Exhibit 10.1


 


STOCK
PURCHASE AGREEMENT


 


 


by and
among


 


TULSA WINCH, INC.,


 


BLOUNT, INC.


 


AND


 


DOVER INDUSTRIAL PRODUCTS, INC.


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS; INTERPRETATION

  	
   

  	
  1

  
	
  Section 1.1

  	
  Definitions

  	
   

  	
  1

  
	
  Section 1.2

  	
  Additional Defined Terms

  	
   

  	
  6

  
	
  Section 1.3

  	
  Interpretation

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  PURCHASE AND SALE; CLOSING

  	
   

  	
  7

  
	
  Section 2.1

  	
  Purchase and Sale

  	
   

  	
  7

  
	
  Section 2.2

  	
  Purchase Price

  	
   

  	
  8

  
	
  Section 2.3

  	
  The Closing

  	
   

  	
  8

  
	
  Section 2.4

  	
  Adjustment of the Initial Purchase Price

  	
   

  	
  8

  
	
  Section 2.5

  	
  Payment of the Initial Purchase Price by Purchaser

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  REPRESENTATIONS AND WARRANTIES OF SELLER

  	
   

  	
  10

  
	
  Section 3.1

  	
  Organization; Power; Authorization

  	
   

  	
  10

  
	
  Section 3.2

  	
  Binding Effect; Non-contravention

  	
   

  	
  11

  
	
  Section 3.3

  	
  Ownership of Stock

  	
   

  	
  11

  
	
  Section 3.4

  	
  Litigation

  	
   

  	
  11

  
	
  Section 3.5

  	
  Broker

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY

  	
   

  	
  11

  
	
  Section 4.1

  	
  Organization, Qualification and Organizational Power

  	
   

  	
  11

  
	
  Section 4.2

  	
  Non-contravention

  	
   

  	
  12

  
	
  Section 4.3

  	
  Capitalization; Subsidiaries

  	
   

  	
  12

  
	
  Section 4.4

  	
  Financial Statements

  	
   

  	
  12

  
	
  Section 4.5

  	
  Events Subsequent to the Reference Balance Sheet

  	
   

  	
  13

  
	
  Section 4.6

  	
  Title to Assets

  	
   

  	
  13

  
	
  Section 4.7

  	
  Compliance with Laws

  	
   

  	
  14

  
	
  Section 4.8

  	
  Litigation

  	
   

  	
  14

  
	
  Section 4.9

  	
  Tax Matters

  	
   

  	
  14

  
	
  Section 4.10

  	
  Environmental Matters

  	
   

  	
  16

  
	
  Section 4.11

  	
  Intellectual Property

  	
   

  	
  17

  
	
  Section 4.12

  	
  Real Estate

  	
   

  	
  17

  
	
  Section 4.13

  	
  Employee Benefits

  	
   

  	
  18

  
	
  Section 4.14

  	
  Contracts

  	
   

  	
  19

  
	
  Section 4.15

  	
  Labor Matters

  	
   

  	
  20

  
	
  Section 4.16

  	
  Insurance

  	
   

  	
  20

  
	
  Section 4.17

  	
  Affiliate Transactions

  	
   

  	
  21

  
	
  Section 4.18

  	
  Licenses and Permits

  	
   

  	
  21

  
	
  Section 4.19

  	
  Customers and Suppliers

  	
   

  	
  21

  
	
  Section 4.20

  	
  Brokerage

  	
   

  	
  21

  
	
  Section 4.21

  	
  Accounts Receivable

  	
   

  	
  21

  
	
  Section 4.22

  	
  Powers of Attorney; Authorized Signatories

  	
   

  	
  21

  
	
  Section 4.23

  	
  Product Warranties

  	
   

  	
  21

  



 


i

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  REPRESENTATIONS AND WARRANTIES OF PURCHASER AND PARENT

  	
   

  	
  22

  
	
  Section 5.1

  	
  Organization, Power and Authorization

  	
   

  	
  22

  
	
  Section 5.2

  	
  Binding Effect and Non-contravention

  	
   

  	
  22

  
	
  Section 5.3

  	
  Consents

  	
   

  	
  22

  
	
  Section 5.4

  	
  Litigation

  	
   

  	
  23

  
	
  Section 5.5

  	
  Parent Financial Statements

  	
   

  	
  23

  
	
  Section 5.6

  	
  Broker

  	
   

  	
  23

  
	
  Section 5.7

  	
  Investment

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  PRE-CLOSING COVENANTS

  	
   

  	
  23

  
	
  Section 6.1

  	
  Further Actions; Commercially Reasonable Efforts

  	
   

  	
  23

  
	
  Section 6.2

  	
  Conduct of Business

  	
   

  	
  24

  
	
  Section 6.3

  	
  Access

  	
   

  	
  25

  
	
  Section 6.4

  	
  Contact with Customers and Suppliers

  	
   

  	
  26

  
	
  Section 6.5

  	
  Notifications; Schedule Updates/Corrections

  	
   

  	
  26

  
	
  Section 6.6

  	
  Funds Available

  	
   

  	
  27

  
	
  Section 6.7

  	
  Purchaser Actions

  	
   

  	
  27

  
	
  Section 6.8

  	
  Releases

  	
   

  	
  27

  
	
  Section 6.9

  	
  Public Announcements

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  CONDITIONS TO CLOSING

  	
   

  	
  27

  
	
  Section 7.1

  	
  Conditions to Purchaser’s Obligation

  	
   

  	
  27

  
	
  Section 7.2

  	
  Seller’s Closing Deliveries

  	
   

  	
  28

  
	
  Section 7.3

  	
  Conditions to Seller’s Obligation

  	
   

  	
  29

  
	
  Section 7.4

  	
  Purchaser’s Closing Deliveries

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  POST-CLOSING COVENANTS

  	
   

  	
  30

  
	
  Section 8.1

  	
  Further Assurances

  	
   

  	
  30

  
	
  Section 8.2

  	
  Books and Records

  	
   

  	
  30

  
	
  Section 8.3

  	
  Employees; Employees Benefit Plans

  	
   

  	
  31

  
	
  Section 8.4

  	
  Litigation Support and Products Liability Claims

  	
   

  	
  31

  
	
  Section 8.5

  	
  Used Oil Sump Closure and Remediation

  	
   

  	
  33

  
	
  Section 8.6

  	
  Covenant Not to Compete and Not to Solicit

  	
   

  	
  34

  
	
  Section 8.7

  	
  Heat Treat Machine

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  TERMINATION

  	
   

  	
  35

  
	
  Section 9.1

  	
  Termination

  	
   

  	
  35

  
	
  Section 9.2

  	
  Effect of Termination

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  INDEMNIFICATION

  	
   

  	
  36

  
	
  Section 10.1

  	
  Indemnification

  	
   

  	
  36

  
	
  Section 10.2

  	
  Procedures for Indemnification

  	
   

  	
  37

  
	
  Section 10.3

  	
  Construction of Representations and Warranties

  	
   

  	
  37

  
	
  Section 10.4

  	
  Limitations on Indemnification

  	
   

  	
  38

  
	
  Section 10.5

  	
  Adjustments to Final Purchase Price

  	
   

  	
  40

  



 


ii

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  TAX MATTERS

  	
   

  	
  41

  
	
  Section 11.1

  	
  Tax Returns

  	
   

  	
  41

  
	
  Section 11.2

  	
  Liability for Taxes

  	
   

  	
  42

  
	
  Section 11.3

  	
  Apportionment of Taxes

  	
   

  	
  42

  
	
  Section 11.4

  	
  Cooperation

  	
   

  	
  43

  
	
  Section 11.5

  	
  Tax Contests

  	
   

  	
  43

  
	
  Section 11.6

  	
  Amended Tax Returns

  	
   

  	
  44

  
	
  Section 11.7

  	
  Tax Refunds

  	
   

  	
  44

  
	
  Section 11.8

  	
  338(h)(10) Election

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  MISCELLANEOUS

  	
   

  	
  45

  
	
  Section 12.1

  	
  Transaction Expenses; Transfer Taxes

  	
   

  	
  45

  
	
  Section 12.2

  	
  Amendments and Waivers

  	
   

  	
  45

  
	
  Section 12.3

  	
  Entire Agreement

  	
   

  	
  46

  
	
  Section 12.4

  	
  Successors and Assigns

  	
   

  	
  46

  
	
  Section 12.5

  	
  Governing Law; Consent to Jurisdiction; Venue; Waiver of
  Jury Trial

  	
   

  	
  46

  
	
  Section 12.6

  	
  Notices

  	
   

  	
  46

  
	
  Section 12.7

  	
  Time of the Essence

  	
   

  	
  48

  
	
  Section 12.9

  	
  Schedules

  	
   

  	
  48

  
	
  Section 12.10

  	
  Counterparts

  	
   

  	
  48

  
	
  Section 12.11

  	
  No Third-Party Beneficiaries

  	
   

  	
  48

  
	
  Section 12.12

  	
  No Strict Construction

  	
   

  	
  48

  
	
  Section 12.13

  	
  Headings

  	
   

  	
  48

  



 


iii

















 


SCHEDULES AND EXHIBITS


 


	
  Schedule
  1.1(a)

  	
   

  	
  Seller’s
  Retained Liabilities

  
	
  Schedule
  1.1(b)

  	
   

  	
  Working
  Capital Schedule

  
	
  Schedule
  4.2

  	
   

  	
  Approvals
  and Consents

  
	
  Schedule
  4.3(d)

  	
   

  	
  Outstanding
  Indebtedness

  
	
  Schedule
  4.4

  	
   

  	
  Financial
  Statements

  
	
  Schedule
  4.5

  	
   

  	
  Events
  Subsequent to Reference Balance Sheet

  
	
  Schedule
  4.6

  	
   

  	
  Title
  to Assets

  
	
  Schedule
  4.7

  	
   

  	
  Compliance
  with Laws

  
	
  Schedule
  4.8

  	
   

  	
  Litigation

  
	
  Schedule
  4.9

  	
   

  	
  Tax
  Matters

  
	
  Schedule
  4.10

  	
   

  	
  Environmental
  Matters

  
	
  Schedule
  4.11

  	
   

  	
  Intellectual
  Property

  
	
  Schedule
  4.12(a)

  	
   

  	
  Owned
  Real Property

  
	
  Schedule
  4.12(d)

  	
   

  	
  Leases
  or Grants of Owned Real Property

  
	
  Schedule
  4.13

  	
   

  	
  Employee
  Benefits

  
	
  Schedule
  4.13(e)

  	
   

  	
  Benefit
  Plan

  
	
  Schedule
  4.14

  	
   

  	
  Material
  Contracts

  
	
  Schedule
  4.16

  	
   

  	
  Insurance

  
	
  Schedule
  4.17

  	
   

  	
  Affiliate
  Transactions

  
	
  Schedule
  4.18

  	
   

  	
  Licenses
  and Permits

  
	
  Schedule
  4.19

  	
   

  	
  Customer
  and Suppliers

  
	
  Schedule
  4.21

  	
   

  	
  Accounts
  Receivable

  
	
  Schedule
  4.22

  	
   

  	
  Powers
  of Attorney; Authorized Signatories

  
	
  Schedule
  4.23

  	
   

  	
  Product
  Warranties

  
	
  Schedule
  5.3

  	
   

  	
  Purchaser
  Consents

  
	
  Schedule
  5.5

  	
   

  	
  Parent
  Financial Statements

  
	
  Schedule
  6.2(b)

  	
   

  	
  Existing
  Contracts Mandating Payments to Employees

  
	
  Schedule
  7.2(d)

  	
   

  	
  Required
  Consents

  
	
  Schedule
  7.2(e)

  	
   

  	
  Agreements
  to be Terminated

  
	
  Schedule
  10.4(k)

  	
   

  	
  Environmental
  Documents

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Release

  
	
  Exhibit B

  	
   

  	
  Assignment
  and Assumption Agreement

  



 


iv






 












 


STOCK
PURCHASE AGREEMENT


 


THIS
STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of September 30,
2010, by and among Tulsa Winch, Inc., a Delaware corporation (“Purchaser”),
Blount, Inc., a Delaware corporation (“Seller”), and, solely for
the purposes set forth in Article V, Article VI, Article X
and Article XII of this Agreement, Dover Industrial Products, Inc.,
a Delaware corporation (“Parent”). 
Purchaser, Seller and Parent are each sometimes referred to herein as a “Party”
and, collectively, as the “Parties.” Capitalized terms used but not
otherwise defined herein are defined in Section 1.1.


 


WHEREAS, Seller owns all of the issued and outstanding
capital stock (the “Outstanding Stock”) of Gear Products, Inc., an
Oklahoma corporation (the “Company”);


 


WHEREAS, Purchaser is an Affiliate of Parent; and


 


WHEREAS, the Parties desire to enter into this Agreement
pursuant to which, at the Closing, Seller shall sell to Purchaser, and
Purchaser shall purchase from Seller, the Outstanding Stock, on and subject to
the terms and conditions contained herein.


 


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


 


ARTICLE I


 


DEFINITIONS; INTERPRETATION


 


Section 1.1             Definitions.  For the purposes of this Agreement, the
following terms have the meanings set forth below:


 


“Access
Agreement” means the Access Agreement by and between Purchaser and the
Company dated as of August 4, 2010.


 


“Affiliate”
means, with respect to any Person, any other Person who directly or indirectly
controls, is controlled by, or is under common control with, such Person. The
term “control” means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise, and the terms “controlled” and “controlling” have
meanings correlative thereto.


 


“Business”
means the business of the Company as conducted on the date of this Agreement.


 


“Business
Day” means any day excluding Saturday, Sunday, any day that is a legal
holiday under the laws of the State of Oklahoma, and any day on which banking
institutions located in the State of Oklahoma are authorized or required by law
or other governmental action to close.


 

















 


“Code”
means the Internal Revenue Code of 1986, as amended.


 


“Competitive
Business” means any business that consists of selling, marketing,
manufacturing or servicing rotational swing drive bearings, worm and planetary
gear drives, hoists, hydraulic pump drives or winches for original equipment
manufacturers in North America.


 


“Confidentiality
Agreement” means the Confidentiality Agreement by and between Seller and
Dover Corporation dated April 20, 2010.


 


“Contract”
means any written agreement, contract, obligation, commitment or undertaking.


 


“Customer
Survey Agreement” means the Customer Survey Agreement by and among the
Company, Purchaser and Clarity Consulting dated as of August 3, 2010.


 


“Environmental
Laws” means all federal and state statutes or regulations concerning the
pollution, protection or cleanup of the environment, including those relating
to the treatment, storage, disposal, handling, transportation, discharge,
emission or release of Hazardous Substances, and those relating to the health
and safety of workers and the public as affected by environmental conditions,
including the Clean Air Act, the Clean Water Act, the Toxic Substances Control
Act, the Solid Waste Disposal Act, the Resource Conservation and Recovery Act,
the Comprehensive Environmental Response, Compensation, and Liability Act and,
to the extent related to environmental conditions, the Occupational Safety and
Health Act.


 


“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.


 


“ERISA
Controlled Group Member” means any Person that, together with Seller, the
Company or any of their Affiliates, as of the relevant measuring date, is (or
was) required to be treated as single employer under Section 414 of the
Code.


 


“ERISA
Event” means, with respect to Seller, the Company or any ERISA Controlled
Group Member, (a) any event described in Section 4043(c) of
ERISA with respect to a Title IV Plan; (b) the withdrawal of Seller, the
Company or any ERISA Controlled Group Member from a Title IV Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial employer, as defined
in Section 4001(a)(2) of ERISA, (c) the filing of a notice of
intent to terminate a Title IV Plan or the treatment of a plan amendment as a
termination under Section 4041 of ERISA; (d) the institution of
proceedings to terminate a Title IV Plan; (e) the failure by Seller, the
Company or any ERISA Controlled Group Member to make, when due, required
contributions to a Title IV Plan; (f) the loss of the qualified status of
any Benefit Plan; or (g) the termination of a Benefit Plan described in Section 4064
of ERISA.


 


“Estimated
Working Capital Adjustment Amount” means Estimated Working Capital minus
Target Working Capital.


 


“Foreign
Official” means any foreign government official, any official of a
political party in a foreign country or any candidate for political office in a
foreign country, and any employee of a company which is owned directly or
indirectly in whole or in part by a foreign government.


 


2

















 


“Fundamental
Representations” means the representations set forth in Sections 3.1,
3.2(a), 3.3, 3.5, 4.1, 4.2, 4.3, 4.6
and 4.20.


 


“GAAP”
means accounting principles generally accepted in the United States as in
effect from time to time.


 


“Governmental
Entity” means any United States or foreign federal, state or local
government or any court, administrative agency, or government authority acting
under the authority of the United States federal, state or local government.


 


“Hazardous
Substance” means any waste, pollutant, contaminant, hazardous, radioactive,
or toxic substance, asbestos, petroleum, petroleum products or by-products, the
presence of which requires investigation or remediation under any Environmental
Laws.


 


“Heat
Treat Machine” means the G10-01 New Induction Hardening Machine, also known
as the GearPro Machine, which the Company has purchased from InductoHeat
pursuant to purchase order number 551227.


 


“Indebtedness”
of any Person means, without duplication, all indebtedness of such Person for
borrowed money.  Indebtedness shall not
include trade liabilities and accrued expenses incurred and payable in the
ordinary course of business.


 


“Intellectual
Property” means (i) United States patents, patent applications,
continuations, continuations-in-part, divisions, reissues, patent disclosures,
inventions (whether or not patentable) and improvements thereto, (ii) United
States trademarks, service marks, logos, trade dress and trade names or other
source-identifying designations or devices, (iii) United States copyrights
and design rights, whether registered or unregistered, and pending applications
to register the same, (iv) Internet domain names and registrations
thereof, and (v) confidential ideas, trade secrets, computer software,
including source code, know-how, works-in-progress, concepts, methods,
processes, inventions, invention disclosures, formulae, reports, data, customer
lists, mailing lists, business plans or other proprietary information.


 


“Knowledge”
means, with respect to the Company or Seller, the actual knowledge after
reasonable inquiry of Ervin Rock, David McCarthy, Brian Shrum, Tim Simmons,
Bill Alford, Cal Jenness, Dick Irving, Mark Allred and Chad Paulson.  For these purposes, “actual knowledge” refers
to the actual (and not imputed and constructive) knowledge and conscious
awareness of specific facts or circumstances related to the applicable
representation or warranty.  For these
purposes, “reasonable inquiry” means (i) review of the relevant sections
of this Agreement and corresponding schedules, (ii) inquiry of individual
employees of the Company likely to have knowledge of a particular subject (with
no obligation to make any inquiries outside of the Company or to any third
parties), and (iii) review of Company documents consisting of non-archived
files that are reasonably anticipated to be relevant to the inquiry.


 


“Legal
Requirement” means any requirement arising under any action, law, treaty, rule or
regulation, determination or direction of a Governmental Entity.


 


“Liens”
means any mortgage, pledge, lien, security interest, charge, claim, or other
encumbrance.


 


3

















 


“Losses”
means, with respect to any Person, any liabilities, costs, damages,
deficiencies, penalties, fines or other losses or expenses incurred by such
Person.


 


“Material
Adverse Effect” means any effect or change that would be materially adverse
to (i) the financial condition or results of operations of the Company, (ii) the
Business or (iii) the ability of the Company to perform its material
obligations under this Agreement; provided that
none of the following shall be deemed to constitute, or taken into account in
determining whether there has been, a Material Adverse Effect: (x) any
adverse change, event, development or effect arising from or relating to
(1) general business or economic conditions, including such conditions
related to the industry in which the Company operates, (2) national or
international political or social conditions, including the engagement by the
United States in hostilities, whether or not pursuant to the declaration of a national
emergency or war, or the occurrence of any military or terrorist attack upon
the United States, or any of its territories, possessions, or diplomatic or
consular offices or upon any military installation, equipment or personnel of
the United States, (3) financial, banking, or securities markets
(including any disruption thereof and any decline in the price of any security
or any market index), (4) changes in GAAP, (5) any change or
amendment to any law or other Legal Requirement or any change in the manner in
which any law or Legal Requirement is or may be enforced, or (6) the
announcement or performance of this Agreement or the transactions contemplated
by this Agreement, including any reaction of customers, suppliers or employees
of the Company, and (y) any action taken by Purchaser or any of its
Affiliates or representatives.


 


“Permitted
Liens” means (i) Liens for Taxes not yet delinquent or that are being
contested by appropriate proceedings, (ii) statutory Liens of landlords
for amounts not yet delinquent, (iii) Liens of carriers, warehousemen,
mechanics and materialmen incurred in the ordinary course of business for
amounts not yet delinquent, (iv) Liens attaching to inventory held by
consignees in the ordinary course of business, (v) zoning, building codes
and other land use regulations imposed by any Governmental Entity,
(vi) Liens created by any act of Purchaser, (vii) such rights, if
any, of any utility company to construct and/or maintain lines, pipes, wires,
cables, poles, conduits and distribution boxes and equipment in, over, under,
and/or upon any portion of the Owned Real Property, (viii) matters of plat
with respect to the Owned Real Property, (ix) oil, gas, and mineral rights
of record against the Owned Real Property, and (x) easements,
rights-of-way, covenants, conditions, restrictions and other similar matters,
all of which do not materially impair the use or occupancy of the Owned Real
Property or other assets in the operation of the Business by the Company.


 


“Person”
means an individual, a partnership, a corporation, an association, a limited
liability company, a joint stock company, a trust, a joint venture or an
unincorporated organization.


 


“Post-Closing
Tax Period” means any Tax period (or portion thereof) beginning after the
Closing Date.


 


“Pre-Closing
Tax Period” means any Tax period (or portion thereof) ending on or before
the Closing Date.


 


4

















 


“Reference
Balance Sheet” means the unaudited balance sheet of the Company as of
June 30, 2010, a copy of which is attached hereto as Schedule 4.4.


 


“Securities
Act” means the Securities Act of 1933, as amended.


 


“Seller’s
Retained Liabilities” means those liabilities which are identified on Schedule 1.1(a) attached
hereto.


 


“Subsidiary”
means, with respect to any Person, any corporation, limited liability company,
partnership, association or other business entity of which (i) if a
corporation or a limited liability company (with voting securities), a majority
of the total voting power of shares of stock or interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a limited liability
company (without voting securities), partnership, association or other business
entity, a majority of the partnership or other similar ownership interest
thereof is at the time owned or controlled, directly or indirectly, by any
Person or one or more Subsidiaries of that Person or a combination thereof. For
purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority
of limited liability company, partnership, association or other business entity
gains or losses or shall be or control any managing director or general partner
of such limited liability company, partnership, association or other business
entity.


 


“Target
Working Capital” means $2,434,610.82.


 


“Tax
Return” means 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.


 


“Tax”
means any and all income, excise, real or personal property, sales, use, gross
receipts, service, value added, license, net worth, transfer, withholding,
employment and recording taxes, charges, fees, levies or other assessments
imposed by the Internal Revenue Service or any other taxing authority, together
with any interest, penalties or additional amounts attributable to, or imposed
upon, or with respect to, any such taxes, charges, fees, levies or other
assessments.


 


“Title
IV Plan” means any Benefit Plan subject to Title IV of ERISA.


 


“Unfunded
Pension Liability” means, at any time, the aggregate amount, if any, of the
sum of (a) the amount by which the present value of all accrued benefits
under a Title IV Plan exceeds the fair market value of all assets of such Title
IV Plan allocable to such benefits in accordance with Title IV of ERISA, all
determined as of the most recent valuation date for such Title IV Plan using
the actuarial assumptions for funding purposes in effect under such Title IV
Plan, and (b) for a period of five years following a transaction which
might reasonably be expected to be covered by Section 4069 of ERISA, the
liabilities (whether or not accrued) that could be avoided by Seller, the
Company or any ERISA Controlled Group Member as a result of such transaction.


 


5

















 


“Working
Capital” means, as of the Closing Date and subject to the adjustments set
forth in the next succeeding sentence, the current assets of the Company minus
the current liabilities of the Company (other than the current portion of
Indebtedness, including accrued interest). Working Capital shall be calculated
(i) in accordance with GAAP and (ii) in the same manner, using the
same accounting principles, methods, assumptions, practices and categories as
were used in the preparation of the Working Capital Schedule. Notwithstanding
the foregoing, Working Capital shall exclude (i) amounts due to or from
the Company’s Affiliates, and (ii) Seller’s Retained Liabilities.


 


“Working
Capital Schedule” means Schedule 1.1(b) attached hereto.


 


Section 1.2             Additional Defined Terms.


 


Each
of the following terms is defined in the Section set forth opposite such
term:


 


	
  Allocation
  Schedule

  	
   

  	
  11.8(c)

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Benefit
  Plan

  	
   

  	
  4.13(a)

  
	
  Cap
  Amount

  	
   

  	
  10.4(b)

  
	
  Closing

  	
   

  	
  2.3

  
	
  Closing
  Date

  	
   

  	
  2.3

  
	
  Company

  	
   

  	
  Recitals

  
	
  Deductible

  	
   

  	
  10.4(c)

  
	
  Defaulting
  Party

  	
   

  	
  9.2

  
	
  Designated
  Accounting Firm

  	
   

  	
  2.4(d)

  
	
  Environmental
  Documents

  	
   

  	
  10.4(k)

  
	
  Environmental
  Permits

  	
   

  	
  4.10(b)

  
	
  Estimated
  Working Capital

  	
   

  	
  2.4(a)

  
	
  Excess
  Working Capital

  	
   

  	
  2.4(f)

  
	
  Final
  Purchase Price

  	
   

  	
  2.2

  
	
  Final
  Working Capital

  	
   

  	
  2.4(f)

  
	
  Financial
  Statements

  	
   

  	
  4.4

  
	
  GECC

  	
   

  	
  7.2(c)

  
	
  Indemnified
  Person

  	
   

  	
  10.2(a)

  
	
  Indemnifying
  Person

  	
   

  	
  10.2(b)

  
	
  Initial
  Purchase Price

  	
   

  	
  2.2

  
	
  Interest

  	
   

  	
  2.4(f)

  
	
  IRS

  	
   

  	
  4.13(b)

  
	
  Material
  Contracts

  	
   

  	
  4.14

  
	
  Notice
  of Claim

  	
   

  	
  10.2(a)

  
	
  Objection
  Notice

  	
   

  	
  10.2(a)

  
	
  Outside
  Date

  	
   

  	
  9.1(b)

  
	
  Outstanding
  Stock

  	
   

  	
  Recitals

  
	
  Owned
  Intellectual Property

  	
   

  	
  4.11

  
	
  Owned
  Real Property

  	
   

  	
  4.12(a)

  
	
  Parent

  	
   

  	
  Preamble

  
	
  Parent
  Financial Statements

  	
   

  	
  5.5

  



 


6

















 


	
  Party
  P

  	
   

  	
  Preamble

  
	
  Permits

  	
   

  	
  4.18

  
	
  Phase
  II ESA

  	
   

  	
  10.4(k)

  
	
  Post-Closing
  Straddle Period

  	
   

  	
  11.3(a)

  
	
  Pre-Closing
  Straddle Period

  	
   

  	
  11.3(a)

  
	
  Products
  Liability Claim

  	
   

  	
  10.1(b)

  
	
  Purchaser

  	
   

  	
  Preamble

  
	
  Purchaser
  Indemnification Claim

  	
   

  	
  10.1(a)

  
	
  Purchaser
  Indemnified Persons

  	
   

  	
  10.1(a)

  
	
  Purchaser
  Plans

  	
   

  	
  8.3

  
	
  Purchaser’s
  Closing Date Certificate

  	
   

  	
  2.4(b)

  
	
  Purchaser’s
  Closing Date Balance Sheet

  	
   

  	
  2.4(b)

  
	
  Recognized
  Environmental Conditions

  	
   

  	
  10.4(k)

  
	
  Release

  	
   

  	
  6.8

  
	
  Response
  Actions

  	
   

  	
  10.4(k)

  
	
  Section 338
  Election

  	
   

  	
  11.8(a)

  
	
  Seller

  	
   

  	
  Preamble

  
	
  Seller
  Indemnified Persons

  	
   

  	
  10.1(c)

  
	
  Seller
  Objections

  	
   

  	
  2.4(d)

  
	
  Seller’s
  Closing Date Certificate

  	
   

  	
  2.4(a)

  
	
  Straddle
  Period

  	
   

  	
  11.2

  
	
  Tax
  Claim

  	
   

  	
  11.5(a)

  
	
  Tax
  Contest

  	
   

  	
  11.5(b)

  
	
  Third-Party
  Notice

  	
   

  	
  10.2(b)

  
	
  Transfer
  Taxes

  	
   

  	
  12.1(b)

  
	
  Work

  	
   

  	
  8.5(a)

  
	
  Working
  Capital Shortfall

  	
   

  	
  2.4(f)

  



 


Section 1.3             Interpretation.  Unless otherwise indicated (a) all
references in this Agreement to Articles, Sections, Schedules and Exhibits
refer to Articles, Sections, Schedules and Exhibits of this
Agreement, (b) the words, “herein,” “hereto,” “hereof” and words of
similar import refer to this Agreement as a whole (including the Schedules and
Exhibits hereto) and not to any particular Section or paragraph
hereof, (c) the word “including” means “including, but not limited to”, (d) words
importing the singular will also include the plural, and vice versa, (e) any
reference to any federal, state, local, or foreign statute or law includes
reference to all rules and regulations promulgated thereunder, all
amendments thereof and any successor or replacement statute, law, rule or
regulation, (f) words of any gender include the other gender, (g) references
to a number of days refer to calendar days, unless such reference is
specifically to “Business Days,” and (h) all monetary amounts are
expressed in U.S. dollars.


 


ARTICLE II


 


PURCHASE AND SALE; CLOSING


 


Section 2.1             Purchase and Sale.  At the Closing, upon the terms and subject to
the conditions set forth herein, Purchaser shall purchase from Seller, and
Seller shall sell, assign, transfer, and deliver to Purchaser, the Outstanding
Stock.


 


7






 












 


Section 2.2             Purchase Price.  At the Closing, Purchaser shall pay to Seller
for the Outstanding Stock an aggregate purchase price of $24,900,000, plus
or minus the Estimated Working Capital Adjustment Amount set forth on
the Seller’s Closing Date Certificate (the “Initial Purchase Price”).  The Initial  Purchase Price
shall be payable at the Closing in the manner described in Section 2.5
below and shall be subject to adjustment after the Closing as provided in Section 2.4
below (such adjusted Initial Purchase Price being the “Final Purchase Price”).


 


Section 2.3             The Closing.  Subject to Article VII, the
closing of the transaction contemplated hereby (the “Closing”) shall
take place at the offices of DLA Piper LLP (US) in Chicago, Illinois (or
at such other location as the Parties may agree upon), commencing at 10:00 a.m.
local time on September 30, 2010; provided that
all of the conditions set forth in Article VII have been either
satisfied or waived. The date of the Closing is referred to as the “Closing
Date.”


 


Section 2.4             Adjustment of the Initial
Purchase Price.


 


(a)           Prior to the Closing Date, Seller shall deliver to
Purchaser a certificate (the “Seller’s Closing Date Certificate”)
setting forth Seller’s good faith estimate of the Company’s Working Capital as
of the close of business on the Closing Date (the “Estimated Working Capital”),
calculated in accordance with GAAP and in the same manner, using the same
accounting principles, methods, assumptions, practices and categories as were
used in the preparation of the Working Capital Schedule.  The Working Capital Schedule shall include
(i) the amount of $649,674.98 for inventory surplus/obsolescence (GPI
acct. #13486100), and (ii) the amount of $69,709.12 for inventory
shrinkage (GPI acct. #13486000).  The Seller’s
Closing Date Certificate also shall include a calculation of the Estimated
Working Capital Adjustment Amount and the Initial Purchase Price, in each case
based upon the Estimated Working Capital.


 


(b)           Not later than ninety (90) calendar days after the Closing
Date, Purchaser shall deliver to Seller a statement setting forth Purchaser’s
calculation of the Working Capital as of the close of business on the Closing
Date (the “Purchaser’s Closing Date Certificate”), together with the
balance sheet of the Company prepared as of the close of business on the
Closing Date from which such Purchaser’s Closing Date Certificate was derived
(the “Purchaser’s Closing Date Balance Sheet”). The Purchaser’s Closing
Date Balance Sheet for purposes of the calculation of the Working Capital set
forth in the Purchaser’s Closing Date Certificate shall be calculated in
accordance with GAAP and in the same manner, using the same accounting
principles, methods, assumptions, practices and categories as were used in the
preparation of the Working Capital Schedule. The review of the calculation of
the Working Capital set forth in the Purchaser’s Closing Date Balance Sheet in
accordance with this Section 2.4 shall be limited to a review of
the changes, if any, in the Estimated Working Capital from the amount used to
calculate the Initial Purchase Price and not a review of any changes in
accounting policy or any other matter.


 


(c)           During the sixty (60) calendar day period following
delivery of the Purchaser’s Closing Date Certificate to Seller, Purchaser shall
permit Seller and Seller’s authorized representatives complete and timely
access to the books and records, accountant’s work papers, personnel, and
facilities of the Company in order to complete their review of the Purchaser’s
Closing Date Certificate, the calculation of the Working 


 


8

















 


Capital reflected therein
and the Purchaser’s Closing Date Balance Sheet and Seller and any such
representatives shall have the unrestricted right to make copies, extracts or
compilations of any such books, records and work papers.


 


(d)           Within (i) sixty (60) calendar days after its receipt
of the Purchaser’s Closing Date Certificate, or (ii) thirty (30) days
after the date upon which Seller and Seller’s authorized representatives shall
have received the access referred to in Section 2.4(c) above,
whichever is later, Seller may either inform Purchaser in writing that the
Purchaser’s Closing Date Certificate is acceptable, or object thereto in
writing, setting forth its objections (the “Seller Objections”).  If Seller fails to either accept the
Purchaser’s Closing Date Certificate or submit the Seller Objections within
such period, the Purchaser’s Closing Date Certificate shall be deemed final and
acceptable.  If Seller delivers the
Seller Objections and Purchaser and Seller do not resolve all such Seller
Objections on a mutually agreeable basis within thirty (30) Business Days after
Purchaser’s receipt of the Seller Objections, then any Seller Objections as to
which Purchaser and Seller cannot agree upon may be submitted by either
Purchaser or Seller to a mutually acceptable accounting firm (the “Designated
Accounting Firm”) for resolution as provided herein; provided
that the Designated Accounting Firm
shall not have provided attestation services to either Seller or Purchaser or
any of their respective Affiliates during the prior three (3) year period.
If Seller and Purchaser cannot agree on a Designated Accounting Firm, then
Deloitte LLP shall be the Designated Accounting Firm. The Designated Accounting
Firm shall have the power, authority and duty to resolve any outstanding Seller
Objections and the decision of the Designated Accounting Firm shall be final
and binding upon Seller and Purchaser; provided, however, that
the Designated Accounting Firm is hereby expressly prohibited from making a
determination of the Final Working Capital which is outside of the range of the
Working Capital set forth in the Seller’s Closing Date Certificate and the
Purchaser’s Closing Date Certificate. Upon the resolution of all Seller
Objections (whether by agreement of Purchaser and Seller or the decision of the
Designated Accounting Firm), the Purchaser’s Closing Date Certificate shall be
revised to reflect the resolution and the Purchaser’s Closing Date Certificate,
as so revised, shall be final and binding on Seller and Purchaser. Provided
that Purchaser has fully complied with its obligations under Section 2.4(c),
if Seller fails to deliver any Seller Objections to Purchaser prior to the
expiration of the applicable time period set forth in the first sentence of
this Section 2.4(d), the Purchaser’s Closing Date Certificate as
delivered by Purchaser shall be final and binding on Seller and Purchaser.


 


(e)           In resolving any disputed item, the Designated Accounting
Firm (i) shall be bound by the provisions of this Section 2.4,
(ii) may not assign a value to any item greater than the highest value
claimed for such item or less than the lowest value for such item claimed by
either Purchaser or Seller, (iii) shall restrict its decision to such
items included in the Seller Objections which are then in dispute,
(iv) may review only the written presentations of Purchaser and Seller in
resolving any matter which is in dispute, and (v) shall render its
decision in writing within thirty (30) days after the disputed items have been
submitted to it. The Designated Accounting Firm’s fees, costs and expenses
shall be shared by Purchaser and Seller in inverse proportion to the aggregate
dollar 


 


9

















 


amount of the Seller
Objections resolved in favor of Seller compared to the aggregate dollar amount
of the Seller Objections resolved in favor of Purchaser.


 


(f)            If the Working Capital as of the close of business on the
Closing Date as finally determined in accordance with this Section 2.4
(the “Final Working Capital”) exceeds the Estimated Working Capital (the
“Excess Working Capital”), Purchaser shall pay an amount equal to the
Excess Working Capital to Seller within five (5) Business Days after such
final determination by wire transfer of immediately available funds in
accordance with instructions provided by Seller to Purchaser prior to the
Closing Date. If the Final Working Capital is less than the Estimated Working
Capital (the “Working Capital Shortfall”), Seller shall pay an amount
equal to the Working Capital Shortfall to Purchaser within five (5) Business
Days after such final determination by wire transfer of immediately available
funds in accordance with instructions provided by Purchaser to Seller not less
than two (2) Business Days prior to the date upon which such payment is
due.  In addition to the payment of
Excess Working Capital or Working Capital Shortfall, Purchaser or Seller, as
applicable, shall pay to the other Party interest calculated from the Closing
Date until the date of payment of such Excess Working Capital or Working
Capital Shortfall, as applicable, at the rate of six percent (6%) per annum (“Interest”).  Notwithstanding the foregoing, if there is a
Working Capital Shortfall and Purchaser failed to timely (i) provide
Seller with the Purchaser’s Closing Date Certificate in accordance with Section 2.4(b),
or (ii) permit Seller access to the Company’s books and records in accordance
with Section 2.4(c), Purchaser shall not be entitled to the payment
of any Interest.


 


(g)           Purchaser and Seller shall treat any payments of Excess
Working Capital or Working Capital Shortfall in accordance with Section 2.4(f) as
an adjustment to the Initial Purchase Price.


 


Section 2.5             Payment of the Initial Purchase
Price by Purchaser.  At the Closing, subject to the
satisfaction or waiver of each of the closing conditions specified in Article VII,
Purchaser shall pay to Seller the Initial Purchase Price by wire transfer of
immediately available funds in accordance with instructions provided by Seller
to Purchaser prior to the Closing Date.


 


ARTICLE III


 


REPRESENTATIONS AND WARRANTIES OF
SELLER


 


Seller
hereby represents and warrants as of the date of this Agreement and as of the
Closing Date (except to the extent any such representation or warranty speaks
as of an earlier date) as follows:


 


Section 3.1             Organization; Power;
Authorization.  Seller is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware. Seller has the requisite corporate power and
authority necessary to enter into, deliver and perform its obligations pursuant
to this Agreement.  Seller’s execution,
delivery and performance of this Agreement and each other Contract executed in
connection herewith to which it is a party has been duly authorized by Seller.


 


10

















 


Section 3.2             Binding Effect;
Non-contravention.


 


(a)           This Agreement has been duly executed and delivered by
Seller. Assuming the due authorization, execution and delivery by the other
Parties, this Agreement constitutes a valid and binding obligation of Seller
which is enforceable against Seller in accordance with its terms, except as
such enforceability may be limited by applicable insolvency, bankruptcy,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally, and applicable equitable principles (whether considered in a
proceeding at law or in equity).


 


(b)           Neither the execution and the delivery of this Agreement
nor the performance by Seller of the transactions contemplated hereby will (i) conflict
with or result in a breach of the terms of, (ii) constitute a default
under, or (iii) result in the creation of any Lien (other than Permitted
Lien) upon the Outstanding Stock pursuant to (A) any material Contract to
which Seller is a party, (B) the certificate of incorporation or by-laws
of Seller, or (C) any Legal Requirement to which Seller is subject.


 


Section 3.3             Ownership of Stock.  Seller holds good and valid record and
beneficial title to the Outstanding Stock, free and clear of any Liens (other
than restrictions on transfer arising under the Securities Act and state or
foreign securities laws).


 


Section 3.4             Litigation.  There are no judicial or administrative
actions, suits, proceedings (including any arbitration proceedings), orders,
claims or investigations pending, affecting or, to the Company’s or Seller’s
Knowledge, threatened, against Seller that question the validity, legality or
enforceability of this Agreement or any action taken or to be taken by Seller
in connection herewith, or seek to restrain or prohibit or to obtain damages or
other relief in connection with the transactions contemplated hereby.


 


Section 3.5             Broker.  No broker, finder, agent, representative or
similar intermediary has acted for or on behalf of Seller in connection with
this Agreement or the transactions contemplated hereby, and no broker, finder,
agent or similar intermediary is entitled to any broker’s, finder’s or similar
fee or other commission in connection herewith, based on any agreement or
understanding with Seller or any action taken by Seller.


 


ARTICLE IV


 


REPRESENTATIONS AND WARRANTIES
REGARDING THE COMPANY


 


Except
as set forth on any schedule, Seller hereby represents and warrants to
Purchaser as of the date of this Agreement and as of the Closing Date (except
to the extent any such representation or warranty speaks as of an earlier date)
as follows:


 


Section 4.1             Organization, Qualification and
Organizational Power.  The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Oklahoma. The Company is duly authorized to conduct business and is in good
standing under the laws of each jurisdiction where such qualification is
required, except where the lack of such qualification could not reasonably be
expected to have a Material Adverse Effect. The Company 


 


11

















 


has all necessary corporate 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 4.2             Non-contravention.  Except as set forth on Schedule 4.2,
neither the execution and the delivery of this Agreement nor the performance by
the Company of the transactions contemplated hereby will (i) conflict with
or result in a breach of the terms of, (ii) constitute a default under, (iii) result
in the creation of any Lien (other than Liens created by or on behalf of
Purchaser) upon any assets of the Company pursuant to, or (iv) require any
authorization, consent, approval, exemption or other action by or declaration
or notice to any Person or Governmental Entity pursuant to (A) any
Material Contract to which the Company is a party, (B) the certificate of
incorporation or by-laws of the Company, or (C) any Legal Requirement to
which the Company is subject.


 


Section 4.3             Capitalization; Subsidiaries.


 


(a)           The authorized capital stock of the Company consists of
500,000 shares of common stock. On the date hereof, 442,936.75 shares of common
stock of the Company are issued and outstanding. All of the Outstanding Stock
has been duly authorized, is validly issued, fully paid and nonassessable, and
on the date hereof is held of record by Seller.


 


(b)           There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require the Company to issue, sell,
or otherwise cause to become outstanding any of its capital stock. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation or similar rights with respect to the Company. The Company is not
a party to, and there are no, voting trusts, proxies, or other agreements or
understandings with respect to the voting or transfer of any equity interests
of the Company which will survive the Closing Date.


 


(c)           The Company does not have any Subsidiaries or any equity
investments in any other entity.


 


(d)           Except as set forth on Schedule 4.3(d), the Company
does not have any outstanding Indebtedness or guarantees of Indebtedness.


 


Section 4.4             Financial Statements.


 


(a)           The following financial statements for the Company are
attached hereto as Schedule 4.4 (collectively, the “Financial
Statements”): (i) the Company’s unaudited balance sheet and related
statement of income as of and for the year ended December 31, 2009 and (ii) the
Company’s Reference Balance Sheet and related unaudited statement of income as
of and for the six (6) months ended June 30, 2010. Each Financial
Statement has been prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered thereby and fairly presents in all
material respects the financial condition of the Company as of such dates and
the results of the Company’s operations for the periods specified; provided, however, that the Financial Statements lack
footnotes and other presentation items required by GAAP and the Financial Statements
described in clause (ii) above are subject to normal year-end adjustments.


 


12

















 


(b)           The Company does not have any liability required to be set
forth on a balance sheet prepared in accordance with GAAP, except for (i) liabilities
disclosed in the schedules hereto, (ii) liabilities reflected, reserved
against, or otherwise described in the Reference Balance Sheet, and (iii) liabilities
incurred in the ordinary course of business since June 30, 2010.


 


Section 4.5             Events Subsequent to the
Reference Balance Sheet.  Except as set forth on Schedule
4.5, since June 30, 2010 the Company has operated the Business in all
material respects in the usual and ordinary course and consistent with past
practices, and the Company has not done any of the following:


 


(a)           except for Permitted Liens, suffered or permitted any Lien
to arise or be granted or created against or upon any of the assets of the
Business;


 


(b)           amended its certificate of incorporation or by-laws or other
governing documents;


 


(c)           made or permitted any amendment, supplement, modification
or termination of any Material Contract (as defined below);


 


(d)           sold, leased, transferred, assigned or otherwise disposed
of any of the assets of the Business that, individually or in the aggregate,
had a net book value at the time of such sale, lease, transfer, assignment or
disposition of $25,000.00 or more; provided, however, that this Section 4.5(d) shall
not apply to products sold, leased, transferred, assigned or otherwise disposed
of in the ordinary course of business and consistent with past practices;


 


(e)           increased benefits or benefit plan costs or changed bonus,
insurance, pension, compensation or other benefit plans or arrangements or
granted any bonus or increase in wages, salary or other compensation or made
any other change in employment terms of any employee of the Company (except in
the ordinary course of business and consistent with past practices);


 


(f)            suffered any change in its financial condition (including
changes in working capital, assets, properties, liabilities, obligations or
reserves) or experienced any event or failed to take any action which
reasonably could be expected to result in a Material Adverse Effect; or


 


(g)           agreed, whether in writing or otherwise, to do any of the
foregoing.


 


Section 4.6             Title to Assets.  Except as set forth
on Schedule 4.6, the Company has good and marketable title to, or a
valid leasehold interest in, all material items of tangible personal property,
free and clear of all Liens except for Permitted Liens.  The assets owned, leased or licensed by the
Company, or owned, leased or licensed by Seller and used by the Company in the
operation of the Business, constitute all of the property, rights and assets
necessary for the Company to own and operate the Business for the same or
similar purposes for which, and in the same or similar manner in which, the
Business has been owned and operated by the Company prior to the Closing.


 


13

















 


Section 4.7             Compliance with Laws.  Except as set forth
on Schedule 4.7 (and other than Tax matters addressed in Section 4.9,
environmental matters addressed in Section 4.10 and employee
benefits matters addressed in Section 4.13), the Company is in compliance
in all material respects with all Legal Requirements applicable to the
operation of the Business, including, to the extent applicable to the operation
of the Business, the Foreign Corrupt Practices Act, the Arms Export Control Act
and the International Traffic in Arms Regulations thereunder.


 


Section 4.8             Litigation.  Except as set forth
on Schedule 4.8, there are no claims, actions, suits, arbitrations,
inquiries, proceedings (including any arbitration proceedings), orders, or
investigations by or before any Governmental Entity pending, affecting or, to
the Company’s or Seller’s Knowledge, threatened against the Company. Except as
set forth on Schedule 4.8, the Company is not subject to any material
outstanding order, judgment or decree of any Governmental Entity.


 


Section 4.9             Tax Matters.  Except as set forth
on Schedule 4.9:


 


(a)           The Company has timely filed, or timely filed for
extensions to file, all material Tax Returns for all years and periods and for
all jurisdictions (whether federal, state, local or foreign) in which any such
Tax Returns were due and all such Tax Returns were complete and correct in all
material respects.


 


(b)           The Company has timely paid in full all Taxes that are due
and payable by the Company.  The total
amounts accrued as current liabilities for Taxes in the Financial Statements
and the total amounts accrued as current liabilities for Taxes as of the
Closing Date are and will be sufficient to cover the payment of all Taxes,
whether or not assessed or disputed, which are, or are hereafter found to be,
or to have been, due by the Company as of the date of the applicable Financial
Statement or as of the Closing Date, as applicable.  Without limiting the foregoing, the Company
has paid all applicable sales taxes required to be paid by the Company in
Oklahoma and the other states in which it sells its products.


 


(c)           The Company has complied in all material respects with all
applicable laws, rules and regulations relating to the payment and
withholding of Taxes, and the Company has timely withheld from employee wages
and paid over to the proper Governmental Entity all amounts required to be so
withheld and paid over.


 


(d)           The Company is not a party to any Tax allocation or
sharing agreement.


 


(e)           The Company has not received written notice of any audits
or proceedings currently pending with regard to any Taxes or Tax Returns before
any Governmental Entity.


 


(f)            The Company is not (and has never been) a “United States
real property holding corporation” within the meaning of Section 897(c) of
the Code.


 


(g)           The Company has not received written notice of any
outstanding subpoenas or written requests for information from any taxing
authority with respect to any Taxes. 
There are no agreements in effect to extend the time to file any Tax
Return or 


 


14

















 


the period of limitations
for the assessment or collection of any Taxes for which the Company may be
liable.


 


(h)           Seller has made available to Purchaser complete copies of
all Tax Returns filed by the Company with respect to any Taxes and all tax
audit reports, statements of deficiencies, and closing or other agreements with
respect thereto for tax years 2005, 2006, 2007, 2008 and 2009.


 


(i)            The books and records of the Company, including the Tax
Returns, contain accurate and complete information with respect to all material
tax elections in effect with respect to the Company.


 


(j)            The Company has not entered into any compensatory
agreements which would result in a nondeductible expense pursuant to Section 280G
of the Code.


 


(k)           The Company has not received written notice of any claims
pending against the Company for any Taxes or of any assessment, deficiency or
adjustment with respect to any Tax Return of the Company.


 


(l)            The Company has not received written notice of any claims
by a Governmental Entity that are pending and unresolved in any jurisdiction
where the Company does not file Tax Returns that the Company is or may be
subject to taxation in that jurisdiction.


 


(m)          The Company and Seller are members of an affiliated group
filing a consolidated income Tax Return, within the meaning of Section 1504
of the Code, with Blount International, Inc. as the common parent
corporation. The Company has no liability for the Taxes of any other Person under
Treasury Regulation Section 1.1502-6 (or any similar provision of state,
local or foreign law), as a transferee or successor, by contract or otherwise.
No payment is due or will become due by the Company pursuant to any Tax sharing
or similar agreement or arrangement or any Tax indemnification agreement.


 


(n)           The Company is not a party to any joint venture,
partnership or other arrangement which could be treated as a partnership for
Federal income tax purposes.


 


(o)           During the past five (5) years, neither the Company
nor any predecessor of the Company has participated in a transaction that would
be reportable by, or with respect to, the Company pursuant to Treasury
Regulation Section 1.6011-4 or any predecessor thereto.


 


15






 












 


Section 4.10           Environmental Matters.


 


(a)           Except as set forth on Schedule 4.10(a), since
Seller has owned the Company, the Company is, and has been, in material
compliance with all applicable Environmental Laws and has not received any
written notice regarding any actual or alleged violation of any Environmental
Law that has not been fully and finally resolved.


 


(b)           Since Seller has owned the Company, the Company has
obtained, and is in material compliance with, all permits, licenses and other
authorizations that are required pursuant to Environmental Laws to operate the
Business (“Environmental Permits”).


 


(c)           Except as set forth on Schedule 4.10(c), since
Seller has owned the Company, there has been no material release, spill or
discharge of any Hazardous Substances on, upon, into or from any site currently
or, to the Company’s Knowledge, previously owned, leased or otherwise operated
by the Company that has resulted in material liability or that would reasonably
be expected to result in material liability to the Company under any applicable
Environmental Law.


 


(d)           There is no action or proceeding pending or, to the
Company’s or Seller’s Knowledge, threatened by any Governmental Entity or any
other Person against the Company alleging violations of, or liability under,
Environmental Laws.


 


(e)           Since Seller has owned the Company, the Company has not
entered into any consent decree or other written agreement with any
Governmental Entity in settlement of any alleged material violation of, or
material liability under, any applicable Environmental Law, under which decree
or agreement the Company has any unfulfilled obligations.


 


(f)            Except as set forth on Schedule 4.10(f), since
Seller has owned the Company, the Company has not received written notice of
potential liability under any Environmental Law for any site that has been
included in any published U.S. federal, state or local “superfund” site list or
any other similar list of hazardous or toxic waste sites published by any
Governmental Entity in the United States.


 


(g)           Except as set forth on Schedule 4.10(g), to the
Company’s Knowledge, there are no underground storage tanks located on, no PCBs
(polychlorinated biphenyls) or PCB-containing equipment used or stored on, and
no hazardous waste as defined by the Resource Conservation and Recovery Act or
any other Environmental Law stored on, any site owned or operated by the
Company, during the time in which the Company has owned or leased such site,
except in material compliance with Environmental Laws.


 


(h)           To the Company’s Knowledge, Seller has given Purchaser
access to copies of all material environmental site assessment reports,
Environmental Permits and pending Environmental Permit applications which are
in writing and which were prepared by or for the Company, in each case as
amended and in each case as in the possession or control of the Company.


 


(i)            There are no products in the current product line of the
Company, nor, to the Company’s Knowledge, since Seller has owned the Company
have there been any 


 


16

















 


products in any product line
or product offering associated with, manufactured by or sold by the Company,
that have contained, or contain, asbestos. 
There are no actions or proceedings pending, or to the Company’s or
Seller’s Knowledge, threatened, in which health related claims relating to
asbestos are asserted. To the Company’s or Seller’s Knowledge, since Seller has
owned the Company, there have been no actions or proceedings in which health
related claims relating to asbestos were asserted.


 


(j)            Seller acquired the Company on March 3, 1991.


 


Section 4.11           Intellectual Property.  Schedule 4.11 sets forth a list
of each registered, applied for or issued patent, patent application, domain
name, trademark, service mark and registration and application therefor of the
Company that are material to the operation of the Business (collectively, the “Owned
Intellectual Property”).  The Company
has good and marketable title to the Owned Intellectual Property, free and
clear of all Liens except for Permitted Liens. 
Except as set forth on Schedule 4.11, the Company has not
received any written notice from any third party claiming that:  (a) the Company does not and has not
materially infringed any Intellectual Property of any third-party, (b) to
the Company’s or Seller’s Knowledge, no third-party is currently infringing on
the Intellectual Property of the Company, except for any such infringement that
would not reasonably be expected to have a Material Adverse Effect; (c) the
Company has not received any written notice from any third party pertaining to
or challenging the right of the Company to use any Intellectual Property; (d) there
are no material Intellectual Property rights that are necessary for the
operation or continued operation of the Business for which the Company does not
hold valid and continuing authority in connection with the use thereof; (e) the
Company does not own or use any Intellectual Property pursuant to a license and
has not granted any Person any rights to use Intellectual Property; and (f) all
Owned Intellectual Property that is registered with the U.S. Patent and
Trademark Office is currently in compliance with all formal legal requirements
and filings.


 


Section 4.12           Real Estate.


 


(a)           Schedule 4.12(a) lists all real property that
is owned by the Company and used in the Business (collectively, the “Owned
Real Property”) and any real property owned or leased by the Company at any
time during the past ten (10) years. 
The Company holds marketable fee simple title to the Owned Real
Property, free and clear of all Liens other than Permitted Liens.


 


(b)           The Company does not lease any real property.


 


(c)           The Company has not received from any Governmental Entity
any written notice of any condemnation of the Owned Real Property or any
portion thereof. There is no material writ, injunction, decree, order or
judgment outstanding, nor any material action, claim, suit or proceeding,
pending or, to the Company’s or Seller’s Knowledge, threatened, relating to the
Company’s and/or Seller’s use, occupancy or operation by any Person of the
Owned Real Property.  The use and
operation of the Owned Real Property in the present conduct of the business of
the Company does not violate in any material respect any instrument of record
or agreement to which the Company or Seller is a party.  No damage or destruction has occurred (which
has not been repaired) with respect to the Owned Real Property since June 30,
2010, that would, individually or in the aggregate, 


 


17

















 


have a Material Adverse
Effect.  Except for items that would not,
individually or in the aggregate, have a Material Adverse Effect, the Owned
Real Property is in compliance with all applicable building, zoning, subdivision
and other land use and similar laws affecting such real property, and the
Company has not received any written notice of violation or claimed violation
of any such law.


 


(d)           Except as disclosed on Schedule 4.12(d), the
Company and/or Seller has not leased or granted any right to use (including any
easement rights) any of the Owned Real Property.


 


Section 4.13           Employee Benefits.  Except as set forth
on Schedule 4.13:


 


(a)           Schedule 4.13 contains a list of any pension,
retirement, savings, disability, medical, dental, health, life, death benefit,
group insurance, profit sharing, deferred compensation, stock option, stock
purchase, stock ownership, restricted stock, supplemental retirement, bonus,
incentive, vacation pay, tuition reimbursement, severance pay, or other
employee benefit plan, trust, agreement, contract, policy or commitment
(including any pension plan as defined in ERISA § 3(2) and any welfare
plan as defined in ERISA § 3(1)) sponsored or maintained by the Company, Seller
or any ERISA Controlled Group Member and covering any active or former
employees (or such employee’s dependents or beneficiaries), active or former
officer or director (or such officer or director’s dependents or beneficiaries)
of Seller, the Company or any ERISA Controlled Group Member, or to which the
Company, Seller or any ERISA Controlled Group Member may otherwise have any
material liability (each a “Benefit Plan”).


 


(b)           To the Company’s Knowledge, each Benefit Plan has been administered and operated in all
material respects in accordance with its terms and with the applicable
provisions of ERISA, the Code and other applicable Legal Requirements. Each
Benefit Plan intended to qualify under Code § 401(a) has received a
favorable determination, opinion, notification or advisory letter, as
applicable, from the Internal Revenue Service (“IRS”) stating that such
Benefit Plan meets the requirements of Code § 401(a).  Each Benefit Plan that is a defined
contribution plan is intended to be an “ERISA Section 404(c) Plan”
within the meaning of the applicable Department of Labor regulations.


 


(c)           At no time has Seller, the Company or any ERISA Controlled
Group Member maintained, established, sponsored, participated in, or
contributed to, any (i) multiemployer plan as defined in ERISA § 3(37)),
or (ii) “multiple employer plan” as defined in ERISA or the Code.


 


(d)           All required contributions to, and premium payments on
account of, each Benefit Plan have been made on a timely basis.


 


(e)           There is no pending or, to the Company’s or Seller’s
Knowledge, threatened action relating to a Benefit Plan, other than routine
claims in the ordinary course of business for benefits provided for by the
Benefit Plans.  Except as set forth on Schedule
4.13(e), no Benefit Plan is, or within the last three (3) years has
been, the subject of an examination or audit by a Governmental Entity, and no
Benefit Plan is the 


 


18

















 


subject of an application or
filing under, or is a participant in, a government-sponsored amnesty, voluntary
compliance, self-correction or similar program.


 


(f)            No Benefit Plan in which any active employee, officer or
director of the Company participates is a nonqualified deferred compensation
plan subject to Section 409A of the Code.


 


(g)           Except as could not reasonably be expected to result in a
Material Adverse Effect and to the Company’s Knowledge: (i) no Title IV
Plan is subject to any benefit restrictions under Code section 436, (ii) no
ERISA Event or event described in Section 4062(e) of ERISA with
respect to any Title IV Plan has occurred or is reasonably expected to occur; (iii) within
the last five years, no Title IV Plan has been terminated; (iv) no
Unfunded Pension Liability has, within the last five years, been transferred
outside the “controlled group” (within the meaning of Section 4001(a)(14)
of ERISA) of Seller, the Company or any ERISA Controlled Group Member, (v) no
Lien has been imposed against Seller, the Company or any ERISA Affiliate under Section 412
of the Code or Section 302 of ERISA, and (vi) neither Seller, the
Company nor any ERISA Controlled Group Member has failed to make any
contribution or pay any amount due as required by either Code section 412 or Section 302
of ERISA or the terms of any Benefit Plan.


 


(h)           Neither the execution nor delivery of this Agreement nor
the consummation of the transactions contemplated by this Agreement will
(either alone or in conjunction with any other event) result in an increase in
the amount of compensation or benefits or accelerate the vesting or timing of
payment or cause the funding or delivery of any compensation or benefits
payable under any Benefit Plan to or in respect of any person rendering
services to the Company or require the Company to make a larger contribution
to, or pay greater benefits under, any Benefit Plan.


 


Section 4.14           Contracts.  Except as listed or described on Schedule 4.14,
as of the date hereof, the Company is not a party to or bound by any Contracts
that are of a type described below (such Contracts that are required to be
listed on Schedule 4.14 are referred herein to as the “Material
Contracts”):


 


(a)           any Contract evidencing Indebtedness of the Company;


 


(b)           any Contract involving revenues or expenditures in excess
of $25,000 per annum (excluding purchase and sale orders entered into in the
ordinary course of business consistent with past practice);


 


(c)           any Contract relating to employment, compensation,
severance, consulting or indemnification officer, director, employee or
consultant of the Company who is entitled to annual compensation thereunder in
excess of $25,000 per annum;


 


(d)           any collective bargaining arrangement with any labor
union;


 


(e)           any Contract that relates to the disposition or
acquisition of the assets of, or any interest in, any business enterprise which
relates to the Business entered into during the past five (5) years
involving payments in excess of $25,000, other than the 


 


19

















 


purchase and sale of
inventory in the ordinary course of business or where there is no continuing
material liability of the Company;


 


(f)            any Contract for capital expenditures or the acquisition
or construction of fixed assets in excess of $25,000;


 


(g)           any Contract granting any Person a material Lien on all or
any part of the material assets of the Company, other than Permitted Liens and
Liens that will be released at the Closing;


 


(h)           any Contract under which the Company is (i) a lessee
or sublessee of any machinery, equipment, vehicle or other tangible personal
property, or (ii) a lessor of any tangible personal property owned by the
Company, in any single lease involving payments in excess of $25,000 per annum;


 


(i)            any Contract under which the Company has granted or
received a material license or sublicense or under which it is obligated to pay
or has the right to receive a royalty, license fee or similar payment in an
amount in excess of $25,000, other than licenses for commercially available
prepackaged software;


 


(j)            any joint venture or partnership Contract;


 


(k)           any Contract with a sales agent, representative, dealer or
distributor of any products or services of the Company; or


 


(l)            any Contract limiting the ability of the Company to
compete or otherwise conduct its business in any geographical area.


 


Except as set forth on Schedule 4.14,
each Material Contract is a valid and binding obligation of the Company,
enforceable in accordance with its terms, subject to bankruptcy,
reorganization, receivership and other laws affecting creditors’ rights
generally and applicable equitable principles (whether considered in a
proceeding at law or in equity). Except as set forth on Schedule 4.14,
neither the Company nor, to the Company’s or Seller’s Knowledge, any other
party to such Material Contract is in breach of, or default under, such
Material Contract.


 


Section 4.15           Labor Matters.  Within the past five
(5) years, the Company has not experienced any, material strike,
picketing, boycott, work stoppage or slowdown or other labor dispute,
allegation, charge or complaint of unfair labor practice, employment
discrimination or, to the Company’s or Seller’s Knowledge, union organizational
activity; nor, to the Company’s or Seller’s Knowledge, is any such action
threatened against the Company.  The
Company is not subject to any collective bargaining agreements or other labor
union contract.


 


Section 4.16           Insurance.  Seller, on behalf of the Company,
maintains the types and dollar amounts of insurance coverage described on Schedule
4.16 under the policies or contracts listed on Schedule 4.16.  There is no material default by the Company
with respect to any provision contained in any such policy or contract, and the
Company has not failed to give any notice or present any claim under any such
policy or contract as required by such policy or contract.  There are no premiums which are past due
under any such policy or contract.


 


20

















 


Section 4.17           Affiliate Transactions.  Except as set forth
on Schedule 4.17, there are no Contracts (other than benefit matters
described on Schedule 4.13) between the Company and Seller or between
the Company, on the one hand, and any equityholder, manager or executive
officer thereof, or any member of such executive officer’s, director’s or
stockholder’s immediate family, or any Person controlled by such executive
officer, director or stockholder, on the other hand.


 


Section 4.18           Licenses and Permits.  Schedule 4.18 sets forth a list
of all material licenses, permits, approvals and other similar documents and authorizations
(collectively, the “Permits”) held by the Company and issued by any
Governmental Entity. The Company holds the Permits that are required for the
Company to operate the Business as presently conducted by it, except where the
failure of the Company to hold any such Permit would not reasonably be expected
to have a Material Adverse Effect.


 


Section 4.19           Customers and Suppliers.  Schedule 4.19  sets
forth a list of the Company’s top ten (10) customers and suppliers as of December 31,
2009 and June 30, 2010 (determined by the amount of total purchases or
sales, as applicable).


 


Section 4.20           Brokerage.  The Company has no liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which Purchaser
could become liable or obligated, or for which the Company could become liable
or obligated after the Closing.


 


Section 4.21           Accounts Receivable.  Except as set forth
on Schedule 4.21, all of the accounts, notes and loans receivable that
have been recorded on the books of the Company are bona fide and represent
accounts receivable validly due for goods sold or services rendered in the
ordinary course of business.


 


Section 4.22           Powers of Attorney; Authorized
Signatories.  Schedule 4.22
sets forth a list of (a) the names and addresses of all Persons holding
powers of attorney on behalf of the Company; and (b) the names of all
banks and other financial institutions in which the Company currently has an
account, deposit or safe deposit box, along with the account numbers and the
names of all persons authorized to draw on such accounts or deposits or to have
access to such boxes.


 


Section 4.23           Product Warranties.  Schedule 4.23 sets forth a description
of the warranties given by the Company in connection with product sales.  No other or additional warranty has been
given in connection with any such sale. 
Except as set forth on Schedule 4.23, to the Company’s Knowledge,
the Company has not received notice of any claims against the Company (a) resulting
from alleged over-shipment, defective products, or products in the hands of
customers, retailers or distributors under any understanding that such products
would be returnable, or (b) with respect to any product warranty or product
liability, which in either of (a) or (b) are reasonably anticipated
to exceed the Company’s reserves therefor.


 


21

















 


ARTICLE V


 


REPRESENTATIONS AND WARRANTIES OF
PURCHASER AND PARENT


 


Each
of Purchaser and Parent, solely with respect to themselves, hereby represents
and warrants as of the date of this Agreement and as of the Closing Date
(except to the extent any such representation or warranty speaks as of an
earlier date) as follows:


 


Section 5.1             Organization, Power and
Authorization.  Purchaser is a corporation, duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware.  Parent is a corporation,
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware.  Each of Purchaser and
Parent has the requisite power and authority necessary to enter into, deliver
and perform its obligations pursuant to this Agreement. Purchaser’s execution,
delivery and performance of this Agreement and each other Contract executed in
connection herewith to which it is a party has been duly authorized by
Purchaser.  Parent’s execution, delivery
and performance of this Agreement has been duly authorized by Parent.


 


Section 5.2             Binding Effect and
Non-contravention.


 


(a)           This Agreement has been duly executed and delivered by
Purchaser and Parent. Assuming the due authorization, execution and delivery by
the other Parties, this Agreement constitutes a valid and binding obligation of
Purchaser or Parent, as the case may be, which is enforceable against Purchaser
or Parent, as the case may be, in accordance with its terms, except as such
enforceability may be limited by applicable insolvency, bankruptcy,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally, and applicable equitable principles (whether considered in a
proceeding at law or in equity).


 


(b)           Neither the execution and the delivery of this Agreement
nor the performance by Purchaser or Parent, as the case may be, of the transactions
contemplated hereby will (i) conflict with or result in a breach of the
terms, conditions or provisions of, (ii) constitute a default under or
result in a violation of, (iii) result in the creation of any Lien upon
the assets of Purchaser or Parent, as the case may be, pursuant to, or (iv) require
any authorization, consent, approval, exemption or other action by or
declaration or notice to any Person or Governmental Entity pursuant to (A) any
material Contract to which Purchaser or Parent, as the case may be, is a party,
by which it is bound, or to which any of its assets are subject, (B) the
certificate of incorporation or by-laws of Purchaser or Parent, as the case may
be, or (C) any Legal Requirement to which the Purchaser or Parent, as the
case may be, is subject.


 


Section 5.3             Consents.  Except for the filings and approvals set
forth on Schedule 5.3, no notice to, filing with, or authorization,
registration, consent or approval of any Governmental Entity or other Person is
necessary for the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby by Purchaser or Parent, as
the case may be.


 


22

















 


Section 5.4             Litigation.  There are no
judicial or administrative actions, suits, proceedings (including any
arbitration proceedings), orders, claims or investigations pending, affecting
or, to Purchaser’s or Parent’s actual knowledge, threatened, against Purchaser
or Parent, as the case may be, that question the validity of this Agreement or
any action taken or to be taken by Purchaser or Parent in connection herewith,
or seek to restrain or prohibit or to obtain damages or other relief in
connection with the transactions contemplated hereby.


 


Section 5.5             Parent Financial Statements.  The following financial statements for the
Parent are attached hereto as Schedule 5.5 (collectively, the “Parent
Financial Statements”): (i) the Parent’s unaudited balance sheet and
related statement of income as of and for the year ended December 31, 2009
and (ii) the Parent’s unaudited balance sheet and related statement of
income as of and for the eight (8) months ended August 31, 2010.  Each Parent Financial Statement has been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby and fairly presents in all material respects the
financial condition of the Parent as of such dates and the results of the
Parent’s operations for the periods specified; provided,
however, that the Parent Financial Statements lack footnotes and
other presentation items required by GAAP and the Parent Financial Statements
described in clause (ii) above are subject to normal year-end adjustments.


 


Section 5.6             Broker.  No broker, finder, agent,
representative or similar intermediary has acted for or on behalf of Purchaser
in connection with this Agreement or the transactions contemplated hereby, and
no broker, finder, agent or similar intermediary is entitled to any broker’s,
finder’s or similar fee or other commission in connection herewith, based on
any agreement or understanding with Purchaser or any action taken by Purchaser
for which the Company or Seller could become liable or obligated.


 


Section 5.7             Investment.  Purchaser is acquiring the Outstanding Stock
for its own account, for investment only, and not with a view to any resale or
public distribution thereof. Purchaser shall not offer to sell or otherwise
dispose of the Outstanding Stock in violation of any Legal Requirement
applicable to any such offer, sale or other disposition. Purchaser acknowledges
that (a) the Outstanding Stock has not been registered under the
Securities Act, or any state or foreign securities laws, (b) there is no
public market for the Outstanding Stock and there can be no assurance that a
public market shall develop, and (c) it must bear the economic risk of its
investment in the Outstanding Stock for an indefinite period of time. Purchaser
has all requisite legal power and authority to acquire the Outstanding Stock in
accordance with the terms of this Agreement and is an “Accredited Investor”
within the meaning of the Securities and Exchange Commission Rule 501 of
Regulation D of the Securities Act, as presently in effect.


 


ARTICLE VI


 


PRE-CLOSING COVENANTS


 


Section 6.1             Further Actions; Commercially
Reasonable Efforts.  Subject to the
terms and conditions hereof, the Parties agree to use their commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
make effective as promptly as practicable the transactions contemplated by this
Agreement and to cooperate with each other in connection with the foregoing,
including using their commercially reasonable efforts to (a) obtain all
necessary 


 


23

















 


waivers, consents and approvals from other parties
to the Material Contracts, (b) obtain all consents, approvals and
authorizations that are required to be obtained under any applicable Legal
Requirement, (c) prevent the entry, enactment or promulgation of any
threatened or pending injunction or order that would adversely affect the
ability of the Parties to consummate the transactions contemplated hereby,
(d) lift or rescind any injunction or order adversely affecting the
ability of the Parties to consummate the transactions contemplated hereby, and
(e) effect all necessary registrations, applications, notices and filings
and submissions of information requested by Governmental Entities. Notwithstanding
the foregoing or anything else in this Agreement, nothing in this Agreement
shall require Seller or the Company to agree to or execute any material changes
to any Contracts or make any payments to any third-party in order to obtain
third-party consents to the transactions contemplated by this Agreement, except
in the case where such material change shall only be effective upon the Closing
and where such payments are expressly contemplated by a Contract between the
Company and such third-party.


 


Section 6.2             Conduct of Business.  Seller covenants and agrees with Purchaser
that, from the date of this Agreement until the Closing, the Company will
conduct the Business in all material respects only in the ordinary and usual
course consistent with past practices. 
Notwithstanding the preceding sentence, Seller covenants and agrees with
Purchaser that, except as specifically contemplated in this Agreement, from the
date of this Agreement until the Closing, without the prior written consent of
Purchaser:


 


(a)           the Company will not (i) acquire any corporation,
partnership or other business entity or any interest therein; (ii) sell,
lease or sublease, transfer or otherwise dispose of, mortgage, pledge or
otherwise encumber any assets that have a value at the time of such sale,
lease, sublease, transfer, disposition or encumbrance in excess of $25,000.00,
individually, or $100,000.00, in the aggregate (other than sales of products in
the ordinary course of business); (iii) make any material loan, advance or
capital contribution to, or investment in, any Person (other than loans or
advances in the ordinary course of business); (iv) enter into any Contract
not terminable by the Company upon notice of 30 days or less and without
penalty or other obligation; (v) pay or declare any dividends or
distributions or purchase, redeem, acquire or retire any indebtedness, stock or
other securities from its stockholders (other than the non-cash settlement of
intercompany accounts between Seller and its Affiliates, on the one hand, and
the Company, on the other hand); (vi) engage in any transaction or incur
any obligation or liability outside the ordinary course of its business; or (vii) enter
into any Contract, commitment or arrangement with respect to any of the
foregoing;


 


(b)           the Company will not (i) enter into, or otherwise
become liable or obligated under or pursuant to (A) any employee benefit,
pension or other plan (whether or not subject to ERISA), (B) any incentive
or deferred compensation plan or arrangement or other fringe benefit plan, or (C) any
consulting, employment, severance, termination or similar Contract with any
Person, or amend or extend any such plan, arrangement or Contract; (ii) except
for payments made pursuant to any Benefit Plan, grant, or otherwise become
liable for or obligated to pay, any severance or termination payments, bonuses
or increases in compensation or benefits (other than payments, bonuses or
increases that are mandated by the terms of Contracts existing as of the date
hereof which are described on Schedule 6.2(b) or that are paid in
the ordinary course of 


 


24

















 


business, consistent with
past practices) to, or forgive any indebtedness of, any employee,
representative, dealer, distributor or consultant; or (iii) enter into any
Contract, commitment or arrangement to do any of the foregoing;


 


(c)           the Company will keep and maintain accurate books, records
and accounts on an accrual basis consistent with past practices;


 


(d)           the Company will not create, incur, assume or permit to
exist any Lien on any of the assets of the Company, except for Permitted Liens;


 


(e)           the Company will (i) pay all Taxes, assessments and
other governmental charges imposed upon any of its assets or with respect to
its franchises, business, income or assets before any penalty or interest
accrues thereon; (ii) pay all claims (including claims for labor,
services, materials and supplies) that have become due and payable and which by
law have or may become a Lien upon any of its assets prior to the time when any
penalty or fine shall be incurred with respect thereto or any such Lien shall
be imposed thereon; and (iii) comply in all material respects with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority, obtain or take all governmental actions necessary in
the operation of its businesses, and comply with and enforce the provisions of
all Contracts of the Company, including paying when due all rentals, royalties,
expenses and other liabilities relating to its business or assets; provided,
however, that the Company may contest the imposition of any such Taxes,
assessments and other governmental charges, any such claim, or the requirements
of any applicable law, rule, regulation or order or any Contract of the Company
if done so in good faith by appropriate proceedings and if reserves required by
GAAP are established;


 


(f)            the Company will preserve and keep in full force and
effect its legal existence and material rights and franchises;


 


(g)           the Company will maintain in full force and effect the
policies and contracts of insurance listed on Schedule 4.16;


 


(h)           neither Seller nor the Company will engage in any
practice, take any action or permit any inaction that would cause any of the representations
or warranties contained in Article III or Article IV to
become untrue; or


 


(i)            the Company shall be solely responsible for providing
continuation coverage under the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended, to all of its employees and former employees, and such
employees’ and former employees’ beneficiaries, who are entitled to receive
such continuation coverage, and shall maintain sufficient health insurance for
such purpose.  In addition, Seller shall
immediately notify Purchaser in the event Seller or the Company terminates or
modifies its health insurance policy or policies.


 


Section 6.3             Access.  From the date hereof through the
Closing, Seller and the Company shall (a) provide Purchaser or its
authorized agents or independent contractors with reasonable access to such
information as Purchaser may from time to time reasonably request with respect
to the Company, the Business and its assets and properties and shall provide
Purchaser or its authorized agents or independent contractors reasonable access
during regular 


 


25

















 


business hours and (b) upon reasonable notice
during regular business hours and under reasonable circumstances in a manner so
as not to interfere with the normal business operations of the Company, provide
Purchaser or its authorized agents or independent contractors with reasonable
access to the premises, management, books, records (including tax records),
contracts and documents of or pertaining to the Company as Purchaser may from
time to time reasonably request. Any disclosure whatsoever during such
investigation by Purchaser shall not constitute any expansion of or additional
representations or warranties of Seller concerning the Company beyond those
specifically set forth in this Agreement. All such information and access shall
be subject to the terms and conditions of the Confidentiality Agreement.
Notwithstanding the foregoing, Seller and the Company shall not have any
obligation to provide Purchaser with any information the disclosure of which is
prohibited or restricted under applicable Legal Requirement, or which would
result in any waiver of the attorney-client privilege.


 


Section 6.4             Contact with Customers and
Suppliers.  Except as permitted by
the Customer Survey Agreement, Purchaser acknowledges and agrees that it is not
authorized to, and shall not (and shall not permit any of its employees,
agents, representatives or Affiliates to), contact any employees of the Company
(excluding executive officers), customers, suppliers, distributors or other
material business relations of the Company prior to the Closing without the
prior written consent of Seller and the Company.


 


Section 6.5             Notifications;
Schedule Updates/Corrections.


 


(a)           Seller will give prompt written notice to Purchaser upon
becoming aware of any development occurring after the date of this Agreement
that causes or reasonably could be expected to cause the condition in Section 7.1(a) to
not be met as of the Closing Date. Purchaser will give prompt written notice to
Seller and the Company of any development occurring after the date of this
Agreement that causes or reasonably could be expected to cause the condition in
Section 7.3(a) to not be met as of the Closing Date.


 


(b)           Prior to the Closing, Seller and the Company may
supplement and update the Schedules to this Agreement to reflect any
matter or information arising after the date of this Agreement which, if
existing, occurring or known at the date of this Agreement, would have been
required to be set forth or described in the Schedules hereto.


 


(c)           Prior to the Closing, if Seller or the Company becomes
aware of any matter existing, occurring or known as of the date of this
Agreement that was required to be set forth or described in the
Schedules to this Agreement, but that is not so set forth or described
thereon, Seller may amend the Schedules to this Agreement in any manner
which is necessary to correct any existing inaccuracy or incorrect or
incomplete information in such Schedules.


 


(d)           No such amendment to the Schedules pursuant to Section 6.5(c) shall
be deemed to have modified the representations, warranties or covenants of
Seller regarding the Company herein for purposes of determining whether the
condition set forth in Section 7.1(a) have been satisfied, or
shall affect whether a breach of such representations, warranties or covenants
has occurred for purposes of determining Purchaser’s rights under Article X
with respect thereto.  From and after the
Closing, any supplement to the Schedules hereto pursuant to Section 6.5(b) (but
not any amendment 


 


26

















 


pursuant to Section 6.5(c))
shall be deemed to have modified the Schedules and the representations,
warranties and covenants of Seller regarding the Company contained herein for
all purposes, including any determination of Purchaser’s rights under Article X.


 


Section 6.6             Funds Available.  Purchaser and Parent shall take all actions
necessary to have available as of the Closing Date funds sufficient to pay the
Initial Purchase Price at the Closing and to fulfill their other obligations
under this Agreement.


 


Section 6.7             Purchaser Actions.  Any acts or
omissions of Purchaser, any of its Affiliates or any Person acting for the
benefit or at the direction of Purchaser or any of its Affiliates before or
after the date hereof, shall not be a basis upon which the condition set forth
in Section 7.1(a) shall fail to be satisfied and shall not
excuse Purchaser or Parent from performing its obligations under this Agreement
and consummating the transactions contemplated hereby.


 


Section 6.8             Releases.  On the Closing Date, Seller shall execute and
deliver to Purchaser, and Purchaser shall cause the Company to execute and
deliver to Seller, a mutual release in the form attached hereto as Exhibit A
(the “Release”).


 


Section 6.9             Public Announcements.  Neither Seller, the
Company, Purchaser, Parent nor any of their respective Affiliates shall issue
or cause the publication of any press release or other public announcement with
respect to this Agreement or the transactions contemplated hereby without prior
consultation with Purchaser and Seller, except as may be required by applicable
Legal Requirement. Notwithstanding the foregoing, Purchaser and Seller shall
cooperate to prepare a joint press release to be issued on the Closing Date,
which press release shall be mutually acceptable to Purchaser and Seller.


 


ARTICLE VII


 


CONDITIONS TO CLOSING


 


Section 7.1             Conditions to Purchaser’s
Obligation.  Purchaser’s
obligation to consummate the transactions contemplated by this Agreement is
subject to the satisfaction (or written waiver by Purchaser) at or prior to the
Closing of the following conditions precedent:


 


(a)           Representations, Warranties and Covenants.  The representations and warranties of Seller
in Article III and regarding the Company contained in Article IV,
as subsequently modified by the provisions of Section 6.5, shall be
true and correct as of the Closing with the same force and effect as though
made on and as of the Closing (other than those representations and warranties
that address matters only as of a particular date or only with respect to a
specific period of time, which need only be accurate as of such date or with
respect to such period), except where the failure of such representations and
warranties to be so true and correct does not have, individually or in the
aggregate, a Material Adverse Effect on the Company. Seller and the Company
shall have performed and complied with, in all material respects, all of the
agreements and covenants in this Agreement that are required to be performed or
complied with by Seller or the Company on, prior to, or as of the Closing Date.


 


27






 












 


(b)                                 No Legal
Prohibition.  No statute,
rule, regulation, ruling, consent, decree, judgment, injunction or order shall
be enacted, promulgated, entered or enforced by any Governmental Entity that
would prohibit the consummation by Seller and the Company of the transactions
contemplated hereby.


 


(c)                                  Closing
Deliveries.  Seller
shall have caused the deliveries set forth in Section 7.2 to be
delivered to Purchaser at or prior to the Closing.


 


(d)                                 No Material
Adverse Effect.  Since the
date of this Agreement, there must have been no event which has had or could
reasonably be expected to have a Material Adverse Effect.


 


Section 7.2                                      Seller’s
Closing Deliveries.  At the
Closing, Seller shall deliver the following documents to Purchaser:


 


(a)                                  a certificate
of the Secretary or Assistant Secretary of the Company certifying as to (A) (1) the
certificate of incorporation of the Company and (2) certificates of good
standing of the Company certified by the Secretary of State of the State of
Oklahoma and of each other jurisdiction in which the Company is qualified to do
business, in each case certified not later than ten (10) days prior to the
Closing Date, (B) the by-laws of the Company, and (C) resolutions of
the board of directors of the Company, authorizing and approving the withdrawal
of the Company from any Benefit Plan;


 


(b)                                 a certificate
of the Secretary or Assistant Secretary of Seller certifying as to (A) (1) the
certificate of incorporation of Seller and (2) the certificate of good
standing of Seller, in each case certified by the Secretary of State of the
State of Delaware not later than ten (10) days prior to the Closing Date,
(B) the by-laws of Seller, and (C) resolutions of the board of
directors of Seller, authorizing and approving (i) the execution, delivery
and performance by Seller of this Agreement and any other Contract executed by
Seller pursuant to this Agreement and (ii) the withdrawal of the Company
from any Benefit Plan;


 


(c)                                  evidence
reasonably satisfactory to Purchaser that all Lien releases with respect to the
Company have been filed or will be filed immediately following the Closing; provided, however, that Purchaser understands and acknowledges that the assets
of the Company are encumbered by Liens in favor of General Electric Capital
Corporation (“GECC”) pursuant to a credit facility extended to Seller
and that, at the Closing, GECC will only deliver a release of Lien as it
relates to the assets of the Company;


 


(d)                                 evidence that
the consents identified on Schedule 7.2(d) have been obtained;


 


(e)                                  evidence that
the agreements identified on Schedule 7.2(e) have been or will
be terminated effective as of the Closing;


 


(f)                                    a certificate
duly executed by an authorized officer of Seller that the condition set forth
in Section 7.1(a) have been satisfied.


 


28

















 


(g)                                 resignations
from the officers and directors of the Company;


 


(h)                                 evidence that
the Company has been released of liability from GECC;


 


(i)                                     evidence that
the Company has been released of liability from the 87/8% Senior Subordinated Notes due 2012 issued by
Seller;


 


(j)                                     evidence that
the Company has withdrawn from all Benefit Plans that are Seller’s Retained
Liabilities, effective as of the Closing;


 


(k)                                  an assignment
and assumption agreement relating to Benefit Plans that are Seller’s Retained
Liabilities, in the form attached hereto as Exhibit B;


 


(l)                                     all of the
minute books and records of the Company in the possession of Seller or the
Company;


 


(m)                               a summary of
vesting status for each employee of the Company participating in the Blount 401(k) Retirement
Savings Plan;


 


(n)                                 a FIRPTA
certificate with respect to Seller;


 


(o)                                 the Release,
duly executed by Seller; and


 


(p)                                 in
consideration of the receipt of the Initial Purchase Price, the original stock
certificate(s) evidencing the Outstanding Stock (or affidavit of lost
certificate), duly endorsed in blank or accompanied by a duly executed stock
power transferring the Outstanding Stock to Purchaser.


 


Section 7.3                                      Conditions to
Seller’s Obligation.  Seller’s
obligation to consummate the transactions contemplated by this Agreement is
subject to the satisfaction (or written waiver by Seller) at or prior to the
Closing of the following conditions precedent:


 


(a)                                  Representations,
Warranties and Covenants.  The representations
and warranties of Purchaser and Parent contained in Article V shall
be true and correct as of the date of this Agreement and on the Closing Date
with the same force and effect as though made on and as of the Closing (other
than those representations and warranties that address matters only as of a
particular date or only with respect to a specific period of time, which need
only be accurate as of such date or with respect to such period), except where
the failure of such representations and warranties to be so true and correct
does not have, individually or in the aggregate, a material adverse effect on
Purchaser. Purchaser shall have performed and complied with, in all material
respects, all of the agreements and covenants in this Agreement that are
required to be performed or complied with by Purchaser on, prior to, or as of
the Closing Date.


 


(b)                                 No Legal
Prohibition.  No statute,
rule, regulation, ruling, consent, decree, judgment, injunction or order shall
be enacted, promulgated, entered or enforced by any Governmental Entity that
would prohibit the consummation by Purchaser or Parent of the transactions
contemplated hereby.


 


29

















 


(c)                                  Closing
Deliveries.  Purchaser
shall have caused the deliveries set forth in Section 7.4 to be
delivered to Seller at or prior to the Closing.


 


Section 7.4                                      Purchaser’s
Closing Deliveries.  At the
Closing, Purchaser shall deliver the following to Seller:


 


(a)                                  the Release,
duly executed by the Company;


 


(b)                                 a certificate
of the Secretary or Assistant Secretary of Parent certifying as to (A) (1) the
certificate of incorporation of Parent and (2) certificate of good
standing of Parent, in each case certified not later than ten (10) days
prior to the Closing Date by the Secretary of State of the State of Delaware,
(B) the by-laws of Parent, and (C) resolutions of the board of
directors of Parent, authorizing and approving the execution, delivery and
performance by Parent of this Agreement and any other Contracts executed by
Parent pursuant to this Agreement;


 


(c)                                  a certificate
of the Secretary or Assistant Secretary of Purchaser certifying as to (A) (1) the
certificate of incorporation of Purchaser and (2) certificate of good
standing of Purchaser, in each case certified not later than ten (10) days
prior to the Closing Date by the Secretary of State of the State of Delaware,
(B) the by-laws of Purchaser, and (C) resolutions of the board of
directors of Purchaser, authorizing and approving the execution, delivery and
performance by Purchaser of this Agreement and any other Contracts executed by
Purchaser pursuant to this Agreement;


 


(d)                                 a certificate
duly executed by an authorized officer of Purchaser that the condition set
forth in Section 7.3(a) have been satisfied; and


 


(e)                                  the Phase II
Environmental Site Assessment of the Owned Real Property prepared on behalf of
Purchaser by HDR/e2M, dated August 26,
2010.


 


ARTICLE VIII


 


POST-CLOSING COVENANTS


 


Section 8.1                                      Further
Assurances.  Purchaser
and Seller agree to (a) furnish upon request to each other such further
information, (b) execute and deliver to each other such other documents,
and (c) do such other acts and things, as the other Party may reasonably
request for the purpose of carrying out the intent of this Agreement and the
documents referred to in this Agreement.


 


Section 8.2                                      Books and
Records.  For a period of seven (7) years
from the Closing Date:


 


(a)                                  Purchaser
shall, and shall cause the Company to, provide Seller and Seller’s authorized
agents or independent contractors access to the personnel, representatives,
attorneys, accountants, properties, books and records of the Company upon
reasonable advance written notice during regular business hours for the purpose
of obtaining information respecting any matter, issue, claim or proceeding
arising from, in connection with, or relating to, this Agreement or any
transaction contemplated hereby, 


 


30

















 


and will permit Seller and
Seller’s authorized agents or independent contractors to make copies,
compilations or extracts of any such information; and


 


(b)                                 Seller shall
provide Purchaser and Purchaser’s authorized agents or independent contractors
access to the books and records of Seller directly pertaining to the Company
upon reasonable advance written notice during regular business hours for the
purpose of obtaining information and will permit Purchaser and Purchaser’s
authorized agents or independent contractors to make copies, compilations or
extracts of any such information.


 


Section 8.3                                      Employees;
Employees Benefit Plans. 
Purchaser shall have no obligation to continue the employment of any
Company employee on any term or condition after the Closing Date.  Purchaser acknowledges that Bill Alford shall
not continue in the employ of the Company following the Closing Date.  Following the Closing Date, Purchaser shall
cause the Company to continue to make available to Company employees and their
respective eligible dependents all employee benefits and compensation plans,
programs and arrangements (other than post-retirement medical and
post-retirement life coverage and a defined benefit pension plan) that are
available to similarly-situated, eligible employees under the employee benefits
and compensation plans, programs and arrangements sponsored or maintained by
Purchaser or its Affiliate (the “Purchaser Plans”)). Purchaser shall
ensure that the Purchaser Plans grant to each such Company employee or eligible
dependent, as the case may be, full credit for all service or employment with,
or recognized by, the Company or Seller in connection with a Benefit Plan for
purposes of eligibility, participation and vesting with respect to any
Purchaser Plan that is an employee pension benefit plan as defined in ERISA § 3(2) and
for purposes of eligibility, participation and determining the amount of any
benefit with respect to any Purchaser Plan that is a vacation or other program
that is affected by seniority and any Purchaser Plan that is an employee
welfare benefit plan as defined in ERISA § 3(1).  Purchaser shall cause the Company to continue
responsibility for the vacation time benefits due to the Company employees as
of the Closing Date.  Purchaser shall
cause the Company to pay severance benefits to any Company employee
involuntarily terminated by the Company or any of its Affiliates within twelve
(12) months following the Closing Date in an amount which is equal to the
greater of (i) the aggregate amount of severance benefits which would have
been payable to such employee as of such employee’s termination date under the
Company’s severance policy or plan currently in effect, or (ii) the
aggregate amount of severance benefits payable to such employee under any
severance policy or plan of the Company or any of its Affiliates which are in
effect on the date such employee shall receive notice of termination, in each
case granting full credit for all service or employment of such employee by the
Company.  As of and after the Closing
Date, Seller shall maintain sole responsibility for any liabilities related to
the Seller’s Retained Liabilities.  As of
and after the Closing Date, Purchaser shall assume all responsibility with
respect to Company “qualified beneficiaries” whose “qualifying event” (each
within the meaning of Code Section 4980B) occurs after the Closing.


 


Section 8.4                                      Litigation
Support and Products Liability Claims.


 


(a)                                  In the event
and for so long as Purchaser or Seller actively is contesting or defending
against any action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand (including, without limitation, any Products Liability Claim
and any 


 


31

















 


proceeding that is a Seller’s
Retained Liability) in connection with any fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction prior to the Closing Date involving
Seller, Purchaser or the Company, each of Seller, Purchaser or the Company, as
applicable, shall (a) reasonably cooperate with the contesting or
defending Party and its counsel, (b) as applicable, make reasonably
available their employees to provide testimony, to be deposed, to act as
witnesses and to assist counsel, and (c) provide reasonable access to its
books and records as shall be necessary in connection with the defense or
contest; provided that the contesting or
defending Party shall pay the out-of-pocket expenses reasonably incurred by the
Party so cooperating, excluding salary, wages, benefit, other compensation or
Taxes attributable to its own employees (unless the contesting or defending
Party is entitled to indemnification from such Party under Article X);
provided, further, however, that Seller shall not have to pay any such
out-of-pocket expenses of Purchaser, Parent or the Company when contesting or
defending a Products Liability Claim.


 


(b)                                 If Purchaser,
Parent or the Company becomes aware of a Products Liability Claim, Purchaser
shall promptly give written notice thereof to Seller, including any information
Purchaser possesses about such Products Liability Claim.  Seller (with counsel selected by Seller and
reasonably acceptable to Purchaser, such acceptance not to be unreasonably
withheld, conditioned or delayed) shall be entitled to contest or defend any
Products Liability Claim. Seller shall have the right to compromise and settle
all matters related to any Products Liability Claim, except to the extent that
such settlement would involve relief other than monetary relief. Seller shall
from time to time apprise Purchaser of the status of any Products Liability
Claim and shall furnish Purchaser with such documents and information filed or
delivered in connection with such Products Liability Claim as Purchaser may
reasonably request.  Subject to Article X,
(i) until the Deductible is reached, Purchaser or the Company shall pay or
reimburse Seller for all amounts related to the settlement or resolution of any
Products Liability Claim (including attorneys’ fees, court costs, costs of
investigation and other costs of defense), and (ii) Seller shall pay all
amounts related to the settlement or resolution of any Products Liability Claim
(including attorneys’ fees, court costs, costs of investigation and other costs
of defense) in excess of the Deductible. Notwithstanding anything herein
stated, Purchaser shall at all times have the right to participate in such
defense at its own expense directly or through counsel; provided
that Purchaser shall not interfere in any manner with Seller’s defense. Until
such time as Seller has delivered a notice of intent to defend a Products
Liability Claim to Purchaser, Purchaser shall, at the expense of Seller,
undertake the defense of (with counsel selected by Purchaser and reasonably
acceptable to Seller, such acceptance not to be unreasonably withheld,
conditioned or delayed) such Products Liability Claim, and shall have the right
to compromise or settle such Products Liability Claim with the prior written
consent of Seller.


 


(c)                                  Following the
Closing, the Company will maintain responsibility, and retain liability, for
product warranty claims, subject to the indemnity
obligations of Seller in this Agreement.


 


32

















 


Section 8.5                                      Used Oil Sump
Closure and Remediation.


 


(a)                                  Promptly following the
Closing and subject to the conditions set forth in this Section 8.5,
Seller shall close the sump located in the used oil storage shed and shall
remediate the release of petroleum hydrocarbons from the sump identified by
Purchaser’s pre-closing investigation in accordance with applicable
Environmental Laws (the “Work”). 
Upon completion of the Work, Seller shall repair and restore disturbed
areas with like materials.  Seller shall
perform the Work diligently and in a workmanlike manner in accordance with
applicable laws and regulations.  Subject
only to applicable legal restrictions, Seller may elect in its sole discretion
to close the sump in place or to remove the sump.  Seller may remediate the petroleum release
using the least restrictive remediation standards applicable to the release,
including risk-based standards applicable to properties with a continuing
industrial use.  Purchaser shall
cooperate fully with Seller’s closure and remediation activities and, if
requested by Seller, shall record in the deed records  or state
registry of environmental covenants, if applicable, such engineering and
institutional controls as reasonably proposed by Seller to complete the
remediation, provided that such engineering and institutional controls shall
not prevent future development of the Owned Real Property for industrial
purposes.  A prohibition on future use of
ground water from the Owned Real Property shall be deemed reasonable
engineering and institutional controls under the immediately preceding
sentence.  Following the Closing,
Purchaser shall, and shall cause the Company to, grant Seller and its
authorized agents and representatives access to the Owned Real
Property as reasonably required by Seller to perform the Work, provided
that Seller shall take reasonable steps to avoid undue interference with the
ongoing operations of the Company. 
Seller shall keep Purchaser reasonably informed as to the progress of
the Work and shall provide to Purchaser Seller’s work plan, Seller’s closure
report and any approvals from or other material correspondence with any
Governmental Entity relating to the Work.  Seller’s right of
access and its obligation to perform the Work shall continue until such
time as Seller receives written approval of Seller’s report of
the sump closure and remediation from the appropriate Governmental Entity
or other confirmation reasonably satisfactory to Seller and Purchaser that
no further action is required by Environmental Law to complete the
Work.  Seller shall not have the
authority to enter into settlements or consent orders in connection with the
Work, but, to the extent that any settlement or consent order is reasonably
required to complete the Work or any portion thereof, Purchaser shall cause the
Company to execute any such settlement or consent order.


 


(b)                                 With respect to any Response
Action for which Seller has an indemnification obligation pursuant to this
Agreement, Purchaser shall promptly give written notice thereof to Seller,
including any information Purchaser possesses about such Response Action.  Seller (with counsel and environmental
consultants and engineers selected by Seller and reasonably acceptable to
Purchaser, such acceptance not to be unreasonably withheld, conditioned or
delayed) shall be entitled to control the process related to such Response
Action, including correspondence and dialogue with any Governmental
Entity.  Seller shall perform any such
Response Action diligently and in a workmanlike manner in accordance with
applicable laws and regulations.  Seller
may remediate any Response Action using the least restrictive remediation
standards applicable to comply with Environmental Law, including risk-based
standards applicable to properties with a continuing industrial use.  Purchaser shall cooperate fully with Seller’s
control of any such Response Action and, if requested by Seller, shall record
in the deed records  or state registry of environmental
covenants, if applicable, such engineering 


 


33

















 


and
institutional controls as reasonably proposed by Seller to complete the
remediation, provided that such engineering and institutional controls shall
not prevent future development of the Owned Real Property for industrial
purposes.  Purchaser shall, and shall
cause the Company to, grant Seller and its authorized agents and
representatives access to the Owned Real Property as reasonably
required by Seller in connection with any Response Action for which Seller has
an indemnification obligation pursuant to this Agreement, provided that Seller
shall take reasonable steps to avoid undue interference with the ongoing
operations of the Company.  Seller shall
keep Purchaser reasonably informed as to the progress thereof and shall provide
to Purchaser Seller’s work plan, Seller’s closure report and any approvals from
or other material correspondence with any Governmental Entity relating to the
Response Action.  Until such time as Seller has delivered a notice of
intent to control a Response Action to Purchaser, Purchaser shall, at the expense
of Seller, undertake the Response Action (with counsel selected by Purchaser
and reasonably acceptable to Seller, such acceptance not to be unreasonably
withheld, conditioned or delayed).


 


Section 8.6                                      Covenant Not to
Compete and Not to Solicit.  As an inducement for Purchaser to enter into
this Agreement, Seller covenants and agrees that (a) from and after the
Closing, and continuing for the lesser of five (5) years from the Closing
Date or the longest time permitted by applicable law, Seller shall not,
directly or indirectly, control, manage, operate, participate or engage in any
business, or own any interest in, any Person or any other form of business
entity, whether as a proprietor, partner, shareholder, joint venturer, trustee,
or in any other capacity whatsoever, if such entity is engaged, in the United
States, in the Competitive Business; and (b) for twelve (12) months from
the Closing Date, Seller shall not solicit for employment, recruit or employ
any employee of the Company or Purchaser, or otherwise persuade or attempt to
persuade any Person to leave the employ of the Company or Purchaser; provided,  however, that
this Section 8.6(b) shall not prohibit Seller from (x) engaging
in any general advertising or general solicitation not targeted specifically to
the Company’s or Purchaser’s employees (including general advertising via
periodicals, the Internet and other media) or (y) soliciting for
employment or recruiting any employee of the Company or Purchaser who has
provided the Company or Purchaser, as applicable, with a notice of termination
of employment..  Notwithstanding the
foregoing, nothing contained in this Agreement shall restrict Seller or its
Affiliates from: (i) owning five percent (5%) or less of the equity
securities of any Person in competition with Purchaser, which securities are
listed on any national securities exchange or authorized for quotation on the
Automated Quotations System of the National Association of Securities Dealers, Inc.,
as long as such party has no other business relationship, direct or indirect,
with the issuer of such securities, or (ii) acquiring (whether by stock
purchase, asset purchase, merger, consolidation or otherwise) any Person whose
revenues attributable to the Competitive Business do not exceed ten percent
(10%) of the aggregate revenues of such Person. 
If the final judgment of a court of competent jurisdiction declares that
any term or provision of this Section 8.6 is invalid or
unenforceable, the parties hereto agree that the court making the determination
of invalidity or unenforceability will have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or
phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement will be enforceable as so modified after the expiration of the
time within which the judgment may be appealed. 
Seller hereby agrees that Purchaser, in addition to any other remedies
available to it, may seek preliminary and permanent injunctive 


 


34

















 


relief against any breach or threatened breach by
Seller of any of the covenants contained in this Section 8.6,
subject to equitable principles applied by a court of competent
jurisdiction.  The terms of the foregoing
obligations shall be extended for a period equal to the period of any breaches
of such obligations by Seller.


 


Section 8.7                                      Heat Treat
Machine.  Purchaser shall notify Seller
in writing when the Heat Treat Machine has been installed and accepted by the
Company and the Company has made the final payment for the Heat Treat Machine.  Upon receipt of such notice (which shall
include proof of final payment), Seller shall pay to Purchaser $267,500.00
within ten (10) Business Days.


 


ARTICLE IX


 


TERMINATION


 


Section 9.1                                      Termination.  This Agreement may be terminated by the
Parties at any time prior to the Closing as follows:


 


(a)                                  Purchaser and
Seller may terminate this Agreement by mutual written consent at any time prior
to the Closing;


 


(b)                                 Purchaser may
terminate this Agreement by giving written notice to Seller at any time prior
to the Closing, if, by October 15,  2010 (the “Outside
Date”), the conditions set forth in Section 7.1 are not
satisfied, complied with or performed (unless such failure of satisfaction,
compliance or performance is the result, directly or indirectly, in whole or in
part, of any action or failure to act on the part of Purchaser or Parent), and
Purchaser has not waived such failure of satisfaction, compliance or
performance;


 


(c)                                  Seller may
terminate this Agreement by giving written notice to Purchaser at any time
prior to the Closing, if, by the Outside Date, the conditions set forth in Section 7.3
are not satisfied, complied with or performed (unless such failure of
satisfaction, compliance or performance is the result, directly or indirectly,
in whole or in part, of any action or failure to act on the part of Seller),
and Seller has not waived such failure of satisfaction, compliance or
performance;


 


(d)                                 Purchaser may
terminate this Agreement by giving written notice to Seller at any time prior
to the Closing if Seller has materially breached or failed to comply with its
warranties, representations or covenants or the warranties, representations or
covenants regarding the Company under this Agreement such that the condition
set forth in Section 7.1(a) would not reasonably be expected
to be satisfied, and such breach or failure to comply is not cured within a
period of thirty (30) calendar days after Purchaser gives written notice to
Seller of such breach or failure to comply; or


 


(e)                                  Seller may
terminate this Agreement by giving written notice to Purchaser at any time
prior to the Closing, if Purchaser has materially breached or failed to comply
with its warranties, representations or covenants under this Agreement such
that the condition set forth in Section 7.3(a) would not
reasonably be expected to be satisfied, and such breach or failure to comply is
not cured within a period of thirty (30) calendar days after Seller gives
written notice to Purchaser of such breach or failure to comply.


 


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Section 9.2                                      Effect of
Termination.  Termination of this Agreement
pursuant to this Article IX shall terminate all liabilities and
obligations of the Parties, except for the obligations under the penultimate
sentence of Section 6.3, Section 6.9, this Section 9.2,
Article XII and the Confidentiality Agreement, provided,
however, that nothing in this Section 9.2 shall relieve
or limit the liability hereunder of one Party (the “Defaulting Party”)
to the other Party on account of a breach of a covenant contained herein by the
Defaulting Party. In the case of such a breach, in addition to any damages for
which the Defaulting Party may be liable, the Defaulting Party shall reimburse
the other Party for any expenses incurred by it to enforce its rights under
this Agreement (including reasonable attorneys’ fees and expenses).


 


ARTICLE X


 


INDEMNIFICATION


 


Section 10.1                                Indemnification.


 


(a)                                  Subject to the
limitations set forth in this Article X, Seller agrees from and
after the Closing Date to indemnify, defend and hold harmless Purchaser and its
officers, managers, directors, shareholders, members, Affiliates, employees and
agents (the “Purchaser Indemnified Persons”) from and against any Losses
incurred by such Purchaser Indemnified Persons arising out of or resulting from
(i) any breach by Seller of any representation or warranty of Seller
contained in Article III or Article IV of this
Agreement, and (ii) any breach by Seller or the Company of any covenant of
Seller or the Company contained in this Agreement; provided,
in each case, that the relevant Purchaser Indemnified Person has submitted to
Seller a Notice of Claim or Third-Party Notice, as applicable, in respect
thereof prior to the date of expiration of the applicable survival period
specified in Section 10.4 (each, a “Purchaser Indemnification
Claim”).


 


(b)                                 Subject to the
limitations set forth in this Article X, Seller further agrees from
and after the Closing Date to indemnify, defend and hold harmless the Purchaser
Indemnified Persons from and against any Losses incurred by such Purchaser
Indemnified Persons arising out of or resulting from (i) the Seller’s
Retained Liabilities and (ii) any products liability claim received in
writing by the Company prior to the second anniversary of the Closing Date, but
only if such claim relates to a product shipped by the Company prior to the
Closing (each, a “Products Liability Claim”).


 


(c)                                  Subject to the
limitations set forth in this Article X, Purchaser and Parent,
jointly and severally, agree from and after the Closing Date to indemnify,
defend and hold harmless Seller, the Company and their respective officers,
managers, directors, shareholders, members, Affiliates, employees and agents
(the “Seller Indemnified Persons”) from and against any Losses incurred
by the Seller Indemnified Persons arising out of or resulting from (i) any
breach by Purchaser or Parent of any representation or warranty of Purchaser or
Parent contained in Article V of this Agreement, (ii) any
breach by Purchaser or Parent of any covenant contained in this Agreement; provided, in each case, that the relevant Seller Indemnified
Person has submitted to Purchaser and Parent a Notice of Claim or Third-Party
Notice, as applicable, in respect thereof prior to the date of expiration of
the applicable survival period specified in Section 10.4.


 


36
















 


Section 10.2                                Procedures for
Indemnification. 


 


(a)                                  If any
Purchaser Indemnified Person or Seller Indemnified Person (each, an “Indemnified
Person”) claims indemnification hereunder for any claim (other than a
third-party claim) for which indemnification is provided in Section 10.1,
the Indemnified Person shall promptly give written notice (a “Notice of
Claim”) to Seller, on the one hand, or Purchaser and Parent, on the other
hand, setting forth the basis for such claim and the nature and estimated
amount of the claim, all in reasonable detail. If Seller, on the one hand, or
Purchaser and Parent, on the other hand, dispute any claim set forth in the
Notice of Claim, it or they, as applicable, may at any time deliver to the
Indemnified Person that gave the Notice of Claim a written notice indicating
its or their dispute (an “Objection Notice”).


 


(b)                                 If an
Indemnified Person claims indemnification hereunder arising from any claim or
demand of a third-party for which indemnification is provided in Section 10.1,
the Indemnified Person shall promptly give written notice (a “Third-Party
Notice”) to Seller, on the one hand, or Purchaser and Parent, on the other
hand (each, an “Indemnifying Person”), of the basis for such claim and
setting forth the nature of the claim or demand, all in reasonable detail. The
Indemnifying Person, upon notice to the Indemnified Person, may at any time
after receiving a Third-Party Notice, at its own cost (with counsel selected by
the Indemnifying Party and reasonably acceptable to the Indemnified Person),
defend any claim or demand set forth in a Third-Party Notice. The Indemnifying
Person shall have the right to compromise and settle all indemnifiable matters
related to claims by third parties that are susceptible to being settled, except
to the extent that such settlement would involve relief other than monetary
damages. The Indemnifying Person shall from time to time apprise the
Indemnified Person of the status of the claim, liability or expense and any
resulting suit, proceeding or enforcement action and shall furnish the
Indemnified Person with such documents and information filed or delivered in
connection with such claim, liability or expense as the Indemnified Person may
reasonably request. The Indemnified Person shall not admit any liability to or
settle any claim with any third-party in connection with any matter which is
the subject of a Notice of Claim and shall cooperate fully in the manner
requested by the Indemnifying Person in the defense of such claim.
Notwithstanding anything herein stated, the Indemnified Person shall at all
times have the right to fully participate in such defense at its own expense
directly or through counsel. Until such time as the Indemnifying Person has
delivered a notice of intent to defend a third-party claim to the Indemnified
Person, the Indemnified Person shall, at the expense of the Indemnifying
Person, undertake the defense of (with counsel selected by the Indemnified
Person and reasonably acceptable to the Indemnifying Person) such claim, liability
or expense, and shall have the right to compromise or settle such claim,
liability or expense with the prior written consent of the Indemnifying Person.


 


Section 10.3                                Construction of
Representations and Warranties.  For purposes of determining whether a breach
has occurred and calculating Losses in connection with a claim for
indemnification under this Article X, each of the representations
and warranties that contains any qualifications as to “materiality” or “Material
Adverse Effect” shall be deemed to have been given as though there were no such
qualifications, and any such qualifications shall be 


 


37

















 


disregarded for purposes of this Article X;
provided, however,
that notwithstanding the foregoing, for purposes of determining whether a
breach has occurred of a representation or warranty contained in Sections
4.5, 4.14 and 4.18, such representations and warranties shall
be deemed to have been given as drafted and to include, for purposes of this Article X,
all qualifications as to “materiality” or “Material Adverse Effect.”


 


Section 10.4                                Limitations on
Indemnification.


 


(a)                                  Except as set
forth below, all representations and warranties of Seller, the Company and
Purchaser under this Agreement will survive the Closing until, and will expire
at 5:00 p.m. Central Time upon, the date that is eighteen (18) months from
the Closing Date.  All Fundamental
Representations will survive the Closing indefinitely.  The representations and warranties contained
in Section 4.9 (Tax Matters) and Section 4.13 (Employee
Benefits) will survive the Closing until thirty (30) days following the
expiration of the respective statute of limitations. The representations and
warranties contained in Section 4.10 (Environmental Matters) will
survive the Closing until the fifth anniversary of the Closing Date. All
covenants requiring performance by any Party after the Closing shall survive
the Closing in accordance with their terms.


 


(b)                                 Seller’s
aggregate liability to Purchaser Indemnified Persons for indemnification
(including costs incurred in the defense of such claim) under Section 10.1(a)(i) shall
not exceed $5,000,000  (the “Cap
Amount”); provided, however,
that in no event shall the limitation set forth in this Section 10.4(b) apply
to Losses arising out of or resulting from breaches of any of the Fundamental
Representations, which shall be subject to an aggregate limitation of the Final
Purchase Price as to all such breaches; and provided further,
that Seller’s aggregate liability to Purchaser Indemnified Persons for breaches
of the representations or warranties under Section 4.10 shall not
exceed eighty percent (80%) of the Cap Amount, which when combined with all
other liabilities under Section 10.1(a)(i) shall not exceed
$5,000,000.


 


(c)                                  No Purchaser
Indemnified Person shall be entitled to indemnification pursuant to Section 10.1(a)(i) or
Section 10.1(b)(ii) unless and until the aggregate Losses
incurred by all Purchaser Indemnified Persons in respect of all claims under Section 10.1(a)(i) and
Section 10.1(b)(ii) collectively exceed $250,000 (the “Deductible”),
whereupon Purchaser Indemnified Persons shall only be entitled to
indemnification hereunder (subject to the other provisions of this Article X)
from Seller for all such Losses incurred by Purchaser Indemnified Persons in
excess of the Deductible; provided, however, that in no event shall the limitations set forth in
this Section 10.4(c) apply to Losses arising out of or
resulting from breaches of any of the Fundamental Representations.


 


(d)                                 The amount of
any Losses for which indemnification is provided for under this Agreement shall
be reduced by (i) any insurance proceeds or other amounts actually
recovered by the Indemnified Person from third parties with respect to such Losses,
and (ii) any Tax benefit actually realized by the Indemnified Person from
the incurrence or payment of any such Losses (where “actually realized” for
purposes of this Section 10.4(d)(ii) includes such Tax benefit
as calculated on a stand-alone separate return basis for the Company).  In valuing a Loss, no adjustment shall be
made as a result of any 


 


38

















 


multiple, increase factor,
or any other premium over book value which may have been paid by Purchaser for
the Outstanding Stock whether or not such multiple, increase factor or other
premium had been used by Purchaser at the time of, or in connection with,
determining the purchase price for the Outstanding Stock.


 


(e)                                  The Indemnified
Person agrees to take all reasonable actions to mitigate all Losses and to
timely make and diligently pursue any claims for insurance, Tax benefits and/or
other payments available from third parties with respect to Losses for which it
will seek indemnification hereunder.  To
the extent an Indemnifying Person indemnifies the Indemnified Person with
respect to any Loss that is later mitigated by any insurance, Tax benefits
and/or other payments from third parties, the amount of such mitigation shall
be returned to the Indemnifying Person.


 


(f)                                    The
Indemnifying Person shall be subrogated to the Indemnified Person’s rights of
recovery to the extent of any Losses satisfied by the Indemnifying Person. The
Indemnified Person shall execute and deliver such instruments and papers as are
necessary to assign such rights and assist in the exercise thereof, including
access to the books and records of the Company.


 


(g)                                 No claim for
indemnification may be made by a Purchaser Indemnified Person and no
indemnification shall be required to the extent that (i) the Losses
sustained or incurred by such Purchaser Indemnified Person for which
indemnification is sought were accrued or included as current liabilities for
purposes of computing the Final Working Capital, or (ii) such Losses are
due to Purchaser or the Company filing a Tax Return, or taking a position for
Tax purposes, that is inconsistent with a position taken on a Tax Return for a
Pre-Closing Tax Period, unless the position taken by Purchaser or the Company
is required by any applicable Legal Requirement subject to the consent of
Seller that will not be unreasonably withheld or delayed.


 


(h)                                 Other than with
respect to third-party claims, neither Seller, on the one hand, nor Purchaser
or Parent, on the other hand, shall have any obligation to indemnify any other
Party or their respective Indemnified Persons from and against consequential
damages, incidental damages, indirect damages, punitive damages, diminution in
value or lost profits; provided, however, that any claim brought or asserted by any bona fide
purchaser of all or any portion of the Owned Real Property shall not be
considered a third-party claim.


 


(i)                                     The
indemnification provisions provided in this Article X are in
addition to, and not in derogation of, any statutory, equitable, or common law
remedy that an Indemnified Person may have for breach of any representation,
warranty, covenant or agreement; provided, however,
in the absence of fraud, the limitations on rights of indemnification set forth
in this Article X shall apply to such remedies.  For the avoidance of doubt, nothing contained
in this Article X shall limit the rights, remedies or claims of any
Party with respect to any actual fraud or willful misconduct in connection with
the transaction contemplated by this Agreement by any Party hereto.


 


(j)                                     Purchaser will
have no liability to Seller Indemnified Persons for indemnification (including
costs incurred in the defense of such claims) under Section 


 


39

















 


10.1(c)(i) unless and
until the aggregate Losses incurred by all Seller Indemnified Persons in
respect of such claims collectively exceed $250,000, whereupon Seller
Indemnified Persons shall only be entitled to indemnification hereunder
(subject to the other provisions of Article X) from Purchaser for
all such Losses incurred by Seller Indemnified Persons in excess of such
amount.  Purchaser’s aggregate liability
to Seller Indemnified Persons for indemnification (including costs incurred in
the defense of such claims) under Section 10.1(c)(i) shall not
exceed $5,000,000.


 


(k)                                  Subject to the
limitations set forth in this Article X, the amount of any Losses
for which indemnification is provided under Section 10.1(a)(i) of
this Agreement with respect to any breach of representations contained in Section 4.10,
shall include those Losses incurred by Purchaser Indemnified Parties with
respect to any environmental investigation, monitoring, cleanup, containment,
restoration, removal or other corrective or response action (collectively “Response
Actions”) as the result of a release of Hazardous Substances on or from the
Owned Real Property, to the extent such Response Action is required by
Environmental Law for the continued industrial use of the Owned Real Property; provided, however, that Seller shall have no obligation to
indemnify any Purchaser Indemnified Party with respect to any Response Action
arising from any conditions of contamination unless identified through any
environmental sampling or analysis by or on behalf of the Company or any
Purchaser Indemnified Party which is (i) affirmatively required by
Environmental Laws or (ii) reasonably necessary for the prudent
environmental management of the Owned Real Property, including the lawful
conduct of a site development or construction project, without regard to the
availability of indemnification hereunder. 
The foregoing shall not restrict a prospective bona fide purchaser of
the Owned Real Property from performing a Phase II Environmental Site
Assessment of the Property (“Phase II ESA”); provided
that Seller shall have no obligation to indemnify any Purchaser Indemnified
Party with respect to any Response Action arising from conditions of
contamination identified through the Phase II ESA unless (i) all
information and reports concerning the environmental condition of the Owned
Real Property in the possession or control of Purchaser Indemnified Parties or
the Company (“Environmental Documents”) shall have been provided to the
bona fide purchaser prior to the Phase II ESA, and (ii) the scope of the
bona fide purchaser’s Phase II ESA shall have been reasonably related to areas
of environmental concern identified in the Environmental Documents or any
Recognized Environmental Condition identified in any Phase I Environmental Site
Assessment prepared for the bona fide purchaser in accordance with 40 CFR Part 312.  As used in this Section 10.4(k), “Environmental
Documents” shall consist of those documents listed in Schedule 10.4(k);
and “Recognized Environmental Conditions” shall have the meaning set
forth in ASTM E1527-05, Standard Practice for Phase I Environmental Site
Assessment Process.


 


Section 10.5                                Adjustments to
Final Purchase Price.  All
payments under this Article X shall be treated as adjustments to
the Final Purchase Price, unless otherwise required by applicable Legal
Requirements.


 


40

















 


ARTICLE XI


 


TAX MATTERS


 


Section 11.1                                Tax Returns.


 


(a)                                  Seller shall
prepare and cause to be filed all Tax Returns of the Company for all Tax
periods ending on or before the Closing Date. 
Seller shall deliver to Purchaser for its review a draft of each Tax
Return of the Company to be filed after the Closing Date that may give rise to
any Tax liability of the Company for which Seller is not liable under this
Agreement not fewer than sixty (60) days before the deadline for filing such
Tax Return, including extensions. 
Purchaser shall notify Seller in writing if it objects to any portion of
the draft Tax Return within thirty (30) days after the draft Tax Return is
delivered to Purchaser.  If Seller does
not receive a written objection (specifying in detail the nature of such
objection) by the end of the thirty (30) day period, Seller may file the Tax
Return and such Tax Return shall be deemed final and binding as between the
Parties.  If Purchaser notifies Seller
that it objects to any portion of the draft Tax Return (specifying in detail
the nature of such objection) on or before the end of the thirty (30) day period,
Purchaser and Seller shall attempt to mutually resolve any disagreements in
good faith regarding such draft Tax Return. 
Any disagreements regarding the draft Tax Returns that are not resolved
within an additional ten (10) day period by Seller and Purchaser shall be
resolved by the Designated Accounting Firm, whose decision shall be final and
whose fees shall be shared equally by Seller and Purchaser.  The Tax Returns that are subject to any
disagreement shall not be filed until such disagreement is resolved; provided that if such Tax Returns must be filed in order to
avoid a penalty, such Tax Returns may be filed as prepared (with any changes to
which Seller and Purchaser agree prior to the date of filing reflected
therein), and if further changes are agreed upon or required by the Designated Accounting
Firm, then Seller shall amend such Tax Returns promptly to reflect such
changes.  Purchaser shall cause the
Company to cooperate fully and promptly in connection with Seller’s preparation
of and the filing of all Tax Returns under this Section 11.1(a).


 


(b)                                 Except as
provided in Section 11.1(a), Purchaser shall cause the Company to
prepare and file all Tax Returns of the Company due after the Closing
Date.  Purchaser shall deliver to Seller
for its review a draft of each Tax Return of the Company to be filed after the
Closing Date that may give rise to any Tax liability of the Company for which
Seller is liable under this Agreement not fewer than sixty (60) days before the
deadline for filing such Tax Return, including extensions.  Seller shall notify Purchaser in writing if
it objects to any portion of the draft Tax Return within thirty (30) days
after the draft Tax Return is delivered to Seller.  If Purchaser does not receive a written
objection by the end of the thirty (30) day period, Purchaser may file the
Tax Return.  If Seller notifies Purchaser
that it objects to any portion of the draft Tax Return on or before the end of
the thirty (30) day period, Purchaser and Seller shall attempt to mutually
resolve any disagreements in good faith regarding such draft Tax Return.  Any disagreements regarding the draft Tax
Returns that are not resolved within an additional ten (10) day period by
Seller and Purchaser shall be resolved by the Designated Accounting Firm, whose
decision shall be final and whose fees shall be shared equally by Seller and 


 


41

















 


Purchaser.  The Tax Returns that are subject to any
disagreement shall not be filed until such disagreement is resolved; provided that if such Tax Returns must be filed in order to
avoid a penalty, such Tax Returns may be filed as prepared (with any changes to
which Seller and Purchaser agree prior to the date of filing reflected
therein), and if further changes are agreed upon or required by the Designated Accounting
Firm, then Purchaser shall amend such Tax Returns promptly to reflect such
changes.


 


Section 11.2                                Liability for
Taxes.  Within thirty (30) Business
Days after Seller receives a written request from Purchaser, Seller shall
reimburse Purchaser or the Company for all Taxes of the Company for any
Pre-Closing Tax Period and for Seller’s portion (as determined under Section 11.3)
of all Taxes of the Company for any Tax period that begins before the Closing
Date and ends after the Closing Date (a “Straddle Period”) to the extent
such Taxes are not included as a current liability for purposes of computing
the Final Working Capital (but excluding any and all Taxes incurred by the
Company as a result of the Section 338 Election).  Purchaser shall be responsible for all Taxes
of the Company for any Post-Closing Tax Period and for its portion (as
determined under Section 11.3) of all Taxes of the Company for any
Straddle Period.


 


Section 11.3                                Apportionment
of Taxes.


 


(a)                                  With respect to
any Straddle Period, the Taxes of the Company attributable to such Straddle
Period shall be apportioned between the portion of the Straddle Period that
begins on the first day of the Straddle Period and ends on the Closing Date
(the “Pre-Closing Straddle Period”), which portion shall be the
responsibility of Seller (to the extent provided in Section 11.2),
and the portion of the Straddle Period that begins on the day immediately
following the Closing Date and ends on the last day of the Straddle Period (the
“Post-Closing Straddle Period”), which portion shall be the
responsibility of Purchaser.


 


(b)                                 In the case of
income Taxes, sales and use Taxes, and Taxes based on gross or net receipts or
payments, the portion of the Tax allocated to the Pre-Closing Straddle Period
shall equal the amount that would be payable if the Straddle Period ended on
the last day of the Pre-Closing Straddle Period by means of closing the books
and records of the Company as of the last day of the Pre-Closing Straddle
Period; provided that all permitted allowances,
exemptions and deductions that are normally computed on the basis of an entire
year or period (such as depreciation and amortization deductions) shall accrue
on a daily basis and shall be allocated between the Pre-Closing Straddle Period
and the Post-Closing Straddle Period in proportion to the number of days in
each such period.  Taxes of the Company
shall be calculated on a stand-alone separate return basis.


 


(c)                                  In the case of
Taxes not described in Section 11.3(b), the portion of the Tax
allocated to the Pre-Closing Straddle Period shall equal the amount of Tax for
the entire Straddle Period multiplied by the ratio of the number of days during
the Pre-Closing Straddle Period to the number of days during the entire
Straddle Period.


 


(d)                                 Notwithstanding
the foregoing provisions of this Section 11.3, (i) any
deductions for income Tax purposes that are attributable to the payment of
bonuses, other 


 


42

















 


compensation, the write-off
of capitalized financing fees and any other deductions that arise on the
Closing Date as a result of the transaction contemplated by this Agreement,
shall be taken into account in the Pre-Closing Straddle Period and (ii) Seller
shall be responsible for any Taxes of the Company attributable to the deemed
sale of assets under the Section 338 Election.


 


Section 11.4                                Cooperation.


 


(a)                                  In connection
with the preparation of Tax Returns, audit examinations, and any administrative
or judicial proceedings relating to the Taxes imposed on the Company for all
Pre-Closing Tax Periods, Purchaser and the Company, on the one hand, and
Seller, on the other hand, shall cooperate fully with each other, including
furnishing or making available during normal business hours records, personnel
(as reasonably required), books of account, powers of attorney or other
materials necessary or helpful for the preparation of such Tax Returns, the
conduct of audit examinations or the defense of claims by Governmental Entities
as to the imposition of Taxes.  Purchaser
shall provide Seller, and Seller shall provide Purchaser, with the information
that each is respectively required to report under Section 6043A of the
Code.


 


(b)                                 Purchaser shall
(i) retain all books and records with respect to Tax matters pertinent to
the Company relating to any Pre-Closing Tax Period until the expiration of the
statute of limitations (including any extensions thereof) applicable to such
taxable periods, and to abide by all record retention agreements entered into
with any taxing authority, and (ii) to give to Seller reasonable written
notice prior to transferring, destroying or discarding any such books and
records and, if Seller so requests, Purchaser will allow Seller to take
possession of such books and records.


 


Section 11.5                                Tax Contests.


 


(a)                                  If any
Governmental Entity issues to Purchaser or the Company (i) a notice of its
intent to audit, examine or conduct another proceeding with respect to Taxes or
Tax Returns of the Company for any Pre-Closing Tax Period or (ii) a notice
of deficiency, notice of reassessment, proposed adjustment, assertion of claim
or demand concerning Taxes or Tax Returns of the Company for any Pre-Closing
Tax Period (each, a “Tax Claim”), Purchaser shall notify Seller of the
receipt of such communication from the Governmental Entity and shall deliver a
copy of any such written communication to Seller within five (5) Business
Days after receiving such Tax Claim.


 


(b)                                 Purchaser and
the Company shall control any proceeding relating to any Tax Claim with respect
to Taxes or Tax Returns of the Company (a “Tax Contest”); provided that (i) Seller shall have the right to
participate in any such Tax Contest to the extent it relates to Taxes or a Tax
Return for a Pre-Closing Tax Period and in such case Purchaser and the Company
shall promptly provide Seller with copies of all written communications
relating to the Tax Contest, (ii) Purchaser shall keep Seller informed on
a timely basis regarding the progress of any Tax Contest and consult with
Seller with respect to any issue relating to such Tax Contest that could affect
Seller, and (iii) Purchaser and the Company shall not settle or otherwise
resolve any Tax Contest (or any issue raised in any Tax Contest) if such
settlement or other resolution relates to Taxes 


 


43

















 


for which Seller is liable
under this Agreement without the prior written consent of Seller (which shall
not be unreasonably withheld, conditioned or delayed).


 


(c)                                  At the request
of Seller, Purchaser and the Company shall settle any issue related to Taxes
for any Pre-Closing Tax Period on terms acceptable to Seller and the applicable
Governmental Entity; provided that
(i) Seller shall pay when due all Taxes (and other amounts) for which
Seller is liable under this Agreement as a result of such settlement, and
(ii) the settlement would not result in Purchaser or the Company paying
any increased Taxes for which Seller is not required to fully indemnify
Purchaser or the Company under this Agreement.


 


Section 11.6                                Amended Tax
Returns.  Purchaser shall not file or
cause to be filed any amended Tax Returns covering any period or adjusting any
Taxes for a period that includes any Pre-Closing Tax Period without the prior
written consent of Seller, which consent may not be unreasonably conditioned,
withheld or delayed.  Purchaser shall not
take and shall not cause or permit the Company to take any action that could
increase the liability of Seller for Taxes under this Agreement or otherwise
without the prior written consent of Seller, which consent shall not be
unreasonably withheld or delayed.


 


Section 11.7                                Tax Refunds.  Purchaser and the Company shall cooperate
with Seller in obtaining any Tax refunds for any Pre-Closing Tax Periods.  Any refunds for Taxes of the Company for
Pre-Closing Tax Periods shall be the property of Seller.  If Purchaser or the Company receives a refund
of Taxes that is the property of Seller, Purchaser shall pay the full amount of
the refund to Seller within ten (10) Business Days of the receipt of the
refund.


 


Section 11.8                                338(h)(10) Election.


 


(a)                                  Seller and
Purchaser shall jointly elect under Section 338(h)(10) of the Code
with respect to the purchase of the Outstanding Stock, on IRS Form 8023 or
in such other manner as may be required by the IRS, and shall jointly make an
election in the manner required under any analogous provisions of state, local,
or foreign law (collectively, the “Section 338 Election”).


 


(b)                                 Seller, with
the assistance and cooperation of Purchaser, shall prepare IRS Form 8023 and
all requisite attachments thereto (and all forms under analogous provisions of
state, local, or foreign law) in accordance with Tax laws. Seller shall deliver
such forms and attachments to Purchaser within thirty (30) days after the
Closing Date or at least sixty (60) days prior to the due date for filing,
whichever is the earlier date.  Purchaser
shall execute and return such completed forms and attachments to Seller.


 


(c)                                  Within ninety
(90) days after the Final Purchase Price is finalized under Section 2.4,
Seller shall prepare and deliver to Purchaser schedules (the “Allocation
Schedule”) allocating the aggregate deemed sales price (as defined in
Treasury Regulation Section 1.338-4) among the assets of the Company.  The Allocation Schedule shall be prepared in
accordance with Section 338(h)(10) of the Code and the Treasury
Regulations thereunder.  The Allocation
Schedule shall be deemed to be accepted by and shall be conclusive and binding
on Purchaser unless, within thirty (30) days after the Allocation Schedule is
delivered to Purchaser, Purchaser delivers a written notice to 


 


44

















 


Seller stating each and
every item to which Purchaser objects (it being understood that any amounts not
so disputed shall be final and binding). 
If a change proposed by Purchaser is disputed by Seller, then Seller and
Purchaser shall negotiate in good faith to resolve such dispute.  If, after a period of thirty (30) days
following the date on which Purchaser gives Seller notice of any such proposed
change, any such proposed change still remains disputed, then a determination
regarding the disputed item(s) shall be made by the Designated Accounting
Firm, whose decision shall be final and whose fees shall be shared equally by
Seller and Purchaser. Promptly upon receiving the final Allocation Schedule,
Purchaser and Seller shall return an executed copy thereof to the other such
party.


 


(d)                                 Purchaser and
Seller shall file (or cause to be filed) all federal, state and local income Tax
Returns in accordance with the Allocation Schedule, and shall take no position
contrary thereto or inconsistent therewith (including, without limitation, in
any amended Tax Return or claim for refund, any examination or audit by any
Governmental Entity, or any other proceeding), except to the extent otherwise
required by any Legal Requirement and after written notice thereof to the other
such Party.


 


ARTICLE XII


 


MISCELLANEOUS


 


Section 12.1                                Transaction
Expenses; Transfer Taxes.


 


(a)                                  Purchaser shall
bear all fees and expenses incurred by Purchaser and its Affiliates and
representatives in connection with the negotiation and execution of this
Agreement and each other agreement, document and instrument contemplated by
this Agreement and the consummation of the transaction contemplated hereby and
thereby. Seller shall bear all fees and expenses incurred by Seller or the
Company prior to Closing in connection with the negotiation and execution of
this Agreement and each other agreement, document and instrument contemplated
by this Agreement and the consummation of the transaction contemplated hereby
and thereby.


 


(b)                                 All sales, use,
gross receipts, transfer, intangible, recordation, documentary stamp or similar
Taxes or charges of any nature whatsoever (including any penalties and
interest) (collectively, “Transfer Taxes”), applicable to, or resulting
from, the transaction contemplated by this Agreement, if any, shall be paid by
Purchaser when due, and Purchaser shall, at its own expense, file all necessary
Tax Returns and other documentation with respect to all such Transfer Taxes
and, if required by applicable Legal Requirements, Seller will, and will cause
its Affiliates to, join in the execution of any such Tax Returns and other
documentation.


 


Section 12.2                                Amendments and
Waivers.  This Agreement may be amended
or modified only by a written agreement executed by each of the Company, Seller
and Purchaser. Any right, power or privilege under this Agreement may be waived
only in a writing executed by the Party having such right, power or
privilege.  No other course of dealing
between or among any of the Parties or any delay in exercising any rights
pursuant to this Agreement shall operate as a waiver of any rights of any Party.


 


45

















 


Section 12.3                                Entire
Agreement.  This Agreement, together with the
Confidentiality Agreement, the Access Agreement, the Customer Survey Agreement
and the other agreements referred to herein, constitute the entire agreement
among the Parties with respect to the matters covered hereby and supersedes all
previous written, oral or implied understandings among the Parties with respect
to such matters.


 


Section 12.4                                Successors and
Assigns.  Except as otherwise expressly
provided in this Agreement, all covenants and agreements set forth in this
Agreement by or on behalf of the Parties shall bind and inure to the benefit of
the respective successors and permitted assigns of the Parties, whether so
expressed or not, except that neither this Agreement nor any of the rights,
interests or obligations hereunder may be assigned by Purchaser or Seller
without the prior written consent of the other Party, except that Purchaser may
assign this Agreement and its rights, interests and obligations hereunder to one
of its Affiliates; provided, however, that notwithstanding any such assignment, Purchaser
and Parent shall remain liable to Seller for all of their respective
obligations arising hereunder.


 


Section 12.5                                Governing Law;
Consent to Jurisdiction; Venue; Waiver of Jury Trial.  THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF DELAWARE FOR
CONTRACTS ENTERED INTO AND TO BE PERFORMED IN SUCH STATE WITHOUT GIVING EFFECT
TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF
DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.  THE PARTIES HEREBY IRREVOCABLY SUBMIT TO THE
NON-EXCLUSIVE JURISDICTION OF THE FEDERAL COURTS WITHIN TULSA,  OKLAHOMA, OVER ANY DISPUTE ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTION CONTEMPLATED HEREBY AND EACH PARTY HEREBY
IRREVOCABLY CONSENTS TO THE JURISDICTION OF SUCH COURTS IN ANY ACTION OR
PROCEEDING IN RESPECT OF SUCH DISPUTE. THE PARTIES HEREBY IRREVOCABLY WAIVE ANY
OBJECTION OF VENUE LAID THEREIN.  THE
PARTIES AGREE TO ACCEPT SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER INITIAL
PLEADING MADE IN THE MANNER PROVIDED FOR THE GIVING OF NOTICES IN THIS
AGREEMENT. NOTHING IN THIS SECTION 12.5 HOWEVER, SHALL AFFECT THE
RIGHT OF ANY PARTY TO SERVE SUCH SUMMONS, COMPLAINT OR INITIAL PLEADING IN ANY
OTHER MANNER PERMITTED BY LAW. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.


 


Section 12.6                                Notices.  All demands,
notices, communications and reports provided for in this Agreement shall be in
writing and shall be either sent by facsimile with confirmation to the number
specified below or personally delivered or sent by reputable overnight courier
service (delivery charges prepaid) as follows:


 


46
















 


	
  (a)                                  If to Purchaser or to the
  Company after the Closing to:

  	
   

  	
  Tulsa
  Winch, Inc.

  11135 S. James Ave., P.O. Box 1130

  Jenks, Oklahoma 74037-1130

  Attention: Mr. Steve Oden

  Tel: (918) 298-8312

  Fax: (918) 298-8300

  Email: soden@team-twg.com

  
	
   

  	
   

  	
   

  
	
  If
  to Parent:

  	
   

  	
  Dover
  Industrial Products, Inc.

  3005 Highland Parkway, Suite 200

  Downers Grove, IL 60515

  Attention: Mr. Robert Scheuer

  Tel: (630) 743-2609

  Fax: (630) 743-2674

  Email: rfs@doverip.com

  
	
   

  	
   

  	
   

  
	
  with
  a copy (not constituting notice) to:



  	
   

  	
  Conner &
  Winters, LLP

  4000 One Williams Center

  Tulsa, Oklahoma 74172

  Attention: Mr. R. Kevin Redwine

  Tel: (918) 586-8540

  Fax: (918) 586-8640

  Email: kredwine@cwlaw.com

  
	
   

  	
   

  	
   

  
	
  (b)                                 If to Seller, or to the
  Company prior to the Closing to:

  	
   

  	
  Blount, Inc.

  4909 SE International Way

  Portland, Oregon 97222-4679

  Attention: Mr. Dick Irving

  Tel: (503) 653-4569

  Fax: (503) 789-2027

  Email: rhi@blount.com

  
	
   

  	
   

  	
   

  
	
  with
  a copy (not constituting notice) to:



  	
   

  	
  DLA
  Piper LLP (US)

  203 North LaSalle Street

  Suite 1900

  Chicago, Illinois 60601

  Attention: Stephen A. Landsman

  Tel: (312) 368-4050

  Fax: (312) 630-6330

  Email: stephen.landsman@dlapiper.com

  



 


or
to such other address or fax or telecopy number as such Party may hereafter
specify for the purpose by notice given to the other Parties in accordance with
this Section 12.6. Each such notice, request or other communication
shall be effective (a) if given by facsimile, when such facsimile is
transmitted to the facsimile number specified in this Section 12.6
and the appropriate facsimile confirmation is received, (b) if by
overnight delivery service, with proof of delivery, 


 


47

















 


the
next Business Day, or (c) if delivered personally, when delivered at the
address specified in this Section 12.6.


 


Section 12.7                                Time of the Essence.  Time is of the essence in this
Agreement.  If the date specified for
giving any notice or taking any action is not a Business Day (or if the period
during which any notice is required to be given or any action taken expires on a date which is not a Business Day), then the date for
giving such notice or taking such action (and the expiration date of such
period during which notice is required to be given or action taken) shall be
the next date which is a Business Day.


 


Section 12.8                                Schedules.  The schedules to
this Agreement constitute a part of this Agreement and are incorporated into
this Agreement for all purposes as if fully set forth herein. Any disclosure
made in any schedule to this Agreement shall be deemed to be disclosures made
with respect to all representations, warrants, covenants and schedules
contained in this Agreement, regardless of whether or not a specific cross
reference is made thereto. The disclosure of any item or matter in any schedule
hereto shall not be taken as an indication of the materiality thereof or the
level of materiality that is applicable to any representation or warranty set
forth herein.


 


Section 12.9                                Counterparts.  The Parties may execute this Agreement in
multiple counterparts, each of which will be deemed an original and all of
which, when taken together, will constitute one and the same agreement.  The Parties may deliver executed signature pages to
this Agreement by facsimile or e-mail transmission.  No Party may raise (a) the use of a
facsimile or e-mail transmission to deliver a signature, or (b) the fact
that any signature, agreement or instrument was signed and subsequently
transmitted or communicated through the use of a facsimile or e-mail
transmission as a defense to the formation or enforceability of a contract, and
each Party forever waives any such defense.


 


Section 12.10                          No Third-Party
Beneficiaries.  Except as otherwise expressly
provided in this Agreement, no Person which is not a Party shall have any right
or obligation pursuant to this Agreement, including, without limitation, any
subsequent purchaser of the Owned Real Property.


 


Section 12.11                          No Strict
Construction.  The Parties
acknowledge that this Agreement has been prepared jointly by the Parties, and
shall not be strictly construed against any Party.


 


Section 12.12                          Headings.  The headings used in
this Agreement are for the purpose of reference only and shall not affect the
meaning or interpretation of any provision of this Agreement.


 


* * * * *


 


48

















 


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


 


	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  TULSA
  WINCH, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Steve Oden

  
	
   

  	
  Name:

  	
  Steve
  Oden

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  BLOUNT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard H. Irving, III

  
	
   

  	
  Name:

  	
  Richard
  H. Irving, III

  
	
   

  	
  Title:

  	
  Senior
  Vice President, General Counsel and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  And,
  solely for the purposes set forth in Article V, Article VI,
  Article X and Article XII:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARENT:

  
	
   

  	
   

  
	
   

  	
  DOVER
  INDUSTRIAL PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Thomas
  W. Giacomini

  
	
   

  	
  Name:

  	
  Thomas
  W. Giacomini

  
	
   

  	
  Title:

  	
  President

  



 


SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT


 

















 


Schedule 1.1(a)


 


Seller’s Retained Liabilities


 


Seller will retain liability
for:


 


1.                                       All Benefit
Plans set forth on Schedule 4.13 and marked with an asterisk (*);


 


2.                                       Litigation
relating to the matter entitled Wayne Paul Duncan and Belinda Duncan v. Chevron
U.S.A., Inc. et al., United States District Court of Eastern District of
Louisiana, Case No. 2:10-cv-00298 and, in the event of a dismissal,
consolidation or separate filing of such matter, any case filed or
re-filed by solely the same plaintiffs or their estates related to the events
described in such litigation; and


 


3.                                       Litigation
relating to the matter entitled Gerald Delacerda and Karen Delacerda v. Chevron
U.S.A., Inc. et al., United States District Court of Eastern District of
Louisiana, Case No. 2:10-cv-01455 and, in the event of a dismissal,
consolidation or separate filing of such matter, any case filed or
re-filed by solely the same plaintiffs or their estates related to the events
described in such litigation.


 

















 


Schedule 1.1(b)


 


Working Capital Schedule


 


Gear Products, Inc.


Working Capital Schedule


 


1
















 


DISCLOSURE SCHEDULE TO


 


STOCK PURCHASE AGREEMENT


 


 


By and among


 


 


TULSA WINCH, INC.,


 


BLOUNT, INC.


 


AND


 


DOVER INDUSTRIAL PRODUCTS, INC.


 


 


Dated as of September 30, 2010


 




 





 


1

















 


INTRODUCTION


 


Reference
is made to the Stock Purchase Agreement dated as of September 30, 2010
(the “Agreement”), by and among Tulsa Winch, Inc., a Delaware
corporation (“Purchaser”), Blount, Inc., a Delaware corporation (“Seller”),
and, solely for the purposes set forth in Article V, Article VI, Article X
and Article XII of the Agreement Dover Industrial Products, Inc., a
Delaware corporation (“Parent”). 
Purchaser, Seller and Parent are each sometimes referred to herein as a “Party”
and, collectively, as the “Parties.” 
Terms used herein and not otherwise defined shall have the respective
meanings ascribed to such terms in the Agreement.


 


This
Disclosure Schedule (including all of the individual Schedules comprising this
Disclosure Schedule) is qualified in its entirety by reference to specific
provisions of the Agreement, and is not intended to constitute, and shall not
be construed as constituting, representations or warranties of Seller or the
Company except as and to the extent provided in the Agreement.  Matters reflected in this Disclosure Schedule
are not necessarily limited to matters required by the Agreement to be
reflected in the Disclosure Schedule. Such additional matters are set forth for
information purposes and do not necessarily include other matters of a similar
nature.  The provision of an item in this
Disclosure Schedule as an exception to a representation or warranty in the
Agreement will not, by itself, be deemed an admission by Seller or the Company
that such item is material, that such item is reasonably likely to result in a
Material Adverse Effect, that such item is outside the ordinary course of
business, or that such item was required to be disclosed herein.  Except for purposes of disclosure to the
Purchaser, no reference in this Disclosure Schedule to any agreement or
document shall be construed as an admission or indication to any Person that is
not a party to the Agreement that such agreement or document is enforceable or
currently in effect or that there are any obligations remaining to be performed
or any rights that may be exercised under such agreement or document.  No disclosure in this Disclosure Schedule
relating to any possible breach or violation of any agreement, law or
regulation shall be construed as an admission that any such breach or violation
exists or has actually occurred.  The
disclosures in any section or subsection of this Disclosure Schedule shall
qualify other sections and subsections in this Disclosure Schedule to the
extent it is obvious and apparent on its face. 
Headings have been inserted on the Schedules comprising this Disclosure
Schedule for convenience of reference only and shall to no extent have the
effect of amending or changing the express description of the Sections as set
forth in the Agreement.  The information
contained herein is in all events subject to the Confidentiality Agreement.


 


2

















 


Schedule 4.2                                         Approvals
and Consents


 


None.


 


3

















 


Schedule 4.3(d)                                    Outstanding
Indebtedness


 


Company
is included as a guarantor under the Seller’s credit agreement with General
Electric Capital Corporation, but Company will be removed as a guarantor at
Closing.


 


4

















 


Schedule 4.4                                         Financial
Statements


 


5

















 


 


Schedule 4.5                                         Events
Subsequent to Reference Balance Sheet


 


None.


 


6

















 


Schedule 4.6                                         Title
to Assets


 


None.


 


7

















 


Schedule 4.7                                         Compliance
with Laws


 


None.


 


8
















 


Schedule 4.8                                         Litigation


 


	
  Name

  	
   

  	
  Jurisdiction

  	
   

  	
  Type

  	
   

  	
  Description

  
	
  ENERGY
  CRANES/ CHEVRON

  	
   

  	
  LOUISIANA

  	
   

  	
  PERSONAL
  INJURY

  	
   

  	
  ON
  10/4/09 A SWING BOX ASSEMBLY FAILED ON A CRANE MANUFACTURED BY GEAR.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DELACERDA,
  GERALD

  	
   

  	
  GULF
  OF MEXICO

  	
   

  	
  PERSONAL
  INJURY

  	
   

  	
  DELACERDA
  WAS EMPLOYED BY CORRPRO COMPANIES AS AN INSPECTOR TO WORK ON AN OIL AND GAS
  PRODUCTION PLATFORM OWNED AND OPERATED BY CHEVRON, U.S.A., INC.
  WHILE BEING LIFTED BY A CRANE ON THE PLATFORM FROM A VESSEL, ON 10/4/09
  THE CRANE FAILED AND THE PERSONNEL BASKET STRUCK A LEG OF THE PLATFORM.
  DELACERDA FELL 70-80 FEET INTO THE WATER. DELACERDA ALLEGES INJURIES TO HIS
  LOW BACK, HEAD, NECK. SUED CHEVRON. HE IS EXPECTED TO AMEND TO ADD GEAR,
  MANUFACTURER OF THE SWING GEAR BOX, AND SPARROWS, MANUFACTURER OF THE CRANE.
  THE SHAFT IN THE GEAR BOX BROKE. IT WAS ORIGINALLY SOLD BY GEAR TO THE CRANE
  MANUFACTURER TITAN IN 1992. SPARROWS IS THE NEW NAME FOR A SUCCESSOR OF
  TITAN.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DUNCAN,
  WAYNE

  	
   

  	
  GULF
  OF MEXICO

  	
   

  	
  PERSONAL
  INJURY

  	
   

  	
  DUNCAN
  WAS EMPLOYED BY WAVELAND SERVICES, INC. AS A BLASTER/PAINTER TO WORK ON
  AN OIL AND GAS PLATFORM OWNED AND OPERATED BY CHEVRON, U.S.A., INC.
  WHILE BEING LIFTED BY A CRANE ON THE PLATFORM FROM A VESSEL, ON 10/4/09
  THE CRANE FAILED AND THE PERSONNEL BASKET STRUCK A LEG OF THE PLATFORM.
  DUNCAN ALLEGES INJURIES TO HIS BACK AND NECK. SUED CHEVRON. AMENDED COMPLAINT
  TO ADD SPARROWS CRANE LTD. AND SPARROWS OFFSHORE GROUP LTD. AS MANUFACTURER
  OF CRANE AND GEAR AS MANUFACTURER OF SWING GEAR BOX. THE SHAFT IN THE GEAR
  BOX BROKE. IT WAS ORIGINALLY SOLD BY GEAR TO THE CRANE MANUFACTURE TITAN IN
  1992. SPARROWS IS NEW NAME FOR A SUCCESSOR OF TITAN.

  



 


9

















 


Schedule 4.9                                         Tax
Matters


 


(b) 
On December 16, 2009, GPI entered into an agreement with the Iowa Department
of Revenue resolving any income tax liabilities for taxable years or periods
ending prior to and including the period ending December 31, 2008.  Also, the Illinois Department of Revenue has
notified the Company that it had not received the state withholding taxes for
the Company during the second quarter. 
The taxes were paid by the Company to the automatic data processing
vendor (“ADP”) but were not paid to the Illinois Department of Revenue.


 


(g) 
Seller entered into a Statute of Limitation extension agreement with the IRS
that runs through September 17, 2010 affecting the December 31, 2002,
December 31, 2004 and December 31, 2005 calendar years.


 


10

















 


Schedule 4.10                                      Environmental
Matters


 


(a) 
Purchaser conducted a Phase II investigation on the Owned Property during the
due diligence period.  The limited Phase
II investigation data provided to Company indicated the potential presence of
total petroleum hydrocarbon contamination beneath the waste oil and chip
storage shed located to the southeast outside the main manufacturing
building.  The potentially contaminated
area may also have an Underground Storage Tank (“UST”) as defined by
Environmental Laws, which was not registered as such by GPI.  Subsequently, GPI did not comply with any
reporting requirements that may have been applicable to a UST.


 


Also,
the facility on the Owned Real Property may require disclosures, updates or
modifications relating to asbestos-containing products, Spill Prevention and
Control Countermeasures and waste from its air compressors.


 


(c) 
In addition to those items listed in subsection (a) above, in 1991 a
diesel spill occurred on the Owned Real Property as a result of a third party’s
tractor-trailer.  On October 12,
1992, Gear obtained a “no further action” letter regarding known soil
contamination related to a product drum storage area that was remediated. In
February 25, 1993, Gear received a “no further action” letter regarding a
waste oil trench and sump system that was remediated.


 


(f) 
Gear was a named third party in the Sand Springs Petrochemical Complex
Superfund Site.


 


(g) See
response to (a) above.


 


11

















 


Schedule 4.11                                      Intellectual
Property


 


Registered
Marks


 


	
  Mark

  	
   

  	
  Registration Number

  	
   

  	
  Date

  
	
  DESIGN GEAR IN A
  PARALLELOGRAM

  	
   

  	
  2,353,146

  	
   

  	
  5/30/2000

  



 


Domain
Name


“gearproducts.com”


 


Domain
Registration with Go Daddy


 


Domain
Registration with Network Solutions


 


12

















 


Schedule 4.12                                      Owned Real
Property


 


(a) 
1111 North 161st East Avenue, Tulsa Oklahoma, 74116.


 


(d) 
Gear has allowed a neighbor’s horses to graze on the Owned Real Property.


 


13

















 


Schedule 4.13                                        Employee
Benefits


 


(a) 
Company’s employees are provided the opportunity to participate certain
benefits offered either by Seller or the Company either pursuant to Plans or
Policies:


 


PLANS


 


The Blount 401(k) Retirement Savings Plan*


Blount International, Inc. Supplemental
Retirement Plan*


Blount
Annual Incentive Plan*


Blount
Executive Management Annual Incentive Plan*


Blount
International, Inc. 2006 Equity Incentive Plan*


Blount
Welfare Benefit Plan for Retired Employees (not Medicare eligible)*


Medical
Plan for Retirees Under Age 65


Medical
Plan for Retirees Eligible for Medicare


Kaiser
Medical Plan Option for Retirees located at Int’l Way/Ptd


Life
Insurance


The
Blount Retirement Plan*


Blount
Senior Management Severance Plan*


Blount
Welfare Benefit Plan for Active Employees*


Delta
Dental


Flexible
Benefits


Highmark
Medical


Highmark
Benefits Administrator


·Vision


Kaiser


·Medical


·Dental


Oregon
Dental Service


Prudential


·Life


·Accidental
Death and Disability


·Optional Life


·Voluntary
Accidental Death and Disability,


UNUM
Disability


·Short Term Disability
(ASO Only)


Takeover
Long Term Disability (ASO Only)


UNUM
Long Term Disability


Zurich
Business Travel Accident


Cascade
Center EAP


 


POLICIES


 


Leave
of Absence Policy


Contributions
Policy


Credit
Union Policy


Emergency
Business Closure Policy


Educational
Assistance Policy


Holidays
Policy


Length
of Service Credits Policy


Moving
Expenses — New Employees Policy


Moving
Expenses — Transferred Employees Policy


Overtime
Policy


Severance
Pay Policy


Sick
Leave Policy


STD
and LTD Policy


 


14

















 


Vacation Policy


 






*
Seller will retain liability for the Plans set forth on this schedule 4.13(a) marked
with an asterisk (*).


 


(e) The
Department of Labor conducted an audit of Blount’s Retirement Plan in August of
2008, which is now closed with no material findings.


 


15






 












 


Schedule 4.14                                      Material
Contracts


 


(a) through
(l)


 


	
  Third Party to Agreement

  	
   

  	
  Type

  	
   

  	
  Entered Into

  
	
  Great America Leasing
  Corporation

  	
   

  	
  Copier Lease

  	
   

  	
  1-9-09

  
	
  Drake Systems, Inc.

  	
   

  	
  Copier Lease

  	
   

  	
  5-21-10

  
	
  JDH Pacific, Inc.

  	
   

  	
  Supplier Agreement

  	
   

  	
  7-9-03

  
	
  UniFirst Corporation
  [Uniform Agreement]

  	
   

  	
  Services Agreement

  	
   

  	
  5-28-10

  
	
  CoxCom, Inc.,
  Cox Oklahoma Telecom, LLC

  	
   

  	
  Services
  Agreement

  	
   

  	
  1-9-09

  
	
  Vault
  Management Incorporated

  	
   

  	
  Management
  Agreement

  	
   

  	
  9-25-07

  
	
  UniFirst Corporation
  [Floor Mat Agreement]

  	
   

  	
  Services Agreement

  	
   

  	
  5-28-10

  
	
  MAPICS, Inc.

  	
   

  	
  License Agreement

  	
   

  	
  4-25-05

  
	
  Infor Global Solutions

  	
   

  	
  Maintenance Invoice

  	
   

  	
  2-22-10

  
	
  O.M.E. Corporation

  	
   

  	
  Maintenance Agreement

  	
   

  	
  2-8-06

  



 


(f) 
The Company ordered a New Induction Hardening Machine via purchase order on December 17,
2009 for $535,000.  The company paid
$214,000 down (on December 17, 2009) and $267,500 is due prior to shipment
and $53,500 is due upon successful start up (not to exceed 60 days from
shipment).


 


16

















 


Schedule 4.16                                      Insurance


 


	
  Insurer

  	
   

  	
  Type

  	
   

  	
  Coverage

  
	
  Lexington
  Ins. Co.

  	
   

  	
  General
  Liability

  	
   

  	
  $2M
  General Aggregate

  
	
  Lexington
  Ins. Co.

  	
   

  	
  Umbrella
  Liability (Primary)

  	
   

  	
  $25M
  General Aggregate

  
	
  ARCH
  Ins. Co/Swett & Crawford

  	
   

  	
  Umbrella
  Liability (Excess)

  	
   

  	
  $25M
  Excess of $25M

  
	
  Great
  American/Swett & Crawford

  	
   

  	
  Umbrella
  Liability (Excess)

  	
   

  	
  $25M
  Excess of $50M

  
	
  Liberty
  Mutual Fire Ins. Co

  	
   

  	
  Automobile

  	
   

  	
  $1M
  Combined Single

  
	
  Federal
  Insurance Company (Chubb)

  	
   

  	
  Business
  Travel Accident

  	
   

  	
  $250,000
  Principal Sum

  
	
  AXIS Ins.Co./Media Prof. Ins.

  	
   

  	
  Media
  Liability

  	
   

  	
  $5M
  Each Loss

  
	
  Liberty
  Mutual Ins. Co.

  	
   

  	
  Workers’
  Compensation - Deductible

  	
   

  	
  $1M
  Per Accident

  
	
  Federal
  Ins. Co. (Chubb)

  	
   

  	
  Directors &
  Officers Liability (Primary) and Executive Risk

  	
   

  	
  $15
  Each Claim

  
	
  ACE
  American Ins. Co.

  	
   

  	
  Directors &
  Officers Liability (Excess)

  	
   

  	
  $10M
  Excess of $15M

  
	
  National
  Union Fire Inc. Co of Pittsburgh, PA (Chartis)

  	
   

  	
  Directors &
  Officers Liability (Excess - Side A DIC)

  	
   

  	
  $5M
  Excess of $25M

  
	
  FM
  Global

  	
   

  	
  Property

  	
   

  	
  $772,447,000

  
	
  Federal
  Insurance Co. (Chubb)

  	
   

  	
  Cargo

  	
   

  	
  $2M
  Per Occurrence

  



 


Gear
also provides its own Flood Insurance through Selective Insurance Company of
Southeast covering up to $500,000 for the building and $500,000 for the
contents in the building.


 


17

















 


Schedule
4.17                                      Affiliate
Transactions


 


None.


 


18

















 


Schedule
4.18                                      Licenses
and Permits


 


Air
Emissions Inventory Turnaround


Oklahoma
Manufacturer Sales Tax Exemption Permit


Storm
Water Discharge Permit


 


19

















 


Schedule
4.19                                      Customers
and Suppliers


 


Top 10 Customers by sales
percentage (Through June 2010)


 


ALTEC INDUSTRIES, INC.


CAT FOREST PRODUCTS 


IOWA MOLD TOOLING


BRODERSON MANUFACTURING


TIME MFG. CO.


STELLAR INDUSTRIES, INC.


HYDRADYNE HYD.


ATLAS COPCO


BADGER EQUIPMENT CO


EQUIPMENT TECH INC


 


Top 10 Customers by sales
percentage for Calendar Year 2009


 


ALTEC INDUSTRIES, INC.


IOWA MOLD TOOLING


BRODERSON MANUFACTURING


TIME MFG. CO.


CAT FOREST PRODUCTS (1)


MANITEX, INC.


STELLAR INDUSTRIES, INC.


TEREX UTILITIES (TELELECT)


EQUIPMENT TECH INC


BADGER EQUIPMENT CO


 


Top 10 Vendors by purchases
(Through June 2010)


 


JDH PACIFIC, INC.


McINNES STEEL COMPANY


G&S FOUNDRY &
MFG. CO.


HONGTENG HEAVY EQUIPMENT
INDUSTRIES LTD.


METALTEK INTERNATIONAL


FRISA


SPECIAL METALS, INC.


FOUR STATE INDUSTRIAL SUPPLY


GLEASON CUTTING TOOLS


AFS LOGISTICS INC


 


Top 10 Vendors by purchases for
Calendar Year2009


 


JDH PACIFIC, INC.


G&S FOUNDRY &
MFG. CO.


McINNES STEEL COMPANY


DIXIE MACHINERY, INC.


INDUCTOHEAT


FRISA


SPECIAL METALS, INC.


FOUR STATE INDUSTRIAL SUPPLY


ACCURATE SPECIALTIES INC.


GLEASON CUTTING TOOLS


 


20

















 


Schedule 4.21                                      Accounts
Receivable


 


The
Company’s balance sheet reflects an amount described as “Interco advances”
within the Company’s Shareholders equity section, which will be settled and
released between the Seller and the Company immediately prior to closing.  Following Closing, the amount reflected in
the balance sheet will not be a valid receivable of the Company.


 


21

















 


Schedule 4.22                                      Powers of
Attorney; Authorized Signatories


 


(b)


 


	
  Bank of Oklahoma (Payroll)

  	
   

  	
  207916218

  	
   

  	
  Wendy J. Gilligan

  Timothy D. Simmons

  William C. Alford

  
	
  Bank of America
  (Disbursement)

  	
   

  	
  003299809196

  	
   

  	
  Wendy J. Gilligan

  Timothy D. Simmons

  William C. Alford

  
	
  Bank of America (Lockbox)

  	
   

  	
  003284002880

  	
   

  	
  Wendy J. Gilligan

  



 


22

















 


Schedule
4.23                                      Product
Warranties


 


Gear
Products, Inc. and Altec Industries, Inc. letter Warranty Agreement
dated November 8, 2007.


 


In
addition to the Warranty provided to Altec, the Company issues the following
general limited warranty regarding its products:


 


“GEAR
PRODUCTS, INC. (“GPI”) warrants each new product to be free from defects
in material and workmanship for a period on one (1) year from date of
shipment by GPI’s factory when properly installed and maintained in an
application consistent with its intended normal use.  However, each GPI Gear Box which remains
unused for a period of one hundred eighty (180) days after date of shipment by
GPI’s factory will not be warranted for leakage due to seal aging.


 


No
product will be eligible for warranty if rust or corrosion has started on
internal surfaces due to lack of lubrication in the assemblies.  Otherwise, should any product be found under
normal use and service during the warranty period to be defective, GPI will, at
its option, repair or replace such product f.o.b. Tulsa, Oklahoma, provided
such product is returned to the location designated by GPI, freight prepaid,
and inspection by GPI establishes the defect to the satisfaction of GPI.  Any replacement provided under this warranty
will be warranted for the remainder of the warranty period applicable to the
product in which it is installed or which it replaces.


 


This
warranty shall not apply to a product upon which repairs or alterations have
been made, unless authorized by GPI, or to a product which has been misused,
neglected, improperly maintained or incorrectly installed; nor shall this
warranty apply to any product manufactured in accordance with specifications of
buyer, and GPI shall have no responsibility or liability for such product.


 


Buyer’s
remedy under this warranty is exclusive and is limited to repair or replacement
as provided herein.  GPI shall not in any
event be liable for consequential or incidental damages, regardless of whether
such damages arise from contract or tort, including negligence, nor shall GPI
be held liable for any expenses, attorneys’ fees or delay caused by defective
material or workmanship.  No allowance
will be made for repairs, replacements or alterations unless made with the
written consent of GPI.


 


THIS
WARRANTY IS EXPRESSLY IN LIEU OF ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL,
EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.”


 


23

















 


Schedule 5.3                                         Purchaser
Consents


 


None.


 


24
















 


Schedule 5.5                                         Parent
Financial Statements


 


25

















 


Schedule 6.2(b)                                    Existing
Contracts Mandating Payments to Employees


 


None.


 


26

















 


Schedule 7.2(d)                                    Required
Consents


 


None.


 


27

















 


Schedule 7.2(e)                                    Agreements
to be Terminated


 


None.


 


28

















 


Schedule 10.4(k)                                 Environmental
Documents


 


Oklahoma Department of Environmental Quality Annual
Comprehensive Site Compliance Evaluation Report for Industrial Facilities,
April 2, 2007


Storm Water Discharge Permit, March 7, 2007


Tier II File Submission Receipt, February 8, 2010


Generator Waste Profile Sheet, April 15, 2004


2009 Air Emissions Inventory Turnaround Document


1991 Air Monitoring Program


1991 Diesel Fuel Spill at Gear


1991 Environmental Review


1991 Medical Surveillance Program


1991 Paint Booth Water Curtain Sampling and
Evaluation Steam Cleaning Effluent Sampling and Evaluation


1991 Remedial Action Plan


1991 Remediation Plan Progress Report


1991 Transportation of Waste Materials


1992 Closure of the Product Drum Storage Area


1992 Draft Hazard Communication Program


1992 Medical Surveillance Program for Lead Exposure


1992 OSHA programs


1992 Product Drum Storage Area Closure Approval


1992 Product Drum Storage Area letter, October 12,
1992


1992 Product Storage Areas Closure Report


1992 Shop Area Sumps letter, February 11, 1992


Summons and Complaint of Gear as 3rd Party Defendant
with October 12, 1992 Oklahoma State Department of Health letter regarding
Product Drum Storage Area


1992 Summons and Complaint of Gear as 3rd Party
Defendant


1992 Sump System Closure Site Specific/Characteristic
Evaluation


1992 US EPA Strom Water Permitting Requirements


1992 USBCI Agreement


1993 Memo Re Environmental Matters


1993 Memo Re Pit Closure


1993 Memo Re Product Storage Area Completion


1993 Simon Hydro-Search, Inc., Remedial Action
Plan


1993 Sump System Closure Approval, February 25,
1993


1993 Sump System Closure Report Supplement


1993 Sump System Closure SARA Title III Reporting


1993 letter from Simon Hydro-Search regarding Texas
Water Commission Rules for Self Classification Industrial Solid Waste and
Municipal Hazardous Waste


1994 Bill from Simons Hydro-Search Inc.


1998 OSHA Cooperative Compliance Program


1998-1999 Vanguard Environmental Agreement


2006 Reminder to File Tier 2 Reports


MSDS GPI Master List


Raybestos Friction Materials Asbestos Memo,
September 13, 2010


Limited Phase II Soil and Groundwater Evaluation of
the Owned Real Property prepared on behalf of Purchaser by HDR/e2M, Dated
August 26, 2010.


Phase I Evaluation of Owned Real Property prepared
on behalf of Purchaser by HDR/e2M, Dated August 2010.


 


29






 












 


ASSIGNMENT AND ASSUMPTION AGREEMENT


 


This
Assignment and Assumption Agreement (“Assignment and Assumption”) is
made as of September 30, 2010, by and between Blount, Inc., a
Delaware corporation (“Seller”),
and Tulsa Winch, Inc., a Delaware corporation ( “Purchaser”).  This Assignment and Assumption is executed
pursuant to the terms of the Stock Purchase Agreement dated as of September 30,
2010 by and among Seller, Purchaser and Dover Industrial Products, Inc., a
Delaware corporation (the “Purchase Agreement”).


 


In
consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Purchaser agree as follows:


 


1.                                       Capitalized
terms used but not defined herein shall have the respective meanings attributed
to them in the Purchase Agreement.


 


2.                                       Upon the terms
and subject to the conditions set forth in the Purchase Agreement, Seller
hereby assumes and agrees to pay, perform and discharge when due and on a
timely basis all liabilities relating to Benefit Plans that are Seller’s
Retained Liabilities.


 


3.                                       Nothing in this
Assignment and Assumption, express or implied, is intended or shall be
construed to expand or defeat, impair or limit in any way the rights,
obligations, claims or remedies of Seller or Purchaser as set forth in the
Purchase Agreement.


 


4.                                       Nothing in this
Assignment and Assumption, express or implied, is intended or shall be
construed to confer upon, or give to, any Person, other than the parties to
this Assignment and Assumption, any rights, remedies, obligations or
liabilities.


 


5.                                       This Assignment
and Assumption shall bind and inure to Seller and Purchaser and their
respective successors and assigns.


 


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


 


[signature page follows]


 

















 


IN WITNESS WHEREOF, Seller and Purchaser have executed this Assignment
and Assumption Agreement as of the date first written above.


 


	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  BLOUNT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard H. Irving, III

  
	
   

  	
  Name:

  	
  Richard
  H. Irving, III

  
	
   

  	
  Title:

  	
  Senior
  Vice President, General Counsel and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  TULSA
  WINCH, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Steve Oden

  
	
   

  	
  Name:

  	
  Steve
  Oden

  
	
   

  	
  Title:

  	
  President

  



 

















 


GENERAL RELEASE AND COVENANT NOT TO SUE


 


This
General Release (this “Release”) is entered into this 30th day of
September, 2010, by and between Blount, Inc., a Delaware corporation (“Seller”), and Gear Products, Inc.,
an Oklahoma corporation (the “Company”). 
Seller and the Company are collectively hereinafter referred to as the “Parties”
and each, individually, as a “Party.”


 


RECITALS


 


WHEREAS, pursuant to the terms and
conditions of that certain Stock Purchase Agreement dated as of September 30,
2010 (the “Purchase Agreement”), by and among Seller, Tulsa Winch, Inc.,
a Delaware corporation (“Purchaser”), and Dover Industrial Products, Inc.,
a Delaware corporation, Purchaser will purchase from Seller all of the issued
and outstanding capital stock of the Company (the “Contemplated Transaction”);
and


 


WHEREAS,
in accordance with Section 6.8 of the Purchase Agreement, the Parties are
desirous of amicably resolving forever any and all matters, issues and
controversies relating to the Company and arising from or related to any event,
fact or circumstance, occurring before or at the Closing.


 


NOW,
THEREFORE, in consideration of the mutual promises, covenants, representations
and agreements hereinafter set forth, the receipt and sufficiency of which are
hereby acknowledged by the Parties, and intending to be legally bound, the
Parties covenant, promise and agree as follows:


 


1.             Recitals: The foregoing
recitals are true and correct and are incorporated herein by reference.  Capitalized terms used but
not defined herein shall have the respective meanings attributed to them in the
Purchase Agreement.


 


2.             Release.


 


(a)           For and in consideration of the mutual promises and
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller, on behalf of
itself and its agents, representatives, successors, executors, estates, heirs,
administrators, attorneys, insurers and assigns hereby releases, remises and
forever discharges the Company and its past, present and future
representatives, directors, officers, employees, agents, predecessors,
successors, assigns, parent company, subsidiaries, affiliates, attorneys and
insurers (hereinafter collectively the “Company Releasees”) from any and
all proceedings, demands, rights, causes, causes or manners of action, suits,
obligations, liabilities, debts, sums of money, accounts, bills, dues,
covenants, undertakings, promises, contracts, agreements, charges, complaints,
controversies, grievances, damages, judgments, actions, claims, losses, costs
or expenses (including attorneys’ fees and costs), known or unknown, suspected
or unsuspected, matured, unmatured or contingent, potential or direct, at law
or in equity, based in statute, common law or otherwise, that Seller has had or
may now have against any Company Releasee, relating to the Company and arising from or related to any
event, fact or circumstance, occurring before or at the Closing.


 

















 


(b)           For and in consideration of the mutual promises and
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company, on
behalf of itself and its agents, representatives, successors, executors,
estates, heirs, administrators, attorneys, insurers and assigns hereby
releases, remises and forever discharges Seller and its past, present and
future representatives, directors, officers, employees, agents, predecessors,
successors, assigns, parent company, subsidiaries, affiliates, attorneys and
insurers (hereinafter collectively the “Seller Releasees”) from any and
all proceedings, demands, rights, causes, causes or manners of action, suits,
obligations, liabilities, debts, sums of money, accounts, bills, dues, covenants,
undertakings, promises, contracts, agreements, charges, complaints,
controversies, grievances, damages, judgments, actions, claims, losses, costs
or expenses (including attorneys’ fees and costs), known or unknown, suspected
or unsuspected, matured, unmatured or contingent, potential or direct, at law
or in equity, based in statute, common law or otherwise, that the Company has
had or may now have against any Seller Releasee, relating to the Company and arising from or related to any
event, fact or circumstance, occurring before or at the Closing.


 


(c)           This Release shall not apply to any rights either Party
has pursuant to the Purchase Agreement, the Contemplated Transaction or any
other documents contemplated thereby.


 


3.             Covenant Not to Sue.  After the Closing, each Party will not, and
will not permit any of its Affiliates, agents, representatives, successors and
permitted assigns to, initiate or maintain any action, suit, proceeding,
investigation, charge, complaint, claim or demand against any Company Releasee
or Seller Releasee, as applicable, before any court, governmental authority or
other forum relating to any claim released hereby.  If any court or governmental authority
assumes jurisdiction with respect to any action, suit, proceeding, investigation,
charge, complaint, claim or demand against any Company Releasee or Seller
Releasee relating to any claim released hereby, then Seller or the Company, as
applicable, will or will cause its applicable Affiliates to, direct that agency
or court to withdraw from or dismiss such action, suit or proceeding with
prejudice.  If, after the Closing, Seller
or the Company, or any of their respective Affiliates, as applicable, initiates
or maintains any action, suit, proceeding, investigation, charge, complaint, claim
or demand against any Company Releasee or Seller Releasee, as applicable, with
respect to any claim released hereby, then Seller or the Company, or any of
their respective Affiliates, as applicable, will promptly pay all costs and
expenses (including attorneys’ fees and costs) incurred by such Company
Releasee or Seller Releasee, as applicable, in defending against such action,
suit, proceeding, investigation, charge, complaint, claim or demand.


 


4.             No Assignment or Transfer of Claims.  Each Party represents
that it has not assigned or otherwise transferred any claim released hereby.


 


5.             Acknowledgements and Agreements of the Parties.  In signing this Release, each Party
acknowledges and agrees that:


 


(a)                                  this Release
will be effective as a bar to all claims released hereby;


 


2

















 


(b)                                 this Release
will be given full force and effect according to its express terms and
provisions (including those relating to unknown and unsuspected claims,
notwithstanding any state law expressly limiting the effectiveness of a general
release of unknown, unsuspected or unanticipated claims);


 


(c)                                  if Seller or
the Company, or any of their respective Affiliates, as applicable asserts any
claim released hereby against any Company Releasee or Seller Releasee, as
applicable, then this Release will serve as a complete defense to such claim;


 


(d)                                 there does not
currently exist any claims and such Party is not aware of any pending or
threatened claims;


 


(e)                                  neither this
Release nor the furnishing of consideration for this Release will be deemed an
admission by Seller, the Company, any of their respective Affiliates and any
Company Releasee or Seller Releasee, as applicable, of any improper or unlawful
conduct; and


 


(f)                                    after the Closing,
the Parties may discover facts different from or in addition to those now known
or believed to be true regarding the subject matter of this Release, and this
Release will remain in full force and effect, notwithstanding the existence of
any different or additional facts.


 


6.             Additional Acknowledgements and Agreements of the
Parties.  In signing this Release,
each Party further acknowledges and agrees that such Party:


 


(a)                                  has carefully
read and fully understands all of the provisions of this Release and has had
the opportunity to discuss the same and their consequences with such Party’s
attorney;


 


(b)                                 is, through
this Release, releasing any Company Releasee or Seller Releasee, as applicable,
from all claims that such Party and its Affiliates may have against such
Company Releasee or Seller Releasee, as applicable;


 


(c)                                  knowingly and
voluntarily agrees to all of the terms of this Release;


 


(d)                                 knowingly and
voluntarily intends to be legally bound by the terms of this Release;


 


(e)                                  was advised,
and is hereby advised in writing, to consult with an attorney of such Party’s
choice before signing this Release concerning its meaning and application; and


 


(f)                                    agrees that the
provisions of this Release as they relate to such Party and its Affiliates may
not be waived, amended or restated except by an instrument in writing signed by
authorized representatives of the Parties.


 


3

















 


7.             General Provisions.


 


(a)           Entire Agreement. 
This Release constitutes the complete agreement and understanding
regarding the subject matter of this Release and supersedes any prior
understandings, agreements or representations regarding the subject matter of
this Release.


 


(b)           Amendments.  The Parties may amend this Release only
pursuant to a written agreement executed by the Parties.


 


(c)           Binding Effect; Benefit.  This Release will inure to the benefit of and
be binding upon the Parties, their respective Affiliates, the Seller Releasees,
the Company Releasees and their respective successors and permitted assigns,
and this Release and all of its provisions and conditions are for the sole and
exclusive benefit of the Parties, their respective Affiliates, the Seller
Releasees, the Company Releasees and their respective successors and permitted
assigns.


 


(d)           Severability. 
If any court of competent jurisdiction holds any provision of this
Release invalid or unenforceable, then the other provisions of this Release
will remain in full force and effect. 
Any provision of this Release held invalid or unenforceable only in part
or degree will remain in full force and effect to the extent not held invalid
or unenforceable.


 


(e)           References. 
The headings of sections are provided for convenience only and will not
affect the construction or interpretation of this Release.  Unless otherwise provided, references to “Section(s)”
refer to the corresponding section(s) of this Release.  Reference to a contract, instrument or other
document as of a given date means the contract, instrument or other document as
amended, supplemented and modified from time to time through such date.


 


(f)            Construction. 
The Parties participated in the negotiation and drafting of this
Release, assisted by such legal counsel as they desired, and contributed to its
revisions.  All pronouns and any
variation thereof will be construed to refer to such gender and number as the
identity of the subject may require.  The
terms “include” and “including” indicate examples of a foregoing general
statement and not a limitation on that general statement.


 


(g)           Governing Law. 
THIS RELEASE IS GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES.


 


(h)           Consent to Jurisdiction.  The Parties hereby (i) agree to the
non-exclusive jurisdiction of the federal courts within Tulsa, Oklahoma with
respect to any claim or cause of action arising under or relating to this
Release, (ii) waive any objection based on forum non
conveniens and waive any objection to venue of any such suit, action
or proceeding, (iii) waive personal service of any process upon them, and (iv) consent
that all services of process be made by registered or certified mail (postage
prepaid, return receipt requested) directed to each Party at the address
provided on the signature page hereto, and service so made will be
complete when received.  Nothing in this Section 7(h) will
affect the rights of any person to serve legal process in any other manner
permitted by law.


 


4

















 


(i)            Waiver of Trial by Jury.  EACH PARTY HEREBY WAIVES ITS RIGHT TO A JURY
TRIAL IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING SEEKING ENFORCEMENT OF
ITS RIGHTS UNDER THIS RELEASE.


 


(j)            Counterparts. 
The Parties may deliver an executed signature page to this Release
by facsimile or e-mail transmission.  The
Parties may not raise (i) the use of a facsimile or email transmission to
deliver a signature or (ii) the fact that any signature, agreement or
instrument was signed and subsequently transmitted or communicated through the
use of a facsimile or email transmission as a defense to the formation or
enforceability of a contract, and the Parties forever waive any such defense.


 


[signature page follows]


 


5

















 


IN WITNESS WHEREOF, the Parties hereto, intending
to be legally bound hereby, have caused this Release to be executed as of the
day and year first above written.


 


 


	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  BLOUNT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Richard
  H. Irving, III

  
	
   

  	
  Name:

  	
  Richard
  H. Irving, III

  
	
   

  	
  Title:

  	
  Senior
  Vice President, General Counsel and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  4909
  SE International Way

  
	
   

  	
  Portland,
  Oregon 97222-4679

  
	
   

  	
  Attn:
  Richard H. Irving, III

  
	
   

  	
   

  
	
   

  	
  THE
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  GEAR
  PRODUCTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Steve Oden

  
	
   

  	
  Name:

  	
  Steve
  Oden

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  c/o
  Tulsa Winch, Inc.

  
	
   

  	
  11135
  S. James Ave., P. O. Box 1130

  
	
   

  	
  Jenks,
  Oklahoma 74037-1130

  
	
   

  	
  Attn:
  Steve Oden