Maxco, Inc.



 


Exhibit 10.30

STOCK PURCHASE AGREEMENT






     THIS AGREEMENT is made effective at 12:01 a.m. on November 14, 2002
(“Effective Date”), between Ersco Corporation a Michigan corporation,
(“Seller”), Maxco, Inc., a Michigan Corporation (the “Seller Shareholder”)
(collective referred to as “Seller Parties”) and Contractor Supply
Incorporated, an Indiana corporation (“Buyer”). (“Agreement”)





BACKGROUND







	A.	 	Ersco Corporation (“Seller”) is a Michigan corporation and is
engaged in the business of the distribution of concrete construction
products and accessories, fabrication of reinforcing steel and
rental of concrete forms used in road and commercial building
construction (the “Business”), at 2364 Woodlake Drive,
Ste. 180,
Okemos, MI 48864.
	 
	B.	 	Seller Shareholder owns all of Seller’s issued and
outstanding capital stock, being 3,000,000 shares of common stock
(“Seller Common Stock”) and 0 shares of preferred stock.
	 
	C.	 	Buyer, Seller and Seller Shareholder desire to enter into a
transaction involving the following steps:




	 	1.	 	Seller Shareholder shall rearrange its bank
financing so that the bank liens on the assets in the Adjusted
Book Value (as hereinafter defined) of Seller shall not exceed
the Adjusted Book Value by more than Three Million Dollars
($3,000,000) after payment by Buyer of the Seller Bank Debt,
as hereinafter defined. “Adjusted Book Value” is defined for
purposes of this Agreement as the amount equal to the net
assets minus the net liabilities as maintained by the Seller
on its books and records according to generally acceptable
accounting principals (“GAAP”) consistently applied, less
Seller’s current year pre-tax profits as may be adjusted, less
the amount of Seller’s estimated liabilities at the Effective
Date after the refinancing discussed above, and less an
allowance by Seller Shareholder of $1,000,000. It is further
agreed that the Adjusted Book Value includes the book value of
the St. Louis Operation with any adjustment required by the
Carter-Waters Agreement described at Section 10.i, so long as
any such adjustment to the assets is reflected by an
adjustment in the current earnings.
	 
	 	2.	 	Seller Shareholder shall cause Seller to redeem
all but one (1) share of the balance of its ownership in
Seller Common Stock and shall issue its 





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	 	 	 	promissory note for the amount that the bank liens exceed the Adjusted Book Value
up to the $3,000,000 limit established in C.1.
	 
	 	3.	 	Buyer shall purchase the one share of Seller
Common Stock for One Dollar ($1) and provide certain
indemnifications to the Seller Shareholder as detailed herein.
	 
	 	4.	 	Buyer shall also pay certain Bank indebtedness of
Seller at Closing as detailed herein.




	D.	 	As a condition to the sale and purchase of the Purchased
Shares by the Parties, the following transactions must be
accomplished simultaneous with the Closing (as defined below) of
this Agreement:




	 	1.	 	St. Joseph County Properties, LLC, an Indiana
limited liability company, (“St. Joseph”) will purchase
certain real estate located in Mishawaka, Indiana from Seller
according to the terms of a Real Estate Purchase Agreement
dated of even date herewith between St. Joseph and Seller (the
“Mishawaka Agreement”).
	 
	 	2.	 	Waukesha County Properties, LLC, an Indiana
limited liability company, (“Waukesha”) will purchase certain
real estate located in Brookfield, Wisconsin from Seller
according to the terms of a Real Estate Purchase Agreement
dated of even date herewith between Waukesha and Seller (the
“Brookfield Agreement”).




	E.	 	As a further condition to Buyer’s willingness to purchase the
Purchased Shares, Seller Shareholder have agreed to not compete with
Buyer or Seller in the conduct of the Business, as provided in a
noncompetition agreement in substantially the form of attached
Exhibit 4.a (the “Noncompetition Agreement”).



AGREEMENTS







		
	 	     NOW, THEREFORE, in consideration of the Background and the
terms and conditions set forth in this Agreement, each of the
Seller Shareholder and Buyer agree as follows:




	1.	 	Restructuring of Seller. The Seller and Seller Shareholder agree to use
their best efforts to take the following actions prior to the sale
envisioned by this Agreement (the obligations of all of the parties to
complete the sale envisioned by this agreement are specifically
conditioned upon the completion of such actions).




	 	a.	 	Refinancing of Seller. Presently, certain assets of Seller
are cross-collateralized for loans to finance both the Seller and
other partially or wholly owned subsidiaries of Seller Shareholder.
This is a result of the Seller and Seller Shareholder having an
established financing arrangement with Comerica Bank





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	 	 	 	that involve two basic components. The first are loans to Ersco which are
secured by certain assets of Seller. The second is a loan to Seller
Shareholder which is secured by accounts receivable of Seller. As
part of this transaction, it will be necessary for the Seller to
make arrangements with its banking institution to terminate the
cross-collateralization of the loans, limiting the Seller’s
obligations only to its assets and removing the security of the
Seller from any other obligations. In addition, Seller Shareholder
will cause Comerica Bank to transfer liability to Seller Shareholder
for a note payable of Seller in the approximate amount of $5,206,000
(“Note 653”) and will pay Comerica Bank $1,300,000 to pay down
indebtedness of Seller.
	 
	 	b.	 	Payment of Seller Bank Debt. As a part of this transaction,
Buyer has agreed that it will pay the indebtedness to Comerica Bank
secured by Seller’s assets (which indebtedness is currently in the
name of Seller Shareholder) remaining after the above described
refinancing (“Seller Bank Debt”) at Closing. In the event Comerica
Bank agrees to assign the Seller Bank Debt to the Buyer, the Seller
Parties shall accept and consent to such assignment. Additionally,
Seller Shareholder will assign its obligations under the Seller Bank
Debt to Seller, all guaranties of Seller Shareholder and its
affiliates will be released. Buyer agrees to consent to such
assignment and release and agrees to indemnify Seller Shareholder
and its affiliates against any liability related to the Seller Bank
Debt. The provisions of section 12.d shall not apply to any
obligations under this sub-section.
	 
	 	c.	 	Acknowledgment of Present Relationship. The Seller has been
wholly owned by the Seller Shareholder and the cash of the Seller is
held as part of the Seller Shareholder’s concentration account and
there is a inter-company account between the Seller and the Seller
Shareholder. Seller Shareholder also incurs certain operational
expenses on behalf of Seller such as insurance and payroll costs and
tax liability which are charged at cost to Seller through the
inter-company account. At the end of the restructuring envisioned
by this Agreement, all cash will be retained by Seller Shareholder
and the inter-company account will be taken into account in arriving
at the value of the promissory note from the Seller Shareholder to
the Seller, as set forth below.
	 
	 	d.	 	Redemption of Common Stock of Seller. At or prior to the
Closing Date, the Seller shall redeem all of the shares of Seller
Shareholder’s Common Stock in the Seller, except for one (1) share.
	 
	 	e.	 	Net Effect of Actions To Be Taken. The net effect of the
actions to be taken as specified above will result in the Bank liens
on the assets of the Seller exceeding the Adjusted Book Value by no
more than Three Million ($3,000,000) Dollars and there would be no
cash or inter-company receivable in the Seller. Thus, the Adjusted
Book Value shall be not less than One Dollar. Any deficiency under
One Dollar shall be made up by a promissory note payable by Seller
Shareholder to Seller in the form attached hereto as Schedule 1.e
with interest at the rate of





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	 	 	 	seven and one half percent (7 1/2 %) per annum and due in three equal payments plus accrued interest, due
on June 30, 2003, September 30, 2003 and December 31, 2003, to be
personally guaranteed by Max A. Coon (“Seller Shareholder Note”).
To the extent Seller Shareholder is financially able to pay the
Seller Shareholder Note earlier than the due date, it shall do so.
However, such decision shall be in the Seller Shareholder’s sole
discretion. The amount of the Seller Shareholder Note cannot exceed
Three Million ($3,000,000) Dollars. To the extent that Adjusted
Book Value is greater than a negative Three Million and One
($3,000,001) Dollars after taking into account the Seller Bank Debt
to be paid by Buyer, the amount necessary to bring the Adjusted Book
Value to that level shall be paid by Seller Shareholder at the
Closing.




	2.	 	Agreement of Purchase and Sale of the Purchased Shares. On the terms and
subject to the conditions set forth in this Agreement, Seller Shareholder
agrees to sell, assign, transfer, set over, convey, and deliver to Buyer
on the Closing Date the one share of Common Stock owned by it after the
redemption of the balance of its Common Shares as envisioned by this
Agreement, free, clear, and discharged of and from all Encumbrances, and
Buyer agrees to purchase the Purchased Share from Seller Shareholder by
the payment of One ($1) Dollar (“Purchase Price”).
	 
	3.	 	Adjustment of Purchase Price.




	 	a.	 	For the Closing, Selling Shareholder shall prepare an
estimated balance sheet for Seller as of the Effective Date or such
other date as may be agreed on by Buyer and Seller Shareholder which
shall be the basis of the redemption called for in Section 1.d
(“Preliminary Balance Sheet”). The Preliminary Balance Sheet will
contain a calculation of the estimated net Adjusted Book Value of
Seller’s Assets at the Effective Date (excluding the assets
purchased through the Mishawaka Agreement and the Brookfield
Agreement). It is agreed that the value for the Seller’s good will
included on the Preliminary Balance Sheet will be the value set
forth on the August 31 Financial Statements and will not reflect any
impairment charge which Seller may be required to take.
	 
	 	b.	 	Within sixty (60) days of the Closing date, the Selling
Shareholder shall prepare a closing balance sheet as of the
Effective Date (the “Closing Balance Sheet”). The Closing Balance
Sheet shall:




	 	 	 	1.	Contain line items to the extent
applicable substantially consistent with the line items
in Seller’s Balance Sheet on the Business dated August
31, 2002 (a true copy of which is contained in attached
Schedule 9.i);
	 
	 	 	 	2.	Include adjustments to Seller’s
current year pre-tax profits where appropriate due to
adjustments in other items;





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	 	 	 	3.	The Closing Balance Sheet will also
be prepared in accordance with GAAP, except as otherwise
provided herein, and will fairly present Seller’s
financial position for the Seller as of the dates
indicated for the periods covered thereby, and are and
will be true and correct in all material respects;
	 
	 	 	 	4.	Be based upon an inventory of the
trade inventory and forms of Seller to be conducted by
the Selling Shareholder but which the Buyer shall have
the option of attending, which inventory shall be valued
at the lower of cost or market and shall have an
expiration date (on any inventory which has an
expiration date) no earlier than April 1, 2003. Forms
have been and will be valued at the current aggregate
book value (cost less accumulated depreciation).
	 
	 	 	 	5.	Be accompanied by a calculation of
the Adjusted Book Value of Seller. It is agreed that
the value for the Seller’s good will included in the
calculation of Adjusted Book Value on the Closing
Balance Sheet will be the value set forth on the August
31 Financial Statements and will not reflect any
impairment charge which Seller is required to take;
	 
	 	 	 	6.	Be delivered to the Buyer immediately
upon its completion, but no later than sixty (60) days
after the Effective Date.




	 	c.	 	Buyer shall have thirty (30) days after receiving the Closing
Balance Sheet, and the calculation of the Adjusted Book Value, to
deliver a written notice to the Seller Shareholder of any objections
to the Closing Balance Sheet and the calculation of the Adjusted
Book Value. Any such notice of objections shall be in writing and
shall state, in reasonable detail, the basis for each objection and
the amount of adjustment that the Buyer requires. If Buyer and
Seller Shareholder cannot agree with respect to the Closing Balance
Sheet or the calculation of the Adjusted Book Value within thirty
(30) days after the delivery of a notice of objections or such later
date as may be agreed on by Buyer and Seller Shareholder, the
dispute shall be resolved accordance with Section ?. In the event
mediation or arbitration in involved as provide in Section ? , such
mediator or arbitrator shall be a certified public accountant. Any
items not in dispute shall be deemed stipulated by Buyer and Seller
Shareholder and shall not be determined by the arbitrator or
mediator. The determination of the arbitrator shall be binding on
and conclusive with regard to the matters it determines and the
Closing Balance Sheet shall be adjusted accordingly for all purposes
under this Agreement.
	 
	 	d.	 	The Closing Balance Sheet and calculation of Adjusted Book
Value shall become final and binding on the Seller Shareholder and
the Buyer upon the earliest of (x) if no objection notice has been
given, the day after the expiration of the period within which the
Buyer may notify the Seller Shareholder of any objections





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	 	 	 	thereto; (y) agreement by the Buyer and Seller Shareholder that such Closing
Balance Sheet and calculation of Adjusted Book Value, together with
any modifications thereto agreed by the Seller Shareholder and the
Buyer, shall be final and binding; and (z) the date on which the
arbitrator issues its decision with respect to any dispute relating
to such Closing Balance Sheet and calculation of Adjusted Book
Value.
	 
	 	e.	 	If the Adjusted Book Value as shown on the Closing Balance
Sheet, as may be adjusted, is different from the Preliminary Balance
Sheet, the Adjusted Book Value shall be reduced or increased by the
amount of such difference for purposes of Section 1.d and any amount
in excess of $3,000,000 shall be payable within ten (10) business
days of the final determination of the Closing Balance Sheet and
calculation of Adjusted Book Value as outlined above, together with
interest from the Closing Date to the date of payment at a rate of
interest equal to the rate per annum of 2% over the published prime
rate of interest of the Northern Trust of Chicago, as applicable
during any relevant period. In the event the Adjusted Book Value is
more or less than the value of the Seller Shareholder Note, the
Seller Shareholder Note shall be voided and a new Seller Shareholder
Note in the new adjusted amount shall be signed.
	 
	 	f.	 	The Seller Shareholder will be allowed full access to the
books and records of the Seller and to Seller’s employees for
purposes of preparing the Closing Balance Sheet.




	4.	 	Related Agreements.




	 	a.	 	Noncompetition Agreement. At the Closing, Seller Shareholder
shall execute and deliver to Buyer the Noncompetition Agreement.
	 
	 	b.	 	Mishawaka Agreement. At the Closing, St. Joseph County
Properties, LLC and Seller shall execute the Mishawaka Agreement in
substantially the form of attached Exhibit 4.b.
	 
	 	c.	 	Brookfield Agreement. At the Closing, Waukesha County
Properties, LLC and Seller shall execute the Brookfield Agreement in
substantially the form of attached Exhibit 4.c.




	5.	 	Preclosing Actions. Before the Closing:




	 	a.	 	Conduct of Business. Seller Shareholder shall cause Seller to
carry on and conduct the Business only in the ordinary course
consistent with past practice, without any change in the policies,
practices, and methods Seller pursued before the date of this
Agreement. Seller Shareholder will use their best efforts and cause
Seller to use its best efforts to preserve the Business organization
intact; to preserve the relationships with Seller’s customers,
suppliers, and others having business dealings with Seller; and to
preserve the services of Seller’s employees,





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	 	 	 	agents, and representatives. Without limitation of the foregoing, (a) Seller
Shareholder will cause Seller not to undertake without Buyer’s prior
written consent any action that, if taken prior to the date of this
Agreement, would be required to be disclosed on any Schedule, and
(b) Seller Shareholder will cause Seller not to alter the physical
contents or character of any of its inventories in a way that
affects the nature of the Business or results in a change in the
total dollar valuation of the inventories or otherwise take action
or refrain from taking action that would result in any change in
Seller’s assets or liabilities, other than in the ordinary course of
business consistent with past practices.
	 
	 	b.	 	Access to Buyer. From the date of this Agreement through the
Closing, Seller Shareholder shall cause Seller to permit Buyer and
its representatives to make a full business, financial, accounting,
and legal audit of Seller. Seller Shareholder shall cause Seller to
take all reasonable steps necessary to cooperate with Buyer in
conducting this audit.
	 
	 	c.	 	Accuracy of Representations and Warranties and Satisfaction
of Conditions. Seller Shareholder will immediately advise Buyer in
writing if (a) any of the representations or warranties of Seller
Shareholder is untrue or incorrect in any material respect, or (b)
Seller Shareholder become aware of the occurrence of any event or
state of facts that results in any of the representations and
warranties of Seller Shareholder being untrue or incorrect as if
Seller Shareholder were then making them. Seller Shareholder will
not take any action, or omit to take any action, and shall cause
Seller not to take any action, or omit to take any action, that
would result in any of Seller Shareholder’ representations and
warranties set forth in this Agreement to be untrue or incorrect as
of the Closing Date. Seller Shareholder will use their best efforts
to cause all conditions set forth in Section 7 that are within their
control to be satisfied as promptly as practicable under the
circumstances.




	6.	 	Conditions Precedent to Buyer’s Obligations. Buyer’s obligation to
consummate the transactions contemplated by this Agreement is subject to
the fulfillment (or waiver by Buyer) before or at the Closing of each of
the following conditions:




	 	a.	 	Accuracy of Representations and Warranties. The
representations and warranties of Seller Shareholder contained in
this Agreement and all related documents shall be true and correct
at and as of the Closing Date as though such representations and
warranties were made on that date.
	 
	 	b.	 	Performance of Covenants. Seller Shareholder shall have in
all respects performed and complied with all covenants, agreements,
and conditions that this Agreement requires, and with all other
related documents to be performed or complied with prior to or on
the Closing Date. Seller Shareholder shall have executed and
delivered the Noncompetition Agreements.





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	 	c.	 	Satisfactory Due Diligence Review. Buyer shall have conducted
a review reasonably satisfactory to Buyer of the business,
financial, accounting, and legal aspects of Seller, the Business,
and Seller’s assets and liabilities.
	 
	 	d.	 	No Casualty. Prior to the Closing Date, Seller shall not have
incurred, or be threatened with, a material liability or casualty
that would materially impair the value of its assets.
	 
	 	e.	 	Share Certificates. Seller Shareholder shall have delivered
to Buyer a certificate representing the Purchased Shares registered
in the name of the Seller Shareholder (without any restrictive
legend or together with such instruments and items that shall
permit, in the reasonable opinion of Buyer’s counsel, the sale and
transfer of such shares free, clear, and discharged of any such
legend). The certificate shall be duly endorsed in blank or with
accompanying stock powers or assignments duly signed. Seller
Shareholder shall also deliver to Buyer such other instruments or
documents that shall, in the reasonable opinion of the Buyer’s
counsel, be reasonably required to vest good and marketable title in
Buyer to the Purchased Shares free, clear, and discharged of any and
all Encumbrances.
	 
	 	f.	 	No Litigation. No action, suit, proceeding, or investigation
shall have been instituted before any court or governmental body, or
instituted by any governmental agency, to restrain or prevent the
carrying out of the transactions contemplated by this Agreement or
that might affect Buyer’s right to own, operate, and control the
Purchased Shares or the Business after the Closing Date.
	 
	 	g.	 	Lien Search. Buyer shall have received UCC lien searches in
form and content satisfactory to Buyer.
	 
	 	h.	 	Consents. Seller Shareholder shall have obtained in writing
all consents necessary or desirable to consummate or facilitate
consummation of this Agreement and any related transactions. The
consents shall be delivered to Buyer before Closing and shall be
reasonably acceptable to Buyer in form and substance.
	 
	 	i.	 	Environmental Investigation. Buyer shall have the option to
obtain, at its cost and expense, a written report of a site
assessment and environmental audit, prepared by an independent,
competent, and qualified engineer, in scope, form, and substance,
satisfactory to Buyer, and any updates Buyer deems necessary or
appropriate. Buyer shall be satisfied, in its sole and absolute
discretion, that there will not be at and after the Closing any
basis for the imposition on Seller or Buyer of any liability under
any Environmental Law.
	 
	 	j.	 	Waivers. Seller Shareholder shall have delivered to Buyer a
statement from each of the Seller Shareholder and each of Seller’s
officers and directors, in form and substance acceptable to Buyer,
that each either waives or has no claim, as appropriate, against
Seller for unpaid dividends, bonuses, profit sharing, rights, or
other claims of any kind, nature, or description except salaries and
fringe benefits





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	 	 	 	normally accrued and described in the statement or otherwise contemplated under this Agreement.
	 
	 	k.	 	Banking Relationship of Seller. The new banking relationship
envisioned by Section 1.a shall have been completed.
	 
	 	l.	 	Board Approval. The Board of Directors of the Buyer has
approved the transaction envisioned by this Agreement.
	 
	 	m.	 	Resignations. Each director and officer of Seller shall have
delivered to Buyer resignations from their positions and any other
positions held in, or by appointment by or from, Seller.
	 
	 	n.	 	Other Documents and Instruments. Buyer shall have received
any other documents and instruments as it may reasonably request.
	 
	 	o.	 	Approvals by Buyer’s Counsel. Buyer’s counsel shall have
reasonably approved all legal matters and the form and substance of
all documents Buyer or Seller is to deliver at the Closing.




	7.	 	Conditions Precedent to Seller Shareholder’ Obligations. Seller and
Seller Shareholder’s obligations to consummate the transactions
contemplated by this Agreement are subject to the fulfillment of each of
the following conditions before or at the Closing Date:




	 	a.	 	Accuracy of Representations and Warranties. Buyer’s
representations and warranties contained in this Agreement and all
related documents shall be true and correct at and as of the Closing
Date as though such representations and warranties were made at that
time.
	 
	 	b.	 	Performance of Covenants. Buyer shall have in all respects
performed and complied with all covenants, agreements, and
conditions required by this Agreement and all related documents that
must be performed or complied with before and at the Closing Date.
	 
	 	c.	 	Banking Relationship of Seller. The new banking relationship
envisioned by Section 1.a have been completed and the transaction
envisioned by this Agreement has been approved by Seller and Seller
Shareholder’s bank.
	 
	 	d.	 	Board Approval. Both the Boards of Directors of the Seller
and the Seller Shareholder have approved the transaction envisioned
by this Agreement.
	 
	 	e.	 	Other Documents and Instruments. Buyer shall have received
any other documents and instruments as it may reasonably request.





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	 	f.	 	Approvals by Seller and Seller Shareholder’s Counsel. Seller
and Seller Shareholder’s counsel shall have reasonably approved all
legal matters and the form and substance of all documents Buyer or
Seller is to deliver at the Closing.




	8.	 	Closing Matters.




	 	a.	 	Closing. The closing of the transactions contemplated in this
Agreement (the “Closing”) shall take place at the offices of Warren
Cameron Faust & Asciutto, P.C. at 2161 Commons Parkway, Okemos,
Michigan 48864 at 10:00 a.m. on November 14, 2002 or at another
place and/or on another date that the parties agree on (the “Closing
Date”).
	 
	 	b.	 	Updated Schedule. At the Closing, certain Schedules will
need to be up-dated to the day of Closing. This shall include
Schedules 9.j (Conduct of Business), 9.o (Litigation) and 9.s
(Contracts) and shall include only those changes that have occurred
in the ordinary course of business consistent with past practices.
	 
	 	c.	 	Payment of Bank Debt. At Closing, Buyer shall pay the Seller
Bank Debt. It is estimated that the amount of Seller Bank Debt
payable by Buyer at Closing will be $13,268,000, which amount shall
be paid to Comerica Bank by wire transfer or cashier’s check.
	 
	 	d.	 	Certain Closing Expenses. Seller Shareholder shall be liable
for and shall pay all federal, state, and local sales, use, excise,
and documentary stamp taxes and all other taxes, duties, or other
like charges properly payable on and in connection with the
conveyance and transfer of the Purchased Shares to Buyer.
	 
	 	e.	 	Further Assurances. Seller Shareholder shall cooperate with
and assist Buyer and take all other reasonable actions to ensure a
smooth transition of the Seller to Buyer. From time to time after
the Closing Date, Seller Shareholder shall, at the request of Buyer,
execute and deliver additional conveyances, transfers, documents,
instruments, assignments, applications, certifications, papers, and
other assurances that Buyer requests as necessary, appropriate,
convenient, useful, or desirable to effectively carry out this
Agreement’s intent and to transfer the Purchased Shares to Buyer.




	9.	 	Seller Shareholder’ Representations and Warranties. As of the date of
this Agreement and as of the Closing, the Seller Shareholder represents
and warrants to Buyer, and acknowledges and confirms, that Buyer is
relying on these representations and warranties in entering into this
Agreement:




	 	a.	 	Organization and Standing. Seller is a corporation duly
organized, validly existing, and in good standing under the laws of
the State of Michigan, and Seller has all requisite power and
authority (corporate and otherwise) to own its properties and
conduct its business as it is now being conducted. Except as
provided in Schedule 9.a, the nature of the business and the
character of the 





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	 	 	 	properties Seller owns or leases do not make
licensing or qualification of Seller as a foreign corporation
necessary under the laws of any other jurisdiction.
	 
	 	b.	 	Articles and Bylaws. Schedule 9.b contains true and complete
copies of Seller’s Articles of Incorporation and Bylaws.
	 
	 	c.	 	Capitalization. Seller’s authorized capital stock consists
solely of 10,000,000 shares of Seller Common Stock, of which
3,000,000 shares are issued and outstanding and 1,000,000 shares of
Preferred stock of which none are issued; All of the issued and
outstanding Seller Common Stock is owned of record and beneficially
by the Seller Shareholder; There are no options, calls,
subscriptions, warrants, agreements, or other securities or rights
outstanding for the purchase or other acquisition of Seller’s
capital stock that are convertible into, exercisable for, or relate
to Seller’s capital stock, or that have any voting rights; and
Seller has no outstanding contractual obligations to repurchase,
redeem, or otherwise acquire any outstanding shares of Seller’s
capital.
	 
	 	d.	 	Authorization. Seller has all requisite power and authority
(corporate and otherwise), and the Seller Shareholder has all
requisite legal capacity (i) to execute, deliver, and perform this
Agreement to which it is a party and (ii) to consummate the
transactions contemplated under this Agreement. Seller has taken,
or will have taken at the time of the Closing, all necessary
corporate action (including the approval of its board of directors
and Seller Shareholder), to approve the execution, delivery, and
performance of this Agreement to be executed and delivered by it and
the consummation of the transactions contemplated in this Agreement.
This Agreement will be legal, valid, and binding obligations of
each of the Seller Parties, that are a party to them, enforceable
against each of them in accordance with the Agreement’s respective
terms, except as such enforcement may be limited by bankruptcy,
insolvency, moratorium, or similar laws relating to the enforcement
of creditors’ rights and by general principles of equity (regardless
of whether such enforceability is considered in a proceeding at law
or in equity).
	 
	 	e.	 	Existing Agreements and Governmental Approvals.




	 	 	i.	The execution, delivery, and performance of this
Agreement and the consummation of the transactions
contemplated by them:




	 	1.	 	Do not and will not violate any
provisions of law applicable to any of Seller Parties;
	 
	 	2.	 	As of the Closing, does not and will
not conflict with, result in the breach or termination
of any provision of, or constitute a default under (in
each case whether with or without the giving of notice
or the lapse of time or both) Seller’s Articles of
Incorporation or Bylaws, or any order, judgment,
arbitration award, or decree to





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	 	 	 	which any of Seller Parties is a party or by which any of them or any of
their assets and properties are bound (including,
without limitation, the Purchased Share); and
	 
	 	3.	 	Do not and will not result in the
creation of any encumbrance, on any of Seller Parties’
properties, assets, or Business (including, without
limitation, the Purchased Shares).
	 


	 	ii.	 	No approval, authority, or consent of, or filing
by, any Seller Party with, or notification to, any federal,
state, or local court, authority, or governmental or
regulatory body or agency:
	 


	 	1.	 	To authorize the execution and
delivery of this Agreement by any of the Seller Parties,
	 
	 	2.	 	To authorize the consummation of the
transactions contemplated by this Agreement by any of
the Seller Parties.
	 


	 	f.	 	No Subsidiaries. Seller does not have any subsidiaries or
directly or indirectly own any interest or have any investment in
any other corporation, partnership, or other entity in connection
with the Business.
	 
	 	g.	 	No Insolvency. To the Best Knowledge of Seller Parties, no
insolvency proceeding of any character, including, without
limitation, bankruptcy, receivership, reorganization, composition,
or arrangement with creditors, voluntary or involuntary, affecting
Seller or any of its assets or properties has commenced. Seller
Parties have not taken any action in contemplation of, or that would
constitute the basis for, the institution of any such insolvency
proceedings.
	 
	 	h.	 	Permits and Licenses. Seller has all necessary permits,
certificates, licenses, approvals, consents, and other
authorizations required to carry on and conduct the Business and to
own, lease, use, and operate the Business at the places and in the
manner in which the Business is conducted.
	 
	 	i.	 	Financial Statements. Seller Parties have delivered to Buyer
the financial statements on the Business listed in Schedule 9.i,
dated March 31, 2002 (unaudited, internally prepared) and August 31,
2002 (unaudited, internally prepared) (the “Financial Statements”).
The Financial Statements have been and will be prepared in
accordance with GAAP, do and will fairly present Seller’s financial
position as of the dates indicated for the periods covered thereby,
and are and will be true and correct in all material respects,
provided, however that the August 31, 2002 Financial Statements will
consist of the Balance Sheet and Statement of Operations only,
excluding all notes. The Fixed Asset list dated August 31, 2002
that Seller has provided to Buyer was prepared according to GAAP as
consistently applied by Seller, and Seller has clear and marketable
title to all such fixed assets, other than security interests
granted pursuant to the Seller 





12







 




	 	 	 	Bank Debt. The Seller has not been a
member of an affiliated group filing a consolidated federal income
tax return other than a group the common parent of which is the
Seller Shareholder.
	 
	 	j.	 	Conduct of Business. Except as otherwise disclosed on
attached Schedule 9.j, or any Schedules in this Agreement, since the
date of the last of the Financial Statements attached as Schedule
9.i, Seller has not:




	 	 	 	i.	Except for the actions envisioned by this
Agreement, issued any capital stock or other securities
convertible into or exchangeable or exercisable for capital
stock or having voting rights; declared or paid any dividend;
made any other payment from capital or surplus or other
distribution of any nature; or directly or indirectly
redeemed, purchased, or otherwise acquired, recapitalized, or
reclassified any of its capital stock.
	 
	 	 	 	ii.	Merged or consolidated with any other entity.
	 
	 	 	 	iii.	Altered or amended its Articles of Incorporation
or Bylaws.




	 	k.	 	Compliance with Laws. At all times prior to the Closing
Date, Seller has, to the Best of Seller Parties’ Knowledge, complied
with all laws, orders, regulations, rules, decrees, and ordinances
affecting to any extent or in any manner any aspects of the
Business.
	 
	 	l.	 	No Brokers. Seller has not engaged, and is not responsible
for any payment to, any finder, broker, or consultant in connection
with the transactions contemplated by this Agreement.
	 
	 	m.	 	Receivables. The accounts and other receivables reflected in
Seller’s Balance Sheet dated August 31, 2002, and to be reflected on
the Preliminary Balance Sheet and Closing Balance Sheet, are and
will be the result of bona fide sales or other transactions. Except
to the extent that a reserve against the possible uncollectibility
of such accounts and other receivables has been established and is
reflected on Seller’s Balance Sheet dated August 31, 2002, and will
be established and reflected on the Preliminary Balance Sheet and
the Closing Balance Sheet, all of the accounts and other receivables
are fully collectible on or before March 31, 2003 in accordance with
Seller’s ordinary practice (which has been disclosed to Buyer) and
without resort to legal proceedings.
	 
	 	n.	 	Taxes.




	 	 	 	i.	For the purposes of this Agreement, Tax or Taxes
shall mean all federal, state, county, local, and other taxes
(including, without limitation, income taxes; premium taxes;
single-business taxes; excise taxes; sales taxes; use taxes;
value-added taxes; gross receipts taxes; franchise taxes; ad
valorem taxes; real estate taxes; severance taxes; capital
levy taxes; transfer taxes; 





13







 




	 	 	 	stamp taxes; employment,
unemployment, and payroll-related taxes; withholding taxes;
and governmental charges and assessments), and include
interest, additions to tax, and any penalties.
	 


	 	 	ii.	Except as otherwise disclosed on Schedule 9.n.ii,
Seller has filed on a timely basis or have received valid
extensions for all Tax returns it is required to file under
any federal, state, or local law and has paid or established
an adequate reserve with respect to all Taxes for the periods
covered by such returns. No agreements have been made by or on
behalf of Seller for any waiver or for the extension of any
statute of limitations governing the time of assessment or
collection of any Taxes. Seller and its officers have received
no notice of any pending or threatened audit by the IRS, or
any state or local agency, related to Seller’s Tax returns or
Tax liability for any period, and no claim for assessment or
collection of Taxes has been asserted against Seller. There
are no federal, state, or local tax liens outstanding against
any of Seller’s assets, properties, or business.
	 
	 	 	iii.	It is acknowledged that Seller Shareholder has
filed a consolidated tax return for its affiliated group of
corporations, including Seller. The Selling Shareholder shall
include the income of the Seller (including any deferred items
triggered into income by Regulation Section 1.1502-13 and any
excess loss account taken into income under Regulation Section
1.1502-19) on the Selling shareholder’s consolidated federal
income tax returns for all period through the Closing Date and
pay any federal income taxes attributable to such income. For
all taxable period ending on or before the Closing Date, the
Selling Shareholder shall cause the Seller to join in the
Selling Shareholder’s consolidated federal income tax return
and, in jurisdiction requiring separate reporting from the
Selling Shareholder, to file separate company state and local
income tax returns. All such tax returns shall be prepared
and filed in a manner consistent with prior income tax returns
practice, except as required by a change in applicable law.
The Buyer shall have the right tor review and comment on any
such tax returns prepared by the Selling Shareholder. The
Selling Shareholder shall allow the Seller to participate in
any audit of the Selling Shareholder to the extent that such
returns relate to the Seller.
	 
	 	 	iv.	The “Inter-Company Agreement” between Seller and
Seller Shareholder dated April 1, 1998, a copy of which is
attached as Schedule 9.n.iv is hereby terminated and the
parties thereto release each other as to any liability
pursuant to such Agreement




	 	o.	 	Litigation. Except as listed on Schedule 9.o, there are no
claims, disputes, actions, suits, proceedings, or investigations
pending or, to the Best Knowledge of the Seller Shareholder,
threatened against or affecting Seller, its business, or its assets
except for collection or lien suits which are in the normal course
of business of the Seller.





14







 






	 	p.	 	Product Liability. No defect or deficiency exists in any of
the products manufactured or sold by Seller, or in any of Seller’s
finished Inventory, that could, to the best of Seller’s knowledge,
give rise to any liabilities or claims for breach of warranty,
product liability, or similar liabilities or claims.
	 
	 	q.	 	Environmental Matters. Except as may be provided on Schedule
9.q, during its period of ownership or occupancy, Seller, its agents
and employees, to the best of its knowledge, complied with all
federal, state and municipal environmental laws, regulations and
policies and have no knowledge of any environmental types of
problems with any property owned or occupied by the Seller.
	 
	 	r.	 	Labor Matters. There is not now, nor has there been at any
time during the past five years, any strike, lockout, grievance,
other labor dispute, or trouble of any nature pending or threatened
against Seller or that in any manner affects Seller. To the best of
its knowledge, Seller is and has been in compliance with all rules
regulating employee wages and hours. On or before the Closing Date,
Seller shall have paid or accrued all its accrued obligations
relating to employees (whether arising by operation of law, by
contract, or by past service) or payments to trusts or other funds,
to any governmental agency, or to any individual employee (or his or
her legal representatives) with respect to compensation,
unemployment compensation benefits, profit sharing, or retirement
benefits, or Social Security benefits. All of the employees of
Seller are employed on terms that are competitive for the industry
and the local where they are employed. Buyer has access to all
employment information and has or will, prior to Closing, be
informed of all employment contracts and employees who are not
“at-will” employees, if any. The employees of the Seller are under
certain group self-insured benefit plans and a 401k plan which are
part of the Seller Shareholder and will not be able to be continued
when the Seller is no longer owned by the Seller Shareholder.
Except as provide in Schedule 9.r, there are no pension or
retirement plans for any past or present employees that is the
obligation of the Seller.
	 
	 	s.	 	Contracts, Suppliers and Customers. Except as provided in
Schedule 9.s, all contracts of the Seller, including those with
suppliers and customers are on normal commercial terms and were done
in the normal course of Seller’s business. Buyer shall have access
to all such contracts during its due diligence period.




	10.	 	Buyer’s Representations and Warranties. Buyer represents and warrants to
Seller that:




	 	a.	 	Organization and Standing. Buyer is a corporation, duly
organized and validly existing under the laws of the State of
Indiana, and Buyer has all the requisite power and authority
(corporate and otherwise) to own its properties and to conduct its
business as it is now being conducted.





15







 




	 	b.	 	Authorization. Buyer has taken all necessary corporate
action (i) to duly approve the execution, delivery, and performance
of this Agreement and (ii) to consummate any related transactions.
Buyer has duly executed and delivered this Agreement. This
Agreement is legal, valid, and the binding obligations of Buyer,
enforceable against Buyer in accordance with their respective terms,
except as such enforcement may be limited by bankruptcy, insolvency,
moratorium, or similar laws relating to the enforcement of
creditor’s rights and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or
in equity).
	 
	 	c.	 	Existing Agreements and Governmental Approvals.




	 	i.	 	The execution, delivery, and performance of this
Agreement and the consummation of the transactions
contemplated by them:




	 	1.	 	Do not and will not violate any
provisions of the law applicable to Buyer;
	 
	 	2.	 	Do not and will not conflict with,
result in the breach or termination of any provision of,
or constitute a default under (in each case whether with
or without the giving of notice or the lapse of time, or
both) Buyer’s Articles of Organization, Bylaws or
Operating Agreement or any indenture, mortgage, lease,
deed of trust, or other instrument, contract, or
agreement or any order, judgment, arbitration award, or
decree to which Buyer is a party or by which it or any
of its assets and properties are bound.




	 	ii.	 	No approval, authority, or consent of, or filing
by Buyer with, or notification to, any federal, state, or
local court, authority, or governmental or regulatory body or
agency or any other corporation, partnership, individual, or
other entity is necessary




	 	1.	 	To authorize Buyer’s execution and
delivery of this Agreement; or
	 
	 	2.	 	To authorize Buyer’s consummation of
the transactions contemplated by this Agreement and the
Supply Agreement.




	 	d.	 	Investment Intent. Buyer is acquiring the Purchased Shares
for its own account, for investment, and without any present
intention to resell the Purchased Shares. Buyer acknowledges and
agrees that the Purchased Shares have not and will not be registered
under the Securities Act of 1933, as amended (“Act”), the Michigan
Uniform Securities Act or any other securities laws, and Buyer will
not resell the Purchased Shares unless they are so registered or
unless an exemption from registration is available, except as
provided in this Agreement.





16







 






	 	e.	 	Disclosure. Buyer acknowledges that Buyer and Buyer’s
advisors have had the full opportunity to examine such books,
records, financial statements and other documents and information,
and to ask questions of and to receive answers from Seller Parties,
as Buyer deems necessary or appropriate in the circumstances and has
had full access to all information and documents: (i) relative to
the Seller and the Seller’s common stock; and (ii) necessary to
verify the accuracy of any information, documents, books and records
furnished. All such materials and information requested by Buyer
and Buyer’s advisors (including information requested to verify
information previously furnished) have been made available and
examined by Buyer or Buyer’s advisors.
	 
	 	f.	 	Investment Decision. In making the decision to purchase the
Shares, Buyer has relied upon independent investigations made by
Buyer and not on the officers or directors of the Seller, the
Seller, Seller Shareholder or any person or entity, other than
Buyer’s own advisors with respect to the legal, tax and other
considerations relating to Buyer’s investment. Buyer is an
“accredited investor” as such term is used in Regulation D under the
Act and Buyer has sufficient knowledge and experience in financial
and business matters to evaluate the merits and risks of this
investment.
	 
	 	g.	 	Seller Shareholder Guaranties. Buyer shall pay or cause
Seller to pay such obligations of Seller that are guarantied by
Seller Shareholder as listed on attached Schedule 10.g and shall
indemnify Seller Shareholder for any cost or obligation imposed upon
Seller Shareholder because of such guaranties. The provisions of
Section 12.d shall not apply to any obligation under this
sub-section.
	 
	 	h.	 	Lease Agreement. Buyer acknowledges that it has had access
to a certain lease agreement covering forms that are used by the
Seller and agrees that the Seller will be obligated to continue such
lease according to its terms, except that such lease shall be
amended to provide that at the conclusion of the lease, Seller will
be obligated to either renew the lease or purchase the forms. Seller
will additionally be granted the right to terminate the lease and
purchase the forms at the price determined according to the schedule
attached at Schedule 10.h. Buyer shall guaranty the performance of
Seller pursuant to the lease agreement and shall indemnify the
lessor under the lease agreement for any cost or obligation imposed
upon such lessor because of any failure of Seller to fulfill its
obligations under the lease agreement. The provisions of Section
12.d shall not apply to any obligation under this sub-section.
	 
	 	i.	 	Sale of St. Louis Operation. Buyer acknowledges that Seller
and Seller Shareholder have entered into an agreement dated October
29, 2002 for Seller to sell the assets of its St. Louis operations
to Carter-Waters Corporation (the “Carter-Waters Agreement”), a copy
of which is attached as Schedule 10.i. Buyer warrants and agrees
that it will operate in good faith to cause Seller’s obligations
under the Carter-Waters Agreement to met and to close the
transaction substantially according to its terms.





17







 




	11.	 	Guaranty of Receivables. Seller Shareholder guarantees that the
accounts receivable which exceed the reserve for bad debt upon Seller’s
books at Closing shall be collected on or before March 31, 2003. Buyer
agrees to cause Seller to use its best efforts to collect all such
accounts receivable prior to March 31, 2003. To the extent that such
portion of the accounts receivable are not so collected, they shall be
repurchased forthwith by Seller Shareholder, but no later than 30 days
after application in writing by Buyer therefor which shall be accompanied
by appropriate documentation substantiating the same to allow the Seller
Shareholder to proceed to collect such amounts. In the event both parties
agree that an account is uncollectible, such account may be repurchased by
Seller Shareholder prior to March 31, 2003. The provisions of Section
12.d shall not apply to any obligation under this section.
	 
	12.	 	Indemnification.




	 	a.	 	Seller Parties. Seller Parties, jointly and severally, shall
defend, indemnify, and hold harmless Buyer and its directors,
officers, shareholders, permitted successors, and permitted assigns
from and against any and all costs, losses, claims, suits, actions,
assessments, diminution in value, liabilities, fines, penalties,
damages (compensatory, consequential, and other), and expenses
(including reasonable legal fees) in connection with or resulting
from:




	 	i.	 	Any inaccuracy in any representation or breach of
any warranty of Seller Parties contained in this Agreement;
	 
	 	ii.	 	Any failure by any Seller Parties to perform or
observe in full, or to have performed or observed in full, any
covenant, agreement, or condition to be performed or observed
by any of the Seller Parties under this Agreement.
	 
	 	iii.	 	Any liabilities, obligations, debts, contracts,
claims, liens and litigation, whether accrued, absolute,
contingent, known or unknown, of a material nature, resulting
or arising from actions prior to the Closing taken by the
Seller or taken by the Seller Shareholder that are not
expressly assumed by the Buyer in this Agreement.
	 
	 	iv.	 	The Selling Shareholder shall include the income
of the Seller (including any deferred items triggered into
income by Regulation Section 1.1502-13 and any excess loss
account taken into income under Regulation Section 1.1502- 19)
on the Selling shareholder’s consolidated federal income tax
returns for all period through the Closing Date and pay any
federal income taxes attributable to such income. For all
taxable period ending on or before the Closing Date, the
Selling Shareholder shall cause the Seller to join in the
Selling Shareholder’s consolidated federal income tax return
and, in jurisdiction requiring separate reporting from the
Selling Shareholder, to file separate company state and local
income tax returns. All such tax returns shall be prepared
and filed in a manner consistent with prior income tax returns
practice, except as required by a change in 





18







 



	 		 	applicable law. The Buyer shall have the right tor review and comment on any
such tax returns prepared by the Selling Shareholder. The
Selling Shareholder shall allow the Seller to participate in
any audit of the Selling Shareholder to the extent that such
returns relate to the Seller.




	 	b.	 	Buyer. Buyer shall defend, indemnify, and hold harmless
Seller Parties and its directors, officers, shareholders, permitted
successors, and permitted assigns from and against any and all
costs, losses, claims, suits, actions, assessments, diminution in
value, liabilities, fines, penalties, damages (compensatory,
consequential, and other), and expenses (including reasonable legal
fees) in connection with or resulting from:




	 	i.	 	Any inaccuracy in any representation or breach of
any warranty of Buyer contained in this Agreement;
	 
	 	ii.	 	Any failure by Buyer to perform or observe in
full, or to have performed or observed in full, any covenant,
agreement, or condition to be performed or observed by the
Buyer under this Agreement.




	 	c.	 	Notice of Claim. Each person entitled to indemnification
under this Section 12 (the “Indemnified Party”) shall give notice to
the party required to provide indemnification (the “Indemnifying
Party”) promptly after such Indemnified Party has actual knowledge
of any claim as to which indemnity may be available or sought, and
shall permit the Indemnifying Party to participate in the defense of
any such claim or any resulting litigation, and the Indemnifying
Party may participate in such defense at such party’s expense. In
the event that a claim or litigation is partially, but not wholly
covered by an indemnity set forth in this Section 12, the
Indemnified and the Indemnifying Parties shall share in the
resulting losses in proportion to their respective liabilities.
Except with the consent of each Indemnified Party, which consent
shall not be unreasonably withheld, no Indemnifying Party shall
consent to the entry of any judgment or enter into any settlement
which does not include a release of such Indemnified Party from all
liability in respect to such claim or litigation to the extent it is
covered by the indemnity in this Section 12. Provided, however, the
parties agree that only fully justifiable claims that have solid
arms’ length basis will be submitted for indemnification. For
example, improving relationships with the third party claimant will
not be sufficient reason to base a claim for indemnification.
Provided further, the indemnified party shall not consent to a
settlement of, or the entry of any judgment arising from, any claim
under this Section 12 without the prior written consent of the
Indemnified Party, which consent shall not be unreasonably withheld.
	 
	 	d.	 	Limit of Liability. Buyer, on the one hand, and Seller and
Seller Shareholder, on the other, shall not have any liability (for
indemnification or otherwise) under this Section 12 except to the
extent that the total of all Damages exceeds Twenty-Five Thousand
Dollars and No Cents ($25,000).





19







 






	13.	 	Expenses. Each of the parties shall pay all of the costs that it incurs
incident to the preparation, execution, and delivery of this Agreement and
the performance of any related obligations, whether or not the
transactions contemplated by this Agreement shall be consummated.
	 
	14.	 	Termination.




	 	a.	 	This Agreement may be terminated at any time before the
Closing Date as follows:




	 	i.	 	By Buyer and Seller Shareholder in a written
instrument.
	 
	 	ii.	 	By either Buyer or Seller Shareholder if the
Closing does not occur on the Closing Date.
	 
	 	iii.	 	By Buyer or Seller Shareholder if there shall
have been a material breach of any of the representations or
warranties set forth in this Agreement on the part of the
other, and this breach by its nature cannot be cured before
the Closing.
	 
	 	iv.	 	By Buyer or Seller Shareholder if there has been
a breach of any of the covenants or agreements set forth in
this Agreement on the part of the other, and this breach is
not cured within 10 business days after the breaching party or
parties receive written notice of the breach from the other
party.




	 	b.	 	If terminated as provided in Section 14.a, this Agreement
shall forthwith become void and have no effect, except for Sections
14.c, and except that no party shall be relieved or released from
any liabilities or damages arising out of the party’s breach of any
provision of this Agreement.
	 
	 	c.	 	Buyer, on the one hand, and the Seller Parties, jointly and
severally, on the other, warrant and agree that if this Agreement is
terminated, each party will not, during the one-year period
following the termination, directly or indirectly solicit any
employee of the other party to leave the employment of the other
party.




	15.	 	Section 338(h)(10) Election. Seller Parties agree to file an election on
a timely basis to treat this transaction as an asset purchase transaction
pursuant to Section 338(h)(10) of the Internal Revenue Code of 1986, as
amended, if Buyer elects to cause such election to be made. The Seller
Parties and the Buyer shall join in making any corresponding Section
338(h)(10) or similar elections under state and local tax law. The Seller
Shareholder shall pay any taxes attributable to the making of any such
elections and shall indemnify the Buyer from such taxes. The Seller
Shareholder has filed a consolidated federal tax income tax return with
the Seller for the taxable year immediately preceding the current taxable
year and is eligible to make a Section 338(h)(10) election.





20







 




	16.	 	Miscellaneous Provisions.




	 	a.	 	Representations and Warranties. All representations,
warranties, and agreements made by the parties pursuant to this
Agreement shall survive the consummation of the transactions
contemplated by this Agreement for two (2) years after the Closing
Date.
	 
	 	b.	 	Press Release and Public Announcements. No party shall issue
any press release or make any public announcement relating to the
subject matter of this Agreement without the prior written approval
of the other party; provided, however, that any party may make any
public disclosure it believes in good faith is required by
applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing party will
use its reasonable best efforts to advise the other party prior to
making the disclosure).
	 
	 	c.	 	Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall
be in writing and shall be deemed given (a) when personally
delivered or sent by facsimile transmission to the party to be given
the notice or other communication or (b) on the business day
following the day such notice or other communication is sent by
overnight courier to the following:




	 	 	 
	if to Seller Shareholder:	 	
Max A. Coon

Maxco, Inc.

1118 Centennial Way

Lansing, Michigan 48917

(517) 321-3130 Phone Number

(517) 321-1022 Fax Number;
	 
	if to Buyer:	 	
Daryle L. Doden

Contractor Supply Incorporated

PO Box 51

Auburn, IN 46706

(260) 925-5440 Phone Number

(260) 925-3152 Fax Number;




		
	 	     or to such other address or facsimile number that the parties may
designate in writing.




	 	d.	 	Assignment. Neither Seller Shareholder nor Buyer shall assign
this Agreement, or any interest in it, without the prior written
consent of the other, except that Buyer may assign any or all of its
rights to any subsidiary without Seller Shareholder’ consent, so
long as Buyer guarantees the performance of such subsidiary under
this Agreement.





21







 




	 	e.	 	Parties in Interest. This Agreement shall inure to the
benefit of, and be binding on, the named parties and their
respective successors and permitted assigns, but not any other
person.
	 
	 	f.	 	Choice of Law. This Agreement shall be governed, construed,
and enforced in accordance with the laws of the State of Michigan.
	 
	 	g.	 	Counterparts/Facsimile Signatures. This Agreement may be
signed in any number of counterparts with the same effect as if the
signature on each counterpart were on the same instrument.
Facsimile signatures shall be deemed and accepted as original
signatures.
	 
	 	h.	 	Entire Agreement. This Agreement and all related documents,
schedules, exhibits, or certificates represent the entire
understanding and agreement between the parties with respect to the
subject matter and supersede all prior agreements or negotiations
between the parties. This Agreement may be amended, supplemented, or
changed only by an agreement in writing that makes specific
reference to this Agreement or the agreement delivered pursuant to
it, and must be signed by the party against whom enforcement of any
such amendment, supplement, or modification is sought.
	 
	 	i.	 	Pre-Mediation and Mediation Procedures28Pre-Mediation and
Mediation Procedures28Pre-Mediation and Mediation
Procedures28PreMediation and Mediation ProceduresPreMediation and
Mediation Procedures. Any dispute or controversy arising out of or
relating to this Agreement, or breach thereof, shall be settled by
the following procedure:




	 	i.	 	No provision of or the exercise of any rights
under this Section shall limit the right of any party to seek
and obtain provisional or ancillary remedies (such as
injunctive relief, attachment, or the appointment of a
receiver) from any court having jurisdiction before, during,
or after the pendency of an arbitration proceeding under this
Section. The institution and maintenance of any such action
or proceeding shall not constitute a waiver of the right of
any party (including the party taking the action or
instituting the proceeding) to submit a dispute, controversy,
or claim to arbitration under this Section.
	 
	 	ii.	 	Level 1: Before entering into Level 2 or Level 3
of this Dispute Resolution Procedure (DRP), the complaining
party shall enter into one or more management meetings for the
purpose of resolving the dispute or controversy through normal
business management practices. The meeting must be held
between upper level managers of both parties. Both parties
agree to put forth their commercially reasonable efforts in
the meeting. The meeting shall be held at the complaining
party’s offices. The Level 1 period shall begin when one
party gives written notice to the other party by certified
mail that it is entering into this Level 1 procedure to
resolve 





22







 




	 	 	 	the dispute and details in that written notice to the specific matters complained about.
	 
	 	iii.	 	Level 2: Only after the parties have completed
Level 1 of the DRP without resolving the dispute or
controversy and before entering into Level 3 of the DRP, the
parties shall enter into a mediation process. The mediation
process is defined as follows:




	 	1.	 	The parties shall engage in pre-suit
mediation under such rules as agreed between the
parties.
	 
	 	2.	 	The parties, their counsel, and the
mediator agree that each has a privilege to refuse to
testify and to prevent the other from testifying in any
court or other proceeding about any communication made
during the mediation.
	 
	 	3.	 	Either party or the mediator may
terminate the mediation at any time because of an
impasse or if for any reason the mediator or a party
deems it in good faith improper or unproductive to
continue. The mediator or a party will not be required
to disclose the reason for terminating the mediation but
may do so to the parties or the mediator only.
	 
	 	4.	 	The parties shall mediate in good
faith but are not required to reach an agreement.
	 
	 	5.	 	Each party is responsible for paying
one-half (1/2) of the mediator’s fees and expenses.
	 
	 	6.	 	If the mediated settlement is
accepted by both parties, such settlement shall be
specifically enforceable under the law as if the
agreement had been a binding arbitration decision.




	 	iv.	 	Level 3: Only after the completion of both Levels
1 and 2 above without a satisfactory resolution of the dispute
or controversy, either party may bring a legal process in the
arbitration procedure described below. The arbitration result
may be enforced in federal court if the jurisdictional
requirement is satisfied. If the party cannot bring a suit in
federal court because the jurisdiction amount is not
satisfied, then the party may raise the claim in a court
having appropriate jurisdiction. Any arbitration shall
proceed in accordance with the current Commercial Arbitration
Rules (the “Arbitration Rules”) of the American Arbitration
Association (“AAA”) to the extent that the Arbitration Rules
do not conflict with any provision of this Section.





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	 	1.	 	Any award, order, or judgment made
pursuant to arbitration shall be deemed final and may be
entered in any court having jurisdiction over the
enforcement of the award, order, or judgment.
	 
	 	2.	 	The arbitration shall be held before
one arbitrator knowledgeable in the general subject
matter of the dispute, controversy, or claim and
selected by AAA in accordance with the Arbitration
Rules.
	 
	 	3.	 	The arbitration shall be held at the
office of AAA located the closest to Lansing, Michigan
(as the same may be from time to time relocated), or at
another place the parties agree on.
	 
	 	4.	 	In any arbitration proceeding under
this Section, subject to the award of the arbitrator(s),
each party shall pay all its own expenses and an equal
share of the fees and expenses of the arbitrator. The
arbitrator shall have the power to award recovery of
costs and fees (including reasonable attorney fees,
administrative and AAA fees, and arbitrator’s fees)
among the parties as the arbitrator determine to be
equitable under the circumstances.




	 	j.	 	General Provisions. The parties also agree to the following
general provisions:




	 	i.	 	No party is aware of any problem or legality that
adversely affects the party’s ability to perform this
Agreement.
	 
	 	ii.	 	Each party agrees to be reasonable with the other
party regarding the performance, interpretation, application,
and enforcement of this Agreement.
	 
	 	iii.	 	The parties are not a partnership nor joint
venture but are independent one to the other.
	 
	 	iv.	 	Each party shall use practices and procedures
consistent with the law.
	 
	 	v.	 	Each party shall act openly and honestly with
each other.
	 
	 	vi.	 	Each party shall provide full disclosure as may
be required by this Agreement.
	 
	 	vii.	 	A waiver of the breach of any provision of this
Agreement at any time shall not apply to any breach of any
other provision of this Agreement.




	17.	 	Definitions




	 	a.	 	As used in this Agreement, “material” when used to qualify an
act, condition, occurrence, event or fact applicable to a party
shall mean any such act, condition, 





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	 	 	 	occurrence, event or fact or series of related acts, conditions, occurrences, events or facts
that would be considered by a reasonably prudent business person
under like circumstances to be of such significance as to affect, in
a substantive manner, the Balance Sheet and the statement of
Operations or the Financial Statement of the Seller.
	 
	 	b.	 	“Best Knowledge” shall mean knowledge actually known by the
party and also knowledge the party should have known after having
made reasonable due inquiry under the circumstances.



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          The parties have executed this Agreement on the date set forth on
the first page of this Agreement.






	 	 
	 	Seller Shareholder

Maxco, Inc.
	 
	 	/s/ Max A. Coon


By: Max A. Coon

President
	 
	 	SELLER

Ersco Corporation
	 
	 	/s/ Max A. Coon




By: Max A. Coon

Chairman of the Board and Secretary
	 
	 	BUYER

Contractor Supply Incorporated
	 
	 	/s/ Daryle L. Doden



By: Daryle L. Doden

President



GUARANTY




		
	 	     Ambassador Steel Corporation, hereby guaranties the
performance by the Buyer of all its obligations and liabilities
under the Agreement, including any payment obligations, and
guaranties the accuracy and completeness of all warranties and
representations made by the Buyer. This is a guaranty of
performance and payment, not merely of collection.




	 	 
	 	Ambassador Steel Corporation
	 
	 	/s/ Daryle L. Doden



By: Daryle L. Doden

President





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