exv10w1






Exhibit 10.1




EXECUTION VERSION




 





ASSET PURCHASE AGREEMENT




By and Among



IVY STEEL & WIRE, INC.,



as the Seller



OLDCASTLE BUILDING PRODUCTS, INC.,



as the Guarantor



and



INSTEEL WIRE PRODUCTS COMPANY



as the Buyer



Dated as of November 19, 2010



 














 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	Section 1.1 Certain Defined Terms
	 	 	1	 
	Section 1.2 Table of Definitions
	 	 	8	 
	 
	 	 	 	 
	ARTICLE II PURCHASE AND SALE
	 	 	10	 
	 
	 	 	 	 
	Section 2.1 Purchase and Sale of Assets
	 	 	10	 
	Section 2.2 Excluded Assets
	 	 	12	 
	Section 2.3 Assumed Liabilities
	 	 	14	 
	Section 2.4 Excluded Liabilities
	 	 	15	 
	Section 2.5 Consideration
	 	 	16	 
	Section 2.6 Closing
	 	 	17	 
	Section 2.7 Post-Closing Adjustment
	 	 	18	 
	Section 2.8 Post Closing Inventory Representation Adjustment
	 	 	19	 
	Section 2.9 Allocation of Purchase Price for Tax Purposes
	 	 	21	 
	Section 2.10 Proration of Certain Items
	 	 	21	 
	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER
	 	 	22	 
	 
	 	 	 	 
	Section 3.1 Organization and Qualification
	 	 	22	 
	Section 3.2 Authority
	 	 	22	 
	Section 3.3 No Conflict; Required Filings and Consents
	 	 	23	 
	Section 3.4 Transferred Assets
	 	 	23	 
	Section 3.5 Books and Records
	 	 	24	 
	Section 3.6 Title to and Sufficiency of Assets
	 	 	24	 
	Section 3.7 Financial Statements
	 	 	24	 
	Section 3.8 Absence of Certain Changes or Events
	 	 	25	 
	Section 3.9 Compliance with Laws; Permits and Licenses
	 	 	25	 
	Section 3.10 Permits and Licenses
	 	 	25	 
	Section 3.11 Real Property
	 	 	25	 
	Section 3.12 Tangible Personal Property
	 	 	28	 
	Section 3.13 Domestic Content
	 	 	28	 
	Section 3.14 Intentionally Omitted
	 	 	28	 
	Section 3.15 Employee Plans
	 	 	28	 
	Section 3.16 Labor and Employment Matters
	 	 	29	 
	Section 3.17 Taxes
	 	 	29	 
	Section 3.18 Environmental Matters
	 	 	30	 
	Section 3.19 Insurance
	 	 	30	 
	Section 3.20 Transferred Contracts
	 	 	30	 
	Section 3.21 Intellectual Property
	 	 	31	 
	Section 3.22 Brokers
	 	 	32	 






i









 





TABLE OF CONTENTS

(Continued)





	 	 	 	 	 
	 	 	Page	 
	Section 3.23 Customers and Suppliers
	 	 	32	 
	Section 3.24 Solvency
	 	 	32	 
	Section 3.25 Product Warranties
	 	 	32	 
	Section 3.26 Related Party Transactions
	 	 	32	 
	Section 3.27 Names
	 	 	32	 
	Section 3.28 Litigation
	 	 	32	 
	Section 3.29 Exclusivity of Representations and Warranties
	 	 	32	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER
	 	 	33	 
	 
	 	 	 	 
	Section 4.1 Organization and Qualification
	 	 	33	 
	Section 4.2 Authority
	 	 	33	 
	Section 4.3 No Conflict; Required Filings and Consents
	 	 	33	 
	Section 4.4 Financing
	 	 	34	 
	Section 4.5 Brokers
	 	 	34	 
	Section 4.6 Buyer’s Investigation and Reliance
	 	 	34	 
	 
	 	 	 	 
	ARTICLE V COVENANTS
	 	 	35	 
	 
	 	 	 	 
	Section 5.1 Employees and Employee Benefits
	 	 	35	 
	Section 5.2 Confidentiality
	 	 	38	 
	Section 5.3 Use of Names
	 	 	38	 
	Section 5.4 Refunds and Remittances
	 	 	38	 
	Section 5.5 No Solicitation
	 	 	39	 
	Section 5.6 Noncompetition and Nonsolicitation
	 	 	39	 
	Section 5.7 Bulk Sales
	 	 	40	 
	Section 5.8 Public Announcements
	 	 	40	 
	Section 5.9 Delivery of Audited Financial Information
	 	 	40	 
	Section 5.10 Further Assurances
	 	 	43	 
	 
	 	 	 	 
	ARTICLE VI TAX MATTERS
	 	 	44	 
	 
	 	 	 	 
	Section 6.1 Apportionment of Taxes
	 	 	44	 
	Section 6.2 Transfer Taxes
	 	 	44	 
	Section 6.3 Tax Returns
	 	 	44	 
	 
	 	 	 	 
	ARTICLE VII CLOSING DELIVERABLES
	 	 	45	 
	 
	 	 	 	 
	Section 7.1 Deliverables by the Seller
	 	 	45	 
	Section 7.2 Deliverables by the Buyer
	 	 	46	 






ii









 





TABLE OF CONTENTS

(Continued)





	 	 	 	 	 
	 	 	Page	 
	ARTICLE VIII INDEMNIFICATION
	 	 	46	 
	 
	 	 	 	 
	Section 8.1 Indemnification by the Seller
	 	 	46	 
	Section 8.2 Indemnification by the Buyer
	 	 	47	 
	Section 8.3 Procedures
	 	 	47	 
	Section 8.4 Limits on Indemnification
	 	 	49	 
	Section 8.5 Tax Effect of Indemnification Payments
	 	 	50	 
	Section 8.6 Survival of Covenants, Representations and Warranties
	 	 	50	 
	Section 8.7 Exclusivity
	 	 	51	 
	Section 8.8 Indemnification — Environmental and Domestic Manufacturing Matters
	 	 	51	 
	Section 8.9 Miscellaneous
	 	 	52	 
	 
	 	 	 	 
	ARTICLE IX GENERAL PROVISIONS
	 	 	53	 
	 
	 	 	 	 
	Section 9.1 Fees and Expenses
	 	 	53	 
	Section 9.2 Amendment and Modification
	 	 	53	 
	Section 9.3 Waiver
	 	 	53	 
	Section 9.4 Notices
	 	 	53	 
	Section 9.5 Interpretation
	 	 	54	 
	Section 9.6 Entire Agreement
	 	 	54	 
	Section 9.7 No Third-Party Beneficiaries
	 	 	55	 
	Section 9.8 Governing Law
	 	 	55	 
	Section 9.9 Submission to Jurisdiction
	 	 	55	 
	Section 9.10 Disclosure Generally
	 	 	56	 
	Section 9.11 Personal Liability
	 	 	56	 
	Section 9.12 Assignment; Successors
	 	 	56	 
	Section 9.13 Enforcement
	 	 	56	 
	Section 9.14 Currency
	 	 	57	 
	Section 9.15 Severability
	 	 	57	 
	Section 9.16 Waiver of Jury Trial
	 	 	57	 
	Section 9.17 Arbitration
	 	 	57	 
	Section 9.18 Counterparts
	 	 	57	 
	Section 9.19 Facsimile Signature
	 	 	58	 
	Section 9.20 Time of Essence
	 	 	58	 
	Section 9.21 No Presumption Against Drafting Party
	 	 	58	 
	Section 9.22 Guarantee by Guarantor
	 	 	58	 











iii









 








ASSET PURCHASE AGREEMENT




     ASSET PURCHASE AGREEMENT, dated as of November 19, 2010 (this “Agreement”), between
Ivy Steel & Wire, Inc., a Delaware corporation (the “Seller”), Oldcastle Building Products,
Inc., a Delaware corporation (the “Guarantor”) and Insteel Wire Products Company, a North
Carolina corporation (the “Buyer”).



RECITALS




     A. The Seller is engaged in the business of producing steel wire and welded wire reinforcement
products (the “Business”).



     B. The Seller wishes to sell to the Buyer, and the Buyer wishes to purchase from the Seller,
certain assets of the Business used in the operation of the Business at the St. Joseph Facility,
the Jacksonville Facility, the Hazleton Facility, the Kingman Facility, the Aldine Facility and the
Tampa Facility, and in connection therewith the Buyer is willing to assume certain liabilities and
obligations of the Seller relating thereto as set forth in this Agreement, all upon the terms and
subject to the conditions set forth herein.



AGREEMENT




     In consideration of the foregoing and the mutual covenants and agreements herein contained,
and intending to be legally bound hereby, the parties agree as follows:



ARTICLE I

DEFINITIONS




     Section 1.1 Certain Defined Terms. For purposes of this Agreement:



     “action” means any claim, action, suit, arbitration or proceeding by or before any
Governmental Authority.



     “Affiliate” means, 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 first Person.



     “Aldine Facility” means that separate facility of the Seller located at 12800 Aldine
Westfield Road, Houston, Texas 77039.



     “Aldine Lease” means that certain lease agreement related to the Aldine Facility real
estate, dated April 11, 2005 between MMI Products, Inc. and GSL Partners Sub Eight, L.P., as
amended.



     “Ancillary Agreements” means the Bill of Sale, the Assignment and Assumption
Agreement, the Transition Services Agreement, the Houston Aldine Property Sublease, the Protocol
Agreement, the Guaranty Agreement and the Real Estate Documents.



1









 





     “Assignment and Assumption Agreement” means an instrument of assignment and assumption
substantially in the form attached hereto as Exhibit A pursuant to which the Seller shall
assign to the Buyer and the Buyer shall assume all of the Assumed Liabilities.



     “Bill of Sale” means a bill of sale substantially in the form attached hereto as
Exhibit B transferring to the Buyer all of the Transferred Assets.



     “Books Accounts Payable” means accounts 2010-0000 (Accounts Payable-Trade), 2010-0001
(Accounts Payable — Outstanding Checks), 2025-0000 (A/P — Manual Accruals), 2029-0000 (A/P — BOA
P-card Clearing Account), 2020-0001 (A/P — PO System Accruals), 2030-0000 (A/P — Freight
Clearing), 2031-0000 (A/P- Freight on Rod), 2045-0000 (A/P-Other) and 2045 —0004 (A/P — Wire
Scrap).



     “Business Day” means any day that is not a Saturday, a Sunday or other day on which
banks are required or authorized by Law to be closed in the State of Georgia.



     “Business Employees” means those individuals listed on Schedule 5.1. In
addition, solely for purposes of Section 5.1(b) and Section 2.4(b), employees at the Tampa Facility
shall be treated as Business Employees.



     “Buy American Law” means the Buy American Act, 41 U.S.C. §§ 10a-10d, the Buy America
Act, 49 U.S.C. §5323(j), the Trade Agreements Act, 19 U.S.C. §§ 2501-2582, Division A, Section
1605 of the American Recovery and Reinvestment Act of 2009, the False Claims Act, 31 U.S.C.
§§3729-3733, and the Fraud Enforcement and Recovery Act of 2009, and 23 U.S.C. §313 all as amended,
and all rules and regulations related thereto or issued thereunder, and any similar federal, state
or local law respecting the design, construction, production, content, manufacture, distribution,
marketing or sale of goods.



     “Buyer Material Adverse Effect” means any event, change, occurrence or effect that
would prevent, materially delay or materially impede the performance by the Buyer of its
obligations under this Agreement or the Ancillary Agreements or the consummation of the
transactions contemplated hereby or thereby.



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



     “control,” including the terms “controlled by” and “under common control
with,” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the ownership of voting
securities, as trustee or executor, as general partner or managing member, by contract or
otherwise.



     “delivery” including the term “delivered” means delivery of a physical or
electronic version, either in Person, by mail, delivery service, electronic transmission or
providing access to such item in a mutually agreed upon location, such as a physical or electronic
data room.



     “Domestic Content Liabilities” means any losses, damages, liabilities, claims, awards,
judgments, penalties, costs and expenses (including, without limitation, costs of investigating,
preparing or defending applicable claims or proceedings and reasonable legal fees, consulting fees
and disbursements), as and when incurred by such parties and whether or not related to a



2









 




Third Party Claim arising out of or resulting from the non-compliance, compliance or alleged
non-compliance of the Seller or any Affiliate of the Seller with any Buy American Law (including
any of the foregoing that constitute punitive, consequential, indirect, special or incidental
damages or liabilities, including business interruption, loss of future revenue, profits or income,
or loss of business reputation or opportunity); provided that the Seller is not responsible
for the Buyer’s misuse or inappropriate sale of any properly labeled products.




     “Employee Plans” means all “employee benefit plans” within the meaning of Section 3(3)
of ERISA, whether or not funded and whether or not terminated, all formal written plans and all
other compensation and benefit plans, contracts, policies, programs and arrangements of the Seller
(other than routine administrative procedures) in connection with the Business in effect as of the
date hereof, whether or not subject to ERISA, including all pension, profit sharing, savings and
thrift, bonus, stock bonus, stock option or other cash or equity-based incentive or deferred
compensation, severance pay, vacation, travel, incentive and medical, disability, welfare and life
insurance plans in which any of the Business Employees or their dependents participate, whether or
not funded.



     “Encumbrance” means any charge, claim, mortgage, lien, option, pledge, easement,
encroachment, right of first option, right of first refusal or similar restriction, including any
restriction on use, voting, transfer, receipt of income or exercise of any other attribute of
ownership, security interest or other restriction of any kind.



     “Environment” means soil, land surface or subsurface strata, surface waters (including
navigable waters and ocean waters), groundwaters, drinking water supply, stream sediments, ambient
air (including indoor air), plant and animal life and any other environmental medium or natural
resource.



     “Environmental, Health and Safety Liabilities” means any cost, damages, expense,
liability, obligation or other responsibility arising from or under any Environmental Law or
Occupational Safety and Health Law, including those consisting of or relating to:



          (a) any environmental, health or safety matter or condition (including on-site or off-site
contamination, occupational safety and health and regulation of any chemical substance or product);




          (b) any fine, penalty, judgment, award, settlement, legal or administrative proceeding,
damages, loss, claim, demand or response, remedial or inspection cost or expense arising under any
Environmental Law or Occupational Safety and Health Law;




          (c) financial responsibility under any Environmental Law or Occupational Safety and Health Law
for cleanup costs or corrective action, including any cleanup, removal, containment or other
remediation or response actions (“Cleanup”) required by any Environmental Law or
Occupational Safety and Health Law and for any natural resource damages; or




          (d) any other compliance, corrective or remedial measure required under any Environmental Law
or Occupational Safety and Health Law.




3









 





          The terms “removal,” “remedial,” and “response action” include the types of activities covered
by the United States Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended (CERCLA).




     “Environmental Law” means any Law that requires or relates to:



          (a) advising appropriate authorities, employees or the public of intended or actual Releases
of pollutants or hazardous substances or materials, violations of discharge limits or other
prohibitions and the commencement of activities, such as resource extraction or construction, that
could have significant impact on the Environment;




          (b) preventing or reducing to acceptable levels the Release of pollutants or hazardous
substances or materials into the Environment;




          (c) reducing the quantities, preventing the Release or minimizing the hazardous
characteristics of wastes that are generated;




          (d) assuring that products are designed, formulated, packaged and used so that they do 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) cleaning up pollutants that have been Released, preventing the Threat of Release or paying
the costs of such clean up or prevention; or




          (h) making responsible parties pay private parties, or groups of them, for damages done to
their health or the Environment or permitting self-appointed representatives of the public interest
to recover for injuries done to public assets.




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



     “Exemption Certificates” means exemption certificates confirming the inapplicability
of Transfer Taxes, in the forms attached hereto as Exhibit I.



     “Foreign Rod” means all wire rod of foreign origin that is equal to or greater than
8.0 millimeter in diameter.



     “Governmental Authority” means any foreign or United States federal, state, local or
municipal or other governmental, regulatory or administrative authority, agency or commission or
any judicial or arbitral body.



     “Guaranty Agreement” means the guaranty agreement substantially in the form attached
hereto as Exhibit C of the Guarantor to guaranty the obligations of the Seller under this
Agreement and the other Ancillary Agreements.



4









 





     “Hazardous Material” means any substance, material or waste which is regulated by any
Governmental Authority including any material, substance or waste which is defined as a “hazardous
waste,” “hazardous material,” “hazardous substance,” “extremely hazardous waste,” “restricted
hazardous waste,” “contaminant,” “toxic waste” or “toxic substance” under any provision of
Environmental Law, and including petroleum, petroleum products, asbestos, presumed
asbestos-containing material or asbestos-containing material, urea formaldehyde and polychlorinated
biphenyls.



     “Hazleton Facility” means that separate facility of the Seller located at an address
listed as “409A Forest Drive” by the Hazle Township Zoning Office and “Forest Road” by the Hazle
Township Tax Collector and changed by Seller to “503 Forest Street”, Hazleton, Pennsylvania 18202.



     “Houston Clinton Facility” means that separate facility of the Seller located at 6933
Clinton Drive, Houston, Texas 77020.



     “IFRS” means International Financial Reporting Standards as in effect on the date
hereof.



     “Improvements” means all buildings and other improvements, fixtures and appurtenances
owned by the Seller and located on the Owned Real Property and all of the Seller’s (or its
applicable Affiliate’s) interest in any improvements, fixtures and appurtenances located on the
Leased Real Property.



     “Jacksonville Facility” means that separate facility of the Seller located at 3050
Melson Ave, Jacksonville, Florida 32254.



     “Kingman Facility” means that separate facility of the Seller located at 4750 North
Olympic Dr, Kingman, Arizona 86401.



     “Knowledge” with respect to the Seller means the actual (but not constructive or
imputed) knowledge of the persons listed in Schedule 1.1 as of the date of this Agreement
(or, with respect to a certificate delivered pursuant to this Agreement, as of the date of delivery
of such certificate).



     “Law” means any statute, law, ordinance, regulation, rule, code, injunction, ruling,
judgment, decree, enforcement policy, agreement or order of or with, as applicable, any
Governmental Authority.



     “Material Adverse Effect” means any event, change, occurrence or effect that (a) would
be (or could be reasonably expected to be) a materially adverse effect to the business, financial
condition or results of operations of the Business, taken as a whole; or (b) would prevent,
materially delay or materially impede the performance by the Seller of its obligations under this
Agreement or the Ancillary Agreements or the consummation of the transactions contemplated hereby
or thereby, other than any event, change, occurrence or effect resulting from (i) general changes
or developments in the industry in which the Business operates; (ii) changes in global, national or
regional political conditions (including the outbreak of war or acts of terrorism) or in general
economic, business, regulatory, political or market conditions or in national or global financial
markets; (iii) any actions required under this Agreement to obtain any approval or



5









 




authorization under applicable antitrust or competition Laws for the consummation of the
transaction; (iv) changes in any applicable Laws or applicable accounting regulations or principles
or interpretations thereof; (v) the announcement, pendency and performance of this Agreement and
the transactions contemplated hereby including compliance with the covenants set forth herein; (vi)
any action taken by the Seller which is required or permitted by or resulting from or arising in
connection with this Agreement; or (vii) any actions taken (or omitted to be taken) at the request
of the Buyer.




     “Mexico Sale” means that certain proposed sale of finished goods utilizing Foreign Rod
to TPL De Mexico, S.A. De C.V. as discussed between the parties.



     “Occupational Safety and Health Law” means any Law designed to provide safe and
healthful working conditions and to reduce occupational safety and health hazards, including the
Occupational Safety and Health Act, and any program, whether governmental or private (such as those
promulgated or sponsored by industry associations and insurance companies), designed to provide
safe and healthful working conditions.



     “Order” means any order, injunction, judgment, decree, ruling, assessment or
arbitration award of any Governmental Authority or arbitrator.



     “Permitted Encumbrance” means each of the following (i) statutory liens for current
Taxes not yet due and payable (or which may be paid without interest or penalties) or the validity
or amount of which is being contested in good faith by appropriate proceedings, (ii) to the extent
set forth on Schedule 1.2(a), mechanics’, carriers’, workers’, repairers’ and other similar
liens arising or incurred in the ordinary course of business relating to obligations as to which
there is no default on the part of the Seller for a period greater than sixty (60) days, or the
validity or amount of which is being contested in good faith by appropriate proceedings, or
pledges, deposits or other liens securing the performance of bids, trade contracts, leases or
statutory obligations (including workers’ compensation, unemployment insurance or other social
security legislation); provided, that with respect to Owned Real Property and Leased Real
Property, the term “Permitted Encumbrance” shall mean (i) Encumbrances specifically set forth on
Schedule 1.2(b), (ii) statutory liens for current Taxes not yet due and payable
(or which may be paid without interest or penalties), entitlements, covenants, restrictions,
zonings and other land use and environmental regulations by Governmental Authorities, (iii) all
recorded exceptions, restrictions, easements, imperfections of title, charges, rights-of-way, and
encroachments, and (iv) all matters which would be shown by a current and accurate survey of the
Owned Real Property or the Leased Real Property that do not materially and adversely interfere with
the present use of the Owned Real Property or the Leased Real Property or the Business conducted
thereon.



     “Person” means an individual, corporation, partnership, limited liability company,
limited liability partnership, syndicate, person, trust, association, organization or other entity,
including any Governmental Authority, and including any successor, by merger or otherwise, of any
of the foregoing.



     “Pilot Steel Facility” means that separate facility of the Seller located at 1950 W.
Copans Road, Pompano Beach, Florida.



6









 





     “Protocol Agreement” means that certain Protocol Agreement in substantially the form
attached hereto as Exhibit K between the Buyer and the Seller.



     “Real Estate Documents” means the following:



          (a) A General Warranty Deed (or local equivalent) for all of the Owned Real Property, duly
executed, acknowledged and delivered in recordable form by the Seller conveying to the Buyer title
to the Owned Real Property in accordance with the provisions of this Agreement, subject only to the
Permitted Encumbrances. Each General Warranty Deed shall be in the form of, and upon the terms
contained in, Exhibit D, as adjusted for the applicable state;



          (b) Any and all owner/seller title affidavits and lien affidavits as are reasonably required
by First American Title Insurance Company (“Title Company”) in the form attached as
Exhibit E;



          (c) Any and all transfer tax declarations, declarations of value, consideration affidavits, or
affidavits of residence as may be required by the Title Company and/or applicable recorders’
offices to record any General Warranty Deed; and



          (d) Such resolutions, authorizations, certificates and/or other entity documents relating to
the Seller as are reasonably required by the Buyer and/or the Title Company in connection with the
transactions contemplated under this Agreement.



     “Release” means any release, spill, emission, leaking, pumping, pouring, dumping,
emptying, injection, deposit, disposal, discharge, dispersal, leaching or migration on or into the
Environment or into or out of any property.



     “Relevant Locations” means the St. Joseph Facility, the Jacksonville Facility, the
Hazleton Facility, the Kingman Facility and the Aldine Facility.



     “Remedial Action” means all actions, including any capital expenditures, (a) to clean
up, remove, treat or in any other way address any Hazardous Material or other substance; (b) to
prevent the Release or Threat of Release or to minimize the further Release of any Hazardous
Material or other substance so it does not migrate or endanger or threaten to endanger public
health or welfare or the Environment; (c) to perform pre-remedial studies and investigations or
post-remedial monitoring and care; or (d) to bring all Transferred Assets and the operations
conducted thereon into compliance with Environmental Laws and environmental Governmental
Authorizations.



     “Representatives” means, with respect to any Person, the officers, directors,
employees, agents, accountants, advisors, bankers and other representatives of such Person.



     “St. Joseph Facility” means that separate facility of the Seller located at 810
Atchison St, St. Joseph, Missouri 64503.



     “Steeltex Inventory” means the Steeltex finished goods, galvanized wire and zinc and
Steeltex paper.



7









 





     “Tampa Facility” means that separate facility of the Seller located at 2835 Overpass
Road, Tampa, Florida 33619.



     “Taxes” means any and all taxes of any kind, whether imposed directly, through
withholding, or otherwise, including without limitation income, profits, receipts, margin,
franchise, license, sales, use, privilege, commercial activity, occupation, occupancy, property,
severance, communications, excise, value added, environmental, employment, social or employment
security, worker’s compensation and other taxes, unclaimed property and other assessments, duties,
fees and imposts (together with any and all interest, penalties, additions thereon and additional
amounts imposed with respect thereto) imposed by any Governmental Authority.



     “Threat of Release” means a reasonable likelihood of a Release that may require action
in order to prevent or mitigate damage to the Environment that may result from such Release.



     “Transition Services Agreement” means the transition services agreement substantially
in the form attached hereto as Exhibit F between the Buyer and the Seller or its relevant
Affiliate setting out the terms of certain services to be provided by the Seller or its relevant
Affiliate to the Buyer post-Closing.



     Section 1.2 Table of Definitions. The following terms have the meanings set forth in the Sections
referenced below:



	 	 	 
	Definition	 	Location
	Actual Current Liabilities 
	 	2.7(d)
	Actual Working Capital 
	 	2.7(b)
	Adjustment Statement 
	 	2.7(f)
	Agreement 
	 	Preamble
	Alleged Obsolete Unit 
	 	2.8(a)
	Alleged Obsolete Units Notice Schedule 
	 	2.8(a)
	Allocation Schedule 
	 	2.9
	Assumed Liabilities 
	 	2.3
	Audited Financial Statements 
	 	5.9(a)
	Basket Amount 
	 	8.4(b)(iii)
	Books and Records 
	 	2.1(h)
	Business 
	 	Recitals
	Business Patents 
	 	3.21(a)
	Business Permits 
	 	2.1(g)
	Business Registered Copyrights 
	 	3.21(a)
	Business Registered IP 
	 	3.21(a)
	Business Registered Marks 
	 	3.21(a)
	Buyer 
	 	Preamble
	Buyer Employee Plans 
	 	5.1(c)
	Buyer Indemnified Parties 
	 	8.1
	Buyer Savings Plan 
	 	5.1(e)
	Buyer’s Value 
	 	2.8(a)






8









 






	 	 	 
	Definition	 	Location
	Cleanup 
	 	1.1
	Closing 
	 	2.6
	Closing Date 
	 	2.6
	Closing Date Payment 
	 	2.5(a)
	COBRA Obligations 
	 	5.1(g)
	Confidentiality Agreement 
	 	5.2
	Copyright Registrations 
	 	2.1(k)
	Core Reps 
	 	8.4(b)(iii)
	Disclosure Schedules 
	 	Article III
	Effective Time 
	 	2.6
	Engagement Letter 
	 	5.9(d)
	Excluded Assets 
	 	2.2
	Excluded Contracts 
	 	2.2(k)
	Excluded Inventory 
	 	2.2(m)
	Excluded Liabilities 
	 	2.4
	Excluded Purchase Orders 
	 	2.2(l)
	Financial Statement Deadline 
	 	5.9(a)
	Financial Statements 
	 	3.7
	Finished Goods Credit 
	 	2.8(c)
	Houston Aldine Property Sublease 
	 	2.5(b)
	Indemnified Party 
	 	8.3(a)
	Indemnifying Party 
	 	8.3(a)
	Independent Accountants 
	 	2.7(g)
	Intellectual Property 
	 	2.1(k)
	Inventions 
	 	2.1(k)
	Leased Real Property 
	 	3.11(c)
	Losses 
	 	8.1
	Marks 
	 	2.1(k)
	Minimum Loss Amount 
	 	8.4(b)(iii)
	Notice of Disagreement 
	 	2.7(g)
	Other Financial Materials 
	 	5.9(b)
	Owned Real Property 
	 	3.11(a)
	Parent 
	 	Preamble
	Patents 
	 	2.1(k)
	Pre Close Default 
	 	2.3(c)
	Production Equipment 
	 	3.6
	Purchase Price 
	 	2.7(h)
	Purchase Price Reduction 
	 	5.9(e)
	Receivables 
	 	2.2(b)
	SEC 
	 	5.9(a)
	Seller 
	 	Preamble
	Seller Indemnified Parties 
	 	8.2
	Seller Note 
	 	2.5(a)
	Seller Savings Plan 
	 	5.1(e)
	Seller’s Value 
	 	2.8(a)
	Severance Cap 
	 	5.1(b)(ii)






9









 






	 	 	 
	Definition	 	Location
	Sundry Payables 
	 	2.4(o)
	Tampa Assets 
	 	2.1(e)
	Tampa Welding Production Assets 
	 	2.1(e)
	Tangible Personal Property 
	 	2.1(d)
	Target Working Capital 
	 	2.7(a)
	Third Party Claim 
	 	8.3(a)
	Title Company 
	 	1.1
	Trade Secrets 
	 	2.1(k)
	Trademark Registrations 
	 	2.1(k)
	Transfer Taxes 
	 	6.2
	Transferred Assets 
	 	2.1
	Transferred Assets Auditor 
	 	5.9(a)
	Transferred Contracts 
	 	2.1(a)
	Transferred Employee 
	 	5.1(a)
	Transferred Inventory 
	 	2.1(f)
	Transferred Inventory Value 
	 	2.7(c)
	Transferred Purchase Orders 
	 	2.1(b)
	transition period 
	 	5.1(d)
	Unit Count 
	 	2.7(e)
	Unit Inventory Schedule 
	 	2.7(c)
	WARN Act 
	 	2.4(b)
	Works of Authorship 
	 	2.1(k)






ARTICLE II

PURCHASE AND SALE




     Section 2.1 Purchase and Sale of Assets. Upon the terms and subject to the conditions of this
Agreement, at the Closing and effective as of the Effective Time, the Seller shall sell, assign,
transfer, convey and deliver to the Buyer all of the Transferred Assets, and the Buyer shall
purchase, acquire, accept and pay for the Transferred Assets free and clear of any Encumbrances
(other than Permitted Encumbrances) and assume the Assumed Liabilities. “Transferred
Assets” shall mean all the following assets, properties and rights referred to below (wherever
located), whether tangible or intangible (other than the Excluded Assets):



          (a) all contracts and agreements that are specifically listed or described on Schedule
2.1(a) (the “Transferred Contracts”), provided, however, that the
Transferred Contracts described on Schedule 3.3 shall be transferred to and assumed by the Buyer
only upon receipt by the Seller of any required consents;




          (b) all purchase orders listed or described on Schedule 2.1(b) outstanding as of
November 17, 2010 and all purchase orders that arise after November 17, 2010 and prior to the
Effective Time in the ordinary course of business consistent with past practice (the
“Transferred Purchase Orders”); provided, that, except as approved in writing by
the Buyer, the Transferred Purchase
Orders shall not include: (i) purchase orders creating obligations extending beyond
December 31, 2010, (ii) purchase orders





10











 




representing commitments to sell more than one hundred (100) tons of inventory; or (iii)
purchase orders with respect to the Seller’s purchase of wire, rod and finished goods inventory,
except, in each case, to the extent set forth on Schedule 2.1(b);




          (c) all Owned Real Property and other interests in real property listed on Schedule
3.11(a), together in each case with the Seller’s right, title and interest in and to all
structures, facilities or Improvements located thereon and all easements, licenses, rights and
appurtenances relating to the foregoing;



          (d) all machinery, equipment, furniture, furnishings, parts, spare parts, vehicles, tools,
office equipment and other tangible personal property owned, used or leased by the Seller and used
or held for use in the Business at the Relevant Locations (including any such items held by
Business Employees (employed at the Relevant Locations) and used in the performance of their
duties)) including the items listed on Schedule 2.1(d) (the “Tangible Personal
Property”);



          (e) the welding production line and associated equipment located at the Tampa Facility (the
“Tampa Welding Production Assets”) and certain other assets at the Tampa Facility listed on
Schedule 2.1(e) (collectively, the “Tampa Assets”);



          (f) all raw materials inventories, work-in-progress, finished goods inventories, supplies,
packaging materials and other inventories used or held for use in the Business at the Relevant
Locations, together with those assets used or held for use at such other locations as described on
Schedule 2.1(f) (the “Transferred Inventory”), except for the Excluded Inventory;



          (g) all registrations, permits and licenses used or held for use in the Business at the
Relevant Locations to the extent transferrable (the “Business Permits”), excluding the
Aldine Facility;



          (h) to the extent permitted by Law, all books of account, financial and accounting, files,
invoices, customers’ and suppliers’ lists, billing records and personnel records (but only with
respect to any Transferred Employees), including all documentation with respect to Transferred
Employees necessary to enable compliance with statutory requirements as provided by 8 CFR
§274a.2(b)(1)(viii)(A)(7)(ii), to the extent relating to the Transferred Assets or Assumed
Liabilities (the “Books and Records”) but excluding such items to the extent they relate
exclusively to the Excluded Assets and Excluded Liabilities; provided that the Seller or
its Affiliates may retain a copy of any Books and Records for archival purposes as well as for
purposes related to any other business of the Seller or its Affiliates to which such records
relate;



          (i) all credits, prepaid expenses and security deposits to the extent relating to the Business
at the Relevant Locations (except the security deposit with respect to the Aldine Lease deposited
by the Seller’s Affiliate);



          (j) all rights to causes of action, lawsuits, judgments, claims and demands of any nature,
known or unknown, contingent or non-contingent, in favor of the Seller to the extent relating
exclusively to the Business, the Assumed Liabilities or the



11









 




Transferred Assets prior to the
Closing, including all rights under all guarantees, warranties, indemnities and similar rights in
favor of the Seller; provided that this does not include any of the Seller’s or its
Affiliates’ “self-insurance” or “captive insurance” policies or proceeds or any other rights or
claims against the Seller or any of its Affiliates;




          (k) all of the intellectual properties and intellectual property rights to the extent that
these are owned, licensed or used by the Seller in connection with the Business including, without
limitation: (i) all actual and potential trademarks, service marks, trade names, logos and other
designations including, without limitation, all of the Seller’s right to use the names “Ivy Steel &
Wire,” “Steeltex” (subject to Section 5.3(b) with respect to Steeltex Inventory) and “Varigrid”
(collectively, the “Marks”) and all United States, foreign and state registrations and
applications for registration relating to the Marks (the “Trademark Registrations”); (ii)
all works of authorship (the “Works of Authorship”) and all United States, foreign and
state copyright registrations and applications for registration relating to the Works of Authorship
(the “Copyright Registrations”); (iii) all patented or patentable inventions (the
“Inventions”) and all United States and foreign patents and applications for patent
relating thereto (the “Patents”); and (iv) all confidential or proprietary processes,
inventions patentable or not, formulas, technical data and other similar information and
technologies that are of commercial value to the Business (the “Trade Secrets”) (the Marks,
the Trademark Registrations, the Works of Authorship, the Copyright Registrations, the Inventions,
the Patents and the Trade Secrets being referred to collectively herein as the “Intellectual
Property”), together with all goodwill related to the Intellectual Property, rights to sue for
infringement, and any royalty and other income from or related to the Intellectual Property
accruing after the Closing Date;



          (l) all other intangible assets of any kind or description, wherever located, which are
carried on the books of the Business or which are owned or used by the Seller to the extent used in
or relating to the operations of the Business; provided that to the extent that such
intangible assets are also used in the Seller’s or its Affiliates businesses Seller and its
Affiliates are hereby granted a nonexclusive license to use same;



          (m) any and all of the Seller’s goodwill in and any going concern value of the Business; and



          (n) Notwithstanding the foregoing: (i) the transfer of the Transferred Assets pursuant to this
Agreement shall not include the assumption of any liability or other obligation related to the
Transferred Assets unless the Buyer expressly assumes that liability or other obligation pursuant
to Section 2.3; and (ii) for purposes of Section 3.18 and Section 8.8, the term “Transferred
Assets” shall include the Buyer’s sublease interest in the Aldine Facility pursuant to the Houston
Aldine Property Lease.



     Section 2.2 Excluded Assets. Notwithstanding anything contained in Section 2.1 to the contrary,
the Seller is not selling, and the Buyer is not purchasing, any assets other than those
specifically listed or described in Section 2.1, and without limiting the generality of the
foregoing, the term “Transferred Assets” shall expressly exclude the following assets of the
Seller, all of which shall be retained by the Seller (collectively, the “Excluded Assets”):



12









 





          (a) all of the Seller’s cash and cash equivalents;



          (b) all accounts receivable, notes receivable, supplier rebate receivables and other similar
receivables due to the Seller that arise out of the operation of the Business prior to the Closing
Date (the “Receivables”), together with any unpaid interest or fees accrued thereon or
other amounts due with respect thereto;



          (c) the Seller’s corporate books and records of internal corporate proceedings, Tax records,
work papers and books and records that the Seller is required by Law to retain;



          (d) the Intellectual Property other than the Intellectual Property described on Schedule
2.1(k) including the following names and marks and any variation or derivation thereof: “MMI”,
“Oldcastle” and “Pilot Steel”;



          (e) all of the Seller’s bank accounts;



          (f) all accounting records (including records relating to Taxes) and internal reports relating
to the business activities of the Seller or any of its Affiliates that are not Transferred Assets;



          (g) any interest in or right to any refund of Taxes relating to the Business, the Transferred
Assets or the Assumed Liabilities for, or applicable to, any taxable period (or portion thereof)
ending on or prior to the Closing Date;



          (h) any insurance policies and rights, claims or causes of action thereunder (but only to the
extent not included in Transferred Assets pursuant to Section 2.1(j));



          (i) any assets relating to any Employee Plan;



          (j) all rights, claims and causes of action relating to any Excluded Asset or any Excluded
Liability;



          (k) all rights under contracts and arrangements other than the Transferred Contracts,
including those set forth on Schedule 2.2(k) (the “Excluded Contracts”);



          (l) all rights under purchase orders other than the Transferred Purchase Orders, including
those set forth on Schedule 2.2(l) (the “Excluded Purchase Orders”);



          (m) all the raw materials inventories, work-in-progress, finished goods inventories, supplies,
packaging materials and other inventories owned by the Seller listed or described on Schedule
2.2(m) and the Foreign Rod (“Excluded Inventory”);



          (n) the Tampa Facility real estate, all real property leases with respect to the Tampa
Facility and all assets of the Seller located at the Tampa Facility other than the Tampa Assets;



13









 





          (o) the Houston Clinton Facility, all real property with respect to the Houston Clinton
Facility and all assets of the Seller located at such facility;



          (p) the Aldine Facility real estate, all real property leases with respect to such facility,
all Improvements in such facility and all assets expressly being leased by the Seller pursuant to
the Aldine Lease (excluding assets of the Seller located at such facility);



          (q) the Pilot Steel Facility, all real property leases with respect to the Pilot Steel
Facility and all the assets and working capital of the Seller relating exclusively to the Seller’s
operations located at the Pilot Steel Facility;



          (r) all performance evaluations or similar records relating to the Business Employees;



          (s) all rights of the Seller to the assets listed in Schedule 2.2(s);



          (t) the security deposit with respect to the Aldine Lease deposited with the lessor of such
lease by the Seller’s Affiliate; and



          (u) all rights of the Seller under this Agreement and the Ancillary Agreements.



     Section 2.3 Assumed Liabilities. The Transferred Assets shall be sold and conveyed to the Buyer
free and clear of all Encumbrances whatsoever (other than Permitted Encumbrances);
provided, however, that the Buyer assumes at Closing the obligations of the Seller
described below (the “Assumed Liabilities”). The Buyer shall in no event assume or be
liable for any liability or obligation of the Seller not specifically assumed pursuant to this
Section 2.3, and the Seller shall retain responsibility for all liabilities and obligations with
respect to it, whether or not accrued and whether or not disclosed. Specifically, but without
limiting the generality of the foregoing, the Buyer shall not assume any liability or obligation of
the Seller in respect to the use, storage, presence, transportation, discharge, handling or
disposal of any Hazardous Material prior to the Closing Date, any liability with respect to product
liability and negligence claims and liabilities for refunds, adjustments, allowances, repairs,
exchanges, returns and warranty or similar claims arising out of actions taken or omitted to
be taken on or prior to the Closing Date, any liability with respect to workers’ compensation
claims or any Domestic Content Liabilities.



     The Assumed Liabilities shall consist exclusively of the following:



          (a) trade accounts payable incurred in the ordinary course of business consistent with past
practice including the Book Accounts Payable (other than a trade account payable to an Affiliate of
the Seller and other than Sundry Payables) that remains unpaid as of the Effective Time;



          (b) any Taxes to be paid by the Buyer pursuant to Article VI;



14









 





          (c) all liabilities arising after the Effective Time under the Transferred Contracts, the
Transferred Purchase Orders and the Business Permits, to the extent assignment thereof is not
prohibited (other than a liability arising out of or relating to (the following a “Pre Close
Default”) (i) a breach that occurred prior to the Closing Date or (ii) an action taken by the
Seller or failure to act by the Seller prior to the Closing Date that is not timely or in
accordance with such Transferred Contracts, Transferred Purchase Orders or Business Permits); and



          (d) all accrued vacation/paid time-off of Transferred Employees, as shown on Schedule
2.3(d).



     Section 2.4 Excluded Liabilities. Notwithstanding any other provision of this Agreement to the
contrary, the Buyer is not assuming and the Seller shall retain the sole responsibility of and
shall pay, perform or otherwise satisfy, all liabilities of the Seller other than the Assumed
Liabilities (the “Excluded Liabilities”), including without limitation the following:



          (a) all liabilities for Taxes, including all Taxes arising from or with respect to the
Transferred Assets or the operation of the Business that are incurred in or attributable to any
period, or any portion of any period, ending on or before the Effective Time (except as otherwise
provided in Article VI), any Taxes that arise as a result of the sale of the Transferred Assets
pursuant to this Agreement (except as otherwise provided in Article VI), and any other Taxes to be
paid by the Seller pursuant to Article VI;



          (b) except as specified in Section 2.3(d), all liabilities relating to the Business Employees,
including (i) subject to Section 5.1(b), any severance obligations; (ii) bonuses and incentive
compensation to the extent related to services performed in the period prior to the Effective Time;
(iii) sick leave; (iv) all workers’ compensation liabilities to the extent related to an injury
incurred by a Business Employee before the Effective Time; and (v) subject to Section 5.1(e), all
obligations and liabilities under the Worker Adjustment Retraining and Notification Act and any
similar state or local law (the “WARN Act”) (provided that, for the avoidance of doubt,
Buyer shall be solely responsible for any liabilities incurred with respect to Transferred
Employees after the Effective Time);



          (c) all liabilities arising prior to the Effective Time under the Transferred Contracts, the
Transferred Purchase Orders and the Business Permits to the extent assignment thereof is not
prohibited (other than any liability arising out of a Pre Close Default);



          (d) any liabilities arising under the Employee Plans;



          (e) any indebtedness for borrowed money or guarantees thereof outstanding as of the Effective
Time, other than current accounts payable (which are Assumed Liabilities pursuant to Section
2.3(a));



          (f) any Environmental, Health and Safety Liabilities arising out of or with respect to the
Seller or the Owned Real Property prior to the Effective Time;



15









 





          (g) all liabilities owed to any Affiliates of the Seller;



          (h) all liabilities in respect of products manufactured, marketed, distributed or sold by the
Seller before the Effective Time, including product liability and negligence claims and liabilities
for refunds, adjustments, allowances, repairs, exchanges, returns and warranty or similar claims;
provided, that the Buyer retains all liabilities to the extent arising out of its actions
or inactions after the Effective Time that cause any such liabilities;



          (i) liabilities arising out of any litigation or other proceeding pending as of the Effective
Time or commenced after the Effective Time to the extent it relates to matters that occurred prior
to the Effective Time;



          (j) any liability arising out of or resulting from the Seller’s compliance or non-compliance
with any Law or Order of any Governmental Authority (including, without limitation Environmental,
Health and Safety Liabilities and Domestic Content Liabilities);



          (k) any liabilities arising out of the ownership or operation of the Transferred Assets or the
Business prior to the Effective Time (other than the Assumed Liabilities);



          (l) any liability of Seller based upon Seller’s acts or omissions occurring after the
Effective Time;



          (m) any liability of the Seller under this Agreement or any other document executed in
connection with the transactions contemplated by this Agreement, including without limitation the
Ancillary Agreements;



          (n) any liability or obligation relating to an Excluded Asset; and



          (o) all “Sundry Payables” as defined on Schedule 2.4(o).



     Section 2.5 Consideration.



          (a) As consideration for the sale, assignment, transfer, conveyance and delivery of the
Transferred Assets to the Buyer, at the Closing, the Buyer shall (i) pay to the Seller, by wire
transfer to a bank account designated in writing by the Seller to the Buyer an amount equal to
$37.588 million (the “Closing Date Payment”) in immediately available funds in United
States dollars; (ii) deliver to the Seller the note, substantially in the form attached hereto as
Exhibit G (the “Seller Note”) in the aggregate principal amount of $13.5 million;
and (iii) assume the Assumed Liabilities. The aggregate consideration hereunder will be adjusted
first by the working capital adjustment and then by the inventory adjustment in accordance with
Sections 2.7 and 2.8.



          (b) The Buyer and the Seller shall execute and deliver a sublease with respect to that
property known as the “Houston Aldine Property” in substantially the form set forth as Exhibit
H hereto (the “Houston Aldine Property Sublease”).



16









 





          (c) If, on or prior to March 31, 2011, the Buyer sells for scrap the Tampa Welding Production
Assets then, in addition to the Purchase Price, the Buyer shall pay the Seller the actual proceeds,
net of the Buyer’s expenses (and net of any Transfer Taxes, but without modifying the allocation of
ultimate responsibility therefor under Article VI), from such sale. Whether the Tampa Welding
Production Assets are sold, and the terms and conditions of any such sale, shall be in the Buyer’s
sole discretion. Whether or not the Buyer sells the Tampa Welding Production Assets on or prior to
March 31, 2011, the Buyer shall promptly (or in any event by March 31, 2011) remove the Tampa
Assets from the Tampa Facility and if the Buyer fails to do so, Seller may do so at the Buyer’s
expense.



          (d) The Buyer will remove the Transferred Inventory held by the Seller at the Houston Port
facility within sixty (60) days after the Closing at the Buyer’s expense. The Buyer shall be
permitted to store the Transferred Inventory at such facility during such 60-day period without
cost.



          (e) The Buyer will store the Foreign Rod for the Seller where located as of Closing at the
Relevant Locations at no charge to the Seller for six (6) months immediately following the Closing.
The Buyer will use commercially reasonable efforts to cooperate with the Seller to complete the
Mexico Sale. If the Mexico Sale is completed by the Seller, the Seller will handle the invoicing
and order processing and, so long as the styles of mesh sold in the Mexico Sale are consistent with
the Buyer’s production capabilities at such time, the Buyer will convert the Foreign Rod to
finished product at one of the Buyer’s manufacturing facilities in Texas, which may or may not be a
Relevant Location acquired from the Seller. The Seller shall reimburse the Buyer for its
manufacturing costs incurred in such conversion and the out of pocket freight costs, if any,
incurred by the Buyer in order to ship such Foreign Rod inventory from its location at Closing to
the Buyer’s manufacturing facility in Texas. The Seller will arrange for the customer in the
Mexico Sale to pick up the finished goods FOB the Buyer’s applicable
Texas manufacturing facility, and the Seller shall collect the purchase price therefor, or if
the purchase price is paid to the Buyer, the Buyer shall pay it over to the Seller. Further, if
the Seller does not complete the Mexico Sale, then it may provide for the liquidation of such
inventory by sale to third parties, and the Buyer, at the Seller’s expense, will exercise
commercially reasonable efforts for a period of no more than six (6) months to cooperate with the
Seller in such efforts. Proceeds from such liquidation shall be received by or paid to the Seller.
If the Mexico Sale or liquidation has not occurred within the six-month period immediately
following the Closing, the Seller shall promptly remove the Foreign Rod from the Buyer’s facility,
and if the Seller fails to do so, the Buyer may do so at the Seller’s expense.



     Section 2.6 Closing. The sale and purchase of the Transferred Assets and the assumption of the
Assumed Liabilities contemplated by this Agreement shall take place at a closing (the
“Closing”) to be held at the offices of Womble Carlyle Sandridge & Rice, PLLC, in
Winston-Salem, North Carolina, at 10:00 a.m. Eastern time on the date hereof, which is referred to
as the “Closing Date” or as otherwise mutually agreed to by the parties. For purposes of
passage of title and risk of loss, allocation of expenses, adjustments and other economic or
financial effects of the transactions contemplated



17









 




hereby, the Closing when completed shall be
deemed to have occurred at 11:59 p.m., local time, on the Closing Date (the “Effective
Time”).




     Section 2.7 Post-Closing Adjustment.



          (a) The “Target Working Capital” is $18,679,394.



          (b) The “Actual Working Capital” shall be the excess of the Transferred Inventory
Value over the Actual Current Liabilities.



          (c) The “Transferred Inventory Value” shall be the aggregate value of the Transferred
Inventory calculated based on the Unit Count valued at the value per unit of Transferred Inventory
in accordance with the inventory valuation schedule attached hereto on Schedule 2.7 (the
“Unit Valuation Schedule”).



          (d) The “Actual Current Liabilities” shall consist of all of the liabilities referred
to in Section 2.3(a) that are Assumed Liabilities as of the Closing Date accounted for in
accordance with IFRS.



          (e) No later than 5:00 pm on November 22, 2010, the Buyer and the Seller will conduct and
agree upon the results of a physical count of the number and type of units of Transferred Inventory
as of November 22, 2010 (the “Unit Count”) and calculate and agree upon the resulting
Transferred Inventory Value. All units of Transferred Inventory shall be included in the Unit
Count and valued at the value set forth on the Unit Valuation Schedule whether or not such unit(s)
are usable,
saleable or otherwise of a nature that would (or would not) cause them to be categorized as
Alleged Obsolete Units.



          (f) The Actual Current Liabilities as of the Closing shall be calculated by the Buyer after
the Closing in accordance with the Seller’s past practice. The Buyer shall also calculate the
Actual Working Capital based on (i) the Transferred Inventory Value as agreed by the Buyer and the
Seller on November 22, 2010 and (ii) the Buyer’s calculation of the Actual Current Liabilities.
The Buyer’s calculation of such amounts (the “Adjustment Statement”) shall be delivered by
the Buyer to the Seller as soon as practicable following the Closing Date, but not later than
thirty (30) days thereafter. The Representatives of the Seller shall have the right at the
Seller’s cost and expense to participate with the Representatives of the Buyer in the process of
preparing the Adjustment Statement and shall (subject to confidentiality restrictions) have access
to all data, schedules and work papers used by the Buyer in preparing the Adjustment Statement.



          (g) The determination of Actual Working Capital shall become final and binding upon the
parties on the 30th day following receipt of the Adjustment Statement by the Seller unless the
Seller delivers written notice of its disagreement (“Notice of Disagreement”) to the Buyer
prior to such date. Any Notice of Disagreement shall specify the amounts set forth on the
Adjustment Statement with which the Seller disagrees. If a Notice of Disagreement is sent by the
Seller, then the Actual Working Capital (as recalculated in accordance with this section) shall
become final and binding upon the parties on the earlier of (x) the date the parties hereto resolve
in writing any differences



18









 




they have with respect to any matter specified in the Notice of
Disagreement or (y) the date any disputed amounts are finally determined in accordance with the
balance of this paragraph. During the 30-day period following the delivery of a Notice of
Disagreement, the Seller and the Buyer shall seek in good faith to resolve in writing any
differences which they may have with respect to any amount specified in the Notice of Disagreement
or identified by the Buyer during said 30-day period. If, at the end of such 30-day period, the
Seller and the Buyer have not reached agreement on such amounts, the amounts which remain in
dispute shall be recalculated by an accounting firm mutually agreed upon by the Seller and the
Buyer (the “Independent Accountants”). The Independent Accountants shall make a ratable
allocation to each of the Seller and the Buyer of their charges for such work as a part of their
determination, based on the proportion by which the amount in dispute was determined in favor of
one party or the other. Any amounts so recalculated shall be final and binding on the parties.
Neither the Buyer nor the Seller shall be permitted to dispute the Transferred Inventory Value as
agreed based on the Unit Count and the Unit Valuation Schedule.




          (h) If the Actual Working Capital is less than the amount of the Target Working Capital, then
the Seller shall promptly deliver to the Buyer the amount of such shortfall. If the Actual Working
Capital is greater than the amount of the Target Working Capital, then the Buyer shall promptly
deliver to the Seller the amount of such excess. The Closing Date Payment as so adjusted plus the
original principal amount of the Seller Note shall be the “Purchase Price”.



     Section 2.8 Post Closing Inventory Representation Adjustment.



          (a) If after Closing, the Buyer in good faith concludes that one or more specifically
identified units of Transferred Inventory were recorded on the books and records of the Seller as
of the Closing at a value in excess of the value that such units should have been recorded in
accordance with IFRS, net of applicable reserves, consistent with the Seller’s past practice,
because such unit or units can be accurately described by one of the categories set forth below
(each such Unit an “Alleged Obsolete Unit”):



               (i) Any pipe mesh and engineered structural mesh produced from imported wire rod for which no
customer purchase commitment exists;



               (ii) Any product in inventory that is over three hundred and sixty (360) days old;



               (iii) Any wire or mesh products that do not meet applicable ASTM specifications;



               (iv) Any pipe mesh products of random lengths not ordered by a customer;



               (v) Any pipe mesh products with telescoped centers (measured on the side of the roll from
which the center protrudes starting from the inside wrap on the mandrel) exceeding four (4) inches
as measured from the outside edge of the innermost



19









 




overhang or longitudinal wire, as the case may
be, to the outside edge of the outer most overhang or longitudinal wire; and




               (vi) Any finished goods quantities by SKU that exceed the previous twelve (12) months
shipments for which there is no customer commitment to purchase, written or verbal, as of the
Closing Date;



               (vii) Any customer-specific finished goods SKUs which the customer has discontinued ordering
as of the Closing Date;



               (viii) Any domestic work in process that is not traceable by size, grade, and rod source;


then within sixty (60) days after the Closing Date, the Buyer shall deliver to the Seller a
schedule (the “Alleged Obsolete Units Notice Schedule”) setting forth: (a) the specifically
identified Alleged Obsolete Unit; (b) the category in (i) — (viii) above in which such unit is
properly categorized in the Buyer’s view; and (c) the dollar amount by which the Buyer’s
calculation of the correct value calculated in accordance with IFRS (“Buyer’s Value”) is
below the value of such identified Alleged Obsolete Unit on the Seller’s books and records
(“Seller’s Value”).




          (b) The Buyer and the Seller will negotiate in good faith to resolve any disagreements with
respect to the proper valuation of the Alleged Obsolete Units for 15 days after the Seller’s
receipt of the Alleged Obsolete Units Notice Schedule. If, after such period, the parties do not
agree on any adjustment to the price to be made with respect to one or more Alleged Obsolete Units
that falls within one or more of the categories (i)-(viii), then with respect to one or more of
such Units, the Seller may either: (i) pay to the Buyer the excess of Seller’s Value over Buyer’s
Value or (ii) purchase such Alleged Obsolete Unit from the Buyer at Seller’s Value and then
liquidate such unit with the Buyer’s cooperation, with the proceeds of such liquidation to be
received by or paid to Seller. The Buyer shall store any such unit purchased by the Seller on the
Buyer’s premises at no cost for six (6) months immediately following the Closing and shall
cooperate (at no cost to the Buyer) with the Seller in liquidation of same. If the Seller fails to
remove any such unit(s) purchased the Seller from the Buyer’s premises within six (6) months, the
Buyer may do so at the Seller’s expense.



          (c) With respect to any finished good Transferred Inventory that are Alleged Obsolete Units,
the Seller shall have a credit of $100,000 (the “Finished Goods Credit”) that can be used
by the Seller to either (i) compensate the Buyer for the excess of Seller’s Value over Buyer’s
Value or (ii) purchase the Alleged Obsolete Units from the Buyer at Seller’s Value and then
liquidate such units in accordance with Section 2.8(b). The Seller may not use such credit with
respect to Alleged Obsolete Units, that are not finished goods inventory, provided however,
that for any and all Alleged Obsolete Units of any kind, including finished goods inventory, the
Seller may utilize the Basket Amount (to the extent available at a given time) as a credit to
compensate the Buyer in the same manner as the Finished Goods Credit. Any such utilization of the
Basket Amount shall



20









 




lower the amount of the Basket Amount available for other indemnity claims on a
dollar for dollar basis.




          (d) None of such activities in this Section 2.8, nor liquidation or sale of Foreign Rod
whether pursuant to the Mexico Sale or otherwise shall be a violation of the noncompete covenants
in this Agreement.



          (e) In connection with the foregoing, and in order that the Transferred Inventory can be
accurately and efficiently counted, Buyer covenants and agrees that such inventory will remain in
place and not be moved, processed, transported, converted or otherwise disturbed, and there will be
no production, shipments in or shipments out until both Buyer and Seller agree that the count is
complete; provided however that on Friday November 19, 2010, plant personnel can weigh drawn wire
and/or straight cut and segregate it from drawn wire and/or straight cut that is required for
production.


     Section 2.9 Allocation of Purchase Price for Tax Purposes. The Seller and the Buyer agree that for tax
purposes only, the Purchase Price and the Assumed Liabilities (plus other relevant items) shall be
allocated among the Transferred Assets as provided on the allocation schedule (the “Allocation
Schedule”). A draft of the Allocation Schedule shall be prepared by the Buyer and delivered to
the Seller as soon as practicable following the Closing Date but not later than thirty (30) days
after the date the Post-Closing Adjustment is established. If the Seller notifies the Buyer in
writing within ten (10) days of the date that the Buyer delivers the Allocation Schedule to the
Seller that the Seller objects to one or more items reflected in the Allocation Schedule, the
Seller and the Buyer shall negotiate in good faith to resolve such dispute; provided, however, that
if the Seller and the Buyer are unable to resolve any dispute with respect to the Allocation
Schedule within thirty (30) days, such dispute shall be resolved by an impartial nationally
recognized firm of independent certified public accountants acting as experts and not arbitrators.
The fees and expenses of such accounting firm shall be borne equally by the Seller and the Buyer.
The Buyer and the Seller shall file all Tax Returns (including amended returns and claims for
refund) and information reports in a manner consistent with the Allocation Schedule. Any
adjustments to the Purchase Price pursuant to this Agreement shall be allocated in a manner
consistent with the Allocation Schedule.




     Section 2.10 Proration of Certain Items. With respect to certain expenses incurred in the
operation of the Business at the Relevant Locations, the following prorations shall be made:1



          (a) Operating Expenses. Subject to the specific provisions of this Agreement,
the Seller shall be responsible for all costs and expenses attributable to the operation of the
Business or the ownership of the Transferred Assets up to the Closing





 




			
	1	 	Parties to ensure proration is consistent with
working capital adjustment and transferred liabilities once working capital
adjustment is agreed.




21









 








Date, and the Buyer shall
become responsible for all costs and expenses attributable to ownership of the Transferred Assets
from and after the Closing Date.




          (b) Taxes. Taxes shall be apportioned as set forth in Article VI.



          (c) Utilities. Utilities, water and sewer charges shall be paid directly to the
obligee by the Seller and the Buyer based on meter readings as of the Closing Date at the
prevailing rates, if possible; otherwise such charges shall be apportioned based on the number of
operating days occurring before and after the Closing Date during the billing period for each such
charge.



          (d) Timing. Appropriate cash payments by the Seller or the Buyer, as the case may
require, shall be made from time to time, as soon as practicable after the facts giving rise to the
obligation for such payments are known, to give effect to the prorations provided in this section.



ARTICLE III

REPRESENTATIONS AND WARRANTIES

OF THE SELLER




     Except as set forth in the Disclosure Schedules attached hereto (collectively, the
“Disclosure Schedules”), the Seller hereby represents and warrants to the Buyer as follows:



     Section 3.1 Organization and Qualification. The Seller is a corporation duly organized, validly
existing and in good standing under the laws of Delaware and has all necessary corporate power and
authority to own, lease and operate the Transferred Assets and to carry on the Business as it is
now being conducted. The Seller is duly qualified and licensed to do business, and is in good
standing, in each jurisdiction where the ownership or operation of the Transferred Assets or the
conduct or operation of the Business makes such qualification or licensing necessary, except, in
each case, for any such failures that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.



     Section 3.2 Authority. The Seller has the corporate power and authority to execute and deliver
this Agreement and each of the Ancillary Agreements to which it will be a party, to perform its
obligations hereunder and thereunder and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance by the Seller of this Agreement and each of the
Ancillary Agreements to which it will be a party and the consummation by the Seller of the
transactions contemplated hereby and thereby have been duly and validly authorized by all necessary
corporate action. This Agreement has been, and upon their execution each of the Ancillary
Agreements to which the Seller will be a party will have been, duly executed and delivered by the
Seller. This Agreement constitutes, and upon their execution each of the Ancillary Agreements to
which the Seller will be a party will constitute, the legal, valid and binding obligations of the
Seller, enforceable against the Seller in accordance with their respective terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,



22









 




moratorium or
similar laws affecting creditors’ rights generally and by general principles of equity (regardless
of whether considered in a proceeding in equity or at law).




     Section 3.3 No Conflict; Required Filings and Consents.



          (a) The execution, delivery and performance by the Seller of this Agreement and each of the
Ancillary Agreements to which the Seller will be a party, and the consummation of the transactions
contemplated hereby and thereby, do not and will not:



               (i) conflict with or violate the certificate of incorporation or bylaws of the Seller;



               (ii) conflict with or violate any Law applicable to the Seller, the Business or any of the
Transferred Assets or by which the Seller, the Business or any of the Transferred Assets may be
bound or affected; or



               (iii) except as set forth on Schedule 3.3, conflict with, result in any breach of,
constitute a default (or an event that, with notice or lapse of time or both, would become a
default) under, require any notice to or consent of any Person pursuant to, or give to others any
rights of termination, acceleration or cancellation of, any material contract or agreement;


except, in the case of clause (ii) or (iii), for any such conflicts, violations, breaches, defaults
or other occurrences that would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect or that arise as a result of any facts or circumstances relating to
the Buyer or any of its Affiliates.




          (b) The Seller is not required to file, seek or obtain any notice, authorization, approval,
order, permit or consent of or with any Governmental Authority in connection with the execution,
delivery and performance by the Seller of this Agreement and each of the Ancillary Agreements to
which the Seller will be a party except where failure to obtain any consent, approval,
authorization or action, or to make any filing or notification, would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.



     Section 3.4 Transferred Assets. This Agreement and the instruments and documents to be delivered
by the Seller to the Buyer at or following the Closing shall be adequate and sufficient to transfer
to the Buyer the Seller’s entire right, title and interest in and to the Transferred Assets. The
Seller is not in the ordinary business of, and the Business does not involve and the Relevant
Locations are not used for, selling assets such as the Transferred Assets (other than inventory
sold in the ordinary course of business). Without limiting the foregoing, excluding any inventory
constituting a Transferred Asset, the Seller has not sold assets of a kind similar to the
Transferred Assets more than twice, nor for more than seven days, in any given twelve-month period.
None of the Transferred Assets (other than those Transferred Assets that have been booked by the
Seller as, and are being transferred to the Buyer as, inventory) were purchased by the Seller for
the original purposes of resale.



23









 





     Section 3.5 Books and Records. The Seller has offered to make available to the Buyer upon the
Buyer’s request, and as soon as practicable after the Closing the Seller will deliver to the Buyer,
true and complete copies of the books and records of the Seller that constitute Transferred Assets.
Except as forth on Schedule 3.5, such books and records for the fiscal year ended December
26, 2009 and the interim period ended September 25, 2010 are true, accurate and complete and have
been maintained in accordance with IFRS applied on a consistent basis. The Aldine Facility either
is separately accounted for as a separate division, branch or segment of the Business, or the
income and expenses of the Aldine Facility are segregable or separately ascertainable from the
books of account or records of the rest of the Business.



     Section 3.6 Title to and Sufficiency of Assets. Except as set forth on Schedule 3.6, the
Seller has good and marketable title to all of the Transferred Assets, free and clear of any
Encumbrances other than Permitted Encumbrances and the Encumbrances set forth on Schedule
3.6. With the exception of the Excluded Assets, the Transferred Assets constitute all of the
assets, tangible and intangible, of any nature whatsoever, that are owned, leased, used, or held
for use, by the Seller or an Affiliate of the Seller in the operation of the Business at the
Relevant Locations in the manner presently operated by the Seller. Except as set forth on
Schedule 3.6, and except for Excluded Assets, Excluded Liabilities and assets used in the
delivery of services pursuant to the Transition Services Agreement, all assets and rights relating
to the Business that are owned by the Seller or any
of its Affiliates are owned or held by the Seller or such Affiliates. Schedule 2.1(d)
sets forth all of the Production Equipment owned by the Seller and located at the Relevant
Locations. “Production Equipment” means the following types of equipment or machinery: (a)
wire drawing production equipment; (b) straight and cut equipment; and (c) welding lines. Seller
has not sold, retired, relocated, moved, conveyed, or otherwise transferred any Production
Equipment since August 31, 2010. With the exception of the Tampa Welding Production Assets at the
Tampa Facility, the Transferred Assets comprise all of the tangible assets (i.e., not including
real estate and intangible assets) owned, leased, used, or held for use, by the Seller with respect
to any given Relevant Location, other than Excluded Inventory, and as such, the sale of the
Transferred Assets with respect to such Relevant Locations will represent a cessation of the
Seller’s business at such Relevant Locations.



     Section 3.7 Financial Statements. The Seller has previously delivered to the Buyer true and
complete copies of (a) the statements of net assets of the Seller as of December 26, 2009 and the
related statements of operations for the fiscal year then ended; (b) interim unaudited financial
reports prepared for the period from December 27, 2009 through September 25, 2010; and (c) monthly
statements of net assets, for the Business for the period from December 27, 2009 through September
25, 2010 (collectively referred to as the “Financial Statements”). The Financial
Statements:



          (a) are true, complete and correct;



          (b) are in accordance with the books and records of the Seller;



24









 





          (c) present fairly the assets, liabilities and financial condition of the Seller as of the
respective dates thereof, and the results of operations for the periods then ending; and



          (d) have been prepared in accordance with IFRS; except for such year-end and other adjustments
and footnotes as would be required by an audit.



          (e) Except as set forth on Schedule 3.7 hereto, the Seller has no liability required
to be recorded in accordance with IFRS that is not reflected or reserved against in the Financial
Statements other than those incurred in the ordinary course of business since December 31, 2009 or
set forth on subsequent interim financial statements.



     Section 3.8 Absence of Certain Changes or Events. Except as set forth on Schedule 3.8, the
Business has been conducted, in all material respects, in the ordinary course of business
consistent with past practice and since August 31, 2010, there has not occurred any Material
Adverse Effect.



     Section 3.9 Compliance with Laws; Permits and Licenses. Except as set forth on Schedule
3.9 hereto, there is not outstanding or, to the Knowledge of the Seller, threatened any order,
writ, injunction or decree of any Governmental Authority or arbitration tribunal against or
involving the Seller, the Business or the Transferred Assets. To the Knowledge of the Seller, the
Business is currently, and has been at all times since
April 1, 2006, conducted in full compliance with all Laws. Except as set forth on
Schedule 3.9 hereto, to the best Knowledge of the Seller, there has been no allegation of
any material violation of any such Laws, and no investigation or review by any federal, state or
local body or agency is pending, threatened or planned with respect to the Seller, the Business or
the Transferred Assets.



     No representation or warranty is made under this Section 3.9 with respect to ERISA,
employment, Taxes or environmental matters, which are covered exclusively by Sections 3.15, 3.16,
3.17 and 3.18, respectively.



     Section 3.10 Permits and Licenses. The Seller is in possession of all Business Permits required
for the conduct of the Business and the ownership and operation of the Transferred Assets, each of
which is in full force and effect. All aspects of the Business have been conducted in compliance
in all material respects with all such Business Permits since April 1, 2006. No suspension,
cancellation, modification, revocation or nonrenewal of any Business Permit is pending or, to the
Knowledge of the Seller, threatened. All Business Permits material to the operation of the
Business are set forth on Schedule 3.10.



     Section 3.11 Real Property.



          (a) Owned. Schedule 3.11(a) contains a true and correct description of all
real property owned by the Seller and used in connection with the Business at the Relevant
Locations (the “Owned Real Property”). Only to the extent as set forth in Schedule
3.11(a), true and correct copies of (i) all surveys, maps and plats, if any, of the Owned Real
Property, excluding the Owned Real Property in Jacksonville, Florida, that to



25









 




the Seller’s
Knowledge are in its possession; (ii) all permits, certificates, licenses and registrations that,
to the Seller’s Knowledge, are in its possession and are necessary and/or required to operate the
Owned Real Property for the purposes for which such properties are presently being used; and (iii)
to the extent transferrable, all warranties, if any and that, to the Seller’s Knowledge, are in its
possession, for all Improvements. To the extent as set forth in Schedule 3.11(a), the
originals of the items referenced in clauses (i) through (iv) of this sub-section shall be provided
to the Buyer on the Closing Date.




          (b) Leased. Schedule 3.11(b) contains a true and correct description of all
real property leased by the Seller and used in connection with the Business. A true and correct
copy of the Aldine Lease has been delivered to the Buyer. The Aldine Lease is valid, binding and
enforceable in accordance with its terms and is in full force and effect, and there are no offsets
or defenses by either landlord or tenant thereunder. There are no existing defaults, and no events
or circumstances have occurred which, with or without notice or lapse of time or both, would
constitute defaults, under the Aldine Lease. The subletting of any portion of the Aldine Lease by
the Seller to the Buyer will not (i) permit the landlord to accelerate the rent or cause the lease
terms to be renegotiated; (ii) constitute a default thereunder; (iii) require the consent of the
landlord or any third party; or (iv) affect the continuation, validity, or effectiveness thereof or
the terms thereof.



          (c) Improvements. The Owned Real Property and property subject to the Aldine
Lease (the “Leased Real Property”) are zoned for the various purposes for which the
Improvements thereon are presently being used. To the best Knowledge of the Seller: (i) all
Improvements are in compliance with all applicable zoning and land use laws, ordinances and
regulations; and (ii) no part of any Improvement encroaches on any real property not included in
the Owned Real Property or the Leased Real Property, except in each case to the extent that would
not materially interfere with the use of such Improvements in the Business for the purposes for
which they are normally used.



          (d) To the best Knowledge of the Seller and except as would not have a Material Adverse
Effect: (i) the Owned Real Property and the Leased Real Property have adequate water and sewer
supply for the current use of such property, and all sewer and water supply facilities required for
the current use of all such property are properly and fully installed and operating; (ii) all other
public or private utilities necessary for the operation of the Owned Real Property and the Leased
Real Property for current uses are properly and fully installed and operating; and (iii) all such
utilities enter the Owned Real Property and the Leased Real Property through adjoining public
streets or through valid easements across adjoining private lands, and all installation, connection
and similar charges in connection with such utilities have been paid in full.



          (e) Except as forth on Schedule 3.11(e), to the best Knowledge of the Seller and
except as would not have a Material Adverse Effect: (i) the Improvements have been completed, and
there are no interior or exterior structural defects or other material defects in such Improvements
or any material defects in the plumbing, electrical, mechanical, heating, ventilating or
air-conditioning systems or other systems; and (ii) all such systems are in satisfactory working
order for current use, and all roofs and basements of the Improvements are in working condition.
With respect to the on-going projects set



26









 




forth on Schedule 3.11(e) and to the best
Knowledge of the Seller (i) such projects are being performed by licensed contractors and (ii)
there is no material defect in the workmanship with respect to such projects.




          (f) Each portion of the Improvements is covered by a permanent certificate of occupancy that
is in full force and effect. To the best Knowledge of the Seller and except as would not have a
Material Adverse Effect, the condition and use of the Owned Real Property and Leased Real Property
conform to any certificates and permits required to be issued in connection with such property,
including, without limitation, the sewage and waste disposal and water system.



          (g) The Seller has received no notice and has no Knowledge of any violations of any Law
affecting the Owned Real Property or the construction, management, ownership, maintenance, use,
acquisition or sale thereof (including, without limitation, building, health and environmental
laws, regulations and ordinances). The Seller has no Knowledge of any pending change in any Law
which may adversely affect the use or ownership of the Owned Real Property or the Leased Real
Property.



          (h) Except as set forth on Schedule 2.1(a) or Schedule 3.11, the Seller has
entered into no agreement, oral or written, not referred to herein, with reference to the Owned
Real Property or the Leased Real Property, and neither the Seller nor any portion of the Owned Real
Property or the Leased Real Property is subject to any claim, demand, suit, unfiled lien,
proceeding or litigation of any kind, pending or outstanding, or to the Knowledge of the Seller,
threatened which would in any way materially and adversely affect or limit the use of the Owned
Real Property or the Leased Real Property by the Buyer or its successors or assigns consistent with
the Seller’s past practice.



          (i) There are no pending or, to the Knowledge of the Seller, threatened or contemplated
condemnation actions involving all or any portion of the Owned Real Property or the Leased Real
Property.



          (j) Except as set forth on Schedule 2.1(a), there are no management, service,
maintenance, brokerage agreements, obligations, commitments, arrangements, written or oral entered
into by Seller, with respect to the Owned Real Property or the Leased Real Property that will
survive the Closing Date and bind the Buyer or the Owned Real Property.



          (k) To the best of Seller’s Knowledge and except as would not have a Material Adverse Effect,
(i) all streets and easements necessary for operation, maintenance and enjoyment of the Owned Real
Property and Leased Real Property are available to the boundaries of the Real Property consistent
with past practice; (ii) all curb cuts and street opening permits or licenses required for
vehicular access to and from the Owned Real Property and the Leased Real Property from any
adjoining public street have been obtained and paid for and are in full force and effect; and (iii)
there are no pending or threatened governmental proceedings which would limit or result in the
termination of the access to and from the Owned Real Property or the Leased Real Property and
adjoining public streets and roads.



27









 





     Section 3.12 Tangible Personal Property. While no representation is made with respect to a
single or particular unit of Tangible Personal Property, the Tangible Personal Property taken as a
whole is in operating order, condition and repair, is suitable for use in the ordinary course of
business of the Business at the Relevant Locations consistent with past practice, and considered in
the aggregate, is free from material defects and is of a quality and quantity presently usable in
the ordinary course of business of the Business at the Relevant Locations consistent with past
practice.



     Section 3.13 Domestic Content. Except as otherwise properly identifiable or traceable, all
engineered structural mesh and concrete pipe reinforcement products included in the Transferred
Assets were produced from wire rod melted and poured in the United States and these products can be
certified to be compliant with Buy American Laws.



     Section 3.14 Intentionally Omitted.



     Section 3.15 Employee Plans.



          (a) Compensation. The Seller has previously made available to the Buyer a complete
and correct list of the name, position, rate of compensation and any incentive compensation
arrangements, bonuses or commissions or fringe or other benefits, whether payable in cash or in
kind, of each Business Employee.



          (b) Employee Benefit Plans.



               (i) Schedule 3.15 contains a correct and complete list of all Employee Plans.



               (ii) Except with respect to which the Buyer will have no liability, the Seller does not
contribute to, has no obligation to contribute to or otherwise has no liability or potential
liability with respect to (A) any Multiemployer Plan (as such term is defined in Section 3(37) of
ERISA); (B) any Employee Plan of the type described in Sections 4063 and 4064 of ERISA or in
Section 413 of the Code (and regulations promulgated thereunder); or (C) any plan which provides
health, disability, life insurance, accident or other “welfare-type” benefits to current or future
retirees or current former employees, their spouses or dependents, other than in accordance with
Section 4980B of the Code or applicable state continuation coverage law.



               (iii) The Buyer and its Affiliates will not have any liability with respect to any plan
subject to Title IV of ERISA as a result of the transactions contemplated by this Agreement. The
Seller has not been required to post any security pursuant to Section 307 of ERISA or Section
401(a)(29) of the Code, and neither the Seller nor any officer or director of the Seller has
Knowledge of any facts which could be expected to give rise to such lien or such posting of
security.



               (iv) The Seller Savings Plan, which is intended to be qualified under Section 401(a) of the
Code, and each trust forming a part thereof, has received a favorable determination letter from the
Internal Revenue Service as to the qualification



28









 




under the Code of such Seller Savings Plan and the
Tax-exempt status of such related trust, and nothing has occurred since the date of such
determination letter that could adversely affect the qualification of the Seller Savings Plan or
the Tax-exempt status of such related trust.




     Section 3.16 Labor and Employment Matters. With respect to employment matters:



          (a) Except with respect to the Tampa Facility and the Hazleton Facility, no employees of the
Seller who work in the Business are or have been represented since April 1, 2006 by a union or
other labor organization or covered by any collective bargaining agreement, and to the Knowledge of
the Seller, no union is attempting to organize any such employees.



          (b) There is no labor strike, dispute, slowdown, unfair labor practice charge, stoppage or
similar labor difficulty pending or, to the Knowledge of the Seller, threatened against or
affecting the Business, nor have there been any such events pending or threatened since December
31, 2009.



          (c) The Seller is in compliance with all Laws respecting employment and employment practices,
terms and conditions of employment and wages and hours, and there is no unfair labor practice
complaint against the Seller pending or, to the Knowledge of the Seller, threatened.



          (d) Except for any communications expressly approved by the Buyer in writing, no
representations other than a true and complete representation as to Buyer’s obligation under the
second sentence of Section 5.1(b)(ii) to pay severance benefits to certain Transferred Employees
and general statements that are non-binding as to the Buyer or the Seller regarding the Buyer’s
intentions as expressed to the Seller, have been made by the Seller or its employees or agents to
employees of the Seller with respect to the Buyer’s intentions to employ, or not to employ, the
Seller’s employees or with respect to the conditions of any such employment. It is expressly
understood that the Buyer has made no representation as to its intentions to employ or not employ
any particular Business Employee or to retain any particular Transferred Employee for any specific
period of time.



     Section 3.17 Taxes. The Seller has properly completed and timely filed all material tax returns
that relate to the Business or the Transferred Assets. All such tax returns are accurate, complete
and correct in all material respects and the Seller has timely paid all Taxes shown as due on such
tax returns. All material Taxes in respect of the Business or the Transferred Assets, have been
timely paid or, if not yet due, will be fully paid or adequately provided for in the Financial
Statements of the Seller. The Seller has timely made and will timely make all withholdings of
material Tax required to be made under all applicable Laws, and such withholdings have either been
paid or will be paid to the respective Governmental Authorities or have been set aside in accounts
for such purpose or accrued, reserved against and entered upon the Financial Statements of the
Seller. There are no Tax Encumbrances (other than liens for taxes which are not yet due



29









 




and
payable) upon any of the Transferred Assets. The Seller is not a “foreign person” within the
meaning of Section 1445 of the Code.




     Section 3.18 Environmental Matters. Since April 1, 2006 and except with respect to the
Jacksonville Facility for which no representation is made, to the best Knowledge of the Seller, the
existing and prior uses of the Transferred Assets comply with, and at all times have complied with,
and the Seller is not in violation of, and has not violated, in connection with the ownership, use,
maintenance or operation of the Transferred Assets, any Environmental or Occupational Safety and
Health Law. Specifically, but not in limitation of the foregoing:



          (a) There are no Encumbrances on any of the Transferred Assets resulting from any Cleanup
or proposed Cleanup under the Environmental Laws.



          (b) Except with respect to a portion of the Jacksonville Facility, no part of the real estate
included in the Transferred Assets constitutes “wetlands” as defined under any Environmental Law or
other law or regulation.



     Section 3.19 Insurance. Schedule 3.19 describes the self-insurance arrangements affecting
the Seller with respect to the Business.



     Section 3.20 Transferred Contracts.



          (a) Other than the Excluded Contracts and the Excluded Purchase Orders, the Transferred
Contracts listed or described on Schedule 2.1(a) are all of the contracts used in or
necessary to conduct the Business in the Relevant Locations as conducted by the Seller prior to the
Closing Date.



          (b) With respect to each Transferred Contract and each Transferred Purchase Order: (i) the
Transferred Contract or Transferred Purchase Order, as applicable (giving effect to the course of
dealing modifications expressly set forth on Schedules 2.1(a) or 2.1(b), as
applicable), is legal, valid, binding and enforceable and in full force and effect with respect to
the Seller, as applicable, and is legal, valid, binding, enforceable and in full force and effect
with respect to each other party thereto to the Knowledge of the Seller (giving effect to the
course of dealing modifications expressly set forth on Schedules 2.1(a) or 2.1(b),
as applicable), in either case subject to the effect of bankruptcy, insolvency, moratorium or other
similar laws affecting the enforcement of creditors’ rights generally and except as the
availability of equitable remedies may be limited by general principles of equity; (ii) the
Transferred Contract or Transferred Purchase Order, as applicable, (giving effect to the course of
dealing modifications expressly set forth on Schedules 2.1(a) or 2.1(b), as
applicable) will continue to be legal, valid, binding and enforceable and in full force and effect
immediately following the Closing in accordance with its terms as in effect prior to the Closing,
subject to the effect of bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and except as the availability of equitable remedies may
be limited by general principles of equity; and (iii) neither the Seller, nor any other party, to
the Knowledge of the Seller, is in breach or default in any material respect, and no event has
occurred (or by entering into this



30









 




Agreement will occur) that with notice or lapse of time would
constitute a breach or default in any material respect by the Seller, or by any such other party,
or permit termination, or modification of, or acceleration of any payment due under, such
Transferred Contract or Transferred Purchase Order, and no notice of any such alleged breach or
default has been served on or received by the Seller.




     Section 3.21 Intellectual Property.



          (a) Schedule 3.21(a)(i) sets forth an accurate and complete list of all registered
Marks and applications for registration of Marks included in the Intellectual Property
(collectively, the “Business Registered Marks”), Schedule 3.21(a)(ii) sets forth an
accurate and complete list of all Patents and applications for Patent included in the Intellectual
Property (collectively, the “Business Patents”) and Schedule 3.21(a)(iii) sets
forth an accurate and complete list of all Copyrights Registrations and all applications for
registration of Copyright Registrations included in the Business Intellectual Property
(collectively, the “Business Registered Copyrights” and, together with the Business
Registered Marks and the Business Patents, the “Business Registered IP”). No Business
Registered IP is involved in any interference, reissue, reexamination, opposition or cancellation
proceeding. All filing, examination, issuance, post registration
and maintenance fees, annuities and the like associated with or required with respect to any
of the Business Registered IP have been paid.



          (b) Except as forth on Schedule 1.2, the Seller owns all right, title and interest in
and to the Business Registered IP, free and clear of any claims, licenses or encumbrances, and, to
the Knowledge of the Seller, all issued Business Registered IP is valid, subsisting and
enforceable. The Seller has not received since April 1, 2006 any notice or claim asserting that
any Intellectual Property is invalid or unenforceable, asserting any encumbrance or other claim
with respect to the Intellectual Property or challenging the Seller’s sole ownership of any
Intellectual Property. No Intellectual Property is subject to any outstanding order, judgment,
decree, stipulation or agreement restricting the use or licensing thereof by the Seller or any
Affiliate thereof or which would restrict the use thereof by the Buyers.



          (c) To the Knowledge of the Seller, none of the products or services distributed, sold or
offered by the Business, nor any activity or conduct of Seller in connection with the Business,
infringes upon or misappropriates any intellectual property right of any third party, and the
Seller has not received within the prior three years any notice or claim (including offers to
license) asserting that any such infringement or misappropriation has or may have occurred. To the
Knowledge of the Seller, no third party is misappropriating or infringing any Intellectual
Property.



          (d) Except as specifically set forth on Schedule 3.21(d), the Seller has not entered
into any license, covenant not to sue, concurrent-use agreement, consent to use or similar
agreement that grants any right to use, or consents to any use of, any Mark included in the
Intellectual Property.



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     Section 3.22 Brokers. No broker, finder or investment banker is entitled to any brokerage,
finder’s or other fee or commission payable by the Buyer in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of the Seller.



     Section 3.23 Customers and Suppliers. Schedule 3.23 lists, by dollar volume paid for the
ten months ended October 23, 2010, the material customers of the Seller and the material suppliers
of the Seller (in each case solely with respect to the Business).



     Section 3.24 Solvency. Immediately after giving effect to the transactions contemplated hereby,
each of the Seller and MMI Products, Inc. shall be able to pay their respective debts as they
become due and shall own property which has a fair saleable value greater than the amounts required
to pay their respective debts (including a reasonable estimate of the amount of all contingent
liabilities). Immediately after giving effect to the transactions contemplated hereby, each of the
Seller and MMI Products, Inc. shall have adequate capital to carry on their respective businesses.
No transfer of property is being made and no obligation is being incurred in connection with the
transactions contemplated by this Agreement with the intent to hinder, delay, or defraud either
present or future creditors of the Seller or MMI Products, Inc.



     Section 3.25 Product Warranties. There are no continuing or outstanding warranties applicable to
goods or products manufactured or sold by the Seller.



     Section 3.26 Related Party Transactions. Except as set forth in Schedule 3.26, the Aldine
Lease, the leases of Tangible Personal Property that are Transferred Contracts, the Transferred
Purchase Orders and the Transferred Contracts do not include any agreement with, or any other
commitment to an Affiliate of the Seller.



     Section 3.27 Names. Since April 1, 2006, except as set forth in Schedule 3.27, during the
term of its existence, the Seller has not been known by or conducted business under any other name.



     Section 3.28 Litigation. Except as set forth on Schedule 3.28, as of the date hereof,
there is no action or proceeding by or against the Seller in connection with the Business or which
could affect the Transferred Assets pending, or to the Knowledge of the Seller, threatened in
writing (a) seeking damages in excess of $100,000, (b) pursuing any criminal sanctions or
penalties, (c) seeking equitable or injunctive relief or (d) that would otherwise, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect or would affect the
legality, validity or enforceability of this Agreement or any Ancillary Agreement or the
consummation of the transactions contemplated hereby or thereby.



     Section 3.29 Exclusivity of Representations and Warranties. Neither the Seller nor any of its
Affiliates or Representatives is making any representation or warranty of any kind or nature
whatsoever, oral or written, express or implied (including, but not limited to, any relating to
financial condition or results of operations of the Business or



32









 




maintenance, repair, condition,
design, performance, value, merchantability or fitness for any particular purpose of the
Transferred Assets), except as expressly set forth in this Agreement and the Ancillary Agreements,
and the Seller hereby disclaims any such other representations or warranties.




ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE BUYER




     The Buyer hereby represents and warrants to the Seller as follows:



     Section 4.1 Organization and Qualification. The Buyer is a corporation duly organized, validly
existing and in good standing under the laws of North Carolina and has all necessary corporate
power and authority to own, lease and operate its properties and to carry on its business as it is
now being conducted. The Buyer is duly qualified or licensed to do business, and is in good
standing, in each jurisdiction where the ownership or operation of the Transferred Assets or the
conduct or operation of the Business after the Closing Date makes such qualification or licensing
necessary, except, in each case, for any such failures that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.



     Section 4.2 Authority. The Buyer has the corporate power and authority to execute and deliver
this Agreement and each of the Ancillary Agreements to which it will
be a party, to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and performance by the Buyer
of this Agreement and each of the Ancillary Agreements to which it will be a party and the
consummation by the Buyer of the transactions contemplated hereby and thereby have been duly and
validly authorized by all necessary corporate action. This Agreement has been, and upon their
execution each of the Ancillary Agreements to which the Buyer will be a party will have been, duly
and validly executed and delivered by the Buyer. This Agreement constitutes, and upon their
execution each of the Ancillary Agreements to which the Buyer will be a party will constitute, the
legal, valid and binding obligations of the Buyer, enforceable against the Buyer in accordance with
their respective terms, except as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally and by general
principles of equity (regardless of whether considered in a proceeding in equity or at law).



     Section 4.3 No Conflict; Required Filings and Consents.



          (a) The execution, delivery and performance by the Buyer of this Agreement and each of the
Ancillary Agreements to which the Buyer will be a party, and the consummation of the transactions
contemplated hereby and thereby, do not and will not:



               (i) conflict with or violate the articles of incorporation or bylaws of the Buyer;



33









 





               (ii) conflict with or violate any Law applicable to the Buyer or by which any property or
asset of the Buyer is bound or affected; or



               (iii) conflict with, result in any breach of, constitute a default (or an event that, with
notice or lapse of time or both, would become a default) under, or require any notice to or consent
of any Person pursuant to, or give to others any rights of termination, acceleration or
cancellation of, any material contract or agreement to which the Buyer is a party;


except, in the case of clause (ii) or (iii), for any such conflicts, violations, breaches, defaults
or other occurrences that would not, individually or in the aggregate, reasonably be expected to
have a Buyer Material Adverse Effect or that arise as a result of any actions of the Seller or any
of its Affiliates.




          (b) The Buyer is not required to file, seek or obtain any notice, authorization, approval,
order, permit or consent of or with any Governmental Authority in connection with the execution,
delivery and performance by the Buyer of this Agreement and each of the Ancillary Agreements to
which it will be a party or the consummation of the transactions contemplated hereby or thereby,
except for where failure to obtain any consent, approval, authorization or action, or to make any
filing or notification, would not, individually or in the aggregate, reasonably be expected to have
a Buyer Material Adverse Effect.



     Section 4.4 Financing. The Buyer has sufficient funds to permit the Buyer to consummate the
transactions contemplated by this Agreement and the Ancillary Agreements. The Buyer has provided
the Seller with accurate and complete copies of materials satisfactory to the Seller evidencing the
Buyer’s possession of sufficient funds for the transactions contemplated by this Agreement.
Notwithstanding anything to the contrary contained herein, the parties acknowledge and agree that
it shall not be a condition to the obligations of the Buyer to consummate the transactions
contemplated hereby that the Buyer have sufficient funds for payment of the Purchase Price.



     Section 4.5 Brokers. Except for Harris Williams, the fees of which will be paid by the Buyer, no
broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or
commission in connection with the transactions contemplated hereby based upon arrangements made by
or on behalf of the Buyer.



     Section 4.6 Buyer’s Investigation and Reliance. The Buyer is not relying on any statement,
representation or warranty, oral or written, express or implied, made by the Seller or its
Affiliates or Representatives, except as expressly set forth in this Agreement and the Ancillary
Agreements. Neither the Seller nor any of its Affiliates or Representatives shall have any
liability to the Buyer or any of its Affiliates or Representatives resulting from the use of any
information, documents or materials made available to the Buyer, whether orally or in writing, in
any confidential information memoranda, “data rooms,” management presentations, due diligence
discussions or in any other form in expectation of the transactions contemplated by this Agreement
except as otherwise set forth in the representations and warranties set forth in this Agreement.



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Neither the Seller nor any of its Affiliates or Representatives is making, directly or indirectly,
any representation or warranty with respect to any estimates, projections or forecasts involving
the Business or the Transferred Assets. The Buyer acknowledges that there are inherent
uncertainties in attempting to make such estimates, projections and forecasts and that it takes
full responsibility for making its own evaluation of the adequacy and accuracy of any such
estimates, projections or forecasts (including the reasonableness of the assumptions underlying any
such estimates, projections and forecasts). The Buyer acknowledges that, except as provided in,
and subject in all respects to the terms and conditions of, this Agreement (including Article III
and the Disclosure Schedules) and in any Ancillary Agreements, the Buyer shall acquire the Business
and the Transferred Assets, on an “as is” and “where is” basis.




ARTICLE V

COVENANTS




     Section 5.1 Employees and Employee Benefits.



          (a) Employment of Business Employees. Effective as of the Closing Date, the Buyer
shall offer employment to all Business Employees listed on Schedule 5.1(a) who are actively
at work with the Seller on the Closing Date. The Seller will encourage such Business Employees to
accept the offer, and will take no action to hinder such acceptance. The Buyer’s offer and the
Business Employee’s acceptance shall be contingent upon the Business Employee’s satisfaction of the
Buyer’s employment
screening. Upon satisfaction of such employment screening, the Business Employee’s employment
by the Buyer shall commence effective as of the Closing Date. A Business Employee whose employment
with the Buyer becomes effective under this Section 5.1(a) shall be referred to herein as a
“Transferred Employee”. The Seller shall pay all amounts due to such Transferred Employees
pursuant to the terms of any Employee Plan as required thereby, excluding all earned vacation. In
all events, the Buyer shall make offers of employment to a sufficient number of Business Employees
to avoid the Seller having any liability under the WARN Act with respect to any Business Employees.



          (b) Severance Obligations.



          (i) The Seller maintains a severance policy, the terms of which are set forth in Schedule
5.1(b)(i). The Seller shall pay severance benefits in accordance with such severance policy to
any Business Employee who either (i) is not offered employment by the Buyer because the Buyer
informs the Seller that it will not hire such Business Employee, or (ii) is offered employment but
does not accept the Buyer’s offer of employment. The Seller shall not pay severance benefits to
any Business Employee who is offered employment by the Buyer but does not satisfy the Buyer’s
employment screening. The terms the Buyer’s employment screening are set forth in the sections
entitled “drugs and alcohol” and “background check” policies set forth in the Buyer’s Employee
Handbook, copies of which policies are attached in Schedule 5.1(b)(ii). The amount paid by
the Seller under the severance policy shall be applied towards any obligation the Seller may have
under the WARN Act. Notwithstanding anything herein to the contrary, the Buyer shall in no case be
responsible for severance-related costs (as defined in Section



35









 




5.1(b)(ii), below) incurred by the
Seller with respect to the Seller’s president and chief financial officer.




          (ii) Within thirty (30) days after receiving an itemized invoice from the Seller, the Buyer
shall reimburse the Seller for all “severance-related costs” paid by the Seller to Business
Employees in accordance with Section 5.1(b)(i), up to a total of $2,000,000 (the “Severance Cap”).
The Buyer shall not be obligated to reimburse the Seller for any severance-related costs incurred
by the Seller other than in accordance with the terms of the severance policy as set forth in
Schedule 5.1(b)(i). In addition, the Buyer shall pay severance-related costs in accordance with
the Seller’s severance policy specified on Schedule 5.1(b)(i) to any Transferred Employee whose
employment with the Buyer terminates within six (6) months following the Closing Date under
circumstances entitling the Transferred Employee to benefits under such policy (or as otherwise
provided in a letter agreement assumed by the Buyer). To the extent that the Buyer’s aggregate
severance-related costs under Section 5.1(b) (including, for the avoidance of doubt, any
reimbursement it pays to the Seller pursuant hereto) exceed the Severance Cap, the Seller shall
reimburse the Buyer therefor within thirty (30) days after receiving an invoice from the Buyer.
For purposes of this Section 5.1, “severance related costs” shall include severance pay and
outplacement benefits paid by the Seller or the Buyer in accordance with the Seller’s severance
policy, plus the amount of any subsidy paid by the Seller on behalf of a terminated Business
Employee, or by the Buyer on behalf
of a terminated Transferred Employee, pursuant to a separation agreement towards the premium
for COBRA health benefits.



          (c) Employee Welfare Benefits. The Transferred Employees shall cease participating in
the Employee Plans at 11:59 p.m. on the Closing Date, except that their participation under the
Seller’s group health plan shall be deemed to continue) in accordance with the provisions of
subsection (d). The Buyer agrees that the Transferred Employees will be eligible to commence
participation in the Buyer’s employee welfare benefit plans for which they are eligible, other than
the Buyer’s group health plan (the “Buyer Employee Plans”) as of 12:01 a.m. on the day
immediately following the Closing Date.



          (d) Transition Health Benefits. The Transferred Employees shall continue to
participate in the Seller’s group health plan under the health care continuation law known as
“COBRA” from the Closing Date through December 31, 2010 (the “transition period” During the
transition period, the Buyer shall pay to the Seller’s health plan the aggregate amount of the
COBRA premium for coverage of the Transferred Employees and their eligible dependents and
beneficiaries. The Buyer may, at its option, withhold the amount of the Transferred Employees’
regular contribution as in effect immediately before the Closing for such coverage from their
compensation paid by the Buyer during the transition period. The Buyer agrees that the Transferred
Employees will be eligible to commence participation in a group health plan sponsored by the Buyer
no later than the day following the end of the transition period. Within three hundred
and sixty-five (365) days following the end of the transition period, the Seller shall provide the
Buyer with an itemized accounting of the claims incurred under the Seller’s group health plan
during the transition period with respect to Transferred Employees and their eligible



36









 




dependents
and beneficiaries. If the total amount of such claims incurred during the transition period
exceeds the total of the premiums paid by the Buyer to the Seller’s health plan during the
transition period (disregarding for this purpose any amount collected from Transferred Employees’
compensation during the period), the Buyer will pay the amount of the excess to the Seller within
fifteen (15) business days following the date the Seller provides the itemized report. If the
total amount of the claims incurred is less than the total of the premiums paid by the Buyer, then
the Seller will pay the difference to the Buyer within fifteen days of providing the itemized
report. For purposes of this report, a claim will be deemed to be incurred on the date that
services giving rise to a claim for reimbursement under the Seller’s group health plan are
rendered, regardless of the date of onset of the disease or condition giving rise to the claim, and
without regard to when the claim is paid.




          (e) 401(k) Retirement Plan. The Buyer maintains a Tax-qualified defined contribution
plan with a salary reduction arrangement, the terms of which meet the requirements of Sections
401(a) and 401(k) of the Code (the “Buyer Savings Plan”). Each Transferred Employee who is
eligible to contribute to the Seller’s Tax-qualified defined contribution plan (the “Seller
Savings Plan”) on the Closing shall be eligible to contribute to the Buyer Savings Plan
commencing with the first payroll period ending on or after January 12, 2011. As soon as
practicable following the Closing Date, but no later than 120
days following the Closing Date, the Seller shall cause the Seller Savings Plan to transfer to
the Buyer Savings Plan the accounts (including outstanding loans) of all Transferred Employees who
are still employed by the Buyer on the date of the transfer. In addition, from the Closing Date
through the date of such asset transfer, the Buyer shall, subject to employee consent, withhold
from the paychecks of Transferred Employees with outstanding loans under the Seller Savings Plan
the required amount of all loan repayments and promptly remit such withholdings to the trustee of
the Seller Savings Plan. The Sellers agree to reimburse the Buyers for any future contributions
required under the Buyer Savings Plan as a result of any administrative errors under the Seller
Savings Plan prior to the Closing Date.



          (f) WARN Act. The Seller shall comply with all requirements of the WARN Act in
connection with its termination of any Business Employees and any other employees, and the Buyer
shall comply with all requirements of the WARN Act in connection with its termination of employment
of any Transferred Employees and any other employees. Amounts paid by the Buyer (i) under Buyer’s
severance policy or (ii) pursuant to Section 5.1(b)(ii), in accordance with the Seller’s severance
policy specified on Schedule 5.1(b)(i) to any Transferred Employee whose employment with the Buyer
terminates within six (6) months following the Closing Date under circumstances entitling the
Transferred Employee to benefits under such policy (or as otherwise provided in a letter agreement
assumed by the Buyer), shall apply towards any obligation the Buyer may have under the WARN Act.
For the avoidance of doubt, amounts paid by the Buyer in respect of its own WARN Act liabilities
shall be applied towards the Severance Cap. Notwithstanding the foregoing, if the Seller becomes
subject to the WARN Act as a result of actions taken by the Buyer after the Closing, the Buyer
shall be responsible for any liabilities incurred by the Seller with respect thereto. In
addition, the Buyer shall be solely responsible for any liabilities arising under the WARN Act at
the Aldine Facility.



37









 





          (g) COBRA. The Buyer shall be responsible for all obligations for continuation
coverage under Section 601 et seq. of ERISA (“COBRA Obligations”) with respect to the
Transferred Employees and their qualified beneficiaries whose qualifying event occurs after the
Closing Date. The Seller shall retain all COBRA obligations for (i) all Business Employees who do
not become Transferred Employees, including Business Employees who incurred a qualifying event
under COBRA prior to or in connection with the Closing; and (ii) all Business Employees who are not
actively at work on the Closing Date and do not become Transferred Employees for any reason.



          (h) Wage Reporting. Seller and Buyer agree to utilize the standard procedure set
forth in Rev. Proc. 2004-53 with respect to wage reporting for Transferred Employees who are
employed by Buyer following the Closing Date.



     Section 5.2 Confidentiality. Each of the parties shall hold, and shall cause its Representatives
to hold, in confidence all documents and information furnished to it by or on behalf of the other
party in connection with the transactions contemplated hereby pursuant to the terms of the
confidentiality agreement dated June 28, 2010, between the Buyer and the Seller (the
“Confidentiality Agreement”), which shall continue in full force and effect until the
Closing Date, at which time such Confidentiality Agreement and the obligations of the parties under
this Section 5.2 shall terminate; provided, however, that after the Closing Date,
the Confidentiality Agreement shall terminate only in respect of that portion of the Evaluation
Material (as defined in the Confidentiality Agreement) exclusively relating to the transactions
contemplated by this Agreement.



     Section 5.3 Use of Names.



          (a) Subject to the terms of Section 5.3(b), on the Closing Date, the Seller shall cease to use
the Intellectual Property transferred to the Buyer as part of the Transferred Assets, including its
rights to use the names “Ivy Steel & Wire,” “Steeltex” and “Varigrid.” Promptly after the Closing
Date, the Seller shall take all actions necessary to change its name, including filing with
secretaries of state amendments to its organizational and governing documents.



          (b) Notwithstanding anything set forth in this Agreement, the Buyer acknowledges and agrees
that, after the Closing Date, the Seller shall use the name “Steeltex” in order to sell the
Steeltex Inventory until such inventory is depleted and the Buyer hereby grants the Seller a
limited, non-exclusive license for such use.



     Section 5.4 Refunds and Remittances.



          (a) After the Closing: (i) if the Seller or any of its Affiliates receive any refund or other
amount that is a Transferred Asset or is otherwise properly due and owing to the Buyer in
accordance with the terms of this Agreement, the Seller promptly shall remit, or shall cause to be
remitted, such amount to the Buyer; and (ii) if the Buyer or any of its Affiliates receive any
refund or other amount that is an Excluded Asset or is otherwise properly due and owing to the
Seller or any of its Affiliates in accordance with the terms of this Agreement, including, without
limitation any payments with respect to



38









 




any accounts receivable, the Buyer promptly shall remit, or
shall cause to be remitted, such amount to the Seller.




          (b) Without limiting the generality of the foregoing, for the 4-month period beginning on the
Closing Date, the Buyer shall use commercially reasonable efforts consistent with Buyer’s practice
with respect to its own receivables to collect the Receivables on behalf of the Seller and the
proceeds thereof shall be remitted to the Seller once per month on the first business day of the
month for the collections during the immediately preceding month. Any payments not specifically
designated by the customer as payment for a specific invoice shall be applied to the oldest
outstanding service charge and then to the oldest outstanding invoice; provided that the
Buyer shall not and shall not explicitly or implicitly encourage customers to give precedence to
payment of receivables of the Buyer over the Receivables. Nothing herein shall be construed to
prevent the Seller from pursuing collection actions directly with account debtors.



     Section 5.5 No Solicitation. The Buyer will not, for a period of eighteen (18) months following
the Closing Date, without the prior written consent of the Seller,
either alone or in conjunction with any other Person, directly or indirectly, or through its
present or future Affiliates, solicit (other than a solicitation by general advertisement) any
person who is an employee of the Seller or any of its Affiliates, at the date hereof or at any time
hereafter that precedes the Closing or such termination, to terminate his or her employment with
the Seller or such Affiliate, except as expressly permitted or required by Section 5.1 of this
Agreement. The Buyer agrees that any remedy at law for any breach by the Buyer of this Section 5.5
would be inadequate, and that the Seller would be entitled to injunctive relief in such a case. If
it is ever held that this restriction on the Buyer is too onerous and is not necessary for the
protection of the Seller, the Buyer agrees that any court of competent jurisdiction may impose such
lesser restrictions which such court may consider to be necessary or appropriate properly to
protect the Seller.



     Section 5.6 Noncompetition and Nonsolicitation. As an inducement for the Buyer to enter into this
Agreement and as additional consideration for the consideration to be paid to the Buyer under this
Agreement, each of the Seller and the Guarantor agrees that:



          (a) For a period of three (3) years after the Closing:



               (i) Neither the Seller nor the Guarantor will, directly or indirectly, engage or invest in,
own, manage, operate, finance, control or participate in the ownership, management, operation,
financing or control of, be employed by, associated with or in any manner connected with, or render
services or advice or other aid to, or guarantee any obligation of, any Person engaged in or
planning to become engaged in the Business or any other business whose products or activities
compete in whole or in part with the Business anywhere in the United States of America;
provided, however, that either of the Seller or the Guarantor may purchase or
otherwise acquire up to (but not more than) one percent of any class of securities of any
enterprise (but without otherwise participating in the activities of such enterprise) if such
securities are listed on any national or regional securities exchange or have been registered under
Section 12(g) of the



39









 




Securities Exchange Act of 1934, as amended. Each of the Seller and the
Guarantor agrees that this covenant is reasonable with respect to its duration, geographical area
and scope.




               (ii) Neither the Seller nor the Guarantor will, for a period of eighteen (18) months following
the Closing Date, without the prior written consent of the Buyer, either alone or in conjunction
with any other Person, directly or indirectly, or through its present or future Affiliates, solicit
(other than a solicitation by general advertisement) any person who is an employee of the Buyer or
any of its Affiliates, at Closing Date, to terminate his or her employment with the Buyer or such
Affiliate.



          (b) In the event of a breach by either of the Seller or the Guarantor of any covenant set
forth in the foregoing Section 5.6(a), the term of such covenant will be extended by the period of
the duration of such breach.



          (c) Each of the Seller and the Guarantor agrees that any remedy at law for any breach by
either the Seller or the Guarantor of this Section 5.6 would be inadequate, and that the Buyer
would be entitled to injunctive relief in such a case. If it is
ever held that this restriction on the Seller or the Guarantor is too onerous and is not
necessary for the protection of the Buyer, the Seller and the Guarantor agree that any court of
competent jurisdiction may impose such lesser restrictions which such court may consider to be
necessary or appropriate properly to protect the Buyer.



          (d) Notwithstanding anything set forth in this Agreement, the Buyer acknowledges and agrees
that the Seller, the Guarantor or any of their Affiliates may (i) at any time, produce any products
that compete in whole or in part with the Business for use by the Seller, the Guarantor or any of
their Affiliates as components of or as a source of supply for or in connection with their
respective businesses and (ii) sell their remaining inventory of PC Strand products and the
Steeltex Inventory.



     Section 5.7 Bulk Sales. Subject to the provisions of this Agreement relating to Transfer Taxes,
the parties agree to waive the requirements, if any, of all applicable bulk sales laws. As an
inducement to the Buyer to enter into such waiver, the Seller represents and warrants that it will
not be rendered insolvent by the transactions contemplated by this Agreement.



     Section 5.8 Public Announcements. The Seller and the Buyer have agreed to issue the press
release(s) substantially in the form attached hereto as Exhibit J, announcing the
transactions contemplated hereby. In connection with the transactions contemplated by this
Agreement, Insteel Industries, Inc. may make such announcements, disclosures and filings, and
furnish such documents, as it deems necessary or appropriate in connection with its status as a
publicly traded corporation.



     Section 5.9 Delivery of Audited Financial Information.



          (a) The Seller has engaged Ernst & Young LLP, an independent registered public accounting firm
(as defined by the Sarbanes-Oxley Act of 2002) (the “Transferred Assets Auditor”). The
Seller shall (i) cause such Transferred Assets Auditor to prepare and timely deliver to the Buyer:
(A) audited financial statements and the notes



40









 




relating thereto (and the Transferred Assets
Auditor’s reports and unqualified opinions thereon) related to the Seller, including the operations
relating to the Pilot Steel Facility, for the fiscal years ended December 27, 2008 and December 26,
2009 and the nine-month period ended September 25, 2010, that meet the requirements for audited
financial statements under accounting principles generally accepted in the United States (“GAAP”)
and Regulation S-X promulgated by the United States Securities and Exchange Commission (the
“SEC”), in sufficient form, scope and substance so that they may be (x) timely filed as an
exhibit to a Current Report on Form 8-K (or a timely filed amendment thereto) of the Buyer’s parent
so that the Buyer may satisfy the SEC’s financial statement reporting requirements triggered by the
transactions covered by this Agreement (the “Form 8-K”) and (y) used and relied upon in the
preparation of the Annual Report on Form 10-K for the year ending October 1, 2011 of the Buyer’s
parent (the “Form 10-K”), and (B) any consents needed in order to permit the Buyer’s parent to
include such financial statements, opinions and reports thereon in any existing or subsequent
governmental filings (including, without limitation, any registration statements of the Buyer’s
parent that are on file or that the
Buyer’s parent may file with the SEC) ((A) and (B) together, the “Audited Financial
Statements”); and (ii) provide all associated pro forma adjustments and pro forma financial
statements to the Audited Financial Statements for the fiscal periods noted in (a)(i)(A) hereof, in
compliance with Regulation S-X and GAAP, necessary to exclude assets not purchased by the Buyer and
other related amounts in sufficient form, scope and substance so that such pro forma adjustments
and pro forma financial statements may be (x) timely filed as or included with an exhibit to the
Form 8-K and (y) used and relied upon in the preparation of the Form 10-K (the “Pro Forma
Adjustments”). The Seller shall provide to the Buyer written status reports prepared by the Seller
with respect to the preparation of the Audited Financial Statements and Pro Forma Adjustments no
less than once each week immediately following the date the Agreement is executed and shall
promptly provide the Buyer with written notification if the Transferred Assets Auditor, or the
Seller itself, expresses a doubt or concern that the Audited Financial Statements or the Pro Forma
Adjustments will not be delivered prior to the Financial Statement Deadline. The Seller shall
deliver to the Buyer the Audited Financial Statements and Pro Forma Adjustments described in the
preceding sentences on or before the seventieth (70th) day after the Closing Date (the
“Financial Statement Deadline”).




          (b) In addition to the foregoing, if requested by the Buyer, the Seller shall procure and
deliver at its own expense, within forty-five (45) days of any such request, such other financial
statements, financial information, audit work papers and related information and documentation
related to the Seller, including the operations relating to the Pilot Steel Facility and the pro
forma adjustments to the Audited Financial Statements necessary to exclude assets and other items
not purchased by the Buyer, in compliance with Regulation S-X and GAAP, as may be reasonably
requested or required by the Transferred Assets Auditor, Grant Thornton LLP (or such other
independent registered public accounting firm designated by the Buyer) or the SEC in connection
with the Buyer’s need to satisfy the SEC’s compliance, disclosure and reporting obligations (the
“Other Financial Materials”). Such Other Financial Materials shall be sufficient in form,
scope and substance for such purposes as requested or required, and shall include customary
consents, opinions and reports related thereto. For purposes of clarity and the avoidance of
doubt, the Seller shall be subject to the obligations set forth in this Section



41









 




5.9(b) until the
Buyer’s parent files its Annual Report on Form 10-K for the year ending October 1, 2011.




          (c) The Seller shall direct the Transferred Assets Auditor to coordinate and cooperate with
the Buyer’s independent registered public accounting firm as to the scope and conduct of any audit
services to be rendered in connection with the preparation of any audited or unaudited financial
statements required under or as a result of this Agreement and as to the thresholds or other
standards to be applied in determining the fiscal periods to be provided and the materiality of any
adjustment or other item. In addition, the Seller shall make available to the Buyer and the
Buyer’s independent registered public accounting firm appropriate personnel on a reasonable basis
to assist in the preparation of the Audited Financial Statements, Pro Forma Adjustments and Other
Financial Materials contemplated by this Section 5.9 and shall cooperate with the Buyer with
respect to any reasonable request (including such access, information and records as
may reasonably be requested) in connection with the obligations of the Buyer to prepare and
file with the SEC the financial statements and information required to satisfy its public reporting
obligations, including but not limited to the Audited Financial Statements, the Pro Forma
Adjustments and the Other Financial Materials. The Buyer shall reimburse the Seller for the
reasonable actual out-of-pocket fees and costs of the Transferred Assets Auditor incurred in
accordance with the Engagement Letter and in connection with the preparation and delivery of the
Audited Financial Statements and Other Financial Materials. Such payment shall be made promptly
upon receipt of invoices, billing statements and other reasonable supporting information received
by the Buyer after delivery of the Audited Financial Statements described in this Section 5.9. For
purposes of clarity and the avoidance of doubt, the Seller shall be subject to the obligations set
forth in this Section 5.9(c) until the Buyer’s parent files its Annual Report on Form 10-K for the
year ending on October 1, 2011.



          (d) The Transferred Assets Auditor has delivered to the Buyer a copy of the engagement letter
pursuant to which the Transferred Assets Auditor has been engaged to provide the Audited Financial
Statements (the “Engagement Letter”). The Seller hereby represents and warrants that (i)
the Engagement Letter provided to the Buyer is true, correct and complete, that such letter has not
been amended, modified or terminated as of the date hereof and that such Engagement Letter sets
forth a true and complete description of the Transferred Assets Auditor’s engagement; and (ii) the
audit committee (or similar body) of the board of directors of the parent company of Seller has
discussed with the Transferred Assets Auditor the independence of the Transferred Assets Auditor.



          (e) The Buyer and the Seller acknowledge and agree that the Buyer would not have entered into
this Agreement unless the Buyer had received assurances that the Audited Financial Statements and
the Pro Forma Adjustments would be provided on or before the Financial Statement Deadline. The
Seller represents and warrants to the Buyer that the Seller is not aware of any fact, condition or
circumstance that will prevent or delay the Transferred Assets Auditor from providing the Audited
Financial Statements to the Buyer, or the Seller from providing the Pro Forma Adjustments, prior to
the Financial Statement Deadline. Both (i) the delivery of the Audited Financial Statements and
the Pro Forma Adjustments and (ii) the timeliness of such delivery are of great value and



42









 




importance to the Buyer. Accordingly, in the event that (i) the Audited Financial Statements and
the Pro Forma Adjustments prepared in accordance with this Section 5.9 are not received by the
Buyer on or before the Financial Statement Deadline and (ii) the Buyer does not and reasonably
could not file such Audited Financial Statements or the Pro Forma Adjustments with the SEC on a
timely basis due to the Seller’s failure to comply with the Financial Statement Deadline, then, the
outstanding principal amount of the Seller Note shall immediately (and without further action by
any party) be reduced by $5,000,000 (the “Purchase Price Reduction”). Of the consideration
defined in Section 2.5, $5,000,000 is specifically allocated as consideration for receiving the
Audited Financial Statements and the Pro Forma Adjustments described in this Section 5.9 on or
before the Financial Statement Deadline; the failure of the Seller to deliver the Audited Financial
Statements or the Pro Forma Adjustments on or before the Financial Statement Deadline will
constitute a failure of this consideration, which will
result in the Purchase Price Reduction, said reduction to be accomplished by the reduction of
the outstanding principal amount of the Seller Note as described above.




          (f) The foregoing adjustment of the outstanding principal amount of the Seller Note in the
event the Audited Financial Statements or the Pro Forma Adjustments are not delivered to the Buyer
by the Financial Statement Deadline shall not relieve the Seller from its obligation to ultimately
cause the production thereof after the Financial Statement Deadline and shall not limit the Buyer’s
right to maintain an action for breach of this Section 5.9 seeking specific performance as further
explained below. The Buyer and the Seller acknowledge and agree that the Seller’s performance of
its obligations under this Section 5.9 is critical to the Buyer’s parent remaining in compliance
with Laws (including without limitation the regulations and rules promulgated by the SEC) and that
money damages would not be a sufficient remedy to fully compensate the Buyer and its parent for a
failure by the Seller to perform its obligations under this Section 5.9 or a complete failure to
produce the Audited Financial Statements, the Pro Forma Adjustments and the Other Financial
Materials. Accordingly, the Seller agrees and consents to a court of competent jurisdiction
entering an order finding that the Buyer and its parent are without an adequate remedy at law as a
result of the failure by the Seller to perform its obligations under this Section 5.9 and to the
granting of an order or decree of specific performance requiring the Seller (i) to provide the Pro
Forma Adjustments and Other Financial Materials, (ii) to direct the Transferred Assets Auditor to
perform any and all actions reasonably necessary to deliver, as soon as possible, the Audited
Financial Statements and (iii) to use its best efforts to cooperate with the Transferred Assets
Auditor and to facilitate production of the Audited Financial Statements, Pro Forma Adjustments and
Other Financial Materials, as soon as possible and in each case without proof of actual damages as
a remedy for any such breach. Such remedies and the Purchase Price Reduction shall be the
exclusive remedies for the Buyer’s failure to receive the Audited Financial Statements, the Pro
Forma Adjustments and the Other Financial Materials or any other breach by the Seller of Section
5.9, whether at law or equity or otherwise.



     Section 5.10 Further Assurances. The Seller shall execute and deliver all such further instruments
of conveyance, assignment and further assurances, and shall take all such further acts, and provide
such further information, as may be reasonably requested by Buyer, in order to sell, transfer,
convey, assign and deliver to the Buyer all of Seller’s



43









 




right, title and interest in and to the
Transferred Assets or to otherwise carry out the provisions and intent of this Agreement and the
Ancillary Agreements. The Seller specifically agrees that it shall cause its Affiliates that hold,
control or use the Transferred Assets, or in whose name any such assets may be titled, to promptly
take any and all such actions, and execute and deliver all instruments of conveyance, assignment
and further assurances, to deliver to the Buyer (and vest title in the Buyer) all Transferred
Assets.




ARTICLE VI

TAX MATTERS




     Section 6.1 Apportionment of Taxes. The Seller shall be responsible for and pay any Taxes of the
Business acquired by the Buyer relating to periods (or portions thereof) ending at or before the
Effective Time. The Buyer shall be responsible for any
Taxes of the Business relating to periods (or portions thereof) beginning after the Effective
Time. For the sole purpose of appropriately apportioning any Taxes relating to a period that
includes (but that does not end on) the Closing Date, the portion of such Tax (or refund of such
Tax) that is attributable to the portion of such period that ends at the Effective Time shall be
(a) in the case of a Tax that is not transaction-based (e.g., real and personal property Taxes),
the total amount of such Tax for the full Tax period that includes the Closing Date multiplied by a
fraction, the numerator of which is the number of days from the beginning of such Tax period to and
including the Closing Date and the denominator of which is the total number of days in such full
Tax period and (b) in the case of a Tax that is transaction-based (e.g., income Taxes, employment
Taxes and sales Taxes), the Tax that would be due with respect to such partial period, if such
partial period were a full Tax period, apportioning income, gain, expenses, loss, deductions and
credits equitably based on an interim closing of the books.



     Section 6.2 Transfer Taxes. Each party shall be responsible for one half of all stamp, transfer,
documentary, sales and use and value added Taxes (and similar Taxes ordinarily arising upon asset
transfers), if any, that are actually incurred as a result of the purchase and the sale of the
Transferred Assets (collectively, “Transfer Taxes”). The Buyer and the Seller agree to cooperate in
the preparation and filing of any tax returns with respect to Transfer Taxes. Notwithstanding the
foregoing, if and to the extent that such Transfer Taxes are incurred as a result of a breach of
(a) a Seller representation or warranty with Knowledge of the inaccuracy or incompleteness thereof,
or (b) a Seller covenant, in each case under this Agreement or the Ancillary Agreements, then in
any such case the Seller shall pay all such Transfer Taxes. Furthermore, the Seller shall bear no
indemnification for Losses resulting from breaches of the representations in the final two
sentences of Section 3.4 or the final sentence of Section 3.6, other than for Transfer Taxes and
directly related Losses such as penalties, interest, and associated professional fees (which shall
be treated as Excluded Liabilities under Article VIII).


Section 6.3 Tax Returns. Except as set forth below, the Buyer shall not file or amend any Tax Return
with respect to any tax period or portion thereof ending on or before the Closing Date in respect
of the Seller’s Business without the prior written consent of the Seller, such Seller consent not
to be unreasonably withheld, conditioned, or delayed. For purposes of the preceding sentence, Tax
Return means any federal, state,




44









 







local or foreign return, declaration, report, statement,
information statement, declaration of estimated Tax, election and any other document, supporting
schedule, records and data required to be filed with respect to Taxes. Notwithstanding anything to
the contrary in this Agreement, the Buyer may file or amend a Tax Return with respect to a tax
period or portion thereof ending on or before the Closing Date in respect of the Seller’s Business
without the prior written consent of the Seller, and the Seller shall nevertheless have an
indemnification obligation with respect to any Losses (as Excluded Liabilities) therefrom, if (a)
such filing or amendment is made after a Governmental Authority, on its own initiative, contacts
the Buyer regarding such pre-Closing period taxes, (b) the Buyer investigates such pre-Closing
period taxes and determines that there is sufficient question with respect thereto in order to
merit a request for an opinion of a state tax professional regarding same and (c) such professional
renders a written opinion that (i) such filing or
amendment is legally required and (ii) a post-Closing filing requirement would also apply to Buyer
with respect to such taxes in such jurisdiction. The Buyer shall submit a written proposal to the
Seller of a tax professional to render such an opinion to the Buyer. If the Seller does not object
to such proposal in writing within ten (10) days of such proposal, then the Seller shall be deemed
to have accepted such selection, and the professional fees for such opinion shall be borne wholly
by the Buyer, except as set forth in the last sentence of this Section 6.3. If the Seller
communicates to the Buyer its written disagreement with such selection prior to the close of
business on such tenth day, then the parties shall mutually and reasonably agree upon an
alternative professional, such agreement to be reached by no later than the fifteenth (15th) day
following the Buyer’s original proposal. The costs of the opinion rendered by the agreed-upon
professional shall be borne evenly by the parties, except as set forth in the next sentence. If
the professional rendering the opinion determines that the filing or amendment is required, the
professional fees for the opinion shall be Losses fully indemnifiable by the Seller as Excluded
Liabilities under Article VIII.




ARTICLE VII

CLOSING DELIVERABLES




     Section 7.1 Deliverables by the Seller. At the Closing, the Seller shall deliver to the Buyer:



          (a) signed counterparts of this Agreement and each of the Ancillary Agreements, each duly
executed and acknowledged by the Seller and any applicable Affiliates of the Seller;



          (b) documents of title for the Transferred Assets, if any;



          (c) those Exemption Certificates which by their terms call for the Seller’s signature, each
duly executed and acknowledged by the Seller and any applicable Affiliates of the Seller;



          (d) a certification of non-foreign status executed by the Seller and satisfying the
requirements of Section 1.1445-2(b)(2)(i) of the United States Treasury Regulations;



45









 





          (e) the Engagement Letter, duly executed by the Seller and the Transferred Assets Auditor;



          (f) a certificate dated the Closing Date executed by the Secretary of the Seller certifying as
to the director, stockholder and other resolutions authorizing this Agreement and the Ancillary
Agreements to which the Seller is a party, in form reasonably satisfactory to the Buyer; and



          (g) a certificate dated the Closing Date executed by the Secretary of the Guarantor certifying
as to the director, stockholder and other resolutions authorizing this Agreement and the Ancillary
Agreements to which the Guarantor is a party, in form reasonably satisfactory to the Buyer.



     Section 7.2 Deliverables by the Buyer. At the Closing, the Buyer shall deliver to the Seller:



          (a) the Closing Date Payment;



          (b) a signed counterpart of this Agreement and each of the Ancillary Agreements, each duly
executed and acknowledged by the Buyer;



          (c) a duly executed Seller Note, signed by the Buyer;



          (d) those Exemption Certificates which by their terms call for the Buyer’s signature, each
duly executed and acknowledged by the Buyer; and



          (e) a certificate dated the Closing Date executed by the Secretary of the Buyer certifying as
to the director, stockholder and other resolutions authorizing this Agreement and the Ancillary
Agreements to which the Buyer is a party, in form reasonably satisfactory to the Seller.



ARTICLE VIII

INDEMNIFICATION




     Section 8.1 Indemnification by the Seller. The Seller shall save, defend, indemnify and hold
harmless the Buyer and its Affiliates, officers, directors, employees, agents, successors and
assigns (collectively, the “Buyer Indemnified Parties”) from and against any and all
losses, damages (excluding any of the foregoing that constitute punitive damages or liabilities,
except to the extent included in a Third Party Claim), liabilities, claims, awards, judgments,
penalties, interest, fines, costs and expenses (including, without limitation, costs of
investigating, preparing or defending applicable claims or proceedings and reasonable legal fees,
consulting fees and disbursements), as and when incurred by such parties and whether or not related
to a Third Party Claim (hereinafter collectively and generically, “Losses”) to the extent
resulting from:



          (a) any breach or inaccuracy of any representation or warranty made by the Seller contained in
this Agreement;



46









 





          (b) noncompliance with any bulk sales laws or fraudulent transfer law (including, without
limitation, 11 U.S.C. Section 548 and comparable state laws);



          (c) any brokerage or finder’s fees or commissions or similar payments based upon any agreement
or understanding made, or alleged to have been made, by any Person with the Seller in connection
with the transactions contemplated by this Agreement;



          (d) any breach of any covenant or agreement by the Seller or its Affiliates contained in this
Agreement; and



          (e) any Excluded Liability.



     Section 8.2 Indemnification by the Buyer. The Buyer shall save, defend, indemnify and hold
harmless the Seller and its Affiliates, officers, directors, employees, agents, successors and
assigns (collectively, the “Seller Indemnified Parties”) from and against any and all
Losses incurred by such parties to the extent resulting from:



          (a) any breach or inaccuracy of any representation or warranty made by the Buyer contained in
this Agreement;



          (b) any breach of any covenant or agreement by the Buyer contained in this Agreement; and



          (c) any Assumed Liability.



     Section 8.3 Procedures.



          (a) In order for a Buyer Indemnified Party or Seller Indemnified Party (the “Indemnified
Party”) to be entitled to any indemnification provided for under this Agreement as a result of
a Loss or a claim or demand made by any Person against the Indemnified Party (a “Third Party
Claim”), such Indemnified Party shall deliver notice thereof to the party against whom
indemnity is sought (the “Indemnifying Party”) as soon as practicable after receipt by such
Indemnified Party of written notice of the Third Party Claim, describing in reasonable detail the
facts giving rise to any claim for indemnification hereunder, the amount or method of computation
of the amount of such claim (if known) and such other information with respect thereto as the
Indemnifying Party may reasonably request. The failure to provide such notice (and any delay with
respect thereto), however, shall not release the Indemnifying Party from any of its obligations
under this Article VIII except to the extent that the Indemnifying Party is prejudiced by such
failure.



          (b) The Indemnifying Party shall have the right, upon written notice to the Indemnified Party
within fifteen (15) days of receipt of notice from the Indemnified Party of the commencement of
such Third Party Claim, to assume the defense thereof at the expense of the Indemnifying Party with
counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnified Party.
If the Indemnifying Party assumes the defense of such Third Party Claim, the Indemnified Party
shall have the right to employ separate counsel and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of the Indemnified Party;
provided, that if in the reasonable



47









 




opinion of counsel for the Indemnified Party, there is
a conflict of interest between the Indemnified Party and the Indemnifying Party, the Indemnifying
Party shall be responsible for the reasonable fees and expenses of one counsel to such Indemnified
Party in connection with such defense. If the Indemnifying Party assumes the defense of any Third
Party Claim, the Indemnified Party shall (y) cooperate with the Indemnifying Party in such defense
and make available to the Indemnifying Party all witnesses, pertinent records, materials and
information in the Indemnified Party’s possession or under the Indemnified Party’s control relating
thereto as is reasonably required by the Indemnifying
Party; and (z) not compromise or settle any such Third Party Claim without the prior written
consent of the Indemnifying Party not to be unreasonably withheld or delayed. The Indemnifying
Party shall not compromise or settle any such Third Party Claim, and shall not enter into any
settlement negotiations in connection therewith, without the prior written consent of the
Indemnified Party not to be unreasonably withheld or delayed. The Indemnified Party may, at its
own cost, participate in the investigation, trial and defense of any such proceeding defended by
the Indemnifying Party and any appeal arising therefrom and employ its own counsel in connection
therewith. The parties shall cooperate with each other in connection with any defense and in any
notifications to insurers. If the Indemnifying Party fails to promptly and diligently assume the
defense of such proceeding after receipt of notice hereunder, the Indemnified Party against which
such Third Party Claim has been asserted shall (upon delivering notice to such effect to the
Indemnifying Party) have the right to undertake the defense, compromise or settlement of such
proceeding with counsel of its own choosing and the Indemnifying Party shall have the right to
participate therein at its own cost. The Indemnified Party shall provide prompt notice to the
Indemnifying Party in the event of any compromise or settlement entered into pursuant to the
immediately preceding sentence. Losses shall be paid within five (5) Business Days of the final
determination of the merits and amount of a Third Party Claim.




          (c) In the event any Indemnified Party should have a claim against any Indemnifying Party
hereunder that does not involve a Third Party Claim being asserted against or sought to be
collected from such Indemnified Party, the Indemnified Party shall deliver notice of such claim as
soon as practicable following notice thereof to the Indemnifying Party, describing in reasonable
detail the facts giving rise to any claim for indemnification hereunder, the amount or method of
computation of the amount of such claim (if known) and such other information with respect thereto
as the Indemnifying Party may reasonably request. The failure to provide such notice (and any
delay with respect thereto), however, shall not release the Indemnifying Party from any of its
obligations under this Article VIII except to the extent that the Indemnifying Party is prejudiced
by such failure. The Indemnified Party shall reasonably cooperate and assist the Indemnifying
Party in determining the validity of any claim for indemnity by the Indemnified Party and in
otherwise resolving such matters. Such assistance and cooperation shall include providing
reasonable access to and copies of information, records and documents relating to such matters,
furnishing employees to assist in the investigation, defense and resolution of such matters and
providing legal and business assistance with respect to such matters.



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     Section 8.4 Limits on Indemnification.



          (a) No claim may be asserted against either party for breach of any representation, warranty
or covenant contained herein unless written notice of such claim is received by such party,
describing in reasonable detail the facts and circumstances with respect to the subject matter of
such claim on or prior to the date on which the representation, warranty or covenant on which such
claim is based ceases to survive as set forth in Section 8.6, in which case such representation,
warranty or covenant shall survive as to such claim until such claim has been finally resolved.



          (b) Notwithstanding anything to the contrary contained in this Agreement but subject to
Section 8.4(f) and Section 8.8:



               (i) the maximum aggregate amount of indemnifiable Losses that may be recovered from the Seller
by the Buyer Indemnified Parties pursuant to Section 8.1(a) shall be $6,600,000;



               (ii) the maximum aggregate amount of indemnifiable Losses that may be recovered from the Buyer
by the Seller Indemnified Parties pursuant to Section 8.2(a) shall be $6,600,000;



               (iii) an Indemnifying Party shall not be liable to any Indemnified Party for any claim for
indemnification pursuant to Section 8.1(a) or Section 8.2(a) unless and until the aggregate amount
of indemnifiable Losses that may be recovered from such Indemnifying Party equals or exceeds
$675,000 (the “Basket Amount”), in which case the Indemnifying Party shall be liable only
for the Losses in excess of the Basket Amount; provided, however, that no Losses
may be claimed by any Indemnified Party or shall be reimbursable by any Indemnifying Party or shall
be included in calculating the aggregate Losses for purposes of this clause (iii) other than Losses
in excess of $20,000 (the “Minimum Loss Amount”) resulting from any single claim or
aggregated claims arising out of the same facts, events or circumstances; provided,
further, that the limitations set forth in Section 8.4(b)(i)-(iii) shall not apply to
Losses arising out of any breach or inaccuracy of any representation or warranty contained in
Sections 3.1, 3.2, 3.3, 3.4 (last three (3) sentences), 3.6, 3.13, 3.15, 3.17, 3.22, 4.1, 4.2, and
4.3 (collectively, the “Core Reps”).



               (iv) Losses shall be net of (A) any insurance proceeds or other amounts actually received by
the Indemnified Party or its Affiliates from third parties (other than captive insurance and
risk-sharing pool arrangements) in connection with the facts giving rise to the right of
indemnification and without any right of subrogation and (B) any Tax benefit actually realized by
such Indemnified Party or its Affiliates arising in connection with the accrual, incurrence or
payment of any such Losses in the year in which such Loss was incurred or in any preceding year;



          (c) the rights to indemnification in this Agreement are cumulative and not alternative, and
the recovery by a Person under any section hereof shall not limit or otherwise adversely affect the
right of such Person to indemnification under any other



49









 




section of this Agreement;
provided, however, that under no circumstances shall the Buyer be entitled under this Agreement
to more than one recovery for any Loss amount. For the avoidance of doubt, to the extent that a
given Loss might be attributable to a claim under one or more of these enumerated subsections on
the one hand, and to a claim under Section 8.1(a) or 8.2(a) or 8.8 on the other hand, such
Losses and related indemnity with respect to Section 8.8 shall not be limited in any manner by
Section 8.4(b) based on the fact that they also arise under Sections 8.1(a) and 8.2(a);




          (d) other than with respect to the reduction in Purchase Price set forth in Section 5.9, the
Buyer shall have no right to setoff any obligations of the Seller or any of its Affiliates or
Representatives to any Buyer Indemnified Party, whether arising under this Article VIII or
otherwise, against the obligations of the Buyer or any of its Affiliates, or of any other surety or
guarantor thereof or under the Seller Note; the Buyer shall pay all amounts payable by it under the
Seller Note without setoff or deduction for any such obligations of the Seller or any of its
Affiliates or Representatives;



          (e) no claim for Remedial Action shall be indemnifiable to the extent that the Remedial Action
exceeds that reasonably required by Law; and



          (f) nothing contained in this Agreement shall limit the maximum aggregate amount of
indemnifiable Losses that may be recovered from the Seller by the Buyer Indemnified Parties
pursuant to Section 8.1(b)-(e) or from the Buyer by the Seller Indemnified Parties pursuant to
Section 8.2(c).



     Section 8.5 Tax Effect of Indemnification Payments. All indemnity payments made by the Seller to
Buyer Indemnified Persons, or by Buyer Indemnified Persons to the Seller, pursuant to this
Agreement shall be treated for all Tax purposes as adjustments to the Purchase Price.



     Section 8.6 Survival of Covenants, Representations and Warranties. Each of the covenants,
indemnities, representations and warranties of the Seller and the Buyer in this Agreement or in any
schedule, instrument or other document delivered pursuant to this Agreement shall survive the
Closing Date and shall continue in force thereafter until the expiration of twenty-four (24) months
following the Closing Date; provided, however, that (a)(i) the representations,
warranties, covenants, agreements and Closing certifications made by the Seller and the Buyer in
relation to the Core Reps (and Transfer Taxes), and (ii) claims related to Excluded Liabilities,
shall each survive the Closing until the date which six (6) months after the date on which the
respective applicable statute of limitations has expired; and (b) covenants which by their terms
are to in effect beyond such 24-month period shall survive for such longer period in accordance
with their terms; provided, further that, the representations, warranties,
covenants and agreements made by the Seller with respect to fraudulent misrepresentation shall
survive until the date on which the statute of limitations with respect thereto has expired; and
provided, further that the covenants set forth in Section 8.8 shall survive
indefinitely; and provided, finally, the representations, warranties and covenants
made in the General Warranty Deeds shall not be limited by the terms of this Article VIII.



50









 





     Section 8.7 Exclusivity. After the Closing, this Article VIII will provide the exclusive remedy
against the Seller, its Affiliates and Representatives for any breach of any representation,
warranty, or covenant (other than the offset and other remedies provided in Section 5.9) in this
Agreement (excluding any and all Ancillary Agreements).



     Section 8.8 Indemnification — Environmental and Domestic Manufacturing Matters. In addition to
the other indemnification provisions in this Article VIII, the Seller will indemnify, defend and
hold harmless the Buyer and the other Buyer Indemnified
Parties, and will reimburse the Buyer and the other Buyer Indemnified Parties, for any Losses
(which term, for purposes of amounts in respect of Section 8.8(e) also includes losses or damages
that constitute indirect, special, incidental, consequential or punitive damages or liabilities,
including business interruption, loss of future revenue, profits or income, loss of business
reputation or opportunity), arising from or in connection with:



          (a) any Environmental, Health and Safety Liabilities arising out of or relating to: (i) the
ownership or operation by any Person at any time on or prior to the Closing Date of any of the
Transferred Assets or the Business; or (ii) any Hazardous Materials or other contaminants that were
present on the Transferred Assets at any time on or prior to the Closing Date;



          (b) any bodily injury (including illness, disability and death, regardless of when any such
bodily injury occurred, was incurred or manifested itself), personal injury, property damage
(including trespass, nuisance, wrongful eviction and deprivation of the use of real property) or
other damage of or to any Person or any Transferred Assets in any way arising from or allegedly
arising from any activity conducted by any Person with respect to the Business of the Seller or the
Transferred Assets prior to the Closing Date or from any Hazardous Material that was (i) present or
suspected to be present on or before the Closing Date on or at the Transferred Assets (or present
or suspected to be present on any other property, if such Hazardous Material emanated or allegedly
emanated from any Transferred Assets and was present or suspected to be present on any Transferred
Assets, on or prior to the Closing Date); or (ii) Released or allegedly Released by any Person on
or at any Transferred Assets at any time on or prior to the Closing Date; or



          (c) the termination of the Houston Aldine Property Sublease or the Aldine Lease or the
eviction or lockout of Buyer, as subtenant under the Houston Aldine Property Sublease, except for
any termination, eviction or lockout arising solely from Buyer’s default or breach of the Houston
Aldine Property Sublease;



          (d) any statutory landlord lien rights which may be asserted by the landlord under the Aldine
Lease, except for any statutory landlord lien rights arising solely from Buyer’s failure to pay the
rent due and payable, as and when due, under the Houston Aldine Property Sublease; or



          (e) any Domestic Content Liabilities arising out of or relating to the Transferred Assets or
the Business; provided, that the maximum aggregate amount of indemnifiable Losses that may
be recovered from the Seller for any and all Domestic



51









 




Content Liabilities shall be $15,000,000.




          As provided in the Protocol Agreement, the Seller will be entitled to control any Remedial
Action and any Proceeding relating to environmental claims. Except as provided in the following
sentence, the Buyer shall control any other Proceeding with respect to which indemnity may be
sought under this Section 8.8. The procedure described in Section 8.3 will apply to any claim
solely for monetary damages relating to a matter covered by this Section 8.8.



     Section 8.9 Miscellaneous. THE INDEMNIFICATION PROVISIONS IN THIS ARTICLE VIII SHALL BE
ENFORCEABLE REGARDLESS OF WHETHER THE LIABILITY IS BASED UPON PAST, PRESENT OR FUTURE ACTS, CLAIMS
OR LAWS (INCLUDING ANY PAST, PRESENT OR FUTURE BULK SALES LAW, ENVIRONMENTAL LAW, FRAUDULENT
TRANSFER ACT, OCCUPATIONAL SAFETY AND HEALTH LAW OR PRODUCTS LIABILITY, SECURITIES OR OTHER LAW)
AND REGARDLESS OF WHETHER ANY PERSON (INCLUDING THE PERSON FROM WHOM INDEMNIFICATION IS SOUGHT)
ALLEGES OR PROVES THE SOLE, CONCURRENT, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OF THE PERSON
SEEKING INDEMNIFICATION OR THE SOLE OR CONCURRENT STRICT LIABILITY IMPOSED UPON THE PERSON SEEKING
INDEMNIFICATION. EXCEPT WITH RESPECT TO THE CONTENT OF A REPRESENTATION OR WARRANTY (AND THE
RELATED DISCLOSURE SCHEDULES) IN DETERMINING A BREACH THEREOF AND CLAIM UNDER SECTION 8.1(a), THE
INDEMNIFICATION PROVISIONS IN THIS ARTICLE VIII SHALL NOT BE AFFECTED BY ANY INVESTIGATION OR
ASSESSMENT CONDUCTED WITH RESPECT TO, OR ANY KNOWLEDGE ACQUIRED (OR CAPABLE OF BEING ACQUIRED) AT
ANY TIME, WHETHER BEFORE OR AFTER THE EXECUTION AND DELIVERY OF THIS AGREEMENT, WITH RESPECT TO THE
ACCURACY OR INACCURACY OF OR COMPLIANCE WITH ANY REPRESENTATION, WARRANTY, COVENANT OR OBLIGATION
IN THIS AGREEMENT OR ANY EVENT, CIRCUMSTANCE, OCCURRENCE OR MATTER SUBJECT TO THE INDEMNIFICATION
PROVISIONS IN THIS ARTICLE VIII. THE WAIVER OF ANY CONDITION BASED UPON THE ACCURACY OF ANY
REPRESENTATION OR WARRANTY, OR ON THE PERFORMANCE OF OR COMPLIANCE WITH ANY COVENANT OR OBLIGATION,
WILL NOT AFFECT THE RIGHT TO INDEMNIFICATION, REIMBURSEMENT OR OTHER REMEDY BASED UPON SUCH
REPRESENTATIONS, WARRANTIES, COVENANTS AND OBLIGATIONS.




52












 





ARTICLE IX

GENERAL PROVISIONS




     Section 9.1 Fees and Expenses. Except as otherwise provided herein, all fees and expenses
incurred in connection with or related to this Agreement and the Ancillary Agreements and the
transactions contemplated hereby and thereby shall be paid by the party incurring such fees or
expenses, whether or not such transactions are consummated.



     Section 9.2 Amendment and Modification. This Agreement may not be amended, modified or
supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in
writing specifically designated as an amendment hereto, signed on behalf of each party.



     Section 9.3 Waiver. The rights and remedies of the Parties to this Agreement are cumulative and
not alternative. No failure or delay of either party in exercising any right or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such right or power, or any course
of conduct, preclude any other or further exercise thereof or the exercise of any other right or
power. Any agreement on the part of either party to any such waiver shall be valid only if set
forth in a written instrument executed and delivered by a duly authorized officer on behalf of such
party.



     Section 9.4 Notices. All notices and other communications hereunder shall be in writing and shall
be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile, upon
written confirmation of receipt by facsimile, e-mail or otherwise; (b) on the first
(1st) Business Day following the date of dispatch if delivered utilizing a next-day
service by a recognized next-day courier; or (c) on the earlier of confirmed receipt or the fifth
(5th) Business Day following the date of mailing if delivered by registered or certified
mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered to the
addresses set forth below, or pursuant to such other instructions as may be designated in writing
by the party to receive such notice:




	 	(i)	 	if to the Seller, to:




Oldcastle, Inc.

375 Northridge Road

Suite 350

Atlanta, GA30350

Attention: Michael O’Driscoll, Chief Financial Officer

Facsimile: 770-677-2370







53









 









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




Gibson, Dunn & Crutcher LLP

200 Park Avenue

New York, New York 10166

Attention: Steven Shoemate

Facsimile: 212-351-5316





	 	(ii)	 	if to the Buyer, to:




Insteel Wire Products Company

1373 Boggs Drive

Attention: James Petelle

Facsimile: (336) 786-2144





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




Womble Carlyle Sandridge & Rice, PLLC

One West Fourth Street

Winston-Salem, NC 27101

Attention: Christopher E. Leon

Facsimile: 336-726-6932




     Section 9.5 Interpretation. When a reference is made in this Agreement to a Section, Article,
Exhibit or Schedule such reference shall be to a Section, Article, Exhibit or Schedule of this
Agreement unless otherwise indicated. The table of contents and headings contained in this
Agreement, any Exhibit or Schedule are for convenience of reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances require. Any
capitalized terms used in any Exhibit or Schedule but not otherwise defined therein shall have the
meaning as defined in this Agreement. All Exhibits and Schedules annexed hereto or referred to
herein are hereby incorporated into and made a part of this Agreement as if set forth herein. The
word “including” and words of similar import when used in this Agreement will mean “including,
without limitation,” unless otherwise specified.



     Section 9.6 Entire Agreement. This Agreement (including the Exhibits and Schedules hereto), the
Ancillary Agreements and the Confidentiality Agreement constitute the entire agreement, and
supersede all prior written agreements, arrangements, communications and understandings and all
prior and contemporaneous oral agreements, arrangements, communications and understandings between
the parties with respect to the subject matter hereof and thereof. Neither this Agreement nor any
Ancillary Agreement shall be deemed to contain or imply any restriction, covenant, representation,
warranty, agreement or undertaking of any party with respect to the transactions contemplated
hereby or thereby other than those expressly set forth herein or therein or in any document
required to be delivered hereunder or thereunder, and none shall be deemed to exist or be inferred
with respect to the subject matter hereof. Notwithstanding any oral agreement or



54









 




course of action of the parties or their Representatives to the contrary, no party to this
Agreement shall be under any legal obligation to enter into or complete the transactions
contemplated hereby unless and until this Agreement shall have been executed and delivered by each
of the parties.




     Section 9.7 No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is
intended to or shall confer upon any Person other than the parties and their respective successors
and permitted assigns any legal or equitable right, benefit or remedy of any nature under or by
reason of this Agreement.



     Section 9.8 Governing Law. This Agreement and all disputes or controversies arising out of or
relating to this Agreement or the transactions contemplated hereby shall be governed by, and
construed in accordance with, the internal Laws of the State of Georgia, without regard to the Laws
of any other jurisdiction that might be applied because of the conflicts of laws principles of the
State of Georgia; provided that notwithstanding anything to the contrary herein, the
parties agree that the provisions of Section 5.6 shall be construed under, governed by and enforced
in accordance with the laws of the State of North Carolina.



     Section 9.9 Submission to Jurisdiction. Each of the parties irrevocably agrees that any legal
action or proceeding arising out of or relating to this Agreement brought by the other party or its
successors or assigns shall be brought and determined in any Georgia state or federal court sitting
in Fulton County in Atlanta, Georgia (or, if such court lacks subject matter jurisdiction, in any
appropriate Georgia state or federal court sitting in Georgia), which the parties agree shall be
the exclusive venue for such suits. Each of the parties further irrevocably agrees that any legal
action or proceeding arising out of or relating to the provisions contained in Section 5.6 (or the
enforceability or enforcement thereof) brought by the other party or its successors or assigns
shall be brought and determined only in any North Carolina state or federal court sitting in Surry
County, North Carolina (or, if such court lacks subject matter jurisdiction, in any appropriate
North Carolina state or federal court sitting in North Carolina), which the parties agree shall be
the exclusive venue for resolution of disputes arising from or relating to Section 5.6 hereof.
Each of the parties hereby irrevocably submits to the exclusive jurisdiction of and waives any
objections to personal jurisdiction in the state and federal courts of Georgia and North Carolina
for itself and with respect to its property, generally and unconditionally, with regard to any such
action or proceeding arising out of or relating to this Agreement and the transactions contemplated
hereby. Each of the parties agrees not to commence any action, suit or proceeding relating thereto
except in the courts described above in Georgia (or, with respect to Section 5.6, North Carolina),
other than actions in any court of competent jurisdiction to enforce any judgment, decree or award
rendered by any such court in Georgia or North Carolina as described herein. Each of the parties
further agrees that notice as provided herein shall constitute sufficient service of process and
the parties further waive any argument that such service is insufficient. Each of the parties
hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a
defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject
to the jurisdiction of the courts in Georgia and North Carolina



55









 




as described herein for any reason, (b) that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such courts (whether through
service of notice, attachment prior to judgment, attachment in aid of execution of judgment,
execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such
court is brought in an inconvenient forum; (ii) the venue of such suit, action or proceeding is
improper; or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such
courts.




     Section 9.10 Disclosure Generally. Notwithstanding anything to the contrary contained in the
Disclosure Schedules or in this Agreement, the information and disclosures contained in any
Disclosure Schedule shall be deemed to be disclosed and incorporated by reference in any other
Disclosure Schedule as though fully set forth in such Disclosure Schedule for which applicability
of such information and disclosure is reasonably apparent on its face. The fact that any item of
information is disclosed in any Disclosure Schedule shall not be construed to mean that such
information is required to be disclosed by this Agreement. The Seller shall use good faith efforts
to include cross references to all relevant Disclosure Schedules on each Disclosure Schedule.



     Section 9.11 Personal Liability. This Agreement shall not create or be deemed to create or permit
any personal liability or obligation on the part of any direct or indirect stockholder of the
Seller or the Buyer or any officer, director, employee, Representative or investor of either party
hereto.



     Section 9.12 Assignment; Successors. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of
law or otherwise, by either party without the prior written consent of the other party, and any
such assignment without such prior written consent shall be null and void; provided, that
the Seller may assign any of its rights under this Agreement, including the right to receive the
Purchase Price, to one or more Affiliates of the Seller without the consent of the Buyer;
provided, further, that no assignment shall limit the assignor’s obligations
hereunder. Subject to the preceding sentence, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the parties and their respective successors and assigns.



     Section 9.13 Enforcement. The parties agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with their specific terms
or were otherwise breached. Accordingly, each of the parties shall be entitled to specific
performance of the terms hereof, including an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this Agreement in any Georgia
State or federal court sitting in Atlanta, Georgia (or, if such court lacks subject matter
jurisdiction, in any appropriate Georgia State or federal court), this being in addition to any
other remedy to which such party is entitled at law or in equity. Each of the parties hereby
further waives (a) any defense in any action for specific performance that a remedy at law would be
adequate and (b) any requirement under any law to post security as a prerequisite to obtaining
equitable relief.



56









 





     Section 9.14 Currency. All references to “dollars” or “$” or “US$” in this Agreement or any
Ancillary Agreement refer to United States dollars, which is the currency used for all purposes in
this Agreement and any Ancillary Agreement.



     Section 9.15 Severability. Whenever possible, each provision or portion of any provision of this
Agreement shall be interpreted in such manner as to be effective and valid under applicable Law,
but if any provision or portion of any provision of this Agreement is held to be invalid, illegal
or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision or portion of any
provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any
provision had never been contained herein.



     Section 9.16 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.



     Acknowledged:



	 	 	 	 	 

	 

	 	Ivy Steel & Wire, Inc.
	 	Insteel Wire Products Company
	 
	 	 	 	 
	 

	 	      
	 	/s/ H.O. Woltz III






     Section 9.17 Arbitration. Except for matters relating to specific performance, injunctive relief
or other equitable remedies, the parties hereto agree to submit to arbitration of any and all
matters in dispute or in controversy among them concerning the terms and provisions of this
Agreement. All such disputes and controversies shall be determined and adjudged by a panel of
three arbitrators, and the hearing shall be held in Atlanta, Georgia. The selection of the
arbitrators and the procedure shall be in accordance with the commercial arbitration rules then in
effect of the American Arbitration Association. Any award rendered shall be final and conclusive
upon the parties and a judgment thereon may be entered in the highest court of the forum, state or
federal, having jurisdiction. The expenses of arbitration shall be borne equally by the parties to
the arbitration, provided that each party pay for and bear the costs of its own experts,
evidence and counsel’s fees, and provided further that in the discretion of the
arbitrators, any award may include the costs of a party’s counsel if the arbitrators expressly
determine that a party against whom such award is entered has caused the dispute, controversy or
claim to be submitted to arbitration in bad faith.



     Section 9.18 Counterparts. This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same instrument and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other party.



57









 





     Section 9.19 Facsimile Signature. This Agreement may be executed by facsimile signature and a
facsimile signature shall constitute an original for all purposes.



     Section 9.20 Time of Essence. Time is of the essence with regard to all dates and time periods set
forth or referred to in this Agreement.



     Section 9.21 No Presumption Against Drafting Party. Each of the Buyer and the Seller acknowledges
that each party to this Agreement has been represented by counsel in connection with this Agreement
and the transactions contemplated by this Agreement. Accordingly, any rule of law or any legal
decision that would require interpretation of any claimed ambiguities in this Agreement against the
drafting party has no application and is expressly waived.



     Section 9.22 Guarantee by Guarantor. In order to induce the Buyer to enter into this Agreement and
in recognition of the benefits flowing to the Guarantor from the consummation of the transactions
contemplated hereby, the Guarantor shall enter into the Guaranty Agreement.



[Signature page follows]




58









 





     IN WITNESS WHEREOF, the Seller, the Guarantor and the Buyer have caused this Agreement to be
executed as of the date first written above by their respective officers thereunto duly authorized.



	 	 	 	 	 
	 	SELLER:



IVY STEEL & WIRE, INC.



 	 
	 	By:  	/s/
Elizabeth A. Potts
 	 
	 	 	Name:  	Elizabeth A. Potts 	 
	 	 	Title:  	President 	 
	 
	 
	 	BUYER:




INSTEEL WIRE PRODUCTS COMPANY


 	 
	 	By:  	/s/ H.O. Woltz III
 	 
	 	 	Name:  	H.O. Woltz III 	 
	 	 	Title:  	President 	 
	 
	 
	 	GUARANTOR:




OLDCASTLE BUILDING PRODUCTS, INC.


 	 
	 	By:  	/s/ William J. Sandbrook
 	 
	 	 	Name:  	William J. Sandbrook 	 
	 	 	Title:  	President 	 
	 



SIGNATURE PAGE TO THE ASSET PURCHASE AGREEMENT BETWEEN

IVY STEEL & WIRE, INC. AND INSTEEL WIRE PRODUCTS COMPANY









 









 








List of Omitted Schedules and Exhibits

to that certain

Asset Purchase Agreement dated as of November 19, 2010

between

Ivy Steel & Wire, Inc.,

Oldcastle Building Products, Inc.,

and

Insteel Wire Products Company




 




Pursuant to Item 601(b)(2) of Regulation S-K, Insteel Industries, Inc. hereby agrees to furnish
supplementally a copy of any omitted schedule or exhibit identified below to the Securities and
Exchange Commission upon request.




OMITTED SCHEDULES




Schedule 1.1 — The Seller Persons with Knowledge

Schedule 1.2(a) — Permitted Encumbrances (Personal Property)

Schedule 1.2(b) — Permitted Encumbrances (Real Property)

Schedule 2.1(a) — Transferred Contracts

Schedule 2.1(b) — Transferred Purchase Orders

Schedule 2.1(d) Tangible Personal Property

Schedule 2.1(e) — Tampa Assets

Schedule 2.1(f) — Transferred Inventory

Schedule 2.1(k) — Intellectual Property

Schedule 2.2(k) — Excluded Contracts

Schedule 2.2(l) — Excluded Purchase Orders

Schedule 2.2(m) — Excluded Inventory

Schedule 2.2(s) — Excluded Assets

Schedule 2.3(a) — Assumed Trade Accounts

Schedule 2.3(d) — Accrued Vacation/Paid Time Off of Transferred Employees

Schedule 2.4(o) — Sundry Payables

Schedule 2.7 — Unit Valuation Schedule

Schedule 3.3 — List of Consents required

Schedule 3.5 — Books and Records

Schedule 3.6 — Title to and Sufficiency of Assets

Schedule 3.7 — Financial Statements

Schedule 3.8 — Absence of Certain Changes or Events

Schedule 3.9 — Compliance with Law; Permits and Licenses

Schedule 3.10 — Business Permits

Schedule 3.11(a) — Owned Real Property

Schedule 3.11(b) — Leased Real Property

Schedule 3.11(e) — Improvements

Schedule 3.15 — Employee Plans




 









 





Schedule 3.19 — Insurance

Schedule 3.21(a) — Intellectual Property

Schedule 3.21(d) — Intellectual Property

Schedule 3.23 — Material Customers and Suppliers

Schedule 3.26 — Related Party Transactions

Schedule 3.27 — Other Names by which the Business was conducted

Schedule 3.28 — Litigation

Schedule 5.1 — Business Employees

Schedule 5.1(a) — Transferred Employees

Schedule 5.1(b)(i) — Severance Policies




OMITTED EXHIBITS




Exhibit A — Form of Assignment and Assumption Agreement

Exhibit B — Form of Bill of Sale

Exhibit C — Form of Guaranty Agreement

Exhibit D — Form of General Warranty Deed for each State

Exhibit E — Form of Owner Title Affidavit

Exhibit F — Form of Transition Services Agreement

Exhibit G — Form of Seller Note

Exhibit H — Form of Houston Aldine Property Sublease

Exhibit I — Form of Exemption Certificates

Exhibit J — Form of Press Release

Exhibit K — Form of Protocol Agreement