shall have received a certificate signed by
an executive officer of Purchaser, in form and substance reasonably satisfactory
to Seller, dated the Closing Date, (i) to the effect that each of the conditions
specified above in Sections 9.3(a)-(b) have been satisfied and (ii) indicating
that Purchaser has no Knowledge of any failure of the representations and
warranties made by Seller in this Agreement to be true and correct or, if
applicable, describing any such failure of which Purchaser has Knowledge.
Purchaser shall be deemed to have waived as of the Closing any and all rights to
assert a claim under Section 10.2 based upon, attributable to or resulting from
any failure of the representations and warranties made by Seller in this
Agreement to be true and correct that is described in such certificate. As used
in this Section 9.3(c), “Knowledge” shall mean the specific, actual knowledge of
either John Barneson or John Donnan, after due inquiry of Purchaser’s
Representatives that have assisted Purchaser in its due diligence investigation
of Seller, the Business, the Purchased Assets and the Assumed Liabilities, of
the failure of the applicable representation or warranty to be true and correct,
and not solely his knowledge of the facts or

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circumstances underlying a failure of a representation or warranty to be true
and correct unless the knowledge of such facts or circumstances would make the
failure of the representation or warranty to be true and correct readily
apparent to a reasonable Person.
     (d) Certain Documents. Purchaser shall have delivered to Seller evidence of
the wire transfer referred to in Section 3.2 and each of the documents and
instruments set forth in Section 4.3.
ARTICLE X
INDEMNIFICATION
     10.1 Survival. The representations and warranties of Seller and Purchaser
in this Agreement and any certificate delivered pursuant hereto shall survive
the Closing as follows:
     (a) Seller’s Fundamental Representations and Warranties. The
representations and warranties of Seller set forth in Section 5.1 (Organization
and Good Standing), Section 5.2 (Authorization of Agreement), Section 5.7(a)
(Title to Owned Purchased Assets), Section 5.7(b) (Interest in Purchased Assets
Not Owned), Section 5.8(e) (Interest in Real Property), Section 5.9(b) (Interest
in Purchased Intellectual Property) and 5.27 (Absence of Financial Advisors)
shall survive the Closing until the sixth anniversary of the Closing Date;
     (b) Seller’s Regulatory Representations and Warranties. The representations
and warranties of Seller set forth in set forth in 5.11 (Employee Benefit
Plans), Sections 5.13 (Taxes) and 5.16 (Environmental Matters) shall survive the
Closing until 90 days after the expiration of the statute of limitations
applicable to the statute, regulation or other authority on which the claim for
indemnification under the representation and warranties is based (after giving
effect to any waiver or extension thereof);
     (c) Purchaser’s Fundamental Representations and Warranties. The
representations and warranties of Purchaser set forth in Sections 6.1
(Organization and Good Standing), 6.2 (Authorization of Agreement), and 6.5
(Absence of Financial Advisors) shall survive the Closing until the sixth
anniversary of the Closing Date; and
     (d) All Other Representations and Warranties. All other representations and
warranties shall survive the Closing until the second anniversary of the Closing
Date.
Notwithstanding the foregoing, any obligations under Sections 10.2(a) and
10.3(a) shall not terminate with respect to any Losses as to which the Person to
be indemnified shall have given notice to the Indemnifying Party in accordance
with Section 10.4 before the termination of the applicable survival period.
     10.2 Indemnification of Purchaser Indemnified Parties. Subject to Sections
10.1, 10.5 and 10.6, from and after the Closing Seller shall indemnify and hold
Purchaser and its Affiliates and their respective stockholders, members,
partners, Representatives, successors and assigns (collectively, the “Purchaser
Indemnified Parties”) harmless from and against, and pay to the

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applicable Purchaser Indemnified Parties the amount of, any and all Liabilities,
deficiencies, demands, fines, penalties, judgments, awards, damages (excluding
special, punitive, exemplary, incidental, consequential and indirect damages,
except to the extent any such damages are awarded to a third party in connection
with a Third Party Claim), settlements, interest, assessments, costs and
expenses, whether or not involving a Third Party Claim (collectively, “Losses”),
based upon, attributable to or resulting from:
     (a) Failure of Seller’s Representations and Warranties. Subject to the
provisions of Section 9.3(c), the failure of any of the representations or
warranties made by Seller in this Agreement or any Seller Document (including
the certificate delivered pursuant to Section 9.2(d)) to be true and correct in
all respects at and as of the date hereof and at and as of the Closing Date
(and, with respect to any Seller Document executed and delivered by Seller to
Purchaser after the Closing Date, the date of such execution);
     (b) Seller’s Breach of Covenant or Other Agreement. The breach by Seller of
any covenant or other agreement in this Agreement or any Seller Document;
     (c) Excluded Assets. Any Excluded Asset; and
     (d) Excluded Liabilities. Any Excluded Liability.
     10.3 Indemnification of Seller Indemnified Parties. Subject to Section 10.1
and 10.5, from and after the Closing Purchaser shall indemnify and hold Seller
and its Affiliates and their respective stockholders, members, partners,
Representatives, successors and assigns (collectively, the “Seller Indemnified
Parties”) harmless from and against, and pay to the applicable Seller
Indemnified Parties the amount of, any and all Losses based upon, attributable
to or resulting from:
     (a) Failure of Purchaser’s Representations and Warranties. The failure of
any of the representations or warranties made by Purchaser in this Agreement or
any Purchaser Document (including the certificate delivered pursuant to
Section 9.3(c)) to be true and correct in all respects at the date hereof and as
of the Closing Date (and, with respect to any Purchaser Document executed and
delivered by Purchaser to Seller after the Closing Date, the date of such
execution);
     (b) Purchaser’s Breach of Covenant or Other Agreement. The breach by
Purchaser of any covenant or other agreement in this Agreement or any Purchaser
Document;
     (c) Assumed Liabilities. Any Assumed Liability; and
     (d) Post-Closing Operations. Any Liability arising in connection with, or
relating to, the operation of the Business or the ownership or use of any of the
Purchased Assets after the Closing, provided that Purchaser does not have an
indemnifiable claim against Seller with respect thereto.

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     10.4 Indemnification Procedures.
          (a) Direct Claims. A claim for indemnification for any matter not
involving a third-party claim may be asserted by notice from the party that may
be entitled to indemnification pursuant to this Article X (the “Indemnified
Party”) to the party that may be obligated to provide indemnification pursuant
to this Article X (the “Indemnifying Party”); provided, however, that failure to
so notify the Indemnifying Party shall not release, waive or otherwise affect
the Indemnifying Party’s obligations with respect thereto, except to the extent
that the Indemnifying Party can demonstrate actual Losses as a result of such
failure. The notice of claim shall state in reasonable detail the basis of the
claim for indemnification.
          (b) Third Party Claims. In the event that any Legal Proceedings shall
be instituted or any claim or demand shall be asserted by any third party in
respect of which indemnification may be sought under Section 10.2 or 10.3
(regardless of the limitations set forth in Section 10.5) (“Third Party Claim”),
the Indemnified Party shall promptly give written notice of the assertion of the
Third Party Claim to the Indemnifying Party; provided, however, that failure of
the Indemnified Party to so notify the Indemnifying Party shall not release,
waive or otherwise affect the Indemnifying Party’s obligations with respect
thereto, except to the extent that the Indemnifying Party can demonstrate actual
Losses as a result of such failure. Subject to the provisions of this
Section 10.4, the Indemnifying Party shall have the right, at its sole expense,
to be represented by counsel of its choice, which must be reasonably
satisfactory to the Indemnified Party, and to defend against, negotiate, settle
or otherwise deal with any Third Party Claim which relates to any Losses
indemnified against by it hereunder; provided that, in order to defend against,
negotiate, settle or otherwise deal with any such Third Party Claim, the
Indemnifying Party must first acknowledge in writing to the Indemnified Party
its unqualified obligation to indemnify the Indemnified Party as provided
hereunder and provide to the Indemnified Party reasonable evidence that the
Indemnifying Party has reasonably sufficient financial resources to enable it to
fulfill its obligations under this Article X. Notwithstanding the preceding
sentence, the Indemnifying Party shall not have the right to defend against,
negotiate, settle or otherwise deal with any Third Party Claim (i) if the
Indemnified Party reasonably and in good faith believes that the Third Party
Claim would reasonably be likely to be materially detrimental to the reputation,
customer or supplier relations or future business prospects of the Indemnified
Party or any of its Affiliates, (ii) unless the Third Party Claim is solely for
monetary damages (except where any non-monetary relief being sought is merely
incidental to a primary claim for monetary damages), (iii) if the Third Party
Claim involves criminal allegations, or (iv) if the Indemnifying Party fails to
prosecute or defend, actively and diligently, the Third Party Claim. If the
Indemnifying Party elects to defend against, negotiate, settle or otherwise deal
with any Third Party Claim, it shall within five Business Days of the
Indemnified Party’s written notice of the assertion of such Third Party Claim
(or sooner if the nature of the Third Party Claim so requires) notify the
Indemnified Party of its intent to do so; provided that the Indemnifying Party
must conduct its defense of the Third Party Claim actively and diligently
thereafter in order to preserve its rights in this regard. If the Indemnifying
Party elects not to defend against, negotiate, settle or otherwise deal with any
Third Party Claim, fails to notify the Indemnified Party of its election as
herein provided or contests its obligation to indemnify the Indemnified Party
for Losses relating to such Third Party Claim under this Agreement, the
Indemnified Party may defend against, negotiate, settle or otherwise deal with
such Third Party Claim. If the

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Indemnified Party defends any Third Party Claim, then the Indemnifying Party
shall reimburse the Indemnified Party for the reasonable and actual
out-of-pocket expenses of defending such Third Party Claim upon submission of
periodic bills. If the Indemnifying Party shall assume the defense of any Third
Party Claim, the Indemnified Party may participate, at his or its own expense,
in the defense of such Third Party Claim; provided, however, that such
Indemnified Party shall be entitled to participate in any such defense with
separate counsel at the expense of the Indemnifying Party if (i) so requested by
the Indemnifying Party to participate or (ii) in the reasonable and written
opinion of counsel to the Indemnified Party an actual conflict exists between
the Indemnified Party and the Indemnifying Party which cannot be waived by the
Indemnified Party; provided further that the Indemnifying Party shall not be
required to pay for more than one such counsel (plus any appropriate local
counsel) for all Indemnified Parties in connection with any single Third Party
Claim. Each of Purchaser and Seller shall provide reasonable access to the other
to such documents and information as may reasonably be requested in connection
with the defense, negotiation or settlement of any Third Party Claim.
Notwithstanding anything in this Section 10.4 to the contrary, the Indemnifying
Party shall not enter into any settlement of any Third Party Claim without the
written consent of the Indemnified Party if such settlement (i) would create any
Liability of the Indemnified Party for which the Indemnified Party is not
entitled to indemnification hereunder, (ii) would provide for any injunctive
relief or other non-monetary obligation affecting the Indemnified Party, or
(iii) does not include an unconditional release of the Indemnified Party from
all Liability in respect of the Third Party Claim. If the Indemnifying Party
makes any payment on any Third Party Claim, the Indemnifying Party shall be
subrogated, to the extent of such payment, to all rights and remedies of the
Indemnified Party with respect to such Third Party Claim.
          (c) Resolution of Claims. At such time as an indemnification claim
under this Section 10 is finally determined by (i) mutual written agreement of
the Indemnified Party and the Indemnifying Party or (ii) a final non-appealable
Order of a Governmental Entity of competent jurisdiction, the Indemnified Party
shall forward to the Indemnifying Party notice of any sums due and owing by the
Indemnifying Party pursuant to this Agreement with respect to such matter and
the Indemnifying Party shall pay all of such remaining sums so due and owing to
the Indemnified Party either (i) in accordance with Section 10.6 or (ii) by wire
transfer of immediately available funds within five Business Days after the date
of such notice.
     10.5 Limitations on Indemnification for Breaches of Representations and
Warranties.
          (a) Basket. Neither Purchaser nor Seller shall have any Liability
under Section 10.3(a) or Section 10.2(a), respectively, unless the amount of
Losses indemnifiable thereunder exceeds $1,000,000 in the aggregate and, in such
event, the Indemnifying Party shall be required to pay the entire amount of all
such Losses.
          (b) Cap. Neither Purchaser nor Seller shall be required to provide
indemnification for Losses under Section 10.3(a) or 10.2(a), respectively, in
excess of $5,000,000 in the aggregate.
          (c) Exceptions to Limitations. Notwithstanding anything to the
contrary contained in this Agreement, the limitations set forth in this
Section 10.5 shall not apply to Losses based upon, attributable to or resulting
from, any failure of any representation or warranty

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contained in Section 5.1 (Organization and Good Standing), Section 5.2
(Authorization of Agreement), Section 5.7(a) (Title to Owned Purchased Assets),
Section 5.7(b) (Interest in Purchased Assets Not Owned), Section 5.8(e)
(Interest in Real Property), Section 5.9(b) (Interest in Purchased Intellectual
Property), Section 5.11 (Employee Benefit Plans), Section 5.13 (Taxes),
Section 5.16 (Environmental Matters), Section 5.27 (Absence of Financial
Advisors), Section 6.1 (Organization and Good Standing), Section 6.2
(Authorization of Agreement) or Section 6.5 (Absence of Financial Advisors) of
this Agreement or any corresponding representation or warranty in any Purchaser
Document or Seller Document (including the certificates delivered pursuant to
Section 9.2(d) and Section 9.3(c)) to be true and correct.
          (d) Elimination of Double Materiality. For purposes of calculating
Losses hereunder, any materiality or Material Adverse Effect qualifications in
the representations, warranties, covenants and agreements shall be disregarded.
     10.6 Indemnity Escrow. So long as funds remain available in the Indemnity
Escrow Account for such purpose, the Indemnity Escrow Account shall be used to
satisfy all indemnification claims under Section 10.2(a) in accordance with the
procedures set forth in the Escrow Agreement. If sufficient funds no longer
remain available in the Indemnity Escrow Account to satisfy all indemnification
claims under Section 10.2(a), subject to the provisions of Section 10.5
Purchaser may seek recovery directly from Seller.
     10.7 Knowledge. Except (a) for matters disclosed in the Disclosure Letter,
to the extent that such matters constitute exceptions to Seller’s
representations and warranties, and (b) as specifically provided in
Section 9.3(c), the right to indemnification or any other remedy based on
representations, warranties, covenants and agreements in this Agreement, or any
Seller Document or any Purchaser Document shall not be affected by any
investigation conducted, or any knowledge acquired (or capable of being
acquired) at any time, whether before or after the execution and delivery of
this Agreement or the Closing Date, with respect to the accuracy or inaccuracy
of any such representation or warranty or Seller’s or Purchaser’s compliance
with any such covenant or agreement.
     10.8 Exclusive Remedy. After the Closing, the sole and exclusive remedy for
each Purchaser Indemnified Party and Seller Indemnified Party with respect to
any and all claims arising out of this Agreement and the transactions
contemplated hereby (other than claims of, or causes of action arising from,
fraud or intentional misrepresentation) shall be pursuant to the indemnification
provisions set forth in this Article X. Notwithstanding the foregoing, this
Article X shall not be the sole and exclusive remedy of Purchaser with respect
to the provisions of Section 7.12, and this Article X shall not affect the
rights of Purchaser to obtain specific performance of any provision of this
Agreement.
     10.9 Tax Treatment of Certain Payments. Purchaser and Seller shall treat
any payment made pursuant to Section 7.15 or this Article X as an adjustment to
the Purchase Price for all Tax purposes. If, notwithstanding the treatment
required by the preceding sentence, any payment under Section 7.15 or this
Article X (including this Section 10.9) is determined to be taxable to the party
receiving such payment by any Taxing Authority, the paying party shall also
indemnify the party receiving such payment for any Taxes incurred by reason of
the receipt of such

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payment and any other Losses incurred by the party receiving such payment
relating to such Taxes.
ARTICLE XI
TAXES
     11.1 Transfer Taxes. Purchaser shall be responsible for 100% of any and all
sales, use, stamp, documentary, filing, recording, transfer, real estate
transfer, gross receipts, registration, duty or similar fees or Taxes or
governmental charges (together with any interest or penalty, addition to tax or
additional amount imposed) as levied by any Taxing Authority in connection with
the transactions contemplated by this Agreement (collectively, “Transfer
Taxes”), regardless of the Person liable for such Transfer Taxes under
applicable Law or custom and timely file or caused to be filed all necessary
documents (including all Tax Returns) with respect to Transfer Taxes.
     11.2 Property Taxes. Purchaser shall bear the cost of all property and ad
valorem Taxes relating to the Purchased Assets for calendar year 2010.
     11.3 Cooperation on Tax Matters. Purchaser and Seller shall furnish or
cause to be furnished to each other, as promptly as practicable, such
information and assistance relating to the Purchased Assets and the Assumed
Liabilities as is reasonably necessary for the preparation and filing of any Tax
Return, claim for refund or other filings relating to Tax matters, for the
preparation for any Tax audit or Tax protest, and for the prosecution or defense
of any Legal Proceeding relating to Tax matters.
ARTICLE XII
TERMINATION
     12.1 Termination of Agreement. This Agreement may be terminated at any time
prior to the Closing Date as follows:
          (a) By Mutual Consent. By mutual written consent of Purchaser and
Seller.
          (b) By Either Party If Legal Prohibition Exists. By Purchaser or
Seller if any Governmental Entity of competent jurisdiction shall have
(i) enacted, issued or promulgated any Law that is in effect and has the effect
of making the consummation of the transactions contemplated hereby illegal or of
prohibiting or otherwise preventing the consummation of the transactions
contemplated hereby or (ii) issued or entered any Order (whether temporary,
preliminary or permanent) that is in effect and has the effect of making the
consummation of the transactions contemplated hereby illegal or of prohibiting
or otherwise preventing the consummation of the transactions contemplated
hereby; it being agreed that, subject to the last sentence of Section 7.4(b)
hereof, the parties hereto shall promptly appeal any Order which is appealable
(and pursue such appeal with reasonable diligence); provided, however, that the
right to terminate this Agreement under Section 12.1(b)(ii) shall not be
available to a party if such Order was primarily due to the failure of such
party to perform any of its obligations under this Agreement.

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          (c) By Purchaser Upon a Material Adverse Effect. By Purchaser if
(i) there has been an event, change, occurrence or circumstance that,
individually or in the aggregate with any other events, changes, occurrences or
circumstances, has had or could reasonably be expected to have a Material
Adverse Effect or (ii) at any time, disregarding the materiality and Material
Adverse Effect qualifications in the representations, warranties, covenants and
agreements of Seller, the failure of the representations and warranties of
Seller contained in this Agreement to be true and correct and the failure of
Seller to have performed and complied with all covenants and agreements required
by this Agreement to be performed or complied with by Seller prior to such time,
when considered in the aggregate, have had or could reasonably be expected to
have a Material Adverse Effect, and such failures shall be such that (A) if not
cured, the condition set forth in Section 9.3(c) would not be fulfilled and
(B) if capable of cure, shall not have been cured within 10 Business Days of the
receipt of written notice thereof by Seller from Purchaser.
          (d) By Purchaser If Outside Date Reached. By Purchaser if the Closing
shall not have occurred on or prior to the Outside Date; provided that such
right to terminate this Agreement under this Section 12.1(d) shall not be
available to Purchaser if Purchaser has breached its obligations under this
Agreement in a manner that shall have proximately contributed to the failure of
the Closing to occur by such date.
          (e) By Seller If Outside Date Reached. By Seller if the Closing shall
not have occurred on or prior to the Outside Date; provided that such right to
terminate this Agreement under this Section 12.1(e) shall not be available to
Seller if Seller has breached its obligations under this Agreement in a manner
that shall have proximately contributed to the failure of the Closing to occur
by such date.
          (f) By Purchaser Upon Failure of Seller’s Representations, Warranties,
Covenants or Agreements. By Purchaser if at any time the representations and
warranties of Seller contained in this Agreement shall fail to be true and
correct in all material respects (or, if such representation or warranty
contains a materiality or Material Adverse Effect qualification, in all
respects) or Seller shall at any time have failed to perform and comply in all
material respects with all covenants and agreements of Seller contained in this
Agreement requiring performance or compliance prior to such time, and in either
case, such failure (i) shall be such that, if not cured, the conditions set
forth in Section 9.2(a) or Section 9.2(b) would not be fulfilled and (ii) if
capable of cure, shall not have been cured within 10 Business Days of the
receipt of written notice thereof by Seller from Purchaser.
          (g) By Seller Upon Failure of Purchaser’s Representations, Warranties,
Covenants or Agreements. By Seller if at any time the representations and
warranties of Purchaser contained in this Agreement shall fail to be true and
correct in all material respects (or, if such representation or warranty
contains a materiality qualification, in all respects) or Purchaser shall at any
time have failed to perform and comply in all material respects with all
covenants and agreements of Purchaser contained in this Agreement requiring
performance or compliance prior to such time, and in either case, such failure
(i) shall be such that, if not cured, the conditions set forth in Section 9.3(a)
or Section 9.3(b) would not be fulfilled and (ii) if capable of cure, shall not
have been cured within 10 Business Days of the receipt of written notice thereof
by Purchaser from Seller.

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          (h) By Purchaser Upon a Title Defect, Casualty or Condemnation. By
Purchaser in accordance with Section 7.9(c) or Section 7.10(a).
     12.2 Notice of Termination. Purchaser may exercise its right to terminate
this Agreement by giving written notice thereof from time to time to Seller
specifying the basis for Purchaser’s termination. Seller may exercise its right
to terminate this Agreement by giving written notice thereof from time to time
to Purchaser specifying the basis for Seller’s termination.
     12.3 Effect of Termination. In the event of the termination of this
Agreement pursuant to the provisions of this Article XII, this Agreement shall
become void and have no effect, and there shall be no further Liability on the
part of Purchaser or Seller to any Person in respect hereof; provided, however,
that the covenants and agreements contained in Section 7.11 (Publicity) and
Article XIII and in this Section 12.3 shall survive the termination of this
Agreement; provided further that, except as otherwise provided herein, no such
termination shall relieve any party hereto of any Liability resulting from any
breach of this Agreement prior to the time of such termination.
     12.4 Confidentiality and Non-Disclosure Agreement. In the event that this
Agreement is terminated pursuant to Section 12.1, the Confidentiality and
Non-Disclosure Agreement between the Seller and Kaiser Aluminum Corporation
dated August 26, 2010 (the “Confidentiality Agreement”) shall continue in full
force in accordance with its terms. Any confidentiality obligation owing by
Purchaser to Seller with respect to nonpublic information relating to the
Business, whether pursuant to the Confidentiality Agreement or otherwise, shall
terminate at the Closing.
ARTICLE XIII
MISCELLANEOUS
     13.1 Expenses. Except as otherwise expressly provided in this Agreement,
each of Seller and Purchaser shall bear its own expenses incurred in connection
with the negotiation and execution of this Agreement, the Purchaser Documents
and the Seller Documents and the consummation of the transactions contemplated
hereby and thereby.
     13.2 Specific Performance. Seller acknowledges that the breach of this
Agreement by Seller would cause irreparable damage to Purchaser and that money
damages or other legal remedies would not be an adequate remedy for any such
damages. Therefore, the obligations of Seller under this Agreement, including
Seller’s obligation to sell, and cause to be sold, the Purchased Assets to
Purchaser, shall be enforceable by a decree of specific performance and
appropriate injunctive relief may be applied for and granted in connection
therewith. Such remedies shall, however, be cumulative and not exclusive and
shall be in addition to any other remedies which Purchaser may have under this
Agreement or otherwise.
     13.3 Further Actions. Each of Purchaser and Seller shall execute and
deliver such documents and take such other actions as may reasonably be
requested by the other party hereto in order to carry out the provisions of this
Agreement and consummate and make effective the transactions contemplated by
this Agreement.

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     13.4 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, or
(c) sent by next-day or overnight mail or delivery, as follows:
if to Seller, to:
Alexco, L.L.C.
6520 West Allison Road
Chandler, Arizona 85226
Attention: Greg Fraley
with a copy to:
Plattner, Schneidman & Schneider, P.C.
4201 N. 24th Street, Suite 100
Phoenix, Arizona 85016
Attention: Darrin C. Jeffries, Esq.
and
if to Purchaser, to:
Desert Fabco Acquisition, LLC
c/o Kaiser Aluminum Corporation
27422 Portola Parkway, Suite 200
Foothill Ranch, California 92610
Attention: Senior Vice President — Corporate Development
with copies to:
Kaiser Aluminum Corporation
27422 Portola Parkway, Suite 200
Foothill Ranch, California 92610
Attention: Senior Vice President and General Counsel
and
Jones Day
2727 North Harwood Street
Dallas, Texas 75201
Attention: Troy B. Lewis, Esq.
or, in each case, at such other address as may be specified in writing to the
other party hereto. All such notices, requests, demands, waivers and other
communications so delivered, mailed or sent shall be deemed to have been
received (a) if by personal delivery, on the day delivered,

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(b) if by certified or registered mail, 72 hours after such communication is
deposited in the mails with certified postage prepaid, or (c) if by next-day or
overnight mail or delivery, on the day delivered.
     13.5 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors and
permitted assigns.
     13.6 Assignment; Third-Party Beneficiaries. This Agreement shall not be
assignable by either party hereto without the prior written consent of the other
and any attempt to assign this Agreement without such consent shall be void and
of no effect, except that Purchaser may by notice to Seller assign its rights or
delegate its obligations hereunder in whole or in part to any of its Affiliates,
provided that no such assignment shall relieve Purchaser of its obligations
hereunder. Nothing in this Agreement, expressed or implied, is intended or shall
be construed to confer upon any Person other than the parties hereto and their
successors and assigns permitted by this Section 13.6 any right, remedy or claim
under or by reason of this Agreement; provided, however, that, after the
Closing, the indemnification obligations of Purchaser and Seller set forth in
Article X of this Agreement shall inure to the benefit of, and be enforceable
by, each Seller Indemnified Party and each Purchaser Indemnified Party.
     13.7 Amendment; Waivers. No amendment, modification or discharge of this
Agreement, and no waiver hereunder, shall be valid or binding unless set forth
in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. The failure of either party hereto to
exercise any rights or privileges hereunder shall not be construed as a waiver
of any such rights or privileges hereunder. Except as otherwise expressly
provided in this Agreement, the rights and remedies herein provided are
cumulative and none is exclusive of any other or of any rights or remedies that
a party may otherwise have at law or in equity.
     13.8 Entire Agreement. This Agreement (including the Disclosure Letter and
the exhibits hereto), together with the Confidentiality Agreement, constitute
the entire agreement of the parties to this Agreement with respect to the
subject matter hereof and thereof and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
     13.9 Severability. Whenever possible, each provision or portion of any
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable Law, but, if any provision or portion of
any provision of this Agreement is held to be invalid, illegal or unenforceable
in any respect under any applicable Law, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
any other provision or portion of any provision in such jurisdiction, and,
subject to Section 7.12(e), this Agreement shall be reformed, construed and
enforced in such jurisdiction in such manner as will effect as nearly as
lawfully possible the purposes and intent of such invalid, illegal or
unenforceable provision.

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     13.10 Counterparts; Effectiveness. This Agreement may be executed in
several counterparts, each of which shall be deemed an original and all of which
shall together constitute one and the same instrument. This Agreement will
become effective when each party to this Agreement shall have received a
counterpart hereof signed by the other party hereto.
     13.11 Passage of Title; Risk of Loss. Legal title, equitable title and risk
of loss with respect to the Purchased Assets shall not pass to Purchaser until
the Purchased Assets are sold, transferred, conveyed, assigned and delivered to
Purchaser at the Closing.
     13.12 Governing Law; Venue.
          (a) This Agreement shall be construed, performed and enforced in
accordance with the Laws of the State of Arizona, without giving effect to its
principles or rules of conflict of laws to the extent such principles or rules
would require or permit the application of the Laws of another jurisdiction.
          (b) Except as otherwise expressly provided in this Agreement, any
Legal Proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby may only be brought in state or federal court in Phoenix,
Arizona, and each of the parties hereby consents to the jurisdiction of such
court (and of the appropriate appellate courts therefrom) in any such Legal
Proceeding and irrevocably waives, to the fullest extent permitted by Law, any
objection which it may now or hereafter have that any such Legal Proceeding that
is brought in any such court has been brought in an inconvenient forum.
          (c) Each of the parties hereto hereby consents to process being served
by any party to this Agreement in any Legal Proceeding by the delivery of a copy
thereof in accordance with the provisions of Section 13.4.
          (d) THE PARTIES HERETO IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING TO ENFORCE OR INTERPRET THE PROVISIONS OF THIS AGREEMENT.
     13.13 No Other Representations and Warranties. EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, THERE ARE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND
(INCLUDING ANY REPRESENTATIONS OR WARRANTIES AS TO THE QUALITY OR FITNESS OF THE
PURCHASED ASSETS FOR THEIR INTENDED PURPOSES OR ANY PARTICULAR PURPOSE),
EXPRESSED OR IMPLIED, WITH RESPECT TO SELLER, THE BUSINESS, THE PURCHASED ASSETS
OR THE ASSUMED LIABILITIES. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT SELLER MAKES NO REPRESENTATIONS
OR WARRANTIES WITH RESPECT TO ANY INFORMATION OR DOCUMENTS MADE AVAILABLE TO
PURCHASER OR ITS REPRESENTATIVES REGARDING SELLER, THE BUSINESS, THE PURCHASED
ASSETS OR THE ASSUMED LIABILITIES IN CONNECTION WITH PURCHASER’S DUE DILIGENCE
INVESTIGATION THEREOF.

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers, as of the date first
written above.

            PURCHASER:

DESERT FABCO ACQUISITION, LLC, a Delaware limited liability corporation
      By:   /s/ John Barneson         Name:   John Barneson        Title:   SVP 
      SELLER:

ALEXCO, L.L.C., an Arizona limited liability company
      By:   /s/ Robert R. Fraley         Name:   Robert R. Fraley       
Title:   Manager              By:   /s/ Barbara E. Fraley         Name:  
Barbara E. Fraley        Title:   Manager              By:   /s/ Perry J. Fraley
        Name:   Perry J. Fraley        Title:   Manager     

 

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CORPORATE GUARANTY
          THIS CORPORATE GUARANTY (“Guaranty”) is made as of the 12th day
October, 2010, by KAISER ALUMINUM CORPORATION, a Delaware corporation
(“Guarantor”), to ALEXCO, L.L.C., an Arizona limited liability company, or
assigns (“Seller”).
RECITALS:
          This Guaranty is entered into on the basis of the following facts,
understandings and intentions of the parties:
          A. Seller, as seller, and DESERT FABCO ACQUISITION, LLC, a Delaware
limited liability company and a wholly owned subsidiary of Guarantor, as buyer
(“Buyer”), have entered into an Asset Purchase Agreement, dated as of
October 12, 2010 (the “Agreement”).
          B. In order to provide Seller with sufficient assurances of Buyer’s
performance under the Agreement, Seller has, as a condition to performance under
the Agreement, required that Guarantor agree to execute this Guaranty of
performance of all of the covenants and obligations of Buyer under the
Agreement.
          C. Guarantor desired that Seller enter into the Agreement with Buyer
and promised to execute this Guaranty.
          NOW, THEREFORE, in consideration of Seller’s execution of the
Agreement, Guarantor, and agrees as follows:
          1. Guarantor absolutely unconditionally, irrevocably, and without
limitation, guarantees the full and timely performance of Buyer’s obligations
under Sections 3.2, 3.3(f), 4.3(a) and 10.3(a), (b) and (d) of the Agreement
(the “Obligations”). As used herein, “Buyer” includes the Buyer herein
identified and any successor, assignee or transferee of the interest of Buyer
under the Agreement. As a courtesy to Guarantor, Seller may give Guarantor,
without obligation to so do, notice of any default by Buyer of its Obligations.
          2. If Buyer defaults upon the Obligations, or any of them, then
Guarantor, at its own cost and expense, shall, without demand or notice by
Seller, fully and promptly pay and/or perform the Obligations.
          3. Guarantor authorizes Seller, without notice or demand and without
affecting Guarantor’s liability hereunder, from time to time to (i) consent to
any extensions, accelerations or other changes in the time for any payment or
performance of the Obligations, or consent to any other alteration or
modification of any covenant, term or condition of the Agreement in any respect,
or consent to any assignment or reassignment of the Agreement; (ii) take and
hold security for any Obligation, or exchange, waive or release any such
security; and (iii) apply such security and direct the order or manner of sale
thereof as Seller in its discretion may determine. Notwithstanding any
termination, renewal or extension with respect to the Agreement, this Guaranty
shall continue until all of the Obligations have been fully and completely
performed by Buyer, and Guarantor shall not

 

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be released from any obligation or liability hereunder so long as there is any
claim against Buyer arising out of the Agreement that has not been settled or
discharged in full. Guarantor’s undertakings hereunder are irrevocable and
continuing and shall not be affected, nor shall Guarantor be relieved of any
obligation hereunder, by any of the foregoing matters whether or not the same
occurs with Seller’s consent and/or notice to or consent of Guarantor.
          4. Guarantor waives (i) any right to require Seller to proceed against
Buyer or any other person or entity or pursue any other remedy in Seller’s power
whatsoever, complain of delay in the enforcement of Seller’s rights under the
Agreement, require Seller to proceed against or exhaust any security hereafter
held from Buyer or from the Guarantor, or pursue any other remedy whatsoever in
Seller’s power; (ii) notice of default in the payment or performance by Buyer of
any Obligations; (iii) any defense arising by reason of any dissolution,
termination, incapacity or lack of authority of Buyer, or by reason of the
bankruptcy, insolvency, reorganization or other debtor’s relief afforded to
Buyer pursuant to the present or any future provision of any federal or state
bankruptcy act or any other state or federal statue, or by reason of the
decision of any court, or by any disaffirmance or abandonment of the Agreement
by a trustee of Buyer, or by the appointment of a receiver to take possession of
all or substantially all of the assets of Buyer, or by reason of the cessation
from any cause whatsoever of the liability of Buyer other than by full
performance and discharge of the Obligations, Seller’s election of any remedy
against Guarantor or Buyer, or any of them, any statute of limitations that
would bar recovery of any amounts hereunder or with respect to the Obligations,
or any other circumstance which might otherwise constitute a legal or equitable
discharge of a surety or guarantor, and all provisions of applicable law which
are or might be in conflict with the terms of this Guaranty; and (iv) all
presentments, demands for performance, notices of non-performance, protests,
notices of protest, notices of dishonor and notices of acceptance of this
Guaranty and of the existence, creation or incurring of all or any part of the
Obligations now existing or hereafter arising.
          5. Until the Obligations have been performed in full, Guarantor shall
have no right of subrogation, waives any right to enforce any remedy which
Seller now has or may have against Buyer, and waives the benefit of, and any
right to participate in, any security hereafter held by Seller from Buyer,
except to the extent such security remains after performance in full of the
Obligations. Guarantor hereby subrogates all existing or future indebtedness of
Buyer to Guarantor to the Obligations owed to Seller under the Agreement and
this Guaranty, and such indebtedness of Buyer to Guarantor, if Seller so
requests, shall be collected, enforced and received by Guarantor as trustee for
Seller, and, in the event of a default, shall be paid over to Seller on account
of any Obligations.
          6. Guarantor assumes full responsibility for keeping fully informed of
the financial condition of Buyer and all other circumstances affecting Buyer’s
ability to perform the Obligations, and Seller shall have no duty to report to
Guarantor any information that Seller receives about Buyer’s financial condition
or any circumstances bearing on its ability to perform the Obligations. Seller
need not inquire into the powers of Buyer or the officers, managers, directors,
partners, trustees or agents acting or purporting to act on Buyer’s behalf, and
all Obligations made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.

 

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          7. Guarantor covenants, acknowledges, warrants and represents that
(i) Guarantor shall not commence, prosecute or participate in any
administrative, legal or equitable action against Buyer, or take any other
action with respect to Buyer, which might adversely affect Seller or its
interests hereunder; and (ii) this Guaranty is a valid and legally binding
obligation of Guarantor, fully enforceable in accordance with its terms, and
Guarantor has taken all necessary actions and obtained all consents required by
law, and the documents and agreements governing Guarantor to enter into this
Guaranty as a binding obligation of Guarantor. The covenants, acknowledgements,
warranties and representations herein contained are continuing and shall be
deemed restated whenever Guarantor takes any action in connection with them.
          8. The obligations of Guarantor hereunder are primary and are
independent of the obligations of Buyer. A separate action or actions may, at
Seller’s option, be brought and prosecuted against Guarantor whether or not any
action is first or subsequently brought against Buyer, or whether or not Buyer
is joined in any such action, and Guarantor may be joined in any action or
proceeding commenced by Seller against Buyer arising out of, in connection with,
or based upon, the Agreement.
          9. This Guaranty is made under and shall be governed by and construed
in accordance with the laws of the State of Arizona in all respects, including
matters of construction, validity and performance, and the terms and provisions
hereunder may not be waived, altered, modified or amended except in a writing
duly signed by Seller and by Guarantor. If any of the provisions of this
Guaranty shall contravene or be held invalid under the laws of the State of
Arizona, this Guaranty shall be construed as if not containing those provisions,
and the rights and obligations of the parties hereto shall be construed and
enforced accordingly. The use of the singular herein shall include the plural
and use of the plural shall include the singular.
          10. Guarantor hereby submits itself to the jurisdiction of the courts
of the State of Arizona and hereby irrevocably appoints Buyer and all other
persons upon whom service of process may be served as the agent of Buyer for
such purpose, as Guarantors’ agents for the service of process in any action
against Guarantor arising out of this Guaranty. Pursuant to such service, suit
may be brought against Guarantor in the County of Maricopa, State of Arizona.
This provision does not affect any right to serve process upon Guarantor in any
other manner permitted by law. In addition to the amounts guaranteed hereunder,
Guarantor shall pay counsel fees and all other costs and expenses incurred by
Seller in enforcing this Guaranty or, in the event Seller is the prevailing
party, in any action or proceeding arising out of, or relating to, this
Guaranty. In the event Guarantor is the prevailing party in any action or
proceeding arising out of, or relating to, this Guaranty, Seller agrees to pay
all counsel fees and all other costs and expenses incurred by Guarantor in
connection therewith.
          11. No failure on the part of Seller to pursue any remedy hereunder or
under the Agreement shall constitute a waiver by Seller of the right to pursue
such remedy on the basis of the same or a subsequent breach. All of Seller’s
rights and remedies under the Agreement or under this Guaranty are distinct,
separate and cumulative, and no such right or remedy in the Agreement or in this
Guaranty is intended to be in exclusion of or a waiver of any of the others.

 

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          12. This Guaranty shall be binding upon the Guarantor and its legal
representatives, successors and assigns, and shall inure to the benefit of
Seller and its successors and assigns.
          IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the day
and year first above written.

            GUARANTOR:

KAISER ALUMINUM CORPORATION, a Delaware corporation
      By:   /s/ John Barneson       Its:   Authorized Representative