Exhibit 10.60


Execution Copy




 





 


STOCK
PURCHASE AGREEMENT


AMONG


STEEL
DYNAMICS, INC.,


OMNISOURCE
CORPORATION,


AND
THE SHAREHOLDERS LISTED ON THE SIGNATURE PAGES HERETO


 


October
1, 2007


 




 






 ii















TABLE OF
CONTENTS


	
  

  	
  PAGE

  
	
   

  	
   

  
	
  ARTICLE I

  	
        THE TRANSACTION

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  The Stock Purchase

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
        CONSIDERATION
  FOR TRANSFER

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Consideration

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
        THE CLOSING AND
  TRANSFER OF STOCK

  	
  2

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Closing

  	
  2

  
	
  3.2

  	
  Deliveries by Buyer

  	
  2

  
	
  3.3

  	
  Deliveries by the Shareholders

  	
  2

  
	
  3.4

  	
  Closing Agreements

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
        REPRESENTATIONS
  AND WARRANTIES OF BUYER

  	
  3

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Corporate Status and Authority

  	
  3

  
	
  4.2

  	
  Validity

  	
  3

  
	
  4.3

  	
  Violations and Approvals

  	
  3

  
	
  4.4

  	
  Buyer Common Stock

  	
  4

  
	
  4.5

  	
  Buyer SEC Reports; Financial Statements

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
        REPRESENTATIONS
  AND WARRANTIES OF SHAREHOLDERS

  	
  4

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Corporate Status

  	
  4

  
	
  5.2

  	
  Authority

  	
  5

  
	
  5.3

  	
  Validity

  	
  5

  
	
  5.4

  	
  Violations and Approvals

  	
  5

  
	
  5.5

  	
  Capitalization

  	
  5

  
	
  5.6

  	
  Stock Ownership

  	
  6

  
	
  5.7

  	
  Records of the Companies

  	
  6

  
	
  5.8

  	
  Subsidiaries and Joint Ventures

  	
  6

  
	
  5.9

  	
  Financial Statements

  	
  7

  
	
  5.10

  	
  Changes Since September 30, 2006

  	
  8

  
	
  5.11

  	
  Liabilities

  	
  8

  
	
  5.12

  	
  Litigation

  	
  9

  
	
  5.13

  	
  Environmental Matters

  	
  9

  
	
  5.14

  	
  Facilities (Owned Properties and Leased Premises)

  	
  11

  
	
  5.15

  	
  Assets

  	
  14

  
	
  5.16

  	
  Compliance with Laws

  	
  14

  
	
  5.17

  	
  Labor and Employment Matters

  	
  14

  
	
  5.18

  	
  Employee Benefit Plans

  	
  15

  
	
  5.19

  	
  Tax Matters

  	
  19

  
	
  5.20

  	
  Insurance

  	
  20

  




 i
 









 


	
  

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  5.21

  	
  Licenses and Permits

  	
  21

  
	
  5.22

  	
  Affiliated Transactions

  	
  21

  
	
  5.23

  	
  Material Contracts

  	
  21

  
	
  5.24

  	
  Intellectual Property

  	
  24

  
	
  5.25

  	
  Customers and Suppliers

  	
  24

  
	
  5.26

  	
  Foreign Corrupt Practices Act

  	
  25

  
	
  5.27

  	
  Financial Controls

  	
  25

  
	
  5.28

  	
  No Commissions

  	
  25

  
	
  5.29

  	
  Bonus Shares

  	
  26

  
	
  5.30

  	
  Accuracy of Information Furnished

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
        CONDUCT OF
  BUSINESS PENDING THE CLOSING

  	
  26

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Conduct of Business by the Corporation Pending the
  Closing

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
        ADDITIONAL
  AGREEMENTS

  	
  28

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Further Assurances

  	
  28

  
	
  7.2

  	
  Cooperation

  	
  28

  
	
  7.3

  	
  Consents

  	
  29

  
	
  7.4

  	
  Access to Information

  	
  29

  
	
  7.5

  	
  Notification of Certain Matters

  	
  29

  
	
  7.6

  	
  Confidentiality; Publicity

  	
  30

  
	
  7.7

  	
  Exclusivity

  	
  30

  
	
  7.8

  	
  Affiliated Transactions

  	
  30

  
	
  7.9

  	
  Covenants Not To Compete, Solicit or Disclose

  	
  30

  
	
  7.10

  	
  HSR Act

  	
  32

  
	
  7.11

  	
  Appointment of Shareholders Representative

  	
  32

  
	
  7.12

  	
  Title and Survey Matters

  	
  32

  
	
  7.13

  	
  Litigation Support

  	
  34

  
	
  7.14

  	
  Interim Financial Statements

  	
  34

  
	
  7.15

  	
  Board Representation

  	
  34

  
	
  7.16

  	
  Release

  	
  34

  
	
  7.17

  	
  Senior Secured Notes

  	
  35

  
	
  7.18

  	
  Aircraft

  	
  36

  
	
  7.19

  	
  Bonus Obligations

  	
  36

  
	
  7.20

  	
  Financing Cooperation

  	
  38

  
	
  7.21

  	
  Current Base Salary and Benefits

  	
  38

  
	
  7.22

  	
  Shareholder Premises

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
        CONDITIONS TO
  THE OBLIGATIONS OF THE BUYER

  	
  38

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Accuracy of Representations and Warranties and
  Compliance with Obligations

  	
  38

  




 ii
 









 


	
  

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  8.2

  	
  Opinion of Counsel

  	
  39

  
	
  8.3

  	
  No Adverse Litigation

  	
  39

  
	
  8.4

  	
  Real Property

  	
  39

  
	
  8.5

  	
  Hart Scott Rodino Approval

  	
  39

  
	
  8.6

  	
  Resignation

  	
  39

  
	
  8.7

  	
  Other Agreements

  	
  39

  
	
  8.8

  	
  Senior Notes

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
        CONDITIONS TO
  THE OBLIGATIONS OF SHAREHOLDERS

  	
  40

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Accuracy of Representations and Warranties and
  Compliance with Obligations

  	
  40

  
	
  9.2

  	
  No Adverse Litigation

  	
  40

  
	
  9.3

  	
  Hart Scott Rodino Approval

  	
  40

  
	
  9.4

  	
  Agreements

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
        INDEMNIFICATION

  	
  40

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Agreement to Indemnify

  	
  40

  
	
  10.2

  	
  Survival

  	
  41

  
	
  10.3

  	
  Defense of Third Party Claims

  	
  42

  
	
  10.4

  	
  Payment of Indemnification Claims by Shareholders

  	
  43

  
	
  10.5

  	
  Shareholders Representative

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
        TAX MATTERS

  	
  43

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  General

  	
  43

  
	
  11.2

  	
  Preparation of Tax Returns

  	
  44

  
	
  11.3

  	
  Taxable Period

  	
  44

  
	
  11.4

  	
  Section 338(h)(10) Elections

  	
  44

  
	
  11.5

  	
  Tax Contests

  	
  45

  
	
  11.6

  	
  Amended Returns, etc

  	
  45

  
	
  11.7

  	
  Access and Assistance

  	
  45

  
	
  11.8

  	
  Transfer and Similar Taxes

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
        TERMINATION

  	
  46

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  Termination

  	
  46

  
	
  12.2

  	
  Effect of Termination

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII

  	
        GENERAL
  PROVISIONS

  	
  47

  
	
   

  	
   

  	
   

  
	
  13.1

  	
  Notices

  	
  47

  
	
  13.2

  	
  Entire Agreement

  	
  48

  




 iii
 









 


	
  

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  13.3

  	
  Expenses

  	
  48

  
	
  13.4

  	
  Amendment; Waiver

  	
  49

  
	
  13.5

  	
  Binding Effect; Assignment

  	
  49

  
	
  13.6

  	
  Counterparts

  	
  49

  
	
  13.7

  	
  Interpretation

  	
  49

  
	
  13.8

  	
  Governing Law; Interpretation

  	
  49

  
	
  13.9

  	
  Jurisdiction

  	
  49

  
	
  13.10

  	
  Arm’s Length Negotiations; Drafting

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV

  	
        DEFINITIONS

  	
  50

  
	
   

  	
   

  	
   

  
	
  14.1

  	
  Defined Terms

  	
  50

  
	
  14.2

  	
  Other Definitional Provisions

  	
  57

  



 



 iv















	
  Exhibit A

  	
  Form of Escrow Agreement

  
	
  Exhibit B

  	
  Form of Real Estate Purchase Agreement

  
	
  Exhibit C

  	
  Form of Shareholders Agreement

  
	
  Exhibit D

  	
  Opinion of Counsel

  
	
   

  	
   

  
	
  Schedule 3.2(a)

  	
  Cash Amount

  
	
  Schedule 3.2(d)

  	
  Shareholders’ Interest

  
	
  Schedule 6.1

  	
  Conduct of Business

  
	
  Schedule 8.4

  	
  Landlord Waivers and Estoppel Letters

  
	
  Schedule 11.4

  	
  Allocation Agreement

  
	
   

  	
   

  
	
  Disclosure Schedule

  	
   

  



 



 i















STOCK
PURCHASE AGREEMENT


This
Stock Purchase Agreement (this “Agreement”) is entered into as of October 1,
2007 by and among Steel Dynamics, Inc., an Indiana corporation (“Buyer”),
Omnisource Corporation, an Indiana corporation (the “Corporation”), and the
shareholders of the Corporation listed on the signature pages hereto
(collectively, the “Shareholders”). 
Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in Section 14.1.  The Buyer, the Corporation and the
Shareholders may be referred to herein each as a “Party” and collectively, the “Parties”.


RECITALS


WHEREAS,
the Shareholders are the registered and beneficial owners of 100% of the issued
and outstanding capital stock of the Corporation on a fully diluted basis (the “Stock”);
and


WHEREAS,
the Shareholders desire to sell and the Buyer desires to purchase 100% of the
Stock on the terms and subject to the conditions set forth herein.


TERMS
OF AGREEMENT


In
consideration of the representations, warranties, covenants and agreements
contained herein, the parties hereto agree as follows:


THE TRANSACTION


The
Stock Purchase.  Subject to
the terms and conditions of this Agreement, at the Closing, the Shareholders
shall sell and the Buyer shall acquire good and marketable title to all the
Stock free and clear of all Liens (including Permitted Liens) and Restrictions.


CONSIDERATION FOR TRANSFER


Consideration.  The aggregate consideration for the Stock
shall be as follows:


$393,400,000 (the “Cash
Amount”); and


9,700,000 shares (the “Shares”)
of the Buyer’s common stock (the “Buyer Common Stock”).


THE CLOSING AND TRANSFER OF
STOCK


Closing.  The closing of the transactions contemplated
by this Agreement shall be effective as of the end of the Closing Date, as
hereinafter defined (the “Closing”), and shall occur at the offices of
McDermott Will & Emery LLP, 227 West Monroe Street, Chicago, Illinois at
10:00 A.M., central standard time, on the second business day following the
satisfaction or













waiver of all conditions to
the obligations of the Parties to consummate the transactions contemplated
hereby (other than conditions with respect to actions the respective Parties
will take at the Closing itself) or at such other time or place as may be
mutually agreed upon by the Parties (the “Closing Date”).


Deliveries by Buyer.  At the Closing, Buyer shall deliver (or cause
to be delivered) the following:


the Cash Amount, as adjusted pursuant to the terms hereof, by wire
transfer of immediately available funds to the persons identified on Schedule
3.2(a) in the proportions set forth opposite their respective names;


1,050,000 shares of Buyer Common Stock (the “Escrow Amount”) to an
escrow agent mutually acceptable to Buyer and the Shareholders (“Escrow Agent”),
pursuant to the provisions of the Escrow Agreement between the Escrow Agent,
Buyer and the Shareholders in the form of Exhibit A hereto (the “Escrow
Agreement”);


such number of shares of Buyer Common Stock as designated by the
Shareholders in accordance with Section 7.19 (the “Bonus Shares”);


a number of Shares of Buyer Common Stock equal to the number of Shares less
the Escrow Amount less the Bonus Shares to the Shareholders in the
relative proportions set forth on Schedule 3.2(d);


the Section 9.1 Certificate; and


such other instruments or documents as may be necessary or reasonably
requested by the Shareholders to carry out the transactions contemplated
hereby.


Deliveries by the
Shareholders.  At the
Closing, the Shareholders shall deliver the following:


certificates representing the Stock free and clear of all Liens
(including Permitted Liens) and Restrictions, together with stock powers
endorsed in blank;


the Section 8.1 Certificate;


the opinion referred to in Section 8.2;


the landlord waivers and estoppel letters referred to in Section
8.4;


completed
and executed IRS Forms 8023 (and any similar state forms) required to be filed
in connection with Section 338(h)(10) Election;


pay off letters from each applicable lender indicating the amount
necessary to pay the Corporation Debt in full at Closing (the “Pay Off Letters”);
and


such other instruments or documents as may be necessary or reasonably
requested by Buyer to carry out the transactions contemplated by this
Agreement.



 2
 









Closing Agreements.  At the Closing, the applicable parties shall
execute, acknowledge and deliver the following: 
(i) the Shareholders Agreement and (ii) the Escrow Agreement.


REPRESENTATIONS AND
WARRANTIES OF BUYER


As
a material inducement to the Shareholders to enter into this Agreement, Buyer
hereby represents and warrants to the Shareholders as of the date hereof, and
as of the Closing Date, as set forth below:


Corporate Status and
Authority.  Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of Indiana.  Buyer has full corporate
right, power and authority, without the consent of any other Person, to execute
and deliver this Agreement and the agreements contemplated hereby, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby and thereby.  All corporate and
other acts or proceedings required to be taken by Buyer to authorize the
execution, delivery and performance of this Agreement and the agreements
contemplated hereby and all transactions contemplated hereby and thereby have
been duly and properly taken.


Validity.  This Agreement has been, and the agreements
and other documents to be delivered at Closing will be, duly executed and
delivered by Buyer and constitute the legal, valid and binding obligations of
Buyer, enforceable in accordance with their respective terms, except as the
same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights
generally and general equitable principles regardless of whether such
enforceability is considered in a proceeding at law or in equity.


Violations and Approvals.  The execution and delivery of this Agreement
and the agreements contemplated hereby, the performance by the Buyer of its
obligations hereunder and thereunder and the consummation of the transactions
contemplated hereby and thereby will not (with notice, the passage of time or
both) result in the creation of any lien, charge or encumbrance or the
acceleration of any indebtedness or other obligation of Buyer and are not
prohibited by, do not violate or conflict with any provision of, and do not and
will not (with notice, the passage of time or both) result in a default under
or a breach of (i) the charter or bylaws of Buyer, (ii) any contract,
agreement, permit, license or other instrument to which Buyer is a party or by
which it is bound, (iii) any order, writ, injunction, decree or judgment of any
court or governmental agency applicable to Buyer, or (iv) any law, statute,
ordinance, rule or regulation, decree, writ, injunction, judgment or order of
any Governmental Authority or of any arbitration award which is binding upon,
enforceable against or applicable to Buyer, except for antitrust filings under
the HSR Act or any applicable foreign jurisdictions, compliance with applicable
requirements of the Securities Act and compliance with any applicable foreign
or state securities or “blue sky” laws.


Buyer Common Stock.  The Shares of Buyer Common Stock to be issued
pursuant to Article II hereof have been duly authorized and when issued and
delivered in



 3
 









accordance with the terms of
this Agreement will be fully paid and non-assessable and the issuance thereof
is not subject to any pre-emptive or similar right.


Buyer SEC Reports; Financial
Statements.  The filings
required to be made by the Buyer under the Securities Act and the Exchange Act
have been filed with the SEC and complied, as of their respective dates, in all
material respects with all applicable requirements of the appropriate statutes
and the rules and regulations thereunder. 
As of their respective dates, none of the Buyer SEC Reports contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.  The audited consolidated financial statements
and unaudited interim financial statements of the Buyer included in the Buyer
SEC Reports have been prepared in accordance with GAAP applied on a consistent
basis during the period involved (except as may be stated in the notes thereto)
and fairly present the financial position and the results of operations and
cash flows of the Buyer and its Subsidiaries as of the times and for the
periods referred to therein, subject, in the case of unaudited interim
financial statements, to normal, recurring audit adjustments.


4.6                                                         Subsequent Events. 
Since the date of filing of the Buyer SEC Reports, no event has occurred
or failed to occur and no action has been taken or failed to be taken by the
Buyer regarding the Buyer, the Buyer’s assets, its current business operations
or its future business prospects which, taken as a whole, has had or is likely
in the future to have a Material Adverse Effect on the Buyer or the Buyer’s
assets, its current business operations or its future business prospects.


REPRESENTATIONS AND
WARRANTIES OF SHAREHOLDERS


As a material inducement to
the Buyer to enter into this Agreement, the Shareholders hereby jointly and
severally represent and warrant to the Buyer as of the date hereof and as of
the Closing Date, as set forth below; provided, however, that each Shareholder
makes the representations and warranties contained in Sections 5.2(b), 5.3
and 5.6 only as to himself and the Corporation and its Subsidiaries (if
applicable) and not as to any other Shareholder.


Corporate Status.  The Corporation and each of its Subsidiaries
is a corporation or limited liability company duly organized, validly existing
and in good standing under the laws of the state of its incorporation, which is
identified on Section 5.1 of the Disclosure Schedule,  and has the requisite power and authority to
own or lease its properties and to carry on its business as now being
conducted.  The Corporation and each Subsidiary
is legally qualified to transact business as a foreign corporation and is in
good standing in each jurisdiction listed on Section
5.1 of the Disclosure Schedule and is qualified and in good
standing in all other jurisdictions where the nature of its properties and the
conduct of its business requires such qualification.  There is no pending or, to the Knowledge of
the Shareholders and the Corporation, threatened proceeding for the merger,
consolidation, dissolution, liquidation, insolvency or rehabilitation of the
Corporation or any of its Subsidiaries.



 4
 









Authority.  (a) The Corporation has the full corporate
right, power and authority to execute and deliver this Agreement and the
agreements contemplated hereby, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby
and has taken all action necessary to authorize the execution and delivery of
this Agreement and the agreements contemplated hereby and the performance of
its obligations hereunder and thereunder and the consummation of the
transactions contemplated hereby and thereby. 
(b) Each of the Shareholders is an individual with the requisite
competence and authority to execute and deliver this Agreement and the
agreements contemplated hereby and to perform his obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.


Validity.  This Agreement has been and the agreements
and other documents to be delivered at Closing will be, duly executed and
delivered by each of the Shareholders and the Corporation, and constitute the
legal, valid and binding obligation of each of them, enforceable in accordance
with their respective terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally and general equitable
principles, whether such enforceability is considered in a proceeding at law or
in equity.


Violations and Approvals.  The execution and delivery of this Agreement
and the agreements contemplated hereby by the Shareholders and the Corporation,
the performance by the Shareholders and the Corporation of their respective
obligations hereunder and thereunder, and the consummation by them of the
transactions contemplated hereby and thereby will not (with notice, the passage
of time, or both) (i) contravene any provision of the charter or bylaws of the
Corporation, (ii) violate or conflict with any law, statute, ordinance, rule,
regulation, decree, writ, injunction, judgment or order of any Governmental
Authority or of any arbitration award which is either applicable to, binding
upon or enforceable against Shareholders or the Corporation or its
Subsidiaries, (iii) except as set forth in Section 5.4 of the Disclosure
Schedule, conflict with, result in any breach of, or constitute a default
(or an event which would, with the passage of time or the giving of notice or
both, constitute a default) under, or give rise to a right of payment under or
the right to terminate, amend, modify, abandon or accelerate, any contract,
agreement, permit, license or other instrument which is applicable to, binding
upon or enforceable against the Shareholders or the Corporation or any of its
Subsidiaries, (iv) result in or require the creation or imposition of any Lien
upon or with respect to any of the property or assets of the Corporation or its
Subsidiaries, or (v) except as set forth in Section 5.4 of the Disclosure
Schedule, require the consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Authority, any court or
tribunal or any other Person.


Capitalization.  Section 5.5
of the Disclosure Schedule sets forth, with respect to the Corporation, (a)
the number of authorized shares of each class of its capital stock, (b) the
number of issued and outstanding shares of each class of its capital stock, and
(c) the number of shares of each class of its capital stock which are held in
treasury.  All of the issued and
outstanding shares of capital stock of the Corporation (i) have been duly
authorized and validly issued and are fully paid and non-assessable, (ii)
were issued in compliance with all applicable state and federal securities
laws, and (iii) were not issued in violation of any preemptive rights or rights
of first refusal.  No preemptive rights
or rights of first refusal exist with respect to the shares of capital stock of
the Corporation and, no such rights will arise by virtue of or in



 5
 









connection with the
transactions contemplated hereby.  There
are no outstanding or authorized rights, options, warrants, convertible
securities, subscription rights, conversion rights, exchange rights or other
agreements or commitments of any kind that could require the Corporation to issue
or sell any shares of its capital stock (or securities convertible into or
exchangeable for shares of its capital stock). 
There are no outstanding stock appreciation, phantom stock, profit
participation or other similar rights with respect to the Corporation.  The Corporation is not obligated to redeem or
otherwise acquire any of its outstanding shares of capital stock.


Stock Ownership.  Each Shareholder is the sole record and
beneficial holder of all issued and outstanding shares of capital stock of the
Corporation designated next to such Shareholder’s name on Section 5.6 of the
Disclosure Schedule.  Each
Shareholder owns such shares free and clear of all Liens and Restrictions and
such shares in the aggregate represent all of the issued and outstanding
capital stock of the Corporation.  The
stock ledger of the Corporation, as attached to Section 5.6 of the
Disclosure Schedule, accurately sets forth the current issued and
outstanding shares of the capital stock of the Corporation.


Records of the Companies.  The copies of the charter and bylaws of the
Corporation attached to Section 5.7(a) of the Disclosure Schedule are
true, accurate and complete and reflect all amendments made through the date of
this Agreement.  The books and records of
the Corporation and its Subsidiaries fully and accurately reflect all of their
transactions, properties, assets and liabilities in all material respects.  Section 5.7(b) of the Disclosure Schedule
lists each account of the Corporation and its Subsidiaries now existing with
any bank, broker, or other depository institution, and the names of all persons
authorized to withdraw funds from each such account.


Subsidiaries and Joint
Ventures.


Subsidiaries.  Section
5.8(a) of the Disclosure Schedule sets forth each Subsidiary of the
Corporation and sets forth, with respect to each Subsidiary, (a) the number of
authorized shares of each class of its capital stock, (b) the number of issued
and outstanding shares of each class of its capital stock, and (c) the number
of shares of each class of its capital stock which are held in treasury.  Section 5.8(a) of the Disclosure Schedule
sets forth the holders of all issued and outstanding securities of each
Subsidiary including a description of the securities held by such Persons.  The equity interests of Subsidiaries of the
Corporation held by the Corporation and any of its Subsidiaries are owned free
and clear of any Lien or Restriction. 
All of the issued and outstanding shares of capital stock and other
equity interests of each Subsidiary (i) have been duly authorized and validly
issued and are fully paid and non-assessable, (ii) were issued in
compliance with all applicable state and federal securities laws, and (iii)
were not issued in violation of any preemptive rights or rights of first
refusal.  No preemptive rights or rights
of first refusal exist with respect to the equity interests of any Subsidiary
and, no such rights will arise by virtue of or in connection with the
transactions contemplated hereby.  There
are no outstanding or authorized rights, options, warrants, convertible
securities, subscription rights, conversion rights, exchange rights or other
agreements or commitments of any kind that could require any Subsidiary to
issue or sell any of its equity interests (or securities convertible into or
exchangeable for its equity interests). 
There are no outstanding stock appreciation, phantom stock, profit
participation or other



 6
 









similar rights with respect
to any Subsidiary.  No Subsidiary is
obligated to redeem or otherwise acquire any of its outstanding equity
interests.


Joint Ventures.  The
ownership of each Joint Venture is as set forth on Section 5.8(b) of the
Disclosure Schedule, including (i) name of each equityholder, (ii) type and
number of securities issued to such equityholders and (iii) percentage interest
in the Joint Venture of each such equityholder. 
All of the issued and outstanding securities of each Joint Venture have
been duly authorized and validly issued, are fully paid and nonassessable and,
to the Knowledge of the Shareholders and the Corporation have been issued in
compliance with all applicable securities laws. 
The equity interests in each Joint Venture held by the Corporation or
any of its Subsidiaries are held of record by the Corporation or such Subsidiary
and are and will be at Closing free and clear of all Liens (including Permitted
Liens).  Except as set forth in Section
5.8(b) of the Disclosure Schedule or the joint venture agreements among the
Corporation, any of its Subsidiaries and any other Person (the “Joint Venture
Agreements”), (i) the Corporation’s and, if applicable, its Subsidiary’s equity
interests in the Joint Ventures are not subject to any agreement, restriction
on transfer, or any limitation on voting, voting trust, stockholders agreement,
proxies or other understandings with respect to the voting of such equity
interests, (ii) no party has a right of first refusal, right to purchase or
compel the sale of any such equity interests, right to put any equity interests
held by such third party to the Corporation or one of its Subsidiaries or to
the Joint Venture, and (iii) none of the Corporation or any of its Subsidiaries
has any material liability relating thereto, other than the value of its
investment in such Joint Venture.  Except
as set forth on Section 5.8(b) of the Disclosure Schedule, neither the
Corporation nor any of its Subsidiaries has any obligation to make or
contribute additional capital or assets to any Joint Venture.  Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any Joint Venture Agreement, or
to the Knowledge of the Corporation or any of the Shareholders, of any
agreement, contract lease, license, instrument, or other arrangement to which
Joint Venture is a party.


Financial Statements.


Attached to Section 5.9(a) of the Disclosure Schedule is a true
and correct copy of the audited consolidated financial statements of the
Corporation and its Subsidiaries as of September 30, 2005 and September 30,
2006 and for the one year periods ended on September 30, 2004, 2005 and 2006
including the notes thereto (the “Audited Financial Statements”).  Attached to Section 5.9 of the Disclosure
Schedule is the unaudited consolidated balance sheet and income statement
of the Corporation and its Subsidiaries as of and for the period ending August
31, 2007 (the “Interim Financial Statements” and collectively with the Audited
Financial Statements, the “Financial Statements”).  The Financial Statements (including the notes
thereto) fairly present, in all material respects, the financial position of
the Corporation and its Subsidiaries at each of the balance sheet dates and the
results of operations and cash flows for each of the periods covered thereby,
and, except as set forth on Section 5.9(a) of the Disclosure Schedule,
have been prepared in accordance with GAAP consistently applied throughout



 7
 









the periods indicated,
except with respect to the Interim Financial Statements insofar as it does not
reflect normal, recurring year-end adjustments and does not contain footnote
disclosures.  Except as set forth in Section
5.9(a) of the Disclosure Schedule, there are no extraordinary (as provided
under GAAP) items of income or expense during the periods covered by the
Financial Statements and the balance sheets included in the Financial Statements
do not reflect any write-up or revaluation increasing the book value of
any assets, except as specifically disclosed in the notes thereto.


All of the Receivables of the Corporation and its Subsidiaries
represent a sale made in a bona fide transaction in the ordinary course of
business, have been accounted for in a manner consistent with the Corporation’s
historical practices and the Corporation and its Subsidiaries have performed
their obligations to produce the goods or perform the services to which such
receivable relates.


All inventory of the Corporation and its Subsidiaries, including spare
parts inventories, (i) was acquired in the ordinary course of business
consistent with past practice and, (ii) is, in all material respects, of a
quality, quantity and condition useable or saleable in the ordinary course of
business with the Corporation or such Subsidiaries normal inventory turnover
experience, and is valued in accordance with GAAP.  None of the Corporation or its Subsidiaries
has any material liability with respect to the return or repurchase of any
goods in the possession of any customer.


Changes Since September 30,
2006.  Except as set forth on Section
5.10 of the Disclosure Schedule, since September 30, 2006, (i) neither the
Corporation nor any of its Subsidiaries has suffered a Material Adverse Effect,
(ii) the Corporation and its Subsidiaries have conducted their businesses in
the ordinary course consistent with past practice, and (iii) neither the
Corporation nor any of its Subsidiaries has taken any action that, if taken
after the date hereof, would constitute a violation of Sections 6.1(d), (e),
(l), (m) or (n).


Liabilities.  Neither the Corporation nor any of its
Subsidiaries has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise), whether or not any such liability or
obligation would have been required by GAAP to be set forth on a balance sheet
of the Corporation or any of its Subsidiaries or in the notes thereto, other
than (a) liabilities or obligations set forth on the Audited Financial
Statements as of September 30, 2006 or liabilities or obligations reflected in
the unaudited consolidated balance sheet of the Corporation and its
Subsidiaries as of the date of the Interim Financial Statements, (b)
liabilities or obligations specifically required to be incurred by the
Corporation or any of its Subsidiaries pursuant to this Agreement, (c)
liabilities or obligations incurred since the date of the Interim Financial
Statements in the ordinary course of business (which are not material,
individually or in the aggregate) consistent with past practice, (d)
liabilities or obligations for the purchase of inventory, equipment, goods or
services in the ordinary course of business (which are not material,
individually or in the aggregate) consistent with past practice, (e)
liabilities or obligations for the purchase of equipment as reflected in the
capital expenditure budget of the Corporation attached to Section 5.11 of
the Disclosure Schedule, and (f) those disclosed on Section 5.11(a) of
the Disclosure Schedule.  Section
5.11(b) of the Disclosure Schedule contains a complete and accurate
description (including the name of the lender, amount outstanding and any
related security interests), subject to ordinary and normal month end financial
statement



 8
 









adjustments which are not
material, of all indebtedness for borrowed money of the Corporation and its
Subsidiaries, whether owed to a bank or any other Person, including capitalized
leases, guarantees of indebtedness and any prepayment penalties that may arise
with respect to the repayment thereof as of September 30, 2007 (collectively, “Corporation
Debt”).


Litigation.  Except as listed on Section 5.12 of the
Disclosure Schedule, there is no, and since September 30, 2006 there
has not been, any action, suit, or other legal or administrative proceeding or
governmental investigation pending, or to the Knowledge of the Shareholders or
the Corporation, threatened, anticipated or contemplated (i) against, by or
affecting the Corporation or any of its Subsidiaries, or any of their
properties or assets, in excess of the Litigation Materiality Threshold or
where injunctive relief is being sought as a remedy, or (ii) which questions
the validity or enforceability of this Agreement, or the transactions
contemplated hereby, and, to the Knowledge of the Shareholders or the
Corporation, there is no reasonable basis for any of the foregoing.  There are no outstanding orders, decrees or stipulations
issued by any Governmental Authority applicable to the Corporation or any of
its Subsidiaries.


Environmental Matters.


The Shareholders and the
Corporation represent and Buyer acknowledges that the Corporation has, for
extended periods of time, owned and operated scrap yards and metal recycling
facilities at the Owned Properties and Leased Premises, which activities and
processes represent a substantial portion of the on-going value of the business
being acquired by Buyer and which Buyer intends to continue to operate. These
activities and processes involve the routine handling of Materials of
Environmental Concern normally associated with scrap yards and metal recycling
facilities, including, without limitation, petroleum products, solvents,
antifreeze, heavy metals and other substances associated with such activities
and processes.


Except as set forth on Section 5.13(b) of the Disclosure Schedule, each of the Corporation, its Subsidiaries and, to
the Knowledge of the Shareholders and the Corporation, Joint Ventures has
previously and is currently complying in all material respects, with all
obligations under all Environmental Laws in connection with the operation of
their respective businesses and
occupancy of the Facilities. 
Except as set forth on Section 5.13(b) of the  Disclosure
Schedule, none of the Corporation, its
Subsidiaries, the Shareholders or, to the Knowledge of the Shareholders and the
Corporation, the Joint Ventures have received any outstanding or
unresolved written notices alleging any non-compliance with or any
liability pursuant to any Environmental Laws or with respect to any Materials
of Environmental Concern.


Except as set forth on Section 5.13(c) of the
Disclosure Schedule, no action,
suit, claim, demand, proceeding, investigation, threat, complaint, arbitration
or charge (i) alleging the failure to comply with, or a violation of, any
Environmental Laws, (ii) requesting or mandating investigation, remediation or
cleanup, or (iii) alleging release or disposal of Materials of Environmental
Concern at the Facilities or at any off site location (collectively,
hereinafter defined as an “Environmental Claim”) has been made or, to
the Knowledge of Shareholders or the Corporation,  threatened and neither



 9
 









the Corporation nor any of its
Subsidiaries has received any notice alleging an Environmental Claim which has
not heretofore been fully and finally resolved, subject to no further right of
appeal and for which no further action is required.


Except as set forth on Section 5.13(d)(i) of the
Disclosure Schedule, no Materials of
Environmental Concern have ever been used, generated, treated, stored, released
or disposed of at any Facility, except in compliance with then existing Environmental Laws and except as does not result in
any material damage to person or property. 
Except in compliance with
Environmental Laws and except as set forth on Section 5.13(d)(ii) of the Disclosure Schedule, no underground storage tanks, as defined in RCRA or
under applicable state law, are present at any Facility or are operated by the
Corporation or its Subsidiaries at any Facility, and, to the Knowledge of the
Shareholders or the Corporation, no such tanks were previously abandoned or
removed except in compliance with then existing Environmental Laws.


Except as set forth on Section 5.13(e) of the Disclosure
Schedule, the Corporation and its
Subsidiaries and, to the Knowledge of Shareholders and the Corporation, Joint
Ventures do not have any material liability or unfulfilled
obligation, whether fixed, unliquidated, absolute, contingent or otherwise,
under any Environmental Laws or with respect to any Materials of Environmental
Concern, including any material
liability, responsibility or obligation for fines or
penalties, or for investigation, expense, removal, or remedial action to effect
compliance with or discharge any duty, obligation or claim under any such laws
or regulations and,
to the Knowledge of the Shareholders and the Corporation, there is no basis for any such liability or obligation. 
Except as set forth in Section 5.13(a) and Section 5.13(e)(ii) of the
Disclosure Schedule, (i) there has not
been and is not occurring at any Facility, or any location currently used by the
Corporation, its Subsidiaries or, to the Knowledge of the Shareholders or the
Corporation, any of their predecessors, or (ii) to the Knowledge of the
Shareholders or the Corporation, to which
the Corporation or any of its Subsidiaries or their predecessors ever sent any
materials, any release or threatened release, as those terms are defined in
CERCLA, of any Materials of Environmental Concern.  Except as
identified in Section 5.13(e)(ii) of the Disclosure
Schedule, neither the Corporation nor any
of its Subsidiaries has ever applied or disposed, transported or arranged for
the transportation or disposal of any Materials of Environmental Concern, in
any manner which presently
forms the basis for any present or future claim, demand or
action seeking investigation, removal, remedial action or expense at any
facility, site, location or body of water, surface or subsurface.  Except as
identified in Section 5.13(e)(iii) of the Disclosure
Schedule, neither the Corporation nor any
of its Subsidiaries has received notice that the Corporation or any of its
Subsidiaries has sent, arranged for disposal or treatment, arranged with a transporter
for transport for disposal or treatment, transported, or accepted for transport
any Materials of Environmental Concern, to a facility, site or location, which,
pursuant to CERCLA or any similar state or local law, (i) has been placed or
has been publicly proposed by authorities having jurisdiction to be placed, on
the National Priorities List or its state equivalent, or (ii) which is subject
to a claim, administrative order or other request to take removal or remedial
action by any person having jurisdiction and authority in the matter.



 10
 









Section 5.13 of the Disclosure Schedule identifies all environmental audits or assessments or occupational health
studies undertaken by or on behalf of the Corporation or any of its
Subsidiaries or, to the Knowledge of the Shareholders and the Corporation,
other Persons with respect to any Facility or the business of the Corporation
and its Subsidiaries, in the past five years, copies of which have been
provided to the Buyer.


Facilities
(Owned Properties and Leased Premises).


Title to Owned Properties. 
All of the real property owned in fee by the Corporation and/or its
Subsidiaries (the “Owned Properties”) are listed or described by common address
and related title commitment number on Section 5.14(a)(i) of the Disclosure
Schedule.  Title to the Owned
Properties is, and at Closing shall be, good and marketable, fee simple
absolute, held in the name of the Corporation or one of its Subsidiaries, free
of all Liens and encumbrances (collectively, “Encumbrances”), excepting only
the Permitted Encumbrances.  The
Permitted Encumbrances are presented on Section 5.14(a)(ii) of the
Disclosure Schedule in a manner so that the Owned Properties to which they
relate is readily identifiable.  At
Closing, title to the Owned Properties shall be insurable by LandAmerica or
Lawyers Title Insurance Corporation pursuant to an ALTA Form 2006 owner’s form
of policy or other form reasonably acceptable to Buyer, free of all exceptions,
except the Permitted Encumbrances. 
Except as set forth on Section 5.14(a)(iii) of the Disclosure
Schedule, other than the Corporation or any Subsidiary thereof, no Person
will be leasing, using or occupying, under a claim of legal right, any portion
of land, property, structures, fixtures or Improvements covered by the Owned
Properties or any part of any thereof as of the Closing Date.


[Intentionally Deleted]


Leased Premises.


Section
5.14.(c)(i) of the Disclosure Schedule lists
each real property lease (“Lease”) to which the Corporation or one of its
Subsidiaries is a tenant and lists the names of the parties thereto, the
expiration dates of the current term, and the annual base rent.  Accurate and complete copies of each Lease
have been delivered to Buyer.


Each Lease
is, and at Closing shall be, legal, valid and binding and in full force and
effect and, except as provided in a landlord waiver or estoppel letter provided
to Buyer at or prior to Closing, if any, has not now and will not at closing
have been assigned, modified, supplemented or amended.  The Corporation and/or its Subsidiaries have
performed all of the obligations required to be performed by it under the
Leases.  Neither the Corporation nor any
Subsidiary thereof nor, to the Knowledge of the Shareholders and the Corporation,
the landlord or sublandlord under any Lease, is in default under any of the
Leases, and to the Knowledge of Shareholders and the Corporation, no
circumstances or state of facts presently exists which, with the giving of
notice or passage of time, or



 11
 









both, would constitute a default under
any Lease or would permit the landlord or sublandlord under any Lease to
terminate any Lease.


Except as
set forth on Section 5.14(c)(iii) of the Disclosure Schedule, other than
the Corporation or any Subsidiary thereof, no Person will be subleasing, using
or occupying, under a claim of legal right, any portion of the Leased Premises
covered by the Leases as of the Closing Date.


The
Corporation and/or its Subsidiaries have the right to quiet enjoyment of each
parcel of the premises subject to each Lease (the “Leased Premises”) as
provided in each Lease for the full term of the applicable Lease (and any
renewal option related thereto) after consummation of the transactions
contemplated hereby.  There are no
contracts or agreements other than the Leases that affect or pertain to the
Corporation’s and/or its Subsidiary’s quiet enjoyment of each parcel of Leased
Premises.


No written
notice has been received by the Corporation or any Subsidiary indicating the
desire or intention of any other party to a Lease to amend, modify, rescind or
terminate the same.


Zoning.  The classification of the Real Property
(which shall mean the Leased Premises and the Owned Properties (collectively,
the “Real Property”)) under applicable zoning laws, ordinances and regulations
permits the present use and occupancy of all Real Property by the Corporation
or the Subsidiaries and permits the Improvements (as hereinafter defined)
located thereon as currently constructed, used and occupied.  To the Knowledge of the Shareholders and the
Corporation, there are no pending or threatened actions or proceedings which
could result in a modification or termination of such zoning and other land use
requirements of a Governmental Authority which would affect the continued right
of the Corporation and its Subsidiaries to use and occupy the Real Property and
Improvements in a manner consistent with historical practices and in the
ordinary course of business.


Utility Services.  The water, electric, gas and sewer utility
services and any septic tank and storm drainage facilities currently servicing
the Real Property are adequate for the present use of the Real Property by the
Corporation and its Subsidiaries in conducting the business operations thereon.
To the Knowledge of the Shareholders and the Corporation, there is no condition
which will result in the termination of the present access from the Real
Property to such utility services and such other facilities described above.


Access.  The Corporation has obtained all Permits and
rights-of-way which are necessary to ensure vehicular and pedestrian ingress
and egress to and from the Owned Properties. 
Except with respect to any matters specifically established by the
Permitted Encumbrances, there are, to the Knowledge of the Shareholders and the
Corporation, no restrictions on entrance to or exit from the Real Property to
adjacent



 12
 









public
streets and no conditions which will result in the termination of the present
access from the Real Property to existing highways and roads.


Eminent Domain.  Neither the Corporation nor any of its
Subsidiaries has received any notices that any Governmental Authority having
the power of eminent domain over the Real Property has commenced to exercise
the power of eminent domain with respect to all or any part of the Real Property.


Improvements.  All buildings, structures, fixtures, building systems
and all components thereof (collectively, the “Improvements”) located on the
Real Property have been maintained in accordance with the Corporation’s
standard maintenance policies in the ordinary course of business and are
sufficient for the business operations as currently conducted thereon.  All mechanical and other systems located in
the Improvements have been maintained in accordance with the Corporation’s
standard maintenance policies in the ordinary course of business, and are
sufficient for the business operations as presently conducted.


Public Improvements. 
No assessment for public improvements has been made against the Real
Property which is currently due and payable and remains unpaid.


All Real Property. 
Except as set forth on Section 5.14(j) of the Disclosure Schedule,
the Real Property comprises all of the real property used by the Corporation in
its presently conducted business operations; and neither the Corporation nor
any of its Subsidiaries is a party to any agreement or option to purchase or
lease any real property or interest therein, except as set forth on Section
5.14(j) of the Disclosure Schedule.


Proceedings.  With respect to the Real Property,  (i) except
as set forth on Section 5.14(k)(i) of the Disclosure Schedule, no
portion thereof is subject to any pending or, to the Knowledge of the
Shareholders and the Corporation, threatened fire, health, safety, building,
environmental, hazardous substances, pollution control, zoning or other land
use regulatory proceedings or proceeding by any Governmental Authority, and(ii)
neither the Corporation nor any of its Subsidiaries has received any notice of
a violation or claimed violation of any Law affecting the Real Property.


Damage. 
No portion of the Real Property that is material to the operation of the
business of the Corporation and its Subsidiaries has suffered any damage by
fire or other casualty which (i) has not heretofore been repaired; or, (ii) (A)
for which repairs have commenced and are being diligently pursued, and (B) for
which the Corporation or the Subsidiaries have adequate insurance coverage to
complete such repairs.


Landlord Leases.  Section
5.14(m) of the Disclosure Schedule describes each real property leased
by the Corporation or one of its Subsidiaries to a third party tenant by
listing the name of the parties thereto, a brief description of the leased
premises, the expiration dates of the current term, and the annual rental (the “Landlord
Leases”).


Shareholders Premises.  Section
5.14(n) of the Disclosure Schedule described those real properties owned or
controlled by the Shareholders, or entities owned or controlled by the
Shareholders (the “Shareholder Premises”), now leased to the



 13
 









Corporation or one of its Subsidiaries.  For purposes of the representations and
warranties contained herein, the Shareholder Premises shall be deemed “Owned
Properties”.


Assets.


Except as set forth on Section 5.15 of the Disclosure
Schedule and Permitted Liens, the Corporation or one of its Subsidiaries
has good title to all of its Assets, free and clear of any Liens or
restrictions on use.


The Fixed Assets currently in use in the business of the
Corporation and its Subsidiaries have been maintained in the ordinary course of
business and are sufficient for the business operations as presently conducted.


The Assets and Facilities constitute, in the aggregate, all
of the assets and properties used in the conduct of the business of the
Corporation and its Subsidiaries as currently conducted.


Compliance with Laws.  Except as set forth on Section 5.16 of the
Disclosure Schedule, the Corporation and its Subsidiaries are and have been
in compliance, in all material respects, with all laws, regulations and orders
of federal, state, local and foreign governments (and all agencies thereof)
applicable to them, their business, Assets and operations.  Neither the Corporation nor any of its
Subsidiaries has been cited, fined or otherwise notified in writing of any past
or present failure to comply with any laws, regulations or orders which has not
been (i) paid, (ii) cured, (iii) is in the process of being cured and set forth
on Section 5.16 of the Disclosure Schedule, or (iv) which is being
contested in good faith and set forth on Section 5.16 of the Disclosure
Schedule.


Labor and Employment Matters.  The Corporation has provided Buyer with the
name and current rate of compensation of all employees of the Corporation and
its Subsidiaries with total annual compensation in excess of $200,000.  Except as set forth in Section 5.17 of the
Disclosure Schedule:


neither the Corporation nor any of its Subsidiaries is a
party to or bound by any Collective Bargaining Agreement or any other agreement
with a labor union, and there has been no effort by any labor union during the
24 calendar months prior to the date hereof to organize any employees of the
Corporation or any of its Subsidiaries into one or more collective bargaining
units;


there is no pending or, to the Knowledge of the Shareholders
or the Corporation, threatened labor dispute, strike or work stoppage which
affects or which may affect the business of the Corporation and its
Subsidiaries or which may interfere with its continued operations;


there are no outstanding arbitration awards, labor
grievances, arbitration proceedings or other proceedings under any Collective
Bargaining Agreement which are material;



 14
 









the Corporation and its Subsidiaries have received no
written notice of, and the Corporation and its Subsidiaries have committed no
material breaches of any Collective Bargaining Agreement;


there are no written or, to the Knowledge of the
Shareholders and the Corporation, oral agreements or courses of conduct which
modify any Collective Bargaining Agreement; and


no Collective Bargaining Agreement has a remaining term that
will terminate in accordance with its terms within twenty-four (24) months of
the date hereof.


Except as
set forth on Section 5.17 of the Disclosure Schedule, none of the
Corporation, its Subsidiaries, nor any agent, representative or employee
thereof has committed any unfair labor practice as defined in the National
Labor Relations Act, as amended, and there is no pending or, to the Knowledge
of the Shareholders and the Corporation, threatened charge or complaint against
the Corporation or any of its Subsidiaries by or with the National Labor
Relations Board or any representative thereof in the past 3 years.  There is no employment-related charge,
complaint, grievance, investigation, inquiry or obligation of any kind, pending
or threatened in any forum relating to an alleged violation or breach by the
Corporation or any of its Subsidiaries (or any of their officers or directors)
of any law, regulation or contract.  To
the Knowledge of the Shareholders and the Corporation, no executive or key
employee or group of key employees has any plans to terminate his, her or their
employment with the Corporation or any of its Subsidiaries as a result of the
transactions contemplated hereby or otherwise. 
The Corporation and its Subsidiaries have complied in all material
respects with applicable laws, rules and regulations relating to employment,
civil rights and equal employment opportunities, including but not limited to,
the Civil Rights Act of 1964, the Fair Labor Standards Act, and the Americans
with Disabilities Act, as amended. 
Neither the Corporation nor any of its Subsidiaries has undertaken any
action that would require notices to be made under the Worker Adjustment and
Retraining Notification Act (the “WARN Act”), and the Corporation and
the Subsidiaries are otherwise in compliance with the requirements of, and have
no liabilities pursuant to, the WARN Act.


Employee Benefit Plans.


Employee Benefit Plans.  Section 5.18(a) of the Disclosure Schedule
contains a complete and accurate list of each employee benefit plan or
arrangement of the Corporation and its Subsidiaries, including but not limited
to employee pension benefit plans, as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), multiemployer
plans, as defined in Section 3(37) of ERISA, employee welfare benefit plans, as
defined in Section 3(1) of ERISA, deferred compensation plans, stock option
plans, bonus plans, stock purchase plans, change in control, loans,
hospitalization, disability, life insurance, and other insurance plans, retiree
medical, severance or termination pay plans and policies, whether or not
described in Section 3(3) of ERISA, in which current or former employees, their
spouses or dependents, of the Corporation or its Subsidiaries participate or
for which the Corporation or any Subsidiary contributes or has a liability (“Employee
Benefit Plans”)



 15















(in the
case of Employee Benefit Plans for which the Corporation or one of the
Subsidiaries is the employer sponsor), true and accurate copies of which,
together with the most recent annual reports on Form 5500 and all schedules
thereto, all favorable determination or opinion letters or other rulings issued
by the Internal Revenue Service, all related trust agreements and insurance
contracts (if any), the most recent summary plan descriptions, and written
summaries of any unwritten arrangements were furnished to the Buyer).  None of the assets of any Employee Benefit
Plan is stock of the Corporation or any of its Subsidiaries, or property leased
to or jointly owned by the Corporation or any of its Subsidiaries.


Compliance with Law.  With respect to each Employee Benefit Plan
for which the Corporation or one of the Subsidiaries is the employer sponsor
(i) each has been administered in all material respects in compliance with its
terms and with all applicable laws, including, but not limited to, ERISA and
the Code; (ii) no actions, suits, claims or disputes are pending, or to the
Knowledge of the Shareholders or the Corporation threatened (except for routine
claims for benefits); (iii) no audits, inquiries, reviews, proceedings, claims,
or demands are pending with any governmental or regulatory agency; (iv) there
are no facts of which the Shareholders or the Corporation have Knowledge which
could give rise to any material liability; (v) all reports, returns, and
similar documents required to be filed with any governmental agency or
distributed to any plan participant have been duly or timely filed or
distributed; and (vi) no “prohibited transaction” has occurred within the
meaning of the applicable provisions of ERISA or the Code with respect to the
Corporation or its Subsidiaries; with respect to each other Employee Benefit
Plan, neither the Corporation nor any of its Subsidiaries has received written
notice of any of the foregoing.  All
Employee Benefit Plans and any other employment agreement or arrangement have
been operated in compliance with Section 409A of the Internal Revenue Code,
such that the Corporation and its Subsidiaries shall be entitled to deduct the
cost of such compensation and no excise tax shall be imposed on any employee,
contractor, or other service provider.


Qualified Plans.  With respect to each Employee Benefit Plan
intended to qualify under Code Section 401(a) or 403(a) and with respect to which the
Corporation or a Subsidiary is the employer sponsor, (i) each
such plan is qualified under Code Section 401(a) or 403(b), as applicable, and
the Internal Revenue Service has issued a favorable determination letter(or, the plan is maintained through
adoption of a prototype or similar plan document with respect to which the
Internal Revenue Service has issued a favorable notification letter to the
prototype sponsor), true and correct copies of which
have been furnished to the Buyer, that such plans are qualified and exempt from
federal income taxes, all such plans and amendments thereto have been timely
adopted and then filed with the Internal Revenue Service for a favorable
determination letter within the applicable remedial amendment period (or such
period has not yet ended), and such plans have been properly amended to comply
with the Economic Growth and Tax Relief Reconciliation Act of 2001; (ii) no
such determination letter has been revoked nor has revocation been threatened,
nor has any amendment or other action or omission occurred with respect to any
such plan since the date of its most recent determination letter or application
therefor in any respect which would adversely affect its qualification or
materially increase its costs; (iii) no such plan has been amended in a manner
that would



 16
 









require
security to be provided in accordance with Section 401(a)(29) of the Code; (iv)
no reportable event (within the meaning of Section 4043 of ERISA) has occurred;
(v) as of the Closing Date, the present value of all liabilities that would be “benefit
liabilities” under Section 4001(a)(16) of ERISA if benefits described in Code
Section 411(d)(6)(B) were included will not exceed the then current fair market
value of the assets of such plan (determined using the reasonable actuarial
assumptions used for the most recent actuarial valuation for such plan); (vi)
all contributions to, and payments from and with respect to such plans, which
may have been required to be made in accordance with such plans and, when
applicable, Section 302 of ERISA or Section 412 of the Code, have been timely
made; and (vii) all such contributions to the plans, and all payments under the
plans (except those to be made from a trust qualified under Section 401(a) of
the Code) and all payments with respect to the plans (including, without
limitation, PBGC and insurance premiums) for any period ending before the
Closing Date that are not yet, but will be, required to be made are properly
accrued and reflected on the Interim Financial Statements.


Multiemployer Plans.  With respect to any multiemployer plan, as
described in Section 4001(a)(3) of ERISA (“MPPA Plan”) (i) all contributions
required to be made with respect to employees of the Corporation and its
Subsidiaries have been timely paid; (ii) except as set forth in Section
5.18(d) of the Disclosure Schedule, neither the Corporation nor any of its
Subsidiaries has incurred, and they will not incur, directly or indirectly, any
withdrawal liability under ERISA with respect to any such plan (whether by
reason of the transactions contemplated by this Agreement or otherwise); (iii) Section
5.18(d) of the Disclosure Schedule sets forth (A) the withdrawal liability
under ERISA with respect to each MPPA Plan as determined by the plan sponsor as
of the date specified on Section 5.18(d) of the Disclosure Schedule, (B)
the date as of which such amount was calculated, and (C) the method for
determining the withdrawal liability; and (iv) except as set forth in Section
5.18(d) of the Disclosure Schedule, neither the Corporation nor any of its
Subsidiaries has received written notice that any such plan is insolvent or in
reorganization or that an accumulated funding deficiency (as defined in Section
302 of ERISA and Section 412 of the Code), whether or not waived, exists with
respect to any such plan.  The hours reported
by the Corporation and its Subsidiaries for work performed by their respective
employees on any withdrawal liability assessment or estimate are accurate in
all material respects.  Anything
contained in this Section 5.18 to the contrary notwithstanding, except
as specifically set forth in this Section 5.18(d), the Shareholders and
the Corporation make no representations or warranties with regard to any MPPA
Plan.


Welfare Plans.  (i) Except as set forth on Section 5.18(e)
of the Disclosure Schedule, neither the Corporation nor any of its Subsidiaries
is obligated under any employee welfare benefit plan as described in Section
3(1) of ERISA (“Welfare Plan”) to provide medical or death benefits with
respect to any employee or former employee of the Corporation, its Subsidiaries
or any of their predecessors after termination of employment (except as
required by Code Section 4980B or Section 601 through 608 of ERISA and only if
the cost of such coverage is paid in full by the former employee); (ii) the
Corporation and each of its Subsidiaries has complied with the notice and
continuation coverage requirements of Section 4980B of the Code and the



 17
 









regulations
thereunder with respect to each Welfare Plan that is, or was during any taxable
year for which the statute of limitations on the assessment of federal income
taxes remains, open, by consent or otherwise, a group health plan within the
meaning of Section 5000(b)(1) of the Code; and (iii) there are no reserves,
assets, surplus or prepaid premiums under any Welfare Plan which is an Employee
Benefit Plan.  The consummation of the
transactions contemplated by this Agreement will not entitle any individual to
severance pay, and, will not accelerate the time of payment or vesting, or
increase the amount of compensation, due to any individual under an Employee
Benefit Plan or otherwise.


Controlled Group Liability.  Neither the Corporation nor any entity that
would be aggregated with it under Code Section 414(b), (c), (m) or (o):  (i) has ever terminated or withdrawn from an
employee benefit plan under circumstances resulting (or that could reasonably
be expected to result) in a liability to the Pension Benefit Guaranty
Corporation (“PBGC”), the fund by which the employee benefit plan is funded, or
any employee or beneficiary for whose benefit the plan is or was maintained
(other than routine claims for benefits) which would be a liability of the
Corporation or any of its Subsidiaries; (ii) has any assets subject to (or that
could reasonably be expected to be subject to) a lien for unpaid contributions
to any employee benefit plan which would be a liability of the Corporation or
any of its Subsidiaries; (iii) has failed to pay premiums to the PBGC when due
which would be a liability of the Corporation or any of its Subsidiaries; (iv)
is subject to (or could reasonably be expected to be subject to) an excise tax
under Chapter 43 of the Code which would be a liability of the Corporation or
any of its Subsidiaries; (v) has engaged in any transaction which would give
rise to liability under Section 4069 or Section 4212(c) of ERISA which would be
a liability of the Corporation or any of its Subsidiaries; or (vi) has violated
Code Section 4980B or Section 601 through 608 of ERISA which would be a
liability of the Corporation or any of its Subsidiaries.


Other Liabilities.  Except as set forth on Section 5.18(g) of
the Disclosure Schedule, (i) none of the Employee Benefit Plans obligates
the Corporation or any of its Subsidiaries to pay separation, severance,
termination or similar benefits as a result of any transaction contemplated by
this Agreement or as a result of a “change of control” (as such term is defined
in Section 280G of the Code) which would be a liability of the Corporation or
any of its Subsidiaries; (ii) all required or discretionary (in accordance with
historical practices) payments, premiums, contributions, reimbursements, or
accruals for all periods ending prior to or as of the Closing Date shall have
been made or properly accrued on the Interim Financial Statements or will be
properly accrued on the books and records of the Corporation and its
Subsidiaries as of the Closing Date; and (iii) none of the Employee Benefit
Plans has any unfunded liabilities which are not reflected on the Interim
Financial Statements or the books and records of the Corporation and its
Subsidiaries.


Tax
Matters.


The Corporation (i) has duly and timely filed or caused to
be filed with the appropriate Tax Authorities all Tax Returns of, related to or
including the Corporation



 18
 









and each
of its Subsidiaries, including, without limitation, with respect to income,
assets, payroll or operations, and properly included the items related thereto
in such Tax Returns, which Tax Returns are true, correct and complete in all
material respects, and (ii) has duly and timely paid or caused to be paid to
the appropriate authorities all Taxes that are due and payable on or before the
Closing Date by the Corporation and its Subsidiaries, and has properly accrued
on its books and records in accordance with GAAP any Tax which is not then due.  Neither the Corporation nor the Subsidiaries
is the beneficiary of any extension of time within which to file any Tax
Return.  The Shareholders, the
Corporation and each of its Subsidiaries have complied with all applicable laws,
rules and regulations relating to the reporting, payment, collection and
withholding of Taxes and have duly and timely collected or withheld and paid
over to the proper Tax Authorities all amounts required to be so collected or
withheld and paid over under applicable Laws. 
Except as set forth on Section 5.19 of the Disclosure Schedule,
all taxable years or periods for the assessment of Taxes are closed either by
agreement with the applicable Tax Authority or by operation of the normal
statute of limitations for such Tax Returns (without extension).  Section 5.19 of the Disclosure Schedule
sets forth a list of each jurisdiction where the Corporation or any of its
Subsidiaries files a Tax Return and the type of Tax Return filed.


Except as set forth on Section 5.19 of the Disclosure
Schedule, no Tax Authority has asserted any adjustment that would result in
additional Tax for which the Corporation or any of its Subsidiaries is or may
be liable or with respect to which a Lien may be imposed on any asset or
property of the Corporation or any of its Subsidiaries which has not been fully
paid or which adjustment, if asserted, would apply to any other period.  No such adjustment is pending or, to the
Knowledge of the Corporation, being considered and there is no basis for any
such adjustment.


Except as set forth on Section 5.19 of the Disclosure
Schedule (1) neither the Corporation nor any of its Subsidiaries is a party
to any agreement, contract or arrangement that would result, individually or in
the aggregate, in the payment of any amount that would not be deductible by
reason of Section 162, 280G or 404 of the Code; 
(2) neither the Corporation nor any of its Subsidiaries has any “tax-exempt
bond financed property” or “tax-exempt use property” within the meaning of
Section 168(g) or (h), respectively, of the Code;  (3) neither the Corporation nor any of its
Subsidiaries have entered into any sale-leaseback or leveraged lease
transaction;  (4) none of the Assets of
the Corporation and its Subsidiaries is required to be treated as being owned
by any other Person pursuant to the “safe harbor” leasing provisions of Section
168(f)(8) of the Internal Revenue Code of 1954, as in effect prior to the
repeal of said leasing provisions;  (5)
neither the Corporation nor any of its Subsidiaries has been included in a
consolidated, combined or unitary Tax Return; 
(6) neither the Corporation nor any of its Subsidiaries is or ever has
been a party to any Tax sharing or Tax allocation agreement, arrangement or
understanding;  (7) no Tax Authority has
ever asserted that the Corporation or any of its Subsidiaries should file a Tax
Return in a jurisdiction where it does not file; and (8) neither the
Corporation nor any of its Subsidiaries has outstanding any power of attorney,
closing agreement or other instrument authorizing another Person to act on its
behalf in connection with any Tax matter.



 19
 









Except as set forth on Section 5.19 of the Disclosure
Schedule, neither the Corporation nor any of its Subsidiaries will be
required to include any item of income in, or exclude any item of deduction
from, taxable income for any taxable period (or portion thereof) ending after
the Closing Date as a result of any (i) change in method of accounting for a
taxable period ending on or prior to the Closing Date; (ii) “closing agreement”
as described in Section 7121 of the Code (or any similar provision of state,
local or foreign income Tax law) executed on or prior to the Closing Date;
(iii) installment sale or open transaction disposition made on or prior to the
Closing Date; or (iv) prepaid amount received on or prior to the Closing Date.


The Corporation is and has been a S corporation (or its
equivalent), and each of its Subsidiaries that is a corporation is and has been
a “qualified subchapter S subsidiary” within the meaning of Section 1361(b)(3)
of the Code,  for federal, state and,
where applicable, local income and franchise Tax purposes since October 1,
2001, or the date of its incorporation, if later, through and including the
Closing Date.  Except as set forth on Section
5.19 of the Disclosure Schedule, neither the Corporation nor any of its
Subsidiaries has, since October 1, 2001, acquired assets from another
corporation in a transaction in which the Corporation’s or Subsidiaries’ Tax
basis for the acquired assets was determined, in whole or in part, by reference
to the Tax basis of the acquired assets in the hands of the transferor, or
acquired the stock of a corporation which is a “qualified subchapter S
subsidiary” within the meaning of Section 1361(b)(3) of the Code.


Except to the extent attributable to the transactions
contemplated by this Agreement, neither the Corporation nor any of its
Subsidiaries will incur any liability for Taxes from the date of this Agreement
through the Closing Date other than in the ordinary course of business and
consistent with past practice.


The Corporation has delivered to Buyer correct and complete
copies of all federal and state income and franchise Tax Returns filed by the
Corporation and its Subsidiaries, and examination reports and statements of
deficiencies assessed against or agreed to by the Corporation and its
Subsidiaries since January 1, 2004.


Insurance.  Section 5.20 of the Disclosure Schedule
sets forth a description of each insurance policy covering the Assets, rights,
business equipment, properties, operations, employees, consultants and
directors of the Corporation and its Subsidiaries, including the name of the
insurer, policy number, policy limits and expiration dates (copies of which,
including all amendments and riders, have been provided to the Buyer (the “Insurance
Policies”).  Such Insurance Policies are
in full force and effect, all premiums due thereon have been paid and neither
the Corporation nor any Subsidiary is in breach or default and, to the
Knowledge of the Shareholders and the Corporation, no event has occurred that
with notice or the lapse of time, would constitute a breach or default
thereunder.  As of the Closing, each of
the Insurance Policies will be in full force and effect.  Except as set forth in Section 5.20 of the
Disclosure Schedule, none of the Insurance Policies will lapse or terminate
as a result of the transactions contemplated by this Agreement.  The Corporation and each of its Subsidiaries
has complied with all provisions of such Insurance Policies, has not received
any notice or other communication from any insurance company canceling or
materially amending any Insurance Policy and, to the Knowledge of the
Shareholders, no such cancellation or amendment is



 20
 









threatened.
Except as set forth in Section 5.20 of the Disclosure Schedule, during
the past three (3) years there have been no claims made (including pending
claims) under any of the Insurance Policies where the amounts paid or expected
to be paid or reserved against exceed $1,000,000.  To the Knowledge of the Shareholders and the
Corporation, neither the Corporation nor any of its Subsidiaries has failed to
give, in a timely manner, any notice required under any of the Insurance
Policies to preserve its rights thereunder.


Licenses and Permits.  The Corporation and each of
its Subsidiaries possess all material licenses and governmental or official
approvals, permits or authorizations (collectively, the “Permits”) required for
their businesses and operations as currently conducted, including with respect
to the operation of each of the Facilities. 
Section 5.21 of the Disclosure Schedule contains a complete and
accurate list of all material Permits.  All Permits are valid and in full force and effect, the Corporation and each
of its Subsidiaries are in compliance, in all material respects, with the
respective requirements thereof.  Except as set forth in Section 5.21 of the Disclosure
Schedule, no proceeding is pending or, to the Knowledge of
the Shareholders or the Corporation, threatened to revoke or amend any such Permits.  None of such Permits is or will be impaired or in any
way materially affected by the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.


Affiliated Transactions.  Except as set forth in Section 5.22 of the
Disclosure Schedule, none of the Shareholders or their Affiliates or family
members has any direct or indirect interest in any customer, supplier or
competitor of the Corporation or any of its Subsidiaries, or in any person from
whom or to whom the Corporation or any of its Subsidiaries leases real or
personal property (other than ownership of less than 5% of a publicly-traded
company).  Except as set forth in Section
5.22 of the Disclosure Schedule, none of the Shareholders, their Affiliates
or family members, or the Corporation’s and its Subsidiaries’ officers,
employees or shareholders has been involved in any business arrangement or
relationship with the Corporation or any of its Subsidiaries within the past 24
months, and none of Shareholders, their Affiliates or family members or the
Corporation’s and its Subsidiaries’ officers, employees and shareholders owns
any asset, tangible or intangible, that is used in the business of the
Corporation and its Subsidiaries (the “Affiliated Transactions”).  The Leases between the Corporation or any of
its Subsidiaries and any Shareholder, their Affiliates or family members are
separately identified on Section 5.22 of the Disclosure Schedule (the “Affiliate
Leases”).


Material Contracts.  Section 5.23 of the Disclosure Schedule
sets forth an accurate, correct and complete list of all contracts,
instruments, commitments, agreements, arrangements and understandings (whether
written or oral) including all amendments and supplements thereto, to which the
Corporation or any of its Subsidiaries is a party or is bound, or by which any
of the assets of the Corporation or any of its Subsidiaries are subject or
bound, which are (A) not able to be terminated by the Corporation on not more
than 60 days advance notice and which involve total payments to or by the
Corporation of $2,000,000 or more within any 12 month period, or (B) which
otherwise involve any of the following types of contracts (the items in (A) and
(B) being collectively referred to herein as the “Material Contracts”):



 21
 









all raw material supply contracts (exclusive of scrap metal
supply contracts) and any other purchase orders, agreements or contracts for
the purchase of any materials or services (including utilities) involving an
amount in excess of $1,000,000;


any sales, license, service or distribution agreements and
contracts, open purchase orders or similar commitments providing for sales of
products (exclusive of scrap metal products and secondary aluminum alloys) in
an amount in excess of $1,000,000 annually;


all Leases and all other leases, agreements, contracts and
other instruments affecting the Facilities under which the aggregate potential
payments under any such lease, agreement, contract and other instrument in any
12 month period are greater than $2,000,000;


(i) all employment contracts for employees with annual base
pay of $100,000 or more that are not cancellable by the Corporation or its
Subsidiaries on not more than 60 days notice without liability to the
Corporation or its Subsidiaries, (ii) all Collective Bargaining Agreements and
(iii) any contracts with employees containing severance obligations in excess
of one year’s base salary not otherwise disclosed in Sections 5.17 or 5.18(a)
of the Disclosure Schedule;


all machinery leases, equipment leases and other personal
property leases, (excluding master leases disclosed in Section 5.23(e) of
the Disclosure Schedule), involving payment obligations in any 12 month
period in excess of $2,000,000;


all material licenses, agreements, contracts and other
instruments relating to the Intellectual Property or Software (other than COTS
Software);


all agreements and contracts containing “take or pay”
provisions involving consideration in excess of $200,000;


all powers of attorney executed on behalf of the Corporation
or any of its Subsidiaries;


all agreements and contracts for insurance not otherwise
disclosed in Section 5.20 of the Disclosure Schedule);


all agreements and contracts with state, federal, local,
regulatory or other governmental entities that are not cancellable by the
Corporation or its Subsidiaries on not more than 60 days advance notice and
which involve payment obligations in any 12 month period of more than
$2,000,000 ;


all agreements and contracts not to compete or otherwise restricting
activities of the Corporation or its Subsidiaries;


all agreements and contracts containing a provision
requiring the Corporation or its Subsidiaries to indemnify any party for other
than the acts or omissions



 22
 









of the
Corporation or its Subsidiaries or their respective employees and agents or to
assume any tax, environmental or other liability of a third party;


any agreement concerning a partnership or joint venture not
otherwise disclosed in Section 5.8(b) of the Disclosure Schedule;


any agreement (or group of related agreements) under which
the Corporation or any of its Subsidiaries has created, incurred, assumed, or
guaranteed any indebtedness for borrowed money, or any capitalized lease
obligation, or under which it has incurred a Lien on any of its assets,
tangible or intangible;


any agreement between the Corporation or any of its
Subsidiaries and any of the Shareholders or their Affiliates or family members
not otherwise disclosed in Section 5.22 of the Disclosure Schedule;


any agreement under which the Corporation or any of its
Subsidiaries has advanced or loaned any amount to any of its directors,
officers or employees (outside the ordinary course of business);


any agreement, whether or not fully performed, relating to
(i) any acquisition or disposition of any capital stock of, or any material
portion of the assets of, the Corporation or any Subsidiary or the acquisition
or disposition of any division or line of business of the Corporation or any
Subsidiary, or, (ii) any acquisition or disposition of real property assets, or
(iii) the acquisition of any target entity, each of which occurred within the
24 month period prior to the date of this Agreement and the aggregate
consideration to be paid or received by the Corporation or any Subsidiary exceeded
$5,000,000 or which involves ongoing obligations; and,


any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or arrangement
for the benefit of its current or former directors, officers and employers not
otherwise disclosed in Section 5.18(a) of the Disclosure Schedule.


All
Material Contracts are valid, binding and enforceable against the Corporation
or one or more of its Subsidiaries, as the case may be, and to the Knowledge of
the Shareholders and the Corporation, the other parties thereto in accordance
with their terms and are in full force and effect, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally and
general equitable principles regardless of whether such enforceability is
considered in a proceeding at law or in equity, and neither the Corporation,
its Subsidiaries, nor, to the Knowledge of the Shareholders or the Corporation,
any other party to any Material Contract is in material breach of, violation
of, or default under the terms of any such Material Contract.  Except as set forth on Section 5.23 of the
Disclosure Schedule, no event has occurred which with notice or passage of
time or both would result in a material breach of, violation of, or in default
under, the terms of any Material Contract. 
Except as set forth in Section 5.23 of the Disclosure Schedule,
none of the rights of the Corporation or its Subsidiaries under any Material
Contract will be impaired by the consummation of the transactions contemplated
by this Agreement, and all of such rights will be enforceable by the
Corporation or one of its Subsidiaries, as the case may be, after the Closing
Date without the consent or agreement of any other party, including all rights
to renew the applicable Material



 23
 









Contract.  Except as set forth below, the Shareholders
have delivered accurate, correct and complete copies of each Material Contract
(as amended to date) to Buyer.


Intellectual
Property. 
Section 5.24 of the Disclosure Schedule sets forth an accurate
and complete list of all patents, registered Intellectual Property and other
material items of Intellectual Property owned, licensed or used by the
Corporation or any of its Subsidiaries. 
Except as set forth in Section 5.24 of the Disclosure Schedule,
(i) none of the Intellectual Property or products or methods of the business of
the Corporation and its Subsidiaries interferes with, infringes upon, conflicts
with or otherwise violates the rights of others and, to the Knowledge of the
Shareholders or the Corporation, the Intellectual Real Property is not being
interfered with or infringed upon by others, and none of the Intellectual
Property is subject to any outstanding order, decree or judgment; (ii) there
are no royalty, commission or similar arrangements, and no licenses,
sublicenses or agreements, pertaining to any of the Intellectual Property or
products or methods of the business of the Corporation and its Subsidiaries;
and, (iii) neither the Corporation nor its Subsidiaries has agreed to indemnify
any person for or against any infringement of or by the Intellectual Property
or products or methods of the business of the Corporation or its Subsidiaries.  Except as set forth on Section 5.24 of the
Disclosure Schedule, no rights of the Corporation or its Subsidiaries in
and to the Intellectual Property will be affected by the consummation of the
transactions contemplated hereby.


Customers
and Suppliers. 
(a)  Section 5.25 of the
Disclosure Schedule sets forth an encrypted list of those suppliers that
have provided raw materials, products, supplies or services to the Corporation
and its Subsidiaries at a cost to the Corporation and its Subsidiaries of
greater than $2,000,000 during the fiscal year of the Corporation ending
September 30, 2006 and are expected to provide raw materials, products,
supplies or services at a cost to the Corporation and its Subsidiaries of
greater than $2,000,000 during the fiscal year of the Corporation ending
September 30, 2007.  To the Knowledge of
the Corporation and the Shareholders, there does not exist any fact, condition
or event (i) which would cause the Corporation’s or any Subsidiary’s
relationship with any supplier after Closing to be materially and adversely
different than the current relationship with such supplier, or (ii) which would
materially and adversely affect any supplier’s ability to supply raw materials,
products or services to the Corporation or any of its Subsidiaries.  Section 5.25 of the Disclosure Schedule
sets forth an encrypted list by entity of those customers that have purchased
products or services from the Corporation and its Subsidiaries at a cost to the
purchaser of greater than $2,000,000 during the fiscal year of the Corporation
ending September 30, 2006 and are expected to provide raw materials, products,
supplies or services at a cost to the Corporation and its Subsidiaries of
greater than $2,000,000 during the fiscal year of the Corporation ending
September 30, 2007.  To the Knowledge of
the Shareholders or the Corporation, there does not exist any fact, condition
or event (except the transactions contemplated by this Agreement) (i) which
would cause the Corporation’s or any Subsidiary’s relationship with any
customer to be materially and adversely different than the current relationship
with such customer, or (ii) which would materially and adversely effect any
customer’s ability to purchase products or services from the Corporation or its
Subsidiaries.


No supplier of the Corporation or its Subsidiaries listed on Section
5.25 of the Disclosure Schedule has advised the Corporation or any of the
Subsidiaries in writing or, to the Knowledge of the Shareholders and the
Corporation, in any other manner that it will stop, or materially decrease the
rate of, supplying materials, products or services to



 24
 









the
Corporation or its Subsidiaries.  No
customer listed on Section 5.25 of the Disclosure Schedule has advised
the Corporation or any of the Shareholders that it will stop, or materially
decrease the rate of buying materials, products or services from the
Corporation or its Subsidiaries.


Foreign Corrupt Practices Act.  Neither the Corporation nor any of its
Subsidiaries (including any of their officers or directors or, to the Knowledge
of the Shareholders and the Corporation, any of their employees, agents,
distributors or other Persons associated with or acting on their behalf) has,
directly or indirectly, taken any action which would cause the Corporation or
its Subsidiaries to be in violation of the Foreign Corrupt Practices Act of
1977, as amended, or any rules or regulations thereunder or any similar
anti-corruption or anti-bribery Laws applicable to the Corporation or any of
its Subsidiaries in any jurisdiction other than the United States (in each
case, as in effect at the time of such action) or, to the knowledge of the
Corporation or the Shareholders, used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, made, offered or authorized any unlawful payment to foreign
or domestic government officials or employees, whether directly or indirectly,
or made, offered or authorized any unlawful bribe, rebate, payoff, influence
payment, kickback or other similar unlawful payment, whether directly or
indirectly.


Financial Controls.    The
Corporation and its Subsidiaries maintain accurate books and records reflecting
their respective assets and liabilities in all material respects.  The Corporation and its Subsidiaries maintain
internal controls that provide reasonable assurance that the reliability of the
financial reporting and the preparation of financial statements for external
purposes are prepared in accordance with generally accepted accounting
principles.  Such internal controls
include policies and procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and
disposition of assets of the Corporation and its Subsidiaries; (2) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles and that receipts and expenditures of the Corporation are
being made in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the Corporations’
assets that could have a material effect on the financial statements, subject
to the inherent limitations that internal controls may not prevent or detect
misstatements.


No
Commissions. 
Neither the Shareholders nor the Corporation or its Subsidiaries have
incurred any obligation for any finder’s or broker’s or agent’s fees or
commissions or similar compensation in connection with the transactions
contemplated hereby.


Bonus
Shares.  The Bonus
Shares are being delivered to the recipients thereof without payment of any consideration
by the recipients thereof.  None of the
Shareholders, the Corporation or any of its Subsidiaries is under any
obligation to deliver the Bonus Shares to any of the recipients thereof.


Accuracy
of Information Furnished.  No representation, statement or information
made or furnished by the Shareholders or the Corporation to the Buyer in this
Agreement, the



 25
 









Disclosure
Schedule and the various Schedules and Exhibits attached hereto contains or
shall contain any untrue statement of a material fact or omits or shall omit
any material fact necessary to make the information contained therein not
misleading as of the date hereof and as of the Closing Date.  Except with respect to contracts pertaining
to the purchase or sale of scrap metals, the Shareholders and the Corporation
have provided or otherwise made available to the Buyer true, accurate and
complete copies of all material documents listed or described on the Disclosure
Schedule.  For the purpose of this Agreement,
a document that is referenced in one section of the Disclosure Schedule shall
be deemed to have also been referenced on any other section of the Disclosure
Schedule to which that document is applicable to the extent its applicability
to such other section is reasonably apparent.


CONDUCT OF
BUSINESS PENDING THE CLOSING


Conduct of
Business by the Corporation Pending the Closing.  Between the date of this Agreement and the
Closing Date, the Corporation and the Shareholders shall cause the business of
the Corporation and its Subsidiaries to be conducted only in, and the
Corporation and its Subsidiaries shall not take any action except in the
ordinary course of business, consistent with past practice or as specifically
permitted by this Agreement.  The Shareholders
and the Corporation shall use their reasonable best efforts to preserve intact
the business organization of the Corporation and its Subsidiaries and to keep
available the services of the Corporation’s and its Subsidiaries’ current
officers, employees and consultants, and to preserve its present relationships
with customers, suppliers and other persons with which it has significant
business relations.  Notwithstanding the
foregoing, except as contemplated by this Agreement or as set forth on Schedule
6.1, the Shareholders shall not permit the Corporation and its Subsidiaries
to, and the Corporation and its Subsidiaries shall not, between the date of
this Agreement and the Closing Date, directly or indirectly, do or propose or
agree to do any of the following without the prior written consent of the
Buyer:


amend or otherwise change its charter, bylaws or
other organizational documents;


issue, sell, pledge, dispose of, encumber, or
authorize the issuance, sale, pledge, disposition, grant or encumbrance of any
shares of capital stock of any class, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of such capital
stock, or any other ownership interest;


sell, pledge, dispose of, encumber or authorize the
sale, pledge, disposition or encumbrance of any of its assets, tangible or
intangible, except sales of inventory or non-material Assets not necessary for
the conduct of the Business, each in the ordinary course of business consistent
with past practice;


declare, set aside, make or pay any dividend or other
distribution, other than distributions to the Shareholders of amounts necessary
to pay (or make deposits against payment of) federal, state and local income
taxes on income of the Corporation



 26
 









allocated to the Shareholders pursuant to Subchapter S of
the Code; provided,
however, that for this purpose, such distributions shall not be greater than
16.25% of the good faith estimated taxable income earned by the Corporation
during the period from the date of this Agreement through the Closing Date (not
including, for this purpose, any taxable income recognized as a result of the
transactions contemplated by this Agreement);


reclassify, combine, split, subdivide or redeem,
purchase or otherwise acquire, directly or indirectly, any capital stock;


acquire (including, without limitation, for cash or
shares of stock, by merger, consolidation, or acquisition of stock or assets)
any interest in any Person, or make any investment either by purchase of stock
or securities or contribution of capital or property, transfer, or, except in
the ordinary course of business, consistent with past practice, purchase any
property or assets of any other Person;


incur any indebtedness for borrowed money or issue
any debt securities or assume, guarantee or endorse or otherwise as an
accommodation become responsible for, the obligations of any Person, or make
any loans or advances, in each case, other than pursuant to the Corporation’s
current long term debt facility and solely for the purpose of expenditures
incurred in the ordinary course of business relating to the purchase of
inventory or budgeted capital expenditures which expenditures are otherwise
permitted by this Agreement or in connection with any matter disclosed in Schedule
6.1;


enter into, amend or terminate any Material Contract
other than in the ordinary course of business, consistent with past practice;


increase the compensation payable or to become
payable to its officers or employees (in the case of employees other than
officers or other management level employees other than raises in compensation
in the ordinary course of business consistent with past practice), or grant any
severance or termination pay to, or enter into any employment or severance
agreement with, any of its directors, officers or other employees, or
establish, adopt, enter into or amend or take any action to accelerate any
rights or benefits under any collective bargaining, bonus, profit sharing,
trust, compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any directors,
officers or employees or grant or pay any bonuses to the Shareholders or their
Affiliates;


pay, discharge or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or satisfaction in
the ordinary course of business and consistent with past practice and the
payment of notes or accounts payable that are reflected on the Financial
Statements and set forth on Section 5.11(b) of the Disclosure Schedule
or as contemplated by Section 7.17;


delay any budgeted or reasonably necessary capital
expenditure or make or incur any unbudgeted capital expenditure in excess of
$1,000,000 in the aggregate;



 27
 









provided, that the limitation in this Section shall not
apply to (1) capital expenses approved prior to the date of this Agreement and
disclosed to the Buyer prior to the date of this Agreement, or (2) capital
expenditures to repair or replace equipment or Improvement to Facilities
reasonably necessary to continue or preserve the business of the Corporation or
its Subsidiaries;


cancel any material indebtedness (individually or in
the aggregate) or waive any claims or rights of substantial value;


enter into any transaction with the Shareholders or
their Affiliates or their family members, except transactions in the ordinary
course of business consistent with past practice;


take any action to change accounting policies or
procedures (including, without limitation, procedures with respect to revenue
recognition, payments of accounts payable and collection of accounts
receivable);


except as contemplated by the terms of this
Agreement, make any Tax election inconsistent with past practice, revoke any
Tax election, agree to an extension of the statute of limitations, or settle or
compromise any federal, state, local or foreign Tax liability, except to the
extent the amount of any such settlement has been reserved for in the Financial
Statements or which do not adversely affect Buyer, the Corporation or its
Subsidiaries; or


agree, in writing or otherwise, to take or authorize any of
the foregoing actions or take any action which would make any representation or
warranty in Article V untrue or incorrect.


ADDITIONAL
AGREEMENTS


Further
Assurances. 
Prior to Closing, each Party shall execute and deliver such additional
instruments and other documents and shall take such further actions as may be
requested by the other party as necessary or appropriate to effectuate, carry
out and comply with all of the terms of this Agreement and the transactions
contemplated hereby.


Cooperation.  Each of the parties agrees to
reasonably cooperate with the other in the preparation and filing of all forms,
notifications, reports and information, if any, required pursuant to any law,
rule or regulation in connection with the transactions contemplated by this
Agreement.


Consents.  (a)  Each of the Shareholders and the Corporation
shall take, or cause to be taken, all appropriate actions, and do, or cause to
be done, all things necessary or proper under applicable laws and regulations
to consummate and make effective the transactions contemplated herein,
including, without limitation, obtaining all consents, approvals,
authorizations, qualifications and orders of, or making any notice to, any
Governmental



 28
 









Authority
and parties to Contracts by which the Corporation or any Subsidiary is bound as
are necessary for the consummation of the transactions contemplated hereby.


The Buyer shall take, or cause to be taken, all
appropriate actions, and do, or cause to be done, all things necessary or
proper under applicable laws and regulations to consummate and make effective
the transactions contemplated herein, including, without limitation, obtaining
all consents, approvals, authorizations, qualifications and orders of, or
making any notice to, any Governmental Authority and parties to Contracts by
which it is bound, as are necessary for the consummation of the transactions
contemplated hereby.


Each of the parties shall make on a prompt and timely
basis all governmental or regulatory notifications and filings required to be
made by him or it for the consummation of the transactions contemplated hereby.


For the avoidance of doubt, the provisions of this Section
7.3 do not relate to the requirements of the HSR Act, which are separately
addressed in Section 7.10 below.


Access to
Information. 
From the date hereof to the Closing Date, the Shareholders shall cause
the Corporation and its Subsidiaries to (and shall cause its directors,
officers, employees, auditors, counsel and agents to) afford Buyer and Buyer’s
officers, employees, auditors, counsel and agents reasonable access at all
reasonable times, upon
reasonable prior notice and with a representative of Shareholders and the
Corporation,  to the properties, offices, and other
facilities of the Corporation and its Subsidiaries (including for the purpose
of performing any Phase I environmental assessment and audit of
compliance with Environmental Laws), to the Corporation’s and its Subsidiaries’
officers and employees and to all their books and records, and shall furnish
such persons with all financial, operating and other data and information as
may be reasonably requested, other than competitive information, including
information regarding the specific identity of customers of or suppliers to the
Corporation and the Subsidiaries; the specific prices paid or received for
scrap metal and scrap metal products; and, information regarding the results of
operations of specific Facilities or lines of business.  No soil, groundwater or other samples shall be taken
or intrusive assessments or analyses conducted by Buyer or its representatives
without express written consent of Seller. 
No information provided to or obtained by Buyer shall
affect any representation or warranty in this Agreement.


Notification
of Certain Matters. 
Each Party shall give prompt notice to the other Parties of the
occurrence or non-occurrence of any event which would likely cause any
representation or warranty of such Party contained herein to be untrue or
inaccurate, or any covenant, condition, or agreement contained herein not to be
complied with or satisfied; provided that such notice shall not in any way
affect any representation, warranty, covenant or agreement herein or
therein.  From the date of this Agreement
until the Closing, the Shareholders shall have the continuing obligation to
promptly supplement the information contained in the Disclosure Schedule with
respect to any matter hereafter arising or discovered, which, if in existence
on the date hereof and known at the date of this Agreement, would have been
required to be set forth or described in the Disclosure Schedule.  Neither the supplementation of the



 29
 









Disclosure
Schedule pursuant to the obligation in this Section 7.5 nor any
disclosure after the date hereof of the untruth of any representation or
warranty made in this Agreement shall operate as a cure of the failure to disclose
the information, or a cure of any representation or warranty made herein; and
determination of any liability for breach of representations or warranties
either at signing or at Closing shall be made without reference to any
supplements and with reference only to the Disclosure Schedule as it stands on
the date of this Agreement.


Confidentiality;
Publicity. 
Except as may be required by law, the SEC or the NASDAQ Global Select
Stock Market or as otherwise permitted or expressly contemplated herein, no Party
or its respective Affiliates, employees, agents and representatives shall
disclose to any third party this Agreement or the subject matter or terms
hereof without the prior consent of the other Party hereto.  Except as may be required by law, no press
release or other public announcement related to this Agreement or the
transactions contemplated hereby shall be issued by any Party without the prior
written approval of the other Parties.


Exclusivity.  From the date hereof to the
Closing Date, the Shareholders and the Corporation, and their respective
Affiliates, employees, agents and representatives will not (i) initiate or
encourage the initiation by others of, or engage in discussions or negotiations
with, any Person or respond to solicitations by any Person relating to any sale
or other disposition of all or any part of the Corporation’s or its
Subsidiaries’ securities or any material part of the assets, business or
properties of the Corporation or its Subsidiaries (whether such transaction
takes the form of a liquidation, dissolution, reorganization, recapitalization,
merger (other than as disclosed on Schedule 6.1), consolidation, joint venture,
lease, strategic alliance, transfer, sale of stock, sale of assets or
otherwise), (ii) enter into any agreement or commitment (whether or not
binding) with respect to any of the foregoing transactions or (iii) provide any
information to any Person, other than Buyer, its representatives and agents,
concerning the Corporation and its Subsidiaries (other than information which
the Corporation customarily provides to other Persons in the ordinary course of
its business consistent with past custom and practice, so long as the
Shareholders have no Knowledge that the information may be utilized to evaluate
an acquisition, by any form, of the Corporation or any of its Subsidiaries or a
material portion of the Corporation’s or any Subsidiary’s assets).  The Shareholders and the Corporation will
immediately notify Buyer if any third party attempts to initiate any solicitation,
discussion or negotiation or present any offer with respect to any of the
foregoing transactions.


Affiliated
Transactions. 
Except as set forth on Section 7.8 of the Disclosure Schedule,
the Corporation and its Subsidiaries will terminate or discontinue all
Affiliated Transactions on or prior to the Closing and all payments due and
owing the Corporation or any of its Subsidiaries under such Affiliated
Transactions shall be paid prior to Closing.


Covenants
Not To Compete, Solicit or Disclose.


Noncompetition.  In order to protect the value of the business
of the Corporation and its Subsidiaries and the Stock, the Shareholders and
their Affiliates (collectively, the “Shareholder Group”) agree for five (5)
years from the Closing Date, not to (i) engage, directly or indirectly, in any
manner in the business of the Corporation or its Subsidiaries as of the Closing
Date anywhere in the Territory, (ii) engage, directly or indirectly, in any
activity that competes with the business of the Corporation or its



 30
 









Subsidiaries as of the Closing Date anywhere in the
Territory, (iii) solicit any customer of the Corporation or is Subsidiaries for
products or services directly or indirectly competitive with the Corporation or
its Subsidiaries, and (iv) attempt in any way, directly or indirectly, to
obtain for itself, or others, or to divert from Corporation and its
Subsidiaries, any rights, benefits, sales or profits arising out of or in
connection with the business of the Corporation or its Subsidiaries; in each
case other than in such Person’s capacity as an employee of the Corporation in
an authorized activity.  For purposes
hereof, the “business of the Corporation” means the purchase, sale, collection,
processing, or brokerage of scrap metals, and the “Territory” shall mean the
continental United States and that portion of Canada that is east of the Rocky
Mountains.


Nonsolicitation of Employees.  In order to protect the value of
the business of the Corporation and its Subsidiaries and the Stock, the
Shareholder Group agrees that, during the period beginning on the Closing Date
and ending on the fifth anniversary hereof, the Shareholders shall not, and
shall cause each of his Affiliates not to, directly or indirectly, for itself
or through or on behalf of any other Person, in any manner whether as an
employee, agent, officer, director, stockholder, consultant, member, manager,
partner, joint venturer, principal, owner or participant, recruit, solicit or
otherwise attempt to employ or engage any Person employed by the Buyer, the
Corporation or one of the Buyer’s Subsidiaries or any of their Affiliates or
induce or attempt to induce any Person employed thereby to leave such
employment, excluding, however, the Shareholders and, not sooner than 3 months
following the Closing, Jennifer Wilson and Ellen Bero.


Nondisclosure.  After the Closing, except as required by law
or court order, the Shareholder Group will not disclose, or use directly or
indirectly, to or for the benefit of any person or entity other than Buyer or
its Subsidiaries, any Technical Information, Intellectual Property or other
confidential information, data or materials related to the Corporation or its
Subsidiaries.


Breach.  The Shareholder Group agrees that any breach
of Sections 7.9(a), 7.9(b) or 7.9(c) above will result in
irreparable damage to Buyer for which Buyer will have no adequate remedy at
law, and, therefore if such a breach should occur, the Shareholder Group
consents to any temporary or permanent injunction or decree of specific
performance by any court of competent jurisdiction in favor of Buyer enjoining
any such breach, without prejudice to any other right or remedy to which Buyer
shall be entitled.  In the event that any
portion of this Section 7.9 shall be determined by any court of
competent jurisdiction to be unenforceable by reason of its being extended over
too great a period of time or too large a geographic area or over too great a
range of activities, it shall be interpreted to extend only over the maximum
lesser period of time, geographic area, or range of activities as to which it
may be enforceable.  Each of the
covenants herein shall be deemed a separate and severable covenant.  In the event any member of the Shareholder
Group breaches any provision of this Section 7.9, Buyer shall be entitled
to recover from such breaching Shareholder all costs of enforcement, including
reasonable attorneys’ fees.



 31















HSR Act.  Each party will timely and
promptly make or cause to be made all filings which may be required with
respect to the transactions contemplated by this Agreement under the Hart Scott
Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) and use all
reasonable efforts to cause the satisfaction or termination of the waiting
period under the HSR Act.  The
Corporation will furnish to the Buyer such necessary information and reasonable
assistance as may be requested in connection with the preparation of necessary
filings or submissions to any government agency, including, without limitation,
any filings necessary under the provisions of the HSR Act.


Appointment
of Shareholders Representative.  Richard S. Rifkin is hereby appointed (the “Shareholders
Representative”) the agent and attorney-in-fact of each of the Shareholders for
purposes of this Agreement.  The
Shareholders Representative shall have the sole authority to act on behalf of
and to bind the Shareholders for all purposes of this Agreement, including
pursuant to Articles X and XI.  The
Shareholders Representative may be changed from time to time with the consent
of a majority of the Shareholders.  The
Shareholders Representative may resign at any time by giving at least thirty
(30) days’ written notice to the Buyer and the Shareholders, provided that the
Shareholders Representative shall continue to serve until its successor accepts
the duties of the Shareholders Representative. 
If a successor Shareholders Representative is not appointed within
twenty (20) days after the resignation, death or incapacity of the Shareholders
Representative, then the person then serving as the Shareholders Representative
(or his executor or other personal representative) or a majority of the
Shareholders may petition any court of competent jurisdiction for the
appointment of a successor Shareholders Representative.


Title and Survey Matters.


Within
fourteen (14) business days from the date hereof, the Shareholders shall use
reasonable efforts to cause the Corporation to furnish to the Buyer current
title commitments (collectively, the “Title Commitment”) issued by LandAmerica
or Lawyers Title Insurance Corporation (the “Title Company”) together with
copies of all exceptions to title referenced therein.  The Title Commitment shall set forth the
state of title to the Owned Properties, the Shareholder Premises and the Leased Premises identified on Section
7.12 of the Disclosure Schedule (collectively, the “Insured Properties”), together with all exceptions or conditions to such title, including,
without limitation, all easements, restrictions, rights-of-way, covenants,
reservations, and all other encumbrances affecting the Insured Properties,
which would appear in an owner’s or leasehold owners’ title policy, if
issued.  The Title Commitment shall
contain the express commitment of the Title Company to issue one or more owners’
or leasehold owners’ title policies (collectively, the “Title Policy”) to the
Company on the current ALTA Form 2006 in amounts as the Buyer may determine not
in excess of the fair market value of such Owned Properties and such Leased
Properties (including all improvements located thereon), subject to the
Permitted Encumbrances.  Each Title
Policy delivered pursuant to this Agreement shall, at Buyer’s election, and to
the extent legally permissible and commercially available, (i) insure title to
the Insured Properties and all recorded easements benefiting such Insured
Properties as of the date of Closing or the recording of any subsequent deed or
article of merger, whichever occurs last, (ii) contain an “extended coverage
endorsement” insuring over the general exceptions contained customarily in



 32
 









such policies, (iii) contain an ALTA Zoning Endorsement 3.1
(or equivalent), (iv) contain an endorsement insuring that the Insured
Properties described in the title insurance policy is the same real estate as
shown on the Survey delivered with respect to such property, (v) contain an
endorsement insuring that each street adjacent to the real property is a public
street and that there is direct and unencumbered pedestrian and vehicular
access to such street from the Real Property, (vi) if the Real Property
consists of more than one record parcel, contain a “contiguity” endorsement
insuring that all of the record parcels are contiguous to one another, (vii)
contain a “non imputation” endorsement to the effect that title defects known
to the officers, directors, and stockholders of the owner prior to the Closing
shall not be deemed “facts known to the insured” for purposes of the policy,
and (viii) contain an endorsement insuring against loss or damage sustained by
the non-availability of utilities.  The
insurance premium, costs for each Title Policy shall be a Transaction Expense.  The inability of the Title Company to issue a
zoning endorsement on a Title Commitment due to either (i) a legal non
conforming use of such property or (ii) 
shall not be grounds for objection by Buyer provided that the failure to
issue such an endorsement is not due to immaterial non-compliance with
applicable zoning laws and regulations shall not be grounds for objection by
Buyer.


No later than fourteen (14) business days prior to
the Closing Date, the Buyer shall use reasonable efforts to obtain copies of
one or more plats of survey of each Insured Property (whether one or more, the “Survey”)
prepared by a land surveyor or engineer licensed in the state in which the
Insured Property is located.  The Survey
shall, at Buyer’s election, (i) be currently dated (which may include a current
re-certification of a previously prepared survey plat); (ii) show the location
on the Insured Property of all improvements, fences, evidences of abandoned
fences, lakes, ponds, creeks, streams, rivers, easements, roads, and
right-of-way; (iii) identify all easements and rights-of-way by reference to
the recording information applicable to the documents creating such easements
or rights-of-way; (iv) show any encroachments onto the Insured Properties from
any adjacent property, any encroachments from the Insured Property onto
adjacent property, and any encroachments into any easement or restricted area
within the Insured Property (v) locate all existing improvements (such as
buildings, power lines, fences, and the like); (vi) locate all dedicated public
streets or other roadways providing access to the Insured Property, including
all curb cuts and all alleys; (vii) locate all set-back lines and similar
restrictions covering the Insured Property or any part thereof and any
violations of such restrictions; (viii) show thereon a legal description of the
boundaries of the Insured Property by metes and bounds or other appropriate
legal description; and (ix) include such other information found on ALTA/ACSM
Table A items 1-4, 6-11, and 13-16.  The
Survey shall otherwise be in accordance with current ALTA/ACSM Minimum
Standards Detail Requirements.  Each
Survey will be approved by Buyer prior to the Closing Date provided that the
Surveys do not show any defects, encroachments or encumbrances that would
materially affect the ordinary and normal operation of any of the subject
properties consistent with historical practices.  The cost and expense of the Surveys shall not
be a Transaction Expense.


Litigation Support.  In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or



 33
 









(ii) any
fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Corporation or any of its Subsidiaries, each
of the other Parties will cooperate with him or it and his or its counsel in the
contest or defense, make available their personnel, and provide such testimony
and access to their books and records as shall be necessary in connection with
the contest or defense, all at the sole cost and expense of the contesting or
defending Party (unless the contesting or defending Party is entitled to
indemnification therefor below).


Interim
Financial Statements. 
The Corporation shall provide the Buyer as soon as practicable after the
end of each calendar month prior to the Closing Date and in any event no later
than 30  days from the date of the end of
each calendar month an unaudited consolidated balance sheet and income
statement of the Corporation and its Subsidiaries as of the end of such month
and for that portion of the year then ended which shall be prepared in a manner
consistent with the preparation of the Interim Financial Statements and shall
be so certified by the Chief Financial Officer of the Corporation.


Board
Representation.


As soon
as practicable after the Closing Date, Buyer will use its best efforts to cause
Danny Rifkin to be elected or appointed as a director of the Buyer.


Release.


Effective as of the Closing Date, each of the
Shareholders on his own behalf and on behalf of his past, present or future
affiliates, agents, attorneys, heirs, beneficiaries, representatives,
successors and assigns (collectively, the “Releasing Parties”), hereby
absolutely, unconditionally and irrevocably RELEASES and FOREVER DISCHARGES the
Corporation and the Buyer and each of their respective past, present or future
parent entities, divisions, affiliates, subsidiaries, shareholders, members,
partners, limited partners, and their respective present and former directors,
managing directors, officers, control persons, shareholders, employees, agents,
attorneys, administrators, representatives, successors and assigns  (collectively, the “Released Parties”)
from any and all claims, actions, causes of action, suits, debts, liabilities,
obligations, sums of money, accounts, covenants, contracts, controversies,
agreements, promises, damages, judgments, executions, claims and demands,
whether known or unknown, suspected or unsuspected, absolute or contingent,
direct or indirect or nominally or beneficially possessed or claimed by any of
the Releasing Parties, whether the same be at law, in equity or mixed, which
such Releasing Party ever had or now has, or hereafter can, shall or may have
against the Released Parties, in respect of or arising from any and all
agreements and obligations incurred on or prior to the date hereof, or in
respect of or arising from any event occurring or circumstances existing on or
prior to the date hereof (collectively the “Released Claims”); provided,
however, that the Released Parties shall not be released from any of
their obligations or liabilities to the Releasing Parties (and none of such
obligations and liabilities shall be Released Claims) arising under (i) this
Agreement or any other agreement delivered in connection herewith, (ii) rights
to reimbursement for claims incurred prior to the date hereof under the
Employee Benefit Plans, (iii) any base salary and normal perquisites accrued
since the last payroll date of the Corporation; (iv) claims for defense and/or
indemnification by the



 34
 









Corporation pursuant to
the By-Laws of the Corporation or any of the Subsidiaries or under the statutes
of the states of incorporation of the Corporation or the Subsidiaries for
claims against the Shareholders or any of them arising from their positions as
directors, officers or managers of the Corporation, the Subsidiaries or the
Joint Ventures; or (v) claims of Leonard I. Rifkin or his heirs or estate for
payments due under a certain Deferred Compensation Agreement with the
Corporation, dated as of April 5, 1989.


Each of the
Releasing Parties hereby expressly waives any rights such Releasing Party may
have under the statutes of any jurisdiction or common law principles of similar
effect, to preserve Released Claims which such Releasing Party does not know or
suspect to exist in such Releasing Party’s favor at the time of executing this
Agreement.  Each of the Releasing Parties
understands and acknowledges that it may discover facts different from, or in
addition to, those which it knows or believes to be true with respect to the
claims released herein, and agrees that the terms of this release shall be and
remain effective in all respects notwithstanding any subsequent discovery of
different and/or additional facts. 
Should any Releasing Party discover that any fact relied upon in
entering into this release was untrue, or that any fact was concealed, or that
an understanding of the facts of law was incorrect, no Releasing Party shall be
entitled to any relief as a result thereof, and the Releasing Parties surrender
any rights they might have to rescind this release on any ground.  This release is intended to be and is final
and binding regardless of any claim of misrepresentation, promise made with the
intention of performing, concealment of fact, mistake of law, or any other
circumstances whatsoever.  Each of the
Releasing Parties hereby irrevocably covenants to refrain from asserting any
claim or demand, or commencing, instituting or causing to be commenced, any
proceeding of any kind against any Released Party based upon any Released
Claim.


If any of the
Releasing Parties (or an affiliate thereof) brings any claim, suit, action or
manner of action against the Released Parties (or any of them) in
administrative proceedings, in arbitration or admiralty, at law, in equity, or
mixed, with respect to any Released Claim, then such Releasing Party shall
indemnify the Released Parties (or any of them) in the amount or value of any
final judgment or settlement (monetary or other) and any related cost
(including, without limitation, reasonable legal fees) entered against, paid or
incurred by the Released Parties (or any of them).  Each Releasing Party represents and warrants
to the Released Parties that there has been no assignment or other transfer of
any interest in his or her Released Claims.


Senior Secured Notes. 
Within 5 Business Days of the date hereof, the Corporation shall send
notice (the “Change of Control Notice”) to each holder of its 6.75% Senior
Secured Notes (the “Senior Notes”, and each holder thereof, a “Senior
Noteholder”) regarding the execution of this Agreement, in form and substance
reasonably acceptable to the Buyer, which notice shall comply in all respects
with Section 8.3 of that certain Note Purchase Agreement, dated
September 1, 2002 (the “Note Purchase Agreement”), including an offer to prepay
the Senior Notes on the Closing Date and an officer’s certificate.  If the Closing has not occurred within ninety
(90) days of the Proposed Prepayment Date, as set forth in the Change of
Control Notice, the Corporation shall comply with Section 8.3(f) of the
Note Purchase Agreement and send a new Change of Control Notice to each of the
Senior Noteholders in accordance with the Note Purchase Agreement.  The Corporation shall provide prompt notice
to



 35
 









the Buyer of any election by a Senior Noteholder to
exercise the prepayment option as set forth in Section 8.3 of the Note
Purchase Agreement (the “Prepayment”). 
The Corporation shall prepare or cause to be prepared all necessary and
appropriate documentation in connection with any Prepayment, which shall be
reasonably acceptable to the Buyer, so that any Prepayment shall be consummated
on the Closing Date.


Aircraft.  If Buyer so
elects prior to October 15, 2007, the Corporation shall assign to the
Shareholders, and the Shareholders shall assume the Corporation’s obligations
to purchase one Learjet 45XR aircraft pursuant to that certain Aircraft
Purchase Agreement dated January 31, 2007 by and between the Corporation and
Learjet Inc.


Bonus Obligations. 
The Corporation and the Shareholders intend to pay certain bonuses to
certain employees of the Corporation on and after the Closing Date.  The bonuses include “Annual Performance
Bonuses”, “Longevity Bonuses” and “Transaction Bonuses”, each as further
described in subsections (a), (b) and (c) of this Section 7.19 and collectively
referred to as the “Bonuses”.  The
consideration payable by the Buyer for the Stock set forth in Section 2.1
hereof has been adjusted to reflect the portion of the Bonuses that would be
Transaction Expenses hereunder and, anything contained in this Agreement to the
contrary notwithstanding, the Bonuses shall not be included in Transaction
Expenses or otherwise be payable by the Shareholders pursuant to Section 13.3
of this Agreement.  At the Closing or on
such later dates as may be specified herein, the Buyer shall cause the
Corporation to pay the Bonuses in the amounts, manner and to the employees of
the Corporation as specified herein.


Annual Performance Bonuses.  Annual
Performance Bonuses for the fiscal year of the Corporation ended on September
30, 2007 shall be paid by the Corporation after the Closing but prior to
December 15, 2007.  The Corporation has
accrued $27,000,000 for payment of the Annual Performance Bonuses (the “APB
Amount”).  On or prior to Closing, the
Shareholders will provide the Buyer with a schedule listing the employees of
the Corporation who are to receive an Annual Performance Bonus and the amount
of such bonus for each such employee, which amounts shall not exceed, in the
aggregate, the APB Amount.  The Annual
Performance Bonuses will be based on the evaluation of the management of the
Corporation in a manner consistent with the ordinary and normal practices of
the Corporation.  All Annual Performance
Bonus payments shall be subject to all normal withholdings and deposits.


Longevity Bonuses. 
Longevity Bonuses shall be paid to certain employees of the Corporation
based on their tenure as an employee of the Corporation.  Longevity Bonuses shall be payable in Buyer Common
Stock pursuant to Section 3.2(c) of this Agreement in an amount not to exceed
60,000 shares and in federal, state and local withholding taxes and deposits
paid by the Corporation approximately equal to the withholding taxes and
deposits payable by the employee for the value of the Buyer Common Stock to be
received by the employee on the Closing Date. 
At least three (3) days prior to the Closing, the Shareholders shall
deliver to Buyer a list of the employees of the Corporation who are to be
issued Buyer Common Stock as a Longevity Bonus at Closing and the number of
shares of Buyer Common Stock to be issued to each employee.  The Buyer shall issue the Buyer Common Stock
to each such employee on the Closing Date and shall cause the Corporation to
pay as and when the same are due and



 36
 









payable all withholding
taxes and deposits due by such employee on the actual value of the Buyer Common
Stock received by them (collectively, the “Longevity Bonus Taxes”).  Within thirty (30) days after payment of the
Longevity Bonus Taxes by the Corporation, the Buyer shall give the Shareholder
Representative written notice of the actual amount of the Longevity Bonus Taxes
and the employer portion of payroll taxes with respect to the Longevity Bonuses
paid by the Corporation.  If the actual
amount exceeds $1,800,000, then the Shareholders, within ten (10) business days
of receipt of the notice, shall pay to the Corporation the difference.  If the actual amount paid is less than
$1,800,000,the Corporation shall pay the difference to the Shareholders with
the notice. Any payment made by the Shareholders to the Corporation or the
Corporation to the Shareholders pursuant to this Section 7.19(b) is intended to
be and shall be a purchase price adjustment.


The Buyer agrees that the
Buyer Common Stock to be issued to employees of the Company on the Closing Date
pursuant to Section 7.19(b) hereof, shall be registered under the Securities
Act for resale by the employees at Closing or as soon thereafter or reasonably
practicable.


Transaction Bonuses.  Transaction
Bonuses shall be paid to certain employees of the Corporation in the form of
shares of Buyer Common Stock pursuant to Section 3.2(c) hereof and cash
payments from the Corporation.  At least
three (3) days prior to the Closing, the Shareholders shall deliver to Buyer a
list of the employees of the Corporation who are to receive a Transaction
Bonus, with the number of shares of Buyer Common Stock to be issued and the
cash bonus to be paid to each such employee set forth opposite the employee’s
name, which shares of stock shall not exceed 500,000 in the aggregate and which
cash amount shall not exceed $28,500,000 in the aggregate.  To the extent such cash amount is less than
$28,500,000 in the aggregate, the difference shall be paid to the Shareholders
at Closing.  The Buyer shall issue the
Buyer Common Stock to each such employee on the Closing Date and shall cause
the Corporation to pay to each such employee the cash bonus payable to such
employee within ten (10) days after the Closing, less the withholding taxes and
other deposits payable by each such employee on the value of the Buyer Common
Stock issued to such employee and the cash bonus paid to such employee.  Within thirty (30) days after payment of the
Transaction Bonuses by the Corporation, the Buyer shall give the Shareholder
Representative written notice of the employer portion of the payroll taxes with
respect to the Transaction Bonuses.  If
the actual amount exceeds $1,300,000, then the Shareholders, within ten (10)
business days of receipt of the notice, shall pay to the Corporation the
difference.  If the actual amount paid is
less than $1,300,000, the Corporation shall pay the difference to the
Shareholders with the notice. Any payment made by the Shareholders to the
Corporation or the Corporation to the Shareholders pursuant to this Section
7.19(c) is intended to be and shall be a purchase price adjustment.


The Shareholders
acknowledge that the Buyer Common Stock issued to employees of the Corporation
as Transaction Bonuses will not be registered under the Securities Act and will
be tradable by such employees only in conformity with SEC Rule 144. and that
the Buyer will place legends on the related stock certificates and impose other
transfer restrictions consistent therewith.


Financing
Cooperation.  The Corporation and its Subsidiaries shall
and shall cause their respective officers and directors to reasonably cooperate
in connection with any future financings which Buyer may effect, including (i)
the preparation of financial statements



 37
 









and other financial information for the Corporation
and its Subsidiaries as may be required to be included in any offering
memorandum, prospectus or similar documents relating to any such financings,
(ii) participation in meeting with prospective lenders, investors and rating
agencies, due diligence sessions, road shows, the preparation of offering
memoranda, prospectuses and similar documents and (iii) taking reasonable
actions as may be necessary or advisable to consummate such financing
transactions as contemplated by any such financings.  The Corporation shall use commercially
reasonable efforts to cause its independent registered public accounting firm
to take such actions as Buyer may reasonably request in connection with any
such financings, including to (i) deliver a consent to the use of its report on
the relevant audited financial statements, (ii) deliver a “comfort letter” in a
form meeting the requirements of SAS 72 or such other form as may be reasonably
requested by Buyer, (iii) perform a SAS 100 review of any interim financial
statements which may be required or desirable, and (iv) participate, at Buyer’s
request, in the preparation of any offering memorandum, prospectus or similar
document that includes, or incorporates by reference, the foregoing financial
information.


Current Base Salary and Benefits. 
For a period from the Closing Date until December 31, 2008, Buyer will
not cause the Corporation to decrease the current base salary and benefits
(including perquisites) of the persons listed on Schedule 7.21 without
the prior consent of the Shareholders Representative.


Shareholder Premises. 
Immediately following the Closing, Buyer shall purchase the Shareholder
Premises for $10,000,000 in total for all the Shareholder Premises and the
Shareholder Premises shall be conveyed by general warranty deed to the Buyer or
its designee immediately following the Closing pursuant to a real estate
purchase agreement in the form of Exhibit B attached hereto.


CONDITIONS TO THE OBLIGATIONS OF THE BUYER


The obligations of the Buyer to effect the purchase of the
Stock and the other transactions contemplated hereby shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions, any or
all of which may be waived in whole or in part by the Buyer:


Accuracy of Representations and Warranties and
Compliance with Obligations.  The representations and warranties of the
Shareholders and the Corporation contained in this Agreement shall be true and
correct in all material respects at and as of the Closing Date with the same
force and effect as though made at and as of the Closing Date except (i) for
changes specifically permitted by this Agreement, (ii) that those
representations and warranties which address matters only as of a particular
date shall remain true and correct as of such date, and (iii) those
representations and warranties which by their terms are qualified by
materiality or Material Adverse Effect shall be true in all respects.  Each of the Shareholders and the Corporation
shall have performed and complied in all material respects with all of their
respective obligations required by this Agreement to be performed or complied
with at or prior to the Closing Date. The Shareholders and the Corporation
shall have delivered to the Buyer a certificate, dated as of the



 38
 









Closing
Date and signed by each Shareholder, certifying the foregoing (the “Section 8.1
Certificate”).


Opinion of
Counsel.  The Buyer
shall have received an opinion dated as of the Closing Date addressed to Buyer
and its lenders from counsel for the Shareholders and the Corporation in
substantially the form attached as Exhibit D hereto.


No Adverse
Litigation. 
There shall not be pending any action or proceeding by or before any
court or other governmental body which shall seek to restrain, prohibit, invalidate
or collect damages arising out of the transactions contemplated hereby and
which could reasonably be expected to result in a Material Adverse Effect.


Real
Property. 
All landlord waivers and estoppel letters listed on Schedule 8.4
shall have been delivered.  The Surveys
shall have been received by the Buyer and shall not show any defects,
encroachments or encumbrances that would materially affect the ordinary and
normal operation of any of the subject properties consistent with historical
practices.


Hart Scott
Rodino Approval. 
The waiting period under the HSR Act required to permit the consummation
of the transactions provided for herein shall have expired or early termination
shall have been granted.


Resignation.  The Buyer shall have received the
resignations, effective as of the Closing, of each director of the Corporation
and its Subsidiaries, other than Daniel M. Rifkin.


Other
Agreements. 
The Shareholders shall have executed the Shareholders Agreement and
Escrow Agreement.


Senior Notes. 
The Corporation shall have complied with the terms of the Note Purchase
Agreement; the Change of Control Notice shall have been sent to the Senior
Noteholders; the closing of any Prepayment shall have occurred simultaneously
with the Closing on the Closing Date.


CONDITIONS TO THE OBLIGATIONS OF SHAREHOLDERS


The
obligations of the Shareholders to effect the transactions contemplated hereby
shall be subject to the fulfillment at or prior to the Closing Date of the
following conditions, any or all of which may be waived in whole or in part by
the Shareholders Representative:


Accuracy of Representations and Warranties and
Compliance with Obligations.  The representations and warranties of the
Buyer contained in this Agreement shall be true and correct in all material respects
at and as of the Closing Date with the same force and effect as though made at
and as of the Closing Date except (i) for changes specifically permitted by or
disclosed pursuant to this Agreement, (ii) that those representations and
warranties which address matters only as of a particular date shall remain true
and correct as of such date, and (iii)



 39
 









those
representations and warranties which by their terms are qualified by
materiality shall be true in all respects. 
The Buyer shall have performed and complied in all material respects
with all of its obligations required by this Agreement to be performed or
complied with at or prior to the Closing Date. 
The Buyer shall have delivered to the Shareholders Representative a
certificate, dated as of the Closing Date, and signed by an executive officer,
certifying the foregoing (the “Section 9.1 Certificate”).


No Adverse
Litigation. 
There shall not be pending any action or proceeding by or before any
court or other governmental body which shall seek to restrain, prohibit,
invalidate or collect damages arising out of the transactions contemplated
hereby and which could reasonably be expected to result in a Material Adverse
Effect.


Hart Scott
Rodino Approval. 
The waiting period under the HSR Act required to permit the consummation
of the transactions provided for herein shall have expired or early termination
shall have been granted; and


Agreements.  The Buyer shall have executed the
Shareholders Agreement and Escrow Agreement.


INDEMNIFICATION


Agreement to Indemnify.


The Shareholders jointly and severally agree to indemnify and hold the
Buyer, its Affiliates (including after Closing, the Corporation and its
Subsidiaries) and their respective shareholders, members, directors, officers,
employees, attorneys and agents harmless from and against the aggregate of all
expenses (including reasonable attorney and other professional fees and
expenses and court costs), losses, costs, deficiencies, diminution in value,
liabilities and damages (collectively, “Losses”) arising out of or resulting
from (i) any breach of a representation or warranty made by the Shareholders in
or pursuant to this Agreement, (ii) any claim by a third party which, if true,
would constitute a breach of representation or warranty by the Shareholders or
the Corporation, (iii) any breach of the covenants or agreements made by
Shareholders or the Corporation in or pursuant to this Agreement, (iv) any
inaccuracy in any certificate delivered by the Shareholders or the Corporation
pursuant to this Agreement, (v) all Transaction Expenses.


The Buyer agrees to indemnify and hold the Shareholders harmless from and
against all Losses arising out of or resulting from (i) any breach of a
representation or warranty made by the Buyer in or pursuant to this Agreement,
(ii) any claim by a third party which, if true, would constitute a breach of
representation or warranty by the Buyer, (iii) any inaccuracy in any
certificate delivered by the Buyer pursuant to this Agreement, and (iv) any
breach of the covenants or agreements made by the Buyer in or pursuant to this
Agreement.



 40
 









The parties’ indemnification obligations shall be determined as if all
references to “materiality” or a “Material Adverse Effect” were removed from
the representations and warranties. 
Notwithstanding the foregoing, no claim for Losses arising under Section
10.1(a)(i), (ii), (iii) or (iv) or 10.1(b) other than those from any breach
of representation or warranty in Sections 4.1, 4.2, 5.1, 5.2, 5.3, 5.4, 5.6,
5.14(a), 5.15(a), and 5.19 (the “Excluded Representations”) shall be
asserted by the Buyer or by the Shareholders, respectively, until the aggregate
of all such Losses exceeds the sum of $7,500,000 (the “Deductible Amount”) in
which case the party entitled to indemnification shall be entitled to only the
amount of its Losses in excess of the Deductible Amount.  Pursuant to this Section 10.1, except
in the case of fraud or intentional misrepresentation, the maximum aggregate
amount recoverable by the Shareholders or Buyer, as the case may be, with respect
to Losses arising from a breach of representation or warranty (other than the
Excluded Representations) shall be $50,000,000. 
Anything contained herein to the contrary notwithstanding, no
Shareholder shall be liable to Buyer for any portion of Buyer’s Losses which
exceed, in the aggregate, the actual consideration received by such Shareholder
under this Agreement for his Stock (including the proceeds of any Buyer Common
Stock received by a Shareholder and sold after the Closing).


Survival.  Each of the representations and warranties
made by Shareholders and the Buyer in this Agreement or pursuant hereto shall
survive for 24 months after the Closing Date, except (i) the representations
and warranties of Shareholders contained in Sections 5.1, 5.2, 5.3, 5.4 and
5.6 shall survive indefinitely, (ii) the representations and warranties in Sections
5.14(a) and 5.15(a) shall survive for 5 years after the Closing Date,  (iii) the representations and warranties of
Shareholders in Section 5.13 shall survive for three (3) years after the
Closing Date, and (iv) the representations and
warranties of Shareholders in Sections 5.18 and 5.19 shall survive
indefinitely unless a statute of limitations applies to claims of third parties
in which case, with respect to such claims, such representations and warranties
shall expire sixty days following the expiration of the applicable statute of
limitations (including extensions thereof). 
No claim for the recovery of Losses from any breach of representation or
warranty may be asserted after such representations and warranties expire;
provided, however, that claims first asserted in writing within the applicable
period shall survive until finally resolved without possibility of appeal.  Notwithstanding any knowledge of facts determined
or determinable by any party by investigation, each party shall have the right
to fully rely on the representations, warranties, covenants and agreements of
the other parties contained in this Agreement or in any other documents or
papers delivered in connection herewith or therewith.  Each representation, warranty, covenant and
agreement of the parties contained in this Agreement is independent of each
other representation, warranty, covenant and agreement.  All covenants and agreements in this Agreement
shall survive Closing until fully performed.


Defense of Third Party Claims.  With respect
to each third party claim, including claims of Governmental Authorities, subject to this Article X (a “Third Party Claim”),
the party seeking indemnification (the “Indemnified Party”) shall give prompt written notice to the indemnifying party (the “Indemnifying
Party”) of the Third Party Claim, provided that failure to give such notice
promptly shall not relieve or limit the obligations of the Indemnifying Party
except to the extent the Indemnifying Party is materially prejudiced
thereby.  Except for Third Party
Claims arising in whole or in part from Environmental Laws, if the remedy sought in the



 41
 









Third
Party Claim is solely money damages and the Indemnifying Party agrees in
writing to pay the claim without regard to any indemnity limitations herein and
reasonably demonstrates that it has the financial capacity to pay for such
Third Party Claim or if the Indemnified Party otherwise permits, then the
Indemnifying Party, at its sole cost and expense, may, upon notice to the
Indemnified Party, within thirty (30) days after the Indemnifying Party
receives written notice of the Third Party Claim, of its acknowledgement of
liability for the claim and desire to assume the defense thereof, assume the
defense of the Third Party Claim.  The
Indemnifying Party shall have the right to assume the defense of Third Party
Claims arising in whole or in part from Environmental Laws or the generation,
transportation, storage, disposal, handling or other disposition of Materials
of Environmental Concern without regard to whether the claim is solely for
money damages if the Indemnifying Party agrees in writing to pay the claim
without regard to any indemnity limitations herein and reasonably demonstrates
that it has the financial capacity to pay for such Third Party Claim.  If it assumes the defense of a Third Party
Claim, then the Indemnifying Party shall give written notification to the
Indemnified Party of its election to defend the claim and its acknowledgement
of liability for the claim and shall have sole control over, and shall assume
all expenses with respect to, the defense or settlement of such claim,
provided, however, that (i) the Indemnified Party shall be entitled to participate
in (but not control) the defense of such claim and to employ counsel at its own
expense to assist in the handling of such claim; and (ii) the Indemnifying
Party shall obtain the prior written approval of the Indemnified Party (which
shall not be unreasonably withheld) before entering into any settlement of such
claim, if pursuant to or as a result of such settlement, an operations and
maintenance plan, deed restriction, environmental covenant, injunction or other
equitable relief would be imposed against the Indemnified Party.  The Indemnifying Party shall, to the extent
reasonably practicable, provide the Indemnified Party with thirty (30) days
prior notice before it consents to a settlement of, or the entry of a judgment
arising from, any Third Party Claim. 
Subject to the exception for Third Party Claims arising in whole or in
part from Environmental Laws or the generation, transportation, storage,
disposal, handling or other disposition of Materials of Environmental Concern,
with respect to Third Party Claims in which the remedy sought is not solely
money damages and the Indemnified Party does not permit the Indemnifying Party
to assume the defense, the Indemnifying Party shall, upon notice to the
Indemnified Party within fifteen (15) days after the Indemnifying Party
receives notice of the Third Party Claim, be entitled to participate in the
defense with its own counsel at its own expense.  If the Indemnifying Party does not assume the
defense of any Third Party Claim in accordance with the terms of this Section
10.3, then the Indemnifying Party shall be bound by the results obtained by the
Indemnified Party with respect to the Third Party Claim.  The Parties shall cooperate in the defense of
any Third Party Claim and the relevant records of each Party shall be made
available on a timely basis.


Payment of Indemnification Claims by Shareholders.  In addition
to any other means of recovery available to Buyer, unless the remaining value
of the Escrow is less than the amount of the claim, Buyer’s claims for
indemnification shall first be settled by making a claim with the Escrow Agent
pursuant to the Escrow Agreement.  For
all purposes of determining the number of shares of Buyer Common Stock to be
released from the Escrow Amount, all such shares shall be valued at the price
of such shares on the date any such claim is finally settled or adjudicated.



 42
 









Shareholders Representative.  Each of the Shareholders agrees to
indemnify and hold harmless the Shareholders Representative by reason of its
acting or failure to act in connection with any of the transactions
contemplated hereby and against any loss, liability or expense the Shareholders
Representative may sustain or incur as a result of serving as the Shareholders
Representative hereunder, except such losses, liabilities and expenses which
are determined in a final judgment of a court to have resulted primarily from
the gross negligence or willful misconduct of the Shareholders
Representative.  Each of the Shareholders
agrees that the Shareholders Representative shall have no liability whatsoever
to a Shareholder or such Shareholder’s beneficiaries, heirs or personal
representatives for any matters arising out of this Agreement except for
liability for such matters which are determined in a final judgment of a court
to have resulted primarily from the gross negligence or willful misconduct of
the Shareholders Representative or as otherwise set forth in any separate
writing among the Shareholders.  Each of
the Shareholders hereby agrees to reimburse the Shareholders Representative
upon the request of the Shareholders Representative for its pro rata share of
(based on each Shareholders percentage ownership of the Stock on the date
hereof) all reasonable expenses, disbursements and advances incurred or made by
the Shareholders Representative in the performance of its duties under this
Agreement.


TAX MATTERS


General.  Subject to the specific mechanisms of this Section
11.1, the Shareholders shall be jointly and severally responsible for, and
shall indemnify and hold Buyer harmless against: (i) all Tax liabilities of the
Corporation and its Subsidiaries, including any corporate level Taxes resulting
from the Section 338(h)(10) Election other than Taxes imposed on the
Corporation under Section 1374 and any similar state taxes that arise out of or
are attributable to the Section 338(h)(10) Election (“BIG Tax”), for taxable
periods, or portions thereof, ending on or before the Closing Date and the
portion of the Taxes for any Straddle Period (as defined below) that are allocable
to the portion of such Straddle Period ending on the Closing Date; and (ii) any
Taxes arising as a result of the payment of any “excess parachute payments” as
defined in Section 280G of the Code made in connection with the transactions
contemplated by this Agreement.  Any BIG
Tax is and shall remain the obligation of the Corporation and the Buyer shall
cause the Corporation to timely satisfy such obligation without contribution
from, or indemnification by, the Shareholders.


Preparation of Tax Returns.  The
Shareholders Representative shall supervise and with the good faith cooperation
of Buyer cause to be prepared by the Corporation all Tax Returns of the
Corporation and its Subsidiaries for all taxable periods ending on or prior to
the Closing Date with respect to which a Tax Return was not due on or before
the Closing Date (“Pre-Closing Returns”) and Buyer shall prepare any Tax
Returns of the Company with respect to a taxable period beginning before the
Closing Date and ending after the Closing Date (a “Straddle Period”) (the “Straddle
Period Returns”).  The Shareholders
Representative shall submit each of the Pre-Closing Returns and the Buyer shall
submit each of the Straddle Period Returns to the other party for its review at
least thirty (30) days prior to the due date for the filing of such Pre-Closing
Return or Straddle Period Return (taking into account any extensions).  The



 43
 









Shareholders
and Buyer agree to consult and resolve in good faith any issues and comments
arising as a result of the review of each Pre-Closing Return and Straddle
Period Return, and mutually to consent to filing as promptly as possible each
Pre-Closing Return and Straddle Period Return; provided that if the
Shareholders Representative and Buyer are unable to resolve any such issue
within fifteen (15) days after any such Pre-Closing Return or Straddle Period
Return is submitted to the Shareholders Representative, the dispute shall be
submitted to the Independent Auditor for resolution.


Taxable Period.  If the Corporation or any of its Subsidiaries
is permitted under any applicable foreign, state or local income Tax Law to
treat the Closing Date as the last day of a taxable period, the Shareholders
and Buyer shall treat (and cause their respective Affiliates to treat) the
Closing Date as the last day of a taxable period.  For all purposes under this Agreement, in the
case of Taxes that are payable with respect to any Straddle Period, the portion
of any such Tax that is allocable to the portion of the period ending on the
close of the Closing Date shall be (i) in the case of Taxes that are based upon
or related to income or receipts, deemed equal to the amount which would be
payable if the taxable period ended on the Closing Date; and (ii) in the case
of all other Taxes, deemed to be the amount of such Taxes for the entire period
multiplied by a fraction, the numerator of which is the number of calendar days
in the taxable period ending on the Closing Date and the denominator of which
is the number of calendar days in the entire taxable period.


Section 338(h)(10) Elections.  Buyer and each of the Shareholders
shall timely make joint elections under Section 338(h)(10) of the Code and
comparable provisions of state law with respect to the purchase and sale of the
Stock (“Section 338(h)(10) Elections”), and shall timely file executed copies
of IRS Form 8023 and Form 8883, the required schedules thereto and any similar
state forms, with the proper authorities. 
Each of the Shareholders will include any income, gain, loss or
deduction resulting from the Section 338(h)(10) Elections on such Shareholder’s
Tax Return to the extent required by applicable Law.  Within ninety (90) days of the Closing Date,
the Buyer shall prepare and deliver to the Shareholders Representative an
allocation schedule allocating the aggregate deemed sales price of the assets
among the assets of the Corporation and its Subsidiaries in accordance with
Section 338(h)(10) and Section 1060 of the Code and the regulations thereunder,
which shall be completed in a manner consistent with the Allocation Agreement
attached as Schedule 11.4 (the “Allocation Schedule”).  The Allocation Schedule shall be binding on
all Parties for all applicable purposes, including Tax purposes unless, within
thirty (30) days after delivery to the Shareholders Representative, the
Shareholders Representative notifies the Buyer of its disagreement as to one or
more of the items on the Allocation Schedule. 
Any such disagreement shall be resolved by the Independent Auditor.  No Party shall file any Tax Returns or take
any other action which is inconsistent with the Allocation Schedule without
prior disclosure to and agreement of the other Party.  In consideration for the Shareholders’
agreement to make the Section 338(h)(10) Elections, at Closing, Buyer shall pay
the Shareholders an amount equal to $6,000,000 to be allocated among the
Shareholders in the relative proportions set forth on Schedule 3.2(d).


Tax Contests.  Buyer shall
inform the Shareholders Representative of the commencement subsequent to the
Closing Date of any audit, examination or proceeding (“Tax Contests”) relating
in whole or in part to Taxes for which Buyer may be entitled to indemnity from
the Shareholders hereunder and the Shareholders Representative shall be
entitled to control



 44
 









and
conduct those aspects of such Tax Contests that are related exclusively to the
liability for any Taxes the amount of which is recoverable by Buyer from the
Shareholders hereunder.  Costs of any Tax
Contest are to be borne by the party controlling such Tax Contest.  With respect to a Tax Contest which the
Shareholders Representative is entitled to control, the Shareholders
Representative shall have the right to determine, in its sole discretion, such
issues as (i) the forum, administrative or judicial, in which to contest any
proposed adjustment, (ii) the attorney and/or accountant to represent the
Corporation and its Subsidiaries in the Tax Contest, (iii) whether or not to
appeal any decision of any administrative or judicial body, and (iv) whether to
settle any such Tax Contest, except that the Shareholders Representative shall
not settle any Tax Contest in a manner that would have an adverse Tax effect on
the Corporation or its Subsidiaries for taxable periods ending after the
Closing Date without the prior written consent of Buyer (which consent may not
be unreasonably withheld).  The
Shareholders Representative shall keep Buyer informed throughout the Tax
Contest and Buyers shall be entitled to participate at its sole expense in any
such Tax Contest.  The Buyer or the
Corporation and its Subsidiaries, as applicable, shall deliver to the
Shareholders Representative any power of attorney reasonably required to allow
the Shareholders Representative and its counsel to represent the Corporation
and its Subsidiaries in connection with the Tax Contest and shall use their
reasonable efforts to provide the Shareholders Representative with such
assistance as may be reasonably requested by the Shareholders Representative in
connection with the Tax Contest.


Amended Returns, etc.  Without the prior written consent of the
Shareholders Representative (which consent may not be unreasonably withheld),
or unless otherwise required by Law, none of Buyer, the Corporation, or any
Affiliate of Buyer shall (i) file any amended Tax Return or propose or agree to
any adjustment of any item with any Tax Authority with respect to any taxable
period ending on or before the Closing Date that would (in any such case) have
the effect of increasing the Shareholders’ liability for any Taxes, increasing
the indemnification obligations of the Shareholders or increasing the amount
recoverable by Buyer from the Shareholders with respect to Taxes.


Access and Assistance.  The Shareholders Representative and Buyer
shall, upon written request of the other, provide the other, and the Buyer
shall cause the Corporation and its Subsidiaries to provide the Shareholders
Representative, with such assistance as may be reasonably requested by any of
them in connection with the preparation of any Tax Return, audit, or other
examination by any Tax Authority, or any Tax Authority or judicial or
administrative proceedings relating to liability for Taxes, and each will
retain and provide the other, and Buyer shall cause the Corporation and its
Subsidiaries to retain and provide the Shareholders Representative with, any
records or other information that may be relevant to such Tax Return, audit or
examination, proceeding or determination. 
The Shareholders Representative and Buyer shall provide the other with
any final determination of any such audit or examination, proceeding or
determination that affects any amount required to be shown on any Tax Return of
the other or the Corporation or its Subsidiaries for any period.  Such assistance shall include making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder and shall
include providing copies of any relevant Tax Returns and supporting work
schedules, which assistance shall be provided without charge except for
reimbursement of reasonable out-of-pocket expenses.  Without limiting the generality of the
foregoing, Buyer shall retain, and shall cause the Corporation and its
Subsidiaries to retain, and the Shareholders Representative shall retain, until
the applicable



 45















statutes
of limitations (including any extensions) have expired, copies of all Tax
Returns, supporting work schedules, and other records or information that may
be relevant to such returns for all taxable periods or portions thereof ending
before or including the Closing Date and shall not destroy or otherwise dispose
of any such records without first providing the other party with a reasonable
opportunity to review and copy the same. 
Each party shall bear its own expenses in complying with the foregoing provisions.


Transfer and Similar Taxes.  All real property transfer or gains Taxes,
other transfer, documentary, sales, use, registration, stamp and similar Taxes
and fees (including any penalties and interest) incurred in connection with
this Agreement and the transactions contemplated hereby (collectively, “Transfer
Taxes”) shall be borne equally by the Shareholders on the one hand, and the
Buyer on the other hand.  The
Shareholders, in the case of Transfer Taxes and corresponding Tax Returns due
on or prior to the Closing Date, and Buyer, in the case of corresponding Tax
Returns due after the Closing Date, shall cause the Corporation to remit
payment for such Transfer Taxes and duly and timely file such Tax Returns.  Buyer and the Shareholders shall cooperate in
(a) determining the amount of Transfer Taxes, (b) providing all requisite
exemption certificates, and (c) preparing and timely filing any and all
required Tax Returns for or with respect to such Transfer Taxes with any and
all appropriate Tax Authorities.


TERMINATION


Termination.  This Agreement may be terminated
at any time prior to the Closing Date:


by mutual written consent of the Buyer and
Shareholders Representative at any time prior to the Closing;


by the Buyer in the event of a material breach by any
of the Shareholders or the Corporation of any provision of this Agreement,
which breach, is not cured within 20 days after written notice thereof, or, if
the nature of such breach is such that it can not reasonably be cured within 20
days despite the best efforts of the Shareholders and the Corporation, then
within a reasonable period thereafter not to exceed 75 days provided that the
Shareholders or the Corporation, as the case may be, have taken reasonable
steps to begin to cure such breach within the initial 20 day period.  Notwithstanding the foregoing, the Buyer may
not terminate this Agreement for any breach of the Agreement that can be
satisfied by the payment of monies if the Shareholders agree to allow a portion
of the Consideration payable to the Shareholders under Section 2.1 equal
to the amount reasonably necessary to cure such breach to be placed in escrow
(in addition to the Escrow Amount set forth in Section 3.2(c)), to be
held by the Escrow Agent until such breach is cured by the Shareholders to the
reasonable satisfaction of the Buyer or the Shareholders and the Buyer agree in
writing to direct payment of all or any portion of such escrowed amount to
Buyer in consideration of the waiver of such breach of the Agreement;



 46
 









by the Shareholders in the event of a material breach
by the Buyer of any provision of this Agreement, which breach is not cured
within 20 days after written notice thereof, or, if the nature of such breach
is such that it can not reasonably be cured within 20 days despite the best
efforts of the Shareholders and the Corporation, then within a reasonable
period thereafter not to exceed 75 days provided that the Buyer has taken all
reasonable steps to begin to cure such breach within the initial 20 day period.  Notwithstanding the foregoing, the
Shareholders may not terminate this Agreement for any breach of the Agreement
by the Buyer that can be satisfied by the payment of monies if the Buyer agrees
to place in escrow an amount reasonably necessary to cure such breach to be
held in escrow until such breach is cured by the Buyer to the reasonable
satisfaction of the Shareholders or the Shareholders and Buyer agree in writing
to direct payment of all or any portion of such escrowed amount to the
Shareholders in consideration of the waiver of such breach of the Agreement;
and


by either Buyer on the one hand, provided it is not
in breach, or the Shareholders on the other hand, provided none of the
Shareholders or the Corporation are in breach, if the Closing shall not have
occurred by December 31, 2007.


Effect of Termination.  Except for this Section 12.2, the
provisions of Articles X and XIV and Sections 7.6 and 7.11 hereof
and any confidentiality agreements by or among the parties, which shall survive
any termination of this Agreement, in the event of termination of this
Agreement pursuant to Section 12.1, this Agreement shall forthwith
become void; provided, however, that nothing herein shall relieve any party
from liability for the breach of any of its representations, warranties,
covenants or agreements set forth in this Agreement prior to termination.


GENERAL PROVISIONS


Notices.  All notices, requests, demands,
claims, and other communications hereunder shall be in writing and shall be
delivered by certified or registered mail (first class postage pre-paid),
guaranteed overnight delivery, or facsimile transmission if such transmission
is confirmed by delivery by certified or registered mail (first class postage
pre-paid) or guaranteed overnight delivery, to the following addresses
and facsimile numbers (or to such other addresses or facsimile numbers which
such Party shall designate in writing to the other Party in accordance with
this Section 14.1):


if to the Buyer to:


Steel Dynamics, Inc.

6714 Pointe Inverness Way

Suite 200

Fort Wayne, IN  46804

Attention:  Gary Heasley

Facsimile:  (260) 969-3592



 47
 









with a copy to:


McDermott Will & Emery LLP

227 West Monroe Street

Chicago, Illinois  60606

Attention:  Thomas J. Murphy

Facsimile:  (312) 984-7700


if to the Corporation or the Shareholders:


c/o Richard S. Rifkin

7575 West Jefferson Blvd.

Fort Wayne, IN  46804

Facsimile:  (260) 423-8501


with a copy to:


Eastman & Smith Ltd.

One SeaGate, 24th Floor

Toledo, Ohio 43604

Attention:  Ronald J. Tice

Facsimile:  (419) 247-1777


Entire
Agreement. 
This Agreement (including the Exhibits and Schedules attached hereto)
and the Confidentiality Agreement between the Parties dated as of April 30,
2007, and other documents delivered at the Closing pursuant hereto or thereto,
contain the entire understanding of the parties in respect of their subject
matter and supersede all prior agreements and understandings (oral or written)
between or among the parties with respect to such subject matter.  The Disclosure Schedule, Exhibits and
Schedules constitute a part hereof as though set forth in full above.


Expenses.  Except as otherwise provided
herein, the Parties shall pay their own fees and expenses, including their own
counsel fees, incurred in connection with this Agreement.  For the avoidance of doubt, the Shareholders
shall pay all Transaction Expenses.  The
Buyer shall pay all of the fees associated with the filings necessary for Hart
Scott Rodino approval.


Amendment;
Waiver.  This
Agreement may not be modified, amended, supplemented, canceled or discharged,
except by written instrument executed by the Buyer, the Corporation and
Shareholders Representative, provided that no amendment that is not unanimously
approved by the Shareholders shall treat any non-consenting Shareholder
materially and adversely different than any other Shareholder.  No failure to exercise, and no delay in
exercising, any right, power or privilege under this Agreement shall operate as
a waiver, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude the exercise of any other right, power or
privilege.  No waiver of any breach of
any provision shall be deemed to be a waiver of any preceding or succeeding
breach of the same or any other provision, nor shall any waiver be implied from
any course of dealing between the parties. 
No extension of time for performance of any obligations or other acts
hereunder or under any other



 48
 









agreement
shall be deemed to be an extension of the time for performance of any other
obligations or any other acts.


Binding
Effect; Assignment. 
The rights and obligations of this Agreement shall bind and inure to the
benefit of the parties and their respective successors and assigns.  Nothing expressed or implied herein or
therein shall be construed to give any other person any legal or equitable
rights hereunder.  Without limiting the
foregoing, Buyer may assign its rights under this Agreement for collateral
security purposes, without consent, to any lenders providing financing to the
Buyer, the Corporation or its Subsidiaries or any of their Affiliates.  Except as expressly provided herein or
therein, the rights and obligations of this Agreement may not be assigned by
the Shareholders or the Corporation without the prior written consent of Buyer.


Counterparts.  This Agreement may be executed in
any number of counterparts, each of which shall be an original but all of which
together shall constitute one and the same instrument.


Interpretation.  When a reference is made in this
Agreement to an article, section, paragraph, clause, schedule or exhibit, such
reference shall be deemed to be to this Agreement unless otherwise
indicated.  The headings contained herein
and on the Schedules and in the Disclosure Schedule are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement or the Schedules.  Whenever the
words “include,” “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation.”


Governing
Law; Interpretation. 
This Agreement shall be construed in accordance with and governed for
all purposes by the internal substantive laws of the State of Indiana
applicable to contracts executed and to be wholly performed within such State.


Jurisdiction.


Any suit, action or proceeding against the Buyer, the
Corporation or the Shareholders arising out of, or with respect to, this
Agreement or any judgment entered by any court in respect thereof shall be
brought exclusively in the courts of Indiana or in the U.S. District Court for
the Northern District of Indiana, such jurisdiction to be determined by the
first filing of such action, suit or proceeding in such jurisdiction, and the
Parties hereto accept the exclusive jurisdiction of those courts for the
purpose of any suit, action or proceeding.


In addition, each Party hereto hereby irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any judgment entered by any
court in respect thereof brought in Indiana or the U.S. District Court for the
Northern District of Indiana and hereby further irrevocably waives any claim
that any suit, action or proceedings brought in Indiana or in such District
Court has been brought in an inconvenient forum.


Arm’s
Length Negotiations; Drafting.  Each Party herein expressly represents and
warrants to all other Parties hereto that before executing this Agreement, said
Party has fully



 49
 









informed
itself of the terms, contents, conditions and effects of this Agreement and
such agreement;  said Party has relied
solely and completely upon its own judgment in executing this Agreement and
such agreement;  said Party has had the
opportunity to seek and has obtained the advice of counsel before executing
this Agreement and such agreement;  said
party has acted voluntarily and of its own free will in executing this
Agreement and such agreement;  said Party
is not acting under duress, whether economic or physical, in executing this
Agreement and such agreement; and this Agreement and such agreement are the
result of arm’s length negotiations conducted by and among the Parties and
their respective counsel.  This Agreement
shall be deemed drafted jointly by the Parties and nothing shall be construed
against one Party or another as the drafting Party.


DEFINITIONS


Defined
Terms.  As used
herein, the following terms shall have the following meanings:


“Accounting
Principles” has the meaning set forth in Section 2.2(c).


“Affiliate”
shall have the meaning ascribed to it in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act, as in effect on the date hereof.


“Affiliate Leases” has the meaning set forth in Section
5.22.


“Affiliated
Transactions” has the meaning set forth in Section 5.22.


“Agreement”
has the meaning forth in the Preamble.


“Allocation Schedule” has the meaning set forth in Section
11.4.


“Assets”
means all of the rights, properties and assets of the Corporation and its
Subsidiaries, whether personal, real or mixed, tangible or intangible, wherever
located, including all such items reflected on the Interim Financial Statements
(other than those disposed of or consumed in the ordinary course of business).


“Audited
Financial Statements” has the meaning set forth in Section
5.9(a).


“BIG Tax” has the meaning
set forth in Section 11.1.


“Buyer”
has the meaning set forth in the Preamble.


“Buyer
Common Stock” has the meaning set forth in Section 2.1(ii).


“Buyer SEC Reports” means the Buyer’s most recent Form 10-K
and all subsequent filings made by the Buyer with the SEC.


“Cash Amount” has the meaning set forth in Section 2.1.


“CERCLA” has the meaning set forth in the definition of
Environmental Laws.


“Closing”
has the meaning set forth in Section 3.1.


“Closing
Date” has the meaning set forth in Section 3.1.


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


“Collective Bargaining Agreement” means any collective
agreement, letter of understanding, letter of intent or other written
communication with any trade union or association which covers any employees of
the business or the Corporation or any of its Subsidiaries and which is
currently in effect.



 50
 









“Contract”
means any agreement, contract, lease, note, mortgage, indenture, loan
agreement, franchise agreement, covenant, employment agreement, license,
instrument, purchase and sales order, commitment, undertaking, obligation,
whether written or oral, express or implied.


“Corporation”
has the meaning set forth in the Preamble.


“Corporation
Debt” has the meaning set forth in Section 5.11.


“COTS Software” means software that is generally available
in the marketplace for licensure on terms and conditions that are substantially
non-negotiable.


“Dispute
Notice” means, in connection with the calculation of the Adjustment Amount, a
written notice from the Shareholders Representative indicating disagreement
with the proposed Adjustment Amount and summarizing in detail the items in
dispute.


“Disclosure
Schedule” means the disclosure schedule delivered by the Shareholders to the
Buyer on the date hereof regarding certain exceptions to the representations on
warranties in Article V hereof.


“Employee
Benefit Plans” has the meaning set forth in Section
5.18(a).


“Encumbrances” has the meaning set forth in Section
5.14(a).


“Environmental
Laws” (A) Laws relating to (i) pollution or the protection of the environment
(including air, indoor air or other indoor environmental health or safety
conditions, surface water, ground water, soil, land surface or subsurface
strata), or (ii) disposal, emissions, discharges, spills, releases or
threatened releases of Materials of Environmental Concern, or otherwise
relating to the manufacture, processing, distribution, use, import, export,
treatment, storage, disposal, transport or handling of Materials of
Environmental Concern, and (B) shall include the Resource Conservation and
Recovery Act, as amended (“RCRA”); the Comprehensive Environmental Response
Compensation and Liability Act, as amended (“CERCLA”); the Federal Water
Pollution Control Act, as amended; the Occupational Safety and Health Act, as
amended; the Clean Air Act, as amended; the Safe Drinking Water Act, as
amended; the Toxic Substances Control Act, as amended; the Emergency Planning
and Community Right-to-Know Act; the Hazardous Materials Transportation Act, as
amended; all Laws related thereto, all implementing Laws and all applicable similar
state and local Laws with respect to each of the foregoing acts.


“ERISA”
has the meaning set forth in Section 5.18(a).


“Escrow
Agent” has the meaning set forth in Section 3.2(c).


“Escrow
Agreement” has the meaning set forth in Section 3.2(c).


“Escrow
Amount” has the meaning set forth in Section 3.2(c).


“Exchange
Act” means the Securities Exchange Act of 1934, as amended.


“Excluded Representations” has the meaning set forth in Section
10.1(c).


“Facilities”
means the Owned Properties and Leased Premises.


“Financial
Statements” has the meaning set forth in Section
5.9(a).


“Fixed
Assets” means all vehicles, machinery, equipment, tools, supplies, leasehold
improvements, furniture and fixtures owned or used by the Corporation and its
Subsidiaries or reflected on the Interim Financial Statements or acquired by
the Corporation or one of its Subsidiaries since the date of the Interim
Financial Statements (other than those disposed of or consumed in the ordinary
course of business).


“GAAP” means generally accepted accounting principles in
effect in the United States of America consistently applied.



 51
 









“Governmental
Authority” means any nation or government, any state, regional, local or other
political subdivision thereof, and any entity or official exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.


“HSR Act”
has the meaning set forth in Section 7.10.


“Improvements” has the meaning set forth in Section
5.14(h).


“Indemnified Party” has the meaning set forth in Section
10.4.


“Indemnifying Party” has the meaning set forth in Section
10.4.


“Independent
Auditor” means an independent accounting firm mutually agreed to by Buyer and
the Shareholders Representative or, should the parties fail to reach agreement,
Deloitte & Touche.


“Insurance
Policies” has the meaning set forth in Section 5.20.


“Insured
Properties” has the meaning set forth in Section 7.12(a).


“Intellectual
Property” means all copyrights, patents, trademarks, trade names, trade styles,
logos, product designations and service marks and all applications (pending or
in process) and registrations therefor and licenses thereof.


“Interim
Financial Statements” has the meaning set forth in Section
5.9(a).


“Joint
Venture” means each entity in which the Corporation and its Subsidiaries hold
of record less than a majority of the equity interests.


“Knowledge”
an individual will be deemed to have “Knowledge” of a particular fact or other
matter if such individual is actually aware of such fact or other matter
or would reasonably have been expected to be aware of such fact as a result of
their position with or relationship to the Corporation and its Subsidiaries.


The Shareholders and the Corporation will be deemed
to have “Knowledge” of a particular fact or other matter if the directors or
the following officers of the Corporation, Gary Rohrs, Grant Schultz, John
Marynowski,  Ben Eisbart, Paul Everett,
Jennifer Wilson, or a Shareholder has, or at any time had, Knowledge of such
fact or other matter.


The Buyer
will be deemed to have “Knowledge” of a particular fact or other matter if any
officer or director of the Buyer has, or at any time had, Knowledge of such fact
or matter.


“Laws”
means any law (statutory, common or otherwise), constitution, treaty,
convention, ordinance, equitable principle, code, rule, regulation, executive
order or other similar authority enacted, adopted, promulgated, or applied by
any Governmental Authority.


“Leased
Premises” has the meaning set forth in Section
5.14(c)(i).


“Leases”
has the meaning set forth in Section 5.14(c)(i).


“Lien”
means any mortgage, pledge, security interest, encumbrance, lien or charge of
any kind (including, but not limited to, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code or
comparable law or any jurisdiction in connection with such mortgage, pledge,
security interest, encumbrance, lien or charge) but excluding any Permitted
Liens.


“Litigation Materiality
Threshold” means any action, suit, or other legal or administrative proceeding
or governmental investigation pending or, to the Knowledge of the Shareholders
and the Corporation, threatened, against the Corporation or any of the
Subsidiaries where the losses or damages claimed by or against the Corporation
or any Subsidiary are reasonably expected to exceed $250,000.



 52
 









“Losses”
has the meaning set forth in Section 10.1(a).


“Material
Adverse Change (or Effect)” means any state of facts, change, event, effect or
occurrence (when taken together with all other states of fact, changes, events,
effects or occurrences) that has had or is reasonably likely to have a
materially adverse effect on the financial condition, results of operations,
prospects, properties, assets or liabilities (including contingent liabilities)
of the Corporation and its Subsidiaries (or, for the purposes of Section 4.6
only, the Buyer) taken as a whole excluding conditions affecting the scrap
metal business (or for the Buyer, the steel business) generally.  A Material Adverse Effect shall also include
any state of facts, change, event or occurrence that shall have occurred or
been threatened that (when taken together with all other states of facts,
changes, events, effects or occurrences that have occurred or been threatened)
has prevented or materially delayed, or would be reasonably likely to prevent
or materially delay, the performance by the Corporation and the Shareholders of
their obligations hereunder or the consummation of the transactions
contemplated hereby.


“Material
Contract” has the meaning set forth in Section 5.23.


“Materials
of Environmental Concern” means any and all toxic or hazardous chemicals and
materials, and any and all hazardous substances as defined in CERCLA and
hazardous wastes as defined in RCRA, petroleum and petroleum products,
radioactive materials, asbestos, polychlorinated biphenyls, urea formaldehyde,
lead based paint, and any and all other hazardous chemicals, materials,
constituents, pollutants or contaminants regulated under any Environmental
Laws.


“MPPA Plan”
has the meaning set forth in Section 5.18(b).


“Owned
Properties” has the meaning set forth in Section
5.14(a).


“Party”
has the meaning set forth in the Preamble.


“Pay Off
Letters” has the meaning set forth in Section 3.3(f).


“PBGC” has
the meaning set forth in Section 5.18(f).


“Permits” has the meaning set forth
in Section 5.21.


“Permitted
Encumbrances” means: (i) all Permitted Liens; (ii) all easements, covenants,
and restrictions of record; (iii) legal highways and rights of way; and, (iv)
zoning regulations.


“Permitted
Liens” means (i) Liens for Taxes not yet due and payable or being contested in
good faith by appropriate proceedings and for which there are adequate reserves
on the books of the Corporation; (ii) workers or unemployment compensation
liens arising in the ordinary course or business; (iii) mechanic’s, materialman’s,
supplier’s, vendor’s or similar liens arising in the ordinary course of
business securing amounts that are not delinquent or past due; and, (iv)
mortgages, assignments of rents and security interests granted to the
Corporation’s lenders to secure indebtedness of the Corporation disclosed on
the Financial Statements.


“Person”
means an individual, partnership, corporation, business trust, joint stock
corporation, estate, trust, unincorporated association, joint venture,
Governmental Authority or other entity, of whatever nature.


“Pre-Closing Returns” has the meaning set forth in Section
11.2.


“Preliminary
Statement” has the meaning set forth in Section 2.2(b).


“RCRA” has the meaning set forth in the definition of
Environmental Laws.


“Real Property” has the meaning set forth in Section
5.14(d).


“Receivables” means all receivables of the Corporation and
its Subsidiaries, including all trade account receivables, receivables arising
from the provision of services, sale of inventory, notes receivable, and insurance
proceeds receivable.



 53
 









“Release”
has the meaning set forth in Section 3.4.


“Restrictions”
means any restriction on the exercise of any rights related to the Stock,
including without limitation, proxies, voting agreements, transfer
restrictions, agreements to sell or purchase and similar items.


“SEC” means the Securities and Exchange Commission.


“Section 338(h)(10) Election” has the meaning set forth in Section
11.4.


“Securities Act” means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.


“Section
8.1 Certificate” has the meaning set forth in Section 8.1.


“Section
9.1 Certificate” has the meaning set forth in Section 9.1.


“Shareholder
Group” has the meaning set forth in Section 7.9(a).


“Shareholders”
has the meaning set forth in the Preamble.


“Shareholders
Representative” has the meaning set forth in Section 7.11 hereof.


“Software”
means all electronic data processing systems, information systems, computer
software programs, program specifications, charts, procedures, source codes,
object codes, input data, routines, data bases and report layouts and formats,
record file layouts, diagrams, functional specifications and narrative
descriptions, flow charts and other related material and documentation and any
and all licenses and copies thereof and rights thereto.


“Stock”
has the meaning set forth in the Recitals.


“Shareholders
Agreement” means the Shareholders Agreement to be entered into by Buyer and the
Shareholders at the Closing substantially in the form of Exhibit C.


“Straddle Period” has the meaning set forth in Section
11.2.


“Straddle Period Returns” has the meaning set forth in Section
11.2.


“Subsidiary”
and “Subsidiaries” means each entity in which the Corporation or any Subsidiary
of the Corporation or any combination thereof hold of record a majority of the
equity interests.


“Tax
Authority” includes the Internal Revenue Service and any state, local, foreign
or other Governmental Authority responsible for the administration of any
Taxes.


“Tax Consents” has the meaning set forth in Section 11.5.


“Taxes”
means all federal, provincial, territorial, state, municipal, local, domestic,
foreign or other taxes, imposts, rates, levies, assessments and other charges
including, without limitation, ad valorem, capital, capital stock, customs and
import duties, disability, documentary stamp, employment, estimated, excise,
fees, franchise, gains, goods and services, gross income, gross receipts,
income, intangible, inventory, license, mortgage recording, net income, occupation,
payroll, personal property, production, profits, property, real property,
recording, rent, sales, severance, sewer, social security, stamp, transfer,
transfer gains, unemployment, use, value added, water, windfall profits, and
withholding, together with any interest, additions, fines or penalties with
respect thereto or in respect of any failure to comply with any requirement
regarding Tax Returns and any interest in respect of such additions, fines or
penalties and shall include any transferee liability in respect of any and all
of the above.


“Tax Return” means any declaration, estimate, return,
report, information statement, schedule or other document (including any
related or supporting information) with respect to Taxes that is required to be
filed with any Tax Authority.


“Technical Information” means all information in the nature
of know-how, trade secrets, inventions, processes, designs, devices and related
information and documentation and any and all licenses and copies thereof and
rights thereto.



 54
 









“Territory” has the meaning set forth in Section 7.9(a).


“Third Party Claim” has the meaning set forth in Section
10.4.


“Title
Commitment” has the meaning set forth in Section 7.12(a).


“Title
Company” has the meaning set forth in Section 7.12(a).


“Title
Policy” has the meaning set forth in Section 7.12(a).


“Transaction Expenses” means (a) all legal, accounting, tax,
financial advisory, brokers, finders and other professional or transaction
expenses incurred by the Corporation or any of its Subsidiaries in connection
with the transactions contemplated by this Agreement (including any amounts
owed to any
consultants, auditors, accountants, attorneys or investment bankers
and any withholding, payroll, employment or similar Taxes, if any, required to
be withheld or paid by Buyer (on behalf of the Corporation or any of its
Subsidiaries), the Corporation, any of its Subsidiaries, with respect to the
payment of the Cash Amount or the issuance of the Buyer Common Stock, including
the Bonus Shares) and all amounts relating to title insurance required to be
delivered pursuant to this Agreement) and (b) all change of control payments,
transaction bonuses and severance obligations arising as a result of the
consummation of the transactions contemplated hereby and any withholding,
payroll, employment or similar Taxes, if any, required to be withheld or paid
by Buyer (on behalf of the Corporation or any of its Subsidiaries), the
Corporation, any of its Subsidiaries, with respect to such payments; provided,
that Transaction Expenses shall exclude (i) the fees and expenses of LaBov
& Beyond for consulting services in connection with employee communications
and (ii) any principal, accrued interest, prepayment penalties or premiums in
connection with the repayment of the Senior Notes and the Corporation Debt.


“Transfer Taxes” has the meaning set forth in Section
11.8.


“Welfare
Plan” has the meaning set forth in Section 5.18(e).


Other
Definitional Provisions.


All terms defined in this Agreement shall have the
defined meanings when used in any certificates, reports or other documents made
or delivered pursuant hereto or thereto, unless the context otherwise requires.


Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.


As used herein, the neuter gender shall also denote
the masculine and feminine, and the masculine gender shall also denote the
neuter and feminine, where the context so permits.



 55
 









IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and year first above
written.


	
  OMNISOURCE CORPORATION

  	
  STEEL DYNAMICS, INC.

  
	
   

  
	
   

  
	
  By:

  	
    /s/ Daniel M. Rifkin

  	
   

  	
  By:

  	
  /s/ Keith E. Busse

  	
   

  
	
   

  	
    Name:

  	
  Daniel M. Rifkin

  	
  Name: Keith E. Busse

  
	
   

  	
    Title:

  	
  President

  	
  Title: Chairman and CEO

  
	
   

  
	
   

  
	
   

  	
  SHAREHOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Leonard Rifkin

  	
   

  
	
   

  	
  Leonard Rifkin

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Leonard Rifkin Amended and

  
	
   

  	
  Restated Revocable Trust dated
  December 19, 2006

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Leonard Rifkin

  	
   

  
	
   

  	
   Leonard Rifkin

  
	
   

  	
   Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Daniel M. Rifkin

  	
   

  
	
   

  	
     Daniel M. Rifkin

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Richard S. Rifkin

  	
   

  
	
   

  	
     Richard S. Rifkin

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Martin S. Rifkin

  	
   

  
	
   

  	
     Martin S. Rifkin

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Richard S. Rifkin 2006 Irrevocable
  Trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Martin S. Rifkin

  	
   

  
	
   

  	
   Martin S. Rifkin

  
	
   

  	
   Trustee

  
									



 



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