EXHIBIT 10.1
 
ASSET PURCHASE AGREEMENT
AMONG
SOUTHERN SAW ACQUISITION CORPORATION
(“Buyer”)
and
SOUTHERN SAW HOLDINGS, INC.
and
SOUTHERN SAW SERVICE, L.P.
(collectively, “Sellers”)
October 11, 2006
 

 

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TABLE OF CONTENTS

         
 
    Page
1. Definitions
    1  
2. Terms Of The Purchase
    7  
2.1 Purchase and Sale of Assets
    7  
2.2 Excluded Assets
    8  
2.3 Liabilities
    9  
2.4 Purchase Price for the Acquired Assets
    11  
2.5 Preparation of Statement of Assets Acquired
    11  
2.6 Stub Period Adjustments to the Estimated Purchase Price
    12  
2.7 Method of Payment of the Purchase Price
    12  
2.8 Post-Closing Adjustment to the Purchase Price
    13  
2.9 Deliveries at Closing
    13  
2.10 Allocation of the Purchase Price
    14  
2.11 The Closing
    14  
2.12 Prorations
    14  
3. Representations and Warranties Concerning the Transaction
    15  
3.1 Representations and Warranties of the Sellers
    15  
3.2 Representations and Warranties of the Buyer
    15  
4. Representations and Warranties Concerning the Sellers
    15  
4.1 Organization; Authorization
    16  
4.2 Capitalization
    16  
4.3 Noncontravention
    17  
4.4 Brokers’ Fees
    17  
4.5 Title to Assets
    17  
4.6 Subsidiaries
    17  
4.7 Financial Statements; Trade Accounts Receivable; Inventory
    17  
4.8 SEC Filings
    18  
4.9 Events Subsequent to Most Recent Fiscal Year End
    18  
4.10 Undisclosed Liabilities
    19  
4.11 Legal Compliance; Permits and Licenses
    19  
4.12 Tax Matters
    19  
4.13 Real Property
    20  
4.14 Intellectual Property
    21  
4.15 Fixed Assets
    21  
4.16 Inventory
    21  
4.17 Contracts
    21  
4.18 Notes and Accounts Receivable
    23  
4.19 Powers of Attorney
    23  
4.20 Insurance
    23  
4.21 Litigation
    23  
4.22 Product Warranty
    24  
4.23 Product Liability
    24  
4.24 Employees
    24  
4.25 Employee Benefits
    24  
4.26 Guaranties
    25  
4.27 Environment
    25  
4.28 Certain Business Relationships with the Sellers
    26  
4.29 Customers and Suppliers
    26  
5. Covenants
    26  
5.1 Due Diligence Investigation and Access
    26  
5.2 Operation of the Business of the Sellers
    26  
5.3 Negative Covenant of the Sellers
    27  
5.4 Required Approvals
    27  
5.5 Notification
    28  

 

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    Page
5.6 No Shopping
    28  
5.7 Reasonable Best Efforts
    28  
5.8 Change of Name
    28  
5.9 Payment of Liabilities
    28  
5.10 Cooperation Concerning Title; Survey; UCC Searches
    28  
5.11 Removing Excluded Assets
    30  
5.12 Bulk Sales Laws
    30  
5.13 Anti-Sandbagging
    31  
5.14 Stub Period
    31  
6. Employees and Post-Closing Covenants
    31  
6.1 Employees Other than Boyle
    31  
6.2 Payment of Taxes Resulting from Sale of Acquired Assets by the Sellers
    32  
6.3 Payment of Liabilities
    32  
6.4 Restrictions on Dissolution of the Sellers
    32  
6.5 Reports and Returns
    32  
6.6 Further Assurances
    32  
6.7 Litigation Support
    33  
6.8 Transition
    33  
6.9 Post-Closing Access to Assets and Records
    33  
6.10 Warranties and Returns
    33  
7. CONDITIONS TO OBLIGATION TO CLOSE
    33  
7.1 Conditions to Obligation of the Buyer
    33  
7.2 Conditions to Obligation of the Sellers
    35  
8. Remedies for Breaches of This Agreement
    36  
8.1 Survival of Representations and Warranties
    36  
8.2 Indemnification Provisions for Benefit of the Buyer
    36  
8.3 Indemnification Provisions for Benefit of the Sellers
    36  
8.4 Matters Involving Third Parties
    37  
8.5 Limitations
    37  
8.6 Determination of Adverse Consequences
    38  
8.7 Other Indemnification Provisions
    38  
8.8 Mitigation
    38  
9. Miscellaneous
    38  
9.1 Nature of Certain Obligations
    38  
9.2 Press Releases and Public Announcements
    38  
9.3 No Third-Party Beneficiaries
    38  
9.4 Entire Agreement
    38  
9.5 Succession and Assignment
    38  
9.6 Counterparts
    39  
9.7 Headings
    39  
9.8 Notices
    39  
9.9 Governing Law
    39  
9.10 Amendments and Waivers
    40  
9.11 Severability
    40  
9.12 Expenses
    40  
9.13 Construction
    40  
9.14 Specific Performance
    41  
9.15 Dispute Resolution—Mediation and Arbitration
    41  
9.16 Confidentiality
    42  

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EXHIBITS, SCHEDULES AND DISCLOSURE LETTER

         
Exhibits
       
Exhibit A
  —   Steps Required for Compliance with Bulk Sales Law
Exhibit B
  —   Investment Real Estate
Exhibit C
  —   Prepaid Expenses
Exhibit D
  —   Seller Contracts
Exhibit E
  —   Assumed Seller Contracts
Exhibit F
  —   Form of Escrow Agreement
Exhibit G
  —   Allocation of the Purchase Price
Exhibit H
  —   Financial Statements
Exhibit I
  —   Required Consents
Exhibit J
  —   Form of Noncompetition Agreement
Exhibit K
  —   Form of New Boyle Noncompetition Agreement
Exhibit L
  —   Form of Opinion of Counsel to the Sellers and the Holdings ESOP
Exhibit M
  —   Seller Contracts Requiring Changes
Exhibit N
  —   Accrued Expenses
Exhibit O
  —   Form of Opinion of Counsel to the Buyer
 
       
Schedules
       
Schedule 2.3(a)(2)
      Trade Accounts Payable (to be delivered at Closing)
Schedule 2.3(a)(3)
      Accrued Expenses (to be delivered at Closing)
Schedule 2.4
      Acquired Intangibles and Goodwill (to be delivered at Closing)
 
       
Disclosure Letter
       
Section 2.2(g)
      Sellers’ Contracts Other Than Assumed Seller Contracts
Section 2.2
      Certain Excluded Assets
Section 4.1
      Directors and Officers of Holdings
Section 4.9
      Certain Events Since Most Recent Fiscal Year End
Section 4.10
      Certain Listed Liabilities
Section 4.12
      Certain Tax Matters
Section 4.12
      States and Localities for Tax Filings
Section 4.13
      Certain Matters Relating to the Property
Section 4.13(e)
      Unsatisfactory Aspects of the Structures
Section 4.13(i)
      Certain Permitted Exceptions
Section 4.13(j)
      Tax Information for Owned Real Property
Section 4.13(k)
      Delinquent Tenants for Investment Real Property
Section 4.14(a)
      Intellectual Property Owned or Licensed
Section 4.14(b)
      Adverse Matters Concerning Intellectual Property
Section 4.17
      Seller Contracts
Section 4.18
      Terms of Cash Discount or Customer Rebate Programs
Section 4.20
      Sellers’ Insurance Policies
Section 4.21
      Litigation and Investigations
Section 4.22
      Sellers’ Standard Terms and Conditions
Section 4.23
      Sellers’ Product Liability
Section 4.24
      Employees
Section 4.25
      Employee Benefit Plans
Section 4.27
      Certain Environmental Matters
Section 4.27(h)
      Persons Handling Sellers’ Hazardous Substances
Section 4.28
      Certain Business Relationships with the Sellers

 

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ASSET PURCHASE AGREEMENT
     THIS ASSET PURCHASE AGREEMENT (as hereinafter defined, this “Agreement”) is
made and entered into effective as of October 11, 2006, by and among SOUTHERN
SAW ACQUISITION CORPORATION, a Delaware corporation (the “Buyer”), SOUTHERN SAW
HOLDINGS, INC., a Georgia corporation (“Holdings”), and SOUTHERN SAW SERVICE,
L.P., a Georgia limited partnership (“Southern Saw,” collectively with Holdings,
“Sellers,” and each of Southern Saw and Holdings, without distinction, a
“Seller”). The Buyer and the Sellers are sometimes referred to herein
individually as a “Party” and collectively as the “Parties.” This Agreement has
been joined in by KASCO CORPORATION, a Delaware corporation (“Kasco”), the
parent corporation of Buyer, as Buyer’s Guarantor, by execution of the Joinder
of Buyer’s Guarantor appearing at the end of this Agreement.
Background
     The Sellers are in the Business (as hereinafter defined) throughout the
United States. The Holdings ESOP (as hereinafter defined) owns all of the
outstanding capital stock of Holdings, and Holdings and Davis Family
Enterprises, LLC own all of the outstanding equity interests of Southern Saw.
This Agreement contemplates a transaction in which the Buyer will purchase from
the Sellers, and the Sellers will sell to the Buyer, all of the Acquired Assets
in return for cash and the assumption of the Assumed Liabilities, all pursuant
to the terms of this Agreement.
     Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, covenants
and agreements herein contained, the Parties agree as follows:
Terms
     1. DEFINITIONS.
          “AAA” shall mean the American Arbitration Association.
          “Accrued Expenses” shall have the meaning set forth in Section 2.3 of
this Agreement.
          “Acquired Assets” shall have the meaning set forth in Section 2.1 of
this Agreement.
          “Acquired Fixed Assets” shall mean all fixed assets (including the
manufacturing facility and the land upon which it rests) and service equipment
used by Southern Saw in the conduct of its business.
          “Acquired Fixed Asset Value” shall have the meaning set forth in
Section 2.6.
          “Acquired Intangibles and Goodwill” shall have the meaning set forth
in Section 2.1(f).
          “Acquired Working Capital” shall have the meaning set forth in
Section 2.5(b) of this Agreement.
          “Adverse Consequences” shall mean all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, environmental investigation and
remedial costs, dues, penalties, fines, costs, amounts paid in settlement,
Liabilities, obligations, Taxes, liens, losses, expenses, and fees, including
court costs and reasonable attorneys’ fees and expenses.
          “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated
under the Securities Exchange Act.

 

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          “Affiliated Group” shall mean any affiliated group of corporations
within the meaning of Code Sec. 1504.
          “Aged Receivables” shall have the meaning set forth in Section 2.2(c)
of this Agreement.
          “Agreement” shall mean this Asset Purchase Agreement and any written
amendment hereto executed and delivered by the Parties.
          “Assumed Liabilities” shall have the meaning set forth in
Section 2.3(a) of this Agreement.
          “Assumed Customer Contracts” shall have the meaning set forth in
Section 4.17 of this Agreement.
          “Assumed Seller Contracts” shall have the meaning set forth in
Section 2.3(a) of this Agreement.
          “Basis” shall mean any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.
          “Boyle” shall mean Peter J. Boyle.
          “Boyle Agreement” shall mean Sellers’ Restated Employment Retention
Agreement dated July 28, 2006 with Boyle, as such agreement may have been
contingently restated or amended in contemplation of closing of the sale by
Sellers to Buyer, which provides for gross severance pay and benefits equal to
the sum of (A) two years of salary and bonus determined in the manner set forth
in the Boyle Agreement, and (B) two years of certain employee benefits as
specified in the Boyle Agreement.
          “Bulk Sales Laws” shall mean the bulk-transfer provisions of the
Uniform Commercial Code (or any similar law) of the State of Georgia, as
referenced in Exhibit A to this Agreement.
          “Business” shall mean shall mean any or all of (a) the business of
producing, storing, transporting, sharpening, selling, or leasing sharp edge
blade products for the meat business, the bakery business, and the wood pallet
business, and (b) the business of providing repair services for sharp edge,
oven, wall sanitizing, ice machine, compressor and aquarium tank equipment or
products located in retail grocery stores, butcher shops, bakeries, restaurants,
meat packing houses, meat processing houses, or meat slaughter houses.
          “Business Day” shall mean a day other than a Saturday, a Sunday, or a
day on which banks located in Atlanta, Georgia are required or permitted by law
to remain closed.
          “Buyer” shall have the meaning set forth in the preface above.
          “Buyer’s Guarantor” shall mean Kasco Corporation, a Delaware
corporation that is the owner of 100% of the equity securities of Buyer.
          “Cash In” shall mean any cash received by the Sellers during the Stub
Period (including but not limited to cash and credit card sales) except that if
any of the receipts were for Aged Receivables (which are Excluded Assets), then
such receipts shall be excluded from Cash In.
          “Cash Out” shall mean, without duplication:
          (a) any cash paid out by the Sellers during the Stub Period for Trade
Accounts Payable or Accrued Expenses included in the calculation of the
Preliminary Purchase Price as of the Effective Date; and
          (b) Trade Accounts Payable or Accrued Expenses (including payroll and
payroll related expenses for the Stub Period) related to the ongoing business of
the Sellers created during the Stub Period;

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Notwithstanding the foregoing, Cash Out shall not include: (1) any cash payments
(e.g., sales tax payments, legal/consulting fees related to the acquisition,
severance payments to terminated employees, etc.) made during the Stub Period
that (A) relate to Liabilities that are not included in the Trade Accounts
Payable or Accrued Expenses used as a basis for the calculation of the Purchase
Price as of the Effective Date, and (B) do not relate to the ongoing business;
or (2) any cash payment made during the Stub Period for a Liability incurred
prior to October 1 that was not included in Trade Accounts Payable or Accrued
Expenses as of the Effective Date.
          “CERCLA” shall have the meaning set forth in Section 4.27(h) of this
Agreement.
          “Closing” shall have the meaning set forth in Section 2.11 of this
Agreement.
          “Closing Date” shall have the meaning set forth in Section 2.11 of
this Agreement.
          “Code” shall mean the Internal Revenue Code of 1986, as amended.
          “Disclosure Letter” shall have the meaning set forth in Section 4 of
this Agreement.
          “Dispute Notice” shall have the meaning set forth in Section 2.8(a) of
this Agreement.
          “Effective Date” shall mean October 1, 2006, the date when the
consummation of the transactions contemplated hereby shall be deemed to have
occurred notwithstanding that the Closing is occurring as of the date of this
Agreement.
          “Employee Benefit Plan” shall mean any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (b) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (c) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan), or (d) Employee Welfare Benefit Plan or
material fringe benefit plan or program.
          “Employee Pension Benefit Plan” shall have the meaning set forth in
ERISA Sec. 3(2), codified at 29 U.S.C. §1002(2).
          “Employee Welfare Benefit Plan” shall have the meaning set forth in
ERISA Sec. 3(1), codified at 29 U.S.C. §1002(1).
          “Employment Schedule” shall have the meaning set forth in Section 6.1.
          “Engaged Banker” shall mean Slusser Associates, Inc. and any
investment banking firm with which Peter Slusser is affiliated, the financial
advisor who has been engaged by and shall be compensated solely by the Sellers
in connection with the transactions contemplated by this Agreement.
          “Environmental Laws” shall mean any federal, state or local law,
statute, final regulation, rule, ordinance, code, policy, permit, license,
judgment or order, or rule of common law now in effect and in each case as
amended to date and any judicial or administrative interpretation thereof
including any judicial or administrative order, consent decree or judgment to
which the Sellers or any of their respective assets or properties is subject
relating to (a) emissions, discharges, or releases of Hazardous Substances,
(b) the generation, processing, manufacture, distribution, handling, transport,
use, treatment, storage or disposal of Hazardous Substances or materials
containing Hazardous Substances, in each case as in effect on the date of this
Agreement, or (c) otherwise relating to the pollution of the environment, solid
waste handling treatment or disposal, reclamation or remediation activities,
environmental matters, the protection of public health and safety from
environmental or health concerns, or otherwise relating to environmental
conditions.
          “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended.

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          “Escrow Agent” shall mean One Georgia Bank, a Georgia Corporation.
          “Escrow Agreement” shall have the meaning set forth in Section 2.7(a)
of this Agreement.
          “Escrow Amount” shall have the meaning set forth in Section 2.7.
          “Escrowed Proceeds” shall have the meaning set forth in Section 2.7.
          “Estimated Purchase Price” shall have the meaning set forth in
Section 2.6 of this Agreement.
          “Excluded Assets” shall have the meaning set forth in Section 2.2.
          “Financial Statements” shall have the meaning set forth in Section 4.7
of this Agreement.
          “For Cause” shall mean any termination by the Buyer of a former
employee of Sellers hired under Section 6.1 as a result of such employee’s
(a) actual or attempted embezzlement, (b) conviction (or a plea bargain
admitting criminal guilt or no contest) of a crime involving dishonesty, fraud,
or breach of trust, (c) misappropriation, or attempted misappropriation, of any
of the Buyer’s material business opportunities, including violation of any
noncompetition agreement with the Buyer, (d) alcohol or illegal drug abuse
(1) while on the job, or (2) that otherwise has a material adverse effect on job
performance, (e) unlawful harassment of any employee or other business associate
of the Buyer, (f) insubordination of a type and degree that reasonably would be
expected to result in dismissal from employment, or (g) any other willful
nonfeasance, misfeasance, or malfeasance in the performance of duties.
          “GAAP” shall mean United States generally accepted accounting
principles as in effect from time to time, consistently applied.
          “Grant Thornton” shall have the meaning specified in Section 2.5(a) of
this Agreement.
          “Hazardous Substances” shall mean all (a) substances which contain
substances defined in or regulated under the Environmental Laws; (b) petroleum
and petroleum products, including crude oil and any fractions thereof;
(c) natural gas, synthetic gas and any mixtures thereof; (d) substances with
respect to which a federal, state or local agency requires environmental
investigation, monitoring, reporting or remediation; (e) hazardous wastes or
solid wastes, within the meaning of any Environmental Laws; (f) solid,
hazardous, dangerous or toxic chemicals, materials, wastes or substances, within
the meaning of and regulated by any Environmental Laws; (g) radioactive
materials; (h) asbestos-containing materials that represent a health hazard, and
(i) polychlorinated biphenyls, including without limitation, any such pollution
or contamination and any materials defined, listed, identified or under or
described in any Environmental Laws.
          “Holdings ESOP” shall mean the Southern Saw Holdings, Inc. Employee
Stock Ownership Plan and Trust, which is the sole owner of issued and
outstanding equity securities of Holdings.
          “Indebtedness” shall mean all indebtedness or other obligation of the
Sellers, or either of them, for borrowed money, whether current, short-term or
long term, secured or unsecured, capitalized lease obligations, and all accrued
interest, premiums, penalties and other monetary obligations relating thereto.
          “Indemnified Party” shall have the meaning set forth in Section 8.4(a)
of this Agreement.
          “Indemnifying Party” shall have the meaning set forth in
Section 8.4(a) of this Agreement.
          “Indemnity Basket” shall have the meaning set forth in Section 8.5(a)
of this Agreement.
          “Indemnity Cap” shall have the meaning set forth in Section 8.5(b) of
this Agreement.

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          “Intellectual Property” shall mean (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations, continuations-
in-part, revisions, extensions, and reexaminations thereof, (b) all trademarks,
service marks, trade dress, logos, trade names, brand names, designs and
corporate names, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith, (c) all works
of authorship, mask works and copyrights therein, including all applications,
registrations, and renewals in connection therewith, (d) all trade secrets and
confidential business information (including research and development, know-how,
discoveries, formulas, compositions, processes, procedures, methods, techniques,
technical data, operating and maintenance manuals, designs, drawings,
specifications, customer and supplier lists, pricing and cost information, and
business and marketing plans and proposals), (e) all computer software
(including source code, data, tools, modules, databases and related
documentation), Internet websites and domain names and applications and
registrations in connection therewith, (f) all other proprietary rights, and
(g) all copies and tangible embodiments thereof (in whatever form or medium).
          “Investment Real Estate” shall mean the real property of Southern Saw
referenced in Exhibit B, constituting all of the real property owned by Sellers
except for the real property included in the Acquired Fixed Assets;
          “Knowledge” shall mean: (a) with respect to Sellers, the actual
knowledge of either Holdings or Southern Saw, as established by direct or
circumstantial evidence; and (b) with respect to the Buyer, the actual
knowledge, as established by direct or circumstantial evidence, of any of Luke
E. Fichthorn III, Larry Maingot, or Brian E. Turner; provided, however, that any
matter set forth in this Agreement or in any Exhibit or Schedule hereto, or in
the Disclosure Letter shall be deemed within the Knowledge of the Buyer.
          “Lease” shall have the meaning set forth in Section 4.13 of this
Agreement.
          “Leased Property” shall have the meaning set forth in Section 4.13 of
this Agreement.
          “Liability” shall mean any liability or obligation (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, whether due or to
become due, and whether or not required to be reflected on a balance sheet
prepared in accordance with GAAP), including any liability for Taxes.
          “Long Term Contract” shall have the meaning set forth in Section 4.17
of this Agreement.
          “Most Recent Balance Sheet” shall mean the balance sheet contained
within the Most Recent Financial Statements.
          “Most Recent Financial Statements” shall have the meaning set forth in
Section 4.7(a) of this Agreement.
          “Most Recent Fiscal Month End” shall have the meaning set forth in
Section 4.7(a) of this Agreement.
          “Most Recent Fiscal Year End” shall have the meaning set forth in
Section 4.7(a) of this Agreement.
          “Multiemployer Plan” shall have the meaning set forth in ERISA Sec.
3(37), codified at 29 U.S.C. § 1002 (37).
          “New Boyle Noncompetition Agreement” shall have the meaning set forth
in Section 7.1(p).
          “Noncompetition Agreement” shall have the meaning set forth in
Section 7.1(o) of this Agreement.

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          “Ordinary Course of Business” shall mean the ordinary course of
business consistent with past custom and practice (including with respect to
quantity and frequency).
          “Offer Letter” shall have the meaning specified in Section 5.1 of this
Agreement.
          “Owned Property” shall have the meaning set forth in Section 4.13 of
this Agreement.
          “Party” shall have the meaning set forth in the preface above.
          “PBGC” shall mean the Pension Benefit Guaranty Corporation.
          “Pension Plan” shall mean the defined benefit pension plan that
Holdings maintains for employees of Sellers.
          “Permitted Exceptions” shall have the meaning set forth in
Section 4.13 of this Agreement.
          “Person” shall mean an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, or other entity, or a
governmental entity (or any department, agency, or political subdivision
thereof).
          “Prepaid Expenses” shall mean the prepaid expenses and deposits of
Southern Saw and Holdings as set forth on Exhibit C to this Agreement.
          “Prohibited Transaction” shall have the meaning set forth in ERISA
Sec. 406, codified at 29 U.S.C. § 1106, and Code Sec. 4975.
          “Property” shall have the meaning set forth in Section 4.13 of this
Agreement.
          “Property Taxes” shall have the meaning set forth in Section 2.12(a)
of this Agreement.
          “Purchase Price” shall have the meaning set forth in Section 2.4 of
this Agreement.
          “Required Consents” shall have the meaning set forth in Section 7.1(e)
of this Agreement.
          “Retained Liabilities” shall have the meaning set forth in
Section 2.3(b) of this Agreement.
          “Representatives” shall have the meaning set forth in Section 5.4 of
this Agreement.
          “Securities Exchange Act” shall mean the Securities Exchange Act of
1934, as amended.
          “Security Interest” shall mean any mortgage, pledge, lien,
encumbrance, charge, restriction on transfer, conditional sales agreement, deed
of trust or other security interest, other than (a) mechanic’s, materialmen’s,
and similar liens, none of which secure obligations presently in default,
(b) liens for ad valorem and similar Taxes not yet due and payable, (c) purchase
money liens and liens securing rental payments under capital lease arrangements
or other Indebtedness, if any, to be assumed by the Buyer, none of which secure
obligations presently in default, (d) those Permitted Exceptions defined in
Section 4.13(i) of the Disclosure Letter; and (e) other immaterial liens imposed
by law, or otherwise arising, in the Ordinary Course of Business and not
incurred in connection with the borrowing of money.
          “Sellers” shall have the meaning set forth in the preface above, and
“Seller” shall mean either of them, without distinction.
          “Seller Contracts” shall have the meaning set forth in Section 2.1(f)
of this Agreement.

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          “Sellers’ Accountants” shall mean George A. Pennington & Co., LLC, the
independent certified public accountants that audited the Financial Statements
of the Sellers for the fiscal years of the Sellers ended June 30, 2004, June 30,
2005, and June 30, 2006.
          “Set-Aside Program” shall mean an affirmative action, minority
set-aside, diverse business enterprise, minority business entity participation
goal, historically under-utilized business participation goal or similar
program.
          “Statement of Assets Acquired” shall have the meaning set forth in
Section 2.5(a) of this Agreement.
          “Structures” shall have the meaning set forth in Section 4.13(e) of
this Agreement.
          “Stub Period” shall mean the period from the Effective Date to the
Closing Date.
          “Subsidiary” shall mean any corporation, partnership, limited
liability company or other entity with respect to which a specified Person (or a
Subsidiary thereof) owns a majority of the common stock or other ownership
interest or has the power to vote or direct the voting of sufficient securities
to elect a majority of the directors or otherwise direct the management of the
entity.
          “Survey” shall have the meaning set forth in Section 5.11(b) of this
Agreement.
          “Tax” shall mean any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Sec. 59A),
customs duties, capital stock, franchise, escheat, abandoned property, unclaimed
property, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not.
          “Tax Return” shall mean any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
          “Third Party Claim” shall have the meaning set forth in Section 8.4(a)
of this Agreement.
          “Trade Accounts Payable” shall mean the trade accounts payable of
Southern Saw set forth in Schedule 2.3(a)(2) to be delivered at Closing.
          “Trade Accounts Receivable” shall mean all the valid trade accounts
receivable of Southern Saw, but excluding any delinquent rent payable to
Sellers, or either of them, in respect to the Investment Real Property.
     2. TERMS OF THE PURCHASE.
          2.1 Purchase and Sale of Assets. On and subject to the terms and
conditions of this Agreement, at the Closing, the Sellers agree to sell, convey,
assign, transfer and deliver to the Buyer, and the Buyer agrees to purchase and
acquire from the Sellers, free and clear of any Security Interest, all of the
Sellers’ right, title and interest in and to all of the Sellers’ property and
assets, real, personal or mixed, tangible and intangible, wherever located,
including the following (but excluding the Excluded Assets) (collectively, the
“Acquired Assets”):
               (a) all of the Trade Accounts Receivable except for the Aged
Receivables, all of which shall be adequately reserved for an ongoing business
in accordance with the following provisions of this Section 2.1;
               (b) all of the inventory of Southern Saw, all of which shall be
usable except as adequately reserved for an ongoing business in accordance with
the following provisions of this Section 2.1;

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               (c) the Prepaid Expenses;
               (d) the Acquired Fixed Assets;
               (e) the Investment Real Estate;
               (f) all intangibles and goodwill of the Business (collectively,
“Acquired Intangibles and Goodwill,” including: (1) all trade names presently or
historically used by the Sellers in the Business as well as the trade names
“Atlanta Sharptech” and “Southern Saw,” for the Buyer’s exclusive use worldwide
(including as against the Sellers, who shall change their names and the names of
all affiliated entities so that they make no reference to the trade names sold
to the Buyer); (2) the websites and the phone numbers used by the Sellers in the
Business; (3) all technologies, patents, formulas, bills of materials and
processes used by the Sellers as well as all customer and vendor lists and other
information necessary to operate the Business; (4) contract rights of Southern
Saw in respect of contracts and leases that Southern Saw has with unaffiliated
parties that are listed in Exhibit D to this Agreement (the “Seller Contracts”);
and (5) the Sellers’ Kaiser medical insurance policy covering Sellers’
employees.
               (g) the right, to the exclusion of the Sellers’ rights, to hire
employees of the Sellers, all of whom presently are employed by Holdings and
none of whom are employed by Southern Saw;
               (h) all insurance benefits, including rights and proceeds,
arising from or relating to the Acquired Assets or the Assumed Liabilities prior
to the Closing; and
               (i) all claims of the Sellers against third parties relating to
the Acquired Assets, whether choate or inchoate, known or unknown, contingent or
noncontingent.
Notwithstanding the foregoing, the transfer of the Acquired Assets pursuant to
this Agreement shall not include the assumption of any Liability related to the
Acquired Assets except for the Assumed Liabilities.
In accordance with the terms of the letter agreement between the parties dated
August 1, 2006, Grant Thornton LLP has performed pre-close agreed-upon
procedures in respect of the Trade Accounts Receivable, inventory and Trade
Accounts Payable of Sellers. As a result of that audit, Buyer and Sellers have
agreed to stipulate reserves for Trade Accounts Receivable and inventory. The
sole reserve for Trade Accounts Receivable will be fifty percent (50%) of all
Trade Accounts Receivable over ninety (90) days old but less than twelve
(12) months old as of October 1, 2006. The inventory reserve will be $497,000.
          2.2 Excluded Assets. Notwithstanding anything to the contrary
contained in Section 2.1 or elsewhere in this Agreement, the following excluded
assets of the Sellers (collectively, the “Excluded Assets”), without
duplication, are not part of the sale and purchase contemplated hereunder, are
excluded from the Acquired Assets and shall remain the property of the Sellers
after the Closing:
               (a) the Pension Plan;
               (b) the related-party receivables (including excess tax
distributions and management fees, and other such receivables between Sellers
and Davis Family Enterprises, LLC) of the Sellers;
               (c) all Trade Accounts Receivable of the Sellers that are aged
more than 12 months at the Effective Date (the “Aged Receivables”);
               (d) all minute books, stock records, and corporate seals of the
Sellers;
               (e) the shares of equity securities and partnership interests of
the Sellers;
               (f) all insurance policies and rights thereunder (except for the
Kaiser medical insurance policy included in the Acquired Assets and any other
policies to the extent so provided in Section 4.20);

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               (g) all of the agreements, contracts, leases, consensual
obligations, promises or undertakings of the Sellers other than the Assumed
Seller Contracts, with such other contracts being listed in Section 2.2(g) of
the Disclosure Letter;
               (h) all personnel records and other records that the Sellers are
required by law or need to retain in their possession;
               (i) all claims for refund of Taxes and other governmental charges
of whatever nature;
               (j) all rights in connection with and assets of the Employee
Benefit Plans;
               (k) all rights of the Sellers under this Agreement;
               (l) personal items of the employees, shareholders, partners,
officers and directors of Sellers;
               (m) any monthly rental payments from the Investment Property
received by Sellers prior to Closing and relating to periods prior to Closing;
               (n) the Boyle Agreement;
               (o) delinquent rent payable to Sellers, or either of them, in
respect to Investment Real Property;
               (p) the property and assets expressly designated in Section 2.2
of the Disclosure Letter;
               (q) prorated portion (prorated as of the Effective Date) of any
credit card subsidy from the American Express Company with respect to Southern
Saw’s payment arrangements with COSTCO Wholesale Corporation; and
               (r) all assets not enumerated in Section 2.1.
          2.3 Liabilities.
               (a) Assumed Liabilities. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to assume and discharge only the
following Liabilities of the Sellers (the “Assumed Liabilities”):
               (1) the Trade Accounts Payable set forth in Schedule 2.3(a)(1) to
be delivered at Closing, but also including any trade account payable arising in
the Ordinary Course of Business (and not payable to an affiliate of Sellers),
but not recorded as liabilities on October 1, 2006;
               (2) the accrued liabilities of Southern Saw incurred in the
normal course of business and as set forth in Schedule 2.3(a)(2) to be delivered
at Closing (“Accrued Expenses”), but including any liability arising in the
Ordinary Course of Business (and not payable to an affiliate of Sellers), but
not recorded as liabilities on October 1, 2006 (with the Accrued Expenses as of
$83,050, 2006 being reflected in Exhibit N to this Agreement);
               (3) warranties, volume rebates, allowances and similar matters
with respect to which and to the extent to which reserves therefor have been
established on the books of the Sellers;

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               (4) obligations of Sellers under the Seller Contracts set forth
or described in Exhibit E to this Agreement, with such Seller Contracts having
been entered into (A) with Persons other than Affiliates, and (B) in good faith
(“Assumed Seller Contracts”); and
               (5) the Sellers’ Kaiser medical insurance policy (but not the
related MetLife dental plan or the related life insurance plan or
post-retirement medical benefits), including the obligation to handle under the
Kaiser medical insurance policy the administration of COBRA for terminated
employees of the Sellers.
               (b) Retained Liabilities. The Retained Liabilities shall remain
the sole responsibility of and shall be retained, paid, performed and discharged
solely by the Sellers. “Retained Liabilities” shall mean every Liability of the
Sellers other than the Assumed Liabilities, including:
               (1) any Liability arising out of or relating to products of the
Sellers to the extent sold prior to the Closing Date other than to the extent
assumed under Section 2.3(a)(2), (3) and (4) above, with such Retained
Liabilities therefore to include liability for warranty, volume rebates,
allowances, and similar matters with respect to operations prior to the Closing
Date to the extent the liability exceeds established reserves referenced in
Sections 2.3(a)(4). Any such warranty work that exceeds established reserves
will be performed by the Buyer for the Sellers’ account at the Buyer’s
incremental cost;
               (2) subject to Section 2.3(a)(2), (3) and (4), any Liability that
(A) in the case of matters covered by Sellers’ insurance, arises before or after
the Closing Date and relates to any breach that occurred prior to the Closing
Date, or (B) relates to any breach that occurred prior to the Closing Date;
               (3) any Liability for Taxes owed by Sellers, including (A) any
Taxes arising as a result of the Sellers’ operation of their businesses or
ownership of the Acquired Assets prior to the Effective Date, (B) any Taxes that
will arise as a result of the sale of the Acquired Assets pursuant to this
Agreement and (C) any deferred Taxes owed by Sellers of any nature, but
excluding any such Taxes pro-rated by the parties pursuant to Section 2.12(a);
               (4) any Liability under any agreement, contract, lease,
consensual obligation, promise or undertaking not assumed by the Buyer under
Section 2.3(a);
               (5) any Liability under the Employee Benefit Plans maintained by
Sellers, and any benefits accrued prior to the Closing Date relating to payroll,
vacation (which the Sellers shall pay in full at or prior to Closing), except in
each case Accrued Expenses set forth on Schedule 2.3(a)(2) assumed by Buyer and
included in the computation of Acquired Working Capital reflected on the
Statement of Assets Acquired;
               (6) any Liability under any employment, severance, retention or
termination agreement with any employee of the Sellers or any of their
Affiliates;
               (7) any Liability arising out of or relating to any pre-Closing
employee grievance whether or not the affected employees are hired by the Buyer;
               (8) any Liability of either Seller to any Affiliate of the
Sellers;
               (9) any Liability to indemnify, reimburse or advance amounts to
any officer, director, employee or agent of the Sellers;
               (10) any Liability to distribute to any of the Sellers’ owners,
or any of them, or otherwise to apply all or any part of the consideration
received hereunder;

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               (11) any Liability arising out of any legal proceeding pending as
of the Closing Date, and any Liability arising out of any legal proceeding
commenced after the Closing Date and arising out of or relating to any
occurrence or event happening prior to the Closing Date, except for Liabilities
arising out of the acts or omissions of Buyer prior to the Effective Date;
               (12) any Liability of the Sellers under this Agreement or any
other document executed in connection with the transactions contemplated by this
Agreement;
               (13) the Indebtedness, except to the extent that the same is
expressly assumed by the Buyer in the Assumed Liabilities;
               (14) any Liability of the Sellers based upon the Sellers’ acts or
omissions occurring after the Closing Date, except for acts or omissions
requested by Buyer after the Closing Date or arising as a result of the acts or
omissions of Buyer; and
               (15) liability under the Boyle Agreement.
          2.4 Purchase Price for the Acquired Assets. As the purchase price for
the Acquired Assets, the Buyer shall pay the Sellers the Purchase Price, as
determined under Sections 2.4, 2.5, 2.6, 2.7, and 2.8 of this Agreement
(sometimes referred to as the “Purchase Price”). Subject to the following
sentences of this Section 2.4, the purchase price for the Acquired Assets (the
“Purchase Price”) will be the sum of (a) the book value on the books of Sellers
of the Acquired Working Capital as of the Effective Date, which was $4,409,626,
(b) the book value (net of depreciation) on the books of the Sellers of the
Acquired Fixed Assets (excluding the Investment Real Estate), which was
$1,878,000, (c) the amortized book value on the books of Sellers of the Acquired
Intangibles and Goodwill of the Sellers described in Schedule 2.4 to this
Agreement, to be executed and delivered at Closing, which was $135,666, and
(d) an additional amount of $7,500,000. The Purchase Price shall be adjusted up
or down as specified in Section 2.6 of this Agreement and the Purchase Price
will be potentially subject to post-Closing adjustment as specified in
Section 2.8 of this Agreement in order to arrive at the final Purchase Price.
The Purchase Price shall be payable as set forth in Sections 2.6 and 2.7 of this
Agreement. The Purchase Price will be reduced by $500,000 (but without
duplication) if Boyle does not sign the New Boyle Noncompetition Agreement.
          2.5 Preparation of Statement of Assets Acquired.
               (a) On or prior to the Closing Date the parties shall prepare a
statement of assets acquired and the Assumed Liabilities that would be reflected
on a balance sheet (the “Statement of Assets Acquired”) as of the Effective
Date. As agreed by the Sellers and the Buyer, Grant Thornton LLP (“Grant
Thornton”) has performed agreed-upon procedures at the expense of the Buyer in
respect of the Trade Accounts Receivable, the inventory, and the Trade Accounts
Payable with a view toward assuring that the Statement of Assets Acquired is
accurate as of a time that is close to the Effective Date. The Statement of
Assets Acquired to be used on the Closing Date shall be prepared as of the
Effective Date in a manner consistent with the Sellers’ June 30, 2005 audited
financial statements and shall be consistent with GAAP but applying the special
principles required for calculation of Acquired Working Capital as hereinafter
set forth and the following additional rules:
               (1) No Aged Receivables or delinquent rent on the Investment Real
Property shall be valued on the Statement of Assets Acquired, as the Aged
Receivables and the delinquent rent on the Investment Real Property are Excluded
Assets.
               (2) Trade Accounts Receivable aged more than 90 but less than
12 months shall be valued on the Statement of Assets Acquired at fifty percent
(50%) of their face value (with this reserve to be the only reserve with respect
to Trade Accounts Receivable, and will not be subject to post-closing audit
adjustment).
               (3) Inventory shall be valued on the Statement of Assets Acquired
net of an inventory reserve of $497,000 (and this reserve amount will be the
only reserve with respect to inventory, and will not be subject to post-closing
audit adjustment).

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               (4) Without duplicating the matters set forth in
Section 2.5(a)(1) the 2.5(a)(3) above, no Trade Accounts Receivable or inventory
that previously has been written off shall be valued on the Statement of Assets
Acquired.
               (5) No transaction-related expenses or fees shall be reflected on
the Statement of Assets Acquired, it being agreed that each of the Sellers and
the Buyer shall pay such expenses and fees out of their separate moneys.
               (6) On the Statement of Assets Acquired, all ad valorem taxes
payable on the Acquired Assets shall be prorated as of the Effective Date as
provided in Section 2.12(a).
               (b) As used in this Agreement, “Acquired Working Capital” shall
mean the amount determined at any date of calculation (1) by adding together
(A) the Trade Accounts Receivable at the date of calculation, net of any Trade
Accounts Receivable that are Excluded Assets and any associated reserve for bad
or questionable accounts as described in Section 2.3(a) above, (B) the inventory
of Southern Saw at the date of calculation, net of any reserves for damaged,
obsolete, or slow-moving items as set forth in Section 2.3(a) above, but in no
event having an aggregate net value in excess of $3,060,000, and (C) the Prepaid
Expenses, and (2) subtracting from the result obtained in clause (1) above the
sum of (A) the Trade Accounts Payable at the date of calculation, and (B) the
Accrued Expenses at the date of calculation.
          2.6 Stub Period Adjustments to the Estimated Purchase Price. Because
the Closing will take place on the Closing Date but shall be deemed to have
occurred earlier on the Effective Date, it shall be necessary to make cash
adjustments to reflect certain cash transactions between the Effective Date and
the Closing Date. Sellers shall provide Buyers on the Closing Date a written
statement detailing all cash transactions of the Sellers during the Stub Period,
reconciling the same back to Cash In and Cash Out and the net of which must
agree with the change in the Sellers general ledger cash balances between the
Effective Date and the Closing Date. Based on such information and
reconciliation, on the Closing Date the Buyer will pay to the Sellers the amount
by which the Cash Out is greater than the Cash In, and the Sellers will pay to
the Buyer the amount by which the Cash In is greater than Cash Out. Any such
payment due from the Buyer to the Sellers or from the Sellers to the Buyer shall
be handled as upward or downward adjustment of the amount paid in respect of the
Purchase Price on the Closing Date.
          2.7 Method of Payment of the Purchase Price. The Estimated Purchase
Price, as adjusted pursuant to Section 2.6 above, shall be paid on the Closing
Date as follows:
               (a) The Buyer shall pay to the Escrow Agent immediately available
funds in an amount equal to $500,000 (the “Escrow Amount”), with the Escrow
Amount and the earnings thereon (the “Escrowed Proceeds”) to be held and
disposed of as provided in the Escrow Agreement in substantially the form
attached hereto as Exhibit F (the “Escrow Agreement”). Except in cases of actual
fraud of the Sellers, the Escrowed Proceeds would be the sole source available
to the Buyer for (1) downward adjustments to the Purchase Price under
Section 2.8 below, and (2) indemnification for breaches of representations,
warranties, and covenants of the Sellers. Unless sooner disbursed in accordance
with the Escrow Agreement, the Escrowed Proceeds shall be retained by the Escrow
Agent until the date that is 18 months after the Closing Date as security for
the Sellers’ representations and warranties and performance of their obligations
under this Agreement. If there is any conflict between the terms of the Escrow
Agreement and the description of the Escrow Agreement appearing in this
Section 2.7(a), the terms of the Escrow Agreement shall control.
               (b) The Buyer shall pay to the Sellers by wire transfer of
immediately available funds the excess of the Purchase Price (as calculated
pursuant to the preceding provisions of this Section 2) over $500,000.
               (c) Within fifteen (15) days after the Closing Date, the Parties
also shall compare a new reconciliation of Cash In and Cash Out during the Stub
Period as contemplated by Section 2.6 of this Agreement. If such new
reconciliation shall show an overpayment or an underpayment pursuant to
Section 2.6,

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then the responsible Party shall make the reconciling payment promptly.
Notwithstanding anything in this Agreement apparently to the contrary, any
amount payable by the Sellers to the Buyer pursuant to this Section 2.7(c) shall
be payable from the Sellers’ separate funds and not from the Escrowed Proceeds.
          2.8 Post-Closing Adjustment to the Purchase Price.
               (a) After the Closing, subject to the following provisions of
this Section 2.8, the Purchase Price as determined at the Effective Date by the
Parties may be further adjusted based on the Statement of Assets Acquired, as of
the Effective Date, as audited by Grant Thornton at the expense of the Buyer and
completed within ninety days following the Closing Date. In connection with the
preparation of the audited Statement of Assets Acquired, Grant Thornton shall
observe the accounting rules and principles set forth in Section 2.5 above. In
this regard, any post-Closing adjustment or audit will not question or consider
the fifty percent (50%) reserve percentage for Trade Accounts Receivable of
Section 2.5 or the $497,000 reserve for inventory specified in Section 2.5, and
those reserves will apply for purposes of this Section 2.8. Unless disputed by
Sellers, once the Statement of Assets Acquired has been audited, the final
Purchase Price shall be determined. If the Sellers disagree with the final
Purchase Price as so determined, then they may within ten Business Days deliver
a written objection thereto (a “Dispute Notice”), and the Buyer and the Sellers
shall jointly retain an accounting firm other than Grant Thornton to calculate
the final Purchase Price, whose determination of the same shall be final and
binding on the parties absent manifest error. In the event such an additional
accounting firm is retained, half of the cost of retaining such additional
accounting firm shall be paid by the Sellers and the other half shall be paid by
the Buyer. Failure of the Sellers to provide a timely Dispute Notice shall
constitute waiver of the Sellers’ right to dispute such post-Closing adjustment
to the Estimated Purchase Price and shall allow the Buyer to make a drawing on
the Escrowed Funds as contemplated by the Escrow Agreement. The Purchase Price
as determined under this Section 2.8 shall be the final Purchase Price;
provided, however, that if no adjustments to the Purchase Price determined as of
the Closing Date in the manner contemplated by Section 2.6 or 2.7 shall have
been made and no adjustment is made under this Section 2.8, then such Purchase
Price calculated under Section 2.4 will be the final Purchase Price.
               (b) For each dollar that the net value of the Acquired Assets
shown on the final Statement of Assets Acquired shall exceed the Purchase Price
determined as of the Closing Date, the final Purchase Price shall be increased
by one dollar, and for each dollar that net value of the Acquired Assets shown
on the final Statement of Assets Acquired shall be less than the Purchase Price
determined as of the Closing Date, the Final Purchase Price shall be decreased
by one dollar. Any addition to the Purchase Price will be paid by the Buyer in
ten Business Days and, subject to the following sentence, any decrease to the
Purchase Price will be paid promptly from the Escrowed Proceeds. In the event of
a decrease to the Purchase Price that results from: (i) an excess of assets on
the books of Southern Saw as of the Effective Date over the correct assets on
the books of Southern Saw as of the Effective Date (as determined under the
procedure set forth in subsection (a)), (ii) an excess of the correct Assumed
Liabilities of Southern Saw as of the Effective Date (as determined under the
procedure set forth in subsection (a)) over the Assumed Liabilities as reported
on the books of Southern Saw on the Effective Date; or (iii) a combination of
(i) and (ii), then Sellers shall pay the excess assets amount, the deficient
liability amount, or the combination of the excess asset amount and the
deficient liability amount to the Buyer directly without payment from the Escrow
Proceeds.
               (c) In addition to the adjustments under Section 2.8(a) and
(b) above, the Parties also shall compare a new reconciliation of Cash In and
Cash Out during the Stub Period as contemplated by Section 2.6(b) of this
Agreement. If the Parties are unable to agree on such reconciliation of Cash In
and Cash Out during the Stub Period, then they shall refer the matter for
resolution to the additional accounting firm referenced in Section 2.8(a) above,
whose reconciliation shall be final and binding in the absence of manifest
error. If such new reconciliation shall show an overpayment or an underpayment
pursuant to Section 2.6(b) at the Closing Date, then any amount payable by the
Buyer will be paid by the Buyer in ten Business Days and any amount payable by
the Sellers will be paid promptly from the Escrowed Proceeds.
          2.9 Deliveries at Closing. At the Closing, (a) the Sellers will
deliver to the Buyer the various certificates, instruments, and documents
referred to in Section 7.1 below, (b) the Buyer will deliver to the Sellers the
various certificates, instruments, and documents referred to in Section 7.2
below, (c) the Sellers will execute, acknowledge (if appropriate), and deliver
to the Buyer assignments (including real property and Intellectual

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Property transfer documents) and such other instruments of sale, transfer,
conveyance, and assignment as the Buyer and its counsel reasonably may request,
(d) the Buyer shall execute, acknowledge (if appropriate), and deliver to the
Sellers an assumption of Assumed Liabilities and such other instruments of
assumption as the Sellers and their counsel reasonably may request, and (e) the
Buyer will deliver to the Escrow Agent and the Sellers the consideration
specified in Section 2.7 above.
          2.10 Allocation of the Purchase Price. The Parties agree to allocate
the Purchase Price in accordance with Exhibit G. After the Closing, the Parties
shall make consistent use of the allocation, fair market value and useful lives
specified in Exhibit G for all Tax purposes and in all filings, declarations and
reports with the IRS in respect thereof, including the reports required to be
filed under Section 1060 of the Code. The Buyer shall prepare and deliver to
Sellers a draft IRS Form 8594 (prepared in accordance with the preceding
sentences of this Section) within 45 days after the Closing Date. If Sellers
agree with the draft, the parties shall file such form with the IRS as
necessary. If a disagreement exists, the parties will work out this disagreement
in good faith. In any proceeding related to the determination of any Tax,
neither the Buyer nor the Sellers (or any owner of the Sellers, or either of
them) shall contend or represent that such allocation is not a correct
allocation. If the Purchase Price shall be adjusted after Closing pursuant to
Section 2.8 above, such allocation shall be revised so as to reflect the items
that went into the adjustment.
          2.11 The Closing. The closing of the transactions contemplated by this
Agreement (the “Closing”) shall take place at the offices of Holland & Knight in
Atlanta, Georgia, on the date of this Agreement (the “Closing Date”), but in any
event to be deemed effective as of the Effective Date. Once the Closing shall
have taken place on the Closing Date, the transfer of the Acquired Assets to the
Buyer shall be deemed to have occurred on the Effective Date.
          2.12 Prorations.
               (a) Property Taxes. General real estate taxes, personal property
taxes, special assessments, and other governmental taxes and charges relating to
the Acquired Assets (“Property Taxes”) and assessed for the year in which
Closing occurs shall be prorated as of the Effective Date (with maximum
discount), except that Property Taxes with respect to the Investment Real
Property will be prorated as of the Closing Date. If Closing occurs before the
actual Property Taxes for the year are known, the proration shall be upon the
basis of the Property Taxes payable during the immediately preceding year;
provided, however, that if Property Taxes payable during the year in which
Closing occurs thereafter are determined to be more or less than the Property
Taxes payable during the preceding year (after conclusion of any pertinent
appeal of assessed valuation, as reasonably determined by the Buyer and
Sellers), the Sellers and the Buyer promptly (but no later than 30 days after
the date final invoices for such Property Taxes are issued by the applicable
taxing authorities, except in the case of an ongoing tax protest) shall adjust
the proration of Property Taxes, and the Sellers or the Buyer, as the case may
be, shall pay to the other any amount required as a result of such adjustment
(as a Retained Liability in the case of the Sellers).
               (b) Rents. Rents and depreciation on the Investment Real Property
will be prorated as of the Closing Date; provided, however, that October 2006
rents in respect of any particular tract of Investment Real Property as to which
there is any delinquency in rent as of the Closing Date will be paid to Sellers
as and when received.
               (c) Utilities. Solely with respect to those utilities that are
paid for by Sellers (rather than by a tenant of Sellers), the Sellers will
notify the utility companies servicing the Acquired Assets prior to the Closing
that billing to Sellers for such utilities shall be discontinued at the end of
the day preceding the Closing Date, and the Buyer will arrange with such
utilities to have such billings for utility services charged to the Buyer from
and after the Closing Date. The Buyer shall be entitled to refunds for all
deposits therefor to the extent that the same are reflected in the Statement of
Assets Acquired, but otherwise such deposit refunds shall go to the Sellers. The
Sellers Shall pay at Closing all charges with respect to such utilities for
periods prior to the Effective Date. If for any reason the Sellers’ utility
charges to the Closing Date shall not be paid in full by virtue of the foregoing
provisions, then the Sellers shall pay such amounts after Closing as a Retained
Liability.

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               (d) Water. Solely with respect to those water meters that are
paid for by Sellers (rather than by a tenant of Sellers), if there is a water
meter on the real property included among the Acquired Assets, the Sellers shall
have furnished at the Closing or will furnish as soon thereafter as practicable,
a reading to a date not more than 30 days prior to the Effective Date, and the
unfixed meter charge, the unfixed sewer rent and/or unfixed water charges, if
any, based thereon for the intervening period shall be apportioned on the basis
of such last reading, subject to adjustment upon receipt of the actual meter
charge and sewer rent.
               (e) Pending and Certified Liens. Certified liens levied by any
governmental authority for which the work has been substantially completed and
which are currently due and payable in full shall be paid by the Sellers.
     3. REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION.
          3.1 Representations and Warranties of the Sellers. The Sellers jointly
and severally represent and warrant to the Buyer that each of the Sellers has
full power and authority to execute and deliver this Agreement and to perform
its obligations hereunder. This Agreement constitutes the valid and legally
binding joint and several obligation of the Sellers, enforceable in accordance
with its terms and conditions. The Sellers need not give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any government
or governmental agency in order to consummate the transactions contemplated by
this Agreement if the absence to obtain such authorization, consent or approval
would have a material adverse effect on the Acquired Assets or the Business of
the Sellers acquired by the Buyer under this Agreement.
          3.2 Representations and Warranties of the Buyer. The Buyer represents
and warrants to the Sellers that the statements contained in this Section 3.2
are correct and complete as of the date of this Agreement and the Closing Date:
               (a) Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of Delaware.
               (b) Authorization of Transaction. Each of the Buyer and Kasco has
full power and authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform its obligations hereunder.
Without limiting the generality of the foregoing, the transactions contemplated
by this Agreement have been approved by the respective Boards of Directors of
the Buyer and Kasco. This Agreement constitutes the valid and legally binding
obligation of the Buyer, enforceable in accordance with its terms and
conditions. Neither the Buyer nor Kasco need give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.
               (c) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (1) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Buyer or Kasco is subject or any
provision of its charter or bylaws or (2) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice or
consent under any agreement, contract, lease, license, instrument, or other
arrangement to which the Buyer or Kasco is a party or by which it is bound or to
which any of its assets is subject. There is no litigation pending against the
Buyer and relating to or affecting any of the transactions contemplated by this
Agreement.
               (d) Brokers’ Fees. Neither the Buyer nor Kasco has Liability to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which either of the Sellers
could become liable or obligated.
     4. REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLERS. The Sellers,
jointly and severally, represent and warrant to the Buyer that the statements
contained in this Section 4 are correct and complete as of the date of this
Agreement, the Effective Date, and the Closing Date, except as set forth in the

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disclosure letter delivered by the Sellers concurrently with the execution and
delivery of this Agreement (the “Disclosure Letter”). Nothing in the Disclosure
Letter shall be deemed adequate to disclose an exception to a representation or
warranty made herein, however, unless the Disclosure Letter identifies the
exception with reasonable particularity to put the Buyer on notice thereof. The
Disclosure Letter will be arranged in paragraphs corresponding to the lettered
and numbered paragraphs contained in this Section 4.
     4.1 Organization; Authorization.
               (a) Holdings is a corporation duly organized, validly existing
and in good standing under the laws of Georgia, and Southern Saw is a limited
partnership validly existing and in good standing under the laws of Georgia.
Each Seller is duly authorized to conduct business and is in good standing under
the laws of each jurisdiction where such qualification is required. Each Seller
has full corporate or limited partnership, as applicable, power and authority to
carry on the businesses in which it is engaged and to own and use the properties
owned and used by it. Section 4.1 of the Disclosure Letter lists the directors
and officers of Holdings, who also control Southern Saw as a result of Holdings’
position as sole general partner of Southern Saw. Each Seller has delivered to
the Buyer correct and complete copies of its organizational documents (including
the charter and bylaws of Holdings and the certificate and agreement of limited
partnership of Southern Saw), in each case as amended to date. The minute books
(containing the records of meetings of the shareholders, the board of directors
of Holdings, and any committees of the board of directors of Holdings), the
stock certificate books of Holdings, and the stock record books of Holdings are
correct and complete, and no meetings of the stockholders, board of directors or
any committees of the board of directors have been held for which minutes have
not been prepared and are not contained in such minute books. Neither Seller is
in default under or in violation of any provision of its organizational
documents.
               (b) Each Seller has full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding joint and several obligation of the
Sellers, enforceable in accordance with its terms and conditions. The Sellers
need not give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement if the absence to
obtain such authorization, consent or approval would have a material adverse
effect on the Acquired Assets or the Business of the Sellers acquired by the
Buyer under this Agreement. The board of directors and the shareholders of
Holdings (in the case of the shareholders, based upon a favorable vote of the
participants in the Holdings ESOP, which owns 100% of the outstanding equity
securities of Holdings), and Holdings, as the sole general partner of Southern
Saw, and Holdings and Davis Family Enterprises, LLC, constituting all of the
equity owners of Southern Saw, have approved this Agreement and the transactions
contemplated by this Agreement. The vote of participants in the Holdings ESOP
was not conducted in a manner inconsistent with any applicable statute,
regulation, or provision of the documents governing the Holdings ESOP.
          4.2 Capitalization.
               (a) Holdings. The entire authorized capital stock of Holdings
consists of 7,513,051 shares of common stock, $0.10 par value, of which
7,513,051 are issued and outstanding and no shares are held in treasury. All of
the issued and outstanding common stock of Holdings have been duly authorized,
are validly issued, fully paid, and nonassessable, and are held of record by the
Holdings ESOP. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Holdings to issue, sell, or
otherwise cause to become outstanding any of its capital stock. None of the
capital stock of Holdings was issued in violation of any applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder). There are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or similar
rights with respect to Holdings. There are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of the capital stock of
Holdings.
               (b) Southern Saw. In its capacity as sole general partner of
Southern Saw, Holdings owns 75% of the outstanding equity interests of Southern
Saw, all of which is owned by Holdings as a general partner. Davis Family
Enterprises, LLC owns as a limited partner the other 25% of the outstanding
equity

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interests of Southern Saw. All of the issued and outstanding equity interests of
Southern Saw have been duly authorized, are validly issued, fully paid, and (in
the case of limited partnership interest held by Davis Family Enterprises, LLC
only) nonassessable. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Southern Saw to issue, sell,
or otherwise cause to become outstanding any of its equity interests. No equity
interest of Southern Saw was issued in violation of any applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder). There are no outstanding or
authorized equity appreciation, phantom equity, profit participation, or similar
rights with respect to Southern Saw. There are no voting trusts, proxies, or
other agreements or understandings with respect to the voting of the equity
interests of Southern Saw.
          4.3 Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(a) violate any provision of the organizational documents of either Seller or,
to the Knowledge of the Sellers, violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which the either of the
Sellers is subject, or (b) to the Knowledge of the Sellers, conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice or consent under any agreement, contract, lease, license,
instrument, or other arrangement to which either Seller is a party or by which
it is bound or to which any of its assets is subject (or result in the
imposition of any Security Interest upon any of the assets of either Seller).
The Sellers need not give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order to consummate the transactions contemplated by this Agreement if the
absence to obtain such authorization, consent or approval would have a material
adverse effect on the Acquired Assets or the Business of the Sellers acquired by
the Buyer under this Agreement. Without limiting the generality of the
foregoing, the required majority of participants in the Holdings ESOP that owns
100% of the outstanding equity securities of Holdings have voted to approve and
consummate the transactions contemplated by this Agreement.
          4.4 Brokers’ Fees. Except for the arrangement with the Engaged Banker,
neither Seller has any Liability to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement.
          4.5 Title to Assets. The Sellers have good and marketable title to, or
a valid leasehold interest in, the properties and assets used by them, located
on their premises, or shown on the Most Recent Balance Sheet or acquired after
the date thereof, free and clear of all Security Interests, except for
properties and assets disposed of in the Ordinary Course of Business since the
date of the Most Recent Balance Sheet. Without limiting the generality of the
foregoing, the Sellers have good and marketable title to the Acquired Assets
free and clear of all Security Interests.
          4.6 Subsidiaries. Except for Holding’s ownership of Southern Saw, the
Sellers do not have any Subsidiaries.
          4.7 Financial Statements; Trade Accounts Receivable; Inventory.
               Attached hereto as Exhibit H are the following consolidated
financial statements of Southern Saw (the “Financial Statements”):
(a) consolidated balance sheet and statements of income, changes in
stockholders’ equity, and cash flow as of and for the fiscal year ended June 30,
2006 (the “Most Recent Fiscal Year End”) for Southern Saw, as audited by the
Sellers’ Accountants, (b) audited consolidated balance sheets and statements of
income, changes in stockholders’ equity, and cash flow as of and for the fiscal
years ended June 30, 2005 and June 30, 2004 for the Sellers, as audited by the
Sellers’ Accountants, and (c) unaudited consolidated balance sheet and
statements of income, changes in stockholders’ equity, and cash flow (the “Most
Recent Financial Statements”) as of and for the two months ended August 31, 2006
(the “Most Recent Fiscal Month End”) for Southern Saw. The Financial Statements
have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered except as otherwise noted in such Financial
Statements. The Trade Accounts Receivable have arisen in the normal course of
business and represent or will represent valid obligations arising from sales
actually made or services actually performed by Sellers in the Ordinary Course
of Business, and, to

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Sellers’ Knowledge, the reserve established in Section 2.5 is adequate for an
ongoing business. The inventory will be usable, and, to Sellers’ Knowledge, the
reserve established in Section 2.5 is adequate for an ongoing business.
          4.8 SEC Filings. To the Knowledge of the Sellers, neither Seller is
required to file any registration statements, prospectuses, reports, schedules,
forms, statements or other documents with the Securities and Exchange
Commission.
          4.9 Events Subsequent to Most Recent Fiscal Year End. To the Knowledge
of the Sellers, since the Most Recent Fiscal Year End, there has not been any
material adverse change in the business, assets, financial condition,
operations, results of operations, employee relations, supplier relations, or
customer relations of the Sellers, and no event has occurred that may result in
such a change. Without limiting the generality of the foregoing, since that date
the Sellers have conducted their business in the Ordinary Course of Business,
and, except as set forth in Section 4.9 of the Disclosure Letter:
               (a) the Sellers have not sold, leased, transferred, or assigned
any of their assets, tangible or intangible, other than for a fair consideration
in the Ordinary Course of Business;
               (b) neither Seller has made any capital investment in, any loan
to, or any acquisition of the securities or assets of (including by merger or
consolidation), any other Person (or series of related capital investments,
loans, and acquisitions) either involving more than $100,000 or outside the
Ordinary Course of Business;
               (c) neither Seller has issued any note, bond, or other debt
security or created, incurred, assumed, or guaranteed any Indebtedness either
involving more than $50,000 singly or $100,000 in the aggregate;
               (d) neither Seller has delayed or postponed the payment of
accounts payable and other Liabilities or the accrual of any expenses outside
the Ordinary Course of Business, or accelerated or accepted the prepayment of
any notes or accounts receivable or accelerated billings or the recognition of
revenue outside the Ordinary Course of Business;
               (e) neither Seller has cancelled, compromised, waived, or
released any right or claim (or series of related rights and claims) outside the
Ordinary Course of Business;
               (f) except as disclosed to the Buyer in Section 4.9 of the
Disclosure Letter, there has been no change made or authorized in the
organizational documents of either Seller;
               (g) except in connection with the ordinary operation of the
Holdings ESOP in accordance with past practices, neither Seller has issued,
sold, or otherwise disposed of any of its capital stock or other equity
interests, or granted any options, warrants, or other rights to purchase or
obtain (including upon conversion, exchange, or exercise) any of its capital
stock or other equity interests;
               (h) neither Seller has declared, set aside, or paid any dividend
or made any distribution with respect to its capital stock or other equity
interests (whether in cash or in kind) or redeemed, purchased, or otherwise
acquired any of its capital stock or other equity interests;
               (i) neither Seller has experienced any material damage,
destruction, or loss (whether or not covered by insurance) to its property;
               (j) neither Seller has granted any increase in the base
compensation of, or paid any bonuses to, any of its directors, officers, or
employees outside the Ordinary Course of Business or in amounts at variance with
such Seller’s past practice;
               (k) neither Seller has made any other change in employment terms
or deferred any wage or salary increase for any of its directors, officers, and
employees outside the Ordinary Course of Business;

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               (l) there has not been any material change in accounting or
internal control methods, practices, policies or procedures followed by the
Sellers (other than as required by GAAP), any increase in reserves or any
revaluation of any of their assets from those in effect during the past fiscal
year;
               (m) to the Knowledge of the Sellers there has not been any other
occurrence, event, incident, action, failure to act, or transaction outside the
Ordinary Course of Business involving either of the Sellers; and
               (n) neither of the Sellers has committed to take any of the
actions contemplated by (a) through (m) above.
          4.10 Undisclosed Liabilities. To the extent material, neither Seller
has any Liability (and, to the Knowledge of the Sellers, there is no Basis for
any present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against either Seller giving rise to any Liability),
except for (a) Liabilities set forth on the face of the Most Recent Balance
Sheet, (b) Liabilities listed in Section 4.10 of the Disclosure Letter, and
(c) Liabilities that have arisen after the date of the Most Recent Balance Sheet
in the Ordinary Course of Business (none of which results from, arises out of,
relates to, is in the nature of, or was caused by any material breach of
contract, breach of warranty, tort, infringement, or violation of law).
          4.11 Legal Compliance; Permits and Licenses.
               (a) Legal Compliance. To the Knowledge of the Sellers, (1) the
Sellers and their predecessors and Affiliates have complied with all applicable
laws (including rules, regulations, codes, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), (2) Sellers’ operations and practices
are in compliance with environmental, governmental, and other legal requirements
and regulations, including those of the Environmental Protection Agency and the
Occupational Health and Safety Administration, and (3) no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
has been filed or commenced against, and no notice, correspondence, inquiry or
other communication has been received by, any of them alleging any failure so to
comply.
               (b) Permits. To the Knowledge of the Sellers, the Sellers have
all permits, licenses, orders, franchises and approvals of all federal, state,
local and foreign governments (and all agencies thereof), including appropriate
zoning and environmental permits necessary for the lawful operation of the
business of the Sellers as currently conducted. All such permits, licenses,
orders, franchises and approvals are in full force and effect, and no suspension
or cancellation of any of such items are pending or, to the Knowledge of the
Sellers, threatened.
          4.12 Tax Matters. Except as otherwise set forth in Section 4.12 of the
Disclosure Letter:
               (a) To the Knowledge of the Sellers, the Sellers have filed or
caused to be filed all Tax Returns and all reports with respect to Taxes that
are or were required to be filed by the Sellers. All Tax Returns and reports
filed by the Sellers were true, correct and complete in all material respects
and all Taxes owed by Sellers, regardless of whether shown on any return of
Sellers, have been paid in full. There is no Security Interest on any of the
Acquired Assets that arose in connection with any failure (or alleged failure)
to pay any Tax, and the Sellers have no Knowledge of any Basis for assertion of
any claims attributable to Taxes which, if adversely determined, would result in
any such Security Interest.
               (b) To the extent material, the Sellers have withheld and paid
all Taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor, creditor, stockholder, or
other third party.
               (c) There are no disputes or claims concerning any Tax
Liabilities of the Sellers either (1) claimed or raised by any authority in
writing delivered to the Sellers or (2) as to which the Sellers have Knowledge
based upon personal contact with any agent of such authority. The Sellers have
delivered or made

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available to the Buyer correct and complete copies of all federal and state
income Tax Returns, federal and state examination reports, and federal and state
statements of deficiencies assessed against or agreed to by the Sellers for all
periods beginning after June 30, 2003.
               (d) Neither Seller has waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
               (e) Southern Saw is not an S corporation as defined in Code
Section 1361. Holdings is an S corporation as defined in Code Section 1361.
               (f) Section 4.12(f) of the Disclosure Letter lists all the states
and localities with respect to which either Seller believes that it is required
to file any corporate, income, franchise or sales Tax Returns. Except as
otherwise set forth in Section 4.12(f) of the Disclosure Letter, the Sellers
have properly filed Tax Returns with and paid and discharged any liabilities for
Taxes in those states or localities.
          4.13 Real Property. Section 4.13 of the Disclosure Letter lists and
describes briefly all real property owned by either of the Sellers (each an
“Owned Property”) and all real property leased or subleased to either of the
Sellers (each a “Leased Property”) (the Owned Property and the Leased Property
are sometimes referred to herein individually as a “Property” and collectively
as the “Properties”). The Properties include both the Acquired Fixed Assets and
the Investment Real Estate. The Sellers have delivered to the Buyer correct and
complete copies of the leases and subleases listed in Section 4.13 of the
Disclosure Letter (as amended to date) (each a “Lease”). With respect to each
Property and, with respect to each Leased Property, the corresponding Lease:
               (a) The only Person in occupancy of the Property is either or
both of the Sellers, or, in the case of certain parcels of the Investment
Property, a month-to-month tenant not Affiliated with the Sellers who leases the
Property from either or both of the Sellers. Except for persons who park on any
portion of the Investment Real Property used as a parking lot, there is no other
occupant of the Property or any other Person having any right or claim to
possession or use of the Property after the Closing Date, and subject to such
month-to-month leases to tenants, possession of the Property will be delivered
to the Buyer free of rights or claims of any tenants, occupants or parties in
possession, subject to the Leases. The Property is not homestead property.
               (b) To the Knowledge of the Sellers, the Property used by the
Sellers in their business is zoned and designated for land use purposes to
permit the operations of the Sellers that are being conducted on the Property.
To the Knowledge of the Sellers, there are no planned or threatened changes to
the current zoning or land use designations of the Property.
               (c) To the Knowledge of the Sellers, no condition exists with
respect to the Property or with respect to the improvements thereon that
violates any city, county, state or federal law, ordinance, regulation, ruling
or code, including without limitation any Environmental Laws.
               (d) The Property is not subject to any outstanding lease (other
than the Leases), agreement of sale (except for this Agreement), option, right
of first refusal, “back-up contracts,” or other right of a third party to
acquire any interest therein.
               (e) Except as otherwise stated in Section 4.13(e) of the
Disclosure Letter, the buildings, structures and other improvements constituting
parts of the Property (collectively the “Structures”) are satisfactory for the
operation of the Business.
               (f) To the Knowledge of the Sellers, there is no pending or
threatened eminent domain, foreclosure, bankruptcy or insolvency claim,
regulatory enforcement action or other litigation matter affecting or relating
to the Property.
               (g) The Sellers have paid all assessments, bonds, and special
assessments now or at any time or times prior to Closing, constituting a lien or
Security Interest against the Property or a part thereof

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related to off-site improvements, streets, roadways, or utility services and
installments, that, as of the Effective Date, exists as a certified and
confirmed lien against the Property.
               (h) To the Knowledge of the Sellers, all utilities necessary to
operate the business of the Sellers as currently operated (i.e. electric, water,
telephone, internet, etc.) are in place at each parcel of the Property on which
the Business is conducted presently having a Structure located thereon.
               (i) With respect to each Owned Property, Southern Saw has fee
simple title, free from all Security Interests other than the following:
(i) current state and county ad valorem real property taxes not due and payable
on the date of the Effective Date; (ii) easements for the maintenance of public
utilities that service only the Premises and that do not adversely affect the
Sellers’ current use of the Owned Property; (iii) those restrictions contained
in the vesting deeds to Sellers, if any; (iv) those matters described in
Section 4.13(i) of the Disclosure Letter and (v) such other matters, if any, as
may be subsequently approved by Buyer (hereinafter called the “Permitted
Exceptions”).
               (j) Section 4.13(j) of the Disclosure Letter sets forth: (1) the
taxing authority(ies) for the Owned Property; (2) the tax parcel identification
number(s) for the Owned Property. The Sellers have delivered to the Buyer true,
correct and complete copies of all of the most recent bills relating to real
property taxes due and payable on the Owned Property.
               (k) Section 4.13(k) of the Disclosure Letter sets forth
information known to Sellers about tenants who lease property from the Sellers
and are delinquent in their rental payments.
          4.14 Intellectual Property.
               (a) Section 4.14(a) of the Disclosure Letter identifies (1) each
item of Intellectual Property owned by the Sellers, (2) each license, agreement,
or other permission which either Seller have granted to any third party with
respect to any of its Intellectual Property (together with any exceptions) and
(3) each item of Intellectual Property that any third party owns and that either
Seller uses pursuant to license, sublicense, agreement, or permission. The
Sellers have delivered to the Buyer correct and complete copies of all such
Intellectual Property, licenses, sublicenses, agreements or permissions. The
Sellers own or have the right to use pursuant to license, sublicense, agreement,
or permission all Intellectual Property necessary for the operation of their
businesses as currently conducted.
               (b) Except as set forth in Section 4.14(b) of the Disclosure
Letter, to the Knowledge of the Sellers, the Sellers, or either of them, owns
and possesses a valid and enforceable right to use the Intellectual Property
listed on Section 4.14(a), have not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual Property
rights of third parties, and neither Seller has ever received any charge,
complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation, or violation. To the Knowledge of the Sellers,
no third party has interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual Property rights of the
Sellers. To the Knowledge of the Sellers, no Intellectual Property owned or used
by either Seller will interfere with, infringe upon, misappropriate, or
otherwise come into conflict with, any Intellectual Property rights of third
parties as a result of the continued operation of its business as currently
conducted.
     4.15 Fixed Assets. The Sellers own or lease all buildings and tangible
personal property necessary for the conduct of their business as currently
conducted. All such material fixed assets required to operate the Business in
the manner operated by the Sellers, considered as a whole, is in working order,
and the Sellers will maintain all such material fixed assets in such condition
through the Closing Date.
          4.16 Inventory. The inventory of the Sellers consists of supplies,
purchased parts and items, raw materials, work in process and finished goods.
          4.17 Contracts.

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               (a) Section 4.17 of the Disclosure Letter lists the following
contracts and other agreements to which either of the Sellers is a party:
               (1) any agreement concerning a partnership or joint venture or
providing for payments to or by any Person based on or determined by reference
to sales, purchases or profits, other than direct payments for products and/or
services of Southern Saw;
               (2) any agreement (or group of related agreements) under which it
has created, incurred, assumed, or guaranteed any Indebtedness, or any agreement
(or group of related agreements) under which it has imposed a Security Interest
on any of its assets, tangible or intangible, or any currency or interest rate
swap, collar or hedge agreement;
               (3) any agreement concerning confidentiality or noncompetition or
which contains any covenant that purports to restrict the business activity of
either of the Sellers or limits its ability to engage in any line of business;
               (4) any agreement with any of their Affiliates;
               (5) any collective bargaining agreement;
               (6) any agreement pursuant to a Set-Aside Program;
               (7) any agreement with (A) any domestic or foreign national,
state, multi-state or municipal or other local government, any subdivision,
agency, commission or authority thereof, including any quasi-governmental or
private body exercising any regulatory or taxing authority thereunder or any
judicial authority (or any department, bureau or division thereof), (B) any
prime contractor of an entity described in clause (A) above in its capacity as a
prime contractor, or (C) any subcontractor with respect to any contract of a
type described in clauses (A) or (B) above; and
               (8) any other agreement (or group of related agreements) other
than for the sale of goods and/or services the performance of which involves
consideration in excess of $100,000.
               (b) The Sellers have delivered to the Buyer a correct and
complete copy of each written agreement listed in Section 4.17 of the Disclosure
Letter (as amended to date) and a written summary setting forth the terms and
conditions of each oral agreement referred to in Section 4.17 of the Disclosure
Letter.
               (c) As to each contract listed or described in Section 4.17 of
the Disclosure Letter that is both an Assumed Seller Contract and a contract
with a customer of Sellers under which the Sellers provide products or services
to such customer (each of such contracts, an “Assumed Customer Contract,”), the
Sellers provide the following special representations and warranties:
               (1) Except for Southern Saw’s contract with DECA, the Sellers
have no Customer Contracts that are Fixed Price Contracts. As used herein, a
“Fixed Price Contract” shall mean a Long Term Contract that provides for fixed
prices or fixed prices that vary on the basis of an index such as the consumer
price index rather than in the discretion of the Sellers.
               (2) Except for Southern Saw’s contract with DECA, the Sellers
have no Long Term Contracts. As used herein, a “Long Term Contract” shall mean
any contract of Sellers having a remaining duration of one year or more at the
Effective Date and not cancelable at will and without penalty by the Sellers on
no more than 90 days notice to the other contracting party.
               (3) Sellers’ other Customer Contracts are either oral contracts
with no specified prices, purchase orders for particular quantities immediately
deliverable at specified prices, or written agreements that may contain a price
list that is variable upon no more than 90 days notice to the other contracting
party.

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               (d) As to each written Assumed Seller Contract that is not an
Assumed Customer Contract, the Buyer has been provided access to a true and
complete copy of such Assumed Seller Contract.
               (e) To the Knowledge of the Sellers, with respect to each
agreement listed in Section 4.17 of the Disclosure Letter: (1) the agreement is
legal, valid, binding, enforceable, and in full force and effect; (2) the
agreement will continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms and conditions following the consummation of
the transactions contemplated hereby; (3) no party is in breach or default, and
no event has occurred which with notice or lapse of time would constitute a
breach or default, or permit termination, modification, or acceleration, under
the agreement; and (4) no party has repudiated any provision of the agreement.
               (f) Each distributor agreement is: (i) a nonexclusive
distributorship; and (ii) terminable at the option of the Sellers on not more
than ninety (90) days notice.
          4.18 Notes and Accounts Receivable. All notes and accounts receivable
of the Sellers are reflected properly on its books and records, are valid
receivables subject to no setoffs or counterclaims, and represent or will
represent valid obligations arising from sales actually made or services
actually performed in the Ordinary Course of Business. Section 4.18 of the
Disclosure Letter sets forth the terms of any cash discount or customer rebate
programs.
          4.19 Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of the Sellers, or either of them.
          4.20 Insurance.
               (a) Section 4.20 of the Disclosure Letter identifies each
insurance policy (including policies providing property, casualty, liability,
directors and officers liability, employment practices liability, fiduciary
liability, employee dishonesty, environmental liability and workers’
compensation coverage and bond and surety arrangements) to which either of the
Sellers is a party, a named insured, or otherwise the beneficiary of coverage.
Section 4.20 of the Disclosure Letter sets forth, with respect to each policy:
(1) the name of the insurer, the name of the policyholder, and the name of each
covered insured; (2) the scope and amount of coverage; (3) whether the policy
was provided on a primary, excess, umbrella or other basis; (4) an indication
whether such policy is on a “claims made” or “occurrence” basis; and (5) a
description of any retroactive premium adjustments or other loss-sharing or
experience-based Liability arrangements. Section 4.20 of the Disclosure Letter
also describes any self-insurance arrangements affecting the Sellers, including
any self insured retention, captive insurance programs or other self insured
risks, or any reserves established thereunder.
               (b) The Sellers have made a good faith effort to provide the
Buyer with a complete and correct copy of each insurance policy referenced in
Section 4.20 of the Disclosure Letter and will continue to do so after the
Closing.
               (b) All of the insurance policies referenced in Section 4.20 of
the Disclosure Letter are current through the Closing Date.
          4.21 Litigation. Section 4.21 of the Disclosure Letter sets forth each
instance in which either Seller (a) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or (b) is a party or, to the
Knowledge of the Sellers, is threatened to be made a party to any action, suit,
proceeding, hearing, or investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator. To the Knowledge of the Sellers, none of
the actions, suits, proceedings, hearings, and investigations set forth in
Section 4.21 of the Disclosure Letter could result in any material adverse
change in the business, financial condition, operations, results of operations,
or future prospects of the Sellers. No executive or key employee of the Sellers
is a party to any action, suit, proceeding, hearing, or investigation of, in, or
before any arbitrator that would adversely affect his or her ability to perform
his or her employment duties. The Sellers have no reason to believe that any
such action, suit, proceeding, hearing, or investigation may be brought or
threatened against the Sellers, or either of them.

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          4.22 Product Warranty. Section 4.22 of the Disclosure Letter includes
copies of the standard terms and conditions of sale or lease for the Sellers
(containing applicable guaranty, warranty, and indemnity provisions). No product
manufactured, sold, leased, or delivered by the Sellers is subject to any
guaranty, warranty, or other indemnity beyond the applicable standard terms and
conditions of sale or lease set forth in Section 4.22 of the Disclosure Letter.
          4.23 Product Liability. Except as set forth in Section 4.23 of the
Disclosure Letter, to the Knowledge of the Sellers, the Sellers have no
Liability (and to the Knowledge of the Sellers, there is no Basis for any
present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against either of the Sellers giving rise to any
Liability) arising out of any injury to individuals or property as a result of
the ownership, possession, or use of any product manufactured, sold, leased, or
delivered by the Sellers.
          4.24 Employees.
               (a) Section 4.24 of the Disclosure Letter contains a list of the
names and compensation rates and bonus commitments for all employees of the
Sellers. All of such employees are employed by Holdings and none of such
employees is employed by Southern Saw. To the Knowledge of the Sellers, as of
the date of this Agreement, no executive, key employee, or group of employees
has any plans to terminate employment with the Sellers. The Sellers have not
promised or represented to any employee or otherwise entered into an agreement
with any employee (whether written, verbal or otherwise), to the effect that
such employee’s benefits or compensation (base salary, bonus, or equity
compensation) shall in any way increase subsequent to the Closing Date, except
to the extent of the Buyer’s obligation for certain severance for employees it
terminates (other than For Cause) after Closing as set forth in Section 6.1(d)
of this Agreement. To the Knowledge of the Sellers, no executive or key employee
of the Sellers is a party to, or is otherwise bound by, any agreement that in
any way adversely affects or will affect the performance of his or her
employment duties, his or her ability to assign to the Sellers any rights to any
invention, improvement, discovery or information relating to the business of the
Sellers or their ability to conduct their business.
               (b) The consummation of the transactions contemplated by this
Agreement will not (1) entitle any current or former employee, director,
consultant or agent of the Sellers to severance pay, or (2) with the exception
of the possible payment to Boyle under the Boyle Agreement, accelerate the time
of payment or vesting, or increase the amount of any compensation due to, or in
respect of, any current or former employee, director, consultant or agent of the
Sellers, or either of them. Notwithstanding the foregoing, the Sellers will
settle in cash at or prior to Closing all vacation that any of its employees may
have accrued through the date of Closing.
               (c) Neither Seller is a party to or bound by any collective
bargaining agreement, nor, to the Knowledge of the Sellers, has either Seller
experienced any strikes, grievances, claims of unfair labor practices, or other
collective bargaining disputes. To the Knowledge of the Sellers, the Sellers
have not committed any material unfair labor practice, and the Sellers have
complied with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder)
relating to employment practices, terms and conditions of employment, equal
employment opportunity, nondiscrimination, immigration, wages, hours, benefits,
collective bargaining and plant closing. The Sellers have no Knowledge of any
organizational effort currently being made or threatened by or on behalf of any
labor union with respect to employees of the Sellers.
               (d) The Sellers’ workers’ compensation, general liability, group
life and health plans are fully funded and/or expensed for all past and current
experience and occurrences through Closing. Sellers shall retain all such
liabilities as Retained Liabilities and shall satisfy them in the normal course
of business.
          4.25 Employee Benefits.
               (a) Section 4.25 of the Disclosure Letter lists each Employee
Benefit Plan that either Seller maintains or to which either Seller contributes
or has any obligation to contribute. Except for the Sellers’ Kaiser medical
insurance plan (excluding the related MetLife dental plan and the related life
insurance plan

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and post-retirement medical benefits) and excluding post-retirement medical
benefits, which the Buyer will assume and continue, the Buyer will not assume
any Employee Benefit Plans.
               (b) Each Employee Pension Benefit Plan that is intended to be a
“qualified plan” under Code Section 401(a) has been determined by the Internal
Revenue Service to be so qualified, and, to the Knowledge of the Sellers,
nothing has occurred since the date of the most recent such determination (other
than the effective date of certain amendments to the Code for which the remedial
amendment period has not yet expired) that would reasonably be expected to
adversely affect the qualified status of such Employee Pension Benefit Plan.
               (c) For each Employee Pension Benefit Plan, the Sellers have
delivered to the Buyer correct and complete copies of the plan documents and
summary plan descriptions, the three most recently filed Form 5500 Annual
Reports, all related trust agreements, insurance contracts, and other funding
agreements and third party administrative agreements which implement each such
Employee Pension Benefit Plan.
          4.26 Guaranties. Neither Seller is a guarantor or otherwise is liable
for any Liability of any other Person (other than the other Seller).
          4.27 Environment. Except as otherwise set forth in Section 4.27 of the
Disclosure Letter, to the Knowledge of the Sellers:
               (a) The Sellers and their predecessors and Affiliates, have
complied and are in full compliance with all Environmental Laws, and no action,
suit, violation, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed, commenced or is being threatened against any
of them alleging any failure so to comply.
               (b) Without limiting the generality of the preceding sentence, to
their Knowledge, the Sellers and their predecessors and Affiliates have obtained
and been in compliance with all of the terms and conditions of all permits,
licenses, and other authorizations which are required under, and have complied
in all respects with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules, and timetables which are
contained in, all Environmental Laws.
               (c) The Sellers and their predecessors or Affiliates have not
manufactured, sold, marketed or distributed products containing asbestos, and to
their Knowledge, no such entity has any Liability with respect to the presence
of asbestos in or on any product.
               (d) None of the Sellers’ current or past operations, or any
byproduct thereof, and none of the currently or formerly owned property or
assets of the Sellers are related to or subject to any investigation or
evaluation by any governmental entity, as to whether any remedial action is
needed to respond to a release or threatened release of Hazardous Substances.
               (e) The Sellers have filed all notices required under any
Environmental Laws indicating a past or present use, management, handling,
transport, treatment, generation, storage, or release of Hazardous Substances.
               (f) There is not now at, on, in or under the property or assets,
and there was not at, on, in or under any real property previously owned,
leased, operated or otherwise used by either Seller: (1) any treatment,
recycling, storage or disposal of any Hazardous Substances; (2) any underground
or above ground storage tank, service impoundment, lagoon, or other containment
facility (past or present) for the temporary or permanent storage, treatment, or
disposal of Hazardous Substances; (3) any landfill or solid waste disposal area
containing Hazardous Substances; (4) any polychlorinated biphenyls; or (5) any
release of Hazardous Substances.
               (g) Neither Seller is subject to any outstanding order from, or
contractual obligation with, any governmental body or other person in respect of
which such Seller may be required to incur any Liabilities, including any with
respect to any remedial action, arising from the release or threatened release
of any Hazardous Substances, and neither Seller has entered into any contractual
or other obligation with any governmental

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body or any other Person pursuant to which such Seller has assumed
responsibility for, either directly or indirectly, the remediation of any
condition arising from or relating to the release or threatened release of
Hazardous Substances.
               (h) None of the Properties, and no properties previously owned or
leased by either of the Sellers, has transported or arranged for transportation,
directly or indirectly, of any Hazardous Substances to any other location that
is listed or proposed for listing under the Comprehensive Environmental
Response, Compensation and Liability Act (“CERCLA”), or any other similar state
list, or the subject of a federal, state, or local enforcement action or
investigation or remedial action. The names of the entities that have been
retained, currently or in the past, by either of the Sellers in handling,
transporting, and disposal of Hazardous Substances are listed in Section 4.27(h)
of the Disclosure Letter.
               (i) There are no Environmental Laws applicable to the Sellers for
the Properties that would require the Sellers or any other Person to provide
notice to, to take actions to satisfy or to obtain the approval of, any
governmental entity as a condition to the consummation of the transactions
contemplated by this Agreement, except for approvals related to the transfer or
assignments of permits.
               (j) The Sellers have disclosed and made available to the Buyer
all information, including without limitation, all studies, analysis and test
results, in their possession, custody, or control relating to (1) environmental
conditions on, under or about the Properties and (2) Hazardous Substances used,
managed, handled, transported, treated, generated, stored, at any time by the
Sellers or any other Person on the Properties or any other adjacent properties,
or otherwise in connection with the use and operation of the Properties.
          4.28 Certain Business Relationships with the Sellers. Except for cross
ownership of the Sellers and except as otherwise set forth in Section 4.28 of
the Disclosure Letter:
               (a) no Affiliate of Sellers has, or since July 1, 2004 has had,
any interest in any asset, tangible or intangible, used in the business of the
Sellers or any interest in any business arrangement or relationship with the
Sellers;
               (b) no Affiliate of Sellers owns, or since July 1, 2004 has
owned, an equity interest or any other financial or profit interest in a Person
that has (1) had business dealings or a financial interest in any transaction
with either of the Sellers, or (2) engaged in competition with either of the
Sellers with respect to any products or services of the Sellers, except, in each
such case, for the ownership of less than 1% of the outstanding stock of any
publicly-traded corporation.
          4.29 Customers and Suppliers. The top 20 customers and suppliers of
the Sellers, taken as a whole, by dollar volume of business for the fiscal year
ended June 30, 2006, have not materially reduced their business with the Sellers
or advised the Sellers that they intend to cease doing business or materially
reduce their business with the Sellers.
     5. PRE-CLOSING COVENANTS.
          5.1 Due Diligence Investigation and Access. In accordance with the
letter agreement dated August 1, 2006 between the Sellers and Kasco (the “Offer
Letter”), the Buyer has been conducting a due diligence investigation of the
Acquired Assets, the Assumed Liabilities, and the Business. Although not
specified in the Offer Letter agreement, such review has included subsurface
testing as part of the Phase II environmental survey performed at the Buyer’s
expense. In addition, the Buyer commissioned Grant Thornton to conduct the
pre-closing agreed-upon procedures contemplated by Section 2.5(a) above.
          5.2 Operation of the Business of the Sellers. Between the date of the
Effective Date and the Closing Date, the Sellers have:

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               (a) conducted their business only in the Ordinary Course of
Business and confer with the Buyer prior to implementing operational decisions
of a material nature, provided that such operations will not have prohibited
funding any Employee Pension Benefit Plan in any manner;
               (b) except as otherwise directed by the Buyer in writing, and
without making any commitment on the Buyer’s behalf, used the reasonable best
efforts to preserve intact their current business organization, kept available
the services of its officers, employees and agents and maintained its relations
and good will with suppliers, customers, landlords, creditors, employees, agents
and others having business relationships with it;
               (c) maintained the Acquired Assets in working order;
               (d) kept in full force and effect, without amendment, all
material rights relating to the Sellers’ business;
               (e) continued in full force and effect the insurance coverage
under the policies referenced in Section 4.20 of this Agreement or substantially
equivalent policies;
               (f) cooperated with the Buyer and assisted the Buyer in
identifying the governmental authorizations required by the Buyer to operate the
business from and after the Closing Date upon either transferring existing
governmental authorizations of the Sellers to the Buyer, where permissible, or
obtaining new governmental authorizations for the Buyer; and
               (g) maintained all books and records of the Sellers relating to
the Sellers’ business in the Ordinary Course of Business.
          5.3 Negative Covenant of the Sellers. Except as otherwise expressly
permitted herein, between the date of this Agreement and the Closing Date, the
Sellers shall not, without the prior written consent of the Buyer, (a) take any
affirmative action, or fail to take any reasonable action within its control, as
a result of which any of the changes or events listed in Section 4.9 or any
material adverse change in the assets, liabilities, or business of Sellers would
occur; (b) make any modification to any material Seller Contract or governmental
authorization; (c) allow the levels of raw materials, supplies or other
materials included in the Inventories to vary materially from the levels
customarily maintained; or (d) enter into any compromise or settlement of any
litigation, proceeding or governmental investigation relating to the Acquired
Assets, the business of the Sellers, or the Assumed Liabilities.
          5.4 Required Approvals. As promptly as practicable after the date of
this Agreement, the Sellers and the Buyer shall make all filings required by law
to be made in order to consummate the transactions contemplated by this
Agreement. Each of the Buyer, on the one hand, and the Sellers, on the other
hand, shall cooperate with the other Party and its employees, agents, brokers,
employees, attorneys, accountants, bankers, environmental consultants and other
representatives (collectively, “Representatives”) with respect to all filings
that a Party shall be required to make in connection with the transactions
contemplated by this Agreement. Each of the Buyer, on the one hand, and the
Sellers, on the other hand, also shall cooperate with the other

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Party and its Representatives with respect to procuring all consents
contemplated hereby or necessary to consummate the transactions contemplated by
this Agreement.
          5.5 Notification. Between the date of this Agreement and the Closing,
the Sellers shall promptly notify the Buyer in writing if any of them becomes
aware of (a) any fact or condition that causes or constitutes a breach of any of
the Sellers’ representations and warranties made as of the date of this
Agreement, or (b) the occurrence after the date of this Agreement of any
material fact or condition that would or be reasonably likely to (except as
expressly contemplated by this Agreement) cause or constitute a breach of any
such representation or warranty had that representation or warranty been made as
of the time of the occurrence of, or the Sellers’ discovery of, such fact or
condition. Should any such fact or condition require any change to the
Disclosure Letter, the Sellers shall promptly deliver to the Buyer a supplement
to the Disclosure Letter specifying such change. Such delivery shall not affect
any rights of the Buyer under Section 8. During the same period, the Sellers
also shall promptly notify the Buyer of the occurrence of any breach of any
covenant of the Sellers in this Agreement or of the occurrence of any event that
may make the satisfaction of the conditions in Section 7.1 impossible or
unlikely.
          5.6 No Shopping. Until such time as this Agreement shall be
terminated, neither of the Sellers shall directly or indirectly solicit,
initiate, encourage or entertain any inquiries or proposals from, discuss or
negotiate with, provide any nonpublic information to or consider the merits of
any inquiries or proposals from any Person (other than the Buyer) relating to
any business combination transaction involving the Sellers, or either of them,
including the sale of any equity interest in either of the Sellers, the merger
or consolidation of either of the Sellers or the sale of the Sellers’ business
or any of the assets of the Sellers (other than in the Ordinary Course of
Business).
          5.7 Reasonable Best Efforts. The Sellers and the Buyer shall use their
reasonable best efforts to cause the conditions in Section 7 to be satisfied.
          5.8 Change of Name. On or before the Closing Date, the Sellers shall
(a) amend their organizational documents and take all other actions necessary to
change their names to names sufficiently dissimilar to the Sellers’ present
names, in the Buyer’s judgment, to avoid confusion (and in no event containing
the words “Southern Saw,” “Atlanta,” or “Sharptech”), and (b) take all actions
requested by the Buyer to enable the Buyer to use one of such names in the State
of Georgia.
          5.9 Payment of Liabilities. Prior to the Closing Date, the Sellers
shall pay or otherwise satisfy their Liabilities in the Ordinary Course of
Business.
          5.10 Cooperation Concerning Title; Survey; UCC Searches.
               (a) Cooperation Concerning Title. The Sellers shall reasonably
cooperate with the Buyer in obtaining for the Buyer, at the Buyer’s expense, for
each parcel, tract or subdivided land lot of Owned Property, from Chicago Title
Insurance Company (the “Title Insurer”):

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                 (1) title commitments issued by the Title Insurer to insure
title to all Owned Property, including the land, improvements, insurable
appurtenances, in the amount of that portion of the Purchase Price allocated to
the Property, naming the Buyer as the proposed insured and having an effective
date after the date of this Agreement, wherein the Title Insurer shall agree to
issue an ALTA 1992 form owner’s policy of title insurance subject to the
Permitted Exceptions (each a “Title Commitment”);
                 (2) complete and legible copies of all recorded documents
listed as Schedule B-1 matters to be terminated or satisfied in order to issue
the policy described in the Title Commitment or as special Schedule B-2
exceptions thereunder (the “Recorded Documents”); and
The Title Commitment also shall set forth the Title Insurer’s requirements for
issuing its title policy subject to Permitted Exceptions, it being understood
that such requirements (other than the payment of the premium, which shall be
the responsibility of the Buyer) shall be met by the Sellers on or before the
Closing Date (including those requirements that must be met by releasing or
satisfying monetary encumbrances, but excluding encumbrances that will remain
after Closing and those requirements that are to be met solely by the Buyer). In
order to assist the Buyer in obtaining the Title Commitment, the Sellers shall
deliver to the Buyer promptly any existing title insurance policies and title
information that they may have with respect to any parcel of Owned Property.
               (b) Survey. The Sellers shall furnish to the Buyer as promptly as
practicable and in any event before September 15, 2006 a survey an updated
and/or current survey of the Owned Property completed or updated immediately
prior to or after the date of this Agreement by a land surveyor licensed by the
State of Georgia and bearing a certificate, signed and sealed by the surveyor,
certifying to the Buyer and the Title Insurer that: such survey was made (A) in
accordance with “Minimum Standard Detail Requirements for ALTA/ACSM Land Title
Surveys,” jointly established and adopted by ALTA and ACSM in 2005, and includes
Items 2, 3, 4, 7(A), 7(B)(1), 8, 9, 10, 11(A) and 13 of Table A thereof, and
(2) pursuant to the Accuracy Standards (as adopted by ALTA and ACSM and in
effect on the date of said certificate) (“Survey”).
               (c) Title Objections. If any of the following shall occur
(collectively, a “Title Objection”):
                 (1) any Title Commitment or other evidence of title or search
of the appropriate real estate records discloses that any party other than the
Sellers has title to the insured estate covered by the Title Commitment;
                 (2) any title exception is disclosed in Schedule B to any Title
Commitment that is not one of the Permitted Exceptions or one that the Sellers
will cause to be deleted from the Title Commitment concurrently with the
Closing, including (A) any exceptions that pertain to encumbrances securing any
loans that do not constitute an Assumed Liability and (B) any exceptions that
the Buyer reasonably believes could

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materially and adversely affect the Buyer’s use and enjoyment of the Owned
Property described therein; or
                 (3) any Survey discloses any matter that the Buyer reasonably
believes could materially and adversely affect the Buyer’s use and enjoyment of
the Owned Property described therein;
then the Buyer shall notify the Sellers in writing (“Buyer’s Notice”) of such
matters within ten (10) Business Days after receiving all of the Title
Commitment, the Survey and copies of the relevant Recorded Documents. The
Sellers shall use their reasonable best efforts to cure each Title Objection and
take all steps required by the Title Insurer to eliminate each Title Objection
as an exception to the Title Commitment. Any Title Objection that the Title
Company is willing to insure over on terms acceptable to the Sellers and the
Buyer is herein referred to as an “Insured Exception.” The Insured Exceptions,
together with any title exception or matters disclosed by the Survey not
objected to by the Buyer in the manner aforesaid shall be deemed to be
acceptable to the Buyer. Nothing in this Section 5.11(c) waives the Buyer’s
right to claim a breach of Sellers’ obligations under this Agreement.
               (d) UCC Searches. The Sellers shall cooperate with the Buyer in
obtaining complete and current searches in the names of the Sellers and other
appropriate parties of all Uniform Commercial Code Financing Statement records
maintained by the Secretary of State of Georgia, in which both of the Sellers
are organized, and each county within Georgia where either Seller does business
and in which a UCC Financing State properly and effectively could be filed with
respect to accounts, inventory, and equipment in order to perfect a security
interest in such Acquired Assets and wherever else the Sellers or the Buyer
shall believe that a Uniform Commercial Code Financing Statement has been filed.
Sellers also shall take such action as shall be necessary, effective no later
than Closing, to obtain such releases, termination statements and other
documents as may be necessary to provide reasonable evidence that all Acquired
Assets to be sold under this Agreement are free and clear of Security Interests,
other than as permitted under this Agreement.
          5.11 Removing Excluded Assets. On or within ninety (90) days following
the Closing Date, the Sellers shall have removed all Excluded Assets from all
facilities of the Sellers. Such removal shall be done in such manner as to avoid
any damage to the facilities and other properties of the Sellers. Any damage to
the Acquired Assets resulting from such removal shall be promptly paid by the
Sellers. Should the Sellers fail to remove the Excluded Assets as required by
this Section 5.12, the Buyer shall have the right, but not the obligation, after
Closing (a) if agreed upon with the Sellers, to remove the Excluded Assets at
the Sellers’ sole cost and expense; (b) to store the Excluded Assets and to
charge the Sellers all storage costs associated therewith; or (c) to exercise
any other right or remedy conferred by this Agreement or otherwise available at
law or in equity. The Sellers shall promptly reimburse the Buyer for all costs
and expenses incurred by the Buyer in connection with any Excluded Assets not
removed by the Sellers within ninety (90) days.
          5.12 Bulk Sales Laws. The Sellers shall comply with the provisions of
the Bulk Sales Laws in connection with the transactions contemplated by this
Agreement. The Sellers warrant and agree to pay and discharge when due (and in
any event prior to Closing) all claims of creditors that could be asserted
against the Buyer by reason of any non-compliance to the extent that such
liabilities are not Assumed Liabilities. To the extent that the procedures for
compliance with the Bulk Sales Laws referenced in Exhibit A to this Agreement
otherwise would allow the Sellers to satisfy any such obligations after Closing,
the Sellers nevertheless agree to satisfy all such obligations prior to Closing.
The Sellers hereby jointly and severally indemnify and agree to hold the Buyer

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harmless from, against and in respect of, and shall on demand reimburse the
Buyer for, any loss, liability, cost or expense suffered or incurred by the
Buyer by reason of the failure of the Sellers to pay or discharge any such
claims.
          5.13 Anti-Sandbagging. The Buyer has disclosed to Sellers any
inaccuracies or breaches of the Sellers’ representations and warranties that are
within the Knowledge of the Buyer on or prior to the Closing Date. Nothing in
this Section 5.13 shall relieve the Sellers of any indemnity obligation in
respect of such breach if Buyer decides to close the transactions contemplated
hereby notwithstanding such breach.
          5.14 Stub Period. The following rules will apply to the Stub Period:
               (a) During the Stub Period, the Sellers have continued to be the
legal owner of the Acquired Assets and the business. Consequently, the Sellers
shall keep their properties and operations insured under the policies of
insurance referenced in Section 4.20 of this Agreement.
               (b) By the close of business on the Closing Date, the Sellers
shall have terminated all employees except Boyle.
               (c) The Buyer shall be entitled to any earnings during the Stub
Period and shall bear any loss incurred during the Stub Period. Notwithstanding
the foregoing, (1) the expense of terminated employees outside ordinary
compensation, (2) any Liability covered by the Sellers’ insurance, and (3) any
matter constituting a breach of Sellers’ representations and warranties shall be
for Sellers’ account throughout the Stub Period.
     6. EMPLOYEES AND POST-CLOSING COVENANTS. The Parties agree as follows with
respect to Employees and the period following the Closing:
          6.1 Employees Other than Boyle. Not less than five days prior to the
Closing Date, the Buyer has provided the Sellers with a list of the employees of
the Sellers (it being stipulated that Southern Saw has no employees and that all
employees of Sellers are employees of Holdings) who will be offered employment
by Buyer (the “Employment Schedule”). The following terms shall apply to the
employment of those employees listed on the Employment Schedule:
               (a) Concurrent with Closing, the Buyer shall offer employment to
the employees of Sellers listed on the Employment Schedule at such employees’
then existing base wages (except that in the case of territory managers such
compensation may consist of a different mix of salary and commissions than
Sellers have paid), subject to such other employment benefits and incentive
compensation plans as the Buyer may choose. Subject to the foregoing, the Buyer
may offer employment on Buyer’s standard employment terms (which, for territory
managers, may include a noncompetition agreement).
               (b) The Buyer may delete from the Employment Schedule any person
originally listed who shall fail to have proper INS employment documentation
(e.g., documents required to complete Form I-9 “Employment Eligibility
Verification”) or who shall fail the Buyer’s pre-employment drug test. No
deletion of an employee from the Employment Schedule pursuant to this
Section 6.1(c) shall obligate the Buyer to add any substitute employee to the
Employment Schedule.
               (c) If the Buyer shall hire any employee of the Sellers at
Closing and thereafter shall terminate such employee (other than For Cause)
within one year following the Closing Date, the Buyer shall pay such terminated
employee as severance pay three months of such employee’s base pay (for
territory managers the pay will be the average compensation for the preceding
twelve (12) months, provided that months of employment will apply for any
territory manager employed less than 12 months).
               (d) Notwithstanding the Buyer’s obligation to pay severance pay
in certain circumstances as set forth above it is understood and agreed that:
                 (1) The employment offered by the Buyer is “at will” and may be
terminated by the Buyer or by an employee at any time for any reason; and

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                 (2) Nothing in this Agreement shall be deemed to prevent or
restrict in any way the right of the Buyer to terminate, reassign, promote or
demote any of the employees of the Sellers after the Closing or to change
adversely or favorably the title, powers, duties, responsibilities, functions,
or terms or conditions of employment of such employees.
               (e) The Sellers shall be solely liable for (1) any amounts
payable or distributable to Sellers’ employees under any Employment Benefit Plan
maintained or contributed to by Sellers, or either of them, and (2) any
severance payment required to be made to the Sellers’ employees due to the
transactions contemplated by this Agreement, save and except for any severance
that the Buyer may be liable for under this Section 6.1. Without limiting the
generality of the foregoing, the Buyer shall not have any responsibility,
liability or obligation, whether to employee, former employees, their
beneficiaries or to any other Person, with respect to any employee benefit
plans, practices, programs or arrangements (including the establishment,
operation or termination thereof and the notification and provision of COBRA
coverage extension) maintained or contributed to by the Sellers, or either of
them.
               (f) Nothing in this Section 6.1 shall apply to Boyle, and Boyle
shall not be included in the 95% test referenced above.
               (g) Employees of Holdings who are hired by the Buyer will be
entitled to (a) receive credit under the Buyer’s Employee Benefit Plans for
purposes of eligibility and vesting for all years of service under the Holdings
ESOP, but their years of service prior to Closing shall not be taken into
account for purposes of accruing benefits under any retirement plan of the Buyer
or any Affiliate; and (b) until such time as the same is altered to include
Sellers’ employees in Kasco’s existing medical insurance plan, to participate in
the Kaiser medical insurance policy maintained by the Sellers prior to Closing
(provided, however, that dental and life coverage shall be provided only under
Kasco’s existing dental and life insurance plans).
          6.2 Payment of Taxes Resulting from Sale of Acquired Assets by the
Sellers. The Sellers shall pay as required by law all Taxes resulting from or
payable in connection with the sale of the Acquired Assets pursuant to this
Agreement, regardless of the Person on whom such Taxes are imposed by legal
requirements, only to the extent that such Taxes may affect the free and clear
title to the Acquired Assets.
          6.3 Payment of Liabilities. In addition to payment of Taxes pursuant
to Section 6.2, the Sellers shall pay, or make adequate provision for the
payment, in full all of the Retained Liabilities and other Liabilities of the
Sellers under this Agreement to the extent that the nonpayment of such Retained
Liabilities or other Liabilities may affect the free and clear title to the
Acquired Assets. The Sellers will in any event abide by their obligations under
Section 5.12 of this Agreement. The Buyer will pay all Assumed Liabilities in a
timely manner.
          6.4 Restrictions on Dissolution of the Sellers. The Sellers shall not
dissolve until after the later of (a) 30 days after the completion of all
adjustment procedures contemplated by Section 2 above, (b) the Sellers’ payment,
or adequate provision for the payment, of all of its obligations pursuant to
Sections 6.2 and 6.3. Neither Buyer nor Kasco will dissolve prior to payment of
all Assumed Liabilities as provided in this Agreement; provided, however, that
the Buyer may be merged into Kasco without violating the covenant set forth in
this Section 6.4.
          6.5 Reports and Returns. The Sellers shall promptly after the Closing
prepare and file all reports and returns required by legal requirements relating
to the business of the Sellers as conducted using the Acquired Assets, to and
including the Effective Date. The Buyer shall promptly after the Closing Date
prepare and file all reports and returns required by law relating to the
Acquired Assets, the Assumed Liabilities and the Business after the Effective
Date.
          6.6 Further Assurances. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents) as any other
Party reasonably may request, all at the sole cost and expense of the requesting
Party (unless the requesting Party is entitled to

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indemnification therefor under Section 8 below). Each Party acknowledges and
agrees that from and after the Closing any Party will be entitled to possession
of all documents, books, records (including Tax records), agreements, and
financial data of any sort relating to the Business that was conducted by
Southern Saw prior to the Closing Date.
          6.7 Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand brought by a third
party or brought by a Party against a third party in connection with (a) any
transaction contemplated under this Agreement or (b) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Date
involving the Sellers or Buyer, each of the other Parties will cooperate with it
and its counsel in the contest or defense, make available their personnel, and
provide such testimony and access to their books and records as shall be
necessary in connection with the contest or defense, all at the sole cost and
expense of the contesting or defending Party (unless the contesting or defending
Party is entitled to indemnification therefor under Section 8 below).
          6.8 Transition. Neither the Sellers nor their Affiliates will take any
action that is designed or intended to have the effect of discouraging any
lessor, licensor, customer, supplier, or other business associate of the
Business from maintaining the same business relationships with the Buyer after
the Closing as it maintained with the Sellers prior to the Closing. The Sellers
and their Affiliates will refer all customer inquiries relating to the Business
to the Buyer from and after the Closing.
          6.9 Post-Closing Access to Records. After the Closing Date, the Buyer
shall retain for a period consistent with the Buyer’s record-retention policies
and practices those records of the Sellers delivered to the Buyer. The Buyer
also shall provide the Sellers and their Representatives reasonable access to
such records, during normal business hours on at least four (4) hours prior
written notice, to enable them to prepare financial statements or tax returns,
deal with audits of any nature, do any other activities necessary (as determined
by Sellers) to collect and liquidate retained Trade Accounts Receivable, pay
employee compensation (if any), administer or terminate any Employee Benefit
Plans maintained by Sellers and close the business of Sellers. Wherever the
Buyer shall have charged the Buyer the Buyer’s incremental cost of warranty work
and returns as contemplated by Section 6.10 of this Agreement, the Buyer shall
provide the Sellers such access to the books and records of the Buyer as shall
be reasonably necessary to substantiate the Buyer’s charges to the Sellers. In
addition, Boyle will be entitled to use (off-site) the computer that he has used
while working for Holdings for a period of ninety (90) days following the
Closing Date.
          6.10 Warranties and Returns. After the Closing, the Buyer will perform
for the Sellers at its incremental cost all warranty work that is the
responsibility of the Sellers pursuant to warranties described in Disclosure
4.22. The Buyer also will process returns for the Sellers. In performing such
warranty work and processing such returns, the Buyer will perform work, process
returns, and incur expenses for the Sellers’ account only to the extent that the
Buyer would do the same when acting on its own account. All such costs will be
charged to, and be payable solely from, the Escrow Account. Buyer will provide
Sellers with written proof of all charges.
     7.  CONDITIONS TO OBLIGATION TO CLOSE.
          7.1 Conditions to Obligation of the Buyer. The obligation of the Buyer
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
               (a) the representations and warranties set forth in Section 3.1
and Section 4 above (without regard to any amendment or supplement to the
Disclosure Letter pursuant to Section 4 above) shall be true and correct in all
material respects as of the Effective Date and as of the Closing Date;
               (b) the Sellers shall have performed and complied with all of
their covenants and agreements hereunder in all material respects through the
Closing;

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               (c) no action, suit, or proceeding shall be pending before any
court or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (1) prevent
consummation of any of the transactions contemplated by this Agreement,
(2) cause any of the transactions contemplated by this Agreement to be rescinded
following consummation, (3) materially and adversely affect the right of the
Buyer to own the Acquired Assets, or (4) materially and adversely affect the
business of the Buyer with respect to the Acquired Assets (and no such
injunction, judgment, order, decree, ruling, or charge shall be in effect);
               (d) the Buyer shall have received (1) a certificate, signed by
the appropriate officers of the Sellers, as to the satisfaction of the
conditions contained in Sections 7.1(a)-(c) above and (2) a certificate of the
appropriate officer reasonably necessary for contracts to be transferred to
Buyer of Holdings as to the authenticity and effectiveness of the actions of the
board of directors of Holdings and the Holdings ESOP authorizing the Sellers to
enter into this Agreement and approving the transactions contemplated by this
Agreement;
               (e) the Sellers shall have procured all of governmental or other
the third party consents specified in Exhibit I (“Required Consents”) reasonably
necessary for contracts to be transferred to Buyer, and without any change in
the terms of the underlying contract;
               (f) the absence of material pending or threatened litigation or
material claims regarding this Agreement or the transactions contemplated
hereby;
               (g) the absence of any material adverse change in Sellers’
business, financial condition, assets or operations since June 30, 2006 and the
absence of any termination of any material contract or customer relationship as
a result of the change of control of Sellers;
               (h) the audited financial statements of the Sellers for the
fiscal year ended June 30, 2006 shall reflect earnings before interest, taxes,
and ESOP costs, of at least $100,000;
               (i) based solely on the Sellers’ sales to those persons who are
customers of the Sellers at June 30, 2006, the Sellers shall have had for the
fiscal year ended June 30, 2006 annualized sales of $16,500,000 or more;
               (j) the environmental experts engaged by the Buyer shall have
conducted environmental surveys of the Property (including Phase II surveys, if
reasonably required), and the results of such surveys shall not reveal the
presence of environmental conditions that are unacceptable to the Buyer on a
reasonable basis;
               (k) the Buyer shall have obtained with respect to the Owned
Property the Title Commitment contemplated by Section 5.11(a) of this Agreement,
in such amount equal to value of such Owned Property (including all improvements
located thereon), insuring title to the Owned Property to be in the Sellers as
of the Closing and subject only to the Permitted Exceptions described in Section
4.13(i) of the Disclosure Letter;
               (l) with respect to the Owned Property, the Sellers shall have
procured a Survey as contemplated by Section 5.11(b) of this Agreement not
disclosing any survey defect or encroachment from or onto the Owned Property
which has not been cured or insured over to the Buyer’s reasonable satisfaction
prior to the Closing;
               (m) the Sellers and the Escrow Agent shall have entered into the
Escrow Agreement;
               (n) the Sellers shall have entered into a noncompetition
agreement and confidentiality agreement in form and substance as set forth in
Exhibit J attached hereto (the “Noncompetition Agreement”), which, for a period
of two years after the Closing Date, (1) shall impose on Sellers various
obligations of confidentiality, (2) shall preclude Sellers, and companies in
which either of them has a material financial interest from directly or
indirectly competing with Buyer in the Business being acquired, and (3) shall
preclude Sellers or their affiliates from soliciting during the five-year period
following the Closing any employees of Holdings to whom

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Buyer shall have made an offer of employment; provided, however, that if there
is any conflict between the Noncompetition Agreement and the description of it
that appears above, the terms of the Noncompetition Agreement shall control;
               (o) Boyle shall have executed and delivered the New Boyle
Noncompetition Agreement in the form attached to this Agreement as Exhibit K;
provided, however, that this condition shall be deemed waived by the Buyer and
the Sellers if Boyle refuses to execute the New Boyle Noncompetition Agreement
and the Buyer is relieved of its obligation to pay the additional $500,000
contemplated by Section 2.4 of this Agreement;
               (p) the Buyer shall have received from Smith Moore, LLP, counsel
to the Sellers and the Holdings ESOP, an opinion in the form set forth in
Exhibit L attached hereto, addressed to the Buyer, and dated as of the Closing
Date;
               (q) the Seller Contracts requiring changes, as identified in
Exhibit M (the “Seller Contracts Requiring Changes”) shall have been amended to
assign them to the Buyer, and such amendment shall be approved by the other
parties to such agreements;
               (r) the Sellers shall have complied with the Bulk Sales Laws of
the State of Georgia as contemplated by Section 5.12 of this Agreement;
               (s) all actions to be taken by the Sellers in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to the
Buyer.
The Buyer may waive any condition specified in this Section 7.1 if it executes a
writing so stating at or prior to the Closing. The Buyer shall use its
reasonable best efforts to cause the conditions contained in Section 7.1 to be
satisfied.
          7.2 Conditions to Obligation of the Sellers. The obligation of the
Sellers to consummate the transactions to be performed by them in connection
with the Closing is subject to satisfaction of the following conditions:
               (a) the representations and warranties set forth in Section 3.2
above shall be true and correct in all material respects as of the Effective
Date and as of the Closing Date, except for any representations or warranties
qualified by materiality limitations, which shall instead be true and correct in
all respects;
               (b) the Buyer shall have performed and complied with all of its
covenants and agreements hereunder in all material respects through the Closing;
               (c) no order issued by any court of competent jurisdiction
preventing the consummation of the transactions contemplated by this Agreement
shall be in effect;
               (d) the Sellers shall have received a certificate, signed by the
appropriate officer of the Buyer as to the satisfaction of the conditions
specified above in Section 7.2(a)-(c);
               (e) the Buyer and the Escrow Agent shall have entered into the
Escrow Agreement.
               (f) the Sellers shall have received from Holland & Knight, LLP,
counsel to the Buyer, an opinion in the form set forth in Exhibit O attached
hereto, addressed to the Sellers, and dated as of the Closing Date; and
               (g) the absence of pending litigation or material claims
(including any legal action by Steel Partners II, LLP or an affiliate thereof)
regarding this Agreement or the transactions contemplated hereby.

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The Sellers may waive any condition specified in this Section 7.2 if they
execute a writing so stating at or prior to the Closing. The Sellers will use
their reasonable best efforts to cause the conditions contained in this
Section 7.2 to be satisfied.
     8. REMEDIES FOR BREACHES OF THIS AGREEMENT.
          8.1 Survival of Representations and Warranties. All of the
representations and warranties of the Parties contained in this Agreement shall
survive the Closing hereunder (even if the damaged Party knew or had reason to
know of any misrepresentation or breach of warranty at the time of Closing,
except as set forth in Section 6.6 above) for eighteen (18) months after the
Closing Date. No such termination shall affect the rights of a Party in respect
of any claim made by such Party in a writing received by another Party prior to
the expiration of any such period.
          8.2 Indemnification Provisions for Benefit of the Buyer.
               (a) If the Sellers breach any of their representations,
warranties, covenants or agreements contained herein (including, without
limitation, the Sellers’ obligation to satisfy all Retained Liabilities), if
there is an applicable survival period pursuant to Section 8.1 above, provided
that the Buyer makes a written claim for indemnification against the Sellers
pursuant to Section 10.8 below within such survival period, then the Sellers,
jointly and severally, agree to indemnify the Buyer from and against the
entirety of any Adverse Consequences the Buyer may suffer through and after the
date of the claim for indemnification (including any Adverse Consequences the
Buyer may suffer after the end of any applicable survival period) resulting
from, arising out of, relating to, in the nature of, or caused by the breach.
Notwithstanding the foregoing, except in the instances of actual fraud on the
part of Sellers, or either of them, the Buyer agrees that it shall collect any
Adverse Consequences recoverable by the Buyer pursuant to this Section 8.2(a)
solely from the Escrowed Proceeds pursuant to the Escrow Agreement, and the
amount recoverable by the Buyer under this Section 8.2(a) shall be limited to
the amount of the Escrowed Proceeds.
               (b) The Sellers and not the Buyer shall be solely liable in
respect of any matters constituting the Retained Liabilities.
               (c) The Sellers jointly and severally agree to indemnify the
Buyer from and against the entirety of any Adverse Consequences the Buyer may
suffer resulting from, arising out of, relating to, in the nature of, or caused
by actual fraud of the Sellers, or either of them.
          8.3 Indemnification Provisions for Benefit of the Sellers.
               (a) General. If the Buyer breaches any of its representations,
warranties, covenants or agreements contained herein (including, without
limitation, the Buyer’s obligation to satisfy all Assumed Liabilities), and,
only if there remains an applicable survival period pursuant to Section 8.1
above, provided that the Sellers make a written claim for indemnification
against the Buyer pursuant to Section 8.8 below within such survival period,
then the Buyer agrees to indemnify the Sellers from and against the entirety of
any Adverse Consequences the Sellers may suffer through and after the date of
the claim for indemnification (including any Adverse Consequences the Sellers
may suffer after the end of any applicable survival period) resulting from,
arising out of, relating to, in the nature of, or caused by the breach (or the
alleged breach) subject to the limitations set forth in this Article 8.
               (b) The Buyer and not the Sellers will be solely liable for, and
in respect of, the Assumed Liabilities and matters relating thereto.
               (c) The Buyer agrees to indemnify the Sellers from and against
the Adverse Consequences the Sellers may suffer resulting from, arising out of,
relating to, in the nature of, or caused by actual fraud of the Buyer.
               (d) Steel Partners Tender Offer. Should either Seller incur any
litigation or general legal fees or other costs or expenses as a result of being
named as a party defendant, being called to testify, or filing

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any responsive pleading in a court of law to defend its rights in any action or
proceeding relating to the tender offer of Steel Partners II, LLP with respect
to Bairnco Corporation. Buyer will indemnify Sellers for all such fees and
costs.
          8.4 Matters Involving Third Parties.
               (a) If any third party shall notify any Party (the “Indemnified
Party”) with respect to any matter (a “Third Party Claim”) which may give rise
to a claim for indemnification against any other Party (the “Indemnifying
Party”) under this Section 8, then the Indemnified Party shall promptly notify
each Indemnifying Party thereof in writing; provided, however, that no delay on
the part of the Indemnified Party in notifying any Indemnifying Party shall
relieve the Indemnifying Party from any obligation hereunder unless (and then
solely to the extent) the Indemnifying Party thereby is prejudiced.
               (b) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (1) the Indemnifying
Party notifies the Indemnified Party in writing within 15 days after the
Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the Third
Party Claim, except that the Indemnified Party will pay any costs or liabilities
attributable to its conduct (2) the Indemnifying Party provides the Indemnified
Party with evidence acceptable to the Indemnified Party that the Indemnifying
Party will have the financial resources to defend against the Third Party Claim
and fulfill its indemnification obligations hereunder, (3) the Third Party Claim
involves only money damages and does not seek an injunction or other equitable
relief, (4) settlement of, or an adverse judgment with respect to, the Third
Party Claim is not, in the good faith judgment of the Indemnified Party, likely
to establish a precedential custom or practice adverse to the continuing
business interests of the Indemnified Party, and (5) the Indemnifying Party
conducts the defense of the Third Party Claim actively and diligently.
               (c) So long as the Indemnifying Party is conducting the defense
of the Third Party Claim in accordance with Section 8.4(b) above, (1) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
and participate in the defense of the Third Party Claim, (2) the Indemnified
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnifying Party, and (3) the Indemnifying Party will not consent to the entry
of any judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnified Party.
               (d) In the event any of the conditions in either
Section 8.4(b)(1) or (5) above is or becomes unsatisfied (in the case of
Section 8.4(b)(5) after the Indemnified Party has given the Indemnifying Party
written notice of the specific deficiencies in the performance of the
Indemnifying Party and the Indemnifying Party has failed to take reasonable
steps to remedy such deficiencies within 15 days after receipt of such notice),
however, (1) the Indemnified Party may defend against, and consent to the entry
of any judgment or enter into any settlement with respect to, the Third Party
Claim in any manner it may in good faith deem appropriate (and the Indemnified
Party need not consult with, or obtain any consent from, any Indemnifying Party
in connection therewith), (2) the Indemnifying Party will reimburse the
Indemnified Party promptly and periodically for the costs of defending against
the Third Party Claim (including reasonable attorneys’ fees and expenses), and
(3) the Indemnifying Party will remain responsible for any Adverse Consequences
the Indemnified Party may suffer resulting from, arising out of, relating to, in
the nature of, or caused by the Third Party Claim to the fullest extent provided
in this Section 8, subject to the limitations stated in Section 8.5. In the
event any of the conditions in Sections 8.4(b)(2), (3), or (4) above is
unsatisfied, the Indemnified Party will have the right to participate in the
defense of the applicable Third Party Claim with counsel of its choice at its
expense, and the Indemnifying and Indemnified Party will use all reasonable good
faith efforts to agree on an equitable apportionment of the expenses of defense
and other terms of joint defense, it being understood that neither party will
have the unilateral right to commit the other party to any compromise or
settlement of such Third Party Claim.
          8.5 Limitations. The liability of the Sellers for claims under this
Agreement shall be limited by the following:

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               (a) No Adverse Consequences shall be recoverable by the Buyer
pursuant to the provisions of this Section 8 unless and only to the extent that
the amount of all such Adverse Consequences equals or exceeds in the aggregate
eighty thousand dollars ($80,000) (the “Indemnity Basket”); provided, however,
that after the Indemnity Basket has been satisfied in the aggregate such claims
shall be recoverable from the first dollar. Claims in respect of (A) downward
adjustments of the Purchase Price, and (B) actual fraud of Sellers shall be
payable from the first dollar.
               (b) The aggregate amount of Adverse Consequences recoverable
pursuant to the provisions of this Section 8 by the Buyer shall be absolutely
and entirely limited to the Escrowed Proceeds (the “Indemnity Cap”). Such
limitation does not apply to Adverse Consequences based on actual fraud of the
Sellers, or either of them.
          8.6 Determination of Adverse Consequences. The Parties shall take into
account the time cost of money (using the prime rate as reported from time to
time in The Wall Street Journal as the discount rate) in determining Adverse
Consequences for purposes of this Section 8. All indemnification payments under
this Section 8 shall be deemed adjustments to the final Purchase Price.
          8.7 Other Indemnification Provisions. This Section 8 shall be the
absolute and exclusive remedy of the Parties for the breach (or alleged breach)
of any representation, warranty, covenant or agreement contained herein or made
pursuant to this Agreement and the transactions contemplated hereby; provided,
however, that these exclusive remedies will not (a) apply in the case of fraud
and (b) be construed to preclude a Party from bringing an action for specific
performance or other equitable remedy to require the other parties to perform
its or their obligations under this Agreement. .
          8.8 Mitigation. Each Indemnified Party and each Indemnifying Party
shall use its reasonable best efforts and shall consult and cooperate with each
other with a view towards mitigating claims, losses, liabilities, damages,
deficiencies, costs and expenses that may give rise to claims for
indemnification under Sections 8.2 through 8.7.
     9. MISCELLANEOUS.
          9.1 Nature of Certain Obligations. . The representations, warranties,
covenants and agreements of the Sellers in this Agreement are joint and several
obligations of the Sellers.
          9.2 Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to or immediately after the Closing without the prior
written approval of the Buyer and the Sellers; provided, however, that the Buyer
may make any public disclosure it believes in good faith is required by
applicable law or any listing or trading agreement concerning its
publicly-traded securities.
          9.3 No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns, except that the employees of Holdings will be
able to enforce their rights to compensation, benefits and severance pay against
Buyer.
          9.4 Entire Agreement. This Agreement (including the recitals appearing
at the beginning of this Agreement, the Exhibits, the Schedules, and any other
documents referred to herein) constitutes the entire agreement among the Parties
and supersedes any prior understandings, agreements, or representations by or
among the Parties, written or oral, to the extent they relate in any way to the
subject matter hereof, except that the confidentiality agreement dated September
26, 2005 and the provisions of the Offer Letter relating to due diligence and
access will remain in effect.
          9.5 Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign

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either this Agreement or any of its rights, interests, or obligations hereunder
without the prior written approval of the Buyer and the Sellers; provided,
however, that the Buyer may (a) assign any or all of its rights and interests
hereunder to one or more of its Affiliates and (b) designate one or more of its
Affiliates to perform its obligations hereunder (in any or all of which cases
the Buyer nonetheless shall remain responsible for the performance of all of its
obligations hereunder and the guarantee of the Buyer’s Guarantor will continue
to apply).
          9.6 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. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile shall be as
effective as delivery of a manually executed counterpart of this Agreement.
          9.7 Headings. The Section and subsection headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
          9.8 Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given (a) when delivered
personally to the recipient, (b) one Business Day after being sent to the
recipient by reputable overnight courier service (charges prepaid), (d) on the
day of transmission if transmitted by facsimile on any Business Day between 9:00
a.m. and 4:00 p.m. local time, or, if transmitted outside of these times, on the
commencement of the following Business Day or (d) four Business Days if it is
sent by registered or certified mail, return receipt requested, postage prepaid,
and addressed to the intended recipient as set forth below:

                  If to the Sellers:   Southern Saw Holdings, Inc.
 
          Southern Saw Service, L.P.
 
          c/o Peter J. Boyle
 
          8775 Torrington Drive
 
          Roswell, Georgia 30076
 
           
 
  Copy to:       Smith Moore LLP
 
          One Atlantic Center
 
          1201 W. Peachtree Street, Suite 3700
 
          Atlanta, GA 30309
 
          Facsimile: (404) 962-1236
 
          Attention: Allen Buckley, Esq.
 
                If to the Buyer:   Southern Saw Acquisition Corporation
 
          c/o Kasco Corporation
 
          300 Primera Blvd., Suite 432
 
          Lake Mary, FL 32746
 
          Facsimile: (407) 875-3398
 
          Attention: Luke E. Fichthorn III Chairman
 
           
 
  Copy to:       Holland & Knight LLP
 
          200 South Orange Ave., Suite 2600
 
          Orlando, FL 32801
 
          Facsimile: (407) 244-5288
 
          Attention: Leighton D. Yates, Jr.

Any Party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
Parties notice in the manner herein set forth.
          9.9 Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Georgia without giving
effect to any choice or conflict of law provision or

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rule (whether of the State of Georgia or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
Georgia.
          9.10 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Sellers. No waiver by any Party of any default, misrepresentation,
or breach of warranty, covenant or agreement hereunder, whether intentional or
not, shall be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty, covenant or agreement hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
          9.11 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
          9.12 Expenses. Except as otherwise provided in this Agreement, each
party to this Agreement will bear its respective fees and expenses (including
legal fees and expenses) incurred in connection with the preparation,
negotiation, execution and performance of this Agreement and the transactions
contemplated hereby. Notwithstanding the foregoing:
               (a) Brokers and Finders. Each party will be responsible for
compensating any broker or finder engaged by such party.
               (b) Title Insurance. The Buyer will be responsible for the cost
of the Title Commitment and the related title insurance policy to be procured by
the Buyer, and the Sellers will be responsible for the cost of the Surveys.
               (c) Due Diligence Expenses. The Buyer will be responsible for its
due diligence expenses and the Phase I and/or Phase II environmental audit to be
performed on Sellers’ facilities that are included in the Acquired Assets.
               (d) Grant Thornton and Other Accountants. The Buyer will be
responsible for the fees and expenses of Grant Thornton in connection with its
audits, including the audit required for the post-closing adjustment. If other
accountants are engaged because the Sellers do not accept Grant Thornton’s
post-closing determination, each of the Buyer, on the one hand, and the Sellers,
on the other hand, will be responsible for 50% of such other accountants’ fees
and expenses.
               (e) Transfer Taxes. Each of the Buyer, on the one hand, and the
Sellers, on the other hand, shall be liable for 50% of all transfer taxes on the
Acquired Assets. The Sellers and the Buyer will cooperate in seeking by lawful
means to reduce the amount of transfer taxes so payable. Without limiting the
generality of the foregoing, the Sellers and the Buyer specifically agree, to
the extent the same is relevant under the applicable sales tax laws, as follows:
                 (1) With respect to all inventory items that are to be resold
by the Buyer in transactions subject to sales Tax, the Buyer shall execute and
deliver to the Sellers a resale certificate or other certificate as required by
local law.
                 (2) With respect to any Acquired Assets constituting personal
property as to which any “isolated transaction,” “casual sales,” or similar
exemption from transfer Taxes may be available, the Parties shall submit such
documentation as shall be necessary to establish the isolated nature of the
transfer.
          9.13 Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any

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federal, state or local statute or law shall be deemed also to refer to all
rules and final regulations promulgated thereunder, unless the context requires
otherwise. The word “including” shall mean including without limitation. The
Parties intend that each representation, warranty, covenant and agreement
contained herein shall have independent significance. If any Party has breached
any representation, warranty, covenant or agreement contained herein in any
respect, the fact that there exists another representation, warranty, covenant
or agreement relating to the same subject matter (regardless of the relative
levels of specificity) which the Party has not breached shall not detract from
or mitigate the fact that the Party is in breach of the first representation,
warranty, covenant or agreement.
          9.14 Specific Performance. Each of the Parties acknowledges and agrees
that the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
state or federal court sitting in Atlanta, Georgia and otherwise having equity
jurisdiction (subject to the provisions set forth in Section 10.15 below, but
with the understanding that any action for specific performance shall be through
a court proceeding rather than through a mediation or arbitration ), in addition
to any other remedy to which they may be entitled, at law or in equity. Each of
the Parties submits to the jurisdiction of any state or federal court sitting in
Atlanta, Georgia, in any action or proceeding under this Section 10.14 arising
out of or relating to this Agreement and agrees that all claims in respect of
the action or proceeding may be heard and determined in any such court.
          9.15 Dispute Resolution—Mediation and Arbitration. In Section 2.8
above, the Parties have specified a means of resolving disputes as to the final
Purchase Price. In Section 10.14 above, the Parties have specified that a court
proceeding will be used to seek specific performance of this Agreement.
Concerning all other disputes under this Agreement, the Parties agree as
follows:
               (a) Claims, disputes, or other matters in question between the
Parties arising out of this Agreement or breach thereof shall be subject to and
decided by mediation or arbitration. Such mediation or arbitration shall be
conducted in accordance with the applicable rules of the AAA currently in
effect, but each party shall have rights of discovery in accordance with the
Federal Rules of Civil Procedure rather than such mediation or arbitration
rules. Any arbitration pursuant to this Agreement shall be held in Atlanta,
Georgia and shall be conducted by a panel of three arbitrators to be selected
pursuant to the applicable rules of the AAA currently in effect. The fees and
expenses of arbitration shall be part of the award. Each Party in any mediation
or arbitration shall pay its own attorneys’ fees.
               (b) In addition to and prior to arbitration, the Parties shall
endeavor to settle disputes by mediation. Demand for mediation shall be filed in
writing with the other Party to this Agreement and with the AAA. A demand for
mediation shall be made within a reasonable time after the claim, dispute, or
other matter in question has arisen. In no event shall the demand for mediation
be made after the date when institution of legal or equitable proceedings based
on such claim, dispute, or other matter in question would be barred by the
applicable statutes of repose or limitations.
               (c) Demand for arbitration shall be filed in writing with the
other Party to this Agreement and with the AAA. A demand for arbitration shall
be made within a reasonable time after the claim, dispute, or other matter in
question has arisen. In no event shall the demand for arbitration be made after
the date when institution of legal or equitable proceedings based on such claim,
dispute, or other matter in question would be barred by the applicable statutes
of repose or limitations.
               (d) An arbitration pursuant to this Section may be joined with
other matters between the Parties involving common issues of law or fact as to
which the Parties have an obligation to arbitrate disputes. No arbitration
arising out of this Section shall include, by consolidation, joinder, or in any
other manner an additional person or entity not a Party hereto, except by
written consent containing a specific reference to this Section signed by the
other person or entity sought to be joined. Consent to arbitration involving an
additional person or entity shall not constitute consent to arbitration of any
claim, dispute, or other matter in question not described in the written consent
or with a person or entity not named or described therein. The foregoing
agreement

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to arbitrate and other agreements to arbitrate with an additional person or
entity duly consented to by the Parties shall be specifically enforceable in
accordance with applicable law in any court having jurisdiction thereof.
               (e) The award rendered by the arbitrator or arbitrators shall be
final, and judgment may be entered upon it in accordance with applicable law in
any court having jurisdiction thereof. Similarly, the arbitrator or arbitrators
shall have the right to enter, in appropriate circumstances, injunctions and
other orders in equity as well as in law, all of which orders shall be final,
and judgment may be entered upon them in accordance with applicable law in any
court having jurisdiction thereof. Notwithstanding the provisions of
Section 10.14(a), an arbitrator or arbitrators shall be permitted to award
attorneys’ fees and litigation costs and expenses to the prevailing party.
          9.16 Confidentiality.
               (a) Between the date of this Agreement and the Closing Date, the
existing Confidentiality Agreement between the Buyer and Sellers will remain in
effect. However, nothing provided therein will preclude the Buyer from
conducting due diligence contemplated by the Offer Letter.
               (b) If the transactions contemplated by this Agreement are not
consummated, each Party will return or destroy as much of such written
information as the other party may reasonably request.
[Signature Page Follows]

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     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
effective as of the date first above written.

                  BUYER:    
 
                SOUTHERN SAW ACQUISITION CORPORATION    
 
           
 
  By:   /s/ Brian E. Turner
 
Brian E. Turner    
 
      President    
 
                SELLERS:    
 
                SOUTHERN SAW HOLDINGS, INC.    
 
           
 
  By:   /s/ Peter J. Boyle
 
Peter J. Boyle    
 
      President    
 
                SOUTHERN SAW SERVICE, L.P.    
 
           
 
  By:   SOUTHERN SAW HOLDINGS, INC.,    
 
      its General Partner    
 
           
 
  By:   /s/ Peter J. Boyle
 
Peter J. Boyle    
 
      President    

[Signature Pages to Asset Purchase Agreement]

 

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JOINDER OF BUYER’S GUARANTOR
     KASCO CORPORATION, a Delaware corporation (“Buyer’s Guarantor”) hereby
joins in the foregoing Asset Purchase Agreement (the “Agreement”) for the
purpose of guaranteeing the obligations of Southern Saw Acquisition Corporation
(the “Buyer”) thereunder, on the following terms:
W I T N E S S E T H:
     1. Capitalized Terms. Capitalized terms used in this Joinder of Buyer’s
Guarantor (this “Joinder”) and not otherwise defined shall have the meanings set
forth in the Agreement.
     2. Consideration for Guaranty. The Buyer’s Guarantor acknowledges that it
is the owner of the Buyer, and consequently it will benefit materially from the
transactions contemplated by the Agreement, and thus it has received adequate
consideration for its covenants, guarantees and agreements set forth herein. The
Sellers have told the Buyer and the Buyer’s Guarantor that the Sellers would not
have entered into the Agreement unless the Buyer’s Guarantor guaranteed the
Buyer’s obligations thereunder. This Joinder is being entered into at the
Buyer’s request.
     3. Guaranty. By executing and delivering this Joinder, the Buyer’s
Guarantor hereby irrevocably, absolutely, and unconditionally guarantees the
full and punctual payment and performance by the Buyer of the Guaranteed
Obligations (as defined below). For all purposes of this Joinder, “Guaranteed
Obligations” means: (a) the Buyer’s prompt payment in full, when due or declared
due, and at all such times of all obligations heretofore, now or at any time or
times hereafter owing, arising, due or payable from the Buyer to the Sellers;
and (b) the Buyer’s prompt, full and faithful performance, observance and
discharge of each and every agreement, undertaking, covenant and provision in
favor of Sellers to be performed, observed or discharged by the Buyer under the
Agreement and all other documents executed by Buyer related to the asset
purchase transaction contemplated thereby (“Related Agreements”). The Guaranteed
Obligations to the Sellers under this Joinder are hereinafter collectively
referred to as the “Guaranteed Obligations”.
     The Buyer’s Guarantor agrees that it is directly and primarily liable for
the Guaranteed Obligations, but that fact shall not be construed to relieve the
Buyer from its own primary liability.
     4. Payment. To the extent that any payment is required of the Buyer in
respect of the Guaranteed Obligations, the guarantee set forth herein shall be
deemed a guarantee of payment and not a guarantee of collection. If the Buyer
shall default in payment or performance of any of the Guaranteed Obligations
when and as the same shall become due, and after expiration of any applicable
grace period, whether according to the terms of the Agreement, or otherwise, or
upon the occurrence and during the continuance of any default under the
Agreement, then the Buyer’s Guarantor will, upon receipt of written demand
thereof by the Sellers, fully pay to the Sellers an amount equal to all the
Guaranteed Obligations then due and owing.
     5. Absolute Rights and Obligations. The Guaranteed Obligations under this
Joinder shall be absolute and unconditional irrespective of, and the Buyer’s
Guarantor hereby expressly waives, to the extent permitted by law, any defense
to its obligations under this Joinder by reason of:
          (a) any lack of legality, validity or enforceability of the Agreement
or Related Agreements relating to the Guaranteed Obligations;
          (b) any action taken under the Agreement or any of the Related
Agreements, any exercise of any right or power therein conferred, any failure or
omission to enforce any right conferred thereby, or any waiver of any covenant
or condition therein provided;
          (c) any release, exchange, amendment or waiver of any provision of the
Agreement or Related Agreements, or with respect to the Guaranteed Obligations
made in accordance with the terms of such agreements or otherwise, and no
settlement or determination of any disputes between the parties in respect of
the Agreement or Related Agreements, whether or not in connection with any
proceeding;

 

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          (e) any dissolution of the Buyer or any other party to an Agreement or
Related Agreements, or the combination or consolidation of the Buyer or the
Buyer’s Guarantor or any other party to a Related Agreement into or with another
entity or any transfer or disposition of any assets of the Buyer or the Buyer’s
Guarantor or any other party to a Related Agreement;
          (f) any extension (including without limitation extensions of time for
payment), renewal, amendment, restructuring or restatement of, and any
acceptance of late or partial performance or payments under the Agreement or any
Related Agreement, in whole or in part;
          (g) the existence, addition, modification, termination, reduction or
impairment of value, or release of any other guaranty of the Guaranteed
Obligations;
          (h) any waiver of, forbearance or indulgence under, or other consent
to any change in or departure from any term or provision contained in the
Agreement or any other Related Agreement;
          (i) any other circumstance whatsoever (with or without notice to or
Knowledge of the Buyer’s Guarantor) which may or might in any manner or to any
extent vary the risks of the Buyer’s Guarantor, or might otherwise constitute a
legal or equitable defense available to, or discharge of, a surety or a
guarantor, including without limitation any right to require or claim that
resort be had to the Buyer or to any collateral in respect of the Guaranteed
Obligations.
It is the express purpose and intent of the parties hereto that this Joinder and
the Guaranteed Obligations hereunder shall be absolute and unconditional under
any and all circumstances and shall not be discharged except by the payment and
performance in full of the Guaranteed Obligations as herein provided.
     6. Set-Off and Waiver. To the extent permitted by applicable law, the
Buyer’s Guarantor waives any right to assert against the Sellers as a defense,
counterclaim, set-off or cross claim, any defense (legal or equitable) or other
claim which the Buyer’s Guarantor may now or at any time hereafter have against
the Buyer or the Sellers without waiving any additional defenses, set-offs,
counterclaims or other claims otherwise available to the Buyer’s Guarantor.
     7. Waiver of Notice.
          (a) The Buyer’s Guarantor hereby waives to the extent permitted by law
notice of the following events or occurrences: (i) acceptance of this Joinder;
(ii) any amendments, modifications, or supplements made by the Buyer or Sellers
to the Agreement or Related Agreements, or replacements or extensions thereof;
and (iii) presentment, demand, acceptance, default, non-payment, partial
payment, performance, and protest. The Buyer’s Guarantor agrees that the Sellers
may heretofore, now or at any time hereafter do any or all of the foregoing in
such manner, upon such terms and at such times as the Sellers, in their sole and
absolute discretion, deem advisable, without in any way or respect impairing,
affecting, reducing or releasing the Buyer’s Guarantor from the Guaranteed
Obligations, and the Buyer’s Guarantor hereby consents to each and all of the
foregoing events or occurrences.
          (b) The Buyer’s Guarantor hereby agrees that payment or performance by
the Buyer’s Guarantor of the Guaranteed Obligations under this Joinder may be
enforced by the Sellers upon demand by the Sellers to the Buyer’s Guarantor
without the Sellers’ being required (the Buyer’s Guarantor expressly waiving to
the extent permitted by law any right it may have to require the Sellers) to
(i) prosecute collection or seek to enforce or resort to any remedies, or bring
a claim against the Buyer or any other guarantor of the Guaranteed Obligations,
or (ii) seek to enforce or resort to any remedies granted to the Sellers in the
Agreement or Related Agreements by the Buyer, any other guarantor of the
Guaranteed Obligations or any other Person on account of the Guaranteed
Obligations or any guaranty thereof, IT BEING EXPRESSLY UNDERSTOOD, ACKNOWLEDGED
AND AGREED TO BY THE BUYER’S GUARANTOR THAT DEMAND UNDER THIS JOINDER MAY BE
MADE BY THE SELLERS, AND THE PROVISIONS HEREOF ENFORCED BY THE SELLERS,
EFFECTIVE AS OF THE FIRST DATE ANY EVENT OF DEFAULT OR BREACH OCCURS AND IS
CONTINUING UNDER THE AGREEMENT OR RELATED AGREEMENTS.
     8. Representations and Warranties. The Buyer’s Guarantor warrants and
represents to the Sellers that it is duly authorized to execute, deliver and
perform this Joinder; that this Joinder has been duly executed and delivered on
behalf of the Buyer’s Guarantor by its duly authorized representatives; that
this Joinder is legal, valid, binding and enforceable against the Buyer’s
Guarantor in accordance with its terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally and by general equitable
principles; and that the Buyer’s

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Guarantor’s execution, delivery and performance of this Joinder do not violate
or constitute a breach of any of its operating documents or organizational
documents, any agreement or instrument to which the Buyer’s Guarantor is a
party, or any law, order, regulation, decree or award of any governmental
authority or arbitral body to which they or their properties or operations are
subject.
     9. Binding Agreement; Assignment. This Joinder, and the terms, covenants
and conditions hereof, shall be binding upon and inure to the benefit of the
parties hereto, and to their respective heirs, legal representatives, successors
and assigns; provided, however, that the Buyer’s Guarantor shall not be
permitted to assign any of its rights, powers, duties or obligations under this
Joinder or any other interest herein without the prior written consent of the
Sellers.
     10. Severability. The provisions of this Joinder are independent of and
separable from each other. If any provision hereof shall for any reason be held
invalid or unenforceable, such invalidity or unenforceability shall not affect
the validity or enforceability of any other provision hereof, but this Joinder
shall be construed as if such invalid or unenforceable provision had never been
contained herein.
     11 Counterparts. This Joinder may be executed in any number of counterparts
each of which when so executed and delivered shall be deemed an original, and it
shall not be necessary in making proof of this Joinder to produce or account for
more than one such counterpart executed by the Buyer’s Guarantor.
     12. Notices. Any notice required or permitted hereunder shall be given,
(a) with respect to the Buyer’s Guarantor, at the address of the Buyer indicated
in the Agreement and (b) with respect to the Sellers, at the Sellers’ address
indicated in the Agreement. All such addresses may be modified, and all such
notices shall be given and shall be effective, as provided in the Agreement.
     13. Construction. The rules of interpretation specified in Section 10.13 of
the Agreement shall be applicable to this Agreement.
     14. Jurisdiction; Consent to Service of Process.
     (a) The Buyer’s Guarantor hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any Georgia
state courts or federal court of the United States of America sitting in
Atlanta, Georgia, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Joinder or the Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such Georgia state
courts or, to the extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Joinder shall
affect any right that the Sellers may otherwise have to bring any action or
proceeding relating to this Joinder or the Agreement against the Buyer’s
Guarantor or its properties in the courts of any jurisdiction.
     (b) The Buyer’s Guarantor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Joinder or the other Agreement in
any Georgia state or federal court. Each of the parties hereto hereby
irrevocably waive, to

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the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
     IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Joinder this 11th day of October, 2006.

                  BUYER’S GUARANTOR:    
 
                KASCO CORPORATION    
 
           
 
  By:   /s/ Brian E. Turner
 
Brian E. Turner    
 
      President    

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