**EXHIBIT-2.0**
 

 
***Execution Version*****Equity Interest Purchase Agreement**
 

 
**Table of Contents**         1. DEFINITIONS  1          2. SALE AND TRANSFER OF EQUITY INTERESTS; CLOSING  12            2.1  EQUITY INTERESTS  12   2.2  PURCHASE PRICE  12   2.3  CLOSING  12   2.4  CLOSING OBLIGATIONS  13   2.5  WORKING CAPITAL ADJUSTMENT  15   2.6  DETERMINATION OF CLOSING PROCEEDS  16          3. REPRESENTATIONS AND WARRANTIES OF SELLERS   17            3.1  ORGANIZATION AND GOOD STANDING  17   3.2  AUTHORITY; NO CONFLICT  17   3.3  CAPITALIZATION  18   3.4  FINANCIAL STATEMENTS  19   3.5  BOOKS AND RECORDS  19   3.6  TITLE TO ASSETS  19   3.7  CONDITION AND SUFFICIENCY OF ASSETS  20   3.8  ACCOUNTS RECEIVABLE  20   3.9  INVENTORY  20   3.10  NO UNDISCLOSED LIABILITIES  21   3.11  TAXES  21   3.12  NO MATERIAL ADVERSE EFFECT  22   3.13  EMPLOYEE BENEFITS  22   3.14  COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS 26  3.15  LEGAL PROCEEDINGS; ORDERS  26   3.16  ABSENCE OF CERTAIN CHANGES AND EVENTS  27   3.17  CONTRACTS; NO DEFAULTS  28   3.18  INSURANCE  30   3.19  ENVIRONMENTAL MATTERS  31   3.20  LABOR RELATIONS; COMPLIANCE  32   3.21  INTELLECTUAL PROPERTY  33   3.22  CERTAIN PAYMENTS  34   3.23  DISCLOSURE  34   3.24  RELATIONSHIPS WITH RELATED PERSONS  34   3.25  PRODUCT LIABILITY AND WARRANTY  34   3.26  CUSTOMERS; SUPPLIERS  35   3.27  INTERNAL CONTROL  35   3.28  OWNED REAL PROPERTY  35   3.29  LEASED REAL PROPERTY  36 
 

 
          4.   REPRESENTATIONS AND WARRANTIES OF BUYER    36              4.1    ORGANIZATION AND GOOD STANDING   36     4.2    AUTHORITY; NO CONFLICT   36     4.3    INVESTMENT INTENT   37     4.4    CERTAIN PROCEEDINGS   37     4.5    BROKERS OR FINDERS   37            5.   COVENANTS OF SELLERS PRIOR TO CLOSING DATE    37              5.1    ACCESS AND INVESTIGATION   37     5.2    OPERATION OF THE BUSINESSES OF THE ACQUIRED COMPANIES   38     5.3    NEGATIVE COVENANT   38     5.4    REQUIRED APPROVALS   38     5.5    NOTIFICATION   38     5.6    PAYMENT OF INDEBTEDNESS BY RELATED PERSONS   39     5.7    NO NEGOTIATION   39     5.8    NO TERMINATION OR MODIFICATION OF REAL PROPERTY LEASES   40     5.9    BEST EFFORTS   40    5.10 TAX RETURNS  40   5.11 CAPITAL EXPENSES  40           6.   COVENANTS OF BUYER PRIOR TO CLOSING DATE    40              6.1    APPROVALS OF GOVERNMENTAL BODIES   40     6.2    BEST EFFORTS   41            7.   CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE    41              7.1    ACCURACY OF REPRESENTATIONS   41     7.2    SELLERS’ PERFORMANCE   41     7.3    CONSENTS   41     7.4    NO INJUNCTION   42     7.5    FINANCING   42     7.6    TITLE AND ENVIRONMENTAL INSURANCE POLICIES   42     7.7    ESTOPPEL CERTIFICATES   42     7.8    2006 FINANCIALS   42            8.   CONDITIONS PRECEDENT TO SELLERS’ OBLIGATION TO CLOSE    43              8.1    ACCURACY OF REPRESENTATIONS   43     8.2    BUYER’S PERFORMANCE   43     8.3    CONSENTS   43     8.4    NO INJUNCTION   43  
ii 

 
          9.    TERMINATION     44               9.1     TERMINATION EVENTS   44      9.2     EFFECT OF TERMINATION   44             10.    OTHER AGREEMENTS OF THE PARTIES; INDEMNIFICATION; REMEDIES     44               10.1     SURVIVAL   44      10.2     INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS   45      10.3     INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER AND PARENT   46      10.4     LIMITATIONS ON SELLERS’ LIABILITY   46      10.5     PROCEDURE FOR INDEMNIFICATION — THIRD PARTY CLAIMS   47      10.6     PROCEDURE FOR INDEMNIFICATION — OTHER CLAIMS   48      10.7     TAX MATTERS   48      10.8     INSURANCE   49      10.9     SELLERS’ REPRESENTATIVE   50     10.10 NONCOMPETITION  51   10.11 SCC MATTERS  52           11.    GENERAL PROVISIONS     53               11.1     EXPENSES   53      11.2     PUBLIC ANNOUNCEMENTS   53      11.3     TRANSFER TAXES   53      11.4     NOTICES   54      11.5     JURISDICTION; SERVICE OF PROCESS   55      11.6     FURTHER ASSURANCES   55      11.7     WAIVER   55      11.8     ENTIRE AGREEMENT AND MODIFICATION   56      11.9     DISCLOSURE LETTER  56     11.10  ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS 56  11.11  SEVERABILITY  57   11.12 SECTION HEADINGS, CONSTRUCTION   57     11.13 TIME OF ESSENCE  57   11.14 GOVERNING LAW  57   11.15 COUNTERPARTS  57 
iii 

 
**Equity Interest Purchase Agreement**     This Equity Interest Purchase Agreement (“Agreement”) is made as of March 11, 2007, by(1) Coleman Cable, Inc., a Delaware corporation(“Buyer”), (2) the following parties whomshall be collectively referred to herein as the “Sellers”: DJR Fund, Inc., Stephen Lutz,SFB Enterprises, Inc., Mary A. Kennedy Trust, Raymond A. Kennedy, Michael Kennedy, Kevin Kennedy,Clarence Witsken, William Witsken, (the preceding Sellers are also referred to herein as the“Copperfield Sellers”), Spell Capital Partners Fund I, LP, a Minnesota limited partnership,as a Seller and as Sellers’ Representative, Firstar Capital Corporation, John A. Gambell and RonaldJ. Herold (the preceding Sellers, not including the Copperfield Sellers, are also referred toherein as the “SCC Sellers”) and (3) the following individuals, solely with respect toSection 10.10 hereof, whom shall be collectively referred to herein as the “AdditionalSignatories”: Richard A. Carr, James D. Pomeroy and Richard J. Piliponis.RECITALS     A. The SCC Sellers are the record and beneficial owners of all of the issued andoutstanding shares of common stock of Spell Capital Corporation, a Minnesota corporation(“SCC”), which holds 59.42% of the issued and outstanding membership interests (the“SCC Interests”) of Copperfield, LLC, a Minnesota limited liability company (the“Company”);     B. The Copperfield Sellers are the record and beneficial owners of 40.58% of theissued and outstanding membership interests of the Company, which, together with the issuedand outstanding membership interests in the Company held by SCC, constitute all of themembership interests of the Company; and     C. Sellers desire to sell, and Buyer desires to purchase all of the issued andoutstanding interests of the Company through the acquisitions of (i) all of the issued andoutstanding shares of capital stock of SCC (the “Stock”) from the SCC Sellers and (ii)40.58% of the interests of the Company (the “Interests”) from the Copperfield Sellers (the Stockand the Interests collectively referred to herein as the “Equity Interests”), for theconsideration and on the terms set forth in this Agreement.AGREEMENT     The parties, intending to be legally bound, agree as follows:     1. DEFINITIONS     For purposes of this Agreement, the following terms have the meanings specified orreferred to in this Section 1:     **“2006 Tax Liability”**means the income Tax liability as shown on the 2006 Tax Return if Taxesare owing at the time of its filing.     **“2006 Tax Refund”**means the income Tax refund as shown on the 2006 Tax Return if a refund forTaxes is payable to SCC.
 

 
     **“2006 Tax Return”**means the income Tax Return for SCC for the taxable year ending on December31, 2006.     **“2007 Tax Liability”**means an estimate of the income Tax liability of SCC for the period fromJanuary 1, 2007 through the Closing Date determined in the following manner: items of income, gain,receipt, loss, deduction and credit of the Company for the period of January 1, 2007 through theClosing Date shall be allocated to SCC on the same basis as the interim closing of the booksreferenced in Section 10.7(c) above and shall be multiplied by SCC’s average effective Tax rate for2005.     **“Accelerated Collections”**means cash collections of the Acquired Companies between the date ofthis Agreement and the Closing Date on accounts receivable owing from the CD Not Applied Customerspursuant to invoices which were paid in advance of the stated due dates of such invoices.     **“Accountant”**— the Chicago office of KPMG LLP.     **“Acquired Companies”**— the Company and SCC, collectively.     **“Acquisition Proposal”**— as defined in Section 5.7.     **“Acquisition Transaction”**shall mean any transaction or series of transactions (other than theContemplated Transactions) involving: (a) any merger, consolidation, share exchange, businesscombination, issuance of securities, direct or indirect acquisition of securities,recapitalization, tender offer, exchange offer or other similar transaction in which (i) anyAcquired Company is a constituent corporation or is otherwise involved, (ii) a Person or “group”(as defined in the Securities Exchange Act of 1934, as amended, and the rules promulgatedthereunder) of Persons directly or indirectly acquires beneficial or record ownership of securitiesrepresenting more than 5% of the capital stock of SCC or the membership interests of the Company ora combination of both, or (iii) any Acquired Company issues securities; (b) any direct or indirectsale, lease, exchange, transfer, license, acquisition or disposition of any business or businessesor of assets or rights that constitute or account for 5% or more of the net revenues, net income ornet assets of any Acquired Company; or (c) any liquidation or dissolution of any Acquired Company.     **“Additional Contracts”**— as defined in Section 3.17(b).     **“Additional Signatories”**— as defined in the first paragraph of this Agreement.     **“Affiliate”** — with respect to any Person, any other Person that, directly or indirectly,through one or more intermediaries, Controls, is Controlled by or is under common Control with,such Person and any officer, director or controlling person of such Person. For purposes of thisdefinition, “Control” (including, with correlative meanings, the terms “Controlled by” and “undercommon Control with”) means the possession, directly or indirectly, of the power to direct or causethe direction of the management or policies of a Person.     **“Applicable Contract”**— any Contract (a) under which any Acquired Company has or may acquireany rights, (b) under which any Acquired Company has or may become subject to
2

 
any obligation or liability, or (c) by which any Acquired Company or any of the assets owned orused by it is or may become bound.     **“Audited 2006 Financials”**— as defined in Section 7.9.     **“Balance Sheet”**— as defined in Section 3.4(a).     **“Best Efforts”**— the efforts that a Person acting in good faith and observing reasonablecommercial standards would use in similar circumstances.     **“Buyer”**— as defined in the first paragraph of this Agreement.     **“Buyer’s Advisors”**— as defined in Section 5.1.     **“Buyer Disclosure Letter”**— the disclosure letter delivered by Buyer to Sellersconcurrently with the execution and delivery of this Agreement.     **“CD Applied Customers”**means the customers so identified on Exhibit 2.5(b) attached hereto whoare entitled to take, and have traditionally taken, a discount on invoices issued by the AcquiredCompanies in exchange for payment in advance of the stated due dates of such invoices.     **“CD Not Applied Customers”**means the customers so identified on Exhibit 2.5(b) attached heretowho are entitled to take, but traditionally have not taken, a discount on invoices issued by theAcquired Companies in exchange for payment in advance of the stated due dates of such invoices.     **“Closing”**— as defined in Section 2.3.     **“Closing Bonuses”**— means the aggregate amount to be paid to the Closing Bonus Payees asprovided in Exhibit 1.1 hereto.     **“Closing Bonus Payee”**— means each of the individuals identified in Exhibit 1.1 hereto.     **“Closing Date”**— the date and time as of which the Closing actually takes place.     **“Closing Proceeds”**— Purchase Price minus (1) the Escrow Amount, (2) the aggregate PayoffAmounts, (3) the Company Transaction Expenses, (4) the Closing Bonuses and (5) one-half of thecosts and expenses in connection with the new Title Policies and Environmental Policies describedin Section 7.6.     **“Closing Proceeds Statement”**— as defined in Section 2.6(c).     **“Closing Working Capital Adjustment”**means (i) the Copper Difference (if any) multiplied bythe average closing price of copper per pound quoted on the New York Commodities Exchange (COMEX)for the 30-day period immediately prior to (and ending on the last business day immediately priorto) the Closing Date less (ii) Delinquent Payables plus (iii) the CollectionsAdjustment plus (iv) the Customer Payments.
3

 
     **“Collections Adjustment”**means Delayed Receivables less Accelerated Collections;provided,however, that if such total is a positive or negative number less than $100,000,the Collections Adjustment shall be zero.     **“Company”**— as defined in the Recitals of this Agreement.     **“Company Debt”**— means all Contracts of the Acquired Companies for borrowed money evidenced bybonds, debentures, notes, capital leases or other similar instruments or for reimbursement withrespect to letters of credit, banker’s acceptances and surety bonds, in the nature of guarantees ofthe obligations described above.     **“Company Transaction Expenses”**— the fees and expenses incurred by the Acquired Companies onbehalf of themselves and/or the Sellers in connection with the Contemplated Transactions(including, without limitation, attorneys’ and financial advisors’ fees).     **“Computer Software”**means all computer software and databases (including without limitationsource code, object code and all related documentation).     **“Consent”**— any approval, consent, ratification, waiver, or other authorization (including anyGovernmental Authorization).     **“Contemplated Transactions”**— all of the transactions contemplated by this Agreement,including, without limitation, the sale of the Equity Interests by Sellers to Buyer.     **“Contract”**— any written or oral agreement, contract, obligation, promise, or undertaking thatis legally binding.     **“Copper Difference”**means the amount, if any, by which the Pounds of Copper Inventory is lessthan or greater than 11.5 million pounds; provided, however, that if suchdifference or excess is 100,000 pounds or less, the Copper Difference shall be zero. If the CopperDifference results from Pounds of Copper being less than 11.5 million pounds, the component inclause (i) of the definition of “Closing Working Capital Adjustment” shall be a negative number. Ifthe Copper Difference results from Pounds of Copper exceeding 11.5 million pounds, the component inclause (i) of the definition of “Closing Working Capital” shall be a positive number.     **“Copperfield Sellers”**— as defined in the first paragraph of this Agreement.     **“Customer Payments”**means the cash collections of the Acquired Companies from the customerlisted on Exhibit 2.5(a) attached hereto (i) multiplied by -.5 for any payments received prior tothe Closing Date (yielding a negative number), and (ii) multiplied by .5 for any payments receivedafter the Closing Date through April 15, 2007 (yielding a positive number).     **“Damages”**— as defined in Section 10.2.     **“Delayed Receivables”**means accounts receivable of the Acquired Companies as of the ClosingDate owing from the CD Applied Customers pursuant to invoices that would traditionally have beenpaid between the date of this Agreement and the Closing Date if such CD
4

 
Applied Customers had taken a discount to which they were entitled for payment in advance of thestated due dates of such invoices.     **“Delinquent Payables”**means accounts payable of the Acquired Companies outstanding as of theClosing Date that have not been paid in the Ordinary Course of Business; provided,however,that if the amount of the Delinquent Payables is less than $100,000, the Delinquent Payables shallbe zero.     **“Disclosure Letter”**— the disclosure letter delivered by Sellers to Buyer concurrently withthe execution and delivery of this Agreement.     **“Encumbrance”**— any encumbrance, charge, claim, community property interest, condition,equitable interest, lien, option, pledge, security interest, hypothecation, mortgage, right offirst refusal, or restriction of any kind affecting property, real or personal, tangible orintangible, including any restriction on use, voting, transfer, receipt of income, or exercise ofany other attribute of ownership.     **“Environment”**— soil, land surface or subsurface strata, surface waters (including navigablewaters, ocean waters, streams, ponds, drainage basins, and wetlands), groundwater, drinking watersupply, stream sediments, ambient air (including indoor air), plant and animal life, and any otherenvironmental medium or natural resource.     **“Environmental Law”**— any Legal Requirement that requires:     (a) advising appropriate authorities, employees, and the public of intended or actualreleases of pollutants or hazardous substances or materials, violations of discharge limits,or other prohibitions and of the commencements of activities, such as resource extraction orconstruction, that could impact the Environment;     (b) preventing or reducing to acceptable levels the release of petroleum or anypetroleum-based product, pollutants, hazardous substances or materials or otherpotentially harmful substances into the Environment;     (c) reducing the quantities, preventing the release, or minimizing the hazardouscharacteristics of wastes or other materials or potentially harmful substances that aregenerated;     (d) assuring that products are designed, formulated, packaged, and used so that theydo not present unreasonable risks to human health or the Environment when used or disposed of;     (e) protecting resources, species, or ecological amenities;     (f) reducing to acceptable levels the risks inherent in the transportation of hazardous substances, pollutants, oil, or other potentially harmful substances;     (g) investigating, cleaning up or otherwise responding to pollutants, hazardous substances or materials,petroleum, petroleum-based products or other potentially harmful substances that have been released, preventing thethreat of release, or paying the costs of such clean up or prevention; or
5

 
     (h) making responsible parties pay for damages for bodily injury or property damage toprivate parties or the Environment, or permitting self-appointed representatives of the publicinterest to recover for natural resource damages or other injuries done to public assets.     **“Environmental Policies”**— environmental insurance policies issued to Buyer and/or theAcquired Companies as follows:     (a) for the property located at 3400 Union Street, Lafayette, Indiana, one policy in theamount of $10,000,000 with a $250,000 deductible for the period from the Closing Date until tenyears following the Closing Date;     (b) for the property located at 1388 North Zaragosa Road, El Paso, Texas, one policyin the amount of $3,000,000 with a $50,000 deductible for the period from the Closing Date untilNovember 30, 2010; and     (c) for the property located at 302 Progress Way, Avilla, Indiana, one policy in theamount of $2,000,000 with a $50,000 deductible for the period from the Closing Date untilNovember 30, 2010.     **“Equity Interests”**— as defined in the Recitals of this Agreement.     **“ERISA”**— the Employee Retirement Income Security Act of 1974 or any successor law, andregulations and rules issued pursuant to that Act or any successor law.     **“Escrow Agent”**— J. P. Morgan Trust Company, National Association.     **“Escrow Agreement”**— as defined in Section 2.4.     **“Escrow Amount”**— as defined in Section 2.4.     **“Exchange Act”** — as defined in Section 7.8.     **“Facilities”**— the Owned Real Property and the Leased Real Property.     **“Fee Statement Letter”**— means a written statement from each of the Acquired Companies’Representatives to which any Company Transaction Expenses will be owed and outstanding as of theClosing Date, in a form reasonably satisfactory to Buyer and confirming the amount of any CompanyTransaction Expenses payable to such Representative and such Representative’s acknowledgement thatthe Representative will look solely to the Sellers for any unpaid amount of Company TransactionExpenses after the Closing Date.     **“Final Closing Working Capital Adjustment”**means Closing Working Capital Adjustment (i) asshown in Buyer’s calculation delivered pursuant to Section 2.5(b) if no notice of disagreement withrespect thereto is duly delivered pursuant to Section 2.5(c), or (ii) if such a notice ofdisagreement is delivered, (A) as agreed by Buyer and the Sellers’ Representative pursuant toSection 2.5(d) or (B) in the absence of such agreement, as shown in the Accountant’s calculationdelivered pursuant to Section 2.5(d); provided, however, that in no event shallFinal Closing Working Capital Adjustment be less than Buyer’s calculation of Closing Working
6

 
Capital Adjustment delivered pursuant to Section 2.5(b) or more than the Sellers’Representative’ calculation of Closing Working Capital Adjustment delivered pursuant toSection 2.5(c).     **“Final SCC Assets” and “Final SCC Liabilities”**means the SCC Assets and SCC Liabilities (i) asshown in Sellers’ Representatives written statement delivered pursuant to Section 10.11(d) if nonotice of disagreement with respect thereto is duly delivered, or (ii) if such a notice ofdisagreement is delivered, (A) as agreed by Buyer and the Sellers’ Representative pursuant toSection 2.5(d) or (B) in the absence of such agreement, as shown in the Accountant’s calculationdelivered pursuant to Section 2.5(d); provided, however, that in no event shallFinal SCC Assets and Final SCC Liabilities be more than Buyer’s calculation of the same deliveredpursuant to Section 2.5(c) or less than Sellers’ Representative’s calculation of the same deliveredpursuant to Section 10.11(d).     **“Financing Commitment Letter”**— the commitment letter, dated January 5, 2007, from WachoviaBank, National Association, Wachovia Investment Holdings, LLC and Wachovia Capital Markets, LLC toBuyer, a copy of which has been delivered by Buyer to the Sellers prior to the date hereof.     **“GAAP”**— generally accepted United States accounting principles, applied on a basis consistentwith the basis on which the Balance Sheet and the other financial statements referred to inSections 3.4(b) and 3.4(c) were prepared.     **“Governmental Authorization”**— any written approval, consent, license, permit, waiver, orother authorization issued, granted, given, or otherwise made available by or under the authorityof any Governmental Body or pursuant to any Legal Requirement.     **“Governmental Body”** — any:     (a) nation, state, county, city, town, village, district, or other jurisdiction of any nature;     (b) federal, state, local, municipal, foreign, or other government; or     (c) governmental or quasi-governmental authority of any nature (including anygovernmental agency, branch, department, official, or entity and any court or othertribunal).     **“Ground Lease”**— all of the land subject to any ground lease interest owned or held by any ofthe Sellers.     **“Hazardous Materials”**— any waste or other substance that is listed, defined, designated, orclassified as, or otherwise determined to be, hazardous, radioactive, or toxic or a pollutant or acontaminant under or pursuant to any Environmental Law, including any mixture or solution thereof,including, but not limited to, petroleum and all derivatives thereof or synthetic substitutestherefor and asbestos or asbestos-containing materials and silica or silica-containing materials.
7

 
     **“Holdback Amount”**— the amount of $100,000 for use by the Sellers’ Representative to pay thecosts, expenses and other fees associated with the Sellers’ Representative’s duties as set forth inthis Agreement.     **“HSR****Act”** — the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or any successorlaw, and regulations and rules issued pursuant to that Act or any successor law.     **“Indemnified Persons”**— as defined in Section 10.2.     **“Intellectual Property”**— as defined in Section 3.21.     **“Interests”**— as defined in the Recitals of this Agreement.     **“Interim Balance Sheet”**— as defined in Section 3.4(a)(iii).     **“IRC”** — the Internal Revenue Code of 1986 or any successor law, and regulations issued by theIRS pursuant to the Internal Revenue Code or any successor law.     **“IRS”** — the United States Internal Revenue Service or any successor agency, and, to theextent relevant, the United States Department of the Treasury.     **“IT Assets”** — as defined in Section 3.21.     **“Knowledge”**— means the actual knowledge after reasonable inquiry of such Person, and**“Knowledge”**as it is applied to the Acquired Companies means the actual knowledge after reasonableinquiry of Richard Carr, Jim Merritt, Mike Frigo, Jason Nine, Steve Lutz, Bill Ballinger, BrandonRogers, Dieter Kuper, Andrew Carr, Sal Perez and Rob Brown (for purposes of this definition the“Key Persons”), as well as the knowledge such Key Persons would have obtained concerning amatter if such Key Person had conducted an investigation that a reasonable person with the sametitle, position and responsibilities with respect to the Acquired Companies would have conducted onthe basis of the facts and circumstances actually known or which should have been known.     **“Leased Real Property”**— the real property identified on Exhibit 1.1 hereto.     **“Legal Requirement”**— any federal, state, local, municipal, or other administrativeorder, constitution, law, ordinance, regulation, statute, common law rule or treaty.     **“Major Customers”**— as defined in Section 3.26.     **“Major Suppliers”**— as defined in Section 3.26.     **“Material Adverse Effect”**— means, with respect to any Person, any event, change,circumstance, condition or effect that is, or would reasonably be expected to be, individually orin the aggregate, when considered either on a long-term basis or a short-term basis: (i) materiallyadverse to the business, condition (financial or otherwise), earnings, operations, results ofoperations, assets or liabilities (actual or contingent) of such Person and its Subsidiaries, takenas a whole, or (ii) prevent the ability of such Person to consummate the
8

 
Contemplated Transactions or to perform its obligations hereunder; in each case, other than anysuch event, change, circumstance, condition or effect to the extent resulting from (1) any change,development, circumstance, event or occurrence generally affecting the industries in which theCompany operates to the extent that such change, development, circumstance, event or occurrencedoes not affect the Company in a disproportionate manner, (2) the economy, the financial orsecurities markets in general, or political conditions in the United States or any acts ofterrorism, military actions or war, (3) this Agreement or the transactions contemplated hereby,including the announcement or pendency thereof, (4) any failure by the Person to meet any publishedfinancial estimates for any period ending on or after the date of this Agreement and prior to theClosing Date, in and of itself, (5) any fees or expenses incurred in connection with theContemplated Transactions or (6) any change in GAAP or the interpretation thereof.     **“Material Contract”**— as defined in Section 3.17(a).     **“Material Contract Updates”**— has the meaning set forth in Section 3.17(a).     **“Noncompete Party”**— has the meaning set forth in Section 10.10.     **“Order”**— any award, decision, injunction, judgment, order, ruling, subpoena, or verdictentered, issued, made, or rendered by any court, administrative agency, or other Governmental Bodyor by any arbitrator.     **“Ordinary Course of Business”**— an action taken by a Person shall be deemed to have been takenin the “Ordinary Course of Business” only if:     (a) such action is consistent with the past practices of such Person and is taken in theordinary course of the normal day-to-day operations of such Person;     (b) such action is not required to be authorized by the board of directors of suchPerson (or by any Person or group of Persons exercising similar authority) and is not requiredto be specifically authorized by the parent company (if any) of such Person; and     (c) such action is similar in nature and magnitude to actions customarily taken,without any authorization by the board of directors (or by any Person or group of Personsexercising similar authority), in the ordinary course of the normal day-to-day operations ofother Persons that are in the same line of business as such Person.     **“Organizational Documents”**— (a) the articles or certificate of incorporation and the bylawsof a corporation; (b) the articles of organization, operating agreement or bylaws and membercontrol agreement of a limited liability company; (c) the partnership agreement and any statementof partnership of a general partnership; (d) the limited partnership agreement and the certificateof limited partnership of a limited partnership; (e) any charter or similar document adopted orfiled in connection with the creation, formation, or organization of a Person; and (f) anyamendment to any of the foregoing.     **“Owned Intellectual Property”**— as defined in Section 3.21.     **“Owned Real Property”**— as defined in Section 3.6(b).
9

 
     **“Payoff Amount”**— means, with respect to each Company Debt, the amount (including principal,interest, fees, expenses, prepayment premiums or penalties, and other amounts payable to suchlender in connection with the Company Debt) that would constitute payment in full of such CompanyDebt as of the Closing Date.     **“Payoff Letter”**— means the payoff letter or similar documents from the lender of each CompanyDebt (i) confirming the Payoff Amount with respect to such lender and (ii) acknowledging that, uponreceipt of such Payoff Amount in full, (A) all obligations for money borrowed, fees and expenses inconnection with such Company Debt shall be fully discharged and (B) any and all security interestsor mortgages held by such lender in connection with the Company Debt on the Equity Interests or theassets and properties of the Acquired Companies shall be terminated and released.     **“Permitted Encumbrances”**— (a) liens for Taxes (i) not yet due and payable or (ii) the amountor validity of which is being contested in good faith by appropriate proceedings and for whichadequate reserves have been set aside in accordance with GAAP; (b) mechanics, materialmens, andsimilar Encumbrances incurred in the ordinary course of business consistent with past practicesecuring amounts not yet due and payable or being contested in good faith by appropriateproceedings and for which adequate reserves have been set aside in accordance with GAAP; (c)zoning, entitlement, building and other land use regulations that are not violated by the currentuse and operation of such real property; (d) covenants, conditions, restrictions, easements andother exceptions that appear in the title commitments or insurance policies set forth in Exhibit1.1 hereto or that do not, individually or in the aggregate, materially impair the ownership,occupancy, use, or insurability of the real property as currently owned, used and operated by theCompany; and (e) those additional matters set forth on Exhibit 1.1 hereto.     **“Person”**— any individual, corporation, partnership, limited liability company, trust,unincorporated association, or other legal entity or Governmental Body.     **“Plan”**— as defined in Section 3.13.     **“Pounds of Copper Inventory”**means the number of pounds of usable copper in the Company’s rawmaterials, supplies and finished goods inventory at the close of business (Chicago time) on theClosing Date.     **“Pre-Closing Certificate”**— as defined in Section 2.6(b).     **“Pre-Closing Period”**— as defined in Section 5.7.     **“Pre-Closing Tax Period”**— (i) any Tax period ending on or before the close of business on theClosing Date and (ii) in the case of any Tax period which includes, but does not end on, theClosing Date, the portion of such period up to and including the Closing Date.     **“Pro Rata Share”**— with respect to each Seller, the pro rata share of the membership interestsof the Company owned directly (with respect to Copperfield Sellers) or indirectly through SCC (withrespect to SCC Sellers) by such Seller, as provided in Part 3.3 of the Disclosure Letter.
10

 
     **“Proceeding”**— any action, arbitration, audit, hearing, investigation, litigation, or suit(whether civil, criminal, or administrative) commenced, brought, conducted, or heard by or before,or otherwise involving, any Governmental Body or arbitrator.     **“PwC”** — as defined in Section 10.11(b).     **“Real Property Leases”**— leases executed in connection with the Company’s leasehold interestsin the Leased Real Property, and all amendments or modifications thereto.     **“Representative”**— with respect to a particular Person, any director, officer, employee,agent, consultant, advisor, or other representative of such Person, including legal counsel,accountants, and financial advisors.     **“Return Preparation Expenses”**means the fees payable to PwC in exchange for preparationof the 2006 Tax Return and calculation of the 2007 Tax Liability.     **“SCC”** — as defined in the Recitals of this Agreement.     **“SCC Assets”**means all cash held by SCC as of the Closing Date plus the 2006 TaxRefund, if any.     **“SCC Balance Sheet”**— as defined in Section 3.4(b).     **“SCC Interests”**— as defined in the Recitals of this Agreement.     **“SCC Liabilities”**means the 2006 Tax Liability, if any, plus the 2007 Tax Liabilityplus Return Preparation Expenses.     **“SCC Sellers”** — as defined in the first paragraph of this Agreement.     **“SEC”** — the United States Securities and Exchange Commission or any successor agency.     **“SEC Compliance Expense”**— as defined in Section 7.8.     **“Securities Act”**— the Securities Act of 1933 or any successor law, and regulations and rulesissued pursuant to that Act or any successor law.     **“Sellers”**— as defined in the first paragraph of this Agreement.     **“Sellers’ Releases”**— as defined in Section 2.4 (a)(iii).     **“Sellers’ Representative”**— Spell Capital Partners Fund I, L.P.     **“Stock”**— as defined in the Recitals of this Agreement.     **“Straddle Period”**— as defined in Section 10.7(c).
11

 
     **“Subsidiary”**— with respect to any Person (the “Owner”), any corporation or otherPerson of which securities or other interests having the power to elect a majority of thatcorporation’s or other Person’s board of directors or similar governing body, or otherwise havingthe power to direct the business and policies of that corporation or other Person (other thansecurities or other interests having such power only upon the happening of a contingency that hasnot occurred) are held by the Owner or one or more of its Subsidiaries.     **“Tax”** — any tax (including, without limitation, income tax, capital gains tax, value addedtax, sales tax, property tax, gift tax, or estate tax), levy, assessment, tariff, duty (includingany customs duty), deficiency or other fee, and any related charge or amount (including any fine,penalty, interest or addition to tax), imposed, assessed or collected by or under the authority ofany Governmental Body or payable pursuant to any tax-sharing agreement or any other Contractrelating to the sharing or payment of any such tax, levy, assessment, tariff, duty, deficiency orfee.     **“Tax Return”**— any return (including any information return), report, statement, schedule,notice, form, or other document or information filed with or submitted to, or required to be filedwith or submitted to, any Governmental Body in connection with the determination, assessment,collection, or payment of any Tax or in connection with the administration, implementation, orenforcement of or compliance with any Legal Requirement relating to any Tax.     **“Title Policies”**— title insurance policies issued to the Acquired Companies in connectionwith the Acquired Companies’ acquisition or ownership of the Owned Real Property.     **“Unaudited 2006 Financials”**— as defined in Section 3.4(a).     **“Unaudited 2006 Balance Sheet”**— as defined in Section 3.4(a).     2. SALE AND TRANSFER OF EQUITY INTERESTS; CLOSING     2.1 EQUITY INTERESTS     Subject to the terms and conditions of this Agreement, at the Closing, Sellers shall selland transfer the Equity Interests to Buyer, free and clear of all Encumbrances, and Buyer shallpurchase the Equity Interests from Sellers.     2.2 PURCHASE PRICE     Thepurchase price (the “Purchase Price”) for the Equity Interests shall be $213,000,000.     2.3 CLOSING     The purchase and sale (the “Closing”) provided for in this Agreement shall take placeat the offices of Seller’s counsel at Fredrikson & Byron, P.A., 200 South Sixth Street,Minneapolis, Minnesota, at 10:00 a.m. (local time) on the later to occur of the opening of businessof either April 2, 2007 or the fifth (5th) business day after Buyer’s receipt of the Audited 2006Financials (as defined in Section 7.8 herein), or at such other time and place as the parties mayagree.
12

 
Subject to the provisions of Section 9, failure to consummate the purchase and sale provided for inthis Agreement on the date and time and at the place determined pursuant to this Section 2.3 shallnot result in the termination of this Agreement and shall not relieve any party of any obligationunder this Agreement.     2.4 CLOSING OBLIGATIONS     At the Closing:     (a) Sellers shall deliver to Buyer:          (i) certificates representing the Stock, duly endorsed (or accompanied by dulyexecuted stock powers) for transfer to Buyer;          (ii) assignments of the Interests to Buyer, in the form of Exhibit 2.4(a)(ii)executed by the Copperfield Sellers;          (iii) releases in the form of Exhibit 2.4(a)(iii) executed by Sellers (collectively,“Sellers’ Releases”);          (iv) a reasonably current long-form good standing certificate (or equivalentdocument) for each of the Acquired Companies issued by the secretary of state of suchPerson’s jurisdiction of formation and in each state in which such Person is qualified to dobusiness as a foreign entity;          (v) copies of the Certificate of Incorporation (or equivalent document) of each ofthe Acquired Companies, certified by the secretary of state of such Person’s jurisdiction offormation, and copies of the Bylaws (or equivalent document) of each such Person, certifiedby an officer of such Person;          (vi) (A) a Payoff Letter from the lender of each Company Debt or appropriatetermination statements under the Uniform Commercial Code or mortgage releases to release allsecurity interests against the Acquired Companies (or any of their assets) and (B) a FeeStatement Letter from each Representative of the Acquired Companies;          (vii) written resignations of each director (or equivalent) and officer of theAcquired Companies set forth in Exhibit 2.4(a)(vii);          (viii) evidence satisfactory to Buyer that (A) the Plan for Incentive Compensationfor Copperfield, LLC and the Management Services Agreement dated March 24, 2005 between theCompany and Spell Capital Partners Fund I, L.P. have been terminated, (B) the Member ControlAgreement of Copperfield, LLC dated February 2, 1999 as amended has set the number ofgovernors at no less than eight (8) and that is has been terminated, and (C) all agreementsentered into in connection with any of the foregoing, have all been terminated, or shall beterminated, without any liability to the Acquired Companies or to Buyer and its Affiliatestherefor;
13

 
          (ix) a termination and estoppel in a form reasonably acceptable to Buyer executed by MikeFrigo whereby he terminates his existing employment agreement and acknowledges that the Company hasfulfilled all of its obligations thereunder (including any severance obligations);          (x) a certificate executed by Sellers with regard to the conditions set forth in Sections7.1 and 7.2(a);          (xi) an executed amendment in the form attached hereto as Exhibit 2.4(a)(xi) hereto;          (xii) such other documents and instruments as Buyer shall reasonably request to consummatethe Contemplated Transactions.     (b) Buyer shall deliver:          (i) thesum of $15,975,000 (which equals 7.5% of the Purchase Price) (the“Escrow Amount ”) to the Escrow Agent by wire transfer of immediately available funds to be held inaccordance with the Escrow Agreement;          (ii) an amount specified in each Payoff Letter directly to the lender that issued thePayoff Letter, each in accordance with the instructions specified in the relevant Payoff Letter;          (iii) an amount specified in each Fee Statement Letter directly to the Representative ofthe Acquired Companies that issued the Fee Statement Letter, each in accordance with theinstructions specified in the relevant Fee Statement Letter;          (iv) the Closing Bonuses to the Closing Bonus Payees (net of any amounts required to bewithheld by, and applicable employment taxes to be paid by, the Company or Buyer pursuant toapplicable law, which amounts Buyer agrees to timely pay or cause the Company to be paid asrequired pursuant to law), in accordance with the instructions specified in the Closing ProceedsStatement described in Section 2.6;          (v) reasonable evidence that the cost and expenses in connection with the new TitlePolicies and the Environmental Policies described in Section 7.6 have been paid in full;          (vi) an amount equal to the Closing Proceeds to the Sellers in the manner set forth on theClosing Proceeds Statement described in Section 2.6, by wire transfer of immediately availablefunds;          (vii) the amount set forth in a certificate executed by the Company’s Chief FinancialOfficer, which amount shall equal the costs paid or payable by the Company as of the Closing Datein order to make the Company’s financial statements and processes compliant with the federalsecurities laws, in accordance with the instructions specified in such certificate;
14

 
          (viii) a certificate executed by Buyer with regard to the conditions set forth inSections 8.1 and 8.2(a);          (ix) a reasonably current long-form good standing certificate (or equivalentdocument) for Buyer issued by the Secretary of State of the State of Delaware; and          (x) such other documents and instruments as Sellers shall reasonably request toconsummate the Contemplated Transactions.     (c) Buyer and Sellers’ Representative shall enter into an escrow agreement in the form ofExhibit 2.4(c) (the “Escrow Agreement”).2.5 WORKING CAPITAL ADJUSTMENT     (a) No earlier than five (5) business days, and no later than two (2) business days,prior to Closing, the Sellers’ Representative shall deliver to Buyer a statement certifyingthe Sellers’ good faith estimate, in accordance with GAAP, of the Closing Working CapitalAdjustment (“Estimated Closing Working Capital Adjustment”). If the Estimated ClosingWorking Capital is a positive number, the Closing Proceeds shall be increased by the amount ofthe Estimated Closing Working Capital Adjustment and if the Estimated Closing WorkingCapital is a negative number, the Closing Proceeds shall be decreased by the amount of theEstimated Closing Working Capital Adjustment.     (b) As promptly as practicable, but no later than thirty (30) days after the ClosingDate, Buyer shall cause to be prepared and delivered to the Sellers’ Representative astatement (the “Closing Statement”) setting forth the calculation of the Closing Working CapitalAdjustment. The Closing Statement shall be prepared in accordance with GAAP using the sameaccounting methods, principles, policies and procedures, with consistent classifications andvaluation and estimation methodologies and practices, as were used in the preparation of theAudited 2006 Balance Sheet.     (c) If the Sellers’ Representative disagrees with Buyer’s calculation of ClosingWorking Capital Adjustment, the Sellers’ Representative may, within fifteen (15) days afterdelivery of the Closing Statement, deliver a written notice to Buyer, which notice shalldescribe the nature of any such disagreement in reasonable detail, identify the specific items involvedand the dollar amount of each such disagreement and attach reasonable supporting documentation foreach such disagreement. The Sellers’ Representative shall be permitted to dispute amountsreflected in the Closing Statement only under this Section 2.5(c) and only on the basis thatsuch amounts were not arrived at in a manner consistent with the standards set forth in Section2.5(b), or on the basis of arithmetic error. The Sellers’ Representative shall be deemed to haveagreed with all other items and amounts contained in the Closing Statement and the calculation ofClosing Working Capital Adjustment.     (d) If a notice of disagreement shall be duly delivered pursuant to Section 2.5(c),Buyer and the Sellers’ Representative shall, during the fifteen (15) days following suchdelivery, use Best Efforts to reach an agreement on the disputed items or amounts in order to determine,as may be required, the amount of the Closing Working Capital Adjustment. If during such period,Buyer and the Sellers’ Representative are unable to reach such agreement, they shall promptly
15

 
thereafter cause the Accountant to review the disputed items or amounts for the purpose ofcalculating the Closing Working Capital Adjustment (it being understood that, in making suchcalculation, the Accountant shall be functioning as an expert and not as an arbitrator). Buyer andthe Sellers’ Representative each agrees that they shall not engage, or agree to engage, theAccountant prior to the resolution of the matters contemplated by this Section 2.5 to perform anyservices other than as the Accountant pursuant hereto until the Closing Statement and Final ClosingWorking Capital Adjustment have been finally determined pursuant to this Section 2.5. Buyer and theSellers’ Representative each agrees to execute, if requested by the Accountant, a reasonableengagement letter. Buyer and the Sellers’ Representative shall cooperate with the Accountant andpromptly provide all documents and information requested by the Accountant. In making suchcalculation, the Accountant shall consider only those items or amounts in the Closing Statement andBuyer’s calculation of Closing Working Capital Adjustment as to which the Sellers’ Representativehas disputed (and are permitted to dispute) in its notice of disagreement duly delivered pursuantto Section 2.5(c). Such calculation shall be based solely on written submissions by Buyer and theSellers’ Representative and not by independent review. In resolving any disputed items, theAccountant shall be bound by the provisions of Section 2.5(b) and may not assign a value to anyitem greater than the greatest value for such item claimed by either party or less than thesmallest value for such item claimed by either party. The Accountant shall deliver to the Sellers’Representative and Buyer, as promptly as practicable (but in any case no later than thirty (30)days from the date of engagement of the Accountant), a written report setting forth suchcalculation. Such report shall be final and binding upon the Sellers and Buyer, shall be deemed afinal arbitration award that is binding on Buyer and the Sellers, and neither the Sellers nor theSellers’ Representative shall seek further recourse to courts or other tribunals, other than toenforce such report. Judgment may be entered to enforce such report in any court of competentjurisdiction. The cost of such review and report shall be paid one-half by Buyer and one-half bySellers.     (e) If the Estimated Closing Working Capital Adjustment is less than the Final ClosingWorking Capital Adjustment, Buyer shall pay to the Sellers’ Representative, for the benefit of theSellers, within three (3) business days after Final Closing Working Capital Adjustment has beendetermined, by wire transfer of immediately available funds, the amount of such excess as anadjustment to the Purchase Price. If the Estimated Closing Working Capital Adjustment exceeds theFinal Closing Working Capital Adjustment, the Sellers’ Representative shall direct the Escrow Agentto pay to Buyer out of the Escrow Amount within three (3) business days after Final Closing WorkingCapital Adjustment has been determined, by wire transfer of immediately available funds, the amountof such difference as an adjustment to the Purchase Price.     2.6 DETERMINATION OF CLOSING PROCEEDS     (a) No later than three (3) business days prior to the Closing Date, Buyer shalldeliver, or cause to be delivered, to the Seller’s Representative a statement setting forththe costs and expenses in connection with the new Title Policies and the Environmental Policiesdescribed in Section 7.6.     (b) No later than three (3) business days prior to the Closing Date, the Sellers’Representative shall prepare in good faith and deliver to the Buyer a certificate (the“Pre-Closing
16

 
Certificate”) setting forth (i) an estimate of the Closing Proceeds, (ii) a calculation of theestimate of the Payoff Amount of each Company Debt, (iii) a calculation of the estimate of theCompany Transaction Expenses owed to each Representative of the Acquired Companies, (iv) theClosing Bonuses and (v) the amount of each Seller’s Pro Rata Share of the Closing Proceeds. Afterthe Sellers’ Representative delivers the Pre-Closing Certificate to the Buyer, promptly upon theBuyer’s request, the Sellers’ Representative shall make available to the Buyer back-up materialsused by the Sellers’ Representative in preparing the Pre-Closing Certificate, and such otherdocuments as the Buyer may reasonably request in connection with its review of the Pre-ClosingCertificate.     (c) On the day that is one (1) business day prior to the Closing Date, the Sellers’Representative shall prepare in good faith and deliver to the Buyer an updated version of thePre-Closing Certificate (the “Closing Proceeds Statement”), setting forth (i) a calculation of theestimate of the Payoff Amount of each Company Debt, (ii) a calculation of the estimate of theCompany Transaction Expenses owed to each Representative of the Acquired Companies, (iii) theClosing Bonuses, (iv) the amount of each Seller’s Pro Rata Share of the Closing Proceeds and eachSeller’s and each Closing Bonus Payee’s payment instructions. After the Sellers’ Representativedelivers the Closing Proceeds Statement to the Buyer, promptly upon the Buyer’s request, theSellers’ Representative shall make available to Buyer back-up materials used by the Company inpreparing the Closing Proceeds Statement, and such other documents as the Buyer may reasonablyrequest in connection with its review of the Closing Proceeds Statement.     3. REPRESENTATIONS AND WARRANTIES OF SELLERS     Sellers jointly and severally represent and warrant to Buyer as follows, with the intentionthat Buyer may rely upon the same, and acknowledge that the same shall be true as of the ClosingDate (as if made at the Closing) and shall survive the Closing:     3.1 ORGANIZATION AND GOOD STANDING     Each Acquired Company is a legal entity duly organized, validly existing, and in good standingunder the laws of its jurisdiction of formation, with full corporate power and authority to conductits business as it is now being conducted, to own or use the properties and assets that it purportsto own or use, and to perform all its obligations under Applicable Contracts. Each Acquired Companyis duly qualified to do business as a foreign entity in each of the jurisdictions set forth in Part3.1 of the Disclosure Letter and is in good standing under the laws of each such jurisdiction,which are the only jurisdictions in which either the ownership or use of the properties owned orused by it, or the nature of the activities conducted by them, requires such qualification.     3.2 AUTHORITY; NO CONFLICT     (a) This Agreement constitutes the legal, valid, and binding obligation of Sellers,enforceable against Sellers in accordance with its terms. Upon the execution and delivery bySellers’ Representative of the Escrow Agreement, by the applicable Seller of the EmploymentAgreements (to the extent a Seller is a party thereto) and by the Sellers of the Sellers’ Releases(collectively, the “Sellers’ Closing Documents”), the Sellers’ Closing Documents will constitute
17

 
the legal, valid, and binding obligations of Sellers, enforceable against the applicable Sellers inaccordance with their respective terms subject to applicable bankruptcy, insolvency,reorganization, moratorium, liquidation, fraudulent conveyance and other similar Legal Requirementsand principles of equity, including, but not limited to, those affecting creditors’ rights andremedies generally. Each Seller represents solely with regard to him, her or itself, that suchSeller has the power and authority, and if such Seller is a natural person, the capacity, toexecute and deliver this Agreement and to perform his, her or its obligations under this Agreementand the Sellers’ Closing Documents to which he, she or it is a party. The execution, delivery andperformance by those Sellers that are institutional Sellers of this Agreement has been, and of suchSellers’ Closing Documents will be, duly authorized by all necessary corporate, limited liabilitycompany or partnership action, as the case may be, on the part of the institutional Sellers. ThisAgreement has been duly executed and delivered by each Seller.     (b) Except as set forth in Part 3.2(b) of the Disclosure Letter, neither the executionof this Agreement or the Sellers’ Closing Documents, nor the performance by any of the Sellers oftheir obligations hereunder or thereunder will directly or indirectly (with or without notice orlapse of time or both) (i) violate or conflict with the Organizational Documents of any of theAcquired Companies or any Legal Requirement or Order, (ii) violate, conflict with or result in abreach or termination of, give any Person additional rights or compensation under, release anyPerson from any obligation under, give any Person the right to terminate or accelerate, orconstitute (with notice or lapse of time, or both) a default under the terms of any note, deed,security agreement, mortgage, license or other Applicable Contract to which any of the AcquiredCompanies or any of the Sellers is a party or by which any of the assets or the properties of anyof the Acquired Companies are bound or (iii) result in the creation or imposition of anyEncumbrance with respect to, or otherwise have an adverse effect upon, the Equity Interests or anyof the assets or properties of any of the Acquired Companies.     3.3 CAPITALIZATION     Part 3.3 of the Disclosure Letter sets forth the authorized and outstanding equity securitiesof each of the Company and SCC and the ownership of such equity securities. Sellers are and will beon the Closing Date the record and beneficial owners and holders of and have good and valid titleto the Equity Interests, free and clear of all Encumbrances, which constitute all of the issued andoutstanding shares of capital stock of SCC and membership interests of the Company (including thoseowned by SCC), as applicable. Except as set forth on Part 3.3 of the Disclosure Letter, there areno limitations or restrictions on each Seller’s right to transfer his, her or its Equity Intereststo Buyer pursuant to this Agreement and none of the Equity Interests owned by such Seller issubject to (a) any option, warrant, purchase right or other Contract (other than this Agreement)that would require any Seller or, after the Closing, Buyer, to sell, transfer or otherwise disposeof any Equity Interests or any interest therein, (b) any voting trust, proxy or other Contract withrespect to the voting, dividend rights, preferences, sale, acquisition or other disposition of anyof the Equity Interests or (c) any preemptive right, right of participation, right of maintenanceor any similar right (whether pursuant to the Organizational Documents of the Acquired Companies,any Applicable Contract, any Legal Requirement or otherwise). All of the outstanding equitysecurities of the Company and SCC have been duly authorized and validly issued and are fully paidand nonassessable. Except as set forth on Part 3.3 of the Disclosure Letter, there are noApplicable Contracts relating to the issuance, sale, or transfer of any equity
18

 
securities or other securities of any Acquired Company. None of the outstanding equity securitiesor other securities of any Acquired Company was issued in violation of the Securities Act or anyother Legal Requirement. Except as set forth on Part 3.3 of the Disclosure Letter, no AcquiredCompany owns, or has any Applicable Contract to acquire, any equity securities or other securitiesof any Person (other than Acquired Companies) or any direct or indirect equity or ownershipinterest in any other business.     3.4 FINANCIAL STATEMENTS     (a) Sellers have delivered to Buyer: (i) audited balance sheets of the Company as atDecember 31 in each of the years 2003 through 2005 (the “Balance Sheet”), and the relatedaudited statements of operations, changes in members’ equity and statement of cash flow foreach of the fiscal years then ended, together with the audit report thereon ofPricewaterhouseCoopers, LLP, independent certified public accountants, (ii) the unauditedbalance sheets of the Company as at December 31, 2006 (the “Unaudited 2006 BalanceSheet”),and the related unaudited statements of operations, changes in members’ equity and statementof cash flow for the fiscal year then ended (collectively, the “Unaudited 2006 Financials”), and(iii)an unaudited balance sheet of the Company as at March 2, 2007 (the “Interim Balance Sheet”)and the related unaudited statements of operations, changes in members’ equity and statementofcash flow for the two (2) months then ended. All such financial statements and notes fairlypresent the financial condition and the results of operations, changes in members’ equity andcash flow of the Company as at the respective dates of and for the periods referred to in suchfinancial statements, all in accordance with GAAP, subject, in the case of interim financialstatements, to normal recurring year-end adjustments and the absence of notes. All of thefinancial statements referred to in this Section 3.4 reflect the consistent application ofsuchaccounting principles throughout the periods involved, except as disclosed in the notes tosuchfinancial statements.     (b) Sellers have delivered to Buyer the internal balance sheets of SCC as at December31 in each of the years 2004 through 2005 (the “SCC Balance Sheet”), and the related internalstatements of income for each of the fiscal years then ended. All such SCC financialstatementsfairly present the financial condition and the results of operations of SCC as at therespectivedates of and for the periods referred to in such financial statements.     3.5 BOOKS AND RECORDS     The books of account, minute books, ownership record books, and other records of the AcquiredCompanies, all of which have been made available to Buyer, are complete and correct in all materialrespects.     3.6 TITLE TO ASSETS     (a) Except as set forth on Part 3.6(a) of the Disclosure Letter, SCC does not own, andhas not owned, any assets other than the SCC Interests. SCC does not conduct, and has notconducted, any activities or operations other than as a holding vehicle for ownership of the SCCInterests. Except as set forth on Part 3.6(a) of the Disclosure Letter, the Company has good titleto all properties and assets reflected in the Interim Balance Sheet or acquired after the date ofthe
19

 
Interim Balance Sheet (other than property or assets sold, or otherwise disposed of, in theOrdinary Course of Business since the date of the Interim Balance Sheet and except for assets heldunder capitalized leases disclosed or not required to be disclosed in Part 3.17 of the DisclosureLetter), free and clear of all Encumbrances.     (b) Part 3.6(b) of the Disclosure Letter contains a complete and accurate list of allreal property owned by the Acquired Companies and the buildings, plants, structures and otherimprovements thereon (the “Owned Real Property”). Sellers have delivered or made available to Buyercopies of the title insurance policies, title opinions, surveys, reports of engineers,environmental consultants or other consultants in the possession of Sellers or the AcquiredCompanies and relating to the Owned Real Property. Except as set forth on Part 3.6(b) of theDisclosure Letter, the Acquired Companies own, with good and marketable title in fee simple, theOwned Real Property free and clear of all Encumbrances other than the Permitted Encumbrances.     3.7 CONDITION AND SUFFICIENCY OF ASSETS     The buildings, plants, structures, and equipment owned, leased or operated by the AcquiredCompanies are structurally sound, are in materially reasonable operating condition and repair,ordinary wear and tear excepted, and are adequate for the uses to which they are being put. Thebuilding, plants, structures, and equipment of the Acquired Companies, including the Owned RealProperty and the Leased Real Property, are sufficient for the continued conduct of the AcquiredCompanies’ businesses after the Closing in substantially the same manner as conducted prior to theClosing. The assets owned by the Acquired Companies constitute all the assets, properties andrights necessary to carry on the business of the Acquired Companies as conducted as of the date ofthis Agreement and as of the Closing Date.     3.8 ACCOUNTS RECEIVABLE     All accounts and notes receivable of the Acquired Companies that are reflected on the BalanceSheet, the Unaudited 2006 Balance Sheet or the Interim Balance Sheet or on the accounting recordsof the Acquired Companies (collectively, the “Accounts Receivable”) represent valid obligationsarising from sales actually made or services actually performed in the Ordinary Course of Business.The respective reserves shown on the Balance Sheet, the Unaudited 2006 Balance Sheet or the InterimBalance Sheet or on the accounting records of the Acquired Companies are adequate and calculatedconsistent with past practice. All of the Accounts Receivable are in the aggregate collectible infull, net of the reserve therefor. There is no contest, claim, or right of set-off, other thanreturns in the Ordinary Course of Business, under Accounts Receivable relating to the validity ofsuch Accounts Receivable.     3.9 INVENTORY     All inventory (including raw materials, supplies, finished goods and inventory in transit) ofthe Acquired Companies, whether or not reflected in the Balance Sheet, the Unaudited 2006 BalanceSheet or the Interim Balance Sheet, consists of a quality and quantity usable and salable in theOrdinary Course of Business, except for slow-moving, damaged or obsolete items and items ofbelow-standard quality, which allowances have been calculated in accordance with
20

 
GAAP. All inventories not written off have been priced at the lower of cost (on a first in, firstout basis) or market in accordance with GAAP. The quantities of each item of inventory (whether rawmaterials, work-in-process, or finished goods) are consistent with past practices of the AcquiredCompanies, but taking into account expected levels of sales.     3.10 NO UNDISCLOSED LIABILITIES     Except as set forth in Part 3.10 of the Disclosure Letter, the Acquired Companies have noliabilities or obligations of any nature (whether known or unknown and whether absolute, accrued,contingent, or otherwise) except for liabilities or obligations reflected or reserved against inthe Balance Sheet, the Unaudited 2006 Balance Sheet or the Interim Balance Sheet and currentliabilities incurred in the Ordinary Course of Business since the respective dates thereof.     3.11 TAXES     (a) The Acquired Companies have filed or caused to be filed on a timely basis all TaxReturns that are or were required to be filed by or with respect to any of them, eitherseparatelyor as a member of a group, pursuant to applicable Legal Requirements. Sellers have madeavailable to Buyer copies of all such Tax Returns relating to income or franchise taxes. TheAcquired Companies have paid, or made provision for the payment of, all Taxes that have ormay have become due pursuant to those Tax Returns or otherwise, or pursuant to any assessmentreceived by Sellers or any Acquired Company, except such Taxes, if any, as are listed in Part3.11 of the Disclosure Letter and are being contested in good faith and as to which adequatereserves (determined in accordance with GAAP) have been provided in the Unaudited 2006Balance Sheet, the Interim Balance Sheet and the SCC Balance Sheet. No Acquired Companyhas requested any extension of time within which to file any Tax Return which Tax Return hasnot since been filed.     (b) The United States federal and state Tax Returns of each Acquired Company havebeen audited by the IRS or relevant state tax authorities or are closed by the applicablestatute oflimitations for all taxable years through 2002. Part 3.11 of the Disclosure Letter contains acomplete and accurate list of all audits of all such Tax Returns. All deficiencies proposed asaresult of such audits have been paid, reserved against, settled, or, as described in Part 3.11of theDisclosure Letter, are being contested in good faith by appropriate proceedings. Except asdescribed in Part 3.11 of the Disclosure Letter, no Seller or Acquired Company has given orbeenrequested to give waivers or extensions (or is or would be subject to a waiver or extensiongivenby any other Person) of any statute of limitations relating to the payment of Taxes of anyAcquired Company or for which any Acquired Company may be liable.     (c) The unpaid Taxes of the Acquired Companies (i) did not, as of the most recentfiscal month end, exceed the reserve for Tax Liability set forth on the face of the InterimBalanceSheet and (ii) do not exceed that reserve as adjusted for the passage of time through theClosingDate in accordance with the past custom and practice of the Acquired Companies in filing theirTax Returns. There exists no proposed tax assessment against any Acquired Company except asdisclosed in the Balance Sheet, the Unaudited 2006 Balance Sheet or in Part 3.11 of theDisclosure Letter. All Taxes that any Acquired Company is or was required by Legal
21

 
Requirements to withhold or collect have been duly withheld or collected and, to the extentrequired, have been paid to the proper Governmental Body or other Person.     (d) All Tax Returns filed by any Acquired Company are true, correct, and complete.There is no tax sharing agreement that will require any payment by any Acquired Company afterthe date of this Agreement.     (e) No Seller is a foreign person within the meaning of Section 1445(f)(3) of the IRC.     (f) In the past five years, none of the Acquired Companies has been a party to atransaction that has been reported as a reorganization within the meaning of IRC section 368,or distributed as a corporation (or been distributed) in a transaction that is reported toqualify underIRC section 355.     (g) No election has been made to treat the Company as a corporation for U.S. federalincome tax purposes.     (h) The Company executed and filed an election in accordance with Section 754 of the IRC(including Treasury Regulation section 1.754-1) for the tax year ended December 31, 1999. A laterrevocation of such an election under Section 754 of the IRC, if any, did not revoke or otherwiseaffect such Section 754 election with respect to property distributions or transfers of partnershipinterests occurring during the Company’s 1999 taxable year.     3.12 NO MATERIAL ADVERSE EFFECT     Since December 31, 2006, there has not been any Material Adverse Effect on the AcquiredCompanies.     3.13 EMPLOYEE BENEFITS     (a) As used in this Section 3.13, the following terms have the meanings set forthbelow.     **“Company Other Benefit Obligation”**means an Other Benefit Obligation owed, adopted, orfollowed by an Acquired Company or an ERISA Affiliate of an Acquired Company.     **“Company Plan”**means all Plans of which an Acquired Company or an ERISA Affiliate of anAcquired Company is or was a Plan Sponsor, or to which an Acquired Company or an ERISA Affiliate ofan Acquired Company otherwise contributes or has contributed, or in which an Acquired Company or anERISA Affiliate of an Acquired Company otherwise participates or has participated or with respectto which an Acquired Company or an ERISA Affiliate of an Acquired Company has any liability. Allreferences to Plans are to Company Plans unless the context requires otherwise.     **“ERISA Affiliate”**means, with respect to an Acquired Company, any other person that,together with the Company, would be treated as a single employer under IRC § 414.     **“Multi-Employer Plan”**has the meaning given in ERISA § 3(37).
22

 
     **“Other Benefit Obligations”**means all plans, programs, contracts, policies, obligations,arrangements, or customary practices, whether or not legally enforceable, to provide benefits,other than salary, as compensation for services rendered, to present or former directors,employees, or agents, other than obligations, arrangements, and practices that are Plans. OtherBenefit Obligations include consulting agreements under which the compensation paid does not dependupon the amount of service rendered, sabbatical policies, severance payment policies, and fringebenefits within the meaning of IRC § 132.     **“PBGC”**means the Pension Benefit Guaranty Corporation, or any successor thereto.     **“Pension Plan”**has the meaning given in ERISA § 3(2).     **“Plan”**has the meaning given in ERISA § 3(3).     **“Plan Sponsor”**has the meaning given in ERISA § 3(16)(B).     **“Qualified Plan”**means any Plan that meets or purports to meet the requirements of IRC §401(a).     **“Title IV Plans”**means all Pension Plans that are subject to Title IV of ERISA, 29 U.S.C.§ 1301 et seq., other than Multi-Employer Plans.     **“VEBA”**means a voluntary employees’ beneficiary association under IRC § 501(c)(9).     **“Welfare Plan”**has the meaning given in ERISA § 3(1).     (b)     (i) Part 3.13(b)(i) of the Disclosure Letter contains a complete and accuratelist of all Company Plans and Company Other Benefit Obligations, and identifies as such allCompany Plans that are Qualified Plans.     (ii) Part 3.13(b)(ii) of the Disclosure Letter contains a complete and accuratelist of (A) all ERISA Affiliates of each Acquired Company, and (B) all Plans of which anysuch ERISA Affiliate is or was a Plan Sponsor, in which any such ERISA Affiliateparticipates or has participated, or to which any such ERISA Affiliate contributes or hascontributed or with respect to which any ERISA Affiliate has any liability.     (c) Either Sellers or the Acquired Companies have delivered to Buyer:     (i) all documents that set forth the terms of each Company Plan or Company OtherBenefit Obligation, and of any related trust, including (A) all plan descriptions andsummary plan descriptions of Company Plans for which the Acquired Companies are required toprepare, file, and distribute plan descriptions and summary plan descriptions, and (B) allsummaries and descriptions furnished to participants and beneficiaries regarding CompanyPlans and Company Other Benefit Obligations for which a plan description or summary plandescription is not required;
23

 
     (ii) all personnel, payroll, and employment manuals and policies;     (iii) a written description of any Company Plan or Company Other Benefit Obligation thatis not otherwise in writing;     (iv) the Form 5500 filed in each of the most recent three plan years with respectto each Company Plan, including all schedules thereto and the opinions of independentaccountants; and     (v) with respect to Qualified Plans, the most recent determination letter.     (d) Except as set forth in Part 3.13(d) of the Disclosure Letter:     (i) The Acquired Companies and each ERISA Affiliate have performed all of theirrespective obligations under all Company Plans and Company Other Benefit Obligations. The AcquiredCompanies have made appropriate entries in their financial records and statements for allobligations and liabilities under such Plans and Obligations that have accrued but are not due.     (ii) No statement, either written or oral, has been made by any Acquired Company or anyERISA Affiliate to any Person with regard to any Plan or Other Benefit Obligation that was not inaccordance with the Plan or Other Benefit Obligation and that could have an adverse economicconsequence to any Acquired Company or to Buyer.     (iii) The Acquired Companies, with respect to all Company Plans and Company Other BenefitsObligations, are, and each Company Plan and Company Other Benefit Obligation is, in materialcompliance with ERISA, the IRC, and other applicable Laws including the provisions of such Lawsexpressly mentioned in this Section 3.13.     (iv) No transaction prohibited by ERISA § 406 and no “prohibited transaction” under IRC §4975(c) have occurred with respect to any Company Plan. None of the Sellers nor any AcquiredCompany or any ERISA Affiliate has any liability to the IRS with respect to any Plan, including anyliability imposed by Chapters 43, 47, 68 and 100 of the IRC. None of the Sellers nor any AcquiredCompany or any ERISA Affiliate has any liability under ERISA § 502.     (v) All filings required by ERISA and the IRC as to each Plan have been timely filed,and all notices and disclosures to participants required by either ERISA or the IRC have beentimely provided.     (vi) All contributions and payments made or accrued with respect to all Company Plans andCompany Other Benefit Obligations are deductible under IRC § 162 or § 404. No amount, or any assetof any Company Plan, is subject to tax as unrelated business taxable income.     (vii) Since the date of the Interim Balance Sheet, there has been noestablishment or amendment of any Company Plan or Company Other Benefit Obligation.
24

 
     (viii) No event has occurred or circumstance exists that could result in a materialincrease in premium costs of Company Plans and Company Other Benefit Obligations that areinsured, or a material increase in benefit costs of such Plans and Obligations that areself-insured.     (ix) Each Qualified Plan of each Acquired Company is qualified in form and operationunder IRC § 401 (a); each trust for each such Plan is exempt from federal income tax under IRC §501(a). No event has occurred or circumstance exists that will or could give rise todisqualification or loss of tax-exempt status of any such Plan or trust.     (x) No Acquired Company or any ERISA Affiliate has ever established, maintained orcontributed to, or otherwise participated in, or had an obligation to maintain, contribute to orotherwise participate in or otherwise has any liability with respect to (A) any Multi-EmployerPlan, (B) any plan subject to Title IV of ERISA, (C) any VEBA, or (D) any plan subject to thefunding requirements of ERISA § 302 or IRC § 412. Except to the extent required under ERISA § 601et seq. and IRC § 4980B, no Acquired Company provides health or welfare benefits for any retired orformer employee or is obligated to provide health or welfare benefits to any active employeefollowing such employee’s retirement or other termination of service.     (xi) No condition exists that would prevent an Acquired Company or any ERISA Affiliatefrom amending or terminating any Company Benefit Plan or Company Benefit Obligation withoutliability to the Acquired Company or such ERISA Affiliate (other than for benefits accrued at thetime of termination). Each Acquired Company and each ERISA Affiliate has expressly reserved initself the right to amend, modify or terminate any such Company Benefit Plan or Company BenefitObligation, or any portion of it, and has made no representations (whether orally or in writing)which would conflict with or contradict such reservation or right. Each Company Benefit Plan orCompany Benefit Obligation may be transferred by the Acquired Companies or ERISA Affiliate to theBuyer.     (xii) Sellers, the Acquired Companies and each ERISA Affiliate have complied, in allmaterial respects, with the provisions of ERISA § 601 et seq. and IRC § 4980B, and comparable statelaws.     (xiii) Except as set forth on Part 3.13 of the Disclosure Letter, no payment that is owedor may become due to any director, officer, employee, or agent of any Acquired Company will benon-deductible to the Acquired Company or subject to tax under IRC § 280G or § 4999; nor will anyAcquired Company be required to “gross up” or otherwise compensate any such person because of theimposition of any excise tax on a payment to such person.     (xiv) The consummation of the Contemplated Transactions will not result in the payment,vesting, or acceleration of any benefit.
25

 
 3.14 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTALAUTHORIZATIONS     (a) Except as set forth in Part 3.14(a) of the Disclosure Letter:     (i) each Acquired Company is, and during the three-year period ending on theClosing Date has been, in compliance with each Legal Requirement that is or was applicableto it or to the conduct or operation of its business or the ownership or use of any of itsassets; and     (ii) no Acquired Company has received, during the three-year period ending on theClosing Date, any notice or other communication (whether oral or written) from anyGovernmental Body regarding any actual, alleged, or potential violation of, or failure tocomply with, or potential liability under, any Legal Requirement.     (b) Part 3.14(b) of the Disclosure Letter contains a complete and accurate list of eachmaterial Governmental Authorization that is held by any Acquired Company. EachGovernmental Authorization listed or required to be listed in Part 3.14(b) of the DisclosureLetter is valid and in full force and effect. Except as set forth in Part 3.14(b) of theDisclosureLetter:     (i) each Acquired Company is in compliance with all of the terms andrequirements of each Governmental Authorization identified or required to be identified inPart 3.14(b) of the Disclosure Letter;     (ii) no event has occurred or circumstance exists that may (with or withoutnotice or lapse of time or both) result directly or indirectly in the revocation,withdrawal, suspension, cancellation, non-renewal or termination of, any GovernmentalAuthorization listed or required to be listed in Part 3.14(b) of the Disclosure Letter; and     (iii) no Acquired Company has received, during the three-year period ending on theClosing Date, any notice or other communication (whether oral or written) from anyGovernmental Body or any other Person regarding (A) any actual, alleged, possible, orpotential violation of, or failure to comply with, or potential liability under, any term orrequirement of any Governmental Authorization, or (B) any actual, proposed, possible, orpotential revocation, withdrawal, suspension, cancellation, termination of, or modificationto any Governmental Authorization.     The Governmental Authorizations listed in Part 3.14(b) of the Disclosure Letter collectivelyconstitute all of the material Governmental Authorizations necessary to permit the AcquiredCompanies to lawfully conduct and operate business in the manner currently conducted and to permitthe Acquired Companies to own, lease and use their assets in the manner in which they currentlyown, lease and use such assets.     3.15 LEGAL PROCEEDINGS; ORDERS     (a) Except as set forth in Part 3.15(a) of the Disclosure Letter, there is no, and hasnot, within the three-year period prior to the Closing Date, been any, pending or threatened,
26

 
Proceeding against any Acquired Company, the Sellers or any of the officers, governors or directorsof the Acquired Companies (in their respective capacities as such) and no event has occurred orcircumstances exist that could give rise to or serve as a basis for the commencement of anyProceeding. There are no Proceedings pending or threatened that question the validity of thisAgreement, the Sellers’ Closing Documents or the Contemplated Transactions. Without limiting thegenerality of the foregoing, there are no, and have not, within the three-year period prior to theClosing Date, been any, pending or threatened (i) actions by any Governmental Body to modify thezoning classification of, or to condemn or take by power of eminent domain (or purchase in lieuthereof), or to classify as a landmark, or otherwise to take or restrict in any way the right touse, develop or alter, all or any part of the Owned Real Property or Leased Real Property, or (ii)product recalls or post sale warnings, or similar actions by any Governmental Body or other Person,on products manufactured, leased, sold or delivered by the Acquired Companies.     (b) Except as set forth in Part 3.15(b) of the Disclosure Letter, there is no Order towhich any of the Acquired Companies, or any of the assets owned or used by any Acquired Company, isor was during the three-year period prior to the Closing Date subject.     3.16 ABSENCE OF CERTAIN CHANGES AND EVENTS     Except as set forth in Part 3.16 of the Disclosure Letter, since the date of the InterimBalance Sheet, the Acquired Companies have conducted their businesses only in the Ordinary Courseof Business and there has not been any:     (a) change in any Acquired Company’s authorized or issued equity securities; grantof any option or right to purchase equity securities of any Acquired Company; issuance of anysecurity convertible into such equity securities; grant of any registration rights; purchase,redemption, retirement, or other acquisition by any Acquired Company of any equity securities;or declaration or payment of any dividend or other distribution or payment in respect of suchequity securities;     (b) increase in the rate of compensation of any director, governor, officer, oremployee or entry into any employment, severance, or similar Applicable Contract with anydirector, governor, officer, or (except in the Ordinary Course of Business) employee;     (c) adoption of, or increase in the payments to or benefits under, any profit sharing,bonus, deferred compensation, savings, insurance, pension, retirement, or other employeebenefitplan for or with any employees of any Acquired Company (other than amendments required byLegal Requirements);     (d) damage to or destruction or loss of any material asset or property of any AcquiredCompany, whether or not covered by insurance;     (e) sale (other than sales of inventory in the Ordinary Course of Business), lease, orother disposition of any asset or property of any Acquired Company with a book value in excessof $25,000 or mortgage, pledge, or imposition of any lien or other encumbrance on any materialasset or property of any Acquired Company;
27

 
     (f) cancellation or waiver of any claims or rights with a value to any AcquiredCompany in excess of $25,000;     (g) material change in the accounting methods used by any Acquired Company;     (h) there has been no amendment to any of the Organizational Documents of the AcquiredCompanies, and the Acquired Companies have not effected or been a party to any AcquisitionTransaction, recapitalization, reclassification of shares, stock split, reverse stock split orsimilar transaction;     (i) each Acquired Company has not formed any subsidiary or acquired any equity interestor other interest in any other Person;     (j) each Acquired Company has not made any capital expenditure exceeding $100,000;     (k) each Acquired Company has not entered into a Contract with respect toindebtedness, nor has it modified any Contract with respect to indebtedness;     (1) each Acquired Company has not written off as uncollectible, or established anyextraordinary reserve with respect to, any billed or unbilled account receivable or otherindebtedness outside existing reserves;     (m) each Acquired Company has not (i) lent any sum of money to any Person or (ii)guaranteed any indebtedness or other obligations of any Person;     (n) each Acquired Company has not made any tax election other than in the OrdinaryCourse of Business;     (o) each Acquired Company has not threatened in writing, commenced or settled anyProceeding;     (p) each Acquired Company has not entered into any transaction or taken any othermaterial action outside the Ordinary Course of Business; or     (q) agreement, whether oral or written, by any Acquired Company to do any of theforegoing.     3.17 CONTRACTS; NO DEFAULTS     (a) Part 3.17(a) of the Disclosure Letter contains a complete and accurate list, andSellers have delivered to Buyer true and complete copies, of the following (collectively referredto as the “Material Contracts”) as of the date hereof; provided, however, Part 3.17(a) ofthe Disclosure Letter shall be updated from time to time by Sellers until the Closing Date to addContracts entered into after the date hereof, and such added Contracts shall be subject to therepresentations and warranties at subsections (b) and (c) below (the “Material ContractUpdates”):
28

 
     (i) each Applicable Contract that involves performance of services or delivery of goodsor materials by one or more Acquired Companies of an amount or value in excess of $50,000 otherthan purchase orders presented by any customer of the Acquired Companies;     (ii) each Applicable Contract that involves performance of services or delivery of goodsor materials to one or more Acquired Companies of an amount or value in excess of $50,000 otherthan purchase orders presented by the Acquired Companies for other than the purchase of fixedassets;     (iii) each Real Property Lease or other Applicable Contract affecting the ownershipof, leasing of, title to, use of, or any leasehold or other interest in, any real property,including all amendments or modifications to each Real Property Lease;     (iv) each personal property lease, installment or conditional sale agreement or otherApplicable Contract providing the Acquired Companies with rights to use personal property (exceptpersonal property leases and installment and conditional sales agreements having aggregate paymentsof less than $50,000 per year);     (v) each licensing agreement or other Applicable Contract providing the AcquiredCompanies with rights to Intellectual Property owned by any other Person, except for so-called“shrink-wrap” or “click-wrap” license agreements relating to off-the-shelf Computer Softwarelicensed in the Ordinary Course of Business;     (vi) each joint venture, partnership, and other Applicable Contract (however named)involving a sharing of profits, losses, costs, or liabilities by any Acquired Company with anyother Person;     (vii) each Applicable Contract containing covenants that in any way purport to restrictthe business activity of any Acquired Company;     (viii) each Applicable Contract providing for payments to or by any Person based onsales, purchases, or profits, other than direct payments for goods;     (ix) each Applicable Contract for capital expenditures in excess of $25,000;     (x) each written warranty, guaranty, indemnity or other similar undertaking with respectto contractual performance extended by any Acquired Company other than in the Ordinary Course ofBusiness;     (xi) each Applicable Contract relating to the employment of, or theperformance of services by, any Person, including any employee, consultant orindependent contractor in excess of $100,000;     (xii) each Applicable Contract relating to any Company Debt; and     (xiii) each material amendment, supplement, and modification in respect of any of theforegoing.
29

 
     (b) Except as set forth in Part 3.17(b) of the Disclosure Letter, each (i) MaterialContract (ii) purchase order presented by any customer of the Acquired Companies and (iii)purchase order presented by the Acquired Companies for other than the purchase of fixedassets,in each case of clause (ii) and (iii) of any amount or value in excess of $50,000(collectively, the“Additional Contracts”) is in full force and effect and is valid and enforceable in accordancewithits terms.     (c) Except as set forth in Part 3.17(c) of the Disclosure Letter:     (i) each Acquired Company is in compliance with all applicable terms andrequirements of each Material Contract and Additional Contract;     (ii) to the Knowledge of the Acquired Companies, each other Person that has anyobligation or liability under any Material Contract or Additional Contract is in compliancewith all applicable terms and requirements of such Material Contract or Additional Contract,as applicable;     (iii) no event has occurred or circumstance exists that (with or without notice orlapse of time or both) may contravene, conflict with, or result in a violation or breach of,or give any Acquired Company or other Person the right to declare a default or exercise anyremedy under, or to accelerate the maturity or performance of, or to cancel, terminate, ormodify, any Material Contract or Additional Contract; and     (iv) no Acquired Company has given to or received from any other Person any noticeor other written communication regarding any actual, alleged, or potential violation orbreach of, or default under, any Material Contract or Additional Contract.     (d) There are no renegotiations of, attempts to renegotiate, or outstanding rights torenegotiate any material amounts paid or payable to any Acquired Company under any MaterialContract or Additional Contract with any Person and, to the Knowledge of Sellers and theAcquired Companies, no such Person has made written demand for such renegotiation.     3.18 INSURANCE     (a) Sellers have made available to Buyer true and complete copies of all policies ofinsurance or binders evidencing such policies of insurance to which any Acquired Company is aparty or under which any Acquired Company, or any director or governor (in his capacity as adirector or governor) of any Acquired Company, is covered and Part 3.18(a) of the DisclosureLetter sets forth a complete and accurate list of the same.     (b) Part 3.18(b) of the Disclosure Letter describes any self-insurance arrangement byor affecting any Acquired Company, including any reserves established thereunder.     (c) Except as set forth in Part 3.18(c) of the Disclosure Letter:     (i) All policies to which any Acquired Company is a party or that providecoverage to any Acquired Company, or any director, governor or officer of an AcquiredCompany:
30

 
     (A) taken together, provide adequate insurance coverage for the assetsand the operations of the Acquired Companies (x) for all risks normally insuredagainst by a Person carrying on the same business or businesses as the AcquiredCompanies and (y) to comply with all Legal Requirements and ApplicableContracts; and     (B) are in full force and effect and will continue in full force and effectfollowing the consummation of the Contemplated Transactions.     (ii) Except as set forth in Part 3.18(c) of the Disclosure Letter, no AcquiredCompany has received, to the Knowledge of the Acquired Companies, (A) any refusal ofcoverage or any notice that a defense will be afforded with reservation of rights, or (B)any notice of cancellation or any other indication that any insurance policy is no longer infull force or effect or will not be renewed or that the issuer of any policy is not willingor able to perform its obligations thereunder.     (iii) The Acquired Companies have paid all premiums due under each policy to whichany Acquired Company is a party or that provides coverage to any Acquired Company ordirector thereof.     (iv) The Acquired Companies have given notice to the insurer of all claims thatmay be insured thereby.     3.19 ENVIRONMENTAL MATTERS     (a) Except as set forth in Part 3.19 of the Disclosure Letter, to the Knowledge of theAcquired Companies, each Acquired Company is, and to the Knowledge of the AcquiredCompanies has been in the past, in full compliance with, and has not been and is not inviolationof or liable under, any Environmental Law. Except as set forth in Part 3.19 of the DisclosureLetter, to the Knowledge of the Acquired Companies, no Seller or Acquired Company has anybasis to expect, nor has any of them received, any actual or threatened order, notice, orothercommunication from (i) any Governmental Body or private citizen acting in the public interest,or (ii) the current or prior owner or operator of any Facilities, of any actual or potentialviolationof, or failure to comply with, or actual or potential liability under, any Environmental Law.     (b) There are no pending or, to the Knowledge of the Acquired Companies,threatened claims, Encumbrances, requests for information or other notices of investigationsor potential liability, or other restrictions of any nature arising under or pursuant to anyEnvironmental Law, with respect to or affecting any of the Facilities or that would otherwiseimpose liability on any Acquired Company.     (c) Except as set forth in Part 3.19 of the Disclosure Letter, no Seller or any AcquiredCompany has received any citation, directive, inquiry, notice, Order, summons, warning, orothercommunication that relates to (i) Hazardous Materials or (ii) any alleged, actual, orpotentialviolation of, or failure to comply with, or actual or potential liability under anyEnvironmentalLaw. Except as set forth in Part 3.19 of the Disclosure Letter, to the Knowledge of theAcquiredCompanies, no Seller or any Acquired Company has any basis to expect any citation, directive,inquiry, notice, Order, summons, warning or other communication that relates to (x) Hazardous
31

 
Materials or (y) any alleged, actual or potential violation of, or failure to comply with, oractual or potential liability under, any Environmental Law.     (d) Except as set forth in Part 3.19 of the Disclosure Letter, to the Knowledge of theAcquired Companies, there has been no release of any Hazardous Materials at or from theFacilities.     (e) To the Knowledge of the Acquired Companies, no expenditure, including anycapital expenditure, materially in excess of that routinely incurred by any Acquired Companyduring the two years prior to the Closing Date will be required to maintain compliance by theapplicable Acquired Company with all Environmental Laws for the period from the Closing Dateuntil two years thereafter.     (f) Except as set forth in Part 3.19 of the Disclosure Letter, to the Knowledge of theAcquired Companies, the Acquired Companies have conducted off-site disposal of HazardousMaterials only in compliance with applicable Environmental Laws. Except as set forth in Part3.19 of the Disclosure Letter, to the Knowledge of the Acquired Companies, there has been notransportation, treatment, storage or off-site disposal of any Hazardous Materials that couldreasonably be expected to give rise to liabilities under any Environmental Laws.     (g) To the Knowledge of the Acquired Companies, there are no asbestos-containingmaterials that currently require any abatement or remediation located on or at any Facility.Noneof the Acquired Companies has been subject to any claim for personal injury or property damagerelated to exposure to asbestos, silica or materials that contain either asbestos or silica.     (h) Except as set forth in Part 3.19 of the Disclosure Letter, none of the AcquiredCompanies has contractually assumed, or agreed to indemnify a third party for, any liabilitiesunder any Environmental Law.     (i) Sellers have made available to Buyer true and complete copies and results of anyreports, studies, and analyses possessed or initiated by Sellers or any Acquired Company pertainingto Hazardous Materials in, on, or under the Facilities.     3.20 LABOR RELATIONS; COMPLIANCE     Except as set forth in Part 3.20 of the Disclosure Letter, the Acquired Companies are not aparty to or bound by any collective bargaining agreement or other similar type of Contract,including, without limitation, any other Contract with any labor union or association representingany employees of the Acquired Companies. The Acquired Companies have not agreed to recognize anyunion or other collective bargaining unit, and, except as set forth in Part 3.20 of the DisclosureLetter, no union or collective bargaining unit has been certified as representing the employees ofthe Acquired Companies and no organizational attempt has been made or threatened by or on behalf ofany labor union or collective bargaining unit with respect to any employees of the AcquiredCompanies. The Acquired Companies have not experienced any labor strike, dispute, slowdown orstoppage or any other material labor difficulty during the past five years nor is a labor strike,dispute, slowdown or stoppage threatened against the Company. Each Acquired Company has complied inall material respects with all Legal Requirements relating to employment, equal employmentopportunity, nondiscrimination, immigration, wages,
32

 
hours, benefits, collective bargaining, the payment of social security and similar taxes,occupational safety and health, and plant closing.     3.21 INTELLECTUAL PROPERTY     (a) All Owned Intellectual Property is valid, subsisting and enforceable, no OwnedIntellectual Property is subject to any outstanding Order adversely affecting the use thereofor rights thereto, and, except as set forth on Part 3.6(a) *(Title to Assets)*of the DisclosureLetter, theAcquired Companies are the exclusive owner of all Owned Intellectual Property free and clearof any Encumbrance. No Owned Intellectual Property has lapsed, expired or been abandoned orcancelled, or is subject to any pending, or threatened, opposition, cancellation,interference,public protest, domain name dispute or other proceeding and no such item, requires withinthreemonths immediately following the date of this Agreement that any material action to taken tomaintain or preserve such item. Except as set forth in Part 3.21 (a) of the Disclosure Letter,to theKnowledge of the Acquired Companies, no third party is infringing, misappropriating orviolating any of the Owned Intellectual Property.     (b) The conduct of business by the Acquired Companies has not infringed and doesnot infringe, misappropriate or otherwise violate the Intellectual Property rights of anyPerson,except for such infringements, misappropriations or violations that would not, individually orin the aggregate, reasonably be expected to have a Material Adverse Effect on the AcquiredCompanies. Except as set forth in Part 3.21(b) of the Disclosure Letter, (i) no claims arependingor, to the Knowledge of the Acquired Companies, threatened, against the Acquired Companies orany of their Affiliates by any Person with respect to the ownership, validity,registerability,enforceability, infringement or use in the Acquired Companies’ business of any IntellectualProperty or IT Assets and (ii) during the past three (3) years the Acquired Companies have notreceived any written or, to the Acquired Companies’ Knowledge, oral communication allegingthat any of the Acquired Companies has in its conduct of business violated any rights relatingto the Intellectual Property of any Person.     (c) As used herein,     **(i) “Intellectual Property”**means, collectively, all United States and foreign(i) trademarks, service marks, brand names, certification marks, collective marks, d/b/a’s,Internet domain names, logos, symbols, trade dress, assumed names, fictitious names, tradenames, and other indicia of origin, all applications and registrations for the foregoing,and all goodwill associated therewith and symbolized thereby, including all renewals ofsame; (ii) inventions and discoveries, whether patentable or not, and all patents,registrations, invention disclosures and applications therefor, including divisions,continuations, continuations-in-part and renewal applications, and including renewals,extensions and reissues; (iii) trade secrets and confidential information and know-how,including processes, schematics, business methods, formulae, drawings, prototypes, models,designs, customer lists and supplier lists; (iv) published and unpublished works ofauthorship, whether copyrightable or not (including without limitation databases and othercompilations of information), copyrights therein and thereto, and registrations andapplications therefor, and all renewals, extensions, restorations and reversions thereof;(v)
33

 
moral rights, rights of publicity and rights of privacy; and (vi) all otherintellectual property or proprietary rights.     (ii) **“IT Assets”**means ownership license rights for use of the computers,Computer Software, firmware, middleware, servers, workstations, routers, hubs, switches,data communications lines, and all other information technology equipment and elements, andassociated documentation, in each case, which are necessary for the operation of thebusiness of the Acquired Companies as currently conducted.     (iii) **“Owned Intellectual Property”**means the Intellectual Property owned by theAcquired Companies, including any such Intellectual Property created by the AcquiredCompanies, employees or contractors, including those items identified on Part 3.21(c) of theDisclosure Letter.     3.22 CERTAIN PAYMENTS     No Acquired Company has directly or indirectly made any contribution, gift, bribe, rebate,payoff, influence payment, kickback, or other payment to any Person in violation of any LegalRequirement.     3.23 DISCLOSURE     (a) No representation or warranty of Sellers in this Agreement and no statement inthe Disclosure Letter (including supplements), any certificate delivered by Sellers hereunderomits to state a material fact necessary to make the statements herein or therein, in light ofthe circumstances in which they were made, not misleading.     (b) No notice given pursuant to Section 5.5 will contain any untrue statement or omitto state a material fact necessary to make the statements therein or in this Agreement, inlight ofthe circumstances in which they were made, not misleading.     3.24 RELATIONSHIPS WITH RELATED PERSONS     Except as set forth in Part 3.24 of the Disclosure Letter, no Seller or any Affiliate of aSeller or of any Acquired Company (a) has, or during the last three fiscal years has had, anyinterest in any property (whether real, personal, or mixed and whether tangible or intangible),used in or pertaining to the business of the Acquired Companies, or (b) is, or during the lastthree fiscal years was, a party to any Contract with, or has or had any claim or right against, anyAcquired Company. There is no outstanding indebtedness of any current or former director, governoror officer of the Acquired Companies or any Seller or any of their respective Affiliates to theAcquired Companies.     3.25 PRODUCT LIABILITY AND WARRANTY     (a) Except as set forth in Part 3.25(a) of the Disclosure Letter, each productmanufactured, leased, licensed, sold or otherwise delivered by the Acquired Companies has been inconformity with all applicable contractual commitments and all express and implied warranties, andthe Acquired Companies do not have any liability (and there is no basis for any
34

 
present or future Proceeding against the Acquired Companies) for replacement or repair of any suchproducts or other damages in connection therewith, other than returns of products under warranty inthe Ordinary Course of Business. No product manufactured, sold, leased or delivered by the AcquiredCompanies is subject to any guaranty, warranty or other indemnity beyond the applicable standardterms and conditions of sale, lease or service.     (b) Except as set forth in Part 3.25(b) of the Disclosure Letter, none of the AcquiredCompanies has any liability arising out of any injury to Person or property as a result of theownership, possession or use of a product manufactured, sold, leased or delivered by the AcquiredCompanies.     3.26 CUSTOMERS; SUPPLIERS     Part 3.26 of the Disclosure Letter sets forth (a) a list of the ten (10) largest customers ofthe Company, in terms of revenue during each of the 2005 and 2006 calendar years and the portion of2007 prior to the Interim Balance Sheet Date (collectively, the “Major Customers”), showing thetotal revenue collected in each such period from each such customer; and (b) a list of the ten (10)largest suppliers of the Company, in terms of purchases during the 2005 and 2006 calendar years andthe portion of 2007 prior to the Interim Balance Sheet Date (collectively, the “Major Suppliers”),and showing the approximate total purchases in each such period from each such supplier. Except tothe extent set forth in Part 3.26 of the Disclosure Letter, since the Interim Balance Sheet Datethrough the date hereof, (i) there has not been any adverse change in the business relationshipwith, and there has been no material dispute of the Company with, any of the Major Customers or theMajor Suppliers. Except as set forth in Part 3.26 of the Disclosure Letter, Sellers and theAcquired Companies have not received any notice (either written or oral), and have no reason tobelieve, that any Major Customer or Major Supplier intends to (i) cease dealing with the AcquiredCompanies or (ii) materially reduce the volume of business, determined in pounds of copper,transacted by such Person with the Acquired Companies below the volume of business in 2006.     3.27 INTERNAL CONTROL     The Company maintains a system of internal accounting controls sufficient to providereasonable assurance that (a) transactions are executed in accordance with management’s general orspecific authorizations, (b) access to assets is permitted only in accordance with management’sgeneral or specific authorizations and (c) the recorded accountability for assets is compared withthe existing assets at reasonable intervals and appropriate action is taken with respect to anydifferences.     3.28 OWNED REAL PROPERTY     (a) Except as set forth in Part 3.28(a) of the Disclosure Letter, the Company has legalaccess to the Owned Real Property and to the land subject to any Ground Lease through public roadsor rights-of-way or other valid recorded covenants or easement agreements. Each separate parcel ofland included in the Owned Real Property, or subject to a Real Property Lease has water supply,storm and sanitary sewer facilities, access to telephone, gas and electrical
35

 
connections, fire protection, drainage and other public utilities and parking facilities adequatefor the conduct of the business as presently conducted.     (b) The Acquired Companies have no Knowledge of failure to perform any covenantsor other restrictions (if any) to which any of the Owned Real Property is subject or to whichany land subject to a Ground Lease is subject, and the Acquired Companies have not received anynotice of violation (or claimed violation) thereof.     (c) To the Knowledge of the Acquired Companies, there are no current or proposedexpropriation or condemnation proceedings or exercises of rights of eminent domain withrespectto any of the Owned Real Property, Real Property Leases or the lands demised pursuant to theReal Property Leases.     3.29 LEASED REAL PROPERTY     All rent and other amounts due and payable with respect to the Real Property Leases have beenpaid through the date of this Agreement.     4. REPRESENTATIONS AND WARRANTIES OF BUYER     Buyer represents and warrants to Sellers as follows with the intention that the Sellers mayrely upon the same, and acknowledge that the same shall be true as of the Closing Date (as if madeat the Closing):     4.1 ORGANIZATION AND GOOD STANDING     Buyer is a legal entity duly formed, validly existing, and in good standing under the laws ofthe State of Delaware.     4.2 AUTHORITY; NO CONFLICT     (a) This Agreement constitutes the legal, valid, and binding obligation of Buyer,enforceable against Buyer in accordance with its terms. Upon the execution and delivery byBuyer of the Escrow Agreement and the Employment Agreements (collectively, the “Buyer’sClosing Documents”), the Buyer’s Closing Documents will constitute the legal, valid, andbinding obligations of Buyer, enforceable against Buyer in accordance with their respectiveterms subject to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation,fraudulent conveyance and other similar Legal Requirements and principles of equity,including,but not limited to, those affecting creditors’ rights and remedies generally. Buyer has thecorporate power and authority to execute and deliver this Agreement and Buyer’s ClosingDocuments to which it is a party and to perform its obligations under this Agreement andBuyer’s Closing Documents to which it is a party.     (b) Except as set forth in Part 4.2 of Buyer’s Disclosure Letter, neither the executionand delivery of this Agreement nor the consummation or performance of any of theContemplated Transactions will give any Person the right to prevent, delay, or otherwiseinterfere with any of the Contemplated Transactions pursuant to:
36

 
     (i) any provision of Buyer’s Organizational Documents;     (ii) any resolution adopted by the board of directors or the stockholders ofBuyer;     (iii) any Legal Requirement or Order to which Buyer may be subject; or     (iv) any Contract to which Buyer is a party or by which Buyer may be bound.     Except as set forth in Part 4.2 of Buyer’s Disclosure Letter, Buyer is not and will not berequired to obtain any Consent from any Person in connection with the execution and delivery ofthis Agreement or the consummation or performance of any of the Contemplated Transactions.     4.3 INVESTMENT INTENT     Buyer is acquiring the Equity Interests for its own account and not with a view to theirdistribution within the meaning of Section 2(11) of the Securities Act.     4.4 CERTAIN PROCEEDINGS     There is no pending, or to Buyer’s Knowledge threatened, Proceeding that has been commencedagainst Buyer and that challenges, or may have the effect of preventing, delaying, making illegal,or otherwise interfering with, any of the Contemplated Transactions.     4.5 BROKERS OR FINDERS     Except as set forth in Part 4.5 of Buyer’s Disclosure Letter, Buyer and its officers andagents have incurred no obligation or liability, contingent or otherwise, for brokerage or finders’fees or agents’ commissions or other similar payment in connection with this Agreement and willindemnify and hold Sellers harmless from any such payment alleged to be due by or through Buyer asa result of the action of Buyer or its officers or agents.     5. COVENANTS OF SELLERS PRIOR TO CLOSING DATE     5.1 ACCESS AND INVESTIGATION     Between the date of this Agreement and the Closing Date, Sellers shall, and shall cause eachAcquired Company and its Representatives to, (a) furnish Buyer and its Representatives andprospective lenders and their Representatives (collectively, “Buyer’s Advisors”) with copies of allsuch contracts, books and records, and other existing documents and data as Buyer may reasonablyrequest, (b) furnish Buyer and Buyer’s Advisors with such additional financial, operating, andother data and information as Buyer may reasonably request and (c) provide Buyer and Buyer’sAdvisors with access to the Acquired Companies’ Representatives, personnel and assets as Buyer mayreasonably request. Except for the Material Contract Updates, no information or knowledge obtainedin investigation pursuant to this Section 5.1 or otherwise shall affect or be deemed tomodify, qualify or limit any representation or warranty contained herein or the conditions of theobligations of the parties.
37

 
     5.2 OPERATION OF THE BUSINESSES OF THE ACQUIRED COMPANIES     Between the date of this Agreement and the Closing Date, Sellers shall, and shall causeeach Acquired Company to:     (a) conduct the business of such Acquired Company only in the Ordinary Course ofBusiness and not sell assets outside of the Ordinary Course of Business;     (b) use their Best Efforts to preserve intact the current business organization of suchAcquired Company, keep available the services of the current officers, employees, and agentsof such Acquired Company, and maintain the relations and good will with suppliers, customers,landlords, creditors, employees, agents, and others having business relationships with suchAcquired Company;     (c) make payment for accounts payable in a manner consistent with past practice;     (d) collect payment for accounts receivable in a manner consistent with past practiceand not alter credit terms or discount terms in a material manner; and     (e) purchase copper in amounts consistent with the average daily purchases madeover the twelve (12) months prior to the date hereof.     5.3 NEGATIVE COVENANT     Except as set forth on Part 5.3 of the Disclosure Letter or as otherwise expressly permittedby this Agreement, between the date of this Agreement and the Closing Date, Sellers shall not, andshall cause each Acquired Company not to, without the prior consent of Buyer, take any affirmativeaction, or fail to take any reasonable action within their or its control, as a result of which anyof the changes or events listed in Section 3.16 (other than Section 3.16(j)) is likely to occur.     5.4 REQUIRED APPROVALS     As promptly as practicable after the date of this Agreement, Sellers shall, and shall causeeach Acquired Company to, make all filings required by Legal Requirements to be made by them inorder to consummate the Contemplated Transactions; provided, however, that all requiredfilings under the HSR Act shall be made within seven (7) days of execution of this Agreement.Between the date of this Agreement and the Closing Date, Sellers shall, and shall cause eachAcquired Company to, (a) cooperate with Buyer with respect to all filings that Buyer elects to makeor is required by Legal Requirements to make in connection with the Contemplated Transactions, and(b) cooperate with Buyer in obtaining all Consents identified in Part 4.2 of the Buyer DisclosureLetter (including taking all actions requested by Buyer to cause early termination of anyapplicable waiting period under the HSR Act).     5.5 NOTIFICATION     Between the date of this Agreement and the Closing Date, the Company shall promptly notifyBuyer in writing if any Acquired Company becomes aware of (a) any fact or condition
38

 
(that occurs, arises or exists either before or after the date of this Agreement) that causes orconstitutes a breach of any of Sellers’ representations and warranties in this Agreement and (b)any failure on the part of any Seller to comply with or satisfy any covenant, condition oragreement to be complied with or satisfied by the Sellers. The Company shall deliver to Buyer asupplement to the Disclosure Letter specifying such change (even if the language of therepresentation and warranty in question omitted a cross-reference to a Schedule of the DisclosureLetter, in which case such supplement shall be deemed to modify the representation and warranty).Except for the Material Contract Updates, no furnishing of any information in accordance with thisSection 5.5 shall affect or be deemed to modify, qualify or limit the representations,warranties or covenants of the Sellers or the conditions to their obligations under this Agreementor the ability of Buyer to rely thereon.     5.6 PAYMENT OF INDEBTEDNESS BY RELATED PERSONS     Except as expressly provided in this Agreement, Sellers shall cause all indebtedness owed toan Acquired Company by any Seller or any Related Person of any Seller to be paid in full at orprior to Closing.     5.7 NO NEGOTIATION     (a) For a sixty (60) day period following the execution of this Agreement (the “Pre-Closing Period”), Sellers shall not, and shall cause each Acquired Company and each of theirRepresentatives not to, directly or indirectly (i) solicit, initiate, or encourage or inducethe making, submission or announcement of any inquiries or proposals related to an AcquisitionTransaction or take any action that could reasonably be expected to lead to any such inquiriesor the making of any such proposal, (ii) furnish or provide any non-public information regardingany Acquired Company to any Person in connection with or in response to an AcquisitionTransaction or an inquiry or indication of interest that could reasonably be expected to leadto anAcquisition Transaction, (iii) engage in discussions or negotiations with any Person withrespectto any Acquisition Transaction, (iv) approve, endorse or recommend any AcquisitionTransaction, or (v) enter into any letter of intent or similar document or any Contract havinga primary purpose of effectuating, or which would effect, any Acquisition Transaction.     (b) The Sellers’ Representative shall promptly advise Buyer in writing of any inquiryor proposal or offer received by any of the Acquired Companies, any Seller or any of theirRepresentatives related to an Acquisition Transaction (an “Acquisition Proposal”) or anyrequestfor nonpublic information relating to any Acquired Company (including the identity of thePerson making or submitting such inquiry, proposal, offer or request, and the terms thereof)that is made or submitted by any Person during the Pre-Closing Period in connection with anAcquisition Proposal. The Seller’s Representative shall promptly notify Buyer in writing ofany material modification to any such inquiry, proposal, offer or request related to anAcquisitionTransaction.     (c) The Sellers shall immediately cease and cause to be terminated any existingdiscussions with any Person that relate to any Acquisition Transaction. The Sellers shallpromptly request each Person that has executed, within twelve (12) months prior to the date ofthis Agreement, a confidentiality, standstill or similar agreement in connection with its
39

 
consideration of a possible Acquisition Transaction to return all confidentialinformation heretofore furnished to such Person by or on behalf of the Acquired Companies.     5.8 NO TERMINATION OR MODIFICATION OF REAL PROPERTY LEASES     Until the Closing, without the prior written consent of Buyer, the Sellers will not terminate,rescind, modify, amend or otherwise alter or change any of the material terms or provisions of anyReal Property Lease or reduce or discount, waive or forego any material payment or right under anyReal Property Lease or agree to any compromise or settlement with respect thereto or default in theperformance thereof. All rent and other amounts due and payable with respect to the Real PropertyLeases on or prior to the Closing Date will have been paid prior to the Closing Date.     5.9 BEST EFFORTS     Between the date of this Agreement and the Closing Date, Sellers shall use their Best Effortsto cause the conditions in Sections 7 and 8 to be satisfied. Sellers shall use Best Efforts tocause the Audited 2006 Financials to be delivered to Buyer as soon as possible after the date ofthis Agreement.     5.10 TAX RETURNS     Each Acquired Company shall (A) prepare properly and file duly and validly all Tax Returns orrequests for extensions thereof required to be filed prior to the Closing Date with the appropriatetaxing authority on a basis consistent with prior returns, (B) pay duly and fully all Taxes whichare due with respect to the periods covered by such Tax Returns other than amounts contested ingood faith and to which adequate reserves shall have been provided on the Company’s Balance Sheetand (C) provide Buyer with final copies of all U.S. federal income Tax Returns and all materialstate income Tax Returns as soon as practicable after the preparation or contemporaneous with thefiling, thereof.     5.11 CAPITAL EXPENSES     Sellers agree that from the date hereof and until the Closing Date, the Company shallreasonably consult with Buyer before the Acquired Companies make any capital expenditures in excessof $100,000; provided, however, (i) the Company may continue with capital expendituresalready committed to third-parties as of the date hereof; and (ii) after reasonable consultationwith Buyer, the Company shall be entitled to make those capital expenditures it deems in the bestinterest of the Company.     6. COVENANTS OF BUYER PRIOR TO CLOSING DATE     6.1 APPROVALS OF GOVERNMENTAL BODIES     As promptly as practicable after the date of this Agreement, Buyer shall, and shall cause eachof its Affiliates to, make all filings required by Legal Requirements to be made by them toconsummate the Contemplated Transactions; provided, however, that all required filingsunder the HSR Act shall be made within seven (7) days of execution of this Agreement. Between the
40

 
date of this Agreement and the Closing Date, Buyer shall, and shall cause each Affiliatesto, (i) cooperate with Sellers with respect to all filings that Sellers are required by LegalRequirements to make in connection with the Contemplated Transactions, and (ii) cooperate withSellers in obtaining all Consents identified in Part 3.2 of the Disclosure Letter; provided,however that this Agreement shall not require Buyer to dispose of or make any change in anyportion of its business or to incur any other burden to obtain a Governmental Authorization.     6.2 BEST EFFORTS     Except as set forth in the proviso to Section 6.1, between the date of this Agreement and theClosing Date, Buyer shall use its Best Efforts to cause the conditions in Sections 7 and 8 to besatisfied.     7. CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE     Buyer’s obligation to purchase the Equity Interests and to take the other actions required tobe taken by Buyer at the Closing is subject to the satisfaction, at or prior to the Closing, ofeach of the following conditions (any of which may be waived by Buyer, in whole or in part):     7.1 ACCURACY OF REPRESENTATIONS     All of Sellers’ representations and warranties in this Agreement (considered collectively),and each of these representations and warranties (considered individually), must have been accuratein all respects as of the date of this Agreement, and must be accurate in all material respects asof the Closing Date as if made on the Closing Date (except that with respect to representations andwarranties that already contain materiality or Material Adverse Effect qualifiers, suchrepresentations and warranties shall be true and correct in all respects), except to the extentthat such representations and warranties are made expressly as of a certain date, whichrepresentations and warranties shall be true and correct in all respects as of such specified dateand except as permitted by this Agreement with respect to Material Contract Updates.     7.2 SELLERS’ PERFORMANCE     (a) All of the covenants and obligations that Sellers are required to perform or tocomply with pursuant to this Agreement at or prior to the Closing (considered collectively),and each of these covenants and obligations (considered individually), must have been dulyperformed and complied with in all material respects.     (b) Each document required to be delivered by the Sellers pursuant to Section 2.4must have been delivered.     7.3 CONSENTS     Each of the Consents identified in Part 3.2 of the Disclosure Letter must have beenobtained and must be in full force and effect.
41

 
     7.4 NO INJUNCTION     There must not be in effect any Legal Requirement or any injunction or other Order that (a)prohibits the sale of the Equity Interests by Sellers to Buyer, and (b) has been adopted or issued,or has otherwise become effective, final and non-appealable, since the date of this Agreement. Noaction seeking any such injunction or Order shall be pending.     7.5 FINANCING     Buyer shall have received proceeds pursuant to the financing arrangement contemplated by theFinancing Commitment Letter prior to or on the Closing Date.     7.6 TITLE AND ENVIRONMENTAL INSURANCE POLICIES     Buyer shall have obtained new Title Policies, including an access endorsement for the OwnedReal Property located in Lafayette, Indiana, to be dated the Closing Date, insuring the Company asthe owner of fee simple title to the Owned Real Property, subject only to the PermittedEncumbrances, in an amount that is no less than the insured amount as set forth in the currentTitle Policies for such Owned Real Property. Except as set forth on Exhibit 7.6, Buyer shall haveobtained an ALTA leasehold policy of title insurance for the Leased Real Property insuring theCompany’s leasehold interest in such Leased Real Property. The Company shall use Best Efforts toobtain (i) “non-imputation” endorsements for such title insurance policies and (ii) ALTA leaseholdtitle insurance policies for the locations set forth on Exhibit 7.6. Buyer shall have obtained theEnvironmental Policies. Buyer shall pay one-half and the Sellers shall pay one-half of the costs ofthe insurance policies required by this Section 7.6.     7.7 ESTOPPEL CERTIFICATES     The Company shall use Best Efforts to deliver to Buyer estoppel certificates in form andsubstance reasonably acceptable to Buyer, dated as of a date not more than thirty (30) days priorto the Closing Date, from each of the lessors under the Real Property Leases.     7.8 2006 FINANCIALS     Buyer shall have received from the Sellers the audited balance sheet of the Company as ofDecember 31, 2006, and the audited statement of operations, changes in members’ equity andstatement of cash flow of the Company for the period then ended, together with the notes theretoand the audit report thereon of PricewaterhouseCoopers, LLC, independent certified publicaccountants (the “Audited 2006 Financials”). The Audited Financials shall be in form and substanceconsistent with the financial statements required to be included in an annual report on Form 10-Kunder the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and shall comply withthe Exchange Act in all material respects; provided, however, that any expense associatedwith making such financials Exchange Act compliant shall be paid in full by Buyer (the “SECCompliance Expense”). The Audited 2006 Financials shall not differ in any material respect (eitherin nature or amount) as of the relevant date or for the relevant period as compared to theUnaudited 2006 Financials provided in Part 3.4(a) of the Disclosure Letter. By way of example andnot limitation, a decrease in income or net revenue as shown on the Audited 2006 Financials of morethan *5%*from what was shown on the Unaudited 2006 Financials shall be
42

 
deemed a material difference for purposes of this Section 7.9; provided, however,that a reclassification of expenses of over 5% that does not have a corresponding impact onoperating profits shall not be deemed a material difference.     8. CONDITIONS PRECEDENT TO SELLERS’ OBLIGATION TO CLOSE     Sellers’ obligation to sell the Equity Interests and to take the other actions required to betaken by Sellers at the Closing is subject to the satisfaction, at or prior to the Closing, ofeach of the following conditions (any of which may be waived by Sellers, in whole or in part):     8.1 ACCURACY OF REPRESENTATIONS     All of Buyer’s representations and warranties in this Agreement (considered collectively), andeach of these representations and warranties (considered individually), must have been accurate inall respects as of the date of this Agreement and must be accurate in all material respects as ofthe Closing Date as if made on the Closing Date (except that with respect to representations andwarranties that already contain materiality or Material Adverse Effect qualifiers, suchrepresentations and warranties shall be true and correct in all respects), except to the extentthat such representations and warranties are made expressly as of a certain date, whichrepresentations and warranties shall be true and correct in all respects as of such specified date.     8.2 BUYER’S PERFORMANCE     (a) All of the covenants and obligations that Buyer is required to perform or tocomply with pursuant to this Agreement at or prior to the Closing (considered collectively),and each of these covenants and obligations (considered individually), must have been performedand complied with in all material respects.     (b) Buyer must have delivered each of the documents required to be delivered byBuyer pursuant to Section 2.4 and must have made the cash payments required to be made byBuyer pursuant to Sections 2.4(b)(i) and 2.4(b)(ii).     8.3 CONSENTS     Each of the Consents identified in Part 4.2 of Buyer’s Disclosure Letter must have beenobtained and must be in full force and effect.     8.4 NO INJUNCTION     There must not be in effect any Legal Requirement or any injunction or other Order that (a)prohibits the sale of the Equity Interests by Sellers to Buyer, and (b) has been adopted or issued,or has otherwise become effective, final and non-appealable, since the date of this Agreement. Noaction seeking any such injunction or Order shall be pending.
43

 
     9. TERMINATION     9.1 TERMINATION EVENTS     This Agreement may, by notice given prior to or at the Closing, be terminated:     (a) by Buyer, on one hand, or Sellers’ Representative, on the other hand, if a materialbreach of any provision of this Agreement has been committed by the other party, which has notbeen cured within twenty (20) days after receipt of notice by the breaching party, and suchbreach has not been waived by the non-breaching party;     (b) (i) by Buyer if any of the conditions in Section 7 has not been satisfied as of theClosing Date or if satisfaction of such a condition is or becomes impossible (other thanthroughthe failure of Buyer to comply with its obligations under this Agreement) and Buyer has notwaived such condition on or before the Closing Date; or (ii) by Sellers’ Representative, ifany ofthe conditions in Section 8 has not been satisfied as of the Closing Date or if satisfactionof sucha condition is or becomes impossible (other than through the failure of Sellers to comply withtheir obligations under this Agreement) and Sellers’ Representative has not waived suchcondition on or before the Closing Date;     (c) by mutual written consent of Buyer, on the one hand, and Sellers’ Representative,on the other hand; or     (d) by Buyer, on the one hand, and Sellers’ Representative, on the other hand, if theClosing has not occurred (other than through the failure of any party seeking to terminatethis Agreement to comply fully with its obligations under this Agreement) on or before the datethat is sixty (60) days from the date of execution of this Agreement, or such later date as thepartiesmay agree upon.     9.2 EFFECT OF TERMINATION     If this Agreement is terminated pursuant to Section 9.1, all further obligations of theparties under this Agreement shall terminate, except that the obligations in Sections 11.1*(Expenses),*11.2 *(Public Announcement),*11.5 *(Jurisdiction; Service of Process)*and 11.14*(Governing Law)*shall survive. If this Agreement is terminated by a party pursuant to Sections9.1(a) or 9.1(b), except as a result of the breach, due to an event occurring after the datehereof, of Sections 7.1 *(Accuracy of Representations)*or 8.1 *(Accuracy of Representations),*theterminating party’s right to pursue all legal remedies shall survive such termination unimpaired.     10. OTHER AGREEMENTS OF THE PARTIES; INDEMNIFICATION; REMEDIES     10.1 SURVIVAL     All representations, warranties, covenants, and obligations in this Agreement, theDisclosure Letter, the supplements to the Disclosure Letter, Buyer’s Disclosure Letter, thecertificate delivered pursuant to Section 2.4(a)(x), and any other certificate or documentdelivered pursuant to this Agreement shall survive the Closing.
44

 
     10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS     Subject to the limitations contained in Section 10.4 below, Sellers, on a several basis, shallindemnify, defend and hold harmless Buyer, the Acquired Companies, and their respective owners(excluding Sellers and their Affiliates), officers, directors, Affiliates, Representatives andemployees (collectively, the “Indemnified Persons”) for, and shall pay to the Indemnified Personsthe amount of, any loss, liability, claim, damage, response cost, natural resource damage orexpense (including reasonable attorneys’ fees and other costs of litigation) whether or notinvolving a third-party claim with respect to such item (collectively, “Damages”), arising,directly or indirectly, from or in connection with:     (a) a breach of any representation or warranty made by Sellers in this Agreement, theDisclosure Letter, the supplements to the Disclosure Letter, or any other certificate ordocument delivered by Sellers pursuant to this Agreement; provided, however, to the extent thatthere areany Damages arising out of this Section 10.2(a) that are also recoverable under Section10.2(d),10.2(e) or 10.2(h), the Indemnified Persons may only recover once the amount of such Damages;     (b) a breach by a Seller of any covenant or obligation of such Seller in thisAgreement;     (c) any product shipped, manufactured, leased, sold or delivered by, or any servicesprovided by, any Acquired Company prior to the Closing Date;     (d) any Taxes (or the nonpayment thereof) of the Acquired Companies relating to orarising out of the period before the Closing Date, including, without limitation, Taxesrelating tothe Straddle Period as determined pursuant to Section 10.7(c);     (e) any violation of, or liability under, Environmental Laws relating to (i) theownership, operation or condition prior to the Closing Date of the Facilities; (ii) thearrangementfor treatment or disposal, or the arrangement for transportation for treatment or disposal, ofany Hazardous Material generated by any Acquired Company prior to the Closing Date; or (iii)otherwise relating to Environmental Laws and the operations of any Acquired Company prior tothe Closing Date, other than those set forth on Exhibit 10.2(e);     (f) any claim by any Person for brokerage fees or commissions or similar paymentsbased upon any agreement with any Acquired Company in connection with any of theContemplated Transactions;     (g) any claim for (i) any amount under the Company Debt, (ii) any unpaid CompanyTransaction Expenses and (iii) any bonuses or severance payments (including, withoutlimitation, any claim in connection with the Closing Bonuses or bonuses payable under the PlanFor Incentive Compensation for Copperfield, LLC) with respect to or arising out of servicesperformed by any directors, officers, employees or consultants of the Acquired Companiesbefore the Closing Date; and     (h) a breach of the representations, warranties and covenants contained in Section10.11(a).
45

 
     The sole recourse and remedy of Buyer, Sellers and the other Indemnified Persons forany breach of, or any claim with respect to, any representation or warranty made in or pursuant tothis Agreement, other than for instances of fraud, shall be under the provisions of and to theextent provided in this Section 10.     10.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER AND PARENT     Buyer shall indemnify and hold harmless Sellers, and their respective owners, officers,directors, Affiliates (other than the Acquired Companies), Representatives and employees, and shallpay to Sellers the amount of any Damages arising, directly or indirectly, from or in connectionwith (a) any breach of any representation or warranty made by Buyer in this Agreement or in anycertificate delivered by Buyer pursuant to this Agreement, (b) any breach by Buyer of any of itscovenants or obligations in this Agreement, or (c) any claim by any Person for brokerage orfinder’s fees or commissions or similar payments based upon any agreement or understanding allegedto have been made by such Person with Buyer (or any Person acting on its behalf) in connection withany of the Contemplated Transactions.     10.4 LIMITATIONS ON SELLERS’ LIABILITY     (a) Time to Assert. Buyer shall assert any claim under Section 10.2 within fifteen(15) months from the Closing Date or be forever barred from asserting such claim; provided,however that such limitation shall not apply to Buyer’s right to indemnification for (1)breaches of Sections 3.1 (*Organization*), 3.2 (*Authority*) and 3.3 (*Capitalization*), (2) any breachof any of Sellers’ representations and warranties of which a Seller had Knowledge at any time priorto the date on which such representation and warranty is made or any breach by any Seller of anycovenant or obligation and (3) a claim under Section 10.2(f) (*Selling Expenses*); in each case asdescribed in clauses (1) through (3) above Buyer may assert claims up to the applicable statute oflimitation.     (b) Threshold. The Sellers shall have no liability to indemnify the Buyer for anyclaim under Sections 10.2(a) and (c) until such time as the aggregate amount to be indemnifiedunder both such Sections exceeds $1,597,500 (which equals 0.75% of Purchase Price); provided,however, if and when, and at all times after, such Damages equal or exceed this threshold, theIndemnified Persons shall be indemnified and held harmless with respect to the full amount of suchDamages, including the amounts below this threshold; provided,however, that no thresholdshall apply to Buyer’s right to indemnification for (1) breaches of Sections 3.1 (*Organization*),3.2 (*Authority*), and 3.3 (*Capitalization*) and (2) any breach of any of Sellers’ representations andwarranties of which a Seller had Knowledge at any time prior to the date on which suchrepresentation and warranty is made or (3) any breach by any Seller of any covenant or obligation(including any breach of Section 10.11 (a)). Notwithstanding the foregoing, the Sellers shall haveno liability to indemnify the Buyer for any claim under Sections 10.2(a), (b), and (c) with respectto any individual item (without aggregation with any other related or similar item) where theDamages relating to such item or series of related items (excluding attorneys’ fees) is less than$5,000 and which amounts shall not be taken into account for the purposes of determining whetherthe threshold has been reached.
46

 
     (c) Caps. The aggregate amount the Sellers shall be liable for any claims underSection 10.2 is $15,975,000 (which equals 7.5% of the PurchasePrice); provided, howeverthat the aggregate amount the Sellers shall be liable for (i) pursuant to Section 10.2(a) forbreaches of Section 3.1 (*Organization*), 3.2(*Authority*), or 3.3 (*Capitalization*), (ii) any claimbased on a breach of representations or warranties of which a Seller had Knowledge at any timeprior to the Closing Date, (iii) any claim under Section 10.2(f) (*Selling Expenses*) and (iv) anyclaim under Section 10.2(g), shall be the Purchase Price.     (d) ProRata Share; Escrow. Each Seller’s liability shall be limited to his, her orits Pro Rata Share of any Damages other than for breaches of the representations contained inSection 3.1 (with respect to such Seller’s right, power, authority and capacity to execute anddeliver this Agreement and perform his, her or its obligations hereunder), Section 3.3 (withrespect to such Seller’s title to his, her or its Equity Interest), any breach of representationsand warranties of which such Seller had Knowledge at any time prior to the Closing Date or anybreach by a Seller of any covenant, for which such Seller shall be solely responsible. After theClosing Date, the Indemnified Persons’ right to recovery from the Escrow Amount shall be the soleand exclusive remedy under this Agreement for the matters referred to in Section 10.2(a) other thanwith respect to breaches of Section 3.1 (*Organization*), 3.2 (*Authority*) or 3.3 (*Capitalization*),any breach of representations and warranties of which a Seller had Knowledge at any time prior tothe Closing Date or any breach by a Seller of any covenant.     (e) Notwithstanding anything to the contrary contained in this Agreement, nothing in thisAgreement shall preclude Buyer from seeking injunctive relief or specific performance with respectto this Agreement. Nothing shall limit any remedy of an Indemnified Person for fraud on the part ofthe Sellers or any of their Representatives in connection with this Agreement.     (f) Except as set forth in Section 10.8, no Seller shall have, and no Seller shall exercise orassert (or attempt to exercise or assert), any right of contribution, right of indemnity or otherright or remedy against any Acquired Company in connection with any indemnification obligation towhich such Seller may become subject under this Agreement or which may be payable out of the EscrowAmount under or in connection with this Agreement.     (g) Sellers shall have no obligation to indemnify Buyer under this Agreement for any amountswithheld by Buyer from the amount of the Closing Bonuses pursuant to Section 2.4(b)(iv).     10.5 PROCEDURE FOR INDEMNIFICATION — THIRD PARTY CLAIMS     (a) Promptly after receipt by an indemnified party under Section 10.2 or Section 10.3 ofnotice of the commencement of any Proceeding against it, such indemnified party shall, if a claimis to be made against an indemnifying party under such Section, give notice to the indemnifyingparty of the commencement of such claim, but the failure to notify the indemnifying party shall notaffect the indemnity obligations of the indemnifying party (or the indemnified party’s rightsagainst the Escrow Amount), except to the extent that the indemnifying party is prejudiced by theindemnifying party’s failure to give such notice. Such notice shall include a statement that one ormore of the indemnified parties is or may be entitled to indemnification under this Agreement orthe Escrow Agreement, a statement of the aggregate
47

 
amount of the indemnification demanded and a reasonably detailed description of the nature andamount of each individual item of indemnification.     (b) If any Proceeding referred to in Section 10.5(a) is brought against an indemnifiedparty and it gives notice to the indemnifying party of the commencement of such Proceeding, theindemnifying party shall be entitled to participate in such Proceeding and, to the extent that itwishes (unless the indemnifying party is also a party to such Proceeding and the indemnified partydetermines based on an opinion of counsel experienced in the evaluation of conflicts of interest,that there exists a material conflict of interest between the interests of the indemnifying partyand the indemnified party in the defense of such Proceeding), to assume the defense of suchProceeding and, after notice from the indemnifying party to the indemnified party of its electionto assume the defense of such Proceeding, the indemnifying party shall not, as long as itdiligently conducts such defense, be liable to the indemnified party under this Section 10 for anyfees of other counsel or any other expenses with respect to the defense of such Proceeding, in eachcase subsequently incurred by the indemnified party in connection with the defense of suchProceeding, other than reasonable costs of investigation. If the indemnifying party assumes thedefense of a Proceeding, (i) it shall be conclusively established for purposes of this Agreementthat the claims made in that Proceeding are within the scope of and subject to indemnification;(ii) no compromise or settlement of such claims may be effected by the indemnifying party withoutthe indemnified party’s consent unless (A) there is no finding or admission of any violation ofLegal Requirements or any violation of the rights of any Person and no effect on any other claimsthat may be made against the indemnified party, and (B) the sole relief provided is monetarydamages that are paid in full by the indemnifying party (with the settlement terms being subject toconfidentiality protections); and (iii) the indemnified party shall have no liability with respectto any compromise or settlement of such claims effected without its consent. All indemnifiedparties shall be represented by the same counsel, subject to the conflict of interest evaluationconducted as specified above.     10.6 PROCEDURE FOR INDEMNIFICATION — OTHER CLAIMS     A claim for indemnification for any matter not involving a third-party claim may beasserted by notice to the party from whom indemnification is sought.     10.7 TAX MATTERS     (a) Tax Returns. Buyer shall prepare or cause to be prepared and file or cause to befiled for each Acquired Company (A) all Tax Returns other than the 2006 Tax Return for all taxableyears ending on or prior to the Closing Date which are filed after the Closing Date, (B) all TaxReturns for all taxable years relating to the Straddle Period, and (C) all Tax Returns for alltaxable years beginning after the Closing Date. All Tax Returns under (A) and (B) shall be preparedin a manner consistent with past practices. Buyer shall permit Seller to review and comment on eachTax Return described in (A) and (B) above prior to filing. Buyer shall submit any claim for Taxespaid pursuant to (A) or (B) above to the Escrow Agent to the extent such Taxes are subject toSeller’s obligation to indemnify Buyer pursuant to Section 10.2(d).     (b) Cooperation. After Closing, upon reasonable written notice, Buyer and Sellersshall furnish or cause to be furnished to each other, as promptly as practicable, such information
48

 
and assistance (to the extent within the control of such party) as is reasonably requested for thefiling of all Tax Returns, and making of an election related to Taxes, the preparation for anyaudit by any taxing authority, and the prosecution or defense of any claim, suit or proceedingrelated to any Tax Return. Sellers and Buyer shall cooperate with each other in the conduct of anyaudit or other proceeding relating to Taxes of any Acquired Company.     (c) Proration of Allocated Income and Taxes. In the case of any taxable period thatincludes (but does not end on) the Closing Date (a “StraddlePeriod”), income Taxes of the AcquiredCompanies allocable to the Pre-Closing Tax Period shall be computed as if such taxable period endedas of the close of business on the Closing Date; provided, with respect to the AcquiredCompanies other than the Company, that exemptions, allowances or deductions that are calculated onan annual basis (including, but not limited to, depreciation and amortization deductions) shall beallocated between the period ending on the Closing Date and the period after the Closing Date inproportion to the number of days in each period; provided further, with respect to theCompany, the Company shall have an interim closing of its books as of the Closing Date with respectto all Sellers whose entire interest in the Company is liquidated, and the Form K-ls for suchSellers for the Straddle Period shall reflect an allocation to the Sellers of items of income,gain, receipt, loss, deduction and credit of the Company through the Closing Date.     (d) Tax Claims. Notwithstanding the provisions of Sections 10.5 and 10.6, Sellersshall afford Buyer the opportunity to participate, as may reasonably be requested by Buyer, incontesting any Tax claim for Tax periods ending prior to or on the Closing solely to the extentsuch Tax claim would have an effect on the Acquired Companies’ liability for Taxes for periods onor after the Closing Date. Sellers shall not settle or otherwise compromise any Tax claim thatwould have an effect on the Acquired Companies’ liability for Taxes for Tax periods on or after theClosing Date without the Buyer’s prior written consent (which consent shall not be unreasonablywithheld).     (e) Amendments to Prior Tax Returns. Buyer shall not amend or modify any Tax Return ofthe Acquired Companies for periods ending on or before the Closing Date without Sellers’ priorwritten consent (which consent shall not be unreasonably withheld).     (f) 754 Election. Upon reasonable request from Buyer, the Sellers’ Representativeshall execute (or shall cause to be executed) an election in accordance with Section 754 of the IRC(including Treasury Regulation section 1.754 — 1) for the Company and shall reasonably cooperatewith Buyer to make any filings in connection with such election.     10.8 INSURANCE     To the extent that an Indemnified Person shall receive payment under any insurance policies orfrom any other source on account of a claim, the amount, if any, payable by the Sellers on accountof such claim shall be reduced by the Adjusted Recovery Amount of such payment, or if theIndemnified Person shall have already collected on such claim from the Sellers, then theIndemnified Person shall repay to the Sellers the Adjusted Recovery Amount of such payment;provided that after such Indemnified Person shall have collected on such claim from theSellers in full, Sellers shall be entitled to proceed against the insurance carriers of such
49

 
insurancepolicies or such other sources (the “Insurance Subrogation”) and any amount recovered bySellers pursuant to the Insurance Subrogation shall be retained by Sellers (provided that Sellersshall be responsible for all costs and expenses associated with the Insurance Subrogation,including deductibles and all costs, expenses, fee increases and taxes incurred by any IndemnifiedPerson related to such insurance recovery, including, without limitation, retrospective premiumadjustments, experience-based premium adjustments, incremental premiums, taxes due on any recoverypayment and all other direct or indirect costs incurred by the Indemnified Person and itsAffiliates as a result of or in connection with the Insurance Subrogation. For purpose hereof,“Adjusted Recovery Amount” means the amount actually recovered by the Indemnified Personunder insurance policies, or otherwise received from any other third party, less all costs,expenses, fee increases and taxes incurred by any Indemnified Person related to such insurancerecovery, including, without limitation, retrospective premium adjustments, experience-basedpremium adjustments, incremental premiums, taxes due on any recovery payment and all other director indirect costs incurred by the Indemnified Person and its Affiliates.     10.9 SELLERS’ REPRESENTATIVE     (a) Each Seller hereby irrevocably appoints the Sellers’ Representative as his, her or itssole and exclusive agent and attorney-in-fact for each such Seller, for and on behalf of suchSeller, with full power and authority to represent each Seller and such Seller’s successors andassigns, with full power of substitution in the premises, with respect to all matters arising underthis Agreement and the related agreements and all actions taken by the Sellers’ Representativeunder this Agreement or such the related agreements shall be binding upon each such Seller and suchSeller’s successors and assigns as if expressly ratified and confirmed in writing by each of them.The authority conferred under this Agreement shall be an agency coupled with an interest, and allauthority conferred hereby is irrevocable and not subject to termination by any of the Sellers, orby operation of law, whether by the death or incapacity of any Seller, the termination of any trustor estate or the occurrence of any other event. If any Seller should die or become incapacitated,if any trust or estate should terminate or if any other such event should occur, any action takenby the Sellers’ Representative shall be as valid as if such death or incapacity, termination orother event had not occurred, regardless of whether or not the Sellers’ Representative had receivednotice of such death, incapacity, termination or other event. Without limiting the generality ofthe foregoing, the Sellers’ Representative shall have full power and authority, on behalf of eachSeller and such Seller’s successors and assigns, to interpret the terms and provisions of thisAgreement, to terminate the Agreement subject to the provisions of Section 9.1, to dispute or failto dispute any claim made under Section 10 of this Agreement or under any the related agreements,to negotiate and compromise any dispute that may arise under this Agreement or such the relatedagreements and to sign any releases or other documents with respect to any such dispute. A Sellershall be deemed a party or a signatory to any agreement, document, instrument or certificate forwhich the Sellers’ Representative signs on behalf of such Seller for which the Sellers’Representative had authority.     (b) In performing any of its duties under this Agreement or upon the claimed failure toperform its duties under this Agreement, the Sellers’ Representative shall not be liable to theSellers for any Damages that the Sellers may incur as a result of any act, or failure to act, bythe Sellers’ Representative under this Agreement, and the Sellers’ Representative shall be
50

 
indemnified and held harmless by the Sellers for all Damages for Seller’s Pro Rata Share;provided, however, that the Sellers’ Representative shall not be entitled toindemnification for losses to the extent that a court of competent jurisdiction has finallydetermined that the actions or omissions of the Sellers’ Representative both (i) were taken oromitted not in good faith and (ii) constituted willful defaultunder this Agreement; provided,however, that in no event shall Buyer or its Affiliates be responsible for the Sellers’Representative’s actions or omissions in connection with this Agreement or be responsible forindemnity or any amount claimed by the Sellers’ Representative. Accordingly, the Sellers’Representative shall not incur any such liability with respect to (A) any action taken or omittedto be taken in good faith upon advice of counsel given with respect to any questions relating tothe duties and responsibilities of the Sellers’ Representative under this Agreement or the relatedagreements or (B) any action taken or omitted to be taken in reliance upon any document, includingany written notice or instructions provided for in this Agreement or any related agreements, notonly as to its due execution and to the validity and effectiveness of such document’s provisions,but also as to the truth and accuracy of any information contained in such document, which theSellers’ Representative does in good faith believe to be genuine, to have been signed or presentedby the purported proper Person or Persons and to conform with the provisions of this Agreement orthe related agreements. The limitation of liability provisions of this Section 10.9(b) shallsurvive the termination of this Agreement and the resignation of the Sellers’ Representative.     (c)In carrying out its duties hereunder, Sellers’ Representative shall first utilizethe Holdback Amount. In the event that the Sellers’ Representative incurs costs or expenses abovesuch amount and within fifteen (15) days of delivery of invoices or other documentation settingforth in reasonable detail such costs or expenses, each of the remaining Sellers shall reimbursethe Sellers’ Representative for his, her or its Pro Rata Share of such expenses. Upon terminationof all indemnification obligations of Sellers hereunder and resolution of any pendingindemnification claims, Sellers’ Representative shall pay to each Seller his, her or its Pro RataShare of any remaining amount of the Holdback Amount.     10.10 NONCOMPETITION     As an inducement for Buyer to enter into the Agreement and as additional consideration for theconsideration to be paid to the Sellers under the Agreement and the consideration to be paid underthis Agreement, each Seller holding directly or indirectly through ownership of SCC, at least twopercent of the Company, and each of the Additional Signatories (regardless of their percentage ofownership of the Company) (collectively, the “NoncompeteParties”) agrees that:     (a) Except as set forth in Part 10.10 of the Disclosure Letter, for a period of three(3) years after the Closing Date:     (i) such Noncompete Party shall not, directly or indirectly, engage or investin, own, manage, operate, finance, control, or participate in the ownership, management,operation, or control of, be employed by, associated with, or in any manner connected with,lend such Noncompete Party’s name or any similar name to, lend such Noncompete Party’scredit to, or render services or advice to, any business whose products or activitiescompete in whole or in part with the products or activities of the Company, whether withinor without the United States; provided, however, that such Noncompete Party may
51

 
purchase or otherwise acquire up to (but not more than) one percent of any class ofsecurities of any enterprise (but without otherwise participating in the activities of suchenterprise) if such securities are listed on any national or regional securities exchange orhave been registered under Section 12(g) of the Securities Exchange Act of 1934. SuchNoncompete Party agrees that this covenant is reasonable with respect to its duration,geographical area, and scope.     (ii) such Noncompete Party shall not, directly or indirectly, either for itself,himself or herself or any other Person, (A) induce or attempt to induce any employee of anAcquired Company to leave the employ of such Acquired Company, (B) in any way interfere withthe relationship between an Acquired Company and any employee of such Acquired Company, (C)employ, or otherwise engage as an employee, independent contractor, or otherwise, anyemployee of an Acquired Company, or (D) induce or attempt to induce any customer, supplier,licensee, or business relation of an Acquired Company to cease doing business with suchAcquired Company, or in any way interfere with the relationship between any customer,supplier, licensee, or business relation of an Acquired Company.     (iii) such Noncompete Party shall not, directly or indirectly, either for himselfor any other Person, solicit the business of any Person known to such Noncompete Party to bea customer of an Acquired Company, whether or not such Noncompete Party had personal contactwith such Person, with respect to products or activities which compete in whole or in partwith the products or activities of the Acquired Companies;     (b) In the event of a breach by such Noncompete Party of any covenant set forth in Section10.10(a) of this Agreement, the term of such covenant shall be extended by the period of theduration of such breach; and     (c) such Noncompete Party shall not, at any time during or after the above-stated period,disparage Buyer or the Acquired Companies, or any of their respective Affiliates,shareholders, members, directors, governors, officers, employees, or agents.     (d) Buyer shall be entitled to seek a temporary or permanent injunction, restraining order orother equitable relief from any court of competent jurisdiction in the event of any breach of thisSection 10.10 without the necessity of proving actual damage or posting any bond whatsoever. Therights and remedies provided by this Section 10.10 are cumulative and in addition to any otherrights and remedies which Buyer may have hereunder or at law or in equity.     10.11 SCC MATTERS     (a) As of the Closing Date, SCC shall have no liabilities or obligations of any nature(whether known or unknown and whether absolute, accrued, contingent, or otherwise) except for theSCC Liabilities.     (b) In the event that the 2006 Tax Return has not been filed by the Closing Date as a resultof filing a request for extension thereof, PricewaterhouseCoopers,LLP (“PwC”) shall prepare the2006 Tax Return no later than April 30, 2007. Buyer and Sellers shall review and comment on the2006 Tax Return. The Sellers’ Representative shall approve the 2006 Tax
52

 
Return prior to filing thereof, which approval shall not be unreasonably withheld. The 2006 TaxReturn shall be prepared in a manner consistent with past practices.     (c) As promptly as practicable, but within 30 days after the Closing Date, the Sellers’Representative shall deliver a written statement of the calculation of the SCC Assets and the SCCLiabilities the to the Buyer. If the Buyer disagrees with the calculation of the SCC Assets and theSCC Liabilities, the parties shall follow the dispute resolution procedures set forth in Sections2.5(c) and 2.5(d) herein.     (d) If the Final SCC Assets are less than the Final SCC Liabilities, the Sellers’Representative shall direct the Escrow Agent to pay to Buyer out of the Escrow Amount, within thelater of (i) three (3) business days after determination of such amounts and (ii) receipt of the2006 Tax Refund (if any) by SCC, by wire transfer of immediately available funds, the amount ofsuch difference. If the Final SCC Assets are greater than the Final SCC Liabilities, Buyer shallpay to the Sellers’ Representative, for the benefit of the SCC Sellers on a pro-rata basis (basedon ownership of SCC), within the later of (i) three (3) business days after determination of suchamounts and (ii) receipt of the 2006 Tax Refund (if any) by SCC, by wire transfer of immediatelyavailable funds.     11. GENERAL PROVISIONS     11.1 EXPENSES     Except as otherwise expressly provided in this Agreement, each party to this Agreement shallbear its respective expenses incurred in connection with the preparation, execution, andperformance of this Agreement and the Contemplated Transactions, including all fees and expenses ofagents, representatives, counsel, and accountants. The Sellers shall pay all amounts payable toLincoln International, LLC in connection with this Agreement and the Contemplated Transactions.Buyer has borne one-half and the Sellers have borne one-half of theHSR Act filing fee. In theevent of termination of this Agreement, the obligation of each party to pay its own expenses shallbe subject to any rights of such party arising from a breach of this Agreement by another party.     11.2 PUBLIC ANNOUNCEMENTS     No public announcement or similar publicity with respect to this Agreement or the ContemplatedTransactions shall be issued by the Buyer, Sellers, the Acquired Companies or their Representativesprior to the Closing. Each of the parties shall keep this Agreement strictly confidential and maynot make any disclosure of this Agreement to any Person. Sellers and Buyer shall consult with eachother concerning the means by which the Acquired Companies’ employees, customers, and suppliers andothers having dealings with the Acquired Companies shall be informed of the ContemplatedTransactions.     11.3 TRANSFER TAXES     All transfer and other such Taxes and fees (including any penalties and interest) incurred inconnection with the sale of Equity Interests pursuant to this Agreement shall be paid equally byBuyer (on the one hand) and the Sellers (on the other hand) when due, and Buyer shall, in
53

 
cooperation with Sellers file all necessary Tax Returns (it being understood that expenses of suchfilings shall be borne equally by Buyer and the Sellers) and other documentation with respect toall such transfer and other Taxes and fees, and, if required by applicable law, Buyer shall, andshall cause its Affiliates to, join in the execution of any such Tax Returns and otherdocumentation.     11.4 NOTICES     All notices, consents, waivers, and other communications under this Agreement must be inwriting and shall be deemed to have been duly given when (a) delivered by hand (with writtenconfirmation of receipt), (b) sent by facsimile (with written confirmation of receipt), providedthat a copy is mailed by registered mail, return receipt requested, (c) sent by electronic mail(with written confirmation of receipt), provided that a copy is mailed by registered mail, returnreceipt requested, or (d) when received by the addressee, if sent by a nationally recognizedovernight delivery service (receipt requested), in each case to the appropriate addresses andfacsimile numbers set forth below (or to such other addresses and facsimile numbers as a party maydesignate, by notice, to the other parties):       Sellers: c/o the Sellers’ Representative         Spell Capital Partners Fund I, LP    c/o Spell Capital Partners, LLC    222 South Ninth Street, Suite 2880    Minneapolis, MN 55402    Attention: Dobson West    Facsimile No.: (612) 371-9651    Email: dobson@spellcapital.com       with a copy to: K. Lisa Holter, Esq.    Fredrikson & Byron, P.A.    200 South Sixth Street, Suite 4000    Minneapolis, MN 55402-1425    Facsimile No.: (612) 492-7077    Email: lholter@fredlaw.com
54

 
       Buyer: Coleman Cable, Inc.    1530 Shields Drive    Waukegan, Illinois 60085    Attention: Gary Yetman and Rich Burger    Facsimile No.: (847) 689-9099    Email: gzy@coleman-cable.com                rnb@coleman-cable.com       With a copy to: James J. Junewicz, Esq. and Paul M.Crimmins, Esq.    Mayer, Brown, Rowe & Maw    71 S. Wacker Drive    Chicago, IL 60603    Facsimile No.: (312) 701-7711    Email : jjunewicz@mayerbrownrowe.com                pcrimmins@mayerbrownrowe.com     11.5 JURISDICTION; SERVICE OF PROCESS     Any action or proceeding seeking to enforce any provision of, or based on any right arisingout of, this Agreement may be brought against any of the parties in the courts of the County ofCook, State of Illinois or, if it has or can acquire jurisdiction, in the federal courts located inthe County of Cook, State of Illinois. Each of the parties expressly and irrevocably consents tothe jurisdiction of the state and federal courts located in the County of Cook, State of Illinois(and of the appropriate appellate courts) in any such action or proceeding, waives any objection tovenue laid therein and agrees that each state and federal court located in the County of Cook,State of Illinois shall be deemed to be a convenient forum. Process in any such action orproceeding may be served by sending or delivering a copy of the process to the party to be servedat the address and in the manner provided for the giving of notices in Section 11.4. Nothing inthis Section, however, affects the right of any party to serve legal process in any other mannerpermitted by law. Each of the parties hereby waives its rights to jury trial of any claim or causeof action based upon or arising out of or relating to this Agreement. Each party acknowledges thatthis waiver is a material inducement to enter into this Agreement, and that each party willcontinue to rely on the waiver in their future dealings.     11.6 FURTHER ASSURANCES     The parties agree (a) to furnish upon request to each other such further information, (b) toexecute and deliver to each other such other documents, and (c) to do such other acts and things,all as the other party may reasonably request for the purpose of carrying out the intent of thisAgreement and the documents referred to in this Agreement.     11.7 WAIVER     The rights and remedies of the parties to this Agreement are cumulative and not alternative.Neither the failure nor any delay by any party in exercising any right, power, or privilege underthis Agreement or the documents referred to in this Agreement shall operate as a waiver of suchright, power, or privilege, and no single or partial exercise of any such right,
55

 
power, or privilege shall preclude any other or further exercise of such right, power, or privilegeor the exercise of any other right, power, or privilege. To the maximum extent permitted byapplicable law, (a) no claim or right arising out of this Agreement or the documents referred to inthis Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation ofthe claim or right unless in writing signed by the other party; (b) no waiver that may be given bya party shall be applicable except in the specific instance for which it is given; and (c) nonotice to or demand on one party shall be deemed to be a waiver of any obligation of such party orof the right of the party giving such notice or demand to take further action without notice ordemand as provided in this Agreement or the documents referred to in this Agreement.     11.8 ENTIRE AGREEMENT AND MODIFICATION     This Agreement, along with the Confidentiality Agreement dated October 10, 2006 between Buyerand Lincoln International LLC, on behalf of the Company, supersedes all prior agreements betweenthe parties with respect to its subject matter (including the Letter Agreements from Buyer receivedby the Company on January 5, 2007 and January 24, 2007) and constitutes (along with the documentsreferred to in this Agreement) a complete and exclusive statement of the terms of the agreementbetween the parties with respect to its subject matter. This Agreement may not be amended except bya written agreement executed by the Buyer and Sellers’ Representative.     11.9 DISCLOSURE LETTER     (a) The headings contained in the Disclosure Letter are for convenience of reference only andshall not be deemed to modify or influence the interpretation of the information contained in theDisclosure Letter or this Agreement. Furthermore, the disclosure of a particular item ofinformation in the Disclosure Letter shall not be taken as an admission by the Selling Parties thatsuch disclosure is required to be made under the terms of any such representations and warranties.Any disclosure related to a particular Section of this Agreement shall not be restricted solely tothe representations and warranties in such Section as long as the information contained in the Partof the Disclosure Letter is reasonably apparent (by cross-reference or otherwise) that suchinformation also constitutes a disclosure to a different Section of the Agreement. The numbering orreferences herein to Sections of this Agreement are for convenience and do not limit the disclosureconcerning such numbered or referred to Section.     (b) In the event of any inconsistency between the statements in the body of this Agreement andthose in the Disclosure Letter (other than an exception expressly set forth as such in theDisclosure Letter with respect to a specifically identified representation or warranty), thestatements in the body of this Agreement shall control.     11.10 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS     No party may assign any of its rights under this Agreement without the prior consent of theother parties, which shall not be unreasonably withheld;provided, however that Buyer mayassign their rights under this Agreement to its lenders. Subject to the preceding sentence, thisAgreement shall apply to, be binding in all respects upon, and inure to the benefit of thesuccessors and permitted assigns of the parties. Except as set forth in Article X, nothing
56

 
expressed or referred to in this Agreement shall be construed to give any Person other than theparties to this Agreement any legal or equitable right, remedy, or claim under or with respect tothis Agreement or any provision of this Agreement. Except as set forth in Article X, this Agreementand all of its provisions and conditions are for the sole and exclusive benefit of the parties tothis Agreement and their successors and assigns.     11.11 SEVERABILITY     If any provision of this Agreement is held invalid or unenforceable by any court of competentjurisdiction, the other provisions of this Agreement shall remain in full force and effect. Anyprovision of this Agreement held invalid or unenforceable only in part or degree shall remain infull force and effect to the extent not held invalid or unenforceable.     11.12 SECTION HEADINGS, CONSTRUCTION     The headings of Sections in this Agreement are provided for convenience only and shall notaffect its construction or interpretation. All references to “Section” or “Sections” refer to thecorresponding Section or Sections of this Agreement. All words used in this Agreement shall beconstrued to be of such gender or number as the circumstances require. Unless otherwise expresslyprovided, the word “including” does not limit the preceding words or terms. The parties haveparticipated jointly in the negotiation and drafting of this Agreement. In the event an ambiguityor question of intent or interpretation arises, this Agreement must be construed as if draftedjointly by the parties and no presumption or burden of proof must arise favoring or disfavoring anyparty by virtue of the authorship of any of the provisions of this Agreement.     11.13 TIME OF ESSENCE     With regard to all dates and time periods set forth or referred to in this Agreement, time isof the essence.     11.14 GOVERNING LAW     This Agreement shall be governed by the laws of the State of New York without regard toconflicts of laws principles.     11.15 COUNTERPARTS     This Agreement may be executed in one or more counterparts, each of which shall be deemed tobe an original copy of this Agreement and all of which, when taken together, shall be deemed toconstitute one and the same agreement.**[Signature Page Follows]**
57

 
     IN WITNESS WHEREOF, the parties have executed and delivered this Equity InterestPurchase Agreement as of the date first written above.   COLEMAN CABLE, INC.     /s/ Gary Yetman /s/ Kevin Kennedy   By: Gary Yetman Kevin Kennedy    Its: President and Chief Executive Officer     DJR FUND, INC.        /s/ James D. Pomeroy /s/ Clarence Witsken   By: James D. Pomeroy Clarence Witsken    Its: Secretary     SFB ENTERPRISES, INC.        /s/ Stanley F. Berg /s/ William Witsken   By: Stanley F. Berg William Witsken    Its:       SPELL CAPITAL PARTNERS FUND I,   LP, as a Seller and as Sellers’  Representative