Document:

SCP Pool Corporation

	

EXHIBIT 10.1

ASSET PURCHASE AGREEMENT 

     ASSET PURCHASE AGREEMENT dated as of June
14, 2000, among Arch Chemicals, Inc., a Virginia corporation (“Parent”), Superior Pool
Products, Inc., a Delaware corporation (“Seller”) and a wholly owned subsidiary of
Parent, and SCP Pool Corporation, a Delaware corporation (“Purchaser”).  

     Seller desires to sell to Purchaser, and
Purchaser desires to purchase from Seller, substantially all the assets, properties and
business of Seller (the “Business”), upon the terms and subject to the conditions of this
Agreement.  

     Accordingly, the parties hereby agree as
follows: 

ARTICLE I 

Purchase and Sale of Acquired Assets 

     SECTION 1.01. Purchase and Sale. (a) On the
terms and subject to the conditions of this Agreement, at the Closing (as defined in
Section 2.01), Seller shall sell, assign, transfer, convey and deliver to Purchaser, and
Purchaser shall purchase from Seller all the right, title and interest as of the Closing
of Seller in, to and under the Acquired Assets (as defined in Section 1.02(a)), for (i)
an aggregate purchase price equal to the Estimated Net Asset Value (as defined in Section
1.01(b)) plus the Additional Amount (as defined below) (the “Purchase Price”), payable as
set forth in Section 2.02, subject to adjustment as set forth in Section 1.05 and
provided the Purchase Price may not exceed, before and after any adjustment under Section
1.05, $25 million, and (ii) the assumption of the Assumed Liabilities (as defined in
Section 1.03(a)). The purchase and sale of the Acquired Assets and the assumption of the
Assumed Liabilities is referred to in this Agreement as the “Acquisition”. “Additional
Amount” shall mean: (i) if the Estimated Net Asset Value (or Actual Closing Net Asset
Value, as the case may be) is $11 million or less, $12 million, (ii) if Estimated Net
Asset Value (or Actual Closing Net Asset Value, as the case may be) is equal to or
greater than $12 million, $11 million and (iii) if the Estimated Net Asset Value (or
Actual Closing Net Asset Value, as the case may be) is greater than $11 million but less
than $12 million, $12 million less the amount by which such value exceeds $11 million;
provided that for the purposes of determining the Additional Amount only, outstanding
uncleared checks of Seller shall be included in liabilities in determining Estimated Net
Asset Value and the Actual Closing Net Asset Value as of the date of such values.  

	

     (b) At least two days prior to the Closing
Date, Seller shall provide Purchaser with the estimated Net Asset Value of the Business
stated as of the last day of the calendar month immediately preceding the Closing Date
(or if the Closing is held before the tenth day of a month, as of the last day of the
second preceding month), adjusted for any subsequent extraordinary items and prepared on
a basis consistent with the balance sheet set forth as Schedule 1.01(b)(1) (“Sample
Balance Sheet”) (the “Estimated Net Asset Value”). “Net Asset Value”, as of any date of
determination, shall mean net asset value determined in accordance with generally
accepted accounting principles (“GAAP”) applied in a manner consistent with that used in
preparing the Sample Balance Sheet. It is understood that in determining the Actual
Closing Net Asset Value Customer Rebates for the Final Period and Supplier Rebates for
the Final Period shall be included and computed as follows: “Supplier Rebates” shall mean
for the Final Period an amount equal to 1.5% of total net sales of Seller occurring in
such period and (ii) “Customer Rebates” shall mean for the Final Period 2.88% of gross
sales of Seller occurring in such period to (A) customers who qualified for Seller’s
V.I.P. program for 1999 and (B) those additional customers who as of the Closing Date
Seller reasonably projects for 2000 as tracking towards V.I.P. attainment in 2000 based
on 2000 sales occurring prior to the Closing plus an adjustment as set forth in Schedule
1.01(b)(2) and the “Final Period” shall mean January 1, 2000 to and including the Closing
Date.  

     SECTION 1.02. Acquired Assets and Excluded
Assets. (a) The term “Acquired Assets” means all the business, properties, assets,
goodwill and rights of Seller of whatever kind and nature, real or personal, tangible or
intangible, located on or at the Premises (as defined herein), that are owned, leased or
licensed by Seller on the Closing Date (as defined in Section 2.01) and used, held for
use or intended to be used in the operation or conduct of the Business, including:  

	 	
     (i)
all real property, leaseholds and other interests in real property of Seller listed in
Schedule 3.06, in each case together with Seller’s right, title and interest in all
buildings, improvements and fixtures thereon, all other appurtenances thereto and related
easements and rights of way (the “Premises”); 

	 	
     (ii)
all finished goods, supplies, parts, spare parts and other inventories of Seller that on
the Closing Date are located on the Premises (including in transit, on consignment or in
the possession of any third party) on the Closing Date that is used, held for use or
intended to be used in the operation or conduct of the Business (collectively, the
“Inventory”); 

	 	
     (iii)
all other tangible personal property and interests therein, including all machinery,
equipment, furniture, furnishings and vehicles, of Seller on the Premises that is used,
held for use or intended to be used in the operation or conduct of the Business (the
“Personal Property”); 

	 	
     (iv)
all accounts receivable and notes receivable of Seller on the Closing Date (the
“Receivables”); 

	 	
     (v)
all servicemarks, trade names, business names, brand names, copyrights, designs,
design registrations, and all rights to any of the foregoing (“ Intellectual
Property”), of Seller that are used, held for use or intended to be used in the
operation or conduct of the Business (such Intellectual Property being the “Assigned
Intellectual Property”); 

	 	
     (vi)
all trade secrets, confidential information, know-how, procedures, market surveys
and marketing know-how of Seller that are used, held for use or intended to be used in
the operation or conduct of the Business (the “Technology”); 

	 	
     (vii)
all rights existing under contracts, leases, subleases, licenses, indentures,
agreements, commitments and all other legally binding arrangements, whether
oral or written, to which Seller is a party or by which Seller is bound (“Contracts”)
that are listed in Schedule 3.06 or 3.08, and all other Contracts (including purchase
orders and sales orders) to which Seller is a party or by which Seller is bound that are
used, held for use or intended to be used in, or that arise out of, the operation or
conduct of the Business or to which the Acquired Assets are subject (collectively, the
“Assigned Contracts”); 

	 	
     (viii)
all rights in and to products sold or leased (including products returned after the
Closing and rights of rescission, replevin and reclamation) in the operation or conduct
of the Business; 

	 	
     (ix)
all credits, rebates or adjustments from suppliers, prepaid expenses, deferred charges,
advance payments, security deposits and prepaid items that are used, held for use or
intended to be used in, or that arise out of, the operation or conduct of the Business; 

	 	
     (x)
all books of account, ledgers, general, financial, accounting and personnel records,
files, invoices, customers’ and suppliers’ lists, other distribution lists,
billing records, sales and promotional literature, manuals, customer and supplier
correspondence (in all cases, in any form or medium), of Seller in Seller’s or Parent’s
possession that are used, held for use or intended to be used in, or that arise primarily
out of, the conduct or operation of the Business (the “Records”); 

	 	
     (xi)
to the extent transferable, all permits, licenses, franchises, orders, registrations,
certificates, variances, approvals and similar rights obtained from governments and
governmental agencies and all data and records pertaining thereto, in each case, that are
used, held for use or intended to be used, in the conduct or operation of the Business,
and other than those relating to the Excluded Assets or Excluded Liabilities; 

	 	
     (xii)
all claims, refunds, credits, causes of action, choses in action, rights of recovery and
rights of set-off of every kind and nature that are used, held for use or intended to be
used in the Business, other than those arising out of Excluded Assets or the Excluded
Liabilities; 

	 	
     (xiii)
all rights to receive and retain mail and other communications, in each case relating to
the Business other than those relating to the Excluded Assets or Excluded Liabilities; and

	 	
     (xiv)
all goodwill generated by or associated with the Business; 

	

other than, in each case of the above, the Excluded Assets (as defined in
Section 1.02(b)). 

     (b) The term “Excluded Assets” means:  

	 	
     (i)
all assets identified on Schedule 1.02(b); 

	 	
     (ii)
all cash and cash equivalents of Parent or Seller (but excluding petty cash of Seller on
hand at the Premises on the Closing Date in an aggregate amount not to exceed $7,000); 

	 	
     (iii)
all rights, claims and credits of Parent or Seller to the extent relating to any other
Excluded Asset or any Excluded Liability (as defined in Section 1.03(b)), including any
such items arising under insurance policies and all guarantees, warranties, indemnities,
pre-paid taxes, intercompany accounts and similar rights in favor of Seller or Parent in
respect of any other Excluded Asset or any Excluded Liability; 

	 	
     (iv)
all the assets of the Seller Benefit Plans (as defined in Section 3.16); 

	 	
     (v)
all rights of Seller or Parent under this Agreement and the other agreements and
instruments executed and delivered in connection with this Agreement, including the
promissory note referred to in Section 2.02(b) (collectively, the “Ancillary Agreements”); 

	 	
     (vi)
all records and documents, including confidentiality agreements, prepared in connection
with the sale of the Business to Purchaser or other potential purchasers (other than
those contained in Seller’s data room provided to Purchaser or otherwise provided to
Purchaser as a potential purchaser); 

	 	
     (vii)
all financial and tax records relating to the Business that form part of Parent’s general
ledger; 

	 	
     (viii)
all policies of insurance, whether general liability, worker’s compensation, property or
other, and rights and obligations thereunder relating to Seller and its Business; 

	 	
     (ix)
any intercompany accounts owed by Parent or its affiliate to Seller; and

	 	
     (x)
any Contract to which Parent is a party relating to any corporate-wide items described on
Schedule 3.20 in which Seller participates with Parent on an integrated basis with Parent’s
other businesses. 

	

     SECTION 1.03. Assumption of Certain
Liabilities. (a) Upon the terms and subject to the conditions of this Agreement,
Purchaser shall assume, effective as of the Closing, and from and after the Closing
Purchaser shall pay, perform and discharge when due, only the following liabilities,
obligations and commitments of Seller (subject to Purchaser’s right to dispute such
liabilities and obligations in good faith with parties to whom such obligations are owed
provided such right shall not diminish Purchaser’s indemnity obligations under Article
VIII) (such liability, obligations and commitments being the “Assumed Liabilities”):  

	 	
     (i)
any and all payment and performance liabilities, obligations and commitments of Seller
under the Assigned Contracts whether incurred before, on or after the Closing and
including all unpaid rebates and refunds to customers; 

	 	
     (ii)
all accounts payable and accrued liabilities of Seller arising out of the operation or
conduct of the Business prior to the Closing and contained in the Closing Balance Sheet
(as defined in Section 1.05(a)), excluding outstanding uncleared checks of Seller; 

	 	
     (iii)
any and all Unknown Environmental Liabilities but only to the extent Seller is not
required to indemnify an indemnified party under Section 8.01(a)(iv); and

	 	
     (iv)
all other liabilities, obligations and commitments, whether known or unknown, express or
implied, absolute, contingent or otherwise, arising out of the operation or conduct of
the Business or Acquired Asset after the Closing. 

	

     (b) Notwithstanding Section 1.03(a), or any
other provision of this Agreement or any Ancillary Agreement, and regardless of any
disclosure to Purchaser, Purchaser shall not assume any of the following liabilities,
obligations and commitments of Seller (the “Excluded Liabilities”), each of which shall
be retained and paid, performed and discharged when due by Seller or Parent (subject to
Seller’s and Parent’s right to dispute such liabilities and obligations in good faith
with parties to whom such obligations are owed provided such right shall not diminish
Seller’s or Parent’s indemnity obligations under Article VIII). The term “Excluded
Liability” means:  

	 	
     (i)
any liability, obligation or commitment of Seller or Parent arising under the federal
lawsuit Pool Water Products and Aqua Tri v. Olin Corporation and Superior Pool Products
(the “PWP Case”); 

	 	
     (ii)
any liability, obligation or commitment of Seller or Parent, whether express or implied,
liquidated, absolute, accrued, contingent or otherwise, or known or unknown, arising out
of the operation or conduct by Parent or any of its affiliates of any business other than
the Business; 

	 	
     (iii)
any liability, obligation or commitment of Seller or Parent that (x) relates primarily
to, or that arises primarily out of, any Excluded Asset (other than records), or (y) that
arises out of the distribution to, or ownership by, Seller or Parent of the Excluded
Assets or associated with the realization of the benefits of any Excluded Asset; 

	 	
     (iv)
any liability, obligation or commitment for Taxes (as defined in Section 3.14), whether
or not accrued, assessed or currently due and payable, (A) of Seller or (B) relating to
the operation or ownership of the Business or the assets for any Tax period (or portion
thereof) ending on or prior to the Closing Date (for purposes of this clause (iv), all
real property Taxes, personal property Taxes and similar ad valorem Taxes or obligations
levied with respect to the Acquired Assets for a Tax period that includes (but does not
end on) the Closing Date shall be apportioned between Seller and Purchaser based upon the
number of days of such Tax period prior to the Closing Date and the number of days of
such Tax period after the Closing Date (which period shall include the Closing Date)); 

	 	
     (v)
except as expressly provided in Section 5.10, any liability, obligation or commitment of
Seller or Parent arising under any Seller Benefit Plan (as defined in Section 3.16(a)); 

	 	
     (vi)
any liability, obligation or commitment of Seller to any of the affiliates of Parent or
to Parent (in each case, other than those arising out of purchase orders for inventory,
supplies or raw materials and including outstanding uncleared checks of Seller); 

	 	
     (vii)
any of Seller’s or Parent’s liabilities or obligations to Purchaser under this Agreement; 

	 	
     (viii)
any of Seller’s liabilities or obligations for expenses or fees incident to or arising
out of the negotiation, preparation, approval or authorization of this Agreement or the
consummation (or preparation for the consummation) of the transactions contemplated
hereby (including, without limitation, all attorneys’ and accountants’ fees), to the extent
incurred prior to or at Closing and except that Purchaser shall be responsible for all
filing fees for any filing made in connection herewith under the HSR Act (as defined in
Section 3.03); 

	 	
     (ix)
any of Seller’s liabilities or obligations (A) arising by reason of any violation or
alleged violation of any federal, state, local or foreign law or any requirement of any
governmental authority (including liabilities or obligations arising out of civil
litigation brought by any Person), (B) arising by reason of any breach or alleged breach
by Seller of any agreement, contract, lease, commitment, instrument, judgment, order or
decree (regardless of when any such violation or breach is asserted), or (C) otherwise
arising by reason of any active, pending or threatened litigation, in each case relating
to facts, circumstances, acts or omissions existing or occurring prior to the Closing
(but nothing in this clause (ix) shall include any matter relating to any Environmental
Laws as all such matters are covered in clauses (x) and (xi) hereof and clause (iii) of
Section 1.03); 

	 	
     (x)
any and all Known Environmental Liabilities; 

	 	
     (xi)
any and all Unknown Environmental Liabilities but only to the extent Seller is required
to indemnify an indemnified party pursuant to Section 8.01(a)(iv); 

	 	
     (xii)
any of Seller’s liabilities or obligations arising as a result of the failure of Seller
to comply with any bulk sales or bulk transfer laws; and

	 	
     (xiii)
any other liabilities or obligations of Seller of any nature whatsoever not expressly
assumed by Purchaser under this Agreement that relate to facts, circumstances, acts or
omissions existing or occurring prior to the Closing. 

	

     (c) Purchaser shall acquire the Acquired
Assets free and clear of all liabilities, obligations and commitments of Seller, other
than the Assumed Liabilities, and free and clear of all Liens (as defined in Section
3.05), other than Permitted Liens (as defined in Section 3.05). 

     (d) Seller and Purchaser acknowledge that
certain expenses of the Business are paid on a periodic basis. Accordingly, the items
listed below, shall be apportioned between Seller and Purchaser, with Seller being
responsible for all such expenses attributable to periods on or prior to the Closing
Date, and Purchaser being responsible for all expenses attributable to periods after the
Closing Date: 

	 	
     (i)
prepaid rent, tenant utility payments and all other percentage or additional rent, common
area maintenance and sundry charges (including any HVAC charges) and commissions paid by
tenants and prepaid equipment maintenance charges; 

	 	
     (ii)
utility company charges, including electricity, gas, fuel, water and sewer charges; and

	 	
     (iii)
real estate taxes, general and special assessments and other public or private charges
affecting the Premises and other items apportioned as provided in Section 1.03(b)(iv); and

	 	
     (iv)
prepaid premiums and contributions made by Seller, Parent, or Seller’s employees for
Seller’s medical plan (excluding employees participating pursuant to COBRA) provided that
the consent of CIGNA HealthCare of California, Inc. (“CIGNA”) for the transfer of Seller’s
medical plan contract is obtained by Purchaser. 

	

To the extent Seller has already paid prior to the Closing any such
expenses for which Purchaser shall be responsible, Purchaser shall promptly after the
Closing, to the extent not reflected in the Closing Balance Sheet, reimburse Seller in
immediately available funds for such expenses. Seller may also present from time to time
an additional list of such expenses following the Closing. Seller and Purchaser each
agree to pay such expenses to the other as apportioned within 30 days of presentment
after the Closing of an itemized list of such expenses. 

	

      

     SECTION 1.04. Consents of Third Parties.
(a) Notwithstanding anything in this Agreement to the contrary, this Agreement shall not
constitute an agreement to assign any asset (excluding purchase orders and sales orders)
or any claim or right or any benefit arising under or resulting from such asset if an
attempted assignment thereof, without the consent of a third party, would constitute a
breach or other contravention of the rights of such third party, would be ineffective
with respect to any party to an agreement concerning such asset, or would in any way
adversely affect the rights of Seller or, upon transfer, Purchaser under such asset. If
any transfer or assignment by Seller to, or any assumption by Purchaser of, any interest
in, or liability, obligation or commitment under, any asset (other than purchase orders
or sales orders) requires the consent of a third party, then such assignment or
assumption shall be made subject to such consent being obtained.  

     (b) If any such consent is not obtained
prior to the Closing, Seller and Purchaser shall cooperate (at their own expense) in any
lawful and reasonable arrangement reasonably proposed by Purchaser or Seller under which
Purchaser shall obtain the economic claims, rights and benefits under the asset, claim or
right with respect to which the consent has not been obtained in accordance with this
Agreement. Such reasonable arrangement may include (i) the subcontracting, sublicensing
or subleasing to Purchaser of any and all rights of Seller against the other party to
such third-party agreement arising out of a breach or cancellation thereof by the other
party, and (ii) the enforcement by Seller of such rights. 

     SECTION 1.05 Purchase Price Adjustments.
(a) Within twenty (20) business days following the end of the calendar month in which the
Closing occurs, Seller shall deliver to Purchaser a statement (“Seller’s Statement”)
showing a balance sheet for the Business as of the Closing Date (“Closing Balance Sheet”)
and the actual Net Asset Value as of the Closing Date (the “Actual Closing Net Asset
Value”) along with the computation of such value and the recalculation of final Purchase
Price using the Actual Closing Net Asset Value in lieu of Estimated Net Asset Value and
in the determination of the Additional Amount and any necessary resulting adjustment
(“Adjustment”) to the Purchase Price amount paid at Closing. The Closing Balance Sheet
and the preparation of the Actual Closing Net Asset Value shall be prepared on a basis
consistent with the preparation of the Estimated Net Asset Value as set forth in Section
1.01(b). Purchaser shall cooperate with Seller and its representatives in preparing such
statement including providing reasonable access to the Records and the assistance of
Purchaser’s employees. Such statement shall become final and binding on the parties
except to the extent Purchaser notifies Seller on or before the tenth business day after
delivery of Seller’s Statement of Purchaser’s disagreement with such statement along with
Purchaser’s computation of the Actual Closing Net Asset Value and final Purchase Price in
reasonable detail (“Disagreement Notice”); provided that Purchaser shall not notify
Seller of any dispute unless there is a reasonable basis for all such disputes to result
in an Adjustment in the aggregate in excess of $50,000 (excluding interest) from the
Adjustment shown in Seller’s Statement. If Purchaser so notifies Seller, the parties
shall negotiate in good faith regarding such disagreement with the computation of the
Actual Closing Net Asset Value and final Purchase Price. If the parties fail to agree on
the Actual Closing Net Asset Value and final Purchase Price within 30 days of receipt by
Seller of the Disagreement Notice, the parties shall go to arbitration on their
disagreement as provided in Section 1.05(b).  

	

Once the Actual Closing Net Asset Value is final and binding on the
parties (whether as a result of arbitration of otherwise), if the Purchase Price paid at
closing exceeds the final Purchase Price, the Seller shall pay to Purchaser an amount
equal to the difference between the two values and if the final Purchase Price exceeds
the Purchase Price paid at Closing, the Purchaser shall pay to Seller an amount equal to
the difference between the two values in immediately available funds within 10 days of
the Actual Closing Net Asset Value and final Purchase Price becoming final and binding on
the parties. In addition, the payor shall pay with such difference in like funds simple
interest thereon at a rate of eight percent (8%) per annum accruing from the Closing Date
to and including the date of payment. 

     (b) As called for by Section 1.05(a), the
parties shall submit the dispute(s) set forth in the Disagreement Notice regarding the
determination of the Actual Closing Net Asset Value and computation of the final Purchase
Price to final and binding arbitration by PricewaterhouseCoopers LLP or such other
independent “Big Five” accounting firm as may be mutually agreeable to the parties. In
the event PricewaterhouseCoopers LLP is unable or unwilling to review Seller’s Statement
and in the event Purchaser and Seller are unable to mutually agree on a replacement
accounting firm, a “Big Five” accounting firm will be selected by lot after eliminating
one firm designated as objectionable by each of Purchaser and Seller (any accounting firm
so selected or agreed upon shall be referred to herein as the “Independent Accountant”).
Each Purchaser and Seller shall use its reasonable best efforts to cause the Independent
Accountant to make a decision regarding the Actual Closing Net Asset Value and final
Purchase Price as soon as practicable, but in any event such Independent Accountant shall
make a decision within 120 days after the delivery of the Disagreement Notice to Seller.
The costs and expenses associated with the Independent Accountant’s arbitration will be
divided evenly between Purchaser and Seller, it being understood that each party hereto
shall bear its own accountants’  and attorneys’ fees and expenses in connection with the
arbitration.  

     (c) The final Purchase Price resulting from
the adjustment shall be the “Adjusted Purchase Price.”  If the Actual Closing Net Asset
Value matter goes to arbitration as set forth in Section 1.05(b), the amount determined
in the arbitration shall be used to determine the Adjusted Purchase Price for purposes of
this Agreement.  

	

ARTICLE II 

The Closing 

     SECTION 2.01. Closing Date. The closing of
the Acquisition (the “Closing”) shall take place at the offices of Arch Chemicals, Inc.,
501 Merritt 7, Norwalk, Connecticut 06851, at 10:00 a.m. on a date mutually acceptable to
the parties (but not later than 14 days following the satisfaction (or, to the extent
permitted, the waiver) of the conditions set forth in Section 6.01, or, if on such day
any condition set forth in Section 6.02 or 6.03 has not been satisfied (or, to the extent
permitted, waived by the party entitled to the benefit thereof), as soon as practicable
after all the conditions set forth in Article VI have been satisfied (or, to the extent
permitted, waived by the parties entitled to the benefits thereof). The date on which the
Closing occurs is referred to in this Agreement as the “Closing Date”.  

     SECTION 2.02. Transactions To Be Effected
at the Closing. At the Closing:  

     (a) Seller shall deliver to Purchaser (i)
such appropriately executed bills of sale, assignments and other instruments of transfer
relating to the Acquired Assets in form and substance reasonably satisfactory to
Purchaser and its counsel and (ii) such other documents as Purchaser or its counsel may
reasonably request to demonstrate satisfaction of the conditions and compliance with the
covenants set forth in this Agreement; and 

     (b) Purchaser shall deliver to Seller (i)
payment, by wire transfer to a bank account designated in writing by Seller (such
designation to be made at least two business days prior to the Closing Date), immediately
available funds in an amount equal to the Purchase Price, (ii) such appropriately
executed assumption agreements and other instruments of assumption providing for the
assumption of the Assumed Liabilities in form and substance reasonably satisfactory to
Seller and its counsel and (iii) such other documents as Seller or its counsel may
reasonably request to demonstrate satisfaction of the conditions and compliance with the
covenants set forth in this Agreement. 

     SECTION 2.03. Risk of Loss. Until the
Closing, any loss of or damage to the Acquired Assets from fire, casualty or any other
occurrence shall be the sole responsibility of Seller.  

	

ARTICLE III 

Representations and Warranties of Seller 

     Seller represents and warrants to
Purchaser, as of the date of this Agreement and as of the Closing Date, as follows: 

     SECTION 3.01. Organization, Standing and
Power. Each of Seller and Parent is duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is organized and has full corporate power
and authority and possesses all governmental franchises, licenses, permits,
authorizations and approvals necessary to enable it to own, lease or otherwise hold its
properties and assets and to conduct the Business and its other businesses as presently
conducted, other than such franchises, licenses, permits, authorizations and approvals
the lack of which, individually or in the aggregate, have not had and could not
reasonably be expected to have a material adverse effect (i) (A) in the case of Seller,
on the business and financial condition or results of operations of Seller or of the
Business and (B) in the case of Parent, on the business and financial condition or
results of operations of Parent or (ii) on the ability of such party to consummate the
Acquisition and the other transactions contemplated hereby (clauses (i)(A) and (ii) being
a “Seller Material Adverse Effect” and clauses (i)(B) and (ii) being a “Parent Material
Adverse Effect”). Each of Seller and Parent is duly qualified to do business as a foreign
corporation in each jurisdiction where the character of the Acquired Assets held by it or
the nature of the Business make such qualification necessary for it to conduct the
Business as currently conducted by it or the failure to so qualify has had or could
reasonably be expected to have a Seller Material Adverse Effect.  

     SECTION 3.02. Authority; Execution and
Delivery; Enforceability. Each of Seller and Parent has full power and authority to
execute this Agreement and the Ancillary Agreements to which it is, or is specified to
be, a party and to consummate the Acquisition and the other transactions contemplated
hereby and thereby. The execution and delivery by each of Seller and Parent of this
Agreement and the Ancillary Agreements to which it is, or is specified to be, a party and
the consummation by each of Seller and Parent of the Acquisition and the other
transactions contemplated hereby and thereby have been duly authorized by all necessary
corporate action. Each of Seller and Parent has duly executed and delivered this
Agreement and prior to the Closing will have duly executed and delivered each Ancillary
Agreement to which it is, or is specified to be, a party, and this Agreement constitutes,
and each Ancillary Agreement to which it is, or is specified to be, a party will after
the Closing constitute, its legal, valid and binding obligation.  

	

     SECTION 3.03. No Conflicts; Consents. The
execution and delivery by Seller and Parent of this Agreement do not, the execution and
delivery by Seller and Parent of each Ancillary Agreement to which it is, or is specified
to be, a party will not, and the consummation of the Acquisition and the other
transactions contemplated hereby and thereby and compliance by Seller and Parent with the
terms hereof and thereof will not conflict with, or result in any violation of or default
(with or without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a material
benefit under, or result in the creation of any Lien upon any of the properties or assets
of Seller under, any provision of (i) the certificate of incorporation or bylaws of
Seller or Parent, (ii) any Contract to which Seller or Parent is a party or by which any
of their respective properties or assets is bound or (iii) any judgment, order or decree
(“Judgment”) or statute, law, ordinance, rule or regulation (“Applicable Law”) applicable
to Seller or Parent or their respective properties or assets, other than (A) in the case
of clauses (ii) and (iii) above, (1) any such items applicable to Seller (excluding
purchase orders, sales orders and those Contracts listed on Schedule 3.08) that,
individually or in the aggregate, have not had and could not reasonably be expected to
have a Seller Material Adverse Effect, (2) any such items applicable to Parent that
individually or in the aggregate, have not had and could not reasonably be expected to
have a Parent Material Adverse Effect, and (B) those Contracts listed on Schedule 3.08 as
noted therein as requiring consent. No consent, approval, license, permit, order or
authorization (“Consent”) of, or registration, declaration or filing with, any Federal,
state, local or foreign government or any court of competent jurisdiction, administrative
agency or commission or other governmental authority or instrumentality, domestic or
foreign (a “Governmental Entity”), is required to be obtained or made by or with respect
to Seller or Parent in connection with the execution, delivery and performance of this
Agreement or any Ancillary Agreement or the consummation of the Acquisition or the other
transactions contemplated hereby and thereby, other than (I) compliance with and filings
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”), (II)
compliance with and filings under Section 13(a) of the Securities Exchange Act of 1934
(the “Exchange Act”), (III) compliance with and filings and notifications under
applicable environmental laws, and (IV) those that may be required solely by reason of
Purchaser’s (as opposed to any other third party’s) participation in the Acquisition and
the other transactions contemplated hereby and by the Ancillary Agreements.  

     SECTION 3.04. Financial Statements.
Schedule 3.04 sets forth the balance sheets and income statements (the “Financial
Statements”) provided by Seller to Purchaser (the most recent balance sheet included in
the Financial Statements being the “Balance Sheet”). The Financial Statements have been
prepared in conformity with GAAP consistently applied except in each case, they exclude
any statements of cash flows, changes in equity, omit footnotes, and do not include any
allocation of certain compensation and benefit related costs for certain employees, and
on that basis fairly present (subject, in the case of any interim statements, to normal,
recurring year-end adjustments) the financial condition and results of operations of the
Business as of the respective dates thereof and for the respective periods indicated from
the books and records of Seller and Parent relating to the Business and fairly present
the financial condition and results of operation of the Business as of the dates and for
the periods indicated.  

	

     SECTION 3.05. Assets Other than Real
Property Interests. (a) Seller has good and valid title to all the Acquired Assets, in
each case free and clear of all mortgages, liens, security interests, charges, easements,
leases, subleases, covenants, rights of way, options, claims, restrictions or
encumbrances of any kind (collectively, “Liens”), except (i) such as are set forth in
Schedule 3.05, (ii) mechanics’, carriers’, workmen’s, repairmen’s or other like Liens
arising or incurred in the ordinary course of business, Liens arising under original
purchase price conditional sales contracts and equipment leases with third parties
entered into in the ordinary course of business and liens for Taxes that are not due and
payable or that may thereafter be paid without penalty, and (iii) other imperfections of
title or encumbrances, if any, that individually or in the aggregate, do not materially
impair, and could not reasonably be expected to impair, the continued use and operation
of the assets to which they relate in the conduct of the Business as presently conducted
(the Liens described in clauses (i), (ii) and (iii) above, together with the Liens
referred to in clauses (ii) through (vi) of Section 3.06, are referred to collectively as
“Permitted Liens”).  

     (b) This Section 3.05 does not relate to
real property or interests in real property, such items being the subject of Section
3.06, or to Intellectual Property, such items being the subject of Section 3.07. 

     SECTION 3.06. Real Property. There are no
real property and interests in real property owned in fee by Seller and used, held for
use or intended to be used in the operation or conduct of the Business, other than any
such property or interest constituting an Excluded Asset. Schedule 3.06 sets forth a
complete list of all real property and interests in real property leased by Seller and
used, held for use or intended to be used in the operation or conduct of the Business,
other than any such property or interest constituting an Excluded Asset (individually, a
“Leased Property”). Seller has good and valid title to the leasehold estates in all
Leased Property, in each case free and clear of all Liens, except (i) Liens described in
clause (ii) or (iii) of Section 3.05(a), (ii) such as are set forth in Schedule 3.06,
(iii) leases, subleases and similar agreements set forth in Schedule 3.08, (iv)
easements, covenants, rights-of-way and other similar restrictions of record, (v) any
conditions that may be shown by a current, accurate survey or physical inspection of any
Leased Property made prior to Closing and (vi) (A) zoning, building and other similar
restrictions, (B) Liens that have been placed by any developer, landlord or other third
party on property over which Seller has easement rights or on any Leased Property and
subordination or similar agreements relating thereto and (C) unrecorded easements,
covenants, rights-of-way and other similar restrictions. None of the items set forth in
clause (vi) above, individually or in the aggregate, materially impairs, or could
reasonably be expected materially to impair, the continued use and operation of the
Leased Property to which they relate in the conduct of the Business as presently
conducted.  

	

     SECTION 3.07. Intellectual Property. Seller
owns or has licensed to it all Intellectual Property currently used in the operation or
conduct of the Business, other than unregistered designs and copyrights that,
individually and in the aggregate, are not material to the conduct of the Business as
presently conducted.  

     SECTION 3.08. Contracts. (a) Except as set
forth in Schedule 3.08 and except for Contracts relating solely to Excluded Assets or
Excluded Liabilities, Seller is not a party to or bound by any Contract that is used,
held for use or intended for use in, or that arises out of, the operation or conduct of
the Business and that is:  

	 	
     (i)
a written employment agreement or employment contract that has an aggregate future
liability in excess of $20,000 and is not terminable by Seller by notice of not more than
60 days for a cost of less than $20,000; 

	 	
     (ii)
a collective bargaining agreement or other Contract with any labor organization, union or
association; 

	 	
     (iii)
a covenant not to compete (other than pursuant to any radius restriction contained in any
lease, reciprocal easement or development, construction, operating or similar agreement
and listed on Schedule 3.06 or 3.08) that limits the conduct of the Business as presently
conducted; 

	 	
     (iv)
a Contract with (A) any shareholder or affiliate of Seller or (B) any current or former
officer, director or employee of Seller or any of its affiliates (other than employment
agreements covered by clause (i) above and purchase orders for supplies, raw materials
and inventory bought from Parent and its affiliates); 

	 	
     (v)
a lease, sublease or similar Contract with any person under which Seller is a lessor or
sublessor of, or makes available for use to any person, (A) any Leased Property or (B)
any portion of any premises otherwise occupied by Seller; 

	 	
     (vi)
a lease, sublease or similar Contract with any person under which (A) Seller is lessee
of, or holds or uses, any machinery, equipment, vehicle or other tangible personal
property owned by any person or (B) Seller is a lessor or sublessor of, or makes
available for use by any person, any tangible personal property owned or leased by
Seller, that in any such case has an aggregate future liability or receivable, as the
case may be, in excess of $10,000 and is not terminable by Seller by notice of not more
than 60 days for a cost of less than $10,000; 

	 	
     (vii)
(A) a continuing Contract for the future purchase of materials, supplies or equipment
(other than purchase orders for inventory in the ordinary course of business consistent
with past practice), (B) a management, service, consulting or other similar Contract or
(C) an advertising agreement or arrangement, in any such case that has an aggregate
future liability to any person in excess of $15,000 and is not terminable by Seller by
notice of not more than 60 days for a cost of less than $15,000; 

	 	
     (viii)
a license, sublicense, option or other Contract relating in whole or in part to the
Assigned Intellectual Property (including any license or other Contract under which
Seller is licensee or licensor of any Assigned Intellectual Property) or to any
Technology (excluding shrink wrap license entered into in the ordinary course of
business); 

	 	
     (ix)
(A) a Contract under which Seller has borrowed any money from, or issued any note, bond,
debenture or other evidence of indebtedness to, any person (other than Parent) or (B) any
other note, bond, debenture or other evidence of indebtedness issued to any person (other
than Parent), in any such case that, individually, is in excess of $10,000; 

	 	
     (x)
a Contract (including any so-called take-or-pay or keepwell agreement) under which (A)
any person has directly or indirectly guaranteed indebtedness, liabilities or obligations
of Seller or (B) Seller has directly or indirectly guaranteed indebtedness, liabilities
or obligations of any other person (in each case other than endorsements for the purpose
of collection in the ordinary course of business), in any such case that, individually,
is in excess of $10,000; 

	 	
     (xi)
a Contract under which Seller has, directly or indirectly, made any advance, loan,
extension of credit or capital contribution to, or other investment in, any person (other
than Parent and other than extensions of trade credit in the ordinary course of the
Business), in any such case that, individually, is in excess of $10,000 (except those
made to Parent or any of its affiliates); 

	 	
     (xii)
a Contract granting a Lien (other than Permitted Liens) upon any Leased Property or any
other Acquired Asset; 

	 	
     (xiii)
a Contract providing for indemnification of any person with respect to material
liabilities relating to any current or former business of Seller or any predecessor
person; 

	 	
     (xiv)
a power of attorney (other than a power of attorney given in the ordinary course of the
Business with respect to routine tax matters); 

	 	
     (xv)
a Contract not made in the ordinary course of the Business; 

	 	
     (xvi)
a confidentiality agreement; 

	 	
     (xvii)
a Contract (including a purchase order), involving payment by Seller of more than
$100,000 or extending for a term more than 180 days from the date of this Agreement
(unless terminable without payment or penalty upon no more than 60 days’ notice), other
than purchase orders entered into in the ordinary course of the Business after the date
of this Agreement and not in violation of this Agreement; 

	 	
     (xviii)
a Contract (including a sales order) involving the obligation of Seller to deliver
products or services for payment of more than $20,000 or extending for a term more than
180 days from the date of this Agreement (unless terminable without payment or penalty
upon no more than 60 days’ notice), other than sales orders entered into in the ordinary
course of the Business after the date of this Agreement and not in violation of this
Agreement; 

	 	
     (xix)
a Contract for the sale of any Acquired Asset (other than inventory sales in the ordinary
course of business) or the grant of any preferential rights to purchase any Acquired
Asset or requiring the consent of any party to the transfer thereof; 

	 	
     (xx)
a Contract with or license or Permit by or from any Governmental Entity; 

	 	
      (xxi)
a currency exchange, interest rate exchange, commodity exchange or similar Contract to
which Seller is a party; 

	 	
     (xxii)
a Contract for any joint venture, partnership or similar arrangement to which Seller is a
party; 

	 	
     (xxiii)
a Contract providing for the services of any dealer, distributor, sales representative,
franchisee or similar representative involving the payment or receipt over the life of
such Contract in excess of $20,000 by Seller; 

	 	
     (xxiv)
a Contract providing for the provision of advertising services and involving the payment
or receipt over the life of such Contract in excess of $20,000 by Seller; 

	 	
     (xxv)
other Contract that has an aggregate future liability to any person (other than Seller)
in excess of $50,000 and is not terminable by Seller by notice of not more than 60 days
for a cost of less than $50,000 (other than purchase orders and sales orders); or

	 	
     (xxvi)
a Contract other than as set forth above to which Seller is a party or by which it or any
of its assets or businesses is bound or subject that is material to the Business or the
use or operation of the Acquired Assets. 

	

The aggregate expected liability of Seller under all Assigned Contracts
other than Contracts listed on Schedule 3.06 or 3.08 and other than those Contracts
entered into the ordinary course of business does not exceed $50,000. For purposes of
clauses (i), (vi), (vii), (ix), (x), (xi), (xvii), (xviii), (xxiii), (xxiv) and (xxv) of
this Section 3.8(a), the dollar materiality thresholds shall include the aggregate
amounts of any similar agreements with the same or related parties but excluded from this
sentence are those Contracts with customers or suppliers (including purchase orders). 

     (b) Except as set forth in Schedule 3.08,
all Contracts listed in such Schedule are valid, binding and in full force and effect and
are enforceable by Seller, in accordance with their terms, except for such failures to be
valid, binding, in full force and effect or enforceable that, individually or in the
aggregate, have not had and could not reasonably be expected to have a Seller Material
Adverse Effect. Except as set forth in Schedule 3.08, Seller has performed all material
obligations required to be performed by it to date under the Assigned Contracts, and it
is not (with or without the lapse of time or the giving of notice, or both) in breach or
default thereunder and, to the knowledge of Seller, no other party to any Assigned
Contract is (with or without the lapse of time or the giving of notice, or both) in
breach or default thereunder , except, in each case, for such noncompliance, breaches and
defaults that, individually or in the aggregate, have not had and could not reasonably be
expected to have a Seller Material Adverse Effect. Seller has not, except as disclosed in
the applicable Schedule, received any notice of the intention of any party to terminate
any Assigned Contract listed in any Schedule. Complete and correct copies of all
Contracts listed in the Schedules, together with all modifications and amendments
thereto, have been made available to Purchaser. Notwithstanding anything in this
Agreement to the contrary, Seller makes no representation or warranty with respect to
Seller’s obligations to make rebates or refunds to customers and Seller’s rights to
receive rebates or refunds from suppliers (other than providing Purchaser with true and
correct copies of Seller’s customer rebate program as in effect for 2000 and copies of
Seller’s supplier rebate programs in Seller’s possession). 

     (c) Schedule 3.08 sets forth for each
Assigned Contract whether or not the Consent of the other party or parties thereto must
be obtained by virtue of the execution and delivery of this Agreement or the consummation
of the Acquisition to avoid the invalidity of the transfer of such Assigned Contract, the
termination thereof, a breach, violation or default thereunder or any other change or
modification to the terms thereof, other than such Assigned Contracts the termination of
which by any party thereto, individually or in the aggregate, could not reasonably be
expected to have a Seller Material Adverse Effect. 

	

     SECTION 3.09. Inventory. Except to the
extent of reserves required by GAAP, the Inventory is generally of a quality and quantity
usable and salable at customary gross margins and with customary markdowns consistent in
all material respects with past practice in the ordinary course of business and is
reflected on the Balance Sheet and in the books and records of the Business in accordance
with GAAP. Except as set forth in Schedule 3.09, since the date of the Balance Sheet,
there have not been any write-downs of the value of, or establishment of any reserves
against, any inventory of the Business, except for write-downs and reserves in the
ordinary course of business and consistent with past practice.  

     SECTION 3.10. Personal Property. Schedule
3.10 sets forth a brief description of each item of Personal Property with an original
cost in excess of $10,000, indicating, in each case, the purchase price thereof and the
accumulated book depreciation. Each material item of Personal Property is in good working
order (ordinary wear and tear excepted), is free from any material defect and has been
maintained in all material respects in accordance with the past practice of the Business
and generally accepted industry practice, and no repairs, replacements or regularly
scheduled maintenance relating to any such item has been deferred. All leased personal
property of the Business is in all material respects in the condition required of such
property by the terms of the lease applicable thereto.  

     SECTION 3.11. Receivables. All the
Receivables (a) represent actual indebtedness incurred by the applicable account debtors,
(b) have arisen from bona fide transactions in the ordinary course of the Business and
(c) are not subject to any deduction, setoff or similar right, except for customer
rebates in accordance with Seller’s policies, except to the extent of reserves required
by GAAP, and except which if exercised would not have a Seller Material Adverse Effect.
Since the date of the Balance Sheet, there have not been any write-offs as uncollectible
of any receivables, except for write-offs in the ordinary course of the Business and
consistent with past practice.  

     SECTION 3.12. Permits. (a) Schedule 3.12
sets forth all material certificates, licenses, permits, authorizations and approvals
(“Permits”) issued or granted to Seller by Governmental Entities that are used or held
for use in the operation or conduct of the Business. Except as set forth in Schedule
3.12, (i) all such Permits are validly held by Seller, and Seller has complied in all
material respects with all terms and conditions thereof, (ii) since January 1, 1999,
Seller has not received notice of any Proceedings relating to the revocation or
modification of any such Permits the loss of which, individually or in the aggregate, has
had and could reasonably be expected to have a Seller Material Adverse Effect, and (iii)
to the knowledge of Seller, none of such Permits will be subject to suspension,
modification, revocation or nonrenewal as a result of the execution and delivery of this
Agreement or the consummation of the Acquisition, however, Seller makes no representation
and warranty as to the assignability or transferability of the Permits to Purchaser.  

	

     (b) Seller possesses all material Permits
to own or hold under lease and operate the Acquired Assets and to conduct the Business as
currently conducted, other than such Permits the absence of which, individually or in the
aggregate, has not had and could not reasonably be expected to have a Seller Material
Adverse Effect. 

     SECTION 3.13. Sufficiency of Acquired
Assets. The Acquired Assets (together with the Excluded Assets specified in Section
1.02(b)), comprise all the assets employed by Seller in connection with the Business.
Assuming transfer to Purchaser of all Acquired Assets at the Closing, the Acquired Assets
are sufficient for the conduct of Business immediately following the Closing in
substantially the same manner as currently conducted.  

     SECTION 3.14. Taxes. (a) For purposes of
this Agreement:  

     “Tax” or “Taxes” means all Federal, state,
local, foreign and other governmental taxes, fees, levies, duties, or similar assessments
or charges (including, sales, use, ad valorem, value added, transfer, license,
withholding tax on amounts paid, payroll, employment, excise, severance, stamp,
occupation, property, environmental or windfall profit tax, premium, custom, duty or
other tax), together with any interest, penalty, addition to tax or additional amount
due, imposed by the Governmental Entity (domestic or foreign) responsible for the
imposition of any such tax (a “Taxing Authority”).  

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

     (b) Except as set forth in Schedule 3.14,
(i) Seller and/or Parent have filed or caused to be filed in a timely manner (within any
applicable extension periods) all material Tax returns, reports and forms required to be
filed by the Code or by applicable state, local or foreign Tax laws, (ii) all Taxes shown
to be due on such returns, reports and forms have been timely paid in full or will be
timely paid in full by the due date thereof, and (iii) no material Tax Liens have been
filed and no material claims are being asserted in writing with respect to any Taxes and
Seller has no knowledge that any such claim shall be made. 

     (c) Except as set forth in Schedule 3.14,
(i) neither Parent nor any of its affiliates has made with respect to Seller, or any
assets of the Business, any consent under Section 341 of the Code, (ii) none of the
Acquired Assets is “tax exempt use property” within the meaning of Section 168(h) of the
Code, and (iii) none of the Acquired Assets is a lease made pursuant to Section 168(f)(8)
of the Internal Revenue Code of 1954 and (iv) there are no Liens for Taxes (other than
current Taxes not yet due and payable) on any of the Acquired Assets. 

     (d) Seller is not a “foreign person” within
the meaning of Section 1445 of the Code. 

	

     SECTION 3.15. Proceedings. Except for the
PWP Case, Schedule 3.15 sets forth a list as of the date of this Agreement of each
pending or, to the knowledge of Seller, threatened Proceeding or claims with respect to
which Seller has been contacted orally or in writing by counsel for the plaintiff or
claimant, arising out of the conduct of the Business or against any Acquired Asset and
that (a) relates to or involve more than $20,000 (in excess of available insurance
coverage), (b) seek any material injunctive relief or (c) may give rise to any legal
restraint on or prohibition against the transactions contemplated by this Agreement.
Except as set forth in Schedule 3.15, none of the Proceedings or claims listed in
Schedule 3.15 as to which there is at least a reasonable possibility of adverse
determination would have, if so determined, individually or in the aggregate, a Seller
Material Adverse Effect. Except as set forth in Schedule 3.15, to the knowledge of
Seller, there are no unasserted claims of the type that would be required to be disclosed
in Schedule 3.15 if counsel for the claimant had contacted Seller that if asserted would
have at least a reasonable possibility of an adverse determination. Except as set forth
in Schedule 3.15, Seller is not a party or subject to or in default under any Judgment
applicable to the conduct of the Business or any Acquired Asset or Assumed Liability.
Except as set forth in Schedule 3.15, there is not any Proceeding or claim by Seller
pending, or which Seller intends to initiate, against any other Person arising out of the
conduct of the Business. Except as set forth in Schedule 3.15, there is no pending, or to
the knowledge of Seller, threatened investigation of the conduct of the Business or any
Acquired Asset or Assumed Liability of which Seller has been given notice.  

     SECTION 3.16. Benefit Plans. (a) Schedule
3.16(a) contains a list of all “employee pension benefit plans” (as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)),
maintained or contributed to by Seller for the benefit of any officers or employees of
the Business (“Seller Pension Plans”) and all “employee welfare benefit plans” (as
defined in Section 3(1) of ERISA), bonus, stock option, stock purchase, deferred
compensation plans or arrangements and other employee fringe benefit plans maintained, or
contributed to, by Seller or any of its affiliates for the benefit of any officers or
employees of the Business (all the foregoing, including Seller Pension Plans, being
herein called “Seller Benefit Plans”). Seller has made available to Purchaser true,
complete and correct copies of each Seller Benefit Plan (or, in the case of any unwritten
Seller Benefit Plans, descriptions thereof).  

     (b) Except as set forth in Schedule
3.16(b), no employee of the Business will become entitled to any bonus, retirement,
severance, job security or similar benefit or any enhanced benefit solely as a result of
the sale of the Acquired Assets by Seller at the Closing. 

	

     (c) The Seller Pension Plans (i) comply in
form and in operation in all material respects with the applicable requirements of law
except to the extent such compliance with form is not required under Applicable Law as in
effect on the Closing Date and except for instances of noncompliance that, individual or
in the aggregate, would not have a Parent Material Adverse Effect, (ii) if any Seller
Pension Plan is intended to be qualified under Section 401(a) of the Code, such Plan has
received a favorable determination letter from the Internal Revenue Service that it is
qualified and, to Seller’s knowledge, no event has occurred and no condition exists which
could reasonably be expected to result in the revocation of any such favorable
determination letter (except for amendments required to be made prior to the end of 2000
as a result of changes required by Applicable Law), and (iii) all contributions or
premium payments which are due on or before the Closing Date by Parent or Seller or any
of its affiliates with respect to each Seller Benefit Plan will be timely paid in full
and all contributions and premium payments which are not due for all periods ending on
the Closing Date will be adequately accrued in the financial records of Parent or Seller. 

     (d) Seller has complied in all material
respects with the requirements of Section 4980B of the Code and Sections 601 et seq. of
ERISA (“COBRA”). Seller does not have any obligation or liability to provide
post-employment welfare benefits to any current or former employee of the Business (other
than as required by COBRA and other than possibly to persons who retire on or after age
55 under Seller Pension Plans).  

     (e) None of the Acquired Assets of Seller
are subject to any Lien in favor of or asserted by the Internal Revenue Service, the
Pension Benefit Guaranty Corporation, the Department of Labor or any other governmental
authority, agency, department or government-owned corporation. 

     (f) Neither Seller nor any member of Seller’s
controlled group, as defined in Section 414 of the Code, maintains, has maintained or
contributed to a “multiemployer plan” (as defined in Section 3(37) of ERISA) which could
result in liability to Seller or Purchaser. 

     (g) Schedule 3.16(g) lists the employees of
Seller who are on short term disability leave as of the date hereof. 

     SECTION 3.17. Absence of Changes or Events.
Except as set forth in Schedule 3.17, from the date of the Balance Sheet to the date of
this Agreement, there has not been any material adverse change in the business, financial
condition or results of operations of the Business, taken as a whole, other than changes
relating to United States or foreign economies in general or the industries in which the
Business operates and not specifically relating to the Business. Purchaser acknowledges
that there may have been disruption to the Business as a result of the announcement by
Seller of its intention to sell the Business (and there may be disruption to the Business
as a result of the execution of this Agreement and the consummation of the transactions
contemplated hereby), and Purchaser acknowledges that such disruptions do not and shall
not constitute a breach of this Section 3.17. Except as set forth in Schedule 3.17, from
the date of the Balance Sheet to the date of this Agreement, Seller has caused the
Business to be conducted in the ordinary course and in substantially the same manner as
previously conducted and has made all reasonable efforts consistent with past practices
to preserve the relationships of the Business with customers, suppliers and others with
whom the Business deals. Except as set forth in Schedule 3.17 or other Schedules hereto,
since the date of the Balance Sheet to the date of this Agreement, neither Seller nor
Parent has taken any action that, if taken after the date of this Agreement, would
constitute a breach of Section 5.01.  

	

     SECTION 3.18. Compliance with Applicable
Laws. (a) Except as set forth in Schedule 3.18, the Business is in compliance in all
material respects with all Applicable Laws, including those relating to occupational
health and safety or the environment, except for instances of noncompliance that,
individually or in the aggregate, have not had and could not reasonably be expected to
have a Seller Material Adverse Effect. Except as set forth in Schedule 3.18, none of
Seller and Parent has received any written communication in the 24-month period prior to
the date hereof from a Governmental Entity that alleges that the Business is not in
compliance in any material respect with any Applicable Law. This Section 3.18(a) does not
relate to matters with respect to Taxes, which are the subject of Section 3.14, or to
environmental matters, which are the subject of Section 3.18(b).  

     (b) Except as set forth in Schedule 3.18,
(i) in the 24-month period prior to the date hereof, Seller has not received any written
communication from a Governmental Entity that alleges that the Business is not in
compliance in any material respect with any Environmental Law, (ii) Seller holds, and is
in compliance with, all material Permits required to conduct the Business under the
Environmental Laws (as defined below), and is in compliance with all Environmental Laws,
except, in each case, for any instances of noncompliance that, individually or in the
aggregate, have not had and could not reasonably be expected to have a Seller Material
Adverse Effect and (iii) in connection with the conduct of the Business in the 24-month
period prior to the date hereof, Seller has not entered into or agreed to any court
decree or order and are not subject to any Judgment relating to compliance with any
Environmental Law or to investigation or cleanup of Hazardous Materials (as defined
below) under any Environmental Law. Seller has no contingent liabilities in respect of
the Business in connection with any Hazardous Materials that, individually or in the
aggregate, have had or could reasonably be expected to have a Seller Material Adverse
Effect. 

	

The term “Environmental Laws” means any and all Applicable Laws,
Judgments and Permits issued, promulgated or entered into by any Governmental Entity,
relating to the environment, preservation or reclamation of natural resources, or to the
management, Release (as such term is defined below) or threatened Release of Hazardous
Materials, including the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of
1986, 42 U.S.C. sub-section 9601 et seq. (“CERCLA”), the Federal Water Pollution Control
Act, as amended by the Clean Water Act of 1977, 33 U.S.C. sub-section 1251 et seq., the
Clean Air Act of 1970, as amended, 42 U.S.C. sub-section 7401 et seq., the Toxic
Substances Control Act of 1976, 15 U.S.C. sub-section 2601 et seq., the Occupational
Safety and Health Act of 1970, as amended, 29 U.S.C. sub-section 651 et seq., the
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. sub-section 11001
et seq., the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. sub-section 300(f) et seq.,
the Hazardous Materials Transportation Act, 49 U.S.C. sub-section 1801 et seq., and
any similar or implementing state or local law, and all amendments or regulations
promulgated thereunder. The term “Hazardous Materials” means all explosive or regulated
radioactive materials or substances, hazardous or toxic substances, wastes or chemicals,
petroleum (including crude oil or any fraction thereof) or petroleum distillates,
asbestos or asbestos containing materials, and all other materials or chemicals regulated
pursuant to any Environmental Law, including materials listed in 49 C.F.R. section
172.101 and materials defined as hazardous pursuant to sub-section 101(14) of CERCLA. The
term “Release” means any spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching, emanation or migration of any Hazardous Materials in,
into, onto, or through the environment (including ambient air, surface water, ground
water, soils, land surface, subsurface strata or workplace).  

     SECTION 3.19. Employee and Labor Matters.
(a) Except as set forth in Schedule 3.19: (i) there is not any, and in the 24-month
period prior to the date hereof, there has not been any, labor strike, dispute, work
stoppage or lockout pending, or, to the knowledge of Seller, threatened, against the
Business; (ii) to the knowledge of Seller (which, for purposes of this clause (ii) only,
“knowledge of Seller” includes the conscious awareness of its employees who are branch
managers and above), no union organizational campaign is in progress with respect to the
employees of the Business and no question concerning representation of such employees
exists; (iii) neither Seller nor Parent is engaged in any unfair labor practice in
connection with the conduct of the Business; (iv) there are not any unfair labor practice
charges or complaints against Seller pending, or, to the knowledge of Seller, threatened,
before the National Labor Relations Board in connection with the conduct of the Business;
(v) there are not any pending, or, to the knowledge of Seller, threatened, union
grievances against Seller in connection with the conduct of the Business as to which
there is a reasonable possibility of adverse determination and that, if so determined,
individually or in the aggregate, could reasonably be expected to have a Seller Material
Adverse Effect; (vi) there are not any pending, or, to the knowledge of Seller,
threatened, charges in connection with the conduct of the Business against Seller or any
current or former employee of the Business before the Equal Employment Opportunity
Commission or any state or local agency responsible for the prevention of unlawful
employment practices; and (vii) neither Seller nor Parent has received written notice in
the 24-month period prior to the date hereof of the intent of any Governmental Entity
responsible for the enforcement of labor or employment laws to conduct an investigation
of the Business and, to the knowledge of Seller, no such investigation is in progress.  

	

     (b) Seller has supplied Purchaser with a
list setting forth the name and current base salary of each employee of the Business as
of January 20, 2000, together with the current job title or relationship to the Business. 

     (c) No employee of the Business is, to the
knowledge of Seller, a party to or bound by any Contract, or subject to any Judgment that
may interfere with the use of such person’s best efforts to promote the interests of the
Business, may conflict with the Business or the transactions contemplated hereby or that
has had or could reasonably be expected to have a Material Adverse Effect. To the
knowledge of Seller, no activity of any employee of the Business as or while an employee
of the Business has caused a violation of any employment contract, confidentiality
agreement, patent disclosure agreement or other Contract to which such employee was a
party. To the knowledge of Seller, neither the execution and delivery of this Agreement,
nor the conduct of the Business by the employees of the Business, will conflict with or
result in a breach of the terms, conditions or provisions of, or constitute a default
under, any Contract, under which any such employee is now obligated. 

     SECTION 3.20. Transactions with Affiliates.
Except as set forth in Schedule 3.20, none of the Contracts set forth in Schedule 3.08
between the Business, on the one hand, and Seller or any of its affiliates, on the other
hand, will continue in effect subsequent to the Closing. Except as set forth in Schedule
3.20, after the Closing none of Seller’s affiliates (other than Seller) will have any
material interest in any property (real or personal, tangible or intangible) or Contract
used in or pertaining to the Business. Except as set forth in Schedule 3.20, neither
Parent nor Seller provides any material services to the Business.  

     SECTION 3.21. Suppliers. Except as set
forth in Schedule 3.21, between the date of the Balance Sheet and the date of this
Agreement, in the conduct of the Business Seller has not entered into or made any
contract or commitment for the purchase of merchandise other than in the ordinary course
of business consistent with past practice. Set forth on Schedule 3.21 are the top ten
suppliers in terms of dollars spent, of goods or services purchased by the Business
during its most recent full fiscal year. Except as set forth in Schedule 3.21, since the
date of the Balance Sheet there has not been (i) any material adverse change in the
business relationship of the Business with any supplier of merchandise named in Schedule
3.21 or (ii) any change in any material term (including credit terms) of the supply
agreements or related arrangements with any such supplier.  

	

     SECTION 3.22. Subsidiaries; Investments.
Seller does not own or control (directly or indirectly), hold or have any right or
options to subscribe for, purchase or acquire any shares of stock, partnership interest,
joint venture interest, equity participation or any other security or interest in any
other person. Seller does not have and has never had any subsidiaries.  

     SECTION 3.23. Absence of Undisclosed Known
Liabilities. To Seller’s knowledge, Seller has no obligations or liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise, whether due or to become due
and regardless of when or by whom asserted) and there is no basis for any proceeding,
hearing, investigation, charge, complaint or claim with respect to any obligations or
liabilities except (a) obligations under contracts or commitments described in Schedule
3.06 or Schedule 3.08 hereto or under contracts and commitments entered into in the
ordinary course of business which are not required to be disclosed thereon, (b) the
Excluded Liabilities, (c) liabilities reflected on the liability side of the Balance
Sheet, (d) liabilities which have arisen after the date of the Balance Sheet in the
ordinary course of business or otherwise in accordance with the terms and conditions of
this Agreement, (e) such liabilities which in the aggregate would not have a Seller
Material Adverse Effect and (f) liabilities otherwise expressly set forth in Schedule
3.23 or other schedules to this Agreement.  

     SECTION 3.24. Officers and Directors.
Schedule 3.24 attached hereto lists all officers and directors of Seller.  

     SECTION 3.25. Product Warranty. Each
product sold or delivered by Seller has been in conformity with all applicable
contractual commitments and all express and implied warranties made by Seller except in
each case to the extent such lack of conformity would not have a Seller Material Adverse
Effect. Seller has not altered any product from that produced by the manufacturer and has
no Liability for express or implied warranties (other than express warranties provided by
the manufacturer of a product). Liability for replacement, repair or refunds of products
or services sold by Seller for which Seller has not been or is not entitled to
reimbursement by the manufacturer in connection with Seller’s informal return policy has
not since January 1, 2000 exceeded, in the aggregate, 0.1% of Seller’s 1999 annual sales.
Except for products sold or delivered in the ordinary course of its business, no product
sold or delivered by Seller is subject to any guaranty, warranty or other indemnity.  

     SECTION 3.26. Product Liability. Except as
set forth in Schedule 3.26 and except for those liabilities which would not have a Seller
Material Adverse Effect, Seller has no liabilities that have not been satisfied (and to
the knowledge of Seller, there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against Seller
giving rise to any liability) arising out of any injury to individuals or property as a
result of any defective product manufactured, sold or delivered by Seller.  

	

     SECTION 3.27. Names and Locations. Except
as set forth on Schedule 3.27, during the five-year period prior to the execution and
delivery of this Agreement, Seller has not used any names or names under which it has
invoiced account debtors, maintained records concerning its assets or otherwise conducted
its business.  

ARTICLE IV 

Representations and Warranties of Purchaser 

     Purchaser hereby represents and warrants to
Seller, as of the date of this Agreement and as of the Closing Date, as follows: 

     SECTION 4.01. Organization, Standing and
Power. Purchaser is duly organized, validly existing and in good standing under the laws
of the jurisdiction in which it is organized and has full corporate power and authority
and possesses all governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to own, lease or otherwise hold its properties and
assets and to carry on its business as presently conducted, other than such franchises,
licenses, permits, authorizations and approvals the lack of which, individually or in the
aggregate, have not had and could not reasonably be expected to have a material adverse
effect on the ability of Purchaser to consummate the Acquisition and the other
transactions contemplated hereby (a “Purchaser Material Adverse Effect”).  

     SECTION 4.02. Authority; Execution and
Delivery; and Enforceability. Purchaser has full power and authority to execute this
Agreement and the Ancillary Agreements to which it is, or is specified to be, a party and
to consummate the Acquisition and the other transactions contemplated hereby and thereby.
The execution and delivery by Purchaser of this Agreement and the Ancillary Agreements to
which it is, or is specified to be, a party and the consummation by Purchaser of the
Acquisition and the other transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action. Purchaser has duly executed and delivered
this Agreement and prior to the Closing will have duly executed and delivered each
Ancillary Agreement to which it is, or is specified to be, a party, and this Agreement
constitutes, and each Ancillary Agreement to which it is, or is specified to be, a party
will after the Closing constitute, its legal, valid and binding obligation.  

     SECTION 4.03. No Conflicts; Consents. The
execution and delivery by Purchaser of this Agreement do not, the execution and delivery
by Purchaser of each Ancillary Agreement to which it is, or is specified to be, a party
will not, and the consummation of the Acquisition and the other transactions contemplated
hereby and thereby and compliance by Purchaser with the terms hereof and thereof will not
conflict with, or result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of Purchaser or any of its
subsidiaries under, any provision of (i) the certificate of incorporation or by-laws of
the Purchaser or any of its subsidiaries, (ii) any Contract to which Purchaser or any of
its subsidiaries is a party or by which any of their respective properties or assets is
bound or (iii) any Judgment or Applicable Law applicable to Purchaser or any of its
subsidiaries or their respective properties or assets, other than, in the case of clauses
(ii) and (iii) above, any such items that, individually or in the aggregate, have not had
and could not reasonably be expected to have a Purchaser Material Adverse Effect. No
Consent of or registration, declaration or filing with any Governmental Entity is
required to be obtained or made by or with respect to Purchaser or any of its
subsidiaries in connection with the execution, delivery and performance of this Agreement
or any Ancillary Agreement or the consummation of the Acquisition or the other
transactions contemplated hereby and thereby, other than (A) compliance with and filings
under the HSR Act, (B) compliance with and filings under Section 13(a) of the Exchange
Act, if any, (C) compliance with and filings and notifications under applicable
environmental laws, and (D) those that may be required solely by reason of the
participation of Seller and Parent (as opposed to any other third party) in the
Acquisition and other transactions contemplated hereby and by the Ancillary Agreements).  

	

     SECTION 4.04. Litigation. There are not any
(a) outstanding Judgments against Purchaser or any of its subsidiaries, (b) Proceedings
pending or, to the knowledge of Purchaser, threatened against Purchaser or any of its
subsidiaries or (c) investigations by any Governmental Entity that are, to the knowledge
of Purchaser, pending or threatened against Purchaser or any of its subsidiaries that, in
any case, individually or in the aggregate, have had or could reasonably be expected to
have a Purchaser Material Adverse Effect.  

     SECTION 4.05. Availability of Funds.
Purchaser has cash available or has existing borrowing facilities that together are
sufficient to enable it to consummate the Acquisition. The financing required to
consummate the Acquisition is referred to in this Agreement as the “Financing”. As of the
date of this Agreement, Purchaser does not have any reason to believe that any of the
conditions to the Financing will not be satisfied or that the Financing will not be
available to Purchaser on a timely basis to consummate the Acquisition.  

     SECTION 4.06. No Knowledge of
Misrepresentation or Omission. As of the date of this Agreement, Purchaser does not have
any knowledge that the representations and warranties of Seller and Parent made in this
Agreement qualified as to materiality are not true and correct, or that those not so
qualified are not true and correct in any material respect. Purchaser does not have any
knowledge of any material errors in, or material omissions from, any Schedule, except in
each case for items discovered by Purchaser after the date of this Agreement of which
Purchaser gives the Seller prompt notice.  

     SECTION 4.07. Purchaser Plans. Purchaser
has provided Seller with a true and correct summary description of each of Purchaser’s
welfare benefit and 401(k) plans that are to be offered to the Continuing Employees
following the Closing to the extent and as provided in Section 5.10.  

	

ARTICLE V 

Covenants 

     SECTION 5.01. Covenants of Seller and
Parent Relating to Conduct of Business. (a) Except for matters set forth in Schedule 5.01
or otherwise expressly permitted by the terms of this Agreement, from the date of this
Agreement to the Closing Seller shall conduct the Business in the usual, regular and
ordinary course in substantially the same manner as previously conducted (including with
respect to research and development efforts, advertising, promotions, capital
expenditures and inventory levels) and, to the extent consistent therewith, use all
reasonable efforts to keep intact the Business, keep available the services of the
current employees of the Business and preserve the relationships of the Business with
customers, suppliers, licensors, licensees, distributors and others with whom the
Business deals to the end that the Business shall be unimpaired at the Closing. Prior to
the Closing, Seller shall not take any action that would, or that could reasonably be
expected to, result in any of the conditions to the purchase and sale of the Acquired
Assets set forth in Article VI not being satisfied. In addition (and without limiting the
generality of the foregoing), except as set forth in Schedule 5.01 or otherwise expressly
permitted or required by the terms of this Agreement, Seller shall not do any of the
following in connection with the Business without the prior written consent of Purchaser:  

	 	
     (i)
(A) adopt or amend in any material respect any Seller Benefit Plan (or any plan that
would be a Seller Benefit Plan if adopted) or enter into, adopt, extend (beyond the
Closing Date), renew or amend any collective bargaining agreement or other Contract with
any labor organization, union or association, except in each case as required by
Applicable Law or except in each case for amendments applicable to all of Parent’s
employees generally and except to conform the Seller Benefit Plans to Purchaser’s; 

	 	
     (ii)
grant to any executive officer or employee of Seller any increase in compensation or
benefits, except in the ordinary course of business and consistent with past practice or
as may be required under existing agreements and except for any increases for which
Seller shall be solely obligated; 

	 	
     (iii)
incur or assume any liabilities, obligations or indebtedness for borrowed money or
guarantee any such liabilities, obligations or indebtedness, other than in the ordinary
course of business and consistent with past practice; provided, however, that in no event
shall the Business incur or assume any long-term indebtedness for borrowed money;  

	 	
     (iv)
permit, allow or suffer any Acquired Asset to become subjected to any Lien of any nature
whatsoever that would have been required to be set forth in Schedule 3.05, 3.06 or 3.14
if existing on the date of this Agreement except in the ordinary course of business;

	 	
     (v)
cancel any material indebtedness (individually or in the aggregate) or waive any claims
or rights of substantial value except for indebtedness owed to Parent or its affiliates; 

	 	
     (vi)
acquire by merging or consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof or otherwise acquire any
assets (other than inventory) that are material, individually or in the aggregate, to the
Business; 

	 	
     (vii)
make or incur any capital expenditure that is not currently approved in writing or
budgeted or otherwise not in the ordinary course of business; 

	 	
     (viii)
sell, lease, license or otherwise dispose of any of its assets that are material,
individually or in the aggregate, to the Business, except (A) inventory and obsolete or
excess equipment sold or disposed of in the ordinary course of business and consistent
with past practice and (B) any Excluded Asset described in Section 1.02(b); 

	 	
     (ix)
enter into any lease of real property, except any renewals or replacement of existing
leases in the ordinary course of business; or

	 	
     (x)
authorize any of, or commit or agree to take, whether in writing or otherwise, to do any
of, the foregoing actions. 

	

     (b) Advise of Changes. Seller shall
promptly advise Purchaser in writing of the occurrence of any matter or event that is
material to the business, financial condition, liabilities or results of operations of
the Business.  

     (c) Affirmative Covenants. Until the
Closing, Seller shall:  

	 	     
(i)
maintain the Acquired Assets in the ordinary course of business in good operating order
and condition, reasonable wear and tear excepted; 

	 	     
(ii)
upon any damage, destruction or loss to any material Acquired Asset, apply any and all
insurance proceeds received with respect thereto to the prompt repair, replacement and
restoration thereof to the condition of such Acquired Asset before such event or, if
required, to such other (better) condition as may be required by Applicable Law; and

	 	     
(iii)
maintain the level and quality of Inventory and supplies, and spare parts in the ordinary
course in a manner consistent with its past practices. 

	

     SECTION 5.02 [Intentionally left blank.] 

	

     SECTION 5.03. Access to Information. Seller
shall afford to Purchaser and its accountants, counsel and other representatives
reasonable access, upon reasonable notice during normal business hours during the period
prior to the Closing, to all the personnel, properties, books, contracts, commitments,
Tax returns and records of the Business (other than the Excluded Assets), in each case in
Seller’s or Parent’s possession, and during such period shall furnish promptly to
Purchaser any information concerning the Business as Purchaser may reasonably request;
provided, however, that such access does not unreasonably disrupt the normal operations
of Seller or the Business.  

     SECTION 5.04. Confidentiality. (a)
Purchaser acknowledges that the information being provided to it in connection with the
Acquisition and the consummation of the other transactions contemplated hereby is subject
to the terms of a confidentiality agreement between Purchaser and Seller (the
“Confidentiality Agreement”), the terms of which are incorporated herein by reference.
Effective upon, and only upon, the Closing, the Confidentiality Agreement shall terminate
with respect to information relating solely to the Business; provided, however, that
Purchaser acknowledges that any and all other information provided to it by Seller or
Parent or their representatives concerning Seller or Parent in connection with this
Agreement prior to, on or after the Closing shall be deemed “Evaluation Material” under
the Confidentiality Agreement and shall be subject to the terms and conditions of the
Confidentiality Agreement after the Closing Date.  

     (b) Seller and Parent shall each keep
confidential, and cause its affiliates and its and their officers, directors, employees
and advisors to keep confidential, all information relating to the Business, except as
required by law or administrative process and except for information that is available to
the public on the Closing Date, or thereafter becomes available to the public other than
as a result of a breach of this Section 5.04(b). The covenant set forth in this Section
5.04(b) shall terminate one year after the Closing Date. 

     SECTION 5.05. Reasonable Efforts. (a) On
the terms and subject to the conditions of this Agreement, each party shall use its
reasonable efforts to cause the Closing to occur, including taking all reasonable actions
necessary to comply promptly with all legal requirements that may be imposed on it or any
of its affiliates with respect to the Closing.  

     (b) Each of Seller and Purchaser shall as
promptly as practicable, but in no event later than seven business days following the
execution and delivery of this Agreement, file with the United States Federal Trade
Commission (the “FTC”) and the United States Department of Justice (the “DOJ”) the
notification and report form, if any, required for the transactions contemplated hereby
and any supplemental information requested in connection therewith pursuant to the HSR
Act. Any such notification and report form and supplemental information shall be in
substantial compliance with the requirements of the HSR Act. Each of Purchaser and Seller
shall furnish to the other such necessary information and reasonable assistance as the
other may request in connection with its preparation of any filing or submission that is
necessary under the HSR Act. Seller and Purchaser shall keep each other apprised of the
status of any communications with, and any inquiries or requests for additional
information from, the FTC and the DOJ and shall comply promptly with any such inquiry or
request. Each of Seller and Purchaser shall use its reasonable efforts to obtain any
clearance required under the HSR Act for the consummation of the transactions
contemplated by this Agreement; provided that Purchaser shall not be required to accept
any conditions that may be imposed by the FTC or the DOJ in connection with such filings
that would require the divestiture of any Purchaser assets or otherwise have a material
adverse effect on Purchaser’s financial condition, results of operations, business or
prospects.  

	

     (c) Prior to the Closing and for a period
of 12 months thereafter, each party shall, and shall cause its affiliates to, use its
reasonable efforts at its own expense to obtain, and to cooperate in obtaining, all
consents from third parties necessary or appropriate to permit the transfer of the
Acquired Assets to, and the assumption of the Assumed Liabilities by, Purchaser;
provided, however, that the parties shall not be required to pay or commit to pay any
amount to (or incur any obligation in favor of) any person from whom any such consent may
be required (other than nominal filing or application fees).  

     SECTION 5.06. Expenses; Transfer Taxes. (a)
Whether or not the Closing takes place, and except as set forth in Sections 5.12 and 9.03
and Article VIII, all costs and expenses incurred in connection with this Agreement and
the Ancillary Agreements and the transactions contemplated hereby and thereby shall be
paid by the party incurring such expense, including all costs and expenses incurred
pursuant to Section 5.05.  

     (b) All Transfer Taxes applicable to the
conveyance and transfer from Seller to Purchaser of the Acquired Assets and any other
transfer or documentary Taxes or any filing or recording fees applicable to such
conveyance and transfer shall be paid by Purchaser. Each party shall use reasonable
efforts to avail itself of any available exemptions from any such Taxes or fees, and to
cooperate with the other parties in providing any information and documentation that may
be necessary to obtain such exemptions. For purposes of this Agreement, “Transfer Taxes”
means any transfer, sales, use, value-added, excise or similar tax and related amounts,
including penalties, interest and additions imposed with respect to such amounts,
incurred with respect to the transfer of the Acquired Assets.  

     SECTION 5.07. Brokers or Finders. Each of
Purchaser and Seller represent, as to itself and its affiliates, that no agent, broker,
investment banker or other firm or person is or will be entitled to any broker’s or
finder’s fee or any other commission or similar fee in connection with any of the
transactions contemplated by this Agreement.  

	

     SECTION 5.08. Collection of Receivables.
From and after the Closing, Purchaser shall have the right and authority to collect for
its own account all Receivables and other related items that are included in the Acquired
Assets and to endorse with the name of Seller, any checks or drafts received with respect
to any Receivables or such other related items. Seller shall promptly deliver to
Purchaser any cash or other property received directly or indirectly by it with respect
to the Receivables and such other related items, including any amounts payable as
interest.  

     SECTION 5.09. Employee Matters. Purchaser
shall take all steps necessary and appropriate so that at and immediately after the
Closing all individuals who are employed by the Seller, including those on vacation, sick
leave, personal absence, holiday, jury duty or short term disability, shall be employed
by Purchaser at the same base salary, commission rate, and bonus opportunity, as in
effect prior to the Closing (such employees being the “Continuing Employees”) except with
respect to the compensation arrangements that shall be offered by Purchaser to David
Chess. Purchaser shall not be required to employ any individual who is receiving benefits
under Seller’s long term disability plan at the time of Closing and such individuals
shall remain the responsibility of Seller. Seller shall reasonably cooperate with
Purchaser to support Purchaser’s efforts to hire the Continuing Employees, it being
understood such cooperation shall not be at any additional cost to Seller or its
affiliates and shall not require Seller or its affiliates to take any actions which it
deems ill advised or interferes with Seller’s unfettered discretion in handling the
employer-employee relationship including its benefit and compensation programs.  

     SECTION 5.10. Benefit Plan Matters. (a)
Benefit Liabilities. (i) Unless otherwise specifically set forth in this Agreement to the
contrary, Seller shall retain and be fully responsible for all liabilities, obligations
and commitments relating to all wages, salaries and other forms of compensation and
related expenses (other than bonuses) incurred or accrued on or prior to the Closing Date
and all employee pension (retirement) benefits incurred or accrued under any and all
plans, programs or arrangements maintained or contributed to by Seller or any affiliate
on or prior to the Closing Date except for unpaid vacation pay for Continuing Employees.
Unpaid vacation pay and Anticipated Bonuses (as defined below) for Continuing Employees
will be accrued as a compensation expense on the Closing Balance Sheet. “Anticipated
Bonuses” means the prorata portion of bonuses expected by Continuing Employees pursuant
to SPPI Bonus Programs. Seller shall be responsible for worker compensation claims based
on injuries occurring prior to the Closing Date and Purchaser shall be responsible for
those based on injuries occurring on and after the Closing Date.  

	 	     
(ii)
Effective as of the Closing Date, the Continuing Employees shall cease to participate in
any non-pension benefit arrangements (the “Welfare Benefit Plans”) and in all pension
benefit arrangements of Seller or Parent. Seller shall retain responsibility under all
Welfare Benefit Plans and in all pension benefit arrangements for all costs of coverage
and all amounts payable by reason of claims incurred by Continuing Employees on or prior
to the Closing Date, including claims that are not submitted until after the Closing Date
except for any unpaid vacation pay for Continuing Employees and subject to paragraph (iv)
below. A claim shall be deemed to have been incurred on the date of occurrence of (A)
death or dismemberment in the case of claims under life insurance and accidental death
and dismemberment benefits, (B) the date the employee became entitled to receive
disability in the case of claims under disability benefits, or (C) the date on which the
charges or expense giving rise to such claim is incurred in the case of all other claims.
Purchaser shall provide for workers compensation coverage following the Closing for
injuries occurring on or after the Closing Date. 

	 	     
(iii)
Seller shall remain responsible for all record keeping and welfare benefits with respect
to any employees or former employees of Seller who are, as of the Closing Date on long
term disability leave and covered under Seller’s or Parent’s welfare benefit plans. 

	 	     
(iv)
Purchaser shall be fully responsible for all such liabilities, obligations and
commitments and employee benefits with respect to the Continuing Employees under
Purchaser’s employee benefit plans, programs and arrangements for the period after the
Closing Date. Notwithstanding the foregoing, with respect to employees of Seller who are
on short term disability leave as of the Closing Date (“Potential Claimants”), Purchaser
will continue Seller’s short term disability policy and agrees to assume the
responsibility of Seller with respect to benefits that may be due to Potential Claimants
while they are on short term disability leave and had they remained employees of Seller
pursuant to, and will provide the same coverage as under, the terms of Seller’s Long Term
Disability Plan. 

	 	     
(v)
Purchaser shall not be liable for any acts of Seller or its employees or agents with
respect to any employee benefit plan maintained by Seller or any affiliate of Seller.
Seller shall not be responsible for any acts of Purchaser or its employees or agents with
respect to any employee benefit plan maintained by Purchaser after the Closing. 

	

     (b) Post-Closing Benefit Plans. (i)
Effective as of the Closing Date, the Continuing Employees shall cease to participate
under the employee benefit plans of Seller and Parent, and shall be eligible to
participate under the employee benefit plans maintained or established by Purchaser in
which similarly situated employees of Purchaser are generally eligible to participate and
as set forth on Schedule 5.10, except if the consent of CIGNA is obtained to the
assignment of Seller’s medical plan contract, Purchaser shall adopt and maintain Seller’s
existing medical plan as in effect at Closing for the Continuing Employees, including
waiting periods and employee copay, contribution and premium rates, through December 31,
2000 (except for such changes required by law, if any) and Purchaser will give credit to
Continuing Employees for amounts applied to deductibles, copay and stop loss prior to the
Closing for 2000; provided that nothing herein shall prevent Purchaser from terminating
the employment of any Continuing Employee or modifying or terminating such plans (other
than the medical plan for 2000) from time to time.  

	 	     
(ii)
Purchaser shall also provide to each Continuing Employee who is terminated by Purchaser
(other than for cause or nonperformance) within one year of the Closing severance
benefits on terms that are no less favorable than the benefits provided by Seller under
Seller’s severance plan referred to in Section 3.16(a), as in effect on the date of this
Agreement; provided that no severance benefits shall be paid to any Continuing Employee
with respect to a termination that would not have been covered under Seller’s severance
plan; provided further that the amount of severance paid to the terminated employee who
is entitled to severance hereunder shall not be less than the amount which would have
been paid under Seller’s plan had the employee been employed by Seller at time of
termination. 

	 	     
(iii)
For purposes of any length of service requirements, waiting periods, vesting periods or
differential benefits based on length of service in any Purchaser benefit plan for which
a Continuing Employee may be eligible after the Closing (including for the purpose of
computing benefits under Seller’s severance plan), Purchaser shall ensure that service by
any such Continuing Employee with Seller, Parent and Olin Corporation and their
respective affiliates pursuant to the personnel records provided by Seller or Parent
shall be deemed to be service with Purchaser. 

	 	     
(iv)
Continuing Employees who participate in Seller’s medical Flexible Spending Account
(“FSA”) program will be offered the opportunity by Seller to continue their medical FSA
under COBRA, provided such employee’s maximum available benefit under the medical FSA for
the remainder of the plan year exceeds the amount that the medical FSA can charge such
employee for COBRA continuation coverage for the remainder of the plan year. Dependent
care contribution to FSA will cease at closing. 

	 	     
(v)
Continuing Employees who participate in the Seller’s dental insurance plan will be
offered the opportunity by Seller to continue their dental insurance under COBRA. If the
transfer of the sponsorship of Seller’s medical plan to Purchaser effective as of the
Closing, has not been approved within 30 days of the Closing by the respective insurance
company, HMO or other provider, Seller will offer the Continuing Employee the opportunity
to continue their medical insurance under COBRA. 

	

     (c) 401(k) Plan. With respect to the
Contributing Employee Ownership Plan in which Seller’s employees participate (the
“Savings Plan”), Seller or Parent agrees that it shall be solely responsible to the
Continuing Employees with respect to benefits accrued thereunder as of the Closing Date.
To the extent required under the Savings Plan, Seller shall contribute to the Savings
Plan, in accordance with the terms of said plan, all amounts attributable to the
Continuing Employees which are owed to or under the Savings Plan as of the Closing Date.
Seller shall permit the Continuing Employees to elect a distribution and rollover
(including loans) of their account balance from the Savings Plan in accordance with the
requirements of Section 401(k)(10) of the Code and the terms of such plan. 

     (d) Compensation. Seller shall pay to its
employees promptly following the Closing all wages and salaries for all periods up to the
Closing Date, shall pay all payroll taxes with respect to all amounts due to Seller’s
employees for all periods up to the Closing Date and shall provide fringe benefits to
Seller’s employees up to the Closing Date in accordance with Seller’s established
policies and procedures.  

     (e) Severance Plan. Seller shall be
responsible for any severance benefits or other liabilities incurred pursuant to any
severance plan of Seller or any affiliated company that may arise with respect to, or as
a result of the severance of the employment of the Continuing Employees with Seller or
any such affiliated company in connection with the Closing; provided Purchaser pays the
Continuing Employees at the same rate of pay or greater following the Closing and if not,
then Purchaser shall be responsible for any such severance to such Continuing Employee.  

     (f) Following the Closing, Seller will
continue to be responsible for all benefits for Seller’s employees (including former
employees) who are receiving long term disability payments from Seller on or prior to the
Closing Date. 

     (g) Stock-based awards granted on or prior
to Closing under Parent’s Long Term Incentive Plan shall be the responsibility of Seller
or Parent. 

     (h) The SPII Bonus Program for 2000 for
Continuing Employees shall be assumed by and the responsibility of Purchaser. Purchaser
shall adopt and maintain such program in effect for 2000 for Continuing Employees who
participate in the program on the date hereof; provided Purchaser may increase the
benefits after Closing if it elects to do. 

     (i) The amounts set forth on Schedule
3.16(b) shall be the responsibility of Seller. 

	

     SECTION 5.11. Supplemental Disclosure. (a)
Seller and Parent shall have the continuing obligation until the Closing promptly to
supplement or amend the Schedules with respect to any matter hereafter arising or
discovered that, if existing or known at the date of this Agreement, would have been
required to be set forth or described in the Schedules; provided, however, that for the
purpose of the rights and obligations of the parties hereunder and subject to the
provisions of Section 6.05, any such supplemental or amended Schedule shall not be deemed
to have been disclosed as of the date of this Agreement unless so agreed in writing by
Purchaser.  

     (b) Purchaser shall promptly notify Seller
of, and furnish Seller any information it may reasonably request with respect to, the
occurrence to Purchaser’s knowledge of any event or condition or the existence to
Purchaser’s knowledge of any fact that would cause any of the conditions to Seller’s
obligation to consummate the Acquisition not to be fulfilled. 

     SECTION 5.12. Post-Closing Cooperation. (a)
Purchaser and Seller shall cooperate with each other, and shall cause their officers,
employees, agents, auditors and representatives to cooperate with each other, for a
period of 180 days after the Closing to ensure the orderly transition of the Business
from Seller to Purchaser and to minimize any disruption to the Business and the other
respective businesses of Seller and Purchaser that might result from the transactions
contemplated hereby. After the Closing, upon reasonable written notice, Purchaser, Parent
and Seller shall furnish or cause to be furnished to each other and the employees,
counsel, auditors and representatives of Parent, Seller and Purchaser access, during
normal business hours, to such information and assistance relating to the Business (to
the extent within the control of such party) as is reasonably necessary for financial
reporting and accounting matters and as is necessary or desirable in connection with the
defense or settlement of the PWP Case by Seller, Olin Corporation or Parent or its
designee.  

     (b) After the Closing, upon reasonable
written notice, Purchaser, Parent and Seller shall furnish or cause to be furnished to
each other, as promptly as practicable, such information and assistance (to the extent
within the control of such party) relating to the Acquired Assets (including, access to
books and records) as is reasonably necessary for the filing of all Tax returns, and
making of any election related to Taxes, the preparation for any audit by any Taxing
Authority, and the prosecution or defense of any claim, suit or proceeding related to any
Tax return. Seller and Purchaser shall cooperate with each other in the conduct of any
audit or other proceeding relating to Taxes involving the Business. Purchaser shall
retain the books and records of Seller included in the Acquired Assets for a period of
ten years after the Closing. After the end of such ten-year period, before disposing of
such books or records, Purchaser shall give notice to such effect to Seller and Parent
and to give Seller and Parent, at Seller’s or Parent’s cost and expense, an opportunity
to remove and retain all or any part of such books or records as Seller or Parent may
select. 

	

     (c) Each party shall
reimburse the other for reasonable out-of-pocket costs and expenses incurred in assisting
the other pursuant to this Section 5.12. Neither party shall be required by this Section
5.12 to take any action that would unreasonably interfere with the conduct of its
business or unreasonably disrupt its normal operations (or, in the case of Purchaser, the
Business). 

     SECTION 5.13. Publicity.
From the date hereof and through the Closing, no public release or announcement
concerning the transactions contemplated hereby shall be issued by any party without the
prior consent of the other parties (which consent shall not be unreasonably withheld),
except as such release or announcement may be required by law or the rules or regulations
of the Securities Exchange Commission, in which case the party required to make the
release or announcement shall allow the other party reasonable time to comment on such
release or announcement in advance of such issuance; provided, however, that each of
Seller and Purchaser may make internal announcements to their respective employees that
are consistent with the parties’prior public disclosures regarding the transactions
contemplated hereby after reasonable prior notice to and consultation with the other and
each of Parent and Purchaser may make such communications regarding the Acquisition to
security analysts and the financial community as its determines is appropriate.  

     SECTION 5.14. Records.
Purchaser recognizes that certain Records may contain incidental information relating
primarily to subsidiaries or divisions of Parent other than the Business and that Seller
and Parent may retain copies of the relevant portions thereof.  

     SECTION 5.15. Agreement Not
To Compete. (a) Each of Seller and Parent understands that Purchaser shall be entitled to
protect and preserve the going concern value of the Business to the extent permitted by
law and that Purchaser would not have entered into this Agreement absent the provisions
of this Section 5.15 and, therefore, for a period of four years from the Closing, Parent
shall not, and shall cause each of its affiliates not to, directly or indirectly:  

	 	     
(i)
operate, own or control a business engaged in the wholesale distribution of any
residential pool products through a network of small distribution, branch warehouses
located in any of the States of California, Nevada and Arizona (“Competitive Activities”),
except that the Parent and its affiliates may distribute any residential
pool products through up to five shipping points owned or leased by Parent or any of its
affiliates and located in any of these three states. For purposes of this paragraph
“residential pool products” shall include, but not be limited to, pool chemicals, pool
accessories, and pool equipment such as pumps, motors, filters and heaters. Nothing
contained herein shall prohibit Parent or its affiliates from distributing in such states
or elsewhere, pool products or chemicals manufactured, blended or marketed at any time by
Parent or any of its affiliates provided such distribution is not in connection with a
business prohibited under the previous sentence, however, it is understood that Parent’s
current business (other than the Business) conducted by Parent and its affiliates (other
than Seller) will continue after the Closing and is not prohibited by this Section 5.15.
In addition, nothing herein shall prohibit Parent or its affiliates from taking a
security interest in assets of third parties engaged in the wholesale distribution of a
complete line of pool products to secure debts owed by such third parties to Parent or
its affiliates or from taking possession of such pledged assets and operating such a
business upon a bona fide default by such third party; provided that such pledged assets
and related business shall be sold within one year from the date Parent or any affiliate
takes possession or begins operations, whichever is earlier and

	 	     
(ii)
solicit, recruit or hire any employee of the Business who at the time is paid by
Purchaser or any of its affiliates more than $40,000 in annual base salary, while such
employee is employed in the Business or employed by Purchaser or any of its affiliates;
provided the foregoing shall not prohibit Parent and its affiliates from making general
solicitation or advertising for employees in any media or through any required
governmental employment program or listing. 

	

     (b) Section 5.15(a) shall be deemed not
breached as a result of the ownership by Parent or any of its affiliates of: (i) less
than an aggregate of 10% of any class of stock of a person engaged, directly or
indirectly, in Competitive Activities; (ii) less than 10% in value of any instrument of
indebtedness of a person engaged, directly or indirectly, in Competitive Activities;
(iii) a person that engages, directly or indirectly, in Competitive Activities if such
Competitive Activities account for less than 15% of such person’s consolidated annual
revenues and less than $50 million in sales of such person; or (iv) a person that engages
directly or indirectly in Competitive Activities if such Competitive Activities account
for more than 15% but less than 50% provided in such case of this clause (iv), Parent
disposes of such Competitive Activities within one year of acquisition. 

     (c) Notwithstanding any other provision of
this Agreement, it is understood and agreed that the remedy of indemnity payments
pursuant to Article VIII and other remedies at law would be inadequate in the case of any
breach of the covenants contained in Section 5.15(a). Purchaser shall be entitled to seek
equitable relief, including the remedy of specific performance, with respect to any
breach or attempted breach of such covenants. 

     SECTION 5.16. Bulk Transfer Laws. Purchaser
hereby waives compliance by Seller with the provisions of any so-called “bulk transfer
law” of any jurisdiction in connection with the sale of the Acquired Assets to Purchaser;
provided that such waiver shall not affect the obligation of Seller under Section 8.01 to
indemnify Purchaser for the Excluded Liabilities.  

	

     SECTION 5.17. Further Assurances. From time
to time, as and when requested by any party, each party shall execute and deliver, or
cause to be executed and delivered, all such documents and instruments and shall take, or
cause to be taken, all such further or other actions (subject to Section 5.05), as such
other party may reasonably deem necessary or desirable to consummate the transactions
contemplated by this Agreement, including, in the case of Seller, executing and
delivering to Purchaser such assignments, bills of sale, consents and other instruments
as Purchaser or its counsel may reasonably request as necessary or desirable for such
purpose.  

     SECTION 5.18. Purchase Price Allocation.
Seller and Purchaser shall allocate the Adjusted Purchase Price for tax purposes among
the Acquired Assets in accordance with an allocation statement (the “Allocation
Statement”), which shall be agreed to by the Purchaser and Seller as soon as reasonably
possible after the Closing Date, and which the parties acknowledge will be in accordance
with Section 1060 of the Code. Seller and Purchaser shall each prepare and file on a
timely basis Internal Revenue Service Form 8594, setting forth an allocation of such
Purchase Price among the Acquired Assets in accordance with the Allocation Statement. Not
less than ten (10) days prior to the filing of their respective forms 8594 relating to
this transaction, each party shall deliver to the other party a copy of its Form 8594.
Purchaser and Seller further agree to report this transaction for federal income Tax
purposes in accordance with the Allocation Statement and both Purchaser and Seller agree
to act in accordance with such Allocation Statement in the course of any Tax audit, Tax
review or Tax litigation. If Seller and Purchaser are unable to agree on such allocation
of the Adjusted Purchase Price among the Acquired Assets, Seller and Purchaser shall
elect an independent appraisal firm to determine such allocations. The conclusions of
such appraisal firm shall be conclusive and binding. The fees and expenses of such
appraisal firm shall be shared equally by Seller and Purchaser.  

     SECTION 5.19. Supplies. Purchaser shall not
use stationery, purchase order forms or other similar paper goods or supplies
(collectively, the “Supplies”), that state or otherwise indicate thereon that the
Business is a subsidiary, affiliate, division or unit of Parent more than 30 days after
the Closing Date without first crossing out or marking over such statement or indication
or otherwise clearly indicating on such Supplies that the Business is no longer a
subsidiary, affiliate, division or unit of Parent. Purchaser shall not reorder any
Supplies which state or otherwise indicate thereon that the Business is a subsidiary,
affiliate, division or unit of Parent.  

     SECTION 5.20. Names Following Closing.
Promptly following the Closing, Seller shall amend or terminate any certificate of
assumed name or d/b/a filings so as to eliminate its right to use the names Superior Pool
Products, or any name that, in the reasonable judgment of Purchaser, is similar to any
such name, and neither Seller nor Parent shall thereafter use those names or other names
acquired by Purchaser hereunder or names confusingly similar thereto. Within 30 days of
Closing, Seller shall also amend its certificate of incorporation to change its name to
name not including or similar to any of the names or words “Superior Pool Products.”  

	

     SECTION 5.21. Environmental Study. On or
prior to the date hereof, Purchaser shall commission at its own expense a Phase I
Environmental Study on the properties listed on Schedule 5.21 (“Studied Properties”) and
shall complete such study and receive a written report of the study results within 30
days of the date hereof. Within five days of receipt of the report, Purchaser shall give
a copy to Seller. Such report shall be deemed “Evaluation Material” within the meaning of
the Confidentiality Agreement.  

     SECTION 5.22 Insurance. Purchaser
understands and acknowledges that upon Closing all insurance and indemnity coverage under
programs and policies which Seller participates in with respect to the Business will
cease and Purchaser will be responsible for obtaining such coverage for the Business
effective with the Closing.  

ARTICLE VI 

Conditions Precedent 

     SECTION 6.01. Conditions to Each Party’s
Obligation. The obligation of Purchaser to purchase and pay for the Acquired Assets and
the obligation of Seller to sell the Acquired Assets to Purchaser is subject to the
satisfaction or waiver on or prior to the Closing of the following conditions:  

     (a) Governmental Approvals. The waiting
period under the HSR Act, if applicable to the consummation of the Acquisition, shall
have expired or been terminated. All other authorizations, consents, orders or approvals
of, or declarations or filings with, or expirations of waiting periods imposed by, any
Governmental Entity necessary for the consummation of the Acquisition shall have been
obtained or filed or shall have occurred.  

     (b) No Injunctions or Restraints. No
Applicable Law or Injunction enacted, entered, promulgated, enforced or issued by any
Governmental Entity or other legal restraint or prohibition preventing the consummation
of the Acquisition shall be in effect.  

     (c) Environmental Study. The results of the
Phase I environmental study on the Studied Properties are reasonably satisfactory to both
Purchaser and Parent.  

     SECTION 6.02. Conditions to Obligation of
Purchaser. The obligation of Purchaser to purchase and pay for the Acquired Assets is
subject to the satisfaction (or waiver by Purchaser) on or prior to the Closing Date of
the following conditions:  

	

     (a) Representations and Warranties. The
representations and warranties of Seller in this Agreement and the Ancillary Agreements
that are qualified as to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects, as of the date hereof and
as of the Closing Date as though made on the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date (in which case such
representations and warranties qualified as to materiality shall be true and correct, and
those not so qualified shall be true and correct in all material respects, on and as of
such earlier date). Purchaser shall have received a certificate signed by an authorized
officer of Seller to such effect.  

     (b) Performance of Obligations of Seller
and Parent. Each of Seller and Parent shall have performed or complied in all material
respects with all obligations and covenants required by this Agreement to be performed or
complied with by Seller by the time of the Closing, and Purchaser shall have received a
certificate signed by an authorized officer of Seller to such effect.  

     (c) Absence of Proceedings. There shall not
be pending or threatened any Proceeding (i) challenging or seeking to restrain or
prohibit the Acquisition or any other transaction contemplated by this Agreement or the
Ancillary Agreements or seeking to obtain from Purchaser or any of its subsidiaries in
connection with the Acquisition any damages that are material in relation to Purchaser,
(ii) seeking to prohibit or limit the ownership or operation by Purchaser or any of its
subsidiaries of any material portion of the business or assets of Purchaser (including
the Business) or any of its subsidiaries, or to compel Purchaser or any of its
subsidiaries to dispose of or hold separate any material portion of the business or
assets of Purchaser (including the Business) or any of its subsidiaries, in each case as
a result of the Acquisition or any of the other transactions contemplated by this
Agreement, (iii) seeking to impose limitations on ability of Purchaser to acquire or
hold, or exercise full rights of ownership of, the Acquired Assets or (iv) seeking to
prohibit Purchaser or any of its subsidiaries from effectively controlling in any
material respect the Business; provided, however, that this condition shall be deemed to
be waived by Purchaser as to any suit, action or proceeding (except for any suit, action
or proceeding by any Governmental Entity) if Seller provides to Purchaser indemnification
in form and substance reasonably satisfactory to Purchaser and its counsel with respect
to any such suit, action or proceeding.  

     (d) Consents. Purchaser shall have received
written consents from all third parties necessary or appropriate to effect the
Acquisition, other than those required with respect to the assignment of purchase orders
and sales orders and other than such consents the absence of which, individually or in
the aggregate, could not reasonably be expected to have a Seller Material Adverse Effect.  

     SECTION 6.03. Conditions to Obligation of
Seller. The obligation of Seller to sell, assign, convey, and deliver the Acquired Assets
is subject to the satisfaction (or waiver by Parent) on or prior to the Closing Date of
the following conditions:  

	

     (a) Representations and Warranties. The
representations and warranties of Purchaser made in this Agreement and the Ancillary
Agreement qualified as to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects, as of the date hereof and
as of the Closing Date as though made on the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date (in which case such
representations and warranties qualified as to materiality shall be true and correct, and
those not so qualified shall be true and correct in all material respects, on and as of
such earlier date). Seller shall have received a certificate signed by an authorized
officer of Purchaser to such effect.  

     (b) Performance of Obligations of
Purchaser. Purchaser shall have performed or complied in all material respects with all
obligations and covenants required by this Agreement to be performed or complied with by
Purchaser by the time of the Closing, and Seller shall have received a certificate signed
by an authorized officer of Purchaser to such effect.  

     (c) Absence of Proceedings. There shall not
be pending or threatened any Proceeding challenging or seeking to restrain or prohibit
the Acquisition or any other transaction contemplated by this Agreement or the Ancillary
Agreements or seeking to obtain from Parent or any of its subsidiaries in connection with
the Acquisition any damages that are material in relation to Seller or Parent.  

     SECTION 6.04. Frustration of Closing
Conditions. Neither Purchaser nor Seller may rely on the failure of any condition set
forth in this Article VI to be satisfied if such failure was caused by such party’s
failure to act in good faith or to use its reasonable efforts to cause the Closing to
occur, as required by Section 5.05.  

     SECTION 6.05. Effect of Certain Waivers of
Closing Conditions. If prior to the Closing any party (the “waiving party”) has knowledge
of any breach by any other party of any representation, warranty or covenant contained in
this Agreement or any Ancillary Agreement, the effect of such breach is a failure of any
condition to the waiving party’s obligations set forth in this Article VI and the waiving
party proceeds with the Closing, the waiving party shall be deemed to have waived such
breach and the waiving party and its successors, assigns and affiliates shall not be
entitled to be indemnified pursuant to Article VIII, to sue for damages or to assert any
other right or remedy for any losses arising from any matters relating to such condition
or breach, notwithstanding anything to the contrary contained herein or in any
certificate delivered pursuant hereto.  

	

ARTICLE VII 

Termination, Amendment and Waiver 

     SECTION 7.01. Termination. (a)
Notwithstanding anything to the contrary in this Agreement, this Agreement may be
terminated and the Acquisition and the other transactions contemplated by this Agreement
abandoned at any time prior to the Closing:  

	 	     
(i)
by mutual written consent of Parent and Purchaser; 

	 	     
(ii)
by Parent if any of the conditions set forth in Sections 6.01 or 6.03 shall have become
incapable of fulfillment, and shall not have been waived by Parent; 

	 	     
(iii)
by Purchaser if any of the conditions set forth in Sections 6.01 or 6.02 shall have
become incapable of fulfillment, and shall not have been waived by Purchaser; or

	 	     
(iv)
by Parent or Purchaser, if the Closing does not occur on or prior to August 31, 2000; or

	 	     
(v)
by Parent or Purchaser if it reasonably determines that the other has made a material
misrepresentation with respect to the representations and warranties contained in Article
III when made; 

	

provided, however, that the party seeking termination pursuant to clause
(ii), (iii), (iv) or (v) is not then in material breach of any of its representations,
warranties, covenants or agreements contained in this Agreement.  

     (b) In the event of termination by Seller,
Parent or Purchaser pursuant to this Section 7.01, written notice thereof shall forthwith
be given to the other and the transactions contemplated by this Agreement shall be
terminated, without further action by any party. If the transactions contemplated by this
Agreement are terminated as provided herein: 

	 	     
(i)
Purchaser shall return all documents and other material received from Seller or Parent
relating to the transactions contemplated hereby, whether so obtained before or after the
execution hereof, to Parent; and

	 	     
(ii)
all confidential information received by Purchaser with respect to the businesses of
Seller or Parent shall be treated in accordance with the Confidentiality Agreement, which
shall remain in full force and effect notwithstanding the termination of this Agreement. 

	

     SECTION 7.02. Effect of Termination. If
this Agreement is terminated and the transactions contemplated hereby are abandoned as
described in Section 7.01, this Agreement shall become null and void and of no further
force and effect, except for the provisions of (i) Section 5.04 relating to the
obligation of Purchaser to keep confidential certain information and data obtained by it
from Seller or Parent, (ii) Section 5.06 relating to certain expenses, (iii) Section 5.07
relating to finder’s fees and broker’s fees, (iv) Section 7.01 and this Section 7.02 and
(v) Section 5.13 relating to publicity. Nothing in this Section 7.02 shall be deemed to
release any party from any liability for any breach by such party of the terms and
provisions of this Agreement or to impair the right of any party to compel specific
performance by any other party of its obligations under this Agreement.  

     SECTION 7.03. Amendments and Waivers. This
Agreement may not be amended except by an instrument in writing signed on behalf of each
of the parties hereto. By an instrument in writing Purchaser, on the one hand, or Parent,
on the other hand, may waive compliance by the other parties with any term or provision
of this Agreement that such other party was or is obligated to comply with or perform.  

ARTICLE VIII 

Indemnification 

     SECTION 8.01. Indemnification by Seller and
Parent. (a) From and after the Closing, Seller and Parent, jointly and severally, shall
indemnify Purchaser and its affiliates and each of their respective officers, directors,
employees, stockholders, agents and representatives against, and hold them harmless from,
any loss, liability, claim, damage or expense (including reasonable legal fees and
expenses) (“Losses”), as incurred (payable promptly upon written request), for or on
account of or arising from or in connection with or otherwise with respect to:  

	 	     
(i)
any breach of any representation or warranty of Seller or Parent that survives the
Closing and is contained in this Agreement or in any Ancillary Agreement; 

	 	     
(ii)
any breach of any covenant of Seller or Parent contained in this Agreement or in any
Ancillary Agreement requiring performance after the Closing Date; 

	 	     
(iii)
any Excluded Liability (other than Unknown Environmental Liabilities); 

	 	     
(iv)
any Unknown Environmental Liabilities but only as follows: for Losses relating thereto
incurred prior to the fifth anniversary of the Closing, 100% of such Losses so incurred
prior to such date and for such Losses incurred thereafter, 0%; and

	 	     
(v)
any fees, expenses or other payments incurred or owed by Seller or Parent to any brokers,
financial advisors or comparable other persons retained or employed by it in connection
with the transactions contemplated by this Agreement. 

	

     (b) Seller and Parent shall not be required
to indemnify any person, and shall not have any liability: 

	 	     
(i)
under clauses (i) and (ii) of Section 8.01(a) (but excluding breaches for failure to make
any payments required by Seller under Section 1.05 or Section 1.03(d)) unless the
aggregate of all Losses for which Seller or Parent would, but for this clause (i), be
liable exceeds on a cumulative basis an amount equal to $125,000, and then only to the
extent of any such excess; 

	 	     
(ii)
under clauses (i) and (ii) of Section 8.01(a) (but excluding breaches for failure to make
any payments required by Seller under Section 1.05 or Section 1.03(d)) for any individual
items where the Loss relating thereto is less than $20,000 and such items shall not be
aggregated for purposes of clause (i) of this Section 8.01(b); and

	 	     
(iii)
under clauses (i) and (ii) of Section 8.01(a) in excess of the Adjusted Purchase Price
(except that this clause (iii) shall not apply to any willful breach of any covenant by
Seller or Parent). 

	

     (c) In the absence of common law fraud and
except for injunctive relief sought for breaches of covenants, this Section VIII shall
serve as the sole and exclusive remedy for damages of Purchaser, on the one hand, and
Parent and Seller, on the other hand, for Losses and for any other claims in any way
related to this Agreement to the exclusion of all other statutory or common law remedies
(including rights under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended or any other Environmental Law) whether based on
contract, tort, strict liability or otherwise. 

     SECTION 8.02. Indemnification by Purchaser.
(a) From and after the Closing, Purchaser shall indemnify Seller, Parent, their
affiliates and each of their respective officers, directors, employees, stockholders,
agents and representatives against, and agrees to hold them harmless from, any Loss, as
incurred (payable promptly upon written request), for or on account of or arising from or
in connection with or otherwise with respect to (i) any breach of any representation or
warranty of Purchaser that survives the Closing and is contained in this Agreement or in
any Ancillary Agreement, (ii) any breach of any covenant of Purchaser contained in this
Agreement or in any Ancillary Agreement requiring performance after the Closing Date,
(iii) any Assumed Liability or (iv) any fees, expenses or other payments incurred or owed
by Purchaser to any brokers, financial advisors or other comparable persons retained or
employed by it in connection with the transactions contemplated by this Agreement or by
any Ancillary Agreement.  

     (b) Purchaser shall not be required to
indemnify any person, and shall not have any liability: 

	 	     
(i)
under clauses (i) and (ii) of Section 8.02(a) (but excluding breaches for failure to make
any payments required by Purchaser under Section 1.05 or Section 1.03(d)) unless the
aggregate of all Losses for which Purchaser would, but for this clause (i), be liable
exceeds on a cumulative basis an amount equal to $125,000, and then only to the extent of
any such excess; 

	 	     
(ii)
under clauses (i) and (ii) of Section 8.02(a) (but excluding breaches for failure to make
any payments required by Purchaser under Section 1.05 or Section 1.03(d)) for any
individual items where the Loss relating thereto is less than $20,000 and such items
shall not be aggregated for purposes of clause (i) of this Section 8.02(b); and

	 	     
(iii)
under clauses (i) and (ii) of Section 8.02(a) in excess of the Adjusted Purchase Price
(except that this clause (iii) shall not apply to any willful breach of any covenant by
Purchaser). 

	

     (c) In the absence of common law fraud and
except for injunctive relief sought for breaches of covenants, this Section VIII shall
serve as the sole and exclusive remedy for damages of Seller and Parent, on the one hand,
and Purchaser, on the other hand, for Losses and for any other claims in any way related
to this Agreement to the exclusion of all other statutory or common law remedies
(including rights under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended or any other Environmental Law) whether based on
contract, tort, strict liability or otherwise. 

     SECTION 8.03. Calculation of Losses. The
amount of any Loss for which indemnification is provided under this Article VIII shall be
net of any amounts actually recovered by the indemnified party under insurance policies
with respect to such Loss and shall be (i) increased to take account of any net Tax cost
incurred by the indemnified party arising from the receipt of indemnity payments
hereunder (grossed up for such increase) and (ii) reduced to take account of any net Tax
benefit realized by the indemnified party arising from the incurrence or payment of any
such Loss. In computing the amount of any such Tax cost or Tax benefit, the indemnified
party shall be deemed to recognize all other items of income, gain, loss deduction or
credit before recognizing any item arising from the receipt of any indemnity payment
hereunder or the incurrence or payment of any indemnified Loss. An indemnified party
shall use all reasonable efforts to first recover against its insurance carriers for any
Loss for which indemnification is provided under this Article VIII.  

	

     SECTION 8.04. Termination of
Indemnification. The obligations to indemnify and hold harmless any party, (i) pursuant
to Section 8.01 (a)(i) or (ii) or 8.02(i) or (ii), shall terminate when the applicable
representation or warranty or covenant terminates pursuant to Section 8.06, (ii) pursuant
to Section 8.01(a)(iv), shall terminate in accordance with the terms of that Section and
(iii) pursuant to the other clauses of Sections 8.01 and 8.02 shall not terminate;
provided, however, that such obligations to indemnify and hold harmless shall not
terminate with respect to any item as to which the person to be indemnified shall have,
before the expiration of the applicable period, previously made a claim by delivering a
notice of such claim (stating in reasonable detail the basis of such claim) pursuant to
Section 8.05 to the party to be providing the indemnification; provided further
however, that with respect to claims under Section 8.01(a)(iv), the party shall have incurred the
Losses in the periods specified in such Section 8.01(a)(iv).  

     SECTION 8.05. Procedures. (a) Third Party
Claims. In order for a party (the “indemnified party”), to be entitled to any
indemnification provided for under this Agreement in respect of, arising out of or
involving a claim made by any person against the indemnified party (a “Third Party
Claim”), such indemnified party must notify the indemnifying party in writing (and in
reasonable detail) of the Third Party Claim promptly following receipt by such
indemnified party of notice of the Third Party Claim; provided, however, that failure to
give such notification shall not affect the indemnification provided hereunder except to
the extent the indemnifying party shall have been actually prejudiced as a result of such
failure (except that the indemnifying party shall not be liable for any expenses incurred
during the period in which the indemnified party failed to give such notice). Thereafter,
the indemnified party shall deliver to the indemnifying party, promptly following the
indemnified party’s receipt thereof, copies of all notices and documents (including court
papers) received by the indemnified party relating to the Third Party Claim.  

     (b) Assumption. If a Third Party Claim is
made against an indemnified party, the indemnifying party shall be entitled to
participate in the defense thereof and, if it so chooses, to assume the defense thereof
with counsel selected by the indemnifying party; provided, however, that such counsel is
not reasonably objected to by the indemnified party. Should the indemnifying party so
elect to assume the defense of a Third Party Claim, the indemnifying party shall not be
liable to the indemnified party for any legal expenses subsequently incurred by the
indemnified party in connection with the defense thereof. If the indemnifying party
assumes such defense, the indemnified party shall have the right to participate in the
defense thereof and to employ counsel (reasonably satisfactory to by the indemnifying
party), at its own expense, separate from the counsel employed by the indemnifying party,
it being understood that the indemnifying party shall control such defense. The
indemnifying party shall be liable for the fees and expenses of counsel employed by the
indemnified party for any period during which the indemnifying party has not assumed the
defense thereof (other than during any period in which the indemnified party shall have
failed to give notice of the Third Party Claim as provided above). If the indemnifying
party chooses to defend or prosecute a Third Party Claim, all the indemnified parties
shall cooperate in the defense or prosecution thereof. Such cooperation shall include the
retention and (upon the indemnifying party’s request) the provision to the indemnifying
party of records and information that are reasonably relevant to such Third Party Claim,
and making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Whether or not the
indemnifying party assumes the defense of a Third Party Claim, the indemnified party
shall not admit any liability with respect to, or settle, compromise or discharge, such
Third Party Claim without the indemnifying party’s prior written consent (which consent
shall not be unreasonably withheld). If the indemnifying party assumes the defense of a
Third Party Claim, the indemnified party shall agree to any settlement, compromise or
discharge of a Third Party Claim that the indemnifying party may recommend and that by
its terms obligates the indemnifying party to pay the full amount of the liability in
connection with such Third Party Claim, which releases the indemnified party completely
in connection with such Third Party Claim.  

	

     (c) Other Claims. In the event any
indemnified party should have a claim against any indemnifying party under Section 8.01
or 8.02 that does not involve a Third Party Claim being asserted against or sought to be
collected from such indemnified party, the indemnified party shall deliver notice of such
claim with reasonable promptness to the indemnifying party. Subject to Sections 8.04 and
8.06, the failure by any indemnified party so to notify the indemnifying party shall not
relieve the indemnifying party from any liability that it may have to such indemnified
party under Section 8.01 or 8.02, except to the extent that the indemnifying party
demonstrates that it has been prejudiced by such failure. If the indemnifying party does
not notify the indemnified party within 60 calendar days following its receipt of such
notice that the indemnifying party disputes its liability to the indemnified party under
Section 8.01 or 8.02, such claim specified by the indemnified party in such notice shall
be conclusively deemed a liability of the indemnifying party under Section 8.01 or 8.02
and the indemnifying party shall pay the amount of such liability to the indemnified
party on demand or, in the case of any notice in which the amount of the claim (or any
portion thereof) is estimated, on such later date when the amount of such claim (or such
portion thereof) becomes finally determined.  

     (d) Mitigation. Purchaser and Seller shall
cooperate with each other with respect to resolving any claim or liability with respect
to which one party is obligated to indemnify the other party hereunder, including by
making commercially reasonably efforts to mitigate or resolve any such claim or
liability; provided, however, that such party shall not be required to make such efforts
if they would be detrimental in any material respect to such party.  

	

     SECTION 8.06. Survival of Representations.
The representations, warranties, covenants and agreements contained in this Agreement and
in any document delivered in connection herewith shall survive the Closing solely for
purposes of Article VIII and shall terminate at the close of business one year following
the Closing Date except as expressly set forth in a Section and except the following
Sections shall survive for the following periods after Closing: Section 1.03 for
indefinitely, Section 3.14 for six years after Closing, Section 3.16(e) for six years
after Closing, Section 3.05 but only with respect to title to the physical assets
constituting the Acquired Assets indefinitely, Section 5.03 for ten years after Closing,
Section 5.06 for ten years after Closing, Section 5.07 for six years after Closing,
Section 5.08 for two years after Closing, Section 5.10 for indefinitely, Section 5.12 for
indefinitely, Section 5.16 for six years after Closing, Section 5.17 for indefinitely,
and Section 5.19 for indefinitely after Closing. Nothing in this Section 8.06 shall be
construed as a waiver or extension of any applicable statute of limitations.  

     SECTION 8.07. No Additional
Representations. Purchaser acknowledges that it and its representatives have been
permitted full and complete access to the books and records, facilities, equipment,
non-income tax returns, contracts, insurance policies (or summaries thereof) and other
properties and assets of the Business that it and its representatives have desired or
requested to see or review, and that it and its representatives have had a full
opportunity to meet with the officers and employees of Seller and Parent to discuss the
Business. Purchaser acknowledges that none of Seller, Parent or any other person has made
any representation or warranty, expressed or implied, as to the accuracy or completeness
of any information regarding the Business furnished or made available to Purchaser and
its representatives, except as expressly set forth in this Agreement, the Ancillary
Agreements or the Schedules, and none of Seller, Parent or any other person shall have or
be subject to any liability to Purchaser or any other person resulting from the
distribution to Purchaser, or Purchaser’s use of, any such information, including the
Confidential Memorandum prepared by Parent dated December 22 ,1999 and any information,
documents or material made available to Purchaser in any “data rooms”, management
presentations or in any other form in expectation of the transactions contemplated
hereby. PURCHASER ACKNOWLEDGES THAT, SHOULD THE CLOSING OCCUR, PURCHASER SHALL ACQUIRE
THE ACQUIRED ASSETS WITHOUT ANY REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE, IN AN “AS IS” CONDITION AND ON A “WHERE IS” BASIS,
EXCEPT AS OTHERWISE EXPRESSLY REPRESENTED OR WARRANTED IN THIS AGREEMENT AND THE
ANCILLARY AGREEMENTS.  

	

     SECTION 8.08. Arbitration. Except for
matters relating to Sections 1.01 (to the extent it relates to Section 1.05), 1.05, 5.15
and 5.18 (which sections are subject to separate arbitration procedures), in the event of
any dispute, claim or disagreement involving a matter for which indemnification is sought
under Section 8.01 or 8.02 by either Purchaser or Seller following the Closing, the
parties shall in good faith attempt to resolve the matter in 90 days. If such matter is
not resolved in that time period, such matter, upon notice by one party to the other,
shall be submitted to and settled by arbitration administered by the American Arbitration
Association (“AAA”) in arbitration proceedings held in New York, New York in accordance
with the AAA’s applicable rules. The decision of the arbitrators shall be final and
binding on the parties and judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction.  

ARTICLE IX 

General Provisions 

     SECTION 9.01. Assignment. This Agreement
and the rights and obligations hereunder shall not be assignable or transferable by
Purchaser, Seller or Parent without the prior written consent of the other parties hereto
except (i) Seller may assign any and all of its obligations at any time after the Closing
to Parent without the consent of Purchaser and (ii) Purchaser may assign prior to Closing
any and all of its obligations to a wholly-owned subsidiary of Purchaser provided
Purchaser and such subsidiary shall be jointly and severally liable for such obligations
so assigned. If consent to an assignment is not required hereunder, the party assigning
the obligations shall give prompt notice to the other parties hereto. Any attempted
assignment in violation of this Section 9.01 shall be void.  

     SECTION 9.02. No Third-Party Beneficiaries.
Except as provided in Article VIII, this Agreement is for the sole benefit of the parties
hereto and their permitted assigns and nothing herein expressed or implied shall give or
be construed to give to any person, other than the parties hereto and such assigns, any
legal or equitable rights hereunder.  

     SECTION 9.03. Attorney Fees. Except as
expressly provided in this Agreement, a party in breach of this Agreement shall, on
demand, indemnify and hold harmless the other party for and against all reasonable
out-of-pocket expenses, including legal fees, incurred by such other party by reason of
the enforcement and protection of its rights under this Agreement. The payment of such
expenses is in addition to any other relief to which such other party may be entitled.  

	

     SECTION 9.04. Notices. All notices or other
communications required or permitted to be given hereunder shall be in writing and shall
be delivered by hand or sent by facsimile or sent, postage prepaid, by registered,
certified or express mail or reputable overnight courier service and shall be deemed
given when so delivered by hand or facsimile, or if mailed, three days after mailing (one
business day in the case of express mail or overnight courier service), as follows:  

		(i) 		if
to Purchaser,

		 		SCP
Pool Corporation
109 Northpark Boulevard, 4th Floor
Covington, LA 70433-5001

Attention:
President

     with a copy to: 

		 		Jones
Walker Waechter Poitevent
  Carrere & Denegre L.L.P.
201 St. Charles Avenue

New Orleans, LA
70170-5100

Attention:  Lisa M. Buchanan, Esq.; and

		(ii) 		if
to Seller or Parent,

		 		Arch
Chemicals, Inc. 
501 Merritt 7
Norwalk, CT 06851

Attention: Vice President-Strategic
Development

Fax No.: (203) 229-2880

     with a copy to: 

		 		Arch
Chemicals, Inc. 
501 Merritt 7
Norwalk, CT 06851

Attention: Vice President, General Counsel and Secretary

Fax No.: (203) 229-2613

	

     SECTION 9.05. Interpretation; Exhibits and
Schedules; Certain Definitions. (a) The headings contained in this Agreement, in any
Exhibit or Schedule hereto and in the table of contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Any matter set forth in any provision, subprovision, section or
subsection of any Schedule shall, unless the context otherwise manifestly requires, be
deemed set forth for all purposes of the Schedules. All Exhibits and Schedules annexed
hereto or referred to herein are hereby incorporated in and made a part of this Agreement
as if set forth in full herein. Any capitalized terms used in any Schedule or Exhibit but
not otherwise defined therein, shall have the meaning as defined in this Agreement. When
a reference is made in this Agreement to a Section, Exhibit or Schedule, such reference
shall be to a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated.  

     (b) For all purposes hereof: 

     “affiliate” of any person means at the time
of determination another person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with, such first
person.  

     “Environmental Liabilities” means any and
all obligations and liabilities (whether investigatory, corrective, remedial or
otherwise) arising under the Environmental Laws as in effect from time to time.  

     “including” means including, without
limitation.  

     “person” means any individual, firm,
corporation, partnership, limited liability company, trust, joint venture, Governmental
Entity or other entity.  

     “Known Environmental Liabilities”  means
those Environmental Liabilities that (i) arise at any time under Environmental Laws out
of a physical condition existing prior to the Closing and arising out of the operation or
conduct of the Business prior to the Closing and (ii) are either (A) known to Seller as
being an actual, potential, fixed, liquidated, unliquidated, contingent or conditional
liability of the Business as a result of written notice received by Seller prior to the
Closing from a Governmental Entity or a third party or (B) known to Seller at or prior to
Closing as being potential or contingent liabilities after the Closing as a result of
action or inaction by Seller occurring prior to the Closing. 

     “Known to Seller,” “to Seller’s Knowledge,”
or “to the knowledge of Seller” or similar phrases means in the conscious awareness of
any of the following persons: David Chess, Paul Craney, Steven Giuliano, Robert
Koroshetz, Robert Mulholland, Ashley Rushton or Randy Williams.  

	

     “Known to Purchaser”, “to Purchaser’s
knowledge,” or “to the knowledge of Purchaser” or similar phrases mean for purposes of
Section 4.06, 5.11 and 6.05 in the conscious awareness of Lisa Buchanan, Manuel Perez de
la Mesa, Craig Hubbard, Don Meyer, Pat Finger and W. B. Sexton.  

     “subsidiary” of any person means another
person, an amount of the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its Board of Directors
or other governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first person or by
another subsidiary of such person.  

     “Unknown Environmental Liabilities” means
Environmental Liabilities that arise (i) following the Closing under Environmental Laws
out of a physical condition existing prior to Closing and arising out of the operation or
conduct of the Business prior to the Closing and (ii) are not Known Environmental
Liabilities.  

     SECTION 9.06. Counterparts. This Agreement
may be executed in one or more counterparts, all of which shall be considered one and the
same agreement, and shall become effective when one or more such counterparts have been
signed by each of the parties and delivered to the other party.  

     SECTION 9.07. Entire Agreement. This
Agreement, the Ancillary Agreements and the Confidentiality Agreement, along with the
Schedules and Exhibits thereto, contain the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersede all prior
agreements and understandings relating to such subject matter. Neither party shall be
liable or bound to any other party in any manner by any representations, warranties or
covenants relating to such subject matter except as specifically set forth herein or in
the Ancillary Agreements or the Confidentiality Agreement.  

     SECTION 9.08. Severability. If any
provision of this Agreement (or any portion thereof) or the application of any such
provision (or any portion thereof) to any person or circumstance shall be held invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision hereof
(or the remaining portion thereof) or the application of such provision to any other
persons or circumstances.  

     SECTION 9.09. Consent to Jurisdiction. Each
party irrevocably submits to the jurisdiction of (a) the Supreme Court of the State of
New York, New York County, and (b) the United States District Court for the Southern
District of New York, for the purposes of any suit, action or other proceeding arising
out of this Agreement, any Ancillary Agreement or any transaction contemplated hereby or
thereby. Each of Purchaser, Seller and Parent further agrees that service of any process,
summons, notice or document by U.S. registered mail to such party’s respective address
set forth above shall be effective service of process for any action, suit or proceeding
in New York with respect to any matters to which it has submitted to jurisdiction in this
Section 9.09. Each of Purchaser, Parent and Seller irrevocably and unconditionally waives
any objection to the laying of venue of any action, suit or proceeding arising out of
this Agreement, any Ancillary Agreement or the transactions contemplated hereby and
thereby in (i) the Supreme Court of the State of New York, New York County, or (ii) the
United States District Court for the Southern District of New York, and hereby and
thereby further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding brought in any such court has
been brought in an inconvenient forum.  

	

     SECTION 9.10. Governing Law. This Agreement
shall be governed by and construed in accordance with the internal laws of the State of
New York applicable to agreements made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State.  

     SECTION 9.11. Waiver of Jury Trial. Each
party hereby waives to the fullest extent permitted by applicable law, any right it may
have to a trial by jury in respect to any litigation directly or indirectly arising out
of, under or in connection with this Agreement, any Ancillary Agreement or any
transaction contemplated hereby or thereby. Each party (a) certifies that no
representative, agent or attorney of any other party has represented, expressly or
otherwise, that such other party would not, in the event of litigation, seek to enforce
that foregoing waiver and (b) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement and the Ancillary Agreements, as applicable, by,
among other things, the mutual waivers and certifications in this Section 9.11.  

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

	 	ARCH
CHEMICALS, INC.,

	 	by
  
/s/ Paul J. Craney
  Name: Paul J. Craney
  Title: Vice President, Strategic Development

	 	SUPERIOR
POOL PRODUCTS, INC. 

	 	by
  
/s/ Sarah A. O’Connor
  Name: Sarah A. O’Connor
  Title: Vice President

	 	SCP
POOL CORPORATION

	 	by

  /s/ Manuel J. Perez de la Mesa 
  Name: Manuel J. Perez de la Mesa
  Title: President

	

INDEX TO SCHEDULES

Schedule 1.01 (b)(1) – Sample Balance Sheet
Schedule 1.01 (b)(2) – Customer
Rebates Accrual
Schedule 1.02 (b) – Excluded Assets
Schedule 3.04 – Financial
Statements
Schedule 3.05 – Liens
Schedule 3.06 – Real Property
Schedule 3.08 – Contracts
Schedule
3.09 – Inventory
Schedule 3.10 – Fixed Asset Listing
Schedule 3.12 – Permits
Schedule
3.14 – Taxes
Schedule 3.15 – Proceedings
Schedule 3.16 (a) – Pension/Benefit Plans
Schedule
3.16 (b) – Benefits Paid on Sale of Business
Schedule 3.16 (g) – Short Term Disabled
Schedule
3.17 – Absence of Changes or Events
Schedule 3.18 – Compliance with Applicable Laws
Schedule
3.19 – Employee and Labor Matters
Schedule 3.20 – Transactions with Affiliates
Schedule
3.21 – Top Ten Suppliers
Schedule 3.23 – Absence of Undisclosed Liabilities
Schedule
3.24 – Officers and Directors
Schedule 3.26 – Product Liability
Schedule 3.27 – Names
and Locations
Schedule 5.01 – Covenants of Seller and Parent Relating to Conduct of
Business
Schedule 5.10 – Benefit Plan Matters
Schedule 5.21 – Environment Study 

	

Asset Purchase Agreement Schedules 

Page 1 of 3  

Schedule 1.01 (b)(1)

	           Dr. (Cr.)	SPPI G/L @
3/31/00
	Adjustments
Per Contract
	Final as of
3/31/00

	     ASSETS	  		  		  		  
	Petty Cash	  	6,600	  	 	  	6,600	  
	Cash-Wachovia	  	(2,471,284	)	2,471,284	(A)	— 	  
	Cash-Bank of America	  	481,979	  	(481,979	)(1)	— 	  
	A/R Gross	  	5,254,563	  	 	  	5,254,563	  
	A/R Reserves	  	(111,692	)	 	  	(111,692	)
	Other A/R	  	121,980	  	 	  	121,980	  
	Vendor Rebates	  	(71,394	)	 	  	(71,394	)
	Vendor Receivables	  	39,104	  	 	  	39,104	  
	Inventory, Gross	  	13,482,685	  	 	  	13,482,685	  
	Inventory, Reserves	  	(503,465	)	 	  	(503,465	)
	Prepaid, Insurance	  	1,360	  	 	  	1,360	  
	Prepaid, Other	  	13,911	  	 	  	13,911	  
	Office Supplies	  	6,711	  	 	  	6,711	  
	PP&E, Gross	  	1,258,561	  	 	  	1,258,561	  
	Allowance For Depreciation	  	(1,106,034	)	 	  	(1,106,034	)
	        O.N.C. Assets*	  	63,833	  	 	  	63,833	  
	

	        Total Assets	  	16,467,418	  	 	  	18,456,723	  
	

Asset Purchase Agreement Schedules 

	  	  	Page 2 of 3 

	

Schedule 1.01 (b)(1) (continued)

	           Dr. (Cr.)	SPPI G/L @
3/31/00
	Adjustments
Per Contract
	Final as of
3/31/00

	      LIABILITIES	  		  		  		  
	Accrued Inventory	  	160,415	  	 	  	160,415	  
	A/P Trade	  	6,378,926	  	 	  	6,378,926	  
	Special Order Deposit	  	21,246	  	 	  	21,246	  
	VIP Customer Rebates	  	172,188	  	 	  	172,188	  
	A/P, Other	  	36,457	  	 	  	36,457	  
	Accrued Salaries/Wages	  	42,356	  	(42,356	)(2)	— 	  
	Accrued Commissions	  	5,992	  	(5,992	)(2)	— 	  
	Accrued Bonus Incentives	  	26,927	  	10,000	(7)	36,927	  
	Accrued Vacation	  	— 	  	200,000	(5)	200,000	  
	Accrued Workers Comp	  	113,158	  	(113,158	)(4)	— 	  
	Accrued Business Insurance	  	52,020	  	 	  	52,020	  
	Accrued Property Taxes*	  	15,501	  	 	  	15,501	  
	Accrued Medical Insurance*	  	(33,794	)	 	  	(33,794	)
	SPEC Payable	  	462	  	 	  	462	  
	Accrued Expense - A/P	  	120,239	  	 	  	120,239	  
	Accrued Expense-Advertising	  	(160,398	)	 	  	(160,398	)
	Sun 5% TL Accrual	  	16,205	  	 	  	16,205	  
	Other Advertising Accrual	  	156	  	 	  	156	  
	Accrued Federal Income Tax	  	10,277	  	(10,277	)(3)	— 	  
	California mil Tax Payments	  	8,195	  	(8,195	)(3)	— 	  
	Accrued Sales & Use Taxes	  	336,118	  	(336,118	)(3)	— 	  
	I/C Rec. Arch	  	(8,457,795	)	8,457,795	(6)	— 	  
	

	                                  Total
Liabilities	  	(1,135,149	)	 	  	7,016,550	  
	

	Net Asset Value	  	$17,602,567	  	 	  	$11,440,173	  
	

	

Asset Purchase Agreement Schedules 

     Page 3 of 3 

Schedule 1.01 (b)(1) (continued)

Footnotes 

	* 		Per
Section 1.03(d): Amounts represent expenses/prepayments that will be apportioned between
purchaser and seller. To the extent such adjustments apportionments are made, an equal
adjustment shall be made to the final “net asset value”. 

	(A) 		Outstanding
checks (negative cash) represent an “excluded liability”. However, for purposes of
calculating the Additional Amount, such outstanding checks will be included in the
calculation of net assets. 

	(1) 		Per
1.02(b); Cash is an “excluded asset”.

	(2) 		Per
5.10; Seller is responsible for all liabilities for wages and salaries prior to the
closing date, represents an “excluded liability”. 

	(3) 		Per
1.03(b)(iv); Seller is responsible for all “taxes”prior to the closing,
represents an “excluded liability”. 

	(4) 		Per
5.10; Seller is responsible for all workers compensation claims incurred prior to the
closing, represents an “excluded liability”. 

	(5) 		Per
5.10; Purchaser is responsible for unpaid vacation pay as of closing date, represents an
“assumed liability”. Represents an estimate as of March 31, 2000. 

	(6) 		Per
1.02(b)(ix); Intercompany accounts with Parent are “excluded assets”. 

	(7) 		Per
5.10 (h); Purchaser is responsible for Dave Chess Bonus as of closing date, represents an
“assumed liability”. Represents an estimate as of March 31, 2000. 

	

Asset Purchase Agreement Schedules 

Schedule 1.01 (b)(2)

CUSTOMER REBATES ACCRUAL
EXCEPTIONS TO ACCRUAL
(ADJUSTMENTS
- ADDED)

	CUSTOMER #	CUSTOMER NAME	CALCULATION
	  	  	  	  	   	  
	        54-24580	  	    Mission Valley	  	Gross Sales x 2.0% = Adjustment	  
	        56-32301	  	    Shaffer Pools, Inc. 	  	Gross Sales x 6.5% = Adjustment	  

	

Asset Purchase Agreement Schedules 

Schedule 1.02 (b)

EXCLUDED ASSETS

None 

	

Asset Purchase Agreement Schedules 

Schedule 3.04

FINANCIAL STATEMENTS

Superior Pool Products, Inc. 

	1) 		Balance
Sheet (Consolidated SPPI) as of December 31, 1998 and 1999

	2) 		Statement
of Operations (Consolidated SPPI) for the Years ended December 31, 1999, 1998 and 1997

	

Asset Purchase Agreement Schedules 

Schedule 3.05

LIENS

Financing Statements

	             LIEN HOLDER	        EQUIPMENT	     SERIAL NUMBER
	   	  	   	  	   	  
	Nissan Motor Acceptance Corp. 	  	1996 Nissan Forklift	  	C30KLP, S/N 903187	  
	Nissan Motor Acceptance Corp. 	  	1996 Nissan Forklift	  	P30KLP, S/N 901043	  
	Nissan Motor Acceptance Corp. 	  	1996 Nissan Forklift	  	C30KLP, S/N 903188	  
	Material Handling Supply, Inc. 	  	Nissan Forklift	  	P-30KLP, S/N 900949, 900962	  
	Nissan Motor Acceptance Corp. 	  	Nissan Forklift	  	P-30KLP, S/N 901276	  
	Nissan Motor Acceptance Corp. 	  	Nissan Forklift	  	JP-30KLP, S/N 9G0173	  
	Associate Leasing, Inc. 	  	Nissan Forklift	  	JP-30LP, S/N 9G0317	  

	

Asset Purchase Agreement Schedules 

Page 1 of 3 

Schedule 3.06

REAL PROPERTY

Leases

	           LOCATION
     
	 	           
              LESSOR
	 	    TERM OF LEASE
	 
	1.      San Diego	  		  	  	  
	         Building	  	Mission Gorge Development*	  	7/1/1999 - 6/30/2004	  
	         4737 Old Cliffs Road	  
	         San Diego, CA	  
	          	  
	2.      Van Nuys	  		  
	         Building & Land	  	Harry Selvin and Gerelda Selvin*	  	1/1/1999 - 12/31/2003	  
	         14768 Raymer Street	  
	         Van Nuys, CA	  
	          	  
	3.      Canoga Park	  		  
	         Building	  	Howard Gluck and Marilynn Gluck*	  	3/1/2000 - 2/29/2005	  
	         8039 Deering Avenue	  
	         Canoga Park, CA	  
	          	  
	4.      Cerritos	  		  
	         Office & Warehouse	  	JMB Income Properties, Ltd.*	  	8/31/1996-12/31/2000	  
	         16708 S. Parkside Avenue	  
	         Cerritos, CA	  
	          	  
	5.      Monrovia	  		  
	         Building & Land	  	Sealco Air Controls, Inc.*	  	7/1/1999 - 6/30/2004	  
	         509 Fig Avenue	  
	         Monrovia, CA	  
	          	  
	6.      San Diego	  		  
	         Building	  	Gregory K. Wilson and Harold Stephens*	  	3/1/1998 - 12/31/2002	  
	         5805 Fairmount Extension	  
	         San Diego, CA	  
	          	  
	7.      Palm Springs	  		  
	         Warehouse (2)	  	David and Geraldine Lyons	  	Month-to-Month	  
	         507 Sunny Dunes Road	  
	         Palm Springs, CA	  

	

Asset Purchase Agreement Schedules 

Page 2 of 3 

Schedule 3.06 (continued)

REAL PROPERTY

	           LOCATION
     
	 	                    LESSOR
	 	    TERM OF LEASE
	 
	8.        Escondido	  		  	 	  
	           Building & Land	  	Clarence & Phyllis Smith*	  	1/1/1996 - 12/31/2000	  
	           1916 Commercial Street
           Escondido, CA	
  
	          	  
	9.        El Cajon	  		  
	           Office & Warehouse	  	John W. Gibson*	  	6/1/1999 - 5/31/2002	  
	           349 South Marshall Avenue	  
	           El Cajon, CA	  
	          	  
	10.     Ontario, CA	  		  
	           Industrial Building	  	Stubblefield Pacific,	  	6/1/1999 - 5/31/2004	  
	           1410 Cucamonga Avenue	  	a JV of Royal Pacific Developers and	  
	           Ontario, CA	  	Stubblefield Construction*	  
	          	  
	11.     Grand Terrace	  		  
	           Building	  	C-Y Development Co.*	  	7/1/1997 - 5/30/2002	  
	           2060 Commerce Way	  
	           Grand Terrace, CA	  
	          	  
	12.     Cathedral City	  		  
	           Building	  	Hetzner Family Trust*	  	3/1/1999 - 1/31/2002	  
	           68370 Commercial Road	  
	           Cathedral City, CA	  
	          	  
	13.     Palm Desert	  		  
	           Industrial Suite	  	Robert L. Green, Jon Terence Green,	  	10/1/1999 - 9/30/2004	  
	           75-100 Mayfair Drive	  	Estate of Herschel B. Green and the	  
	           Palm Desert, CA	  	Mildred M. Green Trust*	  
	          	  
	14.     Newbury Park	  		  
	           Building	  	1200 Lawrence Drive, Ltd.*	  	5/1/1998 - 4/30/2001	  
	           1200 Lawrence Drive

                     Unit 400	  
	           Newbury Park, CA	  

	

Asset Purchase Agreement Schedules 

Page 3 of 3 

Schedule 3.06 (continued)

REAL PROPERTY

	           LOCATION
     
	 	                    LESSOR
	 	    TERM OF LEASE
	 
	15.       Anaheim	  		  	 	  
	             Building	  	Catellus Development Corp.*	  	5/1/1997 - 4/30/2002	  
	             4900 Landon Drive	  
	             Anaheim, CA	  
	          	  
	16.       Las Vegas	  		  
	             Building	  	Schuster Street Office/Warehouse, LLC*	  	8/1/1998 - 7/31/2001	  
	             6500 South Schuster St	  
	             Las Vegas, NV	  
	          	  
	17.       Phoenix	  		  
	             Storeroom & Parking	  	Gene Tang Investments, Ltd.*	  	4/1/1998 - 3/31/2001	  
	                  Areas	  
	             6036 North 16th Street	  
	             Phoenix, AZ	  
	          	  
	18.       Tucson	  		  
	             Building	  	Keenan Investment Co.*	  	4/1/99 - 3/31/2003	  
	             2801 N. Flowing Wells Road
             Tucson, AZ	  
	              	  
	          	  
	19.       Scottsdale	  		  
	             Office	  	Kertam Corporation*	  	5/1/2000 - 4/30/2003	  
	             7800 Pierce Street
             Scottsdale, AZ	  
	          	  
	20.       Deer Valley	  		  
	             Office	  	Trustees of the Estate of James Campbell*	  	8/1/1997- 7/31/2002	  
	             18201 North 25th Avenue
             Suite A	
  
	             Phoenix, AZ	  

	

*Requires Consent to Assign

	

Asset Purchase Agreement Schedules 

Page 1 of 3 

Schedule 3.08 

CONTRACTS

	Lessor
	 	Year
	 	Make
	 	Vehicle ID#  
	SPPI Location

	Ryder Truck Rental, Inc.*	  	1998	  	Mack	  	1M1AA12Y5WW095736	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	ISU	  	JALC4B1K3W003860	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	ISU	  	JALC4B1K6W7003822	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	ISU	  	JALC4B1K8W7003868	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	INT’L	  	LHTSCABM1WH57727	  	Nevada	  
	Ryder Truck Rental, Inc.*	  	1999	  	ISUZU	  	JALC4B142X7010625	  	Nevada	  
	Ryder Truck Rental, Inc.*	  	1998	  	ISU	  	JALL4B1K5W7003939	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	ISU	  	JALC4B1KXW7003905	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	ISU	  	JALC4B1K9W7003720	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	ISU	  	JALC4B1K0W7003752	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	ISU	  	JALC4B1K8W7003790	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	ISU	  	JALC4B1K7W7003778	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	ISU	  	JALC4B1K1W7003758	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	ISU	  	JALC4B1K3W7003714	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	ISU	  	JALC4B1K3W7003700	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	INT’L	  	1HTSCABM2WH575719	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	ISU	  	JALC4B1K8W7003725	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	INT’L	  	1HTSCABM3WH575728	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	ISU	  	JALC4B1KXW7003869	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	ISU	  	JALC4B1K7W7003893	  	California	  
	Ryder Truck Rental, Inc.*	  	1998	  	INT’L	  	1HTSCABM7WM566733	  	Arizona	  
	Ryder Truck Rental, Inc.*	  	1998	  	INT’L	  	1HTSCABM0WH586752	  	Arizona	  
	Ryder Truck Rental, Inc.*	  	1998	  	INT’L	  	1HTSCABM9WH586751	  	Arizona	  
	Ryder Truck Rental, Inc.*	  	1999	  	INT’L	  	1HTSCABM2XH586754	  	Arizona	  
	Ryder Truck Rental, Inc.*	  	1998	  	INT’L	  	1HTSCABM2WH586753	  	Arizona	  
	Ford Motor Credit Co. *	  	1999	  	Ford	  	1FTNF20L9XED35278	  	California	  

	

Asset Purchase Agreement Schedules 

Page 2 of 3 

Schedule 3.08 (continued) 

CONTRACTS

	Lessor
	 	Year
	 	Make
	 	Vehicle ID#  
	SPPI Location

	Ford Motor Credit Co.*	  	1999	  	Ford	  	1FTNF20L2XEC97991	  	California	  
	Ford Motor Credit Co.*	  	1999	  	Ford	  	1FTNF20L9XEE20105	  	California	  
	Ford Motor Credit Co.*	  	1999	  	Ford	  	1FTNF20L0XEE41618	  	California	  
	Ford Motor Credit Co.*	  	1999	  	Ford	  	1FTNF20L0XEE37441	  	California	  
	Ford Motor Credit Co.*	  	1999	  	Ford	  	1FTNF20L8XEC90639	  	California	  
	Ford Motor Credit Co.*	  	2000	  	Ford	  	1FTN20L3YEA09719	  	California	  
	Ford Motor Credit Co.*	  	2000	  	Ford	  	1FTNF20L4YEB08226	  	Arizona	  
	Ford Motor Credit Co.*	  	1999	  	Ford	  	1FTNF20L3XED61648	  	Nevada	  

	

* Requires Consent to Assign

	CONTRACT HOLDER
	TYPE OF CONTRACT

	  
	CIGNA*	  	Fully Insured HMO/PPO	  
	  
	Robert T. Dorris & Associates	  	Employee Assistance Program	  
	  
	Assured Transportation & Delivery, Inc.**	  	Personnel Services Agreement	  
	  
	The Santa Cruz Operation, Inc. ***	  	Computer Software License Agreement	  
	  
	* Requires Consent to Assign	  
	  
	** Contract Cannot be Assigned	  
	  
	*** Consent Required unless certain procedures are followed	  

	

Asset Purchase Agreement Schedules 

Page 3 of 3 

Schedule 3.08 (continued) 

CONTRACTS

	LESSOR
	TYPE  
  	TERM  
  
	Cannon Financial Services, Inc.*	  	Copier Lease	  	Dated, 1/10/97 - 60 Mos. 	  
	AT & T Capital Corp.*	  	Telephone	  	Dated, 9/1/98 - 24 Mos. 	  
	AT & T Capital Corp.*	  	Telephone	  	Dated, 6/11/97 - 48 Mos. 	  
	AT & T Credit Corp.*	  	Telephone	  	Dated, 6/11/97 - 48 Mos. 	  
	AT & T Capital Corp.*	  	Telephone	  	Dated, 1/19/98 - 48 Mos. 	  
	AT & T Capital Corp.*	  	Telephone	  	Dated, 4/25/97 - 48 Mos. 	  
	Lucent Technologies, Inc.*	  	Telephone	  	Dated, 2/2/99 - 48 Mos. 	  
	Lucent Technologies, Inc.*	  	Telephone	  	Dated, 9/22/97 - 48 Mos. 	  
	AT & T Capital Corp.*	  	Telephone	  	Dated, 5/8/98 - 48 Mos. 	  
	AT & T Capital Corp.*	  	Telephone	  	Dated, 1/15/99 - 24 Mos. 	  
	Lucent Technologies, Inc.*	  	Telephone	  	Dated, 1/28/00 - 48 Mos. 	  

	

*Requires Consent to Assign
All Purchase Orders and Sales
Orders are not assignable. 

	

Asset Purchase Agreement Schedules 

Schedule 3.09

INVENTORY

Not applicable. 

	

Asset Purchase Agreement Schedules 

Schedule 3.10

FIXED ASSET LISTING ($10,000 OR MORE)

	Asset No. 
	 	                    Description
	Date of
Purchase
	Purchase
Price
	Accumulated
Depreciation
	Net
Value

	1-40127A	  	48' 1989 MONO TRAILER	  	7/97	  	12,607	  	6,303	  	6,303	  
	01-10025A	  	FORKLIFT P3000	  	6/82	  	13,693	  	13,693	  	— 	  
	01-40027A	  	RACK SYSTEM - B & G ENTER	  	11/78	  	22,554	  	22,554	  	— 	  
	50-60110A	  	1981 DATSUN FORKLIFT	  	8/81	  	11,872	  	11,872	  	— 	  
	55-60100A	  	1980 DATSUN FORKLIFT P2000	  	6/80	  	10,497	  	10,497	  	— 	  
	69-60185A	  	TOYOTA FORKLIFT	  	4/94	  	11,583	  	11,583	  	— 	  
	58-60098A	  	1980 DATSUN FORKLIFT P2000	  	3/80	  	11,253	  	11,253	  	— 	  
	03-10015A	  	FORKLIFT DATSUN P2700	  	1/83	  	12,365	  	12,365	  	— 	  
	03-40003A	  	WAREHOUSE RACKS	  	2/79	  	11,253	  	11,253	  	— 	  
	01-10036A	  	FORKLIFT P5000	  	11/83	  	18,278	  	18,278	  	— 	  
	01-10026A	  	FORKLIFT P 3000	  	4/82	  	13,605	  	13,605	  	— 	  
	68-60184A	  	NISSAN FORKLIFT	  	3/94	  	15,272	  	15,272	  	— 	  
	01-030578	  	ELECTRONIC MAIL SYSTEM	  	10/96	  	11,418	  	6,661	  	4,758	  
	01-30019A	  	MISC INTERIOR DESIGN (PORTRAITS)	  	1/79	  	28,148	  	28,148	  	— 	  
	01-30185A	  	EDP SYSTEM UPGRADE EQPT	  	1/89	  	65,487	  	65,487	  	— 	  
	01-30548A	  	CANNON COPIER	  	7/94	  	13,994	  	13,994	  	— 	  
	01-30552A	  	COMPUTER SYSTEM	  	7/94	  	18,547	  	18,547	  	0	  
	01-30604A	  	UPGRADE FOR PHONE AND VOICE MAIL	  	10/99	  	11,309	  	377	  	10,932	  
	01-30605A	  	UPGRADE BRANCH OPERATING SYS	  	10/99	  	18,509	  	617	  	17,892	  
	59-30597A	  	STORAGE RACKS/BIN BOX	  	6/97	  	15,342	  	7,526	  	7,816	  
	61-03602A	  	STORAGE RACKS/SHELVING	  	3/99	  	11,836	  	1,973	  	9,864	  
	63-03601A	  	STORAGE RACKS/SHELVING	  	2/99	  	12,095	  	2,016	  	10,079	  
	68-30543A	  	STORAGE RACKS/SHELVING	  	4/94	  	13,842	  	13,842	  	— 	  
	67-30529A	  	STORAGE RACKS - BINS	  	2/92	  	10,722	  	10,722	  	— 	  
	68-30541A	  	SHELVING	  	3/94	  	15,896	  	15,896	  	— 	  
	01-20116A&B	  	CHLORINE STORAGE ROOM	  	12/91	  	102,963	  	102,963	  	— 	  
	02-20114A	  	TENANT IMPROVEMENTS 4/91	  	5/91	  	15,000	  	15,000	  	— 	  
	58-20115A	  	TENANT IMPROVEMENT-CHLR RM	  	5/91	  	25,000	  	25,000	  	— 	  
	63-20144A	  	TENANT IMPROVEMENTS	  	2/99	  	17,835	  	7,431	  	10,404	  
	64-20091A	  	3 SWAMP COOLERS	  	6/86	  	11,573	  	11,573	  	— 	  
	65-20143A	  	HAZARDOUS MAT’L STORAGE RM	  	8/98	  	35,316	  	16,677	  	18,639	  
	68-20129A	  	TENANT IMPROVMENTS	  	6/94	  	22,392	  	22,392	  	— 	  

	

Asset Purchase Agreement Schedules 

Page 1 of 5 

Schedule 3.12

PERMITS

Hazardous Waste Permits

	1. 		Canoga
Park - Hazardous Waste and Hazardous Materials Management Program

	2. 		Cerritos
- Los Angeles County Fire Dept. Hazardous Materials Storage

	3. 		Monrovia
- Los Angeles County Fire Dept. Hazardous Materials Disclosure Program

	4. 		Palm
Springs - County of Riverside Hazardous Materials Certificate

	5. 		Escondido
- County of San Diego Dept. Hazardous Materials Handling

	6. 		El
Cajon - County of San Diego Hazardous Materials Handling

	7. 		Ontario
- San Bernardino County Fire Dept. Hazardous Materials Storage

	8. 		Ontario
- Fire Safety Control Bureau Hazardous Materials Storage

	9. 		Grand
Terrace - San Bernardino County Fire Dept. Hazardous Materials Storage

	10. 		Cathedral
City - County of Riverside Hazardous Materials

	11. 		Palm
Desert - County of Riverside Hazardous Materials Handling

	12. 		Las
Vegas - Nevada Hazardous Materials Storage

	13. 		Newbury
Park - County of Ventura Hazardous Materials Handling

	14. 		Anaheim
- U. S. Dept. of Transportation Hazardous Materials Registration

	15. 		San
Diego - County of San Diego Hazardous Materials Certificate

	16. 		Anaheim
- California Highway Patrol Hazardous Materials Transportation License

	

Asset Purchase Agreement Schedules 

Page 2 of 5 

Schedule 3.12 (continued)

PERMITS

Business Permits

	1. 		California
State Board of Equalization - Van Nuys Seller’s Permit

	2. 		California
State Board of Equalization - Canoga Park Seller’s Permit

	3. 		California
State Board of Equalization - Palm Springs Seller’s Permit

	4. 		California
State Board of Equalization - Escondido Seller’s Permit

	5. 		California
State Board of Equalization - El Cajon Seller’s Permit

	6. 		California
State Board of Equalization - Cerritos Seller’s Permit

	7. 		California
State Board of Equalization - San Diego Seller’s Permit

	8. 		California
State Board of Equalization - Ontario Seller’s Permit

	9. 		California
State Board of Equalization - Cathedral City Seller’s Permit

	10. 		California
State Board of Equalization - Newbury Park Seller’s Permit

	11. 		California
State Board of Equalization - Anaheim Seller’s Permit

	12. 		California
State Board of Equalization - Monrovia Seller’s Permit

	13. 		California
State Board of Equalization - Grand Terrace Seller’s Permit

	14. 		California
State Board of Equalization - Palm Desert Seller’s Permit

	

Asset Purchase Agreement Schedules 

Page 3 of 5 

Schedule 3.12 (continued)

PERMITS

Business Licenses

	1. 		City
of Los Angeles - 1999 Van Nuys Annual Tax Renewal Form

	2. 		City
of Los Angeles - 1999 Van Nuys Fire Permit, 558977-35

	3. 		City
of Los Angeles - 2000 Van Nuys Security Alarm Permit

	4. 		City
of Los Angeles - 1999 Canoga Park Fire Permit, 559111-97

	5. 		City
of Los Angeles - 2000 Canoga Park Security Alarm Permit

	6. 		City
of Los Angeles - Canoga Park Business Tax Certificate

	7. 		City
of Los Angeles - 1999 Canoga Park Annual Tax Renewal Form

	8. 		City
of Palm Springs - 2000 Business License

	9. 		City
of Palm Springs - Palm Springs Sign Permit, #1082

	10. 		City
of Escondido - Business License, #082861

	11. 		City
of Escondido - Security Alarm Permit

	12. 		City
of El Cajon - 2000 Business License, #81696

	13. 		City
of El Cajon - Security Alarm Permit

	14. 		City
of Cerritos - Business License, #014453

	15. 		City
of Stanton - Notice of Business License Due, #1866

	16. 		City
of Buena Park - Annual Business Tax

	17. 		City
of Fountain Valley - Business License

	18. 		City
of Buena Park - Annual Business Tax

	19. 		City
of Fountain Valley - Business License, #66443

	20. 		City
of Covina - 2000 Monrovia Business License

	

Asset Purchase Agreement Schedules 

Page 4 of 5 

Schedule 3.12 (continued)

PERMITS

Business Licenses

	21. 		City
of Monrovia - 2000 Business License, #BA019870

	22. 		City
of Alhambra - 2000 Monrovia Business Tax #714721

	23. 		City
of La Mesa - 2000 San Diego Business License, #001322

	24. 		City
of San Diego - Business Tax, #93003435

	25. 		City
of Ontario - 2000 Business License

	26. 		City
of Rancho Cucamonga - 2000 Business Certificate

	27. 		City
of Riverside - 1998 Business Tax

	28. 		City
of Grand Terrace - 2000 Business Tax

	29. 		City
of Banning - 2000 Grand Terrace Business Tax

	30. 		City
of Riverside - 2000 Grand Terrace Business Tax

	31. 		City
of Phoenix - 2000 Privilege License, #86028085

	32. 		State
of Arizona - Phoenix Tax License

	33. 		City
of Tucson - 2000 Annual Sign Permit Invoice

	34. 		City
of Tucson - 2000 Occupational Business License

	35. 		City
of Scottsdale - 2000 Privilege Tax License, #109891

	36. 		City
of Cathedral City - 1999 Business License, #003187

	37. 		City
of Palm Desert - 2000 Business License

	38. 		Clark
County - Application for Renewal of Gross Revenue License

	39. 		City
of Thousand Oaks - 2000 Newbury Park Business Tax, #03364

	40. 		City
of Anaheim - 1999 Business Tax Certificate

	

Asset Purchase Agreement Schedules 

Page 5 of 5 

Schedule 3.12 (continued)

PERMITS

Business Licenses

	42. 		City
of Phoenix - 2000 Deer Park Privilege License #94002849

	43. 		Arizona
Dept. of Revenue City of Phoenix - Privilege Tax License, #07-332701

	44. 		City
of Las Vegas, State of Nevada - 2000 Las Vegas Pesticide Certificate of Registration

	45. 		City
of Las Vegas, Clark County - Certificate of Occupancy #001816

	46. 		Anaheim,
California Dept. of Motor Vehicles - Anaheim Motor Carrier Permit , 0001927

	

Asset Purchase Agreement Schedules 

Schedule 3.14

TAXES

None 

	

Asset Purchase Agreement Schedules 

Schedule 3.15

PROCEEDINGS

Pool Water Products, et al v. Olin Corporation, et al.

(SA CV 92-563AHS) 

OPEN WORKERS’ COMPENSATION CLAIMS 

Blakely, Gregory
Delazzer, David
DePalma, Isadore
Lavioletta,
Troy
Schoeffling, Thomas
Scott, David E.
Zander, Ward 

NOTICE OF CRIMINAL COMPLAINT FILING 

Letter from the Office of the City Attorney, Los Angeles, California,
dated June 6, 2000, charging Superior Pool Products, Inc. with a violation of Vehicle
Code Section 34506(b), a misdemeanor, arising out of an incident on June 9, 1999 relating
to the transportation of hazardous materials. 

	

Asset Purchase Agreement Schedules 

Schedule 3.16 (a)

PENSION/BENEFIT PLANS

Seller Pension Plans

Olin Contributing Employee Ownership Plan
Arch Employees Pension Plan
Arch
Supplementary and Deferral Benefit Pension Plan 

Seller Benefit Plans

Medical Benefits - Cigna HMO/PPO
Arch Employees Dental Plan - Delta
Dental
Arch Life Insurance Plan - Metropolitan Life Insurance
Arch Accidental Death
and Dismemberment Plan - The Hartford
Arch Disability Plans (Short Term and Long Term
Disability) - Liberty Mutual
Group Universal Life Insurance Plan - Metropolitan
METPAY
(Group Homeowners and Automobile Insurance) - Metropolitan
Employee Assistance Plan -
R.T. Dorris & Associates
Arch Flexible Spending Account - The TPA
Key Executive Life
Insurance Plans - Pacific Life (W. Lynch and Associates)
Tuition Aid Program
SPPI
Severance Plan
SPPI Vacation Policy
Arch Travel Accident Plan
Arch Workers
Compensation Plan
Arch Chemicals, Inc. Employee Deferral Plan
Arch Chemicals, Inc.
Long Term Incentive Plan
SPPI Bonus Programs 

	

Asset Purchase Agreement Schedules 

Schedule 3.16 (b)

BENEFITS PAID ON SALE OF BUSINESS

The following bonuses are to be paid as a result of the sale of the
Superior Pool Products Business if certain conditions are met: 

	Employee Name	  	Bonus Amount	  
	David Chess	  	$100,000 + % of Final Net Sale Price	  
	Randy Williams	  	$50,000	  
	Bob Mulholland	  	$45,000	  
	Larry Lamers	  	$45,000	  
	Barbara Belyea	  	$30,000	  

	

These bonuses are separate from the Superior’s 2000 bonus plan. 

	

Asset Purchase Agreement Schedules 

Schedule 3.16 (g)

SHORT TERM DISABLED

Timothy O’Connell
Shelly Zeck
Diane Saunders 

	

Asset Purchase Agreement Schedules 

Schedule 3.17

ABSENCE OF CHANGES OR EVENTS

None 

	

Asset Purchase Agreement Schedules 

Schedule 3.18

COMPLIANCE WITH APPLICABLE LAWS

1. August 11, 1999 Citation and Notification of Penalty issued by the
State of California Division of Occupational Safety and Health 

Inspection Site: 1200 Lawrence Drive, Newbury Park, CA 91320 

Violation: Employer did not include in their injury and illness
prevention program written documentation and training on employee exposure to vehicle
traffic in the parking lot. 

Certification signed by David Chess, President, Superior Pool Products,
Inc., dated August 16, 1999 that all unsafe conditions listed in the Division’s citation,
dated August 11, 1999 have been corrected. Additional fine of $110.00 paid to CAL/OSHA. 

2. NOTICE OF CRIMINAL COMPLAINT FILING 

Letter from the Office of the City Attorney, Los Angeles, California,
dated June 6, 2000, charging Superior Pool Products, Inc. with a violation of Vehicle
Code Section 34506(b), a misdemeanor, arising out of an incident on June 9, 1999 relating
to the transportation of hazardous materials. 

	

Asset Purchase Agreement Schedules 

Schedule 3.19

EMPLOYEE AND LABOR MATTERS

1. Nadine West v. Superior Pool Products, Inc. (DFHE# E-9798-K-1326-00f) 

Letter dated May 7, 1998 from the California Department of Fair
Employment and Housing enclosing a copy of the complaint in which plaintiff alleged that
her position was eliminated while she was on medical leave in violation of the California
Family Rights Act. 

Case settled June 10, 1998. 

2. Laura A. Dell Amico v. Superior Pool Products, Inc., (Case No.
13-20332-001) 

Suit in which plaintiff alleged she did not receive overtime wages earned
from January 4, 1996 to September 1, 1997 was filed with the California Labor
Commissioner of the State of California, dated June 16, 1999, and served on Superior Pool
Products, Inc. 

The Commissioner awarded plaintiff wages and interest in the amount of
$1,992.25. A check was issued in the same amount and mailed to plaintiff on July 2, 1999. 

3. Notice of Claim and Conference, dated June 2, 2000 from the Labor
Commissioner, State of California, Department of Industrial Relations. A former employee,
Daniel Ingraham alleges non payment of six days of accrued vacation pay in the amount of
$146.17 as well as additional wages accrued pursuant to Labor Code Section 203 as a
penalty, at the rate of $146.17 per day until paid, but not to exceed thirty days. 

	

Asset Purchase Agreement Schedules 

Schedule 3.20

TRANSACTIONS WITH AFFILIATES

Services Provided by Arch Chemicals, Inc.

HUMAN RELATIONS/PAYROLL

	- 		The
payroll and human resource management functions are processed through Arch’s contract
with Olin using Peoplesoft. It is administered locally. 

	

RISK MANAGEMENT

     All insurance coverage is under Arch’s policies

TREASURY FUNCTION

	- 		Bank
accounts and cash management are managed by the Arch Treasury department. 

	

MEDICAL RECORDS

	- 		All
medical records are maintained at Arch’s Medical department. 

	

MIS - E-MAIL/MICROSOFT OFFICE/TELECOMMUNICATIONS

	- 		The
local e-mail system is currently linked through Arch’s e-mail exchange. The Microsoft
Office software 2000 program is licensed to Arch. Long distance telephone service is
supplied through Arch/ATT contract. 

	

LEGAL

	- 		Arch
provides legal support. 

	

Product Purchased from Arch

The following was the sales value of the products purchased
from Arch during 1999:

HTH Brand Products $61,006 

	

Asset Purchase Agreement Schedules 

Schedule 3.21

TOP TEN SUPPLIERS

	SUPPLIER
	 	PURCHASES
($000)

	PAC FAC, INC. WEST	  	18,384	  
	HAYWARD POOL PRODUCTS	  	7,256	  
	AQUA CLEAR INDUSTRIES	  	6,571	  
	WATERPIC TECHNOLOGIES	  	4,922	  
	HASA, INC	  	4,570	  
	STA-RITE INDUSTRIES	  	2,571	  
	RAYPAK INC	  	2,022	  
	UNICEL - MEISSNER	  	1,914	  
	POLARIS POOL SYSTEMS	  	1,529	  
	A.O. SMITH CORP	  	1,134	  

	

Asset Purchase Agreement Schedules 

Schedule 3.23

ABSENCE OF UNDISCLOSED LIABILITIES

None 

	

Asset Purchase Agreement Schedules 

Schedule 3.24

OFFICERS AND DIRECTORS

OFFICERS

James A. Rushton, Chairman of the Board and Chief Executive Officer
David
A. Chess, President
Sarah A. O’Connor, Vice President and Assistant Secretary
Joseph
P. Lacerenza, Secretary
W. Paul Bush, Treasurer
Phyllis K. Hartford, Assistant
Treasurer
Randy Williams, Assistant Treasurer
Carl G. Seefried, Jr., Assistant
Secretary 

BOARD OF DIRECTORS

James A. Rushton, Director
David A. Chess, Director
Louis S.
Massimo, Director 

	

Asset Purchase Agreement Schedules 

Schedule 3.26

PRODUCT LIABILITY

None 

	

Asset Purchase Agreement Schedules 

Page 1 of 2

Schedule 3.27 

NAMES AND LOCATIONS

- C A L I F O R N I A -

CORPORATE OFFICE
4900 E. Landon Drive
Anaheim, CA 92807
(714)
693-8035 
(714) 693-8048 Fax 
SYEA 30-673306-0012-OHB 

#01 WAREHOUSE
4900 E Landon Dr Dept W
Anaheim, CA 92807 
(714)
693-8035 
(714) 693-8720 Fax 
SYEA 30-673306-0012-OHB 
 

#50 VAN NUYS
14768 Raymer Street
Van Nuys, CA 91406 
(818)
782-2721
(818) 782-4808 Fax
SYAC 30-673306-0001-OHB 

#51 CANOGA PARK 
8039 Deering Avenue 
Canoga Park, CA 91304 
(818)
340-7624 
(818) 340-0119 Fax 
SYAC 30-673306-002-OHB 

#52 CERRITOS 
16708 S. Parkside Ave 
Cerritos, CA 90703 
(714)
523-8312 
(562) 404-9909 
(562) 921-5030 Fax 
SYAD 30-673306-0003-OHB 

#53 MONROVIA 
509 Fig Street 
Monrovia, CA 91016 
(626) 358-4426
(626)
359-0396 Fax
SYAP 30-673306-0004-OHB 

#54 SAN DIEGO 
5805 Fairmount Extension 
San Diego, CA 92120  

#54 SAN DIEGO -Current
4737 Old Cliffs Road 
San Diego, CA 92120

(619) 283-2066 
(619) 282-8067 Fax 
SYFH 30-673306-0013-OHB 

#55 PALM SPRINGS 
507 Sunny Dunes Road 
Palm Springs, CA 92264 
(760)
325-6555 
(760) 323-1798 Fax 
SYEHC303-673306-0005-OHB 

#56 ESCONDIDO 
1916 Commercial Street 
Escondido, CA 92029 
(760)
489-0255 
(760) 489-1608 Fax 
SYAP 30-673306-0006-OHB 

#57 EL CAJON 
349 S. Marshall Avenue 
El Cajon, CA 92020 
(619)
447-2466 
(619) 447-2381 Fax 
SYFH 30-673306-0007-OHB 

#58 ONTARIO
1410 S. Cucamonga Avenue 
Ontario, CA 91761 
(909)
923-3600 
(909) 923-3604 Fax 
SYEHA-673306-0008-OHB 

#59 GRAND TERRACE 
22060 Commerce Way 
Grand Terrace, CA 92313 
(909)
825-3500 
(909) 825-3888 Fax 
SY0HB 306773306-00015-EH 

#63 CATHEDRAL CITY 
68370 Commercial Road 
Cathedral City, CA 92234

(760) 321-6005 
(760) 321-2294 Fax 
SY0HB 306773306-00016-EH 

#64 PALM DESERT 
75100 B Mayfair Drive 
Palm Desert, CA 92211 
(760)
568-9661 
(760) 773-5975 Fax 
SYEHC30-673306-0009-OHB 

#66 NEWBURY PARK 
1200 Lawrence Dr, #400 
Newbury Park, CA 91320

(805) 498-9945 
(805) 499-3574 Fax 
SYAR 30-673306-0011-OHB 

#67 ANAHEIM 
4900 E Landon Dr, Dept B 
Anaheim, CA 92807 
(714)
693-3600 
(714) 693-8720 Fax 
SYEA 30-673306-0012-OHB 

#69 HARBOR CITY 
24040 S. Frampton Ave. 
Harbor City, CA 90710 
SYEA
30-6773306-0014-OHB 

- N E V A D A - 

#65 LAS VEGAS 
6595 S. Schuster Street 
Las Vegas, NV 89118 
(702)
914-7444 
(702) 914-1969 Fax 
56 3062272 

- A R I Z O N A - 

#60 PHOENIX 
1530 E. Bethany Home Rd 
Phoenix, AZ 85014 
(602)
263-1130 
(602) 265-6868 Fax 
07-332701-C 

#61 TUCSON 
30 E. Alturas Road 
Tucson, AZ 85705 

	

Asset Purchase Agreement Schedules 

Page 2 of 2

Schedule 3.27 (continued) 

NAMES AND LOCATIONS

- A R I Z O N A (cont)

#61 TUCSON - Current
2801 N. Flowing Wells Rd.
Tucson, AZ 85705
(520)
884-9010
(520) 624-3411
07-332701-C 

#62 SCOTTSDALE
7800 E. Pierce Street
Scottsdale, AZ 85257
(602)
994-8640
(602) 994-0097 Fax
07-332701-C 

#68 DEER VALLEY
18201 N. 25th Avenue, Ste. A
Phoenix, AZ 85023
(602)
789-8200
(602) 789-8180 Fax
07-332701-C 

	

Asset Purchase Agreement Schedules 

Schedule 5.01

COVENANTS OF SELLER AND PARENT RELATING TO CONDUCT OF
BUSINESS

None 

	

Asset Purchase Agreement Schedules 

Schedule 5.10

BENEFIT PLAN MATTERS

Purchaser Pension Benefit Plans

SCP Savings and Retirement Fund
SCP Profit Sharing
Employee Stock
Purchase Plan 

Purchaser Benefit Plans

Medical Benefits
Dental Plans
Life Insurance/AD&DPlan
Voluntary
Term Life Plan
Short Term Disability (Plus State Disability in Certain States)
Long
Term Disability
Tuition Aid Program
Vacation Plan
Workers Compensation Plan
Personal
Time/Jury Duty/Sick Pay/Military Leave Plan
Purchaser Holiday Schedule
Relocation
Plan
Purchaser Incentive Plan 

Other Benefits

Family Medical Leave Act
COBRA
Automobile Allowances/Company
Automobile 

 

	

Asset Purchase Agreement Schedules 

Schedule 5.21

ENVIRONMENT STUDY

STUDIED PROPERTIES

Leased property located at 68370 Commercial Road, Cathedral City, CA<PAGE>   1

                                                                     EXHIBIT 4.1

NUMBER                                                                    SHARES

                                 [AVISTAR LOGO]

INCORPORATED UNDER THE LAWS                     THIS CERTIFICATE IS TRANSFERABLE
 OF THE STATE OF DELAWARE                         IN CANTON, MA OR NEW YORK, NY

                                            SEE REVERSE FOR CERTAIN DEFINITIONS
                                                      CUSIP 05379X 20 8

This Certifies that:

is the record holder of

              FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK,
                              $.001 PAR VALUE, OF

                       AVISTAR COMMUNICATIONS CORPORATION

transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this certificate properly
endorsed. This certificate is not valid until countersigned by the Transfer
Agent and registered by the Registrar.

     WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.

     Dated:

               [AVISTAR COMMUNICATIONS CORPORATION CORPORATE SEAL
                           MARCH 23, 2000, DELAWARE]

/s/ [Signature Illegible]                              /s/ G. J. BURNETT

CHIEF FINANCIAL OFFICER AND SECRETARY                  PRESIDENT

COUNTERSIGNED AND REGISTERED:

     EQUISERVE TRUST COMPANY, N.A.

     TRANSFER AGENT AND REGISTRAR

BY  /s/ [Signature Illegible]

    AUTHORIZED SIGNATURE

<PAGE>   2
        The Corporation shall furnish without charge to each stockholder who so
requests a statement of the powers, designations, preferences and relative,
participating, optional, or other special rights of each class of stock of the
Corporation or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Such requests shall be made to
the Corporation's Secretary at the principal office of the Corporation.

        The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
        <S>                                            <C>
        TEN COM   --  as tenants in common              UNIF GIFT MIN ACT -- ...................Custodian...............
        TEN ENT   --  as tenants by the entireties                                 (Cust)                    (Minor)
        JT TEN    --  as joint tenants with right of                         under Uniform Gifts to Minors
                      survivorship and not as tenants                        Act........................................
                      in common                                                                 (State)
                                                        UNIF TRF MIN ACT  -- .............Custodian (until age.........)
                                                                                 (Cust)
                                                                             ....................under Uniform Transfers
                                                                                    (Minor)
                                                                             to Minors Act..............................
                                                                                                   (State)
</TABLE>

    Additional abbreviations may also be used though not in the above list.

        For Value Received,___________________________hereby sell(s), assign(s)
and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
   IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------------

--------------------------------------

_______________________________________________________________________________
 (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

_______________________________________________________________________________

_______________________________________________________________________________

________________________________________________________________________ Shares
of the common stock represented by the within certificate, and do hereby
irrevocably constitute and appoint

______________________________________________________________________ Attorney
to transfer the said stock on the books of the within named Corporation
with full power of substitution in the premises.

Dated________________________

                                X_______________________________________________

                                X_______________________________________________
                                 THE SIGNATURE TO THIS ASSIGNMENT MUST
                                 CORRESPOND WITH THE NAME AS WRITTEN UPON THE
                       NOTICE:   FACE OF THE CERTIFICATE IN EVERY PARTICULAR,
                                 WITHOUT ALTERATION OR ENLARGEMENT OR ANY
                                 CHANGE WHATEVER.

Signature(s) Guaranteed

By_____________________________________
THE SIGNATURE(S) MUST BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND
LOAN ASSOCIATIONS AND CREDIT UNIONS
WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.

                           AMERICAN BANK NOTE COMPANY
                             55TH AND SANSOM STREET
                             PHILADELPHIA, PA 19139
                                 (215) 764-8600
                         SALES: M. SANDHU: 415-543-8585
                       /HOME 14/LIVE JOBS/A/AVISTAR 66908

              PRODUCTION COORDINATOR: MARY TARTAGLAI 215-764-8621
                             PROOF OF JUNE 27, 2000
                       AVISTAR COMMUNICATIONS CORPORATION
                                   H 66908 BK
                                  OPERATOR: JW
                                      NEW

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