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EXHIBIT 10.1

      

      

ASSET PURCHASE AGREEMENT

       

by and between

THE SHAW GROUP INC.

as Buyer

and

WASHINGTON GROUP INTERNATIONAL, INC.

as Seller

       

      

April 17, 2003

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TABLE OF CONTENTS

RECITAL   1 ARTICLE I—DEFINITIONS   1 ARTICLE II—PURCHASE AND SALE   6     2.01
  Sale and Purchase of Acquired Assets   6     (a)   Acquired Assets Transferred
  6     (b)   Assets Not Transferred   7     2.02   Instruments of Conveyance
and Transfer   9     2.03   Further Assurances   10 ARTICLE III—CLOSING,
PURCHASE PRICE, ASSUMPTION OF LIABILITIES   10     3.01   Closing   10     3.02
  Consideration   11     3.03   Purchase Price and Payment Thereof   11     (a)
  Purchase Price and Payment of Estimated Purchase Price   11     (b)  
Determination of Purchase Price   11     (c)   Adjustment and Settlement of
Purchase Price   12     (d)   Allocation of Purchase Price   12     (e)  
Accounting Objections   12     3.04   Assumption of Liabilities   13     3.05  
No Other Liabilities Assumed   13     3.06   Account Debtors/Power of Attorney  
14 ARTICLE IV—BUYER'S REPRESENTATIONS AND WARRANTIES   14     4.01  
Organization and Good Standing   14     4.02   Authorization and Validity   15  
  4.03   No Violation   15     4.04   Litigation   15     4.05   Consents   15  
  4.06   Finder's Fees   15     4.07   Governmental Approvals   15     4.08  
Condition of Acquired Assets   15 ARTICLE V—SELLER'S REPRESENTATIONS AND
WARRANTIES   16     5.01   Organization and Good Standing   16     5.02  
Authorization and Validity   16     5.03   Employee Benefit Plans   16     5.04
  Absence of Certain Changes   16     5.05   Title   17     5.06   Intellectual
Property   17     (a)   Scheduled Intellectual Property   17     (b)   Owned
Intellectual Property   18     (c)   Licensed Intellectual Property   18     (d)
  Patent, Trademark, Service Mark, and Copyright Infringement   19     5.07   No
Violation   19     5.08   Taxes   19     5.09   Government Approvals   20    
5.10   Labor Relations   20     5.11   Compliance with Laws   20     5.12  
Litigation   20     5.13   Employees   20     5.14   Assigned Contracts   21    
5.15   Accounts Receivable   21              

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    5.16   Finders' Fees   21     5.17   Financial Statements   22     5.18  
All Material Assets of the Business   22     5.19   Condition of Acquired Assets
  22     5.20   Business Operations   22     5.21   Real Estate Leases   23    
5.22   No Springing Liens   23     5.23   Customers   24     5.24   Insurance
Policies   24     5.25   Certain Business Practices   24     5.26  
Environmental Matters   24     5.27   Product Warranties; Performance Guaranties
  25     5.28   Full Disclosure   25     5.29   Confidential Information   25
ARTICLE VI—COVENANTS; THIRD PARTY CONSENTS; EQUITABLY ASSIGNED CONTRACTS   26  
  6.01   Retention of Records, Cooperation and Access   26     6.02   Timely
Payment and Performance of Assumed Liabilities   26     6.03   Warranty Work  
26     6.04   Employment and Benefits   26     6.05   [Reserved.]   28     6.06
  Third Party Consents; Equitably Assigned Contracts   28     6.07   Business
Operations   29     6.08   Access   30     6.09   Mortgages, Liens   31     6.10
  Permits   31     6.11   Supplements to Disclosure Schedule   31 ARTICLE VII  
31 ARTICLE VIII—CONDITIONS TO CLOSING   31     8.01   Conditions to the
Obligations of Each Party   31     8.02   Conditions to the Obligations of
Seller   31     (a)   Representations, Warranties and Covenants   31     (b)  
Other Closing Documents   32     8.03   Conditions to the Obligations of Buyer  
32 ARTICLE IX—LIABILITY AND INDEMNIFICATION   32     9.01   Survival; Seller's
Liability and Indemnity   32     9.02   Buyer's Liability and Indemnity   33    
9.03   Deductible   33     9.04   Cap on Damages   33     9.05   Claims   34    
9.06   Notice of Third Party Claims; Assumption of Defense   34     9.07  
Settlement or Compromise   35     9.08   Failure of Indemnifying Person to Act  
35     9.09   Effect on Purchase Price of Indemnity Payments   35     9.10  
Seller's and Buyer's Obligations Concerning Shared Environmental Losses   35    
9.11   Right of Set Off   36 ARTICLE X—MISCELLANEOUS   36     10.01   Amendment
  36     10.02   Assignment   36     10.03   Notice   36     10.04  
Confidentiality   37              

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    10.05   Entire Agreement   37     10.06   Costs, Expenses and Legal Fees  
38     10.07   Severability   38     10.08   Waiver   38     10.09   Governing
Law   38     10.10   Consent to Jurisdiction and Service of Process   38    
10.11   Captions   38     10.12   Counterparts   39     10.13   Additional
Agreements   39     10.14   Bulk Sales Compliance   39     10.15   Specific
Performance   39     10.16   Remedies Cumulative   39 ARTICLE XI—TERMINATION  
39     11.01   Termination Rights   39     11.02   Continuing Obligations   40

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EXHIBITS AND SCHEDULES

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ASSET PURCHASE AGREEMENT

        THIS ASSET PURCHASE AGREEMENT, dated as of April 17, 2003, is by and
between Washington Group International, Inc., an Ohio corporation ("WGI" or
"Seller") and The Shaw Group Inc., a Louisiana corporation ("Buyer"). Buyer and
Seller are collectively referred to herein as the "Parties."

RECITAL

        The Parties contemplate a transaction in which Buyer will purchase
Seller's assets primarily relating to Seller's U. S. operations of its
Petroleum & Chemicals business unit and the assumption by Buyer of specified
liabilities and obligations of Seller and its Affiliates.

        NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants herein contained, and on the terms and subject to the
conditions herein set forth, the Parties hereto agree as follows:

ARTICLE I—DEFINITIONS

        As used herein, the following definitions apply:

        "Accounting Objections" shall have the meaning set forth in
Section 3.03(e).

        "Acquired Assets" shall have the meaning set forth in Section 2.01(a).

        "Adjustment" shall have the meaning set forth in Section 3.03(c).

        "Affected Employees" shall have the meaning specified in Section 5.13.

        "Affiliate" shall, with respect to any Person, mean any other Person
that controls, is controlled by or is under common control with the former.

        "Agreement" shall have the meaning set forth in the first paragraph of
this document.

        "Assigned Contracts" shall mean all rights under all license or
sublicense agreements, distributor agreements, sales agents agreements, leases
of real or personal property (including the Leases), Equitably Assigned
Contracts, cooperation agreements, secrecy or know-how agreements,
non-competition or non-solicitation agreements, sales orders, the Proposals,
purchase orders, subcontracts and other arrangements and commitments of the
Business, whether written or oral, provided, however, that Assigned Contracts
shall include Equitably Assigned Contracts only to the extent that Seller's
rights and obligations thereunder may be assigned hereunder or under applicable
Law; provided further, that Assigned Contracts shall not include Excluded
Assigned Contracts (as defined herein) or contracts that are listed or described
in Schedule 2.01(b)(iv) of the Disclosure Schedule as Excluded Assets.

        "Assignments of Leases" shall mean the Assignment of Lease (Weymouth)
and the Assignment of Lease (Cambridge) in substantially the forms of Exhibits
B-1 and B-2 hereto.

        "Assumed Liabilities" shall have the meaning set forth in Section 3.04.

        "Assumption Agreement" shall mean the Assumption Agreement in
substantially the form of Exhibit C hereto.

        "Bill of Sale and Assignment Agreement" shall mean the Bill of Sale and
Assignment Agreement in substantially the form of Exhibit A hereto.

        "Business" shall mean the business of Seller and its Affiliates of
researching, developing, marketing and licensing of technologies to the
petroleum refining and petrochemical industries, as conducted by Seller as of
the date hereof, including, (i) the research and development operations
conducted at the

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Facility located in Weymouth, Massachusetts; and (ii) the licensing engineering
procurement and construction management operations conducted at the Facility in
Cambridge, Massachusetts in support of the Intellectual Property (Badger
Technology). The Business does not include operations of any nature carried on
in other of Seller's operations in any industry, including but not limited to
the following:

        Engineering, procurement, construction, turnkey, quality, and operations
and maintenance services provided by Seller's operations to the petroleum
refining, petrochemical, and industrial process industries;

        Engineering, procurement, construction and turnkey services provided by
Seller's operations in The Hague, The Netherlands;

        Engineering, procurement, construction and turnkey services provided by
Seller's operations in Houston, Texas;

        Engineering, procurement, construction and turnkey services provided by
Seller's operations related to oil field development;

        Engineering, procurement, construction and turnkey services provided by
Seller's operations related to the gas processing, gas treating, gas storage,
gas pipelines, gas recovery, and gas reinjection industries; and

        Engineering, procurement, construction, turnkey, quality, operations and
maintenance, and other services of Seller located in Cambridge, Massachusetts
that do not support the Business (as defined above).

        For the avoidance of doubt, the Business does not include technology
related to the gas processing business as encompassed in the current operation
of Seller's gas processing operations including the Denver office and including
Stearns Catalytic technology.

        "Business Day" shall mean any day of the year other than (a) any
Saturday or Sunday or (b) any other day on which banks located in the State of
New York generally are closed for business other than the retail depository
business.

        "Buyer" shall mean The Shaw Group Inc., a Louisiana corporation.

        "Cambridge Lease" means collectively that Lease Agreement dated
December 18, 1998, as amended by that certain First Amendment to Lease dated as
of September 17, 1999, as further amended by that certain Second Amendment to
Lease dated as of July, 2000, between WGI as lessee and Massachusetts Institute
of Technology as lessor for lease of space located at One Broadway, Cambridge,
Massachusetts and as further amended by letter dated January 17, 2002.

        "Closing" and "Closing Date" shall have the meanings set forth in
Section 3.01.

        "Closing Net Assets" shall have the meaning set forth in
Section 3.03(b)(i).

        "Consents" means those consents of (i) any Governmental Entity described
in Schedule 5.09, and (ii) any third Person described in Schedule 5.14 of the
Disclosure Schedule in respect of the Assigned Contracts.

        "Damages" shall have the meaning set forth in Section 9.01.

        "Designated Assigned Contracts" shall mean those Assigned Contracts
identified in Scheduled 5.14 under the following headings: Cooperation
Agreements, License Agreements, Miscellaneous Intellectual Property Agreements,
Project Service Agreements, Project Agreements, Purchase Orders and Oral
Agreements.

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        "Disclosure Schedule" shall mean the Disclosure Schedule delivered by
Seller to Buyer with the execution of this Agreement, which, among other things,
shall identify the exceptions to Seller's representations and warranties
contained in Article V.

        "Environmental Law" means all Laws relating to pollution or protection
of human health or the environment (including ambient air, surface water, ground
water, land surface or subsurface strata, and natural resources), including
(i) those related to releases or threatened releases of Hazardous Materials, or
otherwise relating to any environmental aspect of the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials and (ii) environmental or safety provisions of Laws
(including the federal Occupational Safety and Health Act ("OSHA"), and any
regional, state, local or provincial counterparts thereto).

        "Equitably Assigned Contracts" shall have the meaning set forth in
Section 6.06.

        "Escrow Agent" shall have the meaning set forth in Section 3.03.

        "Escrow Deposit" shall have the meaning set forth in Section 3.03.

        "Estimated Purchase Price" shall have the meaning set forth in
Section 3.03 (a).

        "Excluded Assets" shall have the meaning set forth in Section 2.01(b).

        "Excluded Liabilities" shall have the meaning set forth in Section 3.05.

        "Facilities" shall mean the leased real estate, leasehold improvements,
and fixtures occupied and operated by Seller under the Leases.

        "Final Closing Statement" shall have the meaning set forth in
Section 3.03(b)(i).

        "Fixed Assets" shall mean tangible personal property owned or leased by
Seller and used primarily in the Business, including, without limitation, office
furniture and fixtures, machinery, equipment, laboratory materials, computers,
tools and supplies located on or in the Facilities.

        "GAAP" shall mean generally accepted accounting principles for financial
reporting in the United States of America applied on a basis consistent with
historical management accounting policies and procedures.

        "Governmental Entity" shall mean any court or any governmental entity,
agency or authority of the United States, any foreign country, any domestic or
foreign state and any of their political subdivisions.

        "Hazardous Material" means any chemical, pollutant, contaminant, waste,
toxic or hazardous substance or material, petroleum and petroleum products or
by-products, polychlorinated biphenyls, asbestos or asbestos-containing
materials, lead or lead-based paints or materials, or radon.

        "Hired Employee" shall have the meaning set forth in Section 6.04.

        "Indemnified Person" shall mean a Person entitled to, or claiming to,
indemnification under Article IX.

        "Indemnifying Person" shall mean a Person obligated or claimed to be
obligated to provide indemnification under Article IX.

        "Intellectual Property" shall mean all patents, trademarks, know-how,
trade secrets, copyrights, software or any other types of Seller's right, title
and interest in the intellectual property that is part of the assets of the
Business as conducted as of the date hereof,, and includes all of the
intellectual property rights owned or licensed to Seller that primarily relate
to the Business including: (1) styrenics, including styrene and byproducts and
derivatives of styrene, polystyrene, expandable polystyrene and copolymers of
styrene; (2) alkylated aromatics, including ethylbenzene and cumene; vinyl
compounds, including EDC, VCM, and PVC; (3) phenolic compounds and derivatives
thereof, including phenol,

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BPA and polycarbonates; (4) compounds in the polyester chain and derivatives
thereof, including benzene, toluene, xylenes (and isomers thereof), PTA, EO/EG;
(5) fertilizer technologies including, phosphoric acid, aluminum fluoride, MAP,
DAP, and NPK; (6) lube oils processes; (7) fluid catalytic cracking;
(8) hydrotreating of refinery streams; (9) compounds in the acrylic chain,
including acrylic acid and acrylonitrile; (10) oleochemicals; (11) phthalic
anhydride; (12) olefins to gasoline; (13) processes for the conversion of gas to
liquids, including Fischer-Tropsch Syntheses; and (14) processes for the
treatment of feedstocks in order to adapt them for use in any of the above
identified processes.

        By way of further definition, Intellectual Property shall include
(i) the Owned Intellectual Property, including licenses and sublicenses granted
thereto; (ii) the Licensed Intellectual Property, including sublicenses granted
thereto; (iii) remedies against infringements thereof, and rights to protection
of interests therein under the laws of all jurisdictions; and (iv) all goodwill
associated with any of the foregoing to the extent transferable.

        "Knowledge" means (a) as to Seller, the actual knowledge of Robert
Wiesel, Barry Gifford, W. Mukaddam, D. Ferrari, P. Lewis, F. Demers, R. Sandel,
S. Pal, M. Lee, H. Sears, J. O'Donnell, V.J. Barry, Dennis Cooper and Joy Harris
and (b) as to Buyer, the actual knowledge of N.C. Gallinaro, L. Chapin, R.A.
Walker, Robert Stodghill, Kregg Lunsford, Jay Gann and James Monteaux; and in
each case after such individuals having made due inquiry with persons in their
respective organizations having responsibility in the areas of the matters
referenced and which are indicated to be to such party's knowledge.

        "Laws" shall mean (a) all laws, statutes and ordinances of any
Governmental Entity, including Environmental Laws, (b) any judgment, order or
decree of any Governmental Entity having the effect of law, and (c) any rule or
regulation of any Governmental Entity having the effect of law.

        "Leases" means the Cambridge Lease and the Weymouth Lease.

        "Licensed Intellectual Property" shall have the meaning set forth in
Section 5.06(c).

        "Liens" shall have the meaning set forth in Section 5.05.

        "Material Adverse Change" means a change that has a Material Adverse
Effect.

        "Material Adverse Effect" means an effect on (i) the Acquired Assets or
the business operations, condition (financial or other) or results of operations
of the Business, taken as a whole, which (individually or in the aggregate)
results in a loss or diminution of value equal to or in excess of One Hundred
Fifty Thousand ($150,000), or if not quantifiable, which otherwise materially
and adversely affects the Acquired Assets or the Business; or (ii) on the
ability of a Party hereto to consummate the transactions contemplated herein or
perform such Party's obligations hereunder; provided, however, that the
following shall not be taken into account in determining whether there has been
or would be a Material Adverse Effect on or with respect to the Business or such
Person: (a) a change or effect relating to conditions affecting the economy of
any part of the world generally; (b) any change or effect relating to conditions
generally affecting the industry in which the Business or such Person
participates, or (c) failure to obtain prospective work or secure outstanding
Proposals.

        "Model Statement" shall have the meaning set forth in
Section 3.03(b)(i).

        "Necessary Consents" means those consents listed on Schedule I-A of the
Disclosure Schedule, the obtaining of which are necessary as conditions to the
Buyer's and Seller's obligations to close.

        "Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).

        "Owned Intellectual Property" shall have the meaning set forth in
Section 5.06(b).

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        "Permits" shall mean all permits, authorizations, approvals,
registrations, licenses, certificates, variances and similar rights granted by
any Governmental Entity.

        "Permitted Liens" shall mean (a) statutory liens for taxes not yet due
and payable, (b) contractual and statutory liens of landlords, warehouses,
mechanics and materialmen and other like liens which secure bills for services
or materials not yet due and payable and which arose in the Ordinary Course of
Business, and (c) those Liens described in Schedule I-B of the Disclosure
Schedule.

        "Person" shall mean an individual, partnership, limited liability
company, corporation, joint stock company, trust, estate, joint venture,
association or unincorporated organization, or any other form of business or
professional entity, but shall not include a Governmental Entity.

        "Preliminary Closing Statement" shall have the meaning set forth in
Section 3.03(b)(ii).

        "Proposal" means Seller's bid or other offer or proposal to enter into a
contract to perform work or license Intellectual Property in connection with the
Business.

        "Purchase Price" shall have the meaning set forth in Section 3.03(a).

        "Review Period" shall have the meaning set forth in Section 3.03(b)(ii).

        "Scheduled Intellectual Property" shall have the meaning set forth in
Section 5.06(a).

        "Seller" shall have the meaning set forth in the introductory paragraph
of this Agreement.

        "Seller's Employee Benefit Plans" shall have the meaning set forth in
Section 2.01(b)(v).

        "Taxes" shall mean all income taxes and all other taxes, imposts,
tariffs, fees, levies or other similar assessments or liabilities, including
income taxes, ad valorem taxes, excise taxes, withholding taxes or other taxes
of or with respect to gross receipts, premiums, real property, personal
property, windfall profits, sales, use, transfers, licensing, employment,
payroll and franchises imposed by or under any Law; and such terms shall include
any interest, fines, penalties, assessments or additions to tax resulting from,
attributable to or incurred in connection with any such tax or any contest or
dispute thereof.

        "Third Party Claims" shall have the meaning set forth in Section 9.04.

        "Transaction Documents" shall mean this Agreement and the other
agreements or documents whose execution is contemplated under this Agreement.

        "WARN" means the Worker Adjustment and Retraining Notification Act of
1988, as amended, and all regulations promulgated thereunder.

        "Warranty Work" shall have the meaning set forth in Section 6.03.

        "Weymouth Environmental Matter" shall mean environmental discharges,
spills or impacts being managed under Massachusetts Department of Environmental
Protection ("DEP") Release Tracking Numbers ("RTNs") 3-14967, 3-16701, and
3-20537, and any further contamination discovered in connection with the cases
represented by such RTNs, provided that such further contamination is connected
to the original discharge, spill or impact under such RTN.

        "Weymouth Lease" means that certain Commercial Lease dated December 15,
1997 by and between Albert R. Schofield, Jr., as Trustee of the Lynda Realty
Trust, as Lessor, and Raytheon Engineers & Constructors, Inc., as Lessee, for
the lease of approximately 19,350 square feet comprising the entire building
located at 56 Woodrock Road, East Weymouth, Massachusetts, as amended by letter
dated March 19, 2002 from Schoefield Properties LLC to and accepted by
Washington Group International, Inc.

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ARTICLE II—PURCHASE AND SALE

        2.01    Sale and Purchase of Acquired Assets.    

        (a)    Acquired Assets Transferred.    Upon the terms and subject to the
conditions of this Agreement, at the Closing, Seller shall sell, transfer,
convey, assign and deliver to Buyer and/or one or more Affiliates of Buyer (as
designated by Buyer), and Buyer shall, and shall cause any such designated
Affiliate to, purchase, acquire and accept from Seller all of Seller's
transferable right, title and interest in, to and under all of the properties,
assets, rights, claims and contracts principally used for the conduct of, the
Business, as the same may exist on the Closing Date (collectively, the "Acquired
Assets"), free and clear of any and all Liens (other than Permitted Liens).
Without in any way limiting the generality of the foregoing, the Acquired Assets
shall include (other than Excluded Assets) all transferable right, title and
interest of Seller in, to and under:

(i)the Leases;

(ii)all Fixed Assets;

(iii)all leasehold improvements and fixtures comprising a part of or located at
the Facilities;

(iv)the Intellectual Property;

(v)all of Seller's rights and interests under the Assigned Contracts, including
without limitation any outstanding Proposals (except that Equitably Assigned
Contracts shall be transferred only to the extent that Seller's rights and
obligations thereunder may be assigned hereunder or under applicable Law);

(vi)all financial, project-related, personnel and other books and records of the
Business, including without limitation equipment records, project plans,
documents, catalogs, books, records, files and operating manuals;

(vii)to the extent transferable, all software, computer programs, passwords, and
similar rights and properties of the Business;

(viii)all locks, keys, security codes and similar items and information of the
Business;

(ix)all rights, privileges, claims, demands, choses in action, prepayments,
deposits, refunds, claims in bankruptcy, indemnification agreements with, and
indemnification rights against third parties, warranty claims, offsets and other
claims principally relating to the ownership or operation of, or principally
used for the conduct of, the Business, but excluding any of the foregoing that
principally relate to any Excluded Assets and/or Excluded Liabilities;

(x)to the extent transferable, all Permits held by Seller that are used for the
lawful ownership or operation of the Business (including the Permits listed in
Section 5.01(b) of the Disclosure Schedule);

(xi)all customer lists and goodwill of the Business;

(xii)all sales and marketing materials principally used for the conduct of the
Business;

(xiii)prepaid rent, prepaid supplies, advances and other prepaid expenses and
deposits of the Business;

(xiv)all accounts or notes receivable related to the Assigned Contracts and
other accounts or notes receivable of the Business, whether billed or unbilled,
including, accounts or notes receivable relating to royalties earned on or
before the Closing Date;

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(xv)all confidentiality, non-disclosure, non-competition and non-solicitation
agreements of or principally relating to the Business;

(xvi)cash, bank accounts and cash equivalents of the Business reflected on the
Final Closing Statement;

(xvii)the trade name "Badger" and all marks, goodwill and any common law
trademark rights relating thereto (except that the following Affiliates of
Seller may continue to utilize the word "Badger" in their names for such periods
of time as may be necessary to accomplish a change of business name in the
respective jurisdictions of such Affiliates' state, nation or place of
formation, incorporation, qualification or registration: Badger-SMAS Ltd., Asia
Badger, Inc. and Badger Energy, Inc.); and

(xviii)all proceeds of the foregoing.

        (b)    Assets Not Transferred.    Notwithstanding anything to the
contrary contained herein, the following assets and properties of Seller, none
of which are reflected on the Model Statement or shall be reflected on the Final
Closing Statement, are specifically excluded from the Acquired Assets and shall
be retained by Seller ("Excluded Assets"):

        (i)    Intercompany and Employee Accounts Receivable.    The
intercompany receivables and employee accounts receivable listed on
Schedule 2.01(b)(i) of the Disclosure Statement.

        (ii)    Refund Claims.    All claims or rights to claims of Seller for
refunds of Taxes, credits against Taxes, and other Governmental Entity charges
for taxable periods ending on or prior to the Closing Date.

        (iii)    Insurance.    Insurance policies and rights thereunder,
including rights to any cancellation value on the Closing Date.

        (iv)    Contracts Not Assigned.    Those agreements, commitments,
license agreements, and other contracts listed or described in
Schedule 2.01(b)(iv) of the Disclosure Schedule.

        (v)    Seller's Employee Benefit Plans.    All assets comprising or
directly related to any pension, profit sharing, stock bonus, stock option,
thrift or other retirement plan, medical, hospitalization, dental, life,
disability, vacation or other insurance or benefit plan, employee stock
ownership plan, deferred compensation, stock ownership, stock purchase, bonus,
benefit or other incentive plan, severance plan or other similar plan relating
to Seller or its employees (the "Seller's Employee Benefit Plans").

        (vi)    Corporate Services.    Assets of Seller or Seller's Affiliates
that are situated neither in Cambridge, Massachusetts nor in Weymouth,
Massachusetts, or that are not primarily used in the operation of the Business
such as company systems, agreements, and other corporate assets not used
primarily in the Business (for example, corporate aircraft, corporate-wide
supply agreements, or corporate-licensed software); and services such as
accounting, tax or legal, financial services, building services, data
processing, and other corporate services provided to the Business by Seller or
Seller's Affiliates, provided that if access to computer networking services or
computer software or other similar systems or assets included in the above is
necessary for operation of the Business, Seller has given Buyer separate and
specific written notice of same and will arrange for Buyer to have access to
same for a reasonable time after Closing to enable Buyer to transition the
Business to substitute or replacement systems or assets.

        (vii)    Tradenames and Marks.    The trade name "Washington" or any
variation and/or derivation thereof and the mark (W) of Seller or Seller's
affiliates, provided Buyer shall be authorized to use the "Washington" trade
name on a royalty free basis as necessary to explain

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the source of Buyer's Intellectual Property, provided that Buyer clearly advises
involved third parties that the use of the Washington name does not mean that
WGI is involved in the transaction with the third party or that WGI endorses
such transaction.

        (viii)    Water Damage Claims.    Claims against the landlord and tenant
in the building containing the office premises subject to the Cambridge Lease
and insurance claims for water damages sustained as a result of a failure on
September 23, 2002 of a water filtration system located on the fifth floor of
such building.

        (ix)    The Hague Bankruptcy.    Assets (including claims) of Seller,
whether or not related to the Business, included in The Hague bankruptcy
proceeding of Washington International, B.V. ("WBV"). Rights of Seller as a
shareholder in WBV to claims against the assets of WBV.

        (x)    Certain Undisclosed Contracts.    Except for Proposals less than
$150,000 and "Purchase Orders" as described in Schedule 5.14, any contract of
the Business which would otherwise be an Assigned Contract pursuant to the terms
of this Agreement but: (a) which is not listed or described on Schedule 5.14;
and (b) which is not an amendment, modification, clarification, task
authorization, change order, side letter or does not otherwise relate to or
arise from an Assigned Contract that is listed or described in Disclosure
Schedule 5.14; and (c) with respect to which Buyer and/or its Affiliates have
not, as of the date of notice to Seller described in sub-part (d) below rendered
any material performance or provided any material service with respect to such
contract (it being specifically agreed that any such performance or service will
be deemed material in any event if $20,000 or more of services or fees or costs
are provided or incurred by Buyer and/or its Affiliates with respect to such
contract); and (d) Buyer and/or its Affiliates notify Seller promptly in writing
in accordance with Section 10.3 hereof by courier ("Discovery Notice") upon the
discovery of the existence of any such contract but in no event later than the
fourth anniversary of the Closing Date or the expiration of the statute of
limitations for contract claims applicable to such contract, whichever is later
("Excluded Assigned Contract"). For purposes of the foregoing, Buyer shall be
deemed to discover any such contract on the earlier of (i) the date twenty days
following the date that the first services or costs are entered into the
Business's time collection system in respect of such contract by an employee of
Buyer, or (ii) the date the Business's management personnel employed by Buyer
(or its Affiliates) has actual knowledge of such contract. Notwithstanding the
foregoing, Buyer (or its Affiliate) may elect to accept and assume any contract
which would otherwise be an Excluded Assigned Contract by affirmatively electing
to do so by written notice thereof delivered to Seller within ten business days
following the date of the Discovery Notice. Buyer shall assume all liability for
and defend and hold Seller harmless from and against any and all Damages solely
resulting from any performance provided, services rendered, or other affirmative
conduct by Buyer or its Affiliates following the Closing Date, with respect to
an Excluded Assigned Contract, unless such performance or services were
specifically authorized or requested by Seller.

Buyer agrees to (A) not enter into any amendment, modification, change order,
task order or other alternation or extension (oral or written) with respect to
any Excluded Assigned Contract, and (B) to refund to Seller an amount equal to
any funds received pursuant to each Excluded Assigned Contract which are
unrelated to work performed or expenditures incurred by Buyer with respect
thereto, which shall include an amount equal to any liabilities with respect to
such Excluded Assigned Contract shown on the Final Closing Statement. In
addition Seller will be relieved of its obligations under the Covenant and
Agreement Not-to-Compete to the extent necessary for Seller in its sole judgment
to perform its obligations under any such Excluded Assigned Contract. The Buyer
hereby agrees to provide support to Seller with respect to Seller's performance
of its obligations and duties under any Excluded Assigned Contract by making
applicable Intellectual Property (and improvements

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thereto) which is being sold to Buyer with the Business available to Seller on a
royalty free basis and providing necessary basic engineering in support of
Seller's obligations and duties on commercially reasonable terms, consistent
with the practices of the Business as then currently practiced.

The amount of any net gain realized by Buyer from the performance of all
contracts which (i) satisfy the criterion set forth in subparts (a) and
(b) above but does not satisfy subpart (c) or (d), or (ii) would otherwise be
Excluded Assigned Contracts but which Buyer assumes in accordance with the
foregoing, shall be remitted by payment to Seller up to an amount equal to any
net loss incurred by Seller in performing all Excluded Assigned Contracts (which
net gains and net losses shall be calculated using accounting principles and
methods utilized by the Business, consistent with practices as of the date of
Closing). It is further agreed that Buyer and/or its Affiliates shall have no
claim for breach of this Agreement under Section 5.14 hereof in respect of any
contract which (i) satisfies the criterion set forth in subparts (a) and
(b) above but does not satisfy subpart (c) or (d), or (ii) would otherwise be an
Excluded Assigned Contract hereunder but which Buyer assumes in accordance with
this Section 2.01(b)(x).

Buyer grants to Seller the right to audit its (or its Affiliate's) books and
records related to the Business (during normal business hours) but only to the
extent (a) necessary to verify the existence of any Excluded Assigned Contract
claimed to exist by Buyer and/or its Affiliates and (b) to verify the existence
of any Assigned Contract described herein and the amount of gain claimed to
exist by either Buyer or Seller with respect thereto. Seller grants to Buyer the
right to audit its books and records related to the Business (during normal
business hours) but only to the extent necessary to verify the amount of loss
claimed to be suffered by Seller with respect to any Excluded Assigned Contract.

        2.02    Instruments of Conveyance and Transfer.    

        At the Closing, the Parties shall execute and deliver all necessary
Transaction Documents to consummate the transactions contemplated hereunder. At
Closing, Seller shall deliver to Buyer the following:

        (a)   an original "Bill of Sale and Assignment Agreement" duly executed
by Seller transferring to Buyer the Acquired Assets to be acquired by it under
the terms of this Agreement in substantially the form of Exhibit A annexed
hereto;

        (b)   [reserved];

        (c)   originals "Assignment of Leases" duly executed by Seller assigning
each of the Leases to Buyer in substantially the form of Exhibits B-1 and B-2
annexed hereto;

        (d)   to the extent in the possession of Seller originals of the
Assigned Contracts and Permits; otherwise true and complete copies of such
Assigned Contracts and Permits;

        (e)   with respect to each Lien upon any of the Acquired Assets,
evidence reasonably satisfactory to Buyer of the repayment of the indebtedness
secured thereby and/or the release as of the Closing Date of such Lien;
provided, that this provision does not apply to any Permitted Lien;

        (f)    an original assignment form for recordation at the United States
Patent and Trademark Office for the assignment of patents and patent
applications, in the form of Exhibit D hereto; an original assignment form for
recordation at the United States Patent and Trademark Office for the assignment
of trademarks, in the form of Exhibit E hereto; and written documents in form
for recordation at the United States Patent and Trademark Office or any other
Governmental Authority extinguishing or satisfying any recorded liens of Credit
Suisse First Boston against the Intellectual Property;

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        (g)   a certificate of the secretary of Seller certifying resolutions of
its board of directors approving and authorizing the execution, delivery and
performance of this Agreement and its related Transaction Documents and the
consummation by Seller of the transactions contemplated hereby and thereby
(together with an incumbency and signature certificate regarding the officer(s)
signing on behalf of Seller);

        (h)   the long-form certificate of incorporation or similar instruments
of Seller certified by the Secretary of State or equivalent Person of the
jurisdiction of incorporation of Seller, certified by the secretary of Seller;

        (i)    a Certificate of Good Standing for Seller from the States of
Ohio, Massachusetts and Idaho;

        (j)    Estoppel certificates from each landlord under the Leases in form
and substance satisfactory to Buyer; and

        (k)   an original Covenant and Agreement Not-to-Compete duly executed by
Seller in substantially the form of Exhibit F annexed hereto.

        Buyer shall execute and deliver an original "Assumption Agreement" in
substantially the form of Exhibit C annexed hereto, the Bill of Sale and
Assignment and the Assignments of Leases, as well as such instruments and other
documents as may be reasonably necessary or appropriate to carry out the
transactions contemplated by this Agreement. Buyer and Seller each agree to
assist the other Party as reasonably required after the Closing to register and
record with appropriate Governmental Entities the conveyance and transfer
documents. At Closing, Seller also shall deliver to Buyer actual and exclusive
possession and control of the Acquired Assets and Facilities subject to the
terms hereof, including keys, security codes, computer passwords and other items
required to operate the properties and assets used in the operation of the
Business.

        2.03    Further Assurances.    

        Seller shall from time to time after the Closing at the request of Buyer
and without further consideration, execute and deliver further instruments of
transfer and assignment (in addition to those delivered under Section 2.02) and
take such other actions as Buyer may reasonably require to more effectively
transfer and assign to, and vest in, Buyer and its Affiliates and their
successors and assigns each of the Acquired Assets. Buyer shall, and shall cause
its Affiliates to, from time to time after the Closing at the request of Seller
or its Affiliates or their successors or assigns, and without further
consideration, execute and deliver further instruments or evidences of
assumption or assignment, and take such other actions as Seller or its
Affiliates or their successors and assigns may reasonably require to consummate
and make effective the transactions contemplated by this Agreement. Without
limitation of the foregoing, Seller agrees, at its own reasonable cost and
expense, to cooperate with Buyer in connection with patent, trademark and
copyright transfers in the United States and other countries, and with the
ongoing prosecution of patent, trademark and copyright applications in the
United States and other countries, and maintenance of patents, trademark
registrations and copyright registrations, and to execute such documents as may
be necessary in those transfers and applications.

ARTICLE III—CLOSING, PURCHASE PRICE, ASSUMPTION OF LIABILITIES

        3.01    Closing.    

        Upon satisfaction of the conditions to closing set forth in Article VIII
hereof, Seller shall be obligated to sell, and Buyer shall be obligated to buy,
the Acquired Assets on the terms and conditions stated herein. The closing of
the transactions contemplated hereby (the "Closing") shall take place at the
offices of the Business in Cambridge, Massachusetts on April 17, 2003 or at such
other time and place as the Parties may mutually agree. The day on which the
Closing actually takes place is herein

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sometimes referred to as the "Closing Date." The Closing shall be deemed to be
effective as of 12:01 a.m. eastern standard time on the Closing Date.

        3.02    Consideration.    

        Upon the terms and subject to the conditions set forth in this Agreement
and in exchange and consideration for the Acquired Assets and other
consideration set forth in this Agreement, Buyer shall:

        (a)   On and as of the Closing Date, pay to Seller the "Estimated
Purchase Price" in accordance with, and to the extent provided in,
Section 3.03(a); and

        (b)   Assume as of the Closing Date the Assumed Liabilities in
accordance with, and to the extent provided in, Section 3.04.

        3.03    Purchase Price and Payment Thereof.    

        (a)    Purchase Price and Payment of Estimated Purchase Price.    The
"Estimated Purchase Price" shall be equal to the sum of Seventeen Million Seven
Hundred Thousand Dollars ($17,700,000.00). The purchase price for the Acquired
Assets shall be (a) the Estimated Purchase Price, plus or minus (as applicable)
(b) the Adjustment, if any, as defined in Section 3.03(c) (the "Purchase
Price").

        Buyer shall on the Closing Date pay $17,200,000.00, to Seller, by wire
transfer of immediately available United States Funds, to Seller's bank account
per Seller's written instructions. The sum of Five Hundred Thousand and no/100
Dollars ($500,000.00) (the "Escrow Deposit") shall be deposited with Kean,
Miller, Hawthorne, D'Armond, McCowan & Jarman, L.L.P. (the "Escrow Agent") for a
period of one (1) year after closing pursuant to the terms of the Escrow
Agreement in the form of Exhibit G attached hereto, to be executed at Closing
among Buyer, Seller and Escrow Agent.

        (b)    Determination of Purchase Price.    

          (i)  For purposes of this Agreement, (1) the "Final Closing Statement"
shall mean the statement listing the current assets and current liabilities of
the Business (excluding deferred royalty income) as of the Closing Date prepared
in accordance with this Section 3.03(b)(i) and in the same format as the Model
Statement, (2) the "Model Statement" shall mean the current assets and current
liabilities of the Business (excluding deferred royalty income) as of May 31,
2002, which is attached as Exhibit H, and (3) the "Closing Net Assets" shall
mean the current assets of the Business minus the current liabilities of the
Business, as of the Closing Date, excluding, however, from such calculation
deferred royalty income, as set forth on the Final Closing Statement.

        Seller represents and warrants that, except for exceptions to GAAP as
otherwise set forth in Schedule 5.17 of the Disclosure Schedule, the Model
Statement was prepared in accordance with GAAP consistently applied. The Final
Closing Statement shall be prepared from the books and records of the Business
in accordance with GAAP, applied on a consistent basis, except for GAAP
exceptions set forth in Schedule 5.17 of the Disclosure Schedule. The
Preliminary Closing Statement and the Final Closing Statement will be prepared
on a basis consistent with that used in the preparation of the Model Statement
and will reflect only those types of assets and liabilities reflected in the
Model Statement. The Preliminary Closing Statement and the Final Closing
Statement shall not reflect any Excluded Assets or liabilities that are not
Assumed Liabilities.

         (ii)  Within sixty (60) days following the Closing Date, Seller, with
the reasonable assistance and cooperation of Buyer, shall prepare and deliver to
Buyer a statement of acquired assets and assumed liabilities as of the Closing
Date (the "Preliminary Closing

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Statement"), prepared as provided in paragraph (i) above. Buyer will provide
Seller with access to such financial records and statements of the Business, and
access to personnel, as may be reasonably required for Seller to prepare the
Preliminary Closing Statement. Buyer shall have thirty (30) days following its
receipt of the Preliminary Closing Statement (the "Review Period"), to review
the same for compliance with paragraph (i) above. Seller shall provide Buyer and
its representatives access to Seller's and its accountants' work papers
generated in connection with the preparation of the Preliminary Closing
Statement, as well as access to the employees and representatives of Seller and
its outside accountants (if any) to assist Buyer in its review of such work
papers and the Preliminary Closing Statement. On or before the expiration of the
Review Period, Buyer shall deliver to Seller a written statement accepting or
objecting to the Preliminary Closing Statement. In the event that Buyer shall
object to the Preliminary Closing Statement, such statement shall include a
detailed itemization of Buyer's objections and its reasons therefor. If no such
statement is delivered by Buyer to Seller within the Review Period, Buyer shall
be deemed to have accepted the Preliminary Closing Statement.

        (iii)  In the event that Buyer shall accept or shall be deemed to have
accepted the Preliminary Closing Statement as prepared and delivered by Seller,
the Preliminary Closing Statement shall constitute the Final Closing Statement
for purposes of determining Closing Net Assets and any adjustment to the
Estimated Purchase Price. In the event, however, that Buyer shall object to the
Preliminary Closing Statement within the Review Period, Buyer and Seller shall
promptly meet and in good faith attempt to resolve such objections. Any such
objections which cannot be resolved between Buyer and Seller within thirty
(30) days following Seller's receipt of Buyer's statement of objections shall be
resolved in accordance with the procedures set forth in Section 3.03(e). The
Preliminary Closing Statement, as adjusted to reflect the adjustments agreed
upon by the Parties or determined in accordance with Section 3.03(e), shall
constitute the Final Closing Statement for purposes of determining any
adjustment to the Estimated Purchase Price.

        (c)    Adjustment and Settlement of Purchase Price.    In the event that
the dollar amount of the Closing Net Assets as finally determined and set forth
on the Final Closing Statement is greater than Two Million Two Hundred Thousand
Dollars ($2,200,000), then Buyer shall pay to Seller the amount of such excess.
In the event that the dollar amount of the Closing Net Assets as finally
determined and set forth on the Final Closing Statement is less than Two Million
Two Hundred Thousand Dollars ($2,200,000), then Seller shall pay to Buyer the
amount of such deficiency. Any excess or deficiency, as the case may be, shall
be referred to as the "Adjustment." On the third Business Day following the date
upon which the Final Closing Statement as provided for in
Section 3.03(b)(iii) is determined, the Adjustment, if any, shall be paid to the
Party entitled to the Adjustment by wire transfer of immediately available
United States funds.

        (d)    Allocation of Purchase Price.    The consideration given by Buyer
under this Agreement (including without limitation the payment of the Purchase
Price and the assumption of the Assumed Liabilities) shall be allocated among
the Acquired Assets in accordance with section 1060 of the Internal Revenue Code
of 1986, and the rules and regulations promulgated thereunder. A schedule
setting forth such proposed allocations shall be prepared by Buyer and delivered
to Seller within one hundred twenty (120) days following the Closing Date. The
determination of the amount of consideration paid by Buyer, including the
Assumed Liabilities, and its allocation as set forth on such schedule shall be
reasonably determined by Buyer and shall be reasonably satisfactory to Seller.
Buyer and Seller agree to make such allocation in filing their respective tax
returns or declarations for applicable United States income tax purposes.

        (e)    Accounting Objections.    Should Seller and Buyer not be able to
resolve such objections as may be raised with respect to the Preliminary Closing
Statement or adjustments to the

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Estimated Purchase Price (collectively, the "Accounting Objections") within the
thirty (30) day period described in (b) above, either party may submit the
matter to a mutually agreed upon independent and nationally recognized
accounting firm for review and resolution, with instructions to complete the
same as promptly as practicable and to base such review and resolution on GAAP,
consistently applied, on which the Model Statement was prepared except as set
forth in the accounting procedures and the exceptions to GAAP set forth in
Schedule 5.17 of the Disclosure Schedule. The fees and costs of the accounting
firm, if one is required, shall be borne equally by Seller and Buyer.

        3.04    Assumption of Liabilities.    

        Buyer shall assume as of the Closing Date and agrees to pay, honor and
discharge in accordance with the terms thereof all of the Assumed Liabilities
(subject to any equitable rights of offset or other defenses of Buyer relating
to the Acquired Assets asserted by Buyer in good faith). The term "Assumed
Liabilities" shall mean only the following liabilities and obligations relating
to the Business or the Acquired Assets:

        (a)   Subject to Section 6.06, any and all liabilities, obligations and
commitments arising under the Designated Assigned Contracts (including
Proposals) including those related to the performance thereof whether arising
before or after the Closing Date;

        (b)   Subject to Section 6.06, any and all liabilities, obligations and
commitments arising under the Assigned Contracts other than the Designated
Assigned Contracts, but only to the extent arising after the Closing Date;

        (c)   Any and all Taxes (i) sales, use or transfer Taxes resulting from
the sale of the Acquired Assets to Buyer and (ii) any and all Taxes which may be
applicable to the Business or the Acquired Assets which relate to periods after
the Closing Date;

        (d)   Any and all liabilities, obligations and commitments specifically
undertaken by Buyer pursuant to the other terms of this Agreement;

        (e)   Any and all liabilities included on the Final Closing Statement;

        (f)    The obligation to perform the Warranty Work; and

        (g)   Liabilities arising out of Buyer's and/or its Affiliates' and/or
other Person's operation of the Business and the Acquired Assets after the
Closing Date.

        3.05    No Other Liabilities Assumed.    

        Except for the Assumed Liabilities, Buyer has not agreed to pay or
discharge, shall not be required to assume or be responsible for, and shall not
have any liability or obligation, direct or indirect, absolute or contingent, of
any nature, of Seller or any Affiliate of Seller, the assumption of which by
Buyer is not expressly provided for in this Agreement (the "Excluded
Liabilities"), including the following:

        (a)   all obligations of Seller or any Affiliate of Seller to Seller or
any Affiliate of Seller;

        (b)   all liabilities for income, franchise or similar Taxes of Seller,
for all taxable periods and all liabilities with respect to such Taxes relating
to the Business or the Acquired Assets for any period or portion thereof ending
(or deemed to end) on or before the Closing;

        (c)   all obligations, liabilities, commitments, responsibilities,
expenses or damages of any kind arising on or prior to the Closing Date relating
to the Business's employment or termination of employment of any employees,
former employees, independent contractors of the Business (but not including
Assumed Liabilities or such liabilities for which Seller has made accruals that
are reflected on the Final Closing Statement);

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        (d)   all obligations or liabilities to the extent arising, whether
before, on or after, the Closing Date, out of, or in connection with, the
Excluded Assets (but not including Assumed Liabilities or such liabilities for
which Seller has made accruals that are reflected on the Final Closing
Statement);

        (e)   except for Assumed Liabilities, all obligations or liabilities
arising out of the operation or ownership of the Business on or prior to the
Closing Date, including all expenses, liabilities, damages or obligations
arising out of or in connection with (v) all Taxes relating to the Business or
Acquired Assets for the periods preceding Closing Date, (w) product liability,
toxic tort or similar claims for personal injuries, property damage or Damages
that involve the use of any product sold or disposed of by or on behalf of
Seller or any of its Affiliates on or before the Closing Date, (x) product
liability, toxic tort or similar claims for personal injuries, property damage
or Damages that involve the use of any product manufactured, stored, packaged,
handled or transported by or on behalf of Seller arising before the Closing
Date; (y) any account payable to the extent it is not reflected in the Final
Closing Statement, or (z) any violation of applicable Laws by Seller in
connection with the ownership or operation of the Business; provided, however,
that the exclusion of such liabilities in no way limits Buyer's reimbursement
obligations under Section 9.10; or

        (f)    all liabilities, obligations and expenses (including, without
limitation, costs of assessment, investigation, testing, monitoring,
remediation, removal and cleanup, and fines, penalties, and fees) arising out of
the Weymouth Environmental Matter, subject, however, to the reimbursement
obligations of Buyer set forth under Section 9.10.

        3.06    Account Debtors/Power of Attorney.    

        With respect to all accounts receivable purchased by Buyer, Seller shall
as soon as practicable following Closing notify all account debtors that Buyer
has purchased the account receivable of such account debtor and that each
account debtor should remit payment directly to Buyer of all amounts represented
by any such account receivable. Each payment received by Buyer on any account
receivable shall be applied to the account receivable designated by the account
debtor, or if not designated, then to the oldest portion of the outstanding
balances of such account debtor until paid in full. Seller hereby waives and
forfeits all authority to grant any account debtor any waiver, discount,
indulgence or other delay in respect to any account receivable purchased by
Buyer, and after Closing Seller shall promptly remit to Buyer all funds received
from an account debtor in respect of any account receivable purchased by Buyer.
Seller hereby appoints Buyer as its attorney, with special power to endorse the
name of Seller on any checks, notes, acceptances, money orders, drafts or other
forms of payment or security that may come into Buyer's possession in connection
with any account receivable that is part of the Acquired Assets. Seller's
appointment of Buyer hereunder is an irrevocable special power of attorney
coupled with an interest for a period of two years from the date of Closing.

ARTICLE IV—BUYER'S REPRESENTATIONS AND WARRANTIES

        Buyer represents and warrants that the following are true and correct as
of the date of this Agreement and will be true as of the Closing Date:

        4.01    Organization and Good Standing.    

        Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Louisiana and is duly qualified and
licensed to do business as a foreign corporation and is in good standing in each
jurisdiction where the nature of its business makes such qualification
necessary. Buyer has all requisite corporate power and authority to acquire,
own, lease and operate the Acquired Assets and the Business, to perform its
obligations hereunder and to execute and deliver this Agreement.

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        4.02    Authorization and Validity.    

        The execution, delivery and performance of this Agreement by Buyer and
the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Buyer. This
Agreement has been duly executed and delivered by Buyer and constitutes the
legal, valid and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable principles
relating to or limiting creditor's rights generally.

        4.03    No Violation.    

        Neither the execution and performance of this Agreement nor the
consummation of the transactions contemplated will (a) result in a violation or
breach of the charter or bylaws of Buyer or result in a breach of or constitute
(with due notice or lapse of time or both) a default under, or result in the
creation or imposition of any lien, charge or encumbrance under, any indenture,
agreement or other instrument to which Buyer is a party or to which any assets
of Buyer is subject, or (b) violate any applicable Law.

        4.04    Litigation.    

        There is no legal action, suit, arbitration, governmental investigation
or other legal or administrative proceeding, nor any order, decree or judgment
in process, pending or in effect, or to the Knowledge of Buyer, threatened
against or relating to Buyer that would have a Material Adverse Effect on
Buyer's ability to perform its obligations under this Agreement, and Buyer has
no Knowledge of any basis for the same.

        4.05    Consents.    

        Except for required consents of the parties to the Assigned Contracts,
no authorization, consent, approval, permit or license of, or filing with, any
governmental or public body or authority, any lender or lessor or any other
Person is required to authorize, or is required in connection with, the
execution, delivery and performance of this Agreement on the part of Buyer.

        4.06    Finders' Fees.    

        Buyer has made no agreement with any Person nor taken any action which
would cause any Person to become entitled to agents', brokers', investment
bankers' or finders' fees in connection with the transactions contemplated
hereby.

        4.07    Governmental Approvals.    

        No authorization, consent, approval, permit or license of, or filing
with, any Governmental Entity or public body or authority is required to be
obtained by Buyer for the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.

        4.08    Condition of Acquired Assets.    

        THE BUYER HAS CAREFULLY INSPECTED THE FIXED ASSETS AND KNOWINGLY AND
VOLUNTARILY ACCEPTS THE FIXED ASSETS "AS IS" AND "WHERE IS", WITH NO
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, HAVING BEEN MADE BY OR ON BEHALF
OF THE SELLER WITH RESPECT TO THE PRESENT CONDITION OF THE FIXED ASSETS OR THE
PRESENT OR FUTURE SUITABILITY THEREOF FOR ANY INTENDED USE BY BUYER, OTHER THAN
AS SET FORTH IN ARTICLE V. BUYER HAS HAD AN OPPORTUNITY PRIOR TO EXECUTION
HEREOF TO UNDERTAKE SUCH INVESTIGATIONS OF THE ACQUIRED ASSETS AS IT DEEMED
NECESSARY OR APPROPRIATE AND TO EXAMINE AND REVIEW SUCH RECORDS, DOCUMENTS,
REPORTS AND OTHER INFORMATION OF SELLER AS IT DEEMED RELEVANT TO THE

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CONSUMMATION OF THIS AGREEMENT, EXCEPT THAT NO SUCH INVESTIGATION OR EXAMINATION
SHALL CONSTITUTE A WAIVER BY BUYER OF ITS RIGHT TO RELY ON THE TERMS AND
CONDITIONS OF THIS AGREEMENT.

ARTICLE V—SELLER'S REPRESENTATIONS AND WARRANTIES

        Seller represents and warrants that the following are true and correct
as of the date of this Agreement and will be true as of the Closing Date:

        5.01    Organization and Good Standing.    

        Seller is a corporation duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation, with all
requisite power and authority to own the Acquired Assets and carry on the
Business as it is now conducted and to own and operate the Acquired Assets and
the Business as and in the places where the Business is now conducted and such
Acquired Assets are now owned, located or operated. Seller is duly qualified and
licensed to do business and is in good standing in each jurisdiction where the
nature of the Business makes such qualification necessary. Each such
jurisdiction is listed in Schedule 5.01(a) of the Disclosure Schedule. Seller
has all necessary Permits to own and operate the Acquired Assets and to carry on
the Business as presently conducted. Each Permit required to operate the
Facility at Weymouth, Massachusetts is described in Schedule 5.01(b) of the
Disclosure Schedule.

        5.02    Authorization and Validity.    

        The execution, delivery and performance of this Agreement by Seller, and
the consummation of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on the part of Seller. This
Agreement has been duly executed and delivered by Seller and constitutes the
legal, valid and binding obligation of Seller, enforceable against Seller in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar Laws and equitable principles
relating to or limiting creditor's rights generally.

        5.03    Employee Benefit Plans.    

        Except as set forth in Schedule 5.03 of the Disclosure Schedule:

        (a)   To Seller's Knowledge, all of Seller's employee benefit plans that
cover or have covered employees of the Business comply and have been
administered in form and in operation in all material respects with all
applicable requirements of Law;

        (b)   To Seller's Knowledge, no event has occurred which will or could
cause any such benefit plan to fail to comply with such requirements and no
notice has been issued by any Governmental Entity questioning or challenging
such compliance;

        (c)   There have been no acts or omissions by Seller which have given
rise to or may give rise to fines, penalties, Taxes or related changes under
ERISA or the Internal Revenue Code of 1986, as amended, for which Buyer could be
liable;

        (d)   As a result of the sale of Acquired Assets contemplated herein,
Buyer will not become a successor-in-interest to any employment agreements or
Seller's Employee Benefit Plans. Buyer will not incur any funding, record
keeping, run-off claim or other liabilities or obligations associated with
Seller's Employee Benefit Plans now or at any time in the future.

        5.04    Absence of Certain Changes.    

        Except as set forth in Schedule 5.04 of the Disclosure Schedule, since
January 1, 2002 (i) there has been no Material Adverse Change in the Business or
the Acquired Assets; and (ii) there have been no dispositions or acquisitions of
capital assets over $100,000, except in the Ordinary Course of Business.

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        5.05    Title.    

        Except as set forth in Schedule 5.05 of the Disclosure Schedule and
except for Permitted Liens, Seller owns good and marketable title to, or has a
valid leasehold interest in or holds a valid right under contract or agreement
to use, all Acquired Assets and such property is owned, leased or so held free
and clear of any and all liens, security interests, mortgages, claims,
encumbrances or other interests (the "Liens"). Schedule 5.05 of the Disclosure
Schedule lists all Liens against the Acquired Assets other than the Permitted
Liens.

        5.06    Intellectual Property.    

        (a)    Scheduled Intellectual Property.    Schedules 5.06(a)(i) and
5.06(a)(ii) of the Disclosure Schedule set forth an accurate and complete list
of all (both foreign and domestic) of the following assets of the Business
(whether owned jointly or exclusively) (collectively, the Scheduled Intellectual
Property"). Scheduled Intellectual Property includes the following items:

          (i)  Seller's patents and pending patent applications (including any
extensions, continuations, renewals, divisions, reexaminations or reissues
thereof), including the name of the Person which owns each patent or has filed
such pending patent application. To the extent in Seller's custody or control,
Seller agrees to furnish Buyer with the original Letters Patent or other
original Patent Certificate documents for all patents. To the extent in Seller's
custody or control, Seller agrees to furnish Buyer with true, correct and
complete copies of the files for each patent and pending patent application.

         (ii)  Seller's trade names, registered and unregistered trademarks and
service marks (including any renewals thereof), trademark registration
applications, service mark registration applications, and Internet domain names.
To the extent in Seller's custody or control, Seller agrees to furnish Buyer
with the original United States or foreign registration documents for each
registered trademark and the true, correct and complete copies of the files for
each trademark and pending trademark application.

        (iii)  Seller's records of invention for all potential patent
applications that have not been filed to date. Seller agrees to furnish Buyer
with true, correct and complete copies of the files for each record of
invention.

        (iv)  Except as set forth in Schedule 5.06(a)(iv) to the Disclosure
Schedule, Seller has paid all maintenance, renewal, or similar fees required by
the applicable Governmental Entities to maintain the Scheduled Intellectual
Property. Except as set forth in Schedule 5.06 (a)(iv) to the Disclosure
Schedule, Seller has filed responses to all actions from applicable Governmental
Entities that have become due relating to the Scheduled Intellectual Property,
both foreign and domestic, and has paid all costs and charges, and taken all
acts relating to such actions, including without limitation, payment of
attorney's fees necessary to maintain such patent, trademark registration,
service mark registration, or copyright registration in force.

         (v)  Except as otherwise specified in Schedule 5.06(a)(v) Seller is the
sole owner of the Scheduled Intellectual Property within the United States or
the country of registration, and is listed in the records of the appropriate
government entity as the sole owner of record for each such application, patent
and registration, in connection with the goods or services offered by the
Business, free and clear of Liens. Seller agrees to cooperate with and assist
Buyer, at no cost to Seller and including periods following the Closing (if
necessary) to complete all recordations necessary to effect a transfer of record
title to such items to Buyer.

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        (b)    Owned Intellectual Property.    

          (i)  "Owned Intellectual Property" means (i) the Scheduled
Intellectual Property, (ii) all Seller's rights, if any, with respect to owned
unregistered copyrights (in both published and unpublished works), owned trade
secrets, and owned proprietary information of the Business (whether owned
jointly or exclusively) which relates to categories (1) through (14) listed in
the "Intellectual Property" definition in Article I.

         (ii)  Except as set forth in Schedule 5.06(b)(ii), Seller makes the
following warranties and representations with respect to the Owned Intellectual
Property (or solely with respect to the Scheduled Intellectual Property where so
indicated):

        (A)  No written claim or demand has been asserted or any proceeding
instituted by a third party, including without limitation any opposition
proceeding in any foreign or domestic patent office, copyright office, or
trademark or service mark registration office, which challenges any right, title
or interest of Seller or Affiliates in any of the Owned Intellectual Property,
nor, to Seller's Knowledge, is there any basis upon which any such claim or
challenge could be made.

        (B)  Seller is not obligated to and does not pay royalties or other fees
to anyone for Seller's ownership, use, license or transfer of any of the Owned
Intellectual Property.

        (C)  Seller has no Knowledge that any Person or Governmental Entity is
infringing or has misappropriated any Owned Intellectual Property.

        (D)  Seller warrants that it is the owner, or joint owner where such
joint ownership is set forth in the relevant schedules, of the particular item
of Scheduled Intellectual Property.

        (E)  Seller warrants that with respect to each patent, trademark,
copyright, or other statutory protection, or applications therefore, Seller has,
to Seller's Knowledge, met its duties of disclosure and candor with respect to
all such applications.

        (F)  Seller warrants that with respect to patent, trademark and
copyright and to each issued patent, trademark registration, or copyright
registration that, to Seller's Knowledge, Seller warrants that the item is
valid, enforceable, subsisting, in full force and effect, and has not been
canceled, expired or abandoned, and Seller has no Knowledge of any basis for
challenging the validity and/or enforceability of the item.

        (G)  Except as set forth in Schedule 5.06(a)(v), Seller has good
marketable and exclusive title to, and the valid and enforceable power and
unqualified right to use the Scheduled Intellectual Property free and clear of
Liens and no Person other than Seller has any right or interest of any kind or
nature in or with respect to the Scheduled Intellectual Property or any portion
thereof or any rights to use, market or exploit the Scheduled Intellectual
Property or any portion thereof other than pursuant to agreements entered into
in the ordinary course of business.

        (c)    Licensed Intellectual Property.    Included in the schedule of
Assigned Contracts (Schedule 5.14) is an accurate and complete list of all
unexpired licenses or other written agreements to be assigned to Buyer at
Closing (the "Licensed Intellectual Property") under which Seller (i) is granted
Intellectual Property rights by others or (ii) has granted to others rights in
any Intellectual Property. Except as set forth in Schedule 5.06(c) to the
Disclosure Schedule, none of such licenses is or will on the Closing Date be
subject to termination or cancellation or change in terms or provisions of such
license as a consequence of this Agreement or consummation of the transactions
provided for herein. Except as set forth in Schedule 5.06(c) to the Disclosure

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Schedule, Seller has not granted any Person or Governmental Entity the right to
sublicense or generally distribute any Intellectual Property.

        (d)    Patent, Trademark, Service Mark, and Copyright
Infringement.    Except as set forth in Schedule 5.06(d) to the Disclosure
Schedule, Seller represents and warrants that (i) there are no pending claims or
demands against Seller for infringement or misappropriation of any patent,
trademark, tradename, service mark, copyright, trade secrets, technology or
other proprietary rights of any other person in connection with the Business;
and (ii) to Seller's Knowledge the present conduct of the Business does not
infringe and is not subject to any claim of infringement or misappropriation of
any patent, trademark, trade name, service mark, copyright, or trade secrets and
technology or other proprietary right of any other person; and (iii) Seller has
no Knowledge of facts or circumstances that Seller expects to give rise to any
lawsuit, claim, or proceeding for infringement or misappropriation of a patent,
trademark, trade name, service mark, copyright, trade secret or similar
proprietary right.

        5.07    No Violation.    

        Except as set forth in Schedule 5.07 of the Disclosure Schedule, neither
the execution and performance of this Agreement nor the consummation of the
transactions contemplated hereby will (a) result in a violation or breach of the
charter or bylaws of Seller or any indenture, agreement or other instrument to
which Seller is a party or by which Seller or the Acquired Assets are bound, or
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under, or result in the creation or imposition of any
Lien, charge or encumbrance pursuant to, any such indenture, agreement or
instrument, or (b) violate any applicable Law or regulation or any judgment or
order of any court or Governmental Entity, except where such violation, breach,
conflict, or default would not individually or in the aggregate, have a Material
Adverse Effect on the Acquired Assets or the Business taken as a whole or on the
ability of the Parties to consummate the transactions contemplated by this
Agreement.

        5.08    Taxes.    

        Except as set forth in Schedule 5.08 of Sellers Disclosure Schedule:

        (a)   there is no lien for Taxes (other than any lien for current Taxes
not yet due and payable) on any of the Acquired Assets;

        (b)   Seller has withheld and paid or properly deposited all Taxes
required by Law to be withheld and paid or deposited in connection with amounts
paid or owed to any employee or independent contractor to the Business;

        (c)   all Taxes of any type arising from or applicable allocable to the
operation of the Business have been paid or shown as liabilities on the Final
Closing Statement; and

        (d)   all federal, state, local and foreign income, corporation and
other tax returns relating to the Business have been filed for Seller and all
other filings in respect of Taxes relating to the Business have been made by
Seller (or will be filed or made prior to the due dates therefore) for all
periods through and including the Closing Date as required by applicable Law.
All Taxes shown as due on all such tax returns and other filings have been paid
(or will be paid prior to the due dates therefore). Each such tax return and
filing is accurate and complete and Seller does not and will not have any
additional liability for Taxes with respect to any tax return or other filing
heretofore filed or which was required by Law to be filed and which related to
the Business, other than as reflected as liabilities on the Financial
Statements.

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        5.09    Government Approvals.    

        Except as set forth in Schedule 5.09 of the Disclosure Schedule, no
authorization, consent, approval, Permit or license of, or filing with, any
Governmental Entity in the United States or public body or authority is required
to be obtained by Seller for the execution and delivery of this Agreement or the
consummation by Seller of the transactions contemplated hereby.

        5.10    Labor Relations.    

        Except as set forth in Schedule 5.10 of the Disclosure Schedule, Seller
has not experienced within the last two years and is not experiencing as of the
date of this Agreement any labor disputes, including strikes, work stoppages,
slowdowns or other material interference with or impairment of the Business by
labor, nor has Seller received in the year prior to the date of this Agreement
any written complaints of any unfair labor practice with regard to the employees
of the Business. To Seller's Knowledge, there are no current or contemplated
union organization efforts or negotiations, or requests for negotiations,
representation or any labor contract relating to the employees of the Business.
Seller is not a party to a collective bargaining agreement that relates
primarily to the Business or covers Affected Employees.

        5.11    Compliance with Laws.    

        Except as described in Schedule 5.11 of the Disclosure Schedule, to the
Knowledge of Seller, Seller has at all times operated the Business in compliance
with applicable Laws and there are no past or existing violations by Seller of
any applicable federal, state or local law or regulation that would reasonably
likely have a Material Adverse Effect on the Business or the Acquired Assets.

        5.12    Litigation.    

        Except as described in Schedule 5.12(a) of the Disclosure Schedule,
Seller is not a party to any legal action or administrative proceeding or, to
the Knowledge of Seller, is any such action or proceeding threatened which could
have a Material Adverse Effect on the Business or the Acquired Assets. Except as
disclosed in Schedule 5.12(b) of the Disclosure Schedule, Seller is not
(a) subject to any continuing court or administrative order, writ, injunction or
decree applicable specifically to the Business, Acquired Assets or employees of
the Business, or (b) in default with respect to any such order, writ, injunction
or decree. Schedule 5.12(c) of the Disclosure Schedule sets forth all litigation
pending as of the date of this Agreement with regard to the Business asserting
damages, claims or losses in excess of $100,000.

        5.13    Employees.    

        Set forth in Schedule 5.13(a) of the Disclosure Schedule is a list of
all employees of the Business ("Affected Employees") as of April 2, 2003,
showing such employees' positions, employment date and service date. Since
April 2, 2003, except as set forth in Schedule 5.13(b) of the Disclosure
Schedule, Seller has not granted or become obligated to grant any increases in
the wages or salary of, or paid or become obligated to pay any such increases
(except in the Ordinary Course of Business). Except as set forth in
Schedule 5.13 of the Disclosure Schedule, Seller has at all times conducted the
Business in compliance with all Laws relating to employment and employment
practices, terms, and conditions of employment, wages and hours and
nondiscrimination in employment. Except as provided in Schedule 5.13 of the
Disclosure Schedule, the consummation of the transactions contemplated by this
Agreement will not (i) entitle any individual to severance pay, (ii) accelerate
the time of payment or vesting of, or increase the amount of, compensation due
to any individual; or (iii) result in the payment of any amount that will be an
"excess parachute payment" as defined in the Internal Revenue Code of 1986, as
amended. Except as set forth in Schedule 5.13 of the Disclosure Schedule, Seller
requires its employees to execute written agreements that include a provision
requiring all inventions made by employees to be assigned to Seller.

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        5.14    Assigned Contracts.    

        Set forth in Schedule 5.14 of the Disclosure Schedule is a complete list
of the Assigned Contracts (excluding Proposals in amounts of $150,000 or less),
including material amendments and modifications thereto. Except for Proposals,
and except as set forth in Schedule 5.14 of the Disclosure Schedule:

        (a)   each such Assigned Contract is valid and enforceable in accordance
with its terms;

        (b)   to the Knowledge of Seller, there are no threatened cancellations
thereof nor outstanding disputes thereunder;

        (c)   Seller is not currently in default and no event has occurred
(including the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby) which, with the giving of notice or the
passage of time or both, would constitute a default by Seller under any such
Assigned Contract;

        (d)   to the Knowledge of Seller, no other Party to any of the Assigned
Contracts is in default and no event has occurred (including the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby) which, with the giving of notice or the passage of time or both, would
constitute a default by any Party under any such Assigned Contract;

        (e)   no consent of any third party is required under any of the
Assigned Contracts for the consummation of the transactions contemplated hereby;

        (f)    after the Closing, no Assigned Contract will be cancelable by the
other party due to the consummation of the transactions contemplated hereby; and

        (g)   except as will be accrued for on the Final Closing Statement, in
respect of each Assigned Contract which requires Seller to pay a percentage of
royalties received by Seller therewith to the other party(s) to such Assigned
Contract, all such amounts have been paid to such other party(s) in connection
therewith and Seller has not received any royalties for which any amounts are
due and outstanding to such other party(s).

        Except as set forth in Schedule 5.14 of the Disclosure Schedule, Seller
is not a party to any material contract, agreement or arrangement (oral or
written) which primarily relate to the Business other than the Assigned
Contracts and the Excluded Assets. Except as set forth on Schedule 5.14, Seller
has made available to Buyer (i) true and complete copies of the Assigned
Contracts, as amended, and (ii) a written description of each oral arrangement
listed in Schedule 5.14 of the Disclosure Schedule.

        5.15    Accounts Receivable.    

        All accounts receivable are valid and legally binding obligations of the
Persons obligated to pay such accounts receivable and, to Seller's Knowledge,
will be subject to no counterclaim or set-off, and to Seller's Knowledge, all
such receivables will be good and collectible in the Ordinary Course of
Business, except (a) for unbilled receivables, which to Seller's Knowledge will
be collectible when billed, (b) to the extent of the reserve for uncollectible
accounts and the amount of unearned revenue provided for in the Final Closing
Statement, or (c) as otherwise disclosed in Schedule 5.15 of the Disclosure
Schedule

        5.16    Finders' Fees.    

        Except as set forth in Schedule 5.16 of the Disclosure Schedule, Seller
has made no agreement with any Person nor taken any action which would cause any
Person to become entitled to agents', brokers', investment bankers' or finders'
fees in connection with the transactions contemplated hereby.

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        5.17    Financial Statements.    

        Schedule 5.17 of the Disclosure Schedule sets forth an unauditied
Statement of Assets and Liabilities of the Business as of November 30, 2001,
which was prepared internally by Seller, and an unaudited Statement of Revenues
and Expenses for the Business for the twelve (12) months ending on December 31,
2002, which was prepared internally by Seller (the "Financial Statements").
Except as set forth in Schedule 5.17 of the Disclosure Schedule, and except that
the interim financial statements are subject to normal year-end adjustments, the
Financial Statements were prepared in accordance with GAAP consistently applied
during such periods, and fairly present in all material respects, the assets,
liabilities, revenue and expenses of the Business as of the respective dates and
for the respective periods indicated.

        Seller represents that it does not have any liabilities with respect to
the Business, except (i) liabilities reflected or reserved against in the
Financial Statements or described in the footnotes thereto; (ii) liabilities
incurred after the date of the "Statement of Assets and Liabilities";
(iii) liabilities set forth on the Disclosure Schedule; (iv) Excluded
Liabilities; (v) liabilities and obligations with respect to the Acquired
Assets; and (vi) Assumed Liabilities.

        5.18    All Material Assets of the Business.    

        Except for the Excluded Assets, and except as set forth in Schedule 5.18
of the Disclosure Schedule, Buyer is acquiring hereunder all the assets used by
Seller in the Business as it is conducted by Seller as of the date of this
Agreement in the Ordinary Course of Business, except for tangible assets of
Seller or Seller's Affiliates that are not situated in either Cambridge or
Weymouth, Massachusetts, or that are not primarily used in the operation of the
Business.

        5.19    Condition of Acquired Assets.    

        Except as disclosed in Schedule 5.19 of the Disclosure Schedule, to the
Knowledge of Seller, there are no defects in or concerning the Acquired Assets
or the equipment or the tangible personal property occupied, operated or owned
by Seller as a part of the Business which, individually or in the aggregate,
would reasonably be expected to result in a Material Adverse Effect. Except as
set forth in Schedule 5.19 of the Disclosure Schedule, all of the Facilities and
Fixed Assets have been maintained in accordance with good industry practice and
are in good operating condition and repair, ordinary wear and tear excepted, and
are suitable for the uses for which such Facilities and Fixed Assets are being
employed as of the date of this Agreement. THE FACILITIES AND FIXED ASSETS ARE
CONVEYED TO BUYER "AS IS" AND "WHERE IS," WITH NO REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, HAVING BEEN MADE BY OR ON BEHALF OF THE SELLER WITH RESPECT
TO THEIR PRESENT CONDITION OR THE PRESENT OR FUTURE SUITABILITY THEREOF FOR ANY
INTENDED USE BY THE BUYER, OTHER THAN AS SET FORTH IN THIS ARTICLE V.

        5.20    Business Operations.    

        Except as set forth on Schedule 5.20 of Disclosure Schedule, since
December 31, 2001, Seller has conducted the Business only in the Ordinary Course
of Business and used commercially reasonable efforts to preserve intact the
Business and the goodwill of its employees, customers and suppliers. Since
December 31, 2001, except as set forth on Schedule 5.20 of the Disclosure
Schedule (a) Seller has not taken any action that will have a Material Adverse
Effect on the Business, (b) except pursuant to contracts or plans in existence
as of such date and except for normal annual salary increases consistent with
past practices, no increases were made in the compensation or rate of
compensation payable or to become payable to the employees of the Business,
(c) no bonus, profit sharing, retirement, insurance, death benefits, fringe
benefit or other extraordinary or indirect compensation has accrued, been set
aside or paid to, for or on behalf of any officers or employees, other than
pursuant to the terms of Seller's Employee Benefit Plans as presently
constituted, (d) no employment or benefit related

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agreement or plan other than those then in effect were committed for or adopted,
and (e) Seller has not waived any material right or cancelled any material
contract or claim related to the Business.

        5.21    Real Estate Leases.    

        Except as set forth in Schedule 5.21 of the Disclosure Schedule:

        (a)   Seller has a good and valid leasehold estate to the Facilities, in
each case, free and clear of all Liens, other than Permitted Liens.

        (b)   Except as otherwise provided under the Leases, or except for
common law rights such as rights of reversion, no Person, other than Seller
prior to the Closing and Buyer after the Closing, has any right to occupy or
possess any portion of the Facilities.

        (c)   Seller is not a party to or obligated under any option, right of
first refusal or other contractual right to sell, dispose of or lease any of the
Facilities or any portion thereof or interest therein to any person or entity
other than Buyer.

        (d)   There is no contract or agreement to which Seller is a party,
other than the Assigned Contracts, affecting any of the Facilities for which
Buyer will be responsible or liable after Closing, or which are not terminable
on thirty (30) days' notice without premium or penalty.

        (e)   Seller has not received any written notice of any pending,
threatened or contemplated condemnation proceeding affecting the Facilities or
any part thereof in lieu of condemnation.

        (f)    Seller has not received any written notices from any Governmental
Entity stating or alleging that any improvements on the Facilities have not been
constructed in compliance with Law or are being operated in violation of
applicable zoning and/or real property law.

        (g)   No written notice has been received by Seller from any
Governmental Entity requiring or advising as to the need for any repair,
alteration, restoration or improvement in connection with the Facilities.

        (h)   With respect to the Leases:

          (i)  the Leases are in full force and effect and Seller has not
received any notice, written or otherwise, that any default, or condition which
with the passage of time would constitute a default, exists under the Leases,
except such notices as to which the alleged defaults have been cured or
otherwise resolved;

         (ii)  true and complete copies of the Leases have been made available
to the Buyer prior to the date hereof and such Leases have not been amended or
modified since that date;

        (iii)  Seller has non-disturbance agreements with the landlord's lender
with respect to each Lease; and

        (iv)  neither of the Leases has been pledged by Seller nor is any of the
Facilities subject to any Lien (other than the Permitted Liens).

        5.22    No Springing Liens.    

        Except (i) as provided in Schedule 5.22 to the Disclosure Schedule,
(ii) for Permitted Liens, and (iii) for Assumed Liabilities, Seller does not
have any debt, liability or obligation of any nature, whether accrued, absolute,
contingent or otherwise, and whether due or to become due, which if not paid and
satisfied at or prior to the Closing Date would create or result in a Lien on
any or all of the Acquired Assets or for which Buyer would become liable.

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        5.23    Customers.    

        Schedule 5.23 to the Disclosure Schedule sets forth a list of the ten
largest customers of the Business based on revenues during the twelve months
ended November 30, 2001 and for the nine (9) month period ending September 30,
2002, showing the approximate total revenues received from each such customer
during such periods. Except as described in Schedule 5.23 during the twelve
(12) month period immediately preceding the Closing Date, there has not been any
Material Adverse Change in the business relationship between Seller and any
customer named on Schedule 5.23. Except as set forth in Schedule 5.23 to the
Disclosure Schedule, no customer or group of customers that individually or
taken together accounted for 5% or more of the aggregate revenues of the
Business for the three months ended December 31, 2001, has terminated or, to the
Knowledge of Seller, threatened to terminate its relationship with the Business.

        5.24    Insurance Policies.    

        Schedule 5.24 of the Disclosure Schedule lists all current insurance
policies or binders maintained on behalf of Seller pertaining to the Business,
showing the (i) holder of the policy, (ii) name of the carrier, (iii) the policy
number, (iv) the nature of the coverage afforded and whether on a "claims made"
or "occurrence" policy form, (v) amount of coverage and (vi) expiration date.
Except as set forth in Schedule 5.24 of the Disclosure Schedule, all of the
insurance policies and binders are valid, enforceable and in full force and
effect.

        5.25    Certain Business Practices.    

        With respect to the Business, neither Seller nor any director, officer,
employee or agent of Seller has (i) used any funds for unlawful contributions,
gifts, entertainment or other unlawful payments relating to political activity,
(ii) made any unlawful payment to any foreign or domestic governmental official
or employee or to any foreign or domestic political party or campaign or
violated any provision of the Foreign Corrupt Practices Act of 1977, as amended,
(iii) consummated any transaction, made any payment, entered into any agreement
or arrangement or taken any other action in violation of the Law, or (iv) made
any other unlawful payment, except for any such matters that could not
reasonably be expected to (individually or in the aggregate) have a Material
Adverse Effect on the Business.

        5.26    Environmental Matters.    

        Except as provided in Schedule 5.26 of the Disclosure Schedule:

        (a)   Except as, individually or in the aggregate, has not had and would
not reasonably be expected to result in a Material Adverse Effect, Seller has
operated the Business in compliance with all Environmental Laws, which
compliance includes (i) the possession of all Permits required under applicable
Environmental Laws and compliance with the terms and conditions thereof and
(ii) public or employee health and safety requirements or notifications under
any Environmental Laws. Seller has not received any written communication,
whether from a Governmental Entity or employee that alleges that the Business is
not in compliance with Environmental Laws, and to Seller's Knowledge no event
has occurred that will result in a violation of Environmental Laws in the
future.

        (b)   There is no investigation, inspection or citation pending against
the Business under any Environmental Law.

        (c)   Without in any way limiting the generality of the foregoing, to
Seller's Knowledge:

          (i)  all underground storage tanks (if any), and the capacity and
contents of such tanks, located on or at the Facilities are identified in
Schedule 5.26 of the Disclosure Schedule,

         (ii)  there is no asbestos contained in or forming part of any
building, building component, structure or office or lab space on the
Facilities, that requires abatement or

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removal and, to Seller's Knowledge, there is no other form of asbestos contained
in or forming part of any building, building component, structure or office
space on the Facilities,

        (iii)  no polychlorinated biphenyls ("PCBs") or PCB-containing items are
used or stored at or on the Facilities,

        (iv)  there has been no release at or from any off-site locations at or
to which storage, disposal or arrangement for the disposal of any Hazardous
Materials has been made, sent or deposited from, for or relating to the Business
(whether owned or operated by Seller or any of its Affiliates or any of their
respective predecessors),

         (v)  there has been no release of Hazardous Materials at or from any
on-site locations at or to which storage, disposal or arrangement for the
disposal of any Hazardous Materials has been made, sent or deposited from, for
or relating to the Business (whether owned or operated by Seller or any of its
Affiliates or any of their respective predecessors) and

        (vi)  all on-site and off-site locations where Seller has stored,
disposed or arranged for the disposal of Hazardous Materials from or relating to
the Business are identified in Schedule 5.26 of the Disclosure Schedule.

        (d)   Seller has made available to Buyer all assessments, reports, data,
results of investigations or audits, and other written information that
(i) concerns the compliance (or noncompliance) of the Business under any
Environmental Laws, including any releases or threatened releases of Hazardous
Materials in connection with the Business (whether owned or operated by Seller
or any of its Affiliates or any of their respective predecessors); and (ii) is
either (A) in the possession of Seller or (B) to the Knowledge of Seller, is
reasonably available to Seller or an Affiliate of Seller, and may be disclosed
to Buyer without causing any liability to Seller or its Affiliates.

        (e)   Neither Seller nor any of its Affiliates is required by virtue of
the transactions set forth herein and contemplated hereby, or as a condition to
the effectiveness of any transactions contemplated hereby, (i) to perform a site
assessment for Hazardous Materials, (ii) to remove or remediate any Hazardous
Materials, (iii) to give notice to or receive approval from any Governmental
Entity relating to or required by Environmental Laws, or (iv) to record or
deliver to any Person any disclosure document or statement pertaining to
environmental matters.

        5.27    Product Warranties; Performance Guaranties.    

        Except as set forth in Schedule 5.27 of the Disclosure Schedule, Seller
has no Knowledge of any claim against or liability of Seller (or any predecessor
of Seller) in respect of Warranty Work or any basis for any such claim on
account thereof. Schedule 5.27 of the Disclosure Schedule sets forth a summary
of all Warranty Work performed and performance guaranties paid by Seller with
respect to the Business within the past two (2) years.

        5.28    Full Disclosure.    

        No representation or warranty of Seller in this Agreement contains any
untrue statement of a material fact or omits to state any material fact which
makes any such representation or warranty misleading.

        5.29    Confidential Information.    

        Seller takes reasonable measures to protect the confidentiality of its
material trade secrets, know-how or other confidential information, including
requiring employees, independent contractors and licensees having access thereto
to execute written non-disclosure agreements that adequately protect Seller's
proprietary interests in and to such trade secrets, know-how and other
confidential information, except as set forth in Schedule 5.29 of the Disclosure
Schedule.

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ARTICLE VI—COVENANTS; THIRD PARTY CONSENTS; EQUITABLY ASSIGNED CONTRACTS

        Buyer and Seller covenant and agree as follows:

        6.01    Retention of Records, Cooperation and Access.    

        (a)   If the Closing occurs, Buyer shall retain all original books and
records of the Business that Buyer receives from Seller. After the Closing,
Seller and its representatives shall have reasonable access to such books and
records during normal business hours. In addition, Seller shall have the right
to make abstracts or copies of any such books or records at its expense. If
Buyer intends to dispose of any original documents within six years of the
Closing, it shall give Seller notice of such intention. Seller shall have ninety
(90) days from receipt of notice either to advise Buyer that it does not desire
to have original documents or to collect such documents from Buyer at Seller's
sole cost and expense.

        (b)   Buyer shall use reasonable commercial efforts to cooperate with
Seller's representatives and agents in prosecuting or defending any legal or
administrative proceeding not transferred to or assumed by Buyer pursuant
hereto. Cooperation as it relates to such matters shall include, but not be
limited to, causing Buyer's employees to furnish documents in Buyer's possession
as requested and requiring its employees to testify as witnesses, appear for
depositions and take other similar actions as Seller may reasonably request.
Seller shall, at Buyer's request, either advance to Buyer or reimburse Buyer for
Buyer's out-of-pocket costs and expenses incurred with respect to the foregoing.

        6.02    Timely Payment and Performance of Assumed Liabilities.    

        Buyer agrees to pay, perform and discharge each and every Assumed
Liability in due course and in accordance with the terms thereof, subject to any
equitable rights of offset or other defenses arising out of the Acquired Assets
asserted by Buyer in good faith, provided that Buyer shall agree to indemnify
Seller for damages caused by Buyer's failure to perform Assumed Liabilities for
which Buyer asserts a defense or offset.

        6.03    Warranty Work.    

        Buyer shall perform all service, repair, replacement and similar work
required under Seller's warranties under the Designated Assigned Contracts
("Warranty Work"), in a workmanlike manner and consistent with Seller's past
practices.

        6.04    Employment and Benefits.    

        (a)   Buyer agrees that an offer of employment will be made to certain
of Seller's active Affected Employees working for the Business on the Closing
Date and has provided a true and correct list of Affected Employees to whom
offers of employment will be made by Buyer as Schedule 6.04; provided that Buyer
reserves the right to add or delete Affected Employees from Schedule 6.04 prior
to Closing if (i) it determines in good faith that it is in Buyer's best
interest to do so; and (ii) Buyer so advises Seller and provides a copy of the
amended Schedule 6.04 at least 5 days prior to Closing. In no event shall Buyer
fail to make employment offers to a sufficient number of Affected Employees
where such failure would trigger liability under WARN. The Buyer shall not, at
any time prior to 180 days after the Closing Date, effectuate a "plant closing"
or "mass layoff" as those terms are defined in WARN affecting in whole or in
part any facility, site of employment, operating unit or employee of the
Business without complying fully with the requirements of WARN. Provided Seller
has complied with the terms of this Agreement, Buyer agrees to indemnify, defend
and hold Seller harmless from and against all claims, losses, fines, judgments
and expenses (including attorneys' fees) under WARN resulting from Buyer's
failure to make offers of employment to Affected Employees in accordance with
this Agreement.

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        (b)   Except with Buyer's prior written consent or in accordance with
contracts or plans in existence as of the date of this Agreement, Seller:
(i) shall take all reasonable steps, after consultation with Buyer, to preserve
and retain employees identified on Schedule 6.04, but Seller shall not be
required to increase an employee's compensation or benefits to retain such
employee; (ii) except for cause after informing Buyer, shall not discharge any
of such employees; and (iii) shall not seek to retain, employ or engage any of
such employees who are sought to be employed by Buyer. Seller shall not increase
the compensation or rate of compensation payable or to become payable to the
employees of the Business; no bonus, profit sharing, retirement, insurance,
death benefits, fringe benefit or other extraordinary or indirect compensation
will accrue, be set aside or be paid to, for or on behalf of any employees of
the Business other than under the terms of Seller's Employee Benefit Plans as
presently constituted; and no employment or benefit related agreement or plan
other than those now in effect will be committed for or adopted.

        (c)   Buyer, in its sole discretion, but subject to the requirements of
paragraph (a) of this Section 6.04, shall determine the Affected Employees, if
any, that Buyer desires to hire and, on or prior to the Closing Date and
effective as of the Closing Date, shall make offers of employment to those
Affected Employees on Schedule 6.04 at a rate of compensation no less favorable
than his or her hourly or monthly rate in effect on the Closing Date together
with employee benefits generally available to Buyer's other employees with
comparable years of service and rates of pay. Seller shall not take any actions
that dissuade any such employee from accepting any such offer and shall release
and terminate at Closing the Affected Employees identified on Schedule 6.04.
Each such Affected Employee who accepts any such offer of employment shall be
referred to herein as a "Hired Employee."

        (d)   With respect to all Affected Employees (including Hired
Employees), Seller shall be responsible for and shall timely pay, on or prior to
the Closing Date or otherwise in the Ordinary Course of Business for such
payments, all wages, bonuses, vacation pay, pay for other compensated absences
and other remuneration (including mandatory or discretionary benefits) earned or
accrued by such employees as of 12:01 a.m. eastern standard time on the Closing
Date, including any related payroll deductions (such as FICA and any pension or
other employee benefit plan contributions and employment Taxes) with respect
thereto, regardless of whether such amounts have been accrued on the books of
Seller as of 12:01 eastern standard time on the Closing Date.

        (e)   Seller shall have liability for and shall timely pay all severance
payments (if any) due to any of the Affected Employees (including any Hired
Employee) as a result of the termination of their employment with Seller.

        (f)    Seller shall give notice to Affected Employees of Seller who are
covered under Seller's medical plans as of the Closing Date who do not accept
offers of employment from Buyer as of the Closing (the "Terminated Employees")
and their dependents who are qualified beneficiaries, as defined in
Section 4980B(g)(1) of the Code ("Qualified Beneficiaries of Terminated
Employees") of Seller's group health plans, as such term is defined by the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), of their
rights to continuation coverage in accordance with COBRA. Seller shall be
responsible for complying with the requirements of COBRA with respect to such
Terminated Employees and the Qualified Beneficiaries of Terminated Employees and
Seller's group health plans. Seller hereby agrees to indemnify and hold harmless
Buyer against any and all losses which Buyer may incur with respect to any of
the foregoing in this paragraph.

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        6.05    [Reserved.]    

        6.06    Third Party Consents; Equitably Assigned Contracts.    

        (a)   Prior to execution of this Agreement, Seller and Buyer have
commenced efforts to obtain as promptly as practicable the Consents in a manner
that will avoid any default, conflict or termination of rights under such
contracts, and the Parties agree to continue to use all commercially reasonable
efforts to obtain such Consents as promptly as practicable. Notwithstanding
anything to the contrary in this Agreement, nothing in this Section 6.06 shall
require either Party to expend any material sum, make a material financial
commitment or grant or agree to any material concession to any third Person to
obtain any such consent.

        (b)   If any Consents (other than Necessary Consents), shall not have
been obtained prior to the Closing Date, then as of the Closing, this Agreement,
if permitted by Law as determined by the Parties and their respective counsel,
shall constitute full and equitable assignment and transfer by Seller to Buyer
of all of Seller's right, title and interest in and to, and all of Seller's
liabilities under those contracts (the "Equitably Assigned Contracts"). At
Closing, Buyer shall establish a lock box in accordance with subparagraph
(d) below and to the extent payments are due or subsequently become due Seller
under such contracts, Seller shall notify the account debtors under such
contracts to remit all future payments (following Closing) to such lock box.
Additionally, Seller shall remit any payments with respect to such contracts
which Seller receives after Closing to such lock box. With respect to any such
royalties or other sums received by Seller following Closing, Seller shall be
deemed Buyer's agent for collection purposes only and Seller agrees to promptly
remit to Buyer, via the lock box, without deduction or offset, all such
royalties and other sums received by Seller in respect of such Equitably
Assigned Contracts. Buyer shall be deemed Seller's agent for performing such
Equitably Assigned Contracts and completing, fulfilling and discharging all of
Seller's liabilities under any such Equitably Assigned Contract. The Parties
shall take all commercially reasonable steps and actions to provide Buyer with
the benefits of such Equitably Assigned Contracts and to relieve Seller of the
performance and other liabilities thereunder, including entry into subcontracts
for the performance thereof. Buyer agrees to pay, perform and discharge, and
indemnify Seller against and hold Seller harmless from, all liabilities of
Seller relating to such performance or failure to perform under such Equitably
Assigned Contracts, including any related guarantees, provided, however, that in
the event Buyer is not provided the economic benefits (which includes the right
to payment) of any such Equitably Assigned Contract through no breach of this
Agreement or other fault of Buyer then in such event Buyer shall have no
obligation to pay, perform and discharge such contract and indemnify Seller with
respect thereto. It is specifically agreed that Buyer's election not to provide
a guarantee of its Affiliate's obligations under an Equitably Assigned Contract
(or to become a party thereto) if so requested as a condition to consent to
assignment to such Affiliate of Seller's rights under said Equitably Assigned
Contract will not relieve Buyer of its indemnification obligations to Seller
with respect to such Equitably Assigned Contract.

        (c)   If Seller shall be unable to make the equitable assignment
described in Section 6.06 (b), or if such attempted transfer would adversely
affect the rights of Seller or Buyer under such contract, or would not assign
all of Seller's rights thereunder at the Closing, Seller and Buyer shall
continue to cooperate and use all commercially reasonable efforts to provide
Buyer with all such rights and economic benefits. To the extent that any such
consents are not obtained, or until the impediments to such transfer are
resolved, Seller shall use all commercially reasonable efforts (without the
expenditure of any material sum by Seller and at no additional cost to Buyer) to
the extent permitted by Law to (i) provide to Buyer the benefits of any such
contract, (ii) cooperate in any lawful arrangement designed to provide such
benefits to Buyer and (iii) enforce, at the request of and for the account of
Buyer, any rights of Seller arising from any such contract against any third
Person in accordance with the terms thereof upon the advice of Buyer, provided,
however,

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that Seller shall not be obligated to exercise a right to elect to terminate any
contract except as Seller may reasonably agree thereto. Without limitation of
the foregoing, at Closing, Buyer shall establish a lock box in accordance with
subparagraph (d) below and, to the extent payments are due Seller under such
contracts, Seller shall notify the account debtors under such contracts to remit
all future payments (following Closing) to such lock box. Additionally, Seller
shall remit any payments with respect to such contracts which Seller receives
after Closing to such lock box. With respect to any such royalties or other sums
received by Seller following Closing, Seller shall be deemed Buyer's agent for
collection purposes only and Seller agrees to promptly remit to Buyer, via the
lock box, without deduction or offset, all such royalties and other sums
received by Seller in respect of such contracts. Buyer shall perform for the
benefit of any third Person the obligations of Seller thereunder or in
connection therewith and Buyer shall pay, perform and discharge, and indemnify
Seller against and hold Seller harmless from, all liabilities of Seller relating
to such performance or failure to perform, and in the event of a failure of such
indemnity, Seller shall cease to be obligated under this Agreement in respect of
the Assigned Contract which is the subject of such failure, provided, however,
that in the event Buyer is not provided the economic benefits (which includes
the right to payment) of any such contract through no breach of this Agreement
or other fault of Buyer then in such event Buyer shall have no obligation to
pay, perform and discharge such contract and indemnify Seller with respect
thereto. It is specifically agreed that Buyer's election not to provide a
guarantee of its Affiliate's obligations under an Assigned Contract (or to
become a party thereto) if so requested as a condition to consent to assignment
to such Affiliate of Seller's rights under said Assigned Contract will not
relieve Buyer of its indemnification obligations to Seller with respect to such
Assigned Contract.

        (d)   At Closing, Buyer shall establish a lock box at a bank designated
by Buyer, and the Parties agree to execute any lock box agreements reasonably
required by such bank. Seller shall at Closing notify all account debtors under
the Equitably Assigned Contracts and other contracts described in paragraph (c)
above, to pay the royalties or other sums due thereunder into the lock box.
Buyer shall also have the right to notify other account debtors to make payments
to the lock box. Buyer shall be entitled to all sums deposited in the lock box
immediately upon deposit; without limitation of the foregoing, Buyer reserves
the right to sweep such lock box periodically, including daily. Furthermore, at
Closing, Seller agrees to execute a Security Agreement in the form of Exhibit I
attached hereto, pursuant to which Seller shall grant to and in favor of Buyer a
first security interest in all of Seller's right, title and interest in and to
(i) all Equitably Assigned Contracts, the contracts described in paragraph (c)
above, including all present and future accounts and payment intangibles accrued
thereunder and all proceeds thereof, and (ii) all sums deposited in the above
described lock box.

        (e)   If requested by Buyer, Seller shall following the Closing continue
to cooperate with Buyer and assist Buyer in obtaining any Consents which were
not obtained as of the Closing Date, including with respect to contracts
described in (b) or (c) above.

        (f)    Anything contained in this Section 6.06 to the contrary
notwithstanding, in no event shall Buyer assume or be responsible for
pre-Closing obligations of Seller under any Equitably Assigned Contract or other
Assigned Contract, other than Designated Assigned Contracts. The Parties'
obligations under this Section 6.06 shall survive the Closing indefinitely.

        6.07    Business Operations.    

        Seller will conduct the Business only in the Ordinary Course of Business
and will use commercially reasonable efforts to preserve intact the Business and
the goodwill of its customers and suppliers. Seller will not take any action
that will materially impair the Business without the prior written consent of
Buyer, except to the extent that action is necessary to protect the Business or
Acquired Assets (in which event Seller would so notify Buyer in writing thereof
as soon as practicable thereafter). Unless

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otherwise disclosed in writing to Buyer, all written agreements entered into
after the date hereof which relate to the Business shall by their terms be
freely assignable to Buyer. Without limitation of the foregoing, during the
period from the date of this Agreement to the Closing, except as otherwise
provided for in this Agreement or as Buyer shall otherwise consent in writing,
Seller covenants and agrees that, with respect to the Business or the Acquired
Assets, Seller shall not:

(i)approve any new individual capital expenditure or capital expenditures that
are in excess of $100,000 in the aggregate, in either case where the cost of any
such capital expenditure or expenditures would become a current asset or an
Assumed Liability;

(ii)dispose of any assets of the Business other than in the ordinary course
consistent with past practice, if the greater of the book value or the fair
market value, individually or in the aggregate, of such assets exceeds $100,000;

(iii)enter into any contract or other commitment that constitutes an Assumed
Liability in excess of $100,000 or that has a term of, or requires the
performance of any obligations by Seller over a period in excess of, one year;

(iv)make any Tax election or settle or compromise any Tax liability if such
election, settlement or compromise could result in a Lien on the Acquired
Assets, or could have an adverse Tax effect on the Business or the Acquired
Assets for taxable periods ending after the Closing Date;

(v)enter into any contract, commitment or transaction relating to the Acquired
Assets, or the Business not in the Ordinary Course of Business;

(vi)enter into any contract, commitment or transaction evidencing or involving
the licensing or sublicensing of Intellectual Property;

(vii)modify, amend, cancel or terminate any material contract or agreement in
respect of the Business to which Seller is a party outside the Ordinary Course
of Business;

(viii)waive or abandon or otherwise dispose of or grant any rights in or to the
Intellectual Property;

(ix)fail to maintain or comply with, or fail to pursue diligently any claim
under, any insurance policy covering, or otherwise providing any insurance with
respect to, the Business or any of the Acquired Assets; and

(x)agree or commit to do any of the foregoing.

        6.08    Access.    

        Seller will permit Buyer or its authorized representatives, during
normal business hours, full access to, and make available for inspection, all of
the assets and the documents, records and information, including, but not
limited to, documents, records and information concerning the Business's
Intellectual Property, customers and suppliers, which pertain to the Acquired
Assets and to the Business, all for the sole purpose of permitting Buyer to
become familiar with the Acquired Assets and the Business. In addition, Seller
will permit Buyer access to those Affected Employees identified on Schedule 6.04
by Buyer for purposes of discussing possible employment by Buyer of such
employees upon the consummation of the transactions contemplated hereunder,
provided that Seller's representatives shall be advised of such discussions and
the matters to be discussed beforehand and shall be permitted to participate or
attend such meetings. Seller will cause its officers and employees to cooperate
fully with Buyer's reasonable requests under this Section 6.08.

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        6.09    Mortgages, Liens.    

        Except with Buyer's prior written consent or except in the Ordinary
Course of Business, Seller will not enter into or assume any material mortgage,
pledge, conditional sale or other title retention agreement that imposes a lien
on the Acquired Assets, or voluntarily permit any material Lien, other than a
Permitted Lien, to attach to any of the Acquired Assets.

        6.10    Permits.    

        If certain Permits are not transferable or replacements therefor are not
obtainable on or before the Closing, but such Permits are transferable or
replacements therefor are obtainable after the Closing, Seller shall, at no
additional cost to Seller or Buyer (other than Buyer's reimbursement of Seller's
reasonable out of pocket expenses), use all commercially reasonable efforts in
cooperation with Buyer after the Closing as may be required to obtain all
required consents and approvals to transfer, or obtain replacements for, such
Permits after Closing. In addition, during the interim period, Seller shall
provide to Buyer the benefits of any such Permit of Seller.

        6.11    Supplements to Disclosure Schedule.    

        Seller shall, prior to the Closing Date, by written notice to Buyer,
inform Buyer of any condition, change or event, that occurs or becomes known to
Seller after the date of this Agreement which would result in a change or
require a correction of the Disclosure Schedule, any such Schedule, or other
disclosure; provided that no such supplemental disclosure shall be deemed to
cure a breach of Seller's representations and warranties hereunder.

ARTICLE VII
[INTENTIONALLY OMITTED]

ARTICLE VIII—CONDITIONS TO CLOSING

        8.01    Conditions to the Obligations of Each Party.    

        The obligations of Buyer and Seller to consummate the transaction
contemplated by this Agreement are subject to the satisfaction, at or prior to
the Closing, of each of the following conditions:

        (a)   no Governmental Entity having jurisdiction shall have enacted,
issued, promulgated, enforced or entered any Law or order which is then in
effect making the consummation of the transactions contemplated by this
Agreement illegal or otherwise prohibiting or staying the consummation of such
transactions; and

        (b)   no action shall have been commenced by or before any Governmental
Entity against any party to this agreement seeking to restrain or materially and
adversely alter the transactions contemplated by this Agreement which do, or
would reasonably be expected to, render it impossible or unlawful to consummate
such transactions.

        8.02    Conditions to the Obligations of Seller.    

        The obligations of Seller to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction or waiver (where
permissible), at or prior to the Closing, of each of the following conditions:

        (a)    Representations, Warranties and Covenants.    (i) The
representations and warranties of Buyer contained in this Agreement shall be
true and correct as of the Closing Date in all material respects, with the same
force and effect as if made on the Closing Date, other than such representations
and warranties as are made as of a specified date, which shall be true and
correct as of such date, except to the extent that the failure to be so true and
correct would not,

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individually or in the aggregate with other such failures, have a Material
Adverse Effect or impair the ability of Buyer to perform its obligations under
this Agreement; (ii) the covenants and agreements contained in this Agreement to
be complied with by Buyer on or before the Closing shall have been complied with
in all material respects; and (iii) Seller shall have received a certificate
from Buyer, to such effect signed by a duly authorized officer thereof;

        (b)    Other Closing Documents.    Seller shall have received such other
certificates, instruments and documents in furtherance of the transactions
contemplated by this Agreement as Seller or its counsel may reasonably request.

        8.03    Conditions to the Obligations of Buyer.    

        The obligations of Buyer to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction or waiver (where
permissible), at or prior to the Closing, of each of the following conditions:

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

        (b)   the representations and warranties of Seller set forth in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and as of the Closing Date as though made on and as of the
Closing Date (except in the case of any representation or warranty that by its
terms is made as of the date specified therein, in which case such
representation or warranty shall be true and correct as of such date) except to
the extent that the failure to be so true and correct would not, individually or
in the aggregate with other such failures, have a Material Adverse Effect or
impair the ability of Buyer to perform its obligations under this Agreement;

        (c)   Buyer shall have received the documents referred to in
Section 2.02;

        (d)   Buyer shall have received from Seller a certificate signed by a
duly authorized officer of Seller to the effect that the conditions set forth in
paragraphs (a) and (b) of this Section 8.03 have been satisfied. No exceptions
taken in such certificate will modify Seller's representations, warranties,
covenants or agreements made or deemed made hereunder or have any effect for
purposes of Buyer's closing condition or indemnity rights hereunder; and

        (e)   the Necessary Consents shall have been obtained and shall remain
in full force and effect as of the Closing Date.

ARTICLE IX—LIABILITY AND INDEMNIFICATION

        9.01    Survival; Seller's Liability and Indemnity.    

        All of Seller's representations and warranties contained in this
Agreement shall survive the Closing for a period of two (2) years except that
(i) the representations and warranties of Seller contained in Sections 5.03, and
5.26 shall survive the Closing for a period of four (4) years, (ii) the
representations and warranties of Seller contained in Section 5.06 shall survive
the Closing for a period of six (6) years, and (iii) the representations and
warranties of Seller contained in Sections 5.01, 5.02, 5.05 and 5.08, shall
survive the Closing for the period ending on the 90thday following the
expiration of the statute of limitations applicable to each such matter
(including any extension thereof). The termination of any such representation
and warranty, however, shall not affect any claim for indemnity or breaches of
representations or warranties if written notice thereof is given to the
breaching party or parties prior to such termination date. Seller hereby agrees
to be liable for and to indemnify, defend and hold Buyer and its Affiliates and
their officers, directors, agents and attorneys (each a "Buyer Indemnified
Party") harmless from and against all damages, claims, obligations, demands,
assessments, penalties, fines,

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liabilities, costs, damages, reasonable attorneys' fees and expenses
(collectively, "Damages") asserted against or incurred by any or all of them by
reason of or resulting from or arising out of or in connection with any of the
following:

        (a)   any breach of any representation or warranty made by Seller in
this Agreement or any Transaction Document delivered by Seller at the Closing;

        (b)   any breach of or failure by Seller to perform any covenant or
obligation set out in this Agreement or any Transaction Document;

        (c)   the Excluded Assets and the Excluded Liabilities;

        (d)   the ownership and operation of the Business and Acquired Assets
for all periods preceding and including the Closing Date, except for the Assumed
Liabilities and to the extent of Buyer's reimbursement obligations under
Section 9.10;

        (e)   any violation of applicable Laws by Seller or its Affiliates in
respect of the Business, except to the extend of Buyer's reimbursement
obligations under Section 9.10;

        (f)    any claims by or liabilities with respect to any Affected
Employees with respect to his or her employment with or termination of
employment on or prior to the Closing Date by Seller, including any and all
group insurance claims, workers' compensation claims or liabilities that arise
out of any accidents, illnesses or other events which occurred on or prior to
the Closing Date, except where such claim arises out of Buyer's breach of an
obligation under this Agreement.

        9.02    Buyer's Liability and Indemnity.    

        Subject to the terms and conditions of this Article IX, Buyer hereby
agrees to be liable for and to indemnify, defend and hold Seller and its
Affiliates and their officers, directors, agents and attorneys (each a "Seller
Indemnified Party") harmless from and against all Damages asserted against or
incurred by any or all of them by reason of or resulting from:

        (a)   An Assumed Liability;

        (b)   Buyer's and/or its Affiliate's and/or other Person's operation of
the Business or ownership of the Acquired Assets after the Closing;

        (c)   A breach or failure of any representation, warranty or covenant or
obligation of Buyer contained in this Agreement or in any agreement executed
pursuant to this Agreement;

        (d)   the failure of Buyer to comply with its reimbursement obligations
under Section 9.10.

        9.03    Deductible.    

        Seller shall not be liable to a Buyer Indemnified Party or required to
indemnify a Buyer Indemnified Party pursuant to Section 9.01 unless and until
the aggregate amount of the Damages suffered or incurred by all Buyer
Indemnified Parties exceeds Two Hundred Thousand and No/100 Dollars
($200,000.00) (after which point Seller will be obligated only to indemnify
Buyer Indemnified Parties from and against further Damages).

        9.04    Cap on Damages.    

        Except as otherwise provided in this Section 9.04 and Section 9.10,
Seller's liability for Damages described in Section 9.01 is limited as follows:

        (a)   for all claims by Buyer Indemnified Parties for Damages Seller's
total liability shall not exceed the overall aggregate cap of Five Million
Dollars ($5,000,000);

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        (b)   provided, however, claims by Buyer Indemnified Parties for Damages
for Third Party Claims may exceed the Five Million Dollars ($5,000,000) cap
under Section 9.04 (a) up to the overall aggregate cap of Eight Million Dollars
($8,000,000).

        (c)   provided, further, however, claims by Buyer Indemnified Parties
for Damages may exceed the Five Million Dollar ($5,000,000) cap under
Section 9.04 (a) and the Eight Million Dollar ($8,000,000) cap under
Section 9.04(b) up to the overall aggregate cap of Fifteen Million Dollars
($15,000,000) but only for Damages caused by: (i) any intentional breach of any
of Seller's representations and warranties, if J. O'Donnell, Robert Wiesel,
Barry Gifford, and/or Joy Harris had actual knowledge (which in no event shall
include constructive knowledge) of such representation or warranty and had
actual knowledge (which in no event shall include constructive knowledge) of the
breach at the time such representation and warranty was made.

        For purposes of this Section 9.04 "Third Party Claims" means claims
against Buyer Indemnified Parties by third parties for which Seller is liable
for indemnification under Section 9.01.

        Notwithstanding the foregoing, neither the deductible described in
Section 9.03 nor the limitations on the indemnification obligations of Seller
set forth above in this Section 9.04 shall apply to Buyer's Damages caused by
common law fraud (which in any case shall mean actual fraud established by clear
and convincing evidence in a court of competent jurisdiction) by Seller in
connection with the transactions contemplated to this Agreement

        Buyer agrees to inform Seller in writing before Closing of any breach by
Seller of any of Seller's representations, warranties, covenants, or agreements
herein of which Buyer has actual Knowledge, and, if the Closing occurs, Buyer
will possess no claim against Seller (including without limitation any claim
under Article IX) by reason of, in connection with or arising from any such
known misrepresentation or breach of warranty or covenant or agreement.

        The remedies of Buyer shall be limited to those set forth in this
Article IX. No right to rescission or other common law right of action shall
exist with respect to any breach of this Agreement or default or any other
losses or damages suffered by Buyer hereunder.

        9.05    Claims.    As soon as is reasonably practicable after becoming
aware of a claim for indemnification under this Agreement not involving any
claim, or the commencement of any suit, action or proceeding, of the type
described in Section 9.06, the Indemnified Person shall promptly give notice to
the Indemnifying Person of such claim and the amount that the Indemnified Person
claims to be entitled to receive hereunder from the Indemnifying Person;
provided, that the failure of the Indemnified Person to give notice shall not
relieve the Indemnifying Person of its obligations under this Article IX except
to the extent (if any) that the Indemnifying Person shall have been actually
prejudiced thereby.

        9.06    Notice of Third Party Claims; Assumption of Defense.    The
Indemnified Person shall give notice as promptly as is reasonably practicable to
the Indemnifying Person of the assertion of any claim, or the commencement of
any suit, action or proceeding, by any Person not a party hereto in respect of
which indemnity may be sought under this Agreement; provided, that the failure
of the Indemnified Person to give notice shall not relieve the Indemnifying
Person of its obligations under this Article IX except to the extent (if any)
that the Indemnifying Person shall have been actually prejudiced thereby. The
Indemnifying Person may, at its own expense (a) participate in the defense of
any claim, suit, action or proceeding and (b) upon notice to the Indemnified
Person and the Indemnifying Person's delivering to the Indemnified Person of a
written agreement that the Indemnified Person is entitled to indemnification
pursuant to Section 9.01 or 9.02 for all Damages arising out of such claim,
suit, action or proceeding, at any time during the course of any such claim,
suit, action or proceeding, assume the defense thereof; provided, that (i) the
Indemnifying Person's counsel is reasonably satisfactory to the Indemnified
Person and (ii) the Indemnifying Person shall

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thereafter consult with the Indemnified Person upon the Indemnified Person's
reasonable request for such consultation from time to time with respect to such
claim, suit, action or proceeding. If the Indemnifying Person assumes such
defense, the Indemnified Person shall have the right (but not the obligation) to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the Indemnifying Person. If, however, the
Indemnified Person reasonably determines in its judgment that representation by
the Indemnifying Person's counsel of both the Indemnifying Person and the
Indemnified Person would present such counsel with a conflict of interest, then
such Indemnified Person may employ separate counsel to represent or defend it in
any such claim, action, suit or proceeding and the Indemnifying Person shall pay
the fees and disbursements of such separate counsel. Whether or not the
Indemnifying Person chooses to defend or prosecute any such claim, suit, action
or proceeding, all of the parties hereto shall cooperate in the defense or
prosecution thereof.

        9.07    Settlement or Compromise.    Any settlement or compromise made
or caused to be made by the Indemnified Person or the Indemnifying Person, as
the case may be, of any such claim, suit, action or proceeding of the kind
referred to in Section 9.06 shall also be binding upon the Indemnifying Person
or the Indemnified Person, as the case may be, in the same manner as if a final
judgment or decree had been entered by a court of competent jurisdiction in the
amount of such settlement or compromise; provided, that no obligation,
restriction or Damage shall be imposed on the Indemnified Person as a result of
such settlement without its prior written consent. The Indemnified Person will
give the Indemnifying Person at least thirty (30) days' notice of any proposed
settlement or compromise of any claim, suit, action or proceeding it is
defending, during which time the Indemnifying Person may reject such proposed
settlement or compromise; provided, that from and after such rejection, the
Indemnifying Person shall be obligated to assume the defense of and full and
complete liability and responsibility for such claim, suit, action or proceeding
and any and all Damages in connection therewith in excess of the amount of
unindemnifiable Damages which the Indemnified Person would have been obligated
to pay under the proposed settlement or compromise.

        9.08    Failure of Indemnifying Person to Act.    In the event that the
Indemnifying Person does not elect to assume the defense of any claim, suit,
action or proceeding, then any failure of the Indemnified Person to defend or to
participate in the defense of any such claim, suit, action or proceeding or to
cause the same to be done, shall not relieve the Indemnifying Person of its
obligations hereunder.

        9.09    Effect on Purchase Price of Indemnity Payments.    Any amount
payable under Section 9.01 or Section 9.02 shall be treated by Buyer and Seller
as an adjustment to the Purchase Price of the Acquired Assets.

        9.10    Seller's and Buyer's Obligations Concerning Shared Environmental
Losses.    

        Without regard to and not limited by any other provision of this
Article IX (including without limitation limits on time periods and monetary
obligations), with respect to the remediation costs and expenses for the
Weymouth Environmental Matter, Seller shall be obligated for all of such costs
and expenses. In the event that remediation costs and expenses incurred by
Seller on or after the Closing Date for the Weymouth Environmental Matter exceed
the sum of Seven Hundred Fifty Thousand Dollars ($750,000), Buyer shall
reimburse Seller for one-half (1/2) of such remediation costs and expenses in
excess of Seven Hundred Fifty Thousand Dollars ($750,000) up to a maximum
combined total of One Million Seven Hundred Fifty Thousand Dollars ($1,750,000)
with the excess, if any, above such amount to be the sole obligation of Seller.
Without regard to and not limited by any other provisions of this Article IX,
for all other costs or expenses (including remediation costs but excluding fines
and penalties) arising from liabilities, obligations, or compliance under
Environmental Laws with respect to Seller's or any of its predecessors' use of
or the condition of the building and premises subject to the Weymouth Lease
other than the Weymouth Environmental Matter ("Unknown Weymouth Environmental
Matters"), Seller shall be obligated for all of such costs and expenses but

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Buyer shall reimburse Seller for one-half (1/2) of such costs and expenses up to
a maximum combined total of Two Million Dollars ($2,000,000) with the excess, if
any, above such amount to be the sole obligation of Seller. Notwithstanding the
foregoing, in no event will Buyer's total obligation with respect to remediation
costs and expenses incurred for the Weymouth Environmental Matter and for costs
and expenses incurred for clean up and remediation of Unknown Weymouth
Environmental Matters exceed an aggregate total of One Million Dollars
($1,000,000).

        Additionally and not limited by any other provision of this Article IX,
Buyer shall have no liability or responsibility for, and Seller shall defend,
indemnify and hold Buyer harmless from and against, any and all fines and
penalties arising out of or in connection with the Weymouth Environmental Matter
and/or other violations of Environmental Laws in connection with Seller's or any
of its predecessor's use of or the condition of the building and premises
subject to the Weymouth Lease, whether or not caused or contributed by Seller.

        9.11    Right of Set Off.    To the extent a Party has a valid
entitlement to indemnification and is an Indemnified Person under this
Agreement, if the Indemnifying Person fails or refuses to promptly indemnify
such Indemnified Person as provided herein then, in addition to any other rights
or remedies available to the Indemnified Person, such Person may offset the full
amount to which the Indemnified Person is entitled against any payment or
payments, if any, owed to Indemnifying Person or its respective Affiliates
pursuant to this Agreement or any Transaction Document.

ARTICLE X—MISCELLANEOUS

        10.01    Amendment.    

        This Agreement may be amended, modified or supplemented only by an
instrument in writing executed by each Party (a duly authorized officer in the
case of Seller and Buyer) to this Agreement.

        10.02    Assignment.    

        This Agreement and all the provisions hereof shall be binding upon and
inure to the benefit of the Parties hereto and their respective permitted
successors and assigns; provided, that no assignment of any rights or
obligations shall be made by Seller without written consent of Buyer or by Buyer
without the written consent of Seller. Notwithstanding the provisions above,
(A) Buyer may at any time assign any or all of its rights hereunder without such
consent to (i) any Affiliate of Buyer, or (ii) any Person who acquires
substantially all of the assets of the Business from Buyer and/or its Affiliates
or all of the stock of Buyer and/or its Affiliates which hold title to such
assets, provided that in any such event Buyer shall remain fully obligated
hereunder; and (B) following the Closing, Seller may assign any or all of its
rights hereunder without such consent to (i) any Affiliate of Seller, or
(ii) any Person who acquires substantially all of the assets of Seller and/or
its Affiliates or all of the stock of Seller and/or its Affiliates, provided
that in any such event Seller shall remain fully obligated hereunder.

        10.03    Notice.    

        Any notice or communication must be in writing and given by depositing
the same in the United States mail, addressed to the party to be notified,
postage prepaid and registered or certified with return receipt requested, or by
delivering the same in person or by courier or by sending such notice or
communication by facsimile transmission. Such notice shall be deemed received on
the earlier of the date on which it is hand-delivered or otherwise actually
received or on the third business day following the date on which it is so
mailed. For purposes of notice, the addresses of the Parties shall be:

If to Seller:

Washington Group International, Inc.
P.O. Box 73
Boise, Idaho 83729

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Attention: General Counsel
Telephone: (208) 386-5199
Fax No.: (208) 386-5220

with a copy (which shall not constitute notice) to:

Marshall Batt & Fisher, LLP
P.O. Box 1308
Boise, Idaho 83701
Attention: William J. Batt
Telephone: (208) 331-1000
Fax No.: (208) 331-2400

If to Buyer:

The Shaw Group Inc.
4171 Essen Lane
Baton Rouge, Louisiana 70809
Attention: General Counsel
Telephone: (225) 932-2641
Fax No.: (225) 932-2642

with a copy (which shall not constitute notice) to:

KEAN, MILLER, HAWTHORNE, D'ARMOND,
McCOWAN & JARMAN, L.L.P.
Post Office Box 3513
Baton Rouge, Louisiana 70821-3513
Attention: Dean P. Cazenave, Esq.
Telephone: (225) 387-0999
Fax No.: (225) 388-9133

        Any party may change its address for notice by written notice given to
the other party.

        10.04    Confidentiality.    

        Each Party shall not disclose or use to compete with the other any
confidential information pertaining to such party which is obtained from such
other party pursuant to this Agreement or any document delivered in connection
herewith or with the transactions contemplated hereby, except as such use or
disclosure may be required in the course of performance hereof and such
disclosure as may, in the opinion of such party's counsel, be required by law or
the rules of a national securities exchange. Seller shall not (except at the
request of Buyer) use or disclose to any third party any of the technical,
financial, operational or marketing information pertaining to the Business
except after and to the extent such information is or becomes generally
available to the public through no fault of Seller or as may, in the opinion of
Seller's counsel, be required by Law. The Parties shall take all reasonable
efforts to cause their respective directors, officers, employees and agents to
observe the provisions of this Section 10.04.

        10.05    Entire Agreement.    

        This Agreement and the Exhibits and Schedules hereto supersede all prior
agreements and understandings relating to the subject matter hereof, except that
the obligations of any party under any agreement executed pursuant to this
Agreement shall not be affected by this Section.

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        10.06    Costs, Expenses and Legal Fees.    

        Each party hereto shall bear its own costs and expenses (including,
without limitation, attorneys', brokers', agents', investment bankers' and
finders' fees) with respect to this Agreement and transactions contemplated
hereby. In the event of litigation concerning this Agreement or any agreement or
schedule provided for hereunder, the prevailing party in such litigation shall
be entitled to recover its costs and reasonable attorney fees from the
non-prevailing party.

        10.07    Severability.    

        If any provision of this Agreement is held to be illegal, invalid or
unenforceable, such provision shall be fully severable and this Agreement shall
be construed and enforced as if such illegal, invalid or unenforceable provision
never comprised a part hereof, and the remaining provisions hereof shall remain
in full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance here from.

        10.08    Waiver.    

        All of the original rights and powers of either party hereunder shall
remain in force notwithstanding any neglect, forbearance or delay in enforcement
thereof and neither party shall be deemed to have waived any of its rights or
any provision of this Agreement or any notice given hereunder unless such waiver
is in a writing signed by an officer of the waiving party. No such waiver by
either party of any breach by the other party of this Agreement shall be deemed
a waiver of any continuing, future or recurring breach.

        EACH OF THE SELLER AND THE BUYER TO THE FULLEST EXTENT PERMITTED BY LAW,
IRREVOCABLY WAIVES ANY RIGHTS THAT THEY MAY HAVE TO INCIDENTAL, CONSEQUENTIAL OR
SPECIAL (INCLUDING PUNITIVE OR MULTIPLE) DAMAGES BASED UPON, OR ARISING OUT OF,
THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR
ACTIONS OF ANY OF THEM RELATING THERETO.

        10.09    Governing Law.    

        This Agreement and the rights and obligations of the parties hereto
shall be governed, construed and enforced in accordance with the laws of the
state of New York without regard to the choice of law provisions thereof or such
provisions of any other jurisdiction.

        10.10    Consent to Jurisdiction and Service of Process.    

        Any legal action, suit or proceeding in law or equity arising out of or
relating to this Agreement or any of the transactions contemplated herein shall
be instituted in any state or federal court in New York, and each party agrees
not to assert, by way of motion, as a defense or otherwise, in any such action,
suit or proceeding, any claim that it is not subject personally to the
jurisdiction of such court, that its property is exempt or immune from
attachment or execution, that the action, suit or proceeding is brought in an
inconvenient forum, that the venue of the action, suit or proceeding is improper
or that this Agreement or the subject matter hereof may not be enforced in or by
such court. Each party further irrevocably submits to the jurisdiction of any
such court in any such action, suit or proceeding. Any and all service of
process and any other notice in any such action, suit or proceeding shall be
effective against either party if given by registered or certified mail, return
receipt requested or by any other means of mail which requires a signed receipt,
postage prepaid, mailed to such party at the address listed in Section 10.03
herein.

        10.11    Captions.    

        The captions in this Agreement are for convenience of reference only and
shall not limit or otherwise affect any of the terms or provisions hereof.

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        10.12    Counterparts.    

        This Agreement may be executed in counterparts, each of which shall be
deemed an original, and all of which together shall constitute one and the same
instrument.

        10.13    Additional Agreements.    

        Subject to the terms and conditions herein provided, each of the Parties
hereto agrees to use all reasonable efforts to take, or cause to be taken, all
actions and to do, or to cause to be done, all things necessary, proper or
advisable to consummate and to make effective as promptly as practicable the
transactions contemplated by this Agreement, including without limitation using
all reasonable efforts to obtain all necessary waivers, consents and approvals
and to effect all necessary registrations and filings.

        10.14    Bulk Sales Compliance.    

        The Parties hereto waive compliance with all applicable provisions, if
any, of the bulk sales Laws of the countries and states in which the Acquired
Assets are located, or similar Laws of any jurisdiction.

        10.15    Specific Performance.    

        The Parties agree that if any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached, irreparable damage would occur, no adequate remedy at law would exist
and damages would be difficult to determine, and that the Parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.

        10.16    Remedies Cumulative.    

        The remedies provided in this Agreement shall be cumulative and, except
for remedies excluded or limited by the terms of this Agreement, shall not
preclude the assertion or exercise of any other rights or remedies available
under law, in equity or otherwise.

ARTICLE XI—TERMINATION

        11.01    Termination Rights.    

        This Agreement may be terminated at any time before the Closing:

        (a)   by mutual written agreement of the Parties; or

        (b)   by Buyer if the representations and warranties of Seller are not
true in all material respects when made and as of the date of termination of
this Agreement by Buyer, except for changes specifically permitted or
contemplated by this Agreement, or if Seller fails to comply in any material
respect with any of its covenants or agreements contained in this Agreement;

        (c)   by Seller if the representations and warranties of Buyer are not
true in all material respects when made and as of the date of termination of
this Agreement by Seller, except for changes specifically permitted or
contemplated by this Agreement, or if Buyer fails to comply in any material
respect with any of its covenants or agreements contained in this Agreement;

        (d)   by either Buyer or Seller if there shall be any Law or regulation
that makes the consummation of the transactions contemplated herein illegal or
otherwise prohibited or if consummation of the transactions contemplated by this
Agreement would violate any nonappealable final order, decree or judgment if any
court or Governmental Entity of competent jurisdiction; or

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        (e)   by either Buyer or Seller effective upon written notice to the
other delivered after at any time after thirty (30) days after the date hereof,
if, on or prior to such thirtieth (30th) day, Exxon/Mobil has not consented to
the assignment to Buyer of those Assigned Contracts to which Exxon/Mobil is a
party.

        The right of any party hereto to terminate this Agreement pursuant to
this Section 11.01 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Party hereto, any
Person controlling any such Party or any of their respective officers,
directors, employees or representatives, whether prior to or after the execution
of this Agreement.

        The Parties agree that before terminating this Agreement in accordance
with Section 11.01(b) or 11.01(c), the non-defaulting party will give the
defaulting Party written notice of the default and, if the default is
susceptible of being cured, the defaulting Party will have ten (10) days to cure
the default.

        11.02    Continuing Obligations.    

        Any termination in accordance with this Article XI will not affect the
obligations of the Parties under Section 10.03, 10.04, 10.09 and 10.10.

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        IN WITNESS WHEREOF, this Asset Purchase Agreement has been duly executed
and delivered by the duly authorized officers of the Parties hereto as of the
date first written above.

    Buyer:   THE SHAW GROUP INC.,
a Louisiana corporation  
 
 
 
 
By:
/s/  N. GALLINARO      

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          Its: Pres. Process of ECM Div.

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Seller:
 
WASHINGTON GROUP INTERNATIONAL, INC.,
an Ohio corporation
 
 
 
 
By:
/s/  M. DATSOPOULOS      

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          Its: Assistant Secretary

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          Its:              

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Exhibits:

Exhibit A-1   Bill of Sale and Assignment (Non Canadian Assets) Exhibit A-2  
Bill of Sale and Assignment (Canadian Assets) Exhibit B-1   Assignment of Lease
Agreement (Weymouth) Exhibit B-2   Assignment of Lease Agreement (Cambridge)
Exhibit C   Assumption Agreement Exhibit D   US PTO Patent Assignment Exhibit E
  US PTO Trademark Assignment Exhibit F   Covenant and Agreement Not-to-Compete
Exhibit G   Escrow Agreement Exhibit H   Model Statement Exhibit I   Security
Agreement

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Schedules to
Asset Purchase Agreement

Schedule 2.01 (b)(ii)   Intercompany and Employee Accounts Receivable Schedule
2.01 (b)(iv)   Excluded Contracts Schedule 5.01 (a)   Qualification
Jurisdictions Schedule 5.01 (b)   Weymouth Operating Permits Schedule 5.03  
Employee Benefit Plan Exceptions Schedule 5.05   Title Exceptions Schedule 5.06
(a)(i)   Scheduled Intellectual Property Schedule 5.06 (a)(iii)   IP
Representation Exceptions Schedule 5.06 (a)(v)   IP Title Exceptions Schedule
5.06 (c)   Licensed IP Exceptions Schedule 5.06 (d)   IP Infringement
Disclosures Schedule 5.07   Violations of Laws of Other Agreements Schedule 5.08
  Tax Liens / Payment of Taxes Schedule 5.09   Governmental Consents Schedule
5.10   Labor Exceptions Schedule 5.11   Compliance with Laws Exceptions Schedule
5.12 (a)   MAE Litigation Schedule 5.12 (b)   Court Orders Schedule 5.12 (c)  
Pending Litigation Schedule 5.13   Employment Exceptions Schedule 5.13 (a)  
Affected Employees Schedule 5.13 (b)   Recent Changes in Wages and Salary
Schedule 5.14   Assigned Contracts Schedule 5.15   Accounts Receivable
Exceptions Schedule 5.16   Finders' Fees Schedule 5.17   Statement of Assets and
Liabilities Schedule 5.18   Asset Exceptions Schedule 5.19   Condition of Assets
Exceptions Schedule 5.20   Ordinary Course Exceptions Schedule 5.21   Real
Estate Exceptions Schedule 5.22   Springing Liens Schedule 5.23   Largest
Customers Schedule 5.24   Insurance Policies Schedule 5.26   Environmental
Matters Schedule 5.27   Warranty Work Schedule 5.29   Confidentiality Exceptions
Schedule 6.04   Employees to Receive Offers Schedule I-A   Necessary Consents
Schedule I-B   Permitted Liens

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EXHIBIT A-1
TO ASSET PURCHASE AGREEMENT

BILL OF SALE AND ASSIGNMENT

        THIS BILL OF SALE AND ASSIGNMENT (this "Bill of Sale") is made as of
the            day of April 2003, by and between STONE & WEBSTER, INC., a
Louisiana corporation ("Buyer"), and WASHINGTON GROUP INTERNATIONAL, INC., an
Ohio corporation ("Seller").

BACKGROUND

        A.    Seller and The Shaw Group Inc. ("TSGI") entered into an Asset
Purchase Agreement dated as of the             day of April, 2003 (the
"Agreement"), pursuant to which TSGI (or its assignee) agreed to purchase and
Seller has agreed to sell certain assets.

        B.    TSGI has assigned to Buyer, TSGI's right to acquire the Acquired
Assets (as defined in the Agreement), except for certain Acquired Assets to be
acquired by Stone & Webster Canada LP.

        C.    Seller and Buyer desire Buyer to be in possession of the
instruments necessary to evidence the vesting in Buyer of title in and to the
assets to be transferred to Buyer.

        D.    This Bill of Sale, together with certain other closing documents,
is entered into pursuant to the terms of the Agreement.

AGREEMENT

        NOW, THEREFORE, in consideration of the premises, the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Buyer and Seller agree as follows:

ARTICLE I.
CERTAIN DEFINITIONS

        Terms defined in the Agreement shall have the same meaning in this Bill
of Sale unless otherwise defined herein.

ARTICLE II.
SALE OF ASSETS

        2.01    Sale.    Upon the terms and subject to the conditions,
representations and warranties contained in the Agreement, Seller does hereby,
effective as of 12:01 a.m. (eastern standard time) on the            day of
April, 2003 ("Conveyance Date"), sell, convey, assign, transfer and deliver to
Buyer, and Buyer hereby purchases and accepts all of the properties, rights,
interests and other assets, wherever located, of every type and description,
whether real, personal or mixed and whether tangible or intangible, movable or
immovable, which are defined in the Agreement as Acquired Assets; provided,
however, that in respect of those Assigned Contracts for which Consents are
required but have not been obtained as of the date hereof, such contracts shall
be administered in accordance with Section 6.06 of the Agreement; and provided
further that title to certain Acquired Assets are not being transferred to Buyer
hereunder but rather are being transferred and assigned by Northern Construction
Company, Ltd. (an Affiliate of Seller) to Stone & Webster Canada LP (an
Affiliate of Buyer) pursuant to a separate Bill of Sale and Assignment dated of
even date hereunder.

        2.02    Survival of Representations and Warranties.    This transfer and
conveyance is made pursuant to the Agreement. The representations, warranties
and agreements to indemnify TSGI made by Seller in the Agreement shall survive
the Closing of this transfer and conveyance as set forth in the

2

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Agreement. Nothing herein shall be construed to modify, limit or otherwise
detract from or add to the covenants, warranties and agreements made by Seller
in the Agreement.

        2.03    Power of Attorney.    Seller hereby constitutes and appoints
Buyer the true and lawful attorney of Seller, with full power of substitution,
in Seller's names and stead or otherwise, for the account and benefit of Buyer
(i) to demand and receive from time to time any and all of the Acquired Assets;
(ii) to give receipts and releases for and in respect of the same or any part
thereof; and (iii) to give such notices and to do all such acts and things in
relation to the Acquired Assets as Buyer shall deem desirable, which include
instituting any and all legal or administrative proceedings to assert or enforce
any claim, right or title in and to any of the Acquired Assets.

        IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.

WITNESSES:   Buyer:
STONE & WEBSTER, INC.
 
 
By:
 
 

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WITNESSES:
 
Seller:
WASHINGTON GROUP INTERNATIONAL, INC.
 
 
By:
 
 

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3

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EXHIBIT A-2
TO ASSET PURCHASE AGREEMENT

BILL OF SALE AND ASSIGNMENT

        THIS BILL OF SALE AND ASSIGNMENT (this "Bill of Sale") is made as of
the            day of April, 2003, by and between STONE & WEBSTER CANADA LP, a
Canadian limited partnership formed under the laws of the Province of Ontario
("Buyer"), and NORTHERN CONSTRUCTION COMPANY LTD., a Canadian corporation formed
under the laws of the Province of Ontario ("Seller").

BACKGROUND

        A.    Washington Group International, Inc. ("WGI"), as seller, and The
Shaw Group Inc. ("TSGI"), as buyer, entered into an Asset Purchase Agreement
dated as of the            day of April, 2003 (the "Agreement"), pursuant to
which TSGI (or its assignee) agreed to purchase and Seller has agreed to sell
certain assets held by WGI and/or its Affiliates.

        B.    TSGI has assigned to Buyer, TSGI's right to acquire the contracts
and assets described on Exhibit "A" attached hereto (the "Canadian Assets").

        C.    Seller and Buyer desire Buyer to be in possession of the
instruments necessary to evidence the vesting in Buyer of title in and to the
assets to be transferred to Buyer.

        D.    This Bill of Sale, together with certain other closing documents,
is entered into pursuant to the terms of the Agreement.

AGREEMENT

        NOW, THEREFORE, in consideration of the premises, the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Buyer and Seller agree as follows:

ARTICLE III.
CERTAIN DEFINITIONS

        Terms defined in the Agreement shall have the same meaning in this Bill
of Sale unless otherwise defined herein.

ARTICLE IV.
SALE OF ASSETS

        4.01    Sale.    Upon the terms and subject to the conditions,
representations and warranties contained in the Agreement, Seller does hereby,
effective as of 12:01 a.m. (eastern standard time) on the            day of
April, 2003 ("Conveyance Date"), sell, convey, assign, transfer and deliver to
Buyer, and Buyer hereby purchases and accepts all of the Canadian Assets;
provided, however, that in respect of those Assigned Contracts for which
Consents are required but have not been obtained as of the date hereof, such
contracts shall be administered in accordance with Section 6.06 of the
Agreement.

        4.02    Survival of Representations and Warranties.    This transfer and
conveyance is made pursuant to the Agreement. The representations, warranties
and agreements to indemnify TSGI made by WGI in the Agreement shall survive the
Closing of this transfer and conveyance as set forth in the Agreement. Nothing
herein shall be construed to modify, limit or otherwise detract from or add to
the covenants, warranties and agreements made by WGI in the Agreement.

        4.03    Power of Attorney.    Seller hereby constitutes and appoints
Buyer the true and lawful attorney of Seller, with full power of substitution,
in Seller's names and stead or otherwise, for the account and

4

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benefit of Buyer (i) to demand and receive from time to time any and all of the
Acquired Assets; (ii) to give receipts and releases for and in respect of the
same or any part thereof; and (iii) to give such notices and to do all such acts
and things in relation to the Acquired Assets as Buyer shall deem desirable,
which include instituting any and all legal or administrative proceedings to
assert or enforce any claim, right or title in and to any of the Acquired
Assets.

        IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.

WITNESSES:   Buyer:
STONE & WEBSTER CANADA LP
 
 
By:
 
 

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WITNESSES:
 
Seller:
NORTHERN CONSTRUCTION COMPANY LTD.
 
 
By:
 
 

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5

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EXHIBIT "A"
TO BILL OF SALE AND ASSIGNMENT

        General Engineering Services Agreement between Shell Chemicals
Canada Ltd. and Canadian Badger Company Limited, dated July 2, 1997, including
all work authorizations and task orders issued thereunder.

6

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EXHIBIT B-1
TO ASSET PURCHASE AGREEMENT

ASSIGNMENT OF LEASE
(Weymouth)

        ASSIGNMENT OF LEASE (this "Agreement"), entered into as of April    ,
2003, by and among Washington Group International, Inc., an Ohio corporation
("Assignor"), maintaining an office at One Broadway, Cambridge, Massachusetts,
02142; Stone & Webster, a Louisiana corporation ("Assignee"), maintaining an
office at 4171 Essen Lane, Baton Rouge, Louisiana, 70809; and Albert R.
Schofield, Jr. as Trustee of the Lynda Realty Trust ("Landlord") maintaining an
office at 150 Old Derby Street, Hingham, Massachusetts, 02043. Assignor,
Assignee and Landlord are referred to collectively herein as the "Parties."

WITNESSETH:

        WHEREAS, Assignor as the successor by merger of Raytheon Engineers &
Constructors, Inc., as "Lessee," and Landlord, as "Lessor," are parties to that
lease dated December 15, 1997 as amended by letter dated March 19, 2002
(collectively the "Lease"), presently covering certain premises (the "Premises")
located at 56 Woodrock Road, East Weymouth, Massachusetts, a copy of which Lease
is attached hereto as Exhibit "A"; and

        WHEREAS, Assignor as "Seller," and The Shaw Group Inc., the parent
corporation of Assignee, as "Buyer," are parties to an Asset Purchase Agreement
dated April    , 2003 (the "Purchase Agreement"), pursuant to which, subject to
the terms and conditions set forth therein, The Shaw Group Inc. will acquire all
of Seller's right, title and interest in, under and to the Lease; and

        WHEREAS, The Shaw Group Inc. has assigned its right to acquire
Assignor's right, title and interest in, under and to the Lease to Assignee
pursuant to Section 10.2 of the Purchase Agreement; and

        WHEREAS, simultaneously with the closing of the transactions
contemplated by the Purchase Agreement, the Parties mutually desire (a) that
Assignor assign all of its right, title and interest in, under and to the Lease
to Assignee, and (b) that Landlord consent to the assignment contemplated
hereby, all on the terms and conditions hereinafter set forth.

        NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other valuable consideration, the receipt and adequacy of which are
expressly acknowledged, the Parties agree as follows:

        1.    Effective Date.    For all purposes under this Agreement, the term
"Effective Date" shall mean that date, if any, on which the closing of the
transactions contemplated by the Purchase Agreement is consummated.

        2.    Assignment.    Effective as of the Effective Date, Assignor hereby
assigns transfers and sets over unto Assignee all of Assignor's right, title and
interest in, under and to (i) the Lease and (ii) the aggregate security deposit
heretofore made by Assignor pursuant to the Lease. Assignor will deliver
possession of the Premises to Assignee on the Effective Date. Assignee hereby
accepts the foregoing assignment and hereby agrees to perform all of the terms
and conditions of the Lease to be performed on the part of Assignor and assumes
all of the liabilities and obligations of Assignor under the Lease, arising or
accruing on or after the Effective Date, including, without limitation,
liability for the payment of rent and for the due performance of all the terms,
covenants and conditions of the tenant pursuant to the Lease. Except as provided
in paragraph 4 below as to the Assignor's continuing obligations with respect to
the remediation of the Weymouth Environmental Matter (as defined below),
Assignor's

7

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liabilities and obligations under the Lease shall terminate on the expiration of
the current term on August 14, 2004.

        3.    Consent to Assignment.    Effective as of the Effective Date,
Landlord hereby consents to the assignment effected hereby.

        4.    Weymouth Environmental Matter.    The Parties acknowledge that the
premises subject to the Lease has, during the term of the Lease, sustained
certain environmental discharges, spills or impacts being remediated under
Massachusetts Department of Environmental Protection Release Tracking Numbers
3-14967, 3-16701 and 3-20537 (collectively the "Weymouth Environmental Matter").
Pursuant to the terms of the Purchase Agreement, Assignor remains obligated for
the costs and expenses with respect to remediation of the Weymouth Environmental
Matter and Assignee has granted Assignor a license to enter upon the premises
subject to the Lease for the purpose of performing such remediation activities.
In the event such remediation activities are required beyond the termination or
expiration of the Lease, Landlord does hereby grant to Assignor a license (at no
additional cost to Assignor) to enter upon such premises in order complete such
remediation activities. Landlord acknowledges that as between Landlord and
Assignee, Assignee shall have no liability or obligation with respect to the
Weymouth Environmental Matter, other than to grant access to the premises
pursuant to the license agreement between Assignor and Assignee.

        5.    Miscellaneous.    

        (a)    Headings.    The section headings used herein are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.

        (b)    Governing law.    This Agreement shall be governed by and
construed in accordance with the laws of the State of Massachusetts.

        (c)    Counterparts.    This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

        *** Signature Page Follows ***

8

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LANDLORD:   Lynda Realty Trust
 
 
By:
 
         

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

Albert R. Schofield, Jr.     Its:   Trustee
ASSIGNOR:
 
Washington Group International, Inc.,
an Ohio corporation
 
 
By:
 
         

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

    Name:            

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

    Its:            

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

 
 
Stone & Webster, Inc.,
a Louisiana corporation
ASSIGNEE:
 
By:
 
         

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

    Name:            

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

    Its:            

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

9

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EXHIBIT B-2
TO ASSET PURCHASE AGREEMENT

ASSIGNMENT OF LEASE
(Cambridge)

        ASSIGNMENT OF LEASE (this "Agreement"), entered into as of April    ,
2003, by and among Washington Group International, Inc., an Ohio corporation
("Assignor"), maintaining an office at One Broadway, Cambridge, Massachusetts,
02142; The Shaw Group Inc., a Louisiana corporation ("Assignee"), maintaining an
office at 4171 Essen Lane, Baton Rouge, Louisiana, 70809; and The Massachusetts
Institute of Technology ("Landlord") maintaining an office at 238 Main Street,
Cambridge, Massachusetts, 02142. Assignor, Assignee and Landlord are referred to
collectively herein as the "Parties."

WITNESSETH:

        WHEREAS, Assignor as the successor by merger of Raytheon Engineers &
Constructors, Inc., as "Tenant," and Landlord, as "Landlord," are parties to
that lease dated December 8, 1998 as amended by (a) First Amendment to Lease
dated September 17, 1999, (b) Second Amendment to Lease dated July 2000, and
(c) letter dated January 17, 2002 (collectively the "Lease"), presently covering
certain premises (the "Premises") located at One Broadway, Cambridge,
Massachusetts, a copy of which Lease is attached hereto as Exhibit "A"; and

        WHEREAS, Assignor as "Seller," and Assignee, as "Buyer," are parties to
an Asset Purchase Agreement dated April    , 2003 (the "Purchase Agreement"),
pursuant to which, subject to the terms and conditions set forth therein, The
Shaw Group, Inc. will acquire all of Seller's right, title and interest in,
under and to the Lease; and

        WHEREAS, The Shaw Group Inc. proposes to further assign its right, title
and interest in, under and to the Lease to its subsidiary Stone & Webster, Inc.
pursuant to Section 10.2 of the Purchase Agreement; and

        WHEREAS, simultaneously with the closing of the transactions
contemplated by the Purchase Agreement, the Parties mutually desire (a) that
Assignor assign all of its right, title and interest in, under and to the Lease
to Assignee, (b) that Assignee further assign its rights under the Lease to
Stone & Webster, Inc. and (c) that Landlord consent to the assignments
contemplated hereby subject to the provisions of Section 14.5 of the Lease and
all on the terms and conditions hereinafter set forth.

        NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other valuable consideration, the receipt and adequacy of which are
expressly acknowledged, the Parties agree as follows:

        1.    Effective Date.    For all purposes under this Agreement, the term
"Effective Date" shall mean that date, if any, on which the closing of the
transactions contemplated by the Purchase Agreement is consummated.

        2.    Assignment.    Effective as of the Effective Date, Assignor hereby
assigns transfers and sets over unto Assignee all of Assignor's right, title and
interest in, under and to (i) the Lease and (ii) the aggregate security deposit
heretofore made by Assignor pursuant to the Lease. Assignor will deliver
possession of the Premises to Assignee on the Effective Date. Assignee hereby
accepts the foregoing assignment and hereby agrees to perform all of the terms
and conditions of the Lease to be performed on the part of Assignor and assumes
all of the liabilities and obligations of Assignor under the Lease, arising or
accruing on or after the Effective Date, including, without limitation,
liability for the payment of rent and for the due performance of all the terms,
covenants and conditions of the tenant pursuant to the Lease.

10

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        3.    Consent to Assignments and Assumption.    Effective as of the
Effective Date, Landlord hereby (a) consents to the assignment effected hereby,
(b) consents to further assignment by Assignee to Stone & Webster, Inc., which
consents are, pursuant to Section 14.5 of the Lease, given by Landlord without
thereby affecting the continuing obligations of Assignor as Lessee under the
Lease which obligations of Assignor cease on expiration of the current term on
December 17, 2008. Assignee and Stone & Webster, Inc. do hereby agree to assume
responsibility jointly and severally for all the obligations of Lessee under the
Lease arising after the Effective Date.

        4.    Miscellaneous.    

        (a)    Headings.    The section headings used herein are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.

        (b)    Governing law.    This Agreement shall be governed by and
construed in accordance with the laws of the State of Massachusetts.

        (c)    Counterparts.    This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

***Signature Page Follows***

11

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LANDLORD:   The Massachusetts Institute of Technology
 
 
By:
 
         

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

    Name:            

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

    Its:            

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

ASSIGNOR:
 
Washington Group International, Inc.,
an Ohio corporation
 
 
By:
 
         

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

    Name:            

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

    Its:            

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

 
 
The Shaw Group Inc.,
a Louisiana corporation
ASSIGNEE:
 
By:
 
         

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

    Name:            

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

    Its:            

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

Stone & Webster, Inc. does hereby agree to the provisions of paragraph 3 of the
foregoing.
 
 
Stone & Webster, Inc.,
a Louisiana corporation
 
 
By:
 
         

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

    Name:            

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

    Its:            

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12

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EXHIBIT "A"

13

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EXHIBIT C
TO ASSET PURCHASE AGREEMENT

ASSUMPTION AGREEMENT

        This ASSUMPTION AGREEMENT, dated as of April    , 2003, is executed by
THE SHAW GROUP INC., a Louisiana corporation ("Buyer") for the benefit of
WASHINGTON GROUP INTERNATIONAL, INC., an Ohio corporation ("Seller").

RECITALS:

        A.    Seller and Buyer have entered into that certain Asset Purchase
Agreement, dated as of April    , 2003 (the "Purchase Agreement"), providing for
the purchase by Buyer of the Acquired Assets from Seller. Capitalized terms used
herein without definition shall have the meanings set forth in the Purchase
Agreement.

        B.    In connection with such purchase, Buyer has agreed in the Purchase
Agreement to assume and to be responsible for, pay, perform, satisfy and
discharge in a timely manner all of the Assumed Liabilities.

        C.    This Assumption Agreement is being executed to evidence and effect
the assumption of the Assumed Liabilities by Buyer pursuant to the Purchase
Agreement.

        D.    Execution and delivery of this Assumption Agreement is a condition
to the Closing under the Purchase Agreement.

        NOW, THEREFORE, in consideration of the promises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and pursuant and subject to the terms and conditions of the
Purchase Agreement, Buyer hereby agrees as follows:

        1.    Assumption of Liabilities.    Buyer does hereby, effective as of
12:01 a.m. (eastern standard time) on the            day of April, 2003,
irrevocably and unconditionally assume and agree to observe and be responsible
for, pay, perform, satisfy and discharge in a timely manner all of the Assumed
Liabilities from and after the date hereof subject to any equitable rights of
offset or other defenses asserted by Buyer in good faith, provided that Buyer
hereby agrees to indemnify Seller for damages caused by Buyer's failure to
perform the Assumed Liabilities for which Buyer asserts a defense or offset.

        2.    Subject to Purchase Agreement.    The scope, nature and extent of
the Assumed Liabilities are expressly set forth in the Purchase Agreement.

        3.    Binding Effect.    In accordance with Section 10.2 of the Purchase
Agreement, this Assumption Agreement and Buyer's obligations hereunder and under
the Purchase Agreement shall be and remain binding upon Buyer notwithstanding
any assignment of any rights or obligations under the Purchase Agreement by
Buyer.

        4.    Amendment; Waivers, Etc.    No amendment, modification or
discharge of this Assumption Agreement, and no waiver hereunder, shall be valid
or binding unless set forth in a writing specifically referencing this
Assumption Agreement 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.

        5.    Headings.    The headings contained in this instrument are
included for purposes of convenience only and shall not affect the meaning or
interpretation of this instrument.

1

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        6.    Governing Law.    This Assumption Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of New York,
without regard to principles of conflicts of laws.

        7.    Counterparts.    This Assumption Agreement may be executed in one
or more counterparts each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

        IN WITNESS WHEREOF, Buyer has duly executed this Assumption Agreement as
of the date first above written.

    THE SHAW GROUP INC.,
a Louisiana corporation (Buyer)
 
 
By:
 
         

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    Name:            

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

    Title:            

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2

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EXHIBIT D

TO ASSET PURCHASE AGREEMENT

IN THE UNITED STATES PATENT AND TRADEMARK OFFICE

ASSIGNMENT

        WHEREAS, Washington Group International, Inc., a corporation organized
under the laws of the State of Ohio, is the owner of the entire right, title and
interest in and to the United States patents and patent applications listed on
the attached schedule A; and

        WHEREAS, Stone & Webster, Inc., a corporation organized under the State
of Louisiana, is desirous of acquiring all of Washington Group
International, Inc.'s interest therein;

        NOW, THEREFORE, in consideration of and in exchange for the sum or one
dollar ($1.00) and other good and valuable consideration, the receipt of which
is hereby acknowledged, Washington Group International, Inc. hereby does sell,
assign and transfer unto Stone & Webster, Inc., the entire right, title and
interest in and to each of the aforementioned patents and patent applications,
and to all corresponding applications for patent and patents therefore, in any
and all countries, including all divisions, reissues, reexaminations,
continuations and extensions thereof.

        AND, Washington Group International, Inc. further authorizes and
requests any official whose duty it is to issue patents, to issue all patents on
said improvements, or patents resulting therefrom, to said Stone &
Webster, Inc., as assignee of the entire interest,

        AND, Washington Group International, Inc. further agrees that on request
and without further consideration, but at the expense of Stone & Webster, Inc.,
Washington Group International, Inc. will communicate to Stone & Webster, Inc.,
or its representative, any facts known to it respecting said inventions, will
sign all lawful papers, and execute and deliver all divisional, continuing,
reissue and/or reexamination applications that may be necessary or desirable to
aid Stone & Webster, Inc., or its successors, to obtain and enforce proper
protection for said inventions in the United States of America and its
territorial possessions.

        WASHINGTON GROUP INTERNATIONAL, INC.
Date:
 
 
 
BY:
 
     

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

     

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

        Name:                

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

        Title:                

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

State of                    

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

  )                 )   ss.:     County of       )            

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

           

        This            day of                        , 2003, before me
personally came the above-named                        , to me personally known
as the individual who executed the foregoing assignment, who stated that he is
the                  of Washington Group International, Inc., the corporation
described in the foregoing assignment, and acknowledged to me that he executed
the same of his own free will for the purposes therein set forth.

   

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Notary Public

1

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        STONE & WEBSTER, INC.
Date:
 
 
 
BY:
 
     

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

     

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

        Name:                

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

        Title:                

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

State of                    

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

  )                 )   ss.:     County of       )            

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

           

        This            day of                        , 2003, before me
personally came the above-named                        , to me personally known
as the individual who executed the foregoing assignment, who stated that he is
the                  of Stone & Webster, Inc., the corporation described in the
foregoing assignment, and acknowledged to me that he executed the same of his
own free will for the purposes therein set forth.

   

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Notary Public

2

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SCHEDULE A
ISSUED UNITED STATES PATENTS

PATENT NO.

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

  INVENTOR

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

  DATE ISSUED

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4,485,077   Martinez   11/27/84 4,695,664   Whittle   09/22/87 5,141,049  
Larson et al.   08/25/92 5,196,632   Larson et al.   03/23/93 5,461,179   Chen
et al.   10/24/95 5,686,369   Chen et al.   11/11/97 5,695,724   Chen et al.  
12/09/97 5,739,071   Chen et al.   04/14/98 5,602,290   Fallon   02/11/97
5,811,629   Hubbell   09/22/98 6,171,449   Welch   01/09/01 6,376,736   Rutten
et al.   04/23/02

3

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PENDING UNITED STATES PATENT APPLICATIONS

SERIAL NO.

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

  INVENTOR

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

  DATE FILED

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

09/486,667   Welch   06/02/00 10/048,129   Larsen et al.   01/14/02 60/360,355  
Hwang et al.   02/28/02 60/388,091   Oleksy et al.   06/12/02 60,394,177  
Pizzelli et al.   07/03/02

4

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EXHIBIT E

TO ASSET PURCHASE AGREEMENT

IN THE UNITED STATES PATENT AND TRADEMARK OFFICE

ASSIGNMENT

        WHEREAS, Washington Group International, Inc., a corporation organized
under the laws of the State of Ohio, is the owner of the entire right, title and
interest in and to the United States Trademark Registration No. 871,924 for the
mark "BADGER" and all the goodwill associated therewith; and

        WHEREAS, Stone & Webster, Inc., a corporation organized under the State
of Louisiana, is desirous of acquiring all of Washington Group
International, Inc.'s interest therein;

        NOW, THEREFORE, in consideration of and in exchange for the sum or one
dollar ($1.00) and other good and valuable consideration, the receipt of which
is hereby acknowledged, Washington Group International, Inc. hereby does sell,
assign and transfer unto Stone & Webster, Inc. the entire right, title, goodwill
and interest in and to said trademark registration, and to all corresponding
applications for trademark and trademarks therefore (including related
word/design marks), in any and all countries, including all renewals thereof.

        AND, Washington Group International, Inc. further authorizes and
requests any official whose duty it is to issue trademark registrations, to
issue all trademark renewal registrations resulting from said trademark
registrations to said Stone & Webster, Inc., as assignee of the entire interest,

        AND, Washington Group International, Inc., further agrees that on
request and without further consideration, but at the expense of Stone &
Webster, Inc., Washington Group International, Inc. will communicate to Stone &
Webster, Inc., or its representative, any facts known to it respecting said
trademark registrations, will sign all lawful papers, and execute and deliver
all renewal applications that may be necessary or desirable to aid Badger
Technologies, Inc., or its successors, to obtain and enforce proper trademark
protection for said trademark registrations in the United States of America and
its territorial possessions.

        WASHINGTON GROUP INTERNATIONAL, INC.
Date:
 
 
 
BY:
 
     

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        Name:                

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        Title:                

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State of                    

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  )                 )   ss.:     County of       )            

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        This            day of                        , 2003, before me
personally came the above-named                        , to me personally known
as the individual who executed the foregoing assignment, who stated that he is
the            of Washington Group International, Inc. the corporation described
in the foregoing assignment, and acknowledged to me that he executed the same of
his own free will for the purposes therein set forth.

   

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Notary Public

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        STONE & WEBSTER, INC.
Date:
 
 
 
BY:
 
     

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        Name:                

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        Title:                

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State of                    

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  )                 )   ss.:     County of       )            

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        This            day of                        , 2003, before me
personally came the above-named                        , to me personally known
as the individual who executed the foregoing assignment, who stated that he is
the            of Stone & Webster, Inc. the corporation described in the
foregoing assignment, and acknowledged to me that he executed the same of his
own free will for the purposes therein set forth.

   

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Notary Public

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EXHIBIT F

TO ASSET PURCHASE AGREEMENT

COVENANT AND AGREEMENT NOT-TO-COMPETE

        THIS COVENANT AND AGREEMENT NOT-TO-COMPETE ("Agreement") is entered into
and effective as of April    , 2003, by and between The Shaw Group Inc.
("Buyer") and Washington Group International, Inc. (Seller").

RECITALS:

        A.    Pursuant to the terms of a certain Asset Purchase Agreement
("Asset Purchase Agreement") dated as of April    , 2003 between Seller and
Buyer, Buyer agreed to acquire certain assets of Seller.

        B.    It is a condition to Buyer's obligations under the Asset Purchase
Agreement, that Seller enter into this Agreement.

        C.    In connection with the sale of certain of Seller's assets to
Buyer, as provided in the Asset Purchase Agreement, the parties desire to enter
into this Agreement to provide that Seller will not engage in certain activities
that are competitive with Buyer.

        D.    Capitalized terms not defined herein shall have the same meaning
as set forth in the Asset Purchase Agreement.

AGREEMENT:

        NOW, THEREFORE, the parties hereby agree as follows:

        1.    COVENANT NOT-TO-COMPETE.    Seller agrees that, in consideration
of the purchase by Buyer of the Acquired Assets, it shall not and shall cause
its Affiliates to not, on or prior to the date that is three (3) years after the
Closing Date, engage in any activity which is, competitive with the Business as
conducted as of the Closing Date ("Competing Activities"); provided, however,
that Seller shall not be restricted from performing its obligations under any
contract or proposal existing as of the Closing Date that is not assumed by
Buyer under the terms of the Asset Purchase Agreement. The provisions of this
Section 1 shall not (i) restrict the activities of any Person (other than an
Affiliate of Seller) that acquires any of the stock or any of the assets of
Seller, (ii) restrict Seller from acquiring any or all of the stock or assets of
a company (a "Target") that engages in a business that is competitive with the
Business provided that the Target's revenues for the most recent fiscal year
ended prior to such acquisition which are derived from Competing Activities
shall be both (a) less than ten percent (10%) of Target's gross revenues, and
(b) less than $5 million, (iii) restrict Seller from acquiring or owning up to
ten percent (10%) of the issued and outstanding capital stock of a company that
engages in Competing Activities, (iv) restrict Seller's activity as a member in
an organization (other than an Affiliate of Seller) in which members share
profits, losses and/or economic rights (including, but not limited to,
partnerships, teaming agreements, joint ventures, LLCs and consortiums) provided
that Seller's scope of activity in such organization is not a Competing
Activity, nor in any way restrict members or partners other than Seller,
(v) restrict Seller from continuing to provide engineering, procurement,
construction, and operations and maintenance and other services without
restriction on any project, in any industry, at any location, including
providing such services for projects that employ the Intellectual Property of
the Buyer acquired under the Asset Purchase Agreement or of any other Persons
that have competing intellectual property or engage in Competing Activities.

        2.    NONSOLICITATION COVENANT.    For a period of eighteen (18) months
after the Closing Date, none of Seller or any of its representatives or any of
its Affiliates will directly or indirectly, without the prior written consent of
Buyer, recruit, offer employment to, employ, engage as a consultant, lure or
entice away or in any other manner persuade or attempt to persuade any person
who is at that time an

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employee of the Buyer or Buyer's Affiliate with respect to the Business and who
was also an employee of Seller with respect to the Business on the Closing Date
to leave the employ of Buyer or such other Person unless such person has been
terminated by Buyer or an Affiliate of Buyer. General employment advertising
that is not focused on persons employed by Buyer or any successor shall not be
deemed to violate this Section 2.

        3.    REASONABLENESS OF SCOPE AND DURATION.    Seller agrees that the
covenants and agreements contained herein are, taken as a whole, fair and
reasonable in their geographic scope and duration, and Seller will not raise any
issue of the reasonableness of the scope or duration of any such covenants in
any proceeding to enforce any such covenants.

        4.    CUMULATIVE REMEDIES; ENFORCEABILITY.    Seller acknowledges that
Buyer has consummated the Asset Purchase Agreement in reliance, among other
things, upon the fulfillment by Seller of all of the covenants and agreements of
this Agreement. Seller understands and agrees that Buyer may not be adequately
compensated by damages for a breach by Seller of any of the covenants and
agreements contained herein, and that Buyer shall, in addition to all other
remedies, be entitled to injunctive relief and specific performance. Seller
hereby affirmatively waives the requirement that Buyer demonstrate the
likelihood of irreparable damage to Buyer or demonstrate that any actual damages
will be suffered by Buyer or any other entity seeking enforcement hereof as a
result of Seller's breach of any provision of this Agreement. The covenants and
agreements contained in this Agreement shall be construed as separate covenants
and agreements, and if any court shall finally determine that the restraints
provided for in any such covenants and agreements are too broad as to the area,
activity or time covered, said area, activity or time covered shall be reduced
to whatever extent the court deems reasonable, and such covenants and agreements
shall be enforced as to such reduced area, activity or time. Nothing herein
contained will be construed as prohibiting Buyer from pursuing any other
remedies available to it for such breach or threatened breach, including,
without limitation, the recovery of money damages, and shall also be entitled to
the payment of any and all reasonable fees, disbursements, and other charges of
the attorneys and collection agents, court costs, and all other costs.

        5.    MISCELLANEOUS.    

        5.1    Entire Agreement.    This Agreement embodies the entire agreement
and understanding of the parties related to its subject matter and supersedes
all prior proposals, understandings, agreements, correspondence, arrangements
and contemporaneous oral agreements relating to the subject matter of this
Agreement. No representation, promise, inducement or statement of intention has
been made by any party that has not been embodied in this Agreement.

        5.2    Counterparts.    This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original copy of this
Agreement and all of which, when taken together, shall be deemed to constitute
one and the same agreement.

        5.3    Amendment; Waiver.    This Agreement may be amended, modified or
superseded only by a written instrument signed by all of the parties to this
Agreement. No party shall be deemed to have waived compliance by another party
of any provision of this Agreement unless such waiver is contained in a written
instrument signed by the waiving party and no waiver that may be given by a
party will be applicable except in the specific instance for which it is given.
The failure of any party to enforce at any time any of the provisions of this
Agreement or to exercise any right or option contained in this Agreement or to
require at any time performance of any of the provisions of this Agreement, by
any of the other parties, shall not be construed to be a waiver of such
provisions and shall not affect the validity of this Agreement or any of its
provisions or the right of such party thereafter to enforce each provision of
this Agreement. No course of dealing shall operate as a waiver or modification
of any provision of this Agreement or otherwise prejudice such party's rights,
powers and remedies.

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        5.4    Agreement Non-Assignable; Binding Effect.    Neither Seller nor
Buyer shall assign any of its rights or obligations under this Agreement,
whether by operation of law or otherwise, without obtaining the prior consent of
the other; provided, however, that Buyer may assign its rights hereunder without
such consent to (i) any Affiliate of Buyer, or (ii) any Person who acquires
substantially all of the assets of the Business from Buyer and/or its Affiliate
or all of the stock of Buyer and/or its Affiliate which hold title to such
assets, provided further that in any such event Buyer shall remain obligated
hereunder. Subject to the foregoing, all of the provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
parties to this Agreement and their respective heirs, legal representatives,
successors and assigns.

        5.5    Construction and Interpretation of Agreement.    

        (a)   Section titles or captions in this Agreement are included for
purposes of convenience only and shall not be considered a part of the agreement
in construing or interpreting any of its provisions. All references in this
Agreement to Sections shall refer to sections of this Agreement unless the
context clearly otherwise requires.

        (b)   When used in this Agreement, the word "including" shall have its
normal common meaning and any list of items that may follow such word shall not
be deemed to represent a complete list of the contents of the referent of the
subject.

        (c)   The parties have participated jointly in the negotiation and
drafting of this Agreement. If any ambiguity or question of intent or
interpretation arises, no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.

        (d)   Unless the context otherwise requires, when used in this
Agreement, the singular shall include the plural, the plural shall include the
singular, and all nouns, pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine or neuter, as the identity of the person or
persons may require.

        (e)   The parties do not intend that this Agreement shall confer on any
third party any right, remedy or benefit, or that any third party shall have any
right to enforce any provision of this Agreement.

        5.6    Confidentiality of Agreement.    No party shall make any press
release or other public announcement regarding this Agreement or the
transactions described in this Agreement, unless such party is obligated by law
or the rules of any stock exchange upon which its shares are traded to make such
a disclosure. When a party determines that it is obligated by law or the rules
of a stock exchange to make such a disclosure, it shall notify the other party
prior to such disclosure and all of the parties shall cooperate to cause a
mutually agreeable release or announcement to be issued.

        5.7    Consent to Jurisdiction.    Each of the parties consents and
voluntarily submits to personal jurisdiction in the State of New York and in the
courts in such state located in New York County and the United States District
Court for the Southern District of New York in any proceeding arising out of or
relating to this Agreement, and agrees that all claims raised in such proceeding
may be heard and determined in such court. Each of the parties further consents
and agrees that such party may be served with process in the same manner as a
notice may be given under this Agreement.

        5.8    Governing Law.    This Agreement shall be governed by, and shall
be construed and enforced in accordance with, the laws of New York, without
giving effect to any conflict of law rule or principle of such state.

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        5.9    Time of Essence.    Time is of the essence to the performance of
the obligations set forth in this Agreement.

        6.    NOTICES.    All notices, requests, consents, approvals, waivers,
demands and other communications required or permitted to be given or made under
this Agreement shall be in writing and shall be deemed delivered to the parties
(a) on the date of personal delivery or transmission by facsimile transmission,
(b) on the first business day following the date of delivery to a nationally
recognized overnight courier service or (c) or the third business day following
the date of deposit in the United States Mail, postage prepaid, by certified
mail, in each case, addressed as follows, or to such other address, person or
entity as any party may designate by notice to the others in accordance
herewith:

        If to Seller:

Washington Group International, Inc.
P. O. Box 73
Boise, Idaho 83729
Attention: General Counsel
Telephone: (208) 386-5199
Facsimile: (208) 386-5220

With a copy to:

Marshall Batt & Fisher, LLP
P. O. Box 1308
Boise, Idaho 83701
Attention: William J. Batt
Telephone: (208) 331-1000
Facsimile: (208) 331-2400

        If to Buyer:

The Shaw Group Inc.
4171 Essen Lane
Baton Rouge, Louisiana 70809
Attention: General Counsel
Telephone: (225) 932-2641
Facsimile: (2256) 932-2642

With a copy to:

Dean P. Cazenave
KEAN, MILLER, HAWTHORNE, D'ARMOND,
    McCOWAN & JARMAN, L.L.P.
One American Place, 22nd Floor (70825)
Post Office Box 3513
Baton Rouge, Louisiana 70821
Telephone: (225) 387-0999
Facsimile: (225) 388-9133

or at such other address as any party may have advised the others in writing
pursuant to this Section.

SIGNATURE PAGE FOLLOWS

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        IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the date first written above.

WITNESSES:   Buyer:
The Shaw Group Inc.
 
 
By:
 
         

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    Title:            

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WITNESSES:
 
Seller:
WASHINGTON GROUP INTERNATIONAL, INC.
 
 
By:
 
 

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    Title:    

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EXHIBIT G
TO ASSET PURCHASE AGREEMENT

PURCHASE ESCROW AGREEMENT

        THIS PURCHASE ESCROW AGREEMENT (the "Agreement") is made and entered
into on the    day of April, 2003 by and among Washington Group
International, Inc., an Ohio corporation ("Seller"), The Shaw Group Inc., a
Louisiana corporation, ("Buyer"), and Kean, Miller, Hawthorne, D'Armond,
McCowan & Jarman, L.L.P. ("Escrow Agent").

R E C I T A L S:

        WHEREAS, Seller and Buyer, have entered into that certain Asset Purchase
Agreement dated April            , 2003 (the "Purchase Agreement"), which
provides for the purchase by Buyer of certain assets of Seller (capitalized
terms used herein without definition shall have the meanings given such terms in
the Purchase Agreement);

        WHEREAS, the Purchase Agreement provides that Seller shall indemnify
Buyer under certain circumstances for certain losses and that Seller may be
required to refund to Buyer a portion of the Estimated Purchase Price based upon
the calculation of the Adjustment;

        WHEREAS, the parties desire to arrange for such escrow and appoint
Escrow Agent as escrow agent in accordance with the terms hereof.

        NOW, THEREFORE, in consideration of the closing of the transactions
contemplated by the Purchase Agreement and the agreements herein the parties
agree as follows:

        1.    Appointment of Escrow Agent.    Escrow Agent is hereby appointed
to act as escrow agent in accordance with the terms hereof, and Escrow Agent
hereby accepts such appointment. Escrow Agent shall have all the rights, powers,
duties and obligations provided herein.

        2.    Deposit of Escrow Assets.    Simultaneously with the execution of
this Agreement, Buyer shall deposit with Escrow Agent the sum of Five Hundred
Thousand and No/100 ($500,000.00) Dollars by wire transfer of immediately
available funds (the "Escrow Fund"). The Escrow Agent shall hold the Escrow Fund
in accordance with the terms of this Agreement in one escrow account. The Escrow
Fund shall serve as a method of discharging any Claims (as defined below) of
Buyer made prior to or on the date one year following the date hereof (such
period referred to herein as the "Escrow Period").

        3.    Investment.    Unless jointly instructed otherwise in writing by
Buyer and Seller, Escrow Agent shall invest and reinvest the Escrow Fund during
the term of the Escrow Period in savings accounts or certificates of deposit in
or of a federally insured bank having a net worth of not less than
$500,000,000.00. Escrow Agent shall not be liable or responsible in case of the
failure or suspension of said bank.

        4.    Income.    All income on the Escrow Fund shall be reported as
income of Seller for tax purposes, and distributed to Seller at the end of the
Escrow Period, less and except any amounts paid or held subject to Buyer's
Claims pursuant to Section 5 below.

        5.    Payment of Buyer Claims.    

        a.    Assertion of Indemnifiable Claims.    From time to time during the
Escrow Period, Buyer or its successors or assigns may assert a claim for the
Adjustment payment pursuant to Section 3.03 of the Purchase Agreement (if
applicable) and/or matters for which it is entitled to indemnification pursuant
to the Purchase Agreement (any such claim for indemnification, a "Claim")
against Seller and demand satisfaction thereof out of the Escrow Fund by sending
a written notice, stating the amount of the Claim in dollars, and in general
terms the basis of the Claim, to Seller and to the Escrow Agent. If the Escrow
Agent shall receive such notice from

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Buyer before any distribution of the Escrow Fund is made to Seller at the end of
the Escrow Period pursuant to Section 6 below, the notice shall be deemed to
represent a pending Claim (or Claims).

        b.    Escrow Agent's Role.    The Escrow Agent shall have no
responsibility or obligation for investigating or determining the validity or
sufficiency of any pending Claim. The Escrow Agent shall, however, deliver a
full copy of any pending Claim to Seller promptly upon receipt thereof. Unless
Seller protests the payment of such Claim to Buyer from the Escrow Fund in
writing delivered to the Escrow Agent within Twenty (20) days after the receipt
of Buyer's notice by Seller, Escrow Agent shall thereupon make payment to the
Buyer in accordance with Buyer's notice of its Claim previously delivered to
Escrow Agent.

        c.    Protest by Seller.    If protest of Buyer's Claim is made by
Seller in accordance with subparagraph 5b above, Escrow Agent shall continue to
hold the Escrow Fund and any interest or income thereon until: (i) the right to
same is legally determined by, or an order for the right to same is entered by,
a court of competent jurisdiction from which no appeal may be taken; (ii) the
Claim is resolved by the mutual agreement of Seller and the Buyer; (iii) the
Escrow Fund and any interest or income thereon is paid into the registry or
custody of a court in accordance with Section 10(c) below.

        6.    Termination of Escrow.    Escrow Agent shall hold the Escrow Fund
and all interest accrued thereon in escrow until the later to occur of (a) the
end of the Escrow Period or (b) if Buyer has asserted a Claim under Section 5
hereof prior to such time, five days after such Claim is finally resolved in
accordance with the provisions of this Agreement, and the full amount of all
payments to Buyer required thereby have been disbursed to Buyer (the "Final
Settlement Time"). Immediately after the Final Settlement Time, Escrow Agent
shall disburse to Seller any amounts remaining in the Escrow Fund and the escrow
shall terminate; provided, however, that if at any time prior to the Final
Settlement Time the Escrow Fund shall equal zero, then the escrow shall
terminate at such earlier time. If at any time after the Final Settlement time
the Escrow Fund exceeds the amount of any then pending Claims, Escrow Agent
shall immediately distribute to Seller such excess amount.

        7.    Method of Payment.    Any payments to be made hereunder shall be
made by wire transfer in immediately available funds to the account of such
payee party designated by such party in writing to the other parties, unless
otherwise requested by the receiving party.

        8.    No Transfer of Interest In Escrow Fund.    Except as otherwise
expressly provided hereunder, Seller may not assign or transfer, whether or not
in accordance with the terms of the Purchase Agreement, any interest in the
Escrow Fund in whole or in part. The Escrow Fund shall remain subject to this
Agreement and no assignment or transfer by Seller shall in any way affect any
rights Buyer may have in such Escrow Fund. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their respective heirs, administrators, executors, successors and assigns.

        9.    Notices.    Any notice, communication, request, reply or advice
(hereinafter severally and collectively called "Notice") provided or permitted
to be given, made or accepted by any party in this Agreement must be in writing
and may be given or served by depositing the same, postage prepaid and
registered or certified with return receipt requested in the U. S. Mail, or by
delivering the same in person to the person to be notified, or by sending same
all charges prepaid by any nationally recognized overnight parcel delivery
service, including without limitation Federal Express. Notice deposited in the
mail or with a national overnight delivery service in the manner herein
described shall be effective when so deposited. Notices transmitted by any other
method shall be effective when

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received. For purposes of any Notice the address of the parties shall, until
changed as hereinafter provided, be as follows:

        If to Seller:

Washington Group International, Inc.
P. O. Box 73
Boise, Idaho 83729
Attention: General Counsel
Telephone: (208) 386-5199
Facsimile: (208) 386-5220

With a copy to:

Marshall Batt & Fisher, LLP
P. O. Box 1308
Boise, Idaho 83701
Attention: William J. Batt
Telephone: (208) 331-1000
Facsimile: (208) 331-2400

        If to Buyer:

The Shaw Group Inc.
4171 Essen Lane
Baton Rouge, Louisiana 70809
Attention: General Counsel
Telephone: (225) 932-2641
Facsimile: (2256) 932-2642

If to Escrow Agent:

Dean P. Cazenave
KEAN, MILLER, HAWTHORNE, D'ARMOND,
    McCOWAN & JARMAN, L.L.P.
One American Place, 22nd Floor (70825)
Post Office Box 3513
Baton Rouge, Louisiana 70821
Telephone: (225) 387-0999
Facsimile: (225) 388-9133

or at such other address as any party may have advised the others in writing
pursuant to this Section.

        10.    Liability of Escrow Agent.    Acceptance by the Escrow Agent
under this Agreement is subject to the following terms and conditions, which all
parties to this Agreement hereby agree shall govern and control with respect to
the rights, duties and liabilities of the Escrow Agent.

        a.    Limitation of Liability.    In performing any of its duties under
this Agreement, or upon the claimed failure to perform hereunder, Escrow Agent
shall not be liable to anyone for any damages, losses, or expenses which they
may incur as a result of the Escrow Agent so acting, or failing to act;
provided, however, Escrow Agent shall be liable for damages arising out of its
willful default under this Agreement. Accordingly, Escrow Agent shall not incur
any such liability with respect to (i) any action taken or omitted to be taken
in good faith upon written advice of its counsel given with respect to any
questions relating to the duties and responsibilities of the Escrow Agent
hereunder, or (ii) any action taken or omitted to be taken in reliance upon any
document, including any written notice or instructions provided for in this
Agreement, not only as to its due

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execution and to the validity and effectiveness of its provisions but also as to
the truth and accuracy of any information contained therein, which the Escrow
Agent shall in good faith believe to be genuine, to have been signed or
presented by proper person or persons and to conform with the provisions of this
Agreement.

        b.    Indemnity.    Buyer and Seller, jointly and severally, hereby
agree to indemnify and hold harmless Escrow Agent against any and all losses,
claims, damages, costs, liabilities and expenses, including, without limitation,
reasonable costs of investigation and counsel fees and disbursements which may
be imposed by Escrow Agent or incurred by it in connection with its acceptance
of this appointment as Escrow Agent hereunder or the performance of its duties
hereunder, including, but without limitation, any litigation arising from this
Agreement or involving the subject matter hereof; except, that if Escrow Agent
shall be found guilty of willful default under this Agreement, then, in that
event, Escrow Agent shall bear all such losses, claims, damages and expenses.

        c.    Deposit in Registry of the Court.    In the event of a dispute
between any of the parties hereto sufficient in the discretion of Escrow Agent
to justify its doing so, the Escrow Agent shall be entitled to tender into the
registry or custody of any court of competent jurisdiction all money or property
in its hands under the terms of this Agreement, together with such legal
proceedings as it deems appropriate, and thereupon to be discharged from all
further duties under this Agreement. Any such legal action may be brought in any
such court as Escrow Agent shall determine to have jurisdiction thereof.

        d.    Limitation on Duties.    Escrow Agent shall be bound only by the
terms of this Agreement and shall not be bound by or incur any liability with
respect to the Purchase Agreement or any other agreement or understanding
between the Buyer and the Seller except as herein expressly provided. Escrow
Agent shall not have any duties hereunder except those specifically set forth
herein.

        11.    Resignation or Removal of Escrow Agent.    The Escrow Agent may
resign as such following the giving of thirty days' prior written notice to the
other parties hereto. Similarly, the Escrow Agent may be removed and replaced
following the giving of thirty days' prior written notice to the Escrow Agent by
all of the other parties hereto. In either event, the duties of the Escrow Agent
shall terminate thirty days after the date of such notice (or as of such earlier
date as may be mutually agreeable); and the Escrow Agent shall then deliver the
balance of the Escrow Fund then in its possession to a successor escrow agent as
shall be appointed by the other parties hereto as evidenced by a written notice
filed with the Escrow Agent.

        If the other parties hereto are unable to agree upon a successor or
shall have failed to appoint a successor prior to the expiration of thirty days
following the date of notice of resignation or removal, the then-acting Escrow
Agent may petition any court of competent jurisdiction in Louisiana for the
appointment of a successor Escrow Agent or otherwise appropriate relief, and any
such resulting appointment shall be binding upon all of the parties hereto.

        In addition to the foregoing, in the event a dispute arises between
Seller and Buyer, Seller may require that the Escrow Fund (including any accrued
interest therein) be transferred to a successor escrow agent reasonably
acceptable to Seller and Buyer, with such funds to be held by such successor
escrow agent on the same terms and conditions set forth in this Agreement.

        Upon acknowledgment by any successor Escrow Agent of the receipt of the
then remaining balance of Escrow Fund, the then-acting Escrow Agent shall be
fully released and relieved of all duties, responsibilities, and obligations
under this Agreement.

        12.    Continuance of Agreement.    This Agreement shall be binding upon
the parties hereto and their respective transferees, successors, assigns, legal
representatives, heirs and legatees.

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        13.    Governing Law.    This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York only
in a court of competent jurisdiction in the state of Louisiana.

        14.    Interpretation and Definitions.    This Agreement is being
executed and delivered pursuant to and is subject to the Purchase Agreement and
is the Agreement referred to therein. The provisions of this Agreement shall not
in any event be construed so as to enlarge or diminish the rights of Seller or
Buyer under the Purchase Agreement.

        15.    Representation of Buyer by Escrow Agent.    Seller acknowledges
that the Escrow Agent represents the Buyer and its Affiliates (the "Buyer
Parties") as their attorney. Seller agrees that in the event of a controversy or
litigation between Buyer and Seller pertaining to the Purchase Agreement or this
Agreement or the transactions contemplated thereby, Buyer will waive the
conflict of interest and will not assert that the firm of Kean, Miller,
Hawthorne, D'Armond, McCowan & Jarman, L.L.P. is disqualified from representing
Buyer Parties in such controversy or litigation by reason of the fact that Kean,
Miller, Hawthorne, D'Armond, McCowan & Jarman, L.L.P. has acted as Escrow Agent,
but only if Escrow Agent has resigned as Escrow Agent and the parties have
appointed a successor Escrow Agent.

        16.    Execution in Counterparts.    For the convenience of the parties,
this Agreement may be executed in one or more counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same document.

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        IN WITNESS WHEREOF, the undersigned have executed this document,
effective the date first written above.

WITNESSES:   Seller:
Washington Group International, Inc.

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WITNESSES:
 
Buyer:
The Shaw Group Inc.

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By:
 
         

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Escrow Agent:
Kean, Miller, Hawthorne, D'Armond,
McCowan & Jarman, L.L.P.
 
 
By:
 
 

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EXHIBIT I
TO ASSET PURCHASE AGREEMENT

SECURITY AGREEMENT

        This Security Agreement is made this            day of April, 2003 by
WASHINGTON GROUP INTERNATIONAL, INC., an Ohio corporation ("Grantor") in favor
of THE SHAW GROUP INC., a Louisiana corporation ("Secured Party").

        Solely to secure Secured Party's right to the performance of Grantor's
obligations under Section 6.06 of that certain Asset Purchase Agreement (herein
so called) dated as of April     , 2003, between Grantor and Secured Party
(collectively, the "Obligations"), Grantor grants to Secured Party a continuing
security interest in the property and assets described on Exhibit A attached
hereto; together with all property added to or substituted for any of the
foregoing, and all interest, accessions, accounts and payment intangibles
directly derived therefrom, and all products and proceeds of any of the
foregoing (collectively, "Collateral"). The terms "accounts," "instruments,"
"account debtor," "documents," "general intangibles," "payment intangible,"
"chattel paper," "deposit accounts," and "proceeds" shall have the meanings
provided in the Uniform Commercial Code. Other capitalized terms used herein but
not otherwise defined shall have the meaning ascribed to such terms in the Asset
Purchase Agreement.

        Grantor further authorizes Secured Party at any time and without further
consent from Grantor to file a financing statement(s) in the appropriate public
records evidencing the liens and security interests granted herein. All
Collateral shall remain subject to this Security Agreement until all of the
Obligations have been fully performed and extinguished. All proceeds and other
amounts paid to Grantor in respect of the Collateral shall be delivered upon
receipt to Secured Party in accordance with the Asset Purchase Agreement.
Grantor shall execute any endorsements, assignments, and financing statements
with respect to the Collateral, in form and substance satisfactory to Secured
Party, that Secured Party may reasonably request. Secured Party shall at all
times have a perfected first priority security interest in the Collateral free
of all other security interests, liens and claims except as may otherwise be
disclosed or permitted under the Asset Purchase Agreement. In furtherance of the
rights of Secured Party under the Asset Purchase Agreement, Grantor authorizes
Secured Party, in its sole discretion (a) to notify the obligor on any
Collateral to make payments directly to Secured Party; (b) to receive and
recover any money or other property at any time due with respect to the
Collateral and in connection therewith, endorse notes, checks, drafts or other
evidence of payments; and (c) to settle, adjust and compromise, in Secured
Party's sole discretion, all present and future claims with third parties
arising with respect to the Collateral unless such claims relate to Excluded
Assets and/or Excluded Liabilities. Grantor (a) irrevocably appoints Secured
Party or any agent of Secured Party (which appointment is coupled with an
interest) the true and lawful attorney of Grantor with respect to the Collateral
(with full power of substitution) in the name, place and stead of, at Secured
Party's expense, Grantor and (b) authorizes Secured Party or any agent of
Secured Party, in its own name, at Secured Party's expense to do any of the
following, as Secured Party, in its sole discretion, deems appropriate:

(i)to demand, receive, sue for, and give receipts or acquittances for any moneys
due or to become due on any Collateral and to endorse any item representing any
payment on or proceeds of the Collateral;

(ii)to execute and file in the name of and on behalf of Grantor all financing
statements or other filings deemed necessary or desirable by Secured Party to
evidence, perfect, or continue the security interests granted in this Agreement;
and

(iii)to do and perform any act on behalf of Grantor permitted or required under
this Agreement.

        Upon collection of any accounts constituting Collateral, Grantor agrees
to promptly remit such proceeds to Secured Party in accordance with the Asset
Purchase Agreement. If Grantor accepts chattel paper or instruments in payment
of accounts, goods or services, Grantor shall promptly deliver all such chattel
paper and instruments to Secured Party in negotiable form.

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        Grantor shall during normal business hours permit Secured Party, its
officers and agents, access to the Collateral and to all books, records and data
relating to the Collateral that are not already in the possession of Secured
Party, at Secured Party's expense, for inspection and for verification of the
existence, condition and status of the Collateral. Grantor shall furnish all
assistance and information that Secured Party may reasonably require to conduct
such inspections and verifications.

        If Grantor defaults in the timely performance of any of the Obligations,
then, at the option of Secured Party, Secured Party may take all commercially
reasonable action and exercise the remedies of a secured party under the Uniform
Commercial Code in a manner that is not inconsistent with Section 6.06 of the
Asset Purchase Agreement, as may be necessary to obtain possession or title to
or the rights under all or any part of the Collateral, without recourse to
judicial proceedings and without demand, it being specifically acknowledged that
Secured Party has no right under Section 6.06 of the Asset Purchase Agreement
(and therefore hereunder) inter alia to any deficiency or consequential damages.
The rights and remedies of Secured Party hereunder are cumulative, and may be
exercised singly or concurrently. Any claims for breach of this Agreement by
either party shall be governed by the Asset Purchase Agreement.

        The obligations of Grantor hereunder shall be binding upon and obligate
Grantor's successors, heirs and assigns. Secured Party may assign and transfer
the Collateral to an assignee of substantially all of Secured Party=s rights
under the Asset Purchase Agreement, whereupon such transferee shall become
vested with all powers and rights granted to Secured Party under this Security
Agreement. This Security Agreement shall be governed by the internal laws of the
State of New York. If any provision of this Security Agreement shall be held to
be legally invalid or unenforceable by any court of competent jurisdiction, all
remaining provisions of this Security Agreement shall remain in full force and
effect.

        Grantor shall not sell, transfer, lease or encumber any of the
Collateral. In the event of any irreconcilable conflicts between the terms of
this Security Agreement and the terms of the Asset Purchase Agreement, the terms
of the Asset Purchase Agreement shall control.

        Grantor's agreement herein and to provide to Secured Party economic
benefits under Sections 6.06(b) and/or 6.06(c) of the Asset Purchase Agreement
shall not to be construed as warranty, guaranty or other assurance of the
financial condition of or payment by any third party to an Assigned Contract.

        The undersigned have executed this Security Agreement as of the date
first above written.

    GRANTOR:
 
 
WASHINGTON GROUP INTERNATIONAL, INC.
 
 
By:
 
         

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Its:
 
         

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THE SHAW GROUP INC.
 
 
By:
 
         

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Its:
 
         

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EXHIBIT A

To Security Agreement

        All of Grantor's right, title and interest in and to all Assigned
Contracts (as defined in the Asset Purchase Agreement) for which Consents (as
defined in the Asset Purchase Agreement) have not been obtained as of the date
hereof and with respect to which the parties are obligated to proceed in
accordance with subparagraphs 6.06(b) and 6.06(c) of the Asset Purchase
Agreement; and all renewals, extensions and replacements thereof and all
accounts and general intangibles constituting a part thereof or now or hereafter
derived therefrom excluding from the foregoing, those certain Assigned Contracts
and royalties, accounts, and proceeds thereof which may at any time be subject
to an Order as defined and agreed upon in Paragraph B of that certain letter
agreement between Grantor and Secured Party regarding Section 6.06 of the Asset
Purchase Agreement dated April    , 2003 and/or 2.01(b)(x) of the Asset Purchase
Agreement.

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DISCLOSURE SCHEDULES

        The registrant agrees to provide the Securities and Exchange Commission,
upon request, with copies of the Disclosure Schedules hereto.

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QuickLinks

ASSET PURCHASE AGREEMENT by and between THE SHAW GROUP INC. as Buyer and
WASHINGTON GROUP INTERNATIONAL, INC. as Seller April 17, 2003
TABLE OF CONTENTS
EXHIBITS AND SCHEDULES
Exhibits
Schedules to Asset Purchase Agreement
EXHIBIT A-1 TO ASSET PURCHASE AGREEMENT
EXHIBIT A-2 TO ASSET PURCHASE AGREEMENT
EXHIBIT "A" TO BILL OF SALE AND ASSIGNMENT
EXHIBIT B-1 TO ASSET PURCHASE AGREEMENT
EXHIBIT B-2 TO ASSET PURCHASE AGREEMENT
EXHIBIT "A"
EXHIBIT C TO ASSET PURCHASE AGREEMENT
EXHIBIT D TO ASSET PURCHASE AGREEMENT
SCHEDULE A ISSUED UNITED STATES PATENTS
PENDING UNITED STATES PATENT APPLICATIONS
EXHIBIT E TO ASSET PURCHASE AGREEMENT
EXHIBIT F TO ASSET PURCHASE AGREEMENT
EXHIBIT G TO ASSET PURCHASE AGREEMENT
EXHIBIT I TO ASSET PURCHASE AGREEMENT
EXHIBIT A To Security Agreement
DISCLOSURE SCHEDULES