Document:

exhibit10_1.htm

    STOCK
      PURCHASE AGREEMENT

     

    by
      and among

     

    DXP
      ENTERPRISES, INC.,

     

    PRECISION
      INDUSTRIES, INC.

     

    and

     

    THE
      SELLING STOCKHOLDERS

     

    

     

    ______________________

     

    

     

    Dated
      as of August 19, 2007

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    STOCK
      PURCHASE AGREEMENT

     

    
      This
        STOCK PURCHASE AGREEMENT, dated August 19, 2007 (the
“Agreement”), by and among DXP Enterprises,
        Inc., a
        corporation existing under the laws of Texas
        (“Purchaser”), Precision Industries, Inc., a Nebraska
        corporation, (the “Company”), and the stockholders of
        the Company listed on the signature pages hereof under the heading “Selling
        Stockholders” (collectively, the “Selling
        Stockholders”).

      

    

    
      W
        I T N E
        S S E T H:

       

    

    
      WHEREAS,
        the Selling Stockholders own an aggregate of (i) 472 shares of Common Stock,
        Class A, $100.00 par value per share (the “Class A
        Shares”), of the Company and (ii) 160 shares of Common Stock, Class
        B, $100.00 par value per share (the “Class B Shares”;
        and collectively with the Class A Shares, the “Shares”),
        which collectively constitute all of the issued and outstanding shares of
        capital stock of the Company;

      WHEREAS,
        the Selling Stockholders desire to sell to Purchaser, and Purchaser desires
        to
        purchase from the Selling Stockholders, the Shares for the purchase price
        and
        upon the terms and conditions hereinafter set forth; and

      WHEREAS,
        certain terms used in this Agreement are defined in
Section 1.1;

      NOW,
        THEREFORE, in consideration of the premises and the mutual covenants
        and agreements hereinafter contained, the parties hereby agree as
        follows:

      

      DEFINITIONS

      Certain
        Definitions.  For purposes of this Agreement, the following terms
        shall have the meanings specified in this Section 1.1:

    

    
      “Affiliate”
        means, with respect to any Person, any other Person that, directly or indirectly
        through one or more intermediaries, controls, or is controlled by, or is
        under
        common control with, such Person, and the term “control”
(including the terms “controlled by” and
“under common
        control with”) means the possession,
        directly or indirectly, of the power to direct or cause the direction of
        the
        management and policies of such Person, whether through ownership of voting
        securities, by contract or otherwise.

      “Affiliated
        Group” means any affiliated group within the meaning of Section
        1504 of the Code or any comparable or analogous group under applicable
        Law.

    

    
      “Business”
        means the business and operations of the Company and its Subsidiaries as
        held by
        Purchaser separate or separable from the other business and operations of
        the
        Purchaser and its subsidiaries (other than the Company and its Subsidiaries)
        from and after the Closing in accordance with Schedule 2.8
        hereof.

    

    
      “Business
        Day” means any day of the year on which national banking
        institutions in Texas or Nebraska are open to the public for conducting business
        and are not required or authorized to close.

      “Closing
        Bonuses” means the bonuses and payments in an aggregate amount of
        approximately $3,500,000 processed for payment through the payroll of the
        Company on the Closing Date (and promptly paid in accordance with such payroll
        process) to current officers and employees of the Company with such bonuses
        and
        payments reducing the Purchase Price as contemplated under Section 2.2
        hereof as a result of the transactions contemplated hereby.

      “Closing
        Working Capital” means (A) the consolidated Included Current Assets
        of the Company and the Subsidiaries, less (B) the consolidated Included
        Current Liabilities of the Company and the Subsidiaries, determined as of
        the
        open of business on the Closing Date.

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

      “Company
        Transaction Expenses” means, except as otherwise expressly set
        forth in this Agreement, the aggregate amount of all out-of-pocket fees and
        expenses, incurred by or on behalf of, or paid or to be paid by, the Company
        or
        any of the Subsidiaries in connection with the process of selling the Company
        (including in respect of any previous efforts (not pursuant to this Agreement)
        to sell the Company or all or substantially all of its assets) or otherwise
        relating to the negotiation, preparation or execution of this Agreement or
        any
        documents or agreements contemplated hereby or the performance or consummation
        of the transactions contemplated hereby, including (A) any fees and expenses
        associated with obtaining necessary or appropriate waivers, consents or
        approvals of any Governmental Body or third parties on behalf of the Company
        or
        any of the Subsidiaries, (B) any fees or expenses associated with obtaining
        the
        release and termination of any Liens; (C) all brokers’ or finders’ fees; (D)
        fees and expenses of counsel, advisors, consultants, investment bankers,
        accountants, and auditors and experts, and (E) all sale, “stay-around,”
retention, or similar bonuses or payments to current or former directors,
        officers, employees and consultants paid as a result of or in connection
        with
        the transactions contemplated hereby, but shall not include the amount of
        Closing Bonuses (that are paid in accordance with the requirements of such
        defined term).

      “Contract”
        means any contract, agreement, indenture, note, bond, mortgage, loan,
        instrument, lease, license, commitment or other arrangement, understanding,
        undertaking, commitment or obligation.

    

    
      “Controlling
        Owner” means Dennis P. Circo.

      “DXP
        Business” means the business and operations of Purchaser and its
        subsidiaries, as distinct and separate from the Company and its Subsidiaries
        (and as held by Purchaser separate or separable therefrom from and after
        the
        Closing in accordance with Schedule 2.8 hereof).

      “EBITDA”
        means, for any applicable period, the net income (or loss) of the Business
        excluding (a) extraordinary items and/or non-operating items and/or non-cash
        items to the extent increasing net-income, (b) provisions for taxes based
        on
        income of the Business, (c) total interest expense of the Business with respect
        to indebtedness held by or for the benefit of the Business, (d) to the extent
        that net income of the Business has been reduced thereby, depreciation expense,
        and (e) to the extent that net income for the Business has been reduced thereby,
        amortization expense, all as determined using the same accounting methods,
        practices, principles, policies and procedures, with consistent classifications,
        judgments and valuation and estimation methodologies that were used in the
        preparation of the Company’s audited Financial Statements for the most recent
        fiscal year end.

      “Environmental
        Costs and Liabilities” means, with respect to any Person, all
        liabilities, obligations, responsibilities, Remedial Actions, losses, damages
        (including punitive damages and consequential damages) costs and expenses
        (including all reasonable fees, disbursements and expenses of counsel, experts
        and consultants and costs of investigation and feasibility studies), fines,
        penalties, sanctions and interest incurred as a result of any claim or demand
        by
        any other Person or in response to any violation of Environmental Law, whether
        accrued or contingent, whether based in contract, tort, implied or express
        warranty, strict liability, criminal or civil statute or otherwise, to the
        extent based upon, related to, or arising under or pursuant to any Environmental
        Law, Environmental Permit, Order or agreement with any Governmental Body
        or
        other Person, which relates to any environmental, health or safety condition,
        violation of Environmental Law or a Release or threatened Release of Hazardous
        Materials.

      “Environmental
        Law” means any Law in any way relating to the protection of human
        health and safety, the environment or natural resources including the
        Comprehensive Environmental Response, Compensation and Liability Act (42
        U.S.C.
§ 9601 etseq.), the Hazardous Materials Transportation Act
        (49 U.S.C. App. § 1801 etseq.), the Resource
        Conservation and Recovery Act (42 U.S.C. § 6901 etseq.), the
        Clean Water Act (33 U.S.C. § 1251 etseq.), the Clean Air Act
        (42 U.S.C. § 7401 etseq.) the Toxic Substances Control
        Act (15 U.S.C. § 2601 etseq.), the Federal Insecticide,
        Fungicide, and Rodenticide Act (7 U.S.C. § 136 etseq.), and
        the Occupational Safety and Health Act (29 U.S.C. § 651
etseq.), as each has been or may be amended and the regulations
        promulgated pursuant thereto.

      “Environmental
        Permit” means any Permit required by Environmental Laws for the
        operation of the Company and the Subsidiaries.

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

      “GAAP”
        means generally accepted accounting principles in the United States as of
        the
        date hereof.

      “Governmental
        Body” means any government or governmental or regulatory body
        thereof, or political subdivision thereof, whether federal, state, local
        or
        foreign, or any agency, instrumentality or authority thereof, or any court
        or
        arbitrator (public or private).

      “Hazardous
        Material” means any substance, material or waste that is regulated,
        classified, or otherwise characterized under or pursuant to any Environmental
        Law as “hazardous,” “toxic,”
“pollutant,”
“contaminant,”
        “radioactive,” or words of similar meaning or effect,
        including petroleum and its by-products, asbestos, polychlorinated biphenyls,
        radon, mold and urea formaldehyde insulation.

      “HSR
        Act” means the Hart-Scott-Rodino Antitrust Improvements Act of
        1976, as amended, and the rules and regulations promulgated
        thereunder.

      “Included
        Current Assets” means cash and cash
        equivalents, accounts receivable, other receivables, inventory, deposits
        and
        prepaid expenses, determined in accordance with GAAP applied using the same
        accounting methods, practices, principles, policies and procedures, with
        consistent classifications, judgments and valuation and estimation methodologies
        that were used in the preparation of the Company’s audited Financial Statements
        for the most recent fiscal year end as if such accounts were being prepared
        and
        audited as of a fiscal year end; provided, however, that such
        determination shall be subject to the exceptions and other qualifications
        as set
        forth on Schedule 2.7 hereto.

      “Included
        Current Liabilities” means accounts payable
        and accrued expenses, but excluding the current portion of long term
        Indebtedness, determined in accordance with GAAP applied using the same
        accounting methods, practices, principles, policies and procedures, with
        consistent classifications, judgments and valuation and estimation methodologies
        that were used in the preparation of the Company’s audited Financial Statements
        for the most
        recent fiscal year end as if such accounts were being prepared and audited
        as of
        a fiscal year end; provided, however, that (i) such determination
        shall be subject to the exceptions and other qualifications as set forth
        on
Schedule 2.7 hereto and (ii) such Liabilities shall exclude the amount of
        Closing Bonuses (that are paid in accordance with the requirements of such
        defined term).

    

    
      “Indebtedness”
        of any Person means, without duplication, (i) the principal, accreted
        value, accrued and unpaid interest, prepayment and redemption premiums or
        penalties (if any), unpaid fees or expenses and other monetary obligations
        in
        respect of (A) indebtedness of such Person for money borrowed and
        (B) indebtedness evidenced by notes, debentures, bonds or other similar
        instruments for the payment of which such Person is responsible or liable;
        (ii) all obligations of such Person issued or assumed as the deferred
        purchase price of property, all conditional sale obligations of such Person
        and
        all obligations of such Person under any title retention agreement;
        (iii) all obligations of such Person under leases required to be
        capitalized in accordance with GAAP; (iv) all obligations of such Person
        for the reimbursement of any obligor on any letter of credit, banker’s
        acceptance or similar credit transaction; (v) all obligations of such Person
        under interest rate or currency swap transactions (valued at the termination
        value thereof); (vi) the liquidation value, accrued and unpaid dividends,
        prepayment or redemption premiums and penalties (if any), unpaid fees or
        expenses and other monetary obligations in respect of any redeemable preferred
        stock of such Person; (vii) all obligations of the type referred to in
        clauses (i) through (vi) of any Persons for the payment of which such
        Person is responsible or liable, directly or indirectly, as obligor, guarantor,
        surety or otherwise, including guarantees of such obligations; and
        (viii) all obligations of the type referred to in clauses (i) through (vii)
        of other Persons secured by (or for which the holder of such obligations
        has an
        existing right, contingent or otherwise, to be secured by) any Lien on any
        property or asset of such Person (whether or not such obligation is assumed
        by
        such Person).  The term “Indebtedness” does not include trade accounts
        payable and other accrued current liabilities arising in the Ordinary Course
        of
        Business (other than the current liability portion of any indebtedness for
        borrowed money).

      “Indemnity
        Escrow Account” means an account, set up pursuant to the Escrow
        Agreement, where the Indemnity Escrow Amount is held for disbursement by
        the
        Escrow Agent.

      “Intellectual
        Property” means any rights available (including with respect to
        Technology) under patent, copyright, trade secret or trademark law or any
        other
        similar statutory provision or common law doctrine in the United States or
        anywhere else in the Territory, and also domain names.

      “IRS”
        means the Internal Revenue Service.

      “Knowledge”
        means, with respect to any Person that is not an individual, the knowledge
        of
        such Person’s chief executive officer, president, chief operating officer and
        chief financial officer or, in the case of an individual, knowledge after
        due
        inquiry of the Company’s and the Subsidiaries’ books and records.

      “Law”
        means any foreign, federal, state or local law (including common law), statute,
        code, ordinance, rule, regulation, Order or other requirement.

      “Legal
        Proceeding” means any judicial, administrative or arbitral actions,
        suits, mediation, investigation, inquiry, proceedings or claims (including
        counterclaims) by or before a Governmental Body.

      “Liability”
        means any debt, loss, damage, adverse claim, fines, penalties, liability
        or
        obligation (whether direct or indirect, absolute or contingent, accrued or
        unaccrued, matured or unmatured, determined or determinable, liquidated or
        unliquidated, or due or to become due, and whether in contract, tort, strict
        liability or otherwise), and including all costs and expenses relating thereto
        including all fees, disbursements and expenses of legal counsel, experts,
        engineers and consultants and costs of investigation.

      “Lien”
        means any lien, pledge, mortgage, deed of trust, security interest, claim,
        lease, charge, option, right of first refusal, easement, servitude, proxy,
        voting trust or agreement, transfer restriction under any shareholder or
        similar
        agreement, encumbrance or any other restriction or limitation
        whatsoever.

      “Material
        Adverse Effect” means a material adverse effect on (i) the
        historical, near-term or long-term projected business, assets, properties,
        results of operations, condition (financial or otherwise) or prospects of
        the
        Company or the Subsidiaries, (ii) the financial, banking, capital markets
        or
        general economic conditions, (iii) regulatory or political conditions, or
        securities markets in the United States or worldwide or any outbreak of
        hostilities, terrorist activities or war, or any material worsening of any
        such
        hostilities, activities or war underway as of the date hereof or (iv) the
        ability of the Selling Stockholders to consummate the transactions contemplated
        by this Agreement or perform their obligations under this Agreement or the
        Selling Stockholder Documents; provided, in each case, that any such effect
        has
        a non-annualized negative impact on the EBITDA of the Company and its
        Subsidiaries in an amount of at least $750,000.

      “Order”
        means any order, injunction, judgment, doctrine, decree, ruling, writ,
        assessment or arbitration award of a Governmental Body.

    

    
      “Ordinary
        Course of Business” means the ordinary and usual course
        of  operations of the business of the Company and the Subsidiaries
        through the date hereof consistent with past practice (including, without
        limitation, operations as conducted and reflected in the Company’s audited
        Financial Statements for the most recent fiscal year).

      “Permits”
        means any approvals, authorizations, consents, licenses, permits or certificates
        of a Governmental Body.

      “Permitted
        Exceptions” means (i) all defects, exceptions, restrictions,
        easements, rights of way and encumbrances disclosed in policies of title
        insurance which have been delivered or made available to Purchaser; (ii)
        statutory liens for current Taxes, assessments or other governmental charges
        not
        yet delinquent or the amount or validity of which is being contested in good
        faith by appropriate proceedings, provided an appropriate reserve has been
        established herefore in the Financial Statements in accordance with GAAP;
        (iii)
        mechanics’, carriers’, workers’, and repairers’ Liens arising or incurred in the
        Ordinary Course of Business that are not material to the business, operations
        and financial condition of the Company Property so encumbered and that are
        not
        resulting from a breach, default or violation by the Company or any of the
        Subsidiaries of any Contract or Law; and (iv) zoning, entitlement and other
        land use and environmental regulations by any Governmental Body, provided
        that such regulations have not been violated.

      “Person”
        means any individual, corporation, limited liability company, partnership,
        firm,
        joint venture, association, joint-stock company, trust, unincorporated
        organization, Governmental Body or other entity.

      “Pre-Closing
        Covenant” means a covenant or other agreement set forth in this
        Agreement that by its nature is required to be performed by or prior to the
        Closing.

      “Precision
        de Mexico” means Precision Industries de Mexico, S. de R.L. de
        C.V.

      “Program
        Synergies” means the dollar amount of actual and realized
        incentives, commissions and rebates based upon, attributable to, resulting
        and
        accrued from Alliance Marketing Commissions, inventory purchasing incentive
        and
        other rebate programs provided by suppliers of inventory purchases of the
        Company and its Subsidiaries (whether arising from programs that are new
        to
        Purchaser due to the purchase of the Company and its Subsidiaries hereunder
        or
        from existing programs in which the DXP Business currently participates (which
        are evidenced in documentation provided by Purchaser to the Controlling Owner),
        except that only the incremental Alliance Marketing Commissions, incentive,
        and
        rebate revenue provided thereby shall be counted for existing programs in
        which
        the DXP Business participates) that become available and accrue to the benefit
        of the DXP Business from and after the Closing.

      “Release”
        means any release, spill, emission, leaking, pumping, poring, injection,
        deposit, dumping, emptying, disposal, discharge, dispersal, leaching or
        migration into the indoor or outdoor environment, or into or out of any
        property.

      “Remedial
        Action” means all actions including any capital expenditures
        undertaken to (i) clean up, remove, treat or in any other way address any
        Hazardous Material; (ii) prevent the Release or threat of Release, or minimize
        the further Release of any Hazardous Material so it does not migrate or endanger
        or threaten to endanger public health or welfare or the indoor or outdoor
        environment; (iii) perform pre-remedial studies and investigations or
        post-remedial monitoring and care; or (iv) to correct a condition of
        noncompliance with Environmental Laws.

      “Securities
        Act” means the Securities Act of 1933, as amended.

      “Software”
        means any and all computer programs, whether in source code or object code;
        databases and compilations, whether machine readable or otherwise; descriptions,
        flow-charts and other work product used to design, plan, organize and develop
        any of the foregoing; and all documentation including user manuals and other
        training documentation related to any of the foregoing.

      “Subsidiary”
        means any Person of which (i) a majority of the outstanding share capital,
        voting securities or other equity interests are owned, directly or indirectly,
        by the Company or (ii) the Company is entitled, directly or indirectly, to
        appoint a majority of the board of directors, board of managers or comparable
        body of such Person.

      “Target
        Working Capital” means an amount equal to $41,940,112.

      “Taxes”
        means (i) all federal, state, local or foreign taxes, charges, fees, imposts,
        levies or other assessments, including all income, gross receipts, capital,
        sales, use, ad valorem, value added, transfer, franchise, profits, inventory,
        capital stock, license, withholding, payroll, employment, social security,
        unemployment, excise, severance, stamp, occupation, property and estimated
        taxes, customs duties, fees, assessments and charges of any kind whatsoever,
        (ii) all interest, penalties, fines, additions to tax or additional amounts
        imposed by any Taxing Authority in connection with any item described in
        clause
        (i) and (iii) any transferee liability in respect of any items described
        in
        clauses (i) or (ii) payable by reason of Contract, assumption, transferee
        liability, operation of Law, Treasury Regulation Section 1.1502-6(a) (or
        any
        predecessor or successor thereof of any analogous or similar provision under
        Law) or otherwise.

      “Taxing
        Authority” means the IRS an any other Governmental Body responsible
        for the administration of any Tax.

    

    
      “Tax
        Return” means any return, report or statement required to be filed
        with respect to any Tax (including any elections, declarations, schedules
        or
        attachments thereto, and any amendment thereof) including any information
        return, claim for refund, amended return or declaration of estimated Tax,
        and
        including, where permitted or required, combined, consolidated or unitary
        returns for any group of entities that includes the Company, any of the
        Subsidiaries, or any of their Affiliates.

      “Technology”
        means, collectively, designs, formulae, algorithms, procedures, methods,
        techniques, ideas, know-how, results of research and development, Software,
        tools, data, inventions, apparatus, creations, improvements, works of authorship
        and other similar materials, and all recordings, graphs, drawings, reports,
        analyses, and other writings, and any other embodiments of the above, in
        any
        form whether or not specifically listed herein, and all related technology,
        that
        are used, incorporated, or embodied in or displayed by any of the foregoing
        or
        used in the design, development, reproduction, sale, marketing, maintenance
        or
        modification of any of the foregoing.

      “Territory”
        means the territory comprised by the geographic locations (whether of
        metropolitan areas, counties, parishes or other relevant political subdivisions)
        of Canada, Mexico and the United States in which the Company and its
        Subsidiaries have conducted business and operations, including, without
        limitation, those locations into which the Company and its Subsidiaries have
        made contact with any actual or prospective customer or supplier or otherwise
        sought business arrangements or a relationship.

      “Trust”
        means the “Dennis P. Circo Irrevocable Trust No. 4”, which is a Selling
        Stockholder hereunder.

      “WARN”
        means the Worker Adjustment and Retraining Notification Act of 1988, as
        amended.

       

    

    1.1           Terms
      Defined Elsewhere in this Agreement.  For purposes of this
      Agreement, the following terms have meanings set forth in the sections
      indicated:

     

    
      	
              Term

            	
              Section

            
	
              Acquisition
                Transaction

            	
              6.6(a)

            
	
              Agreement

            	
              Recitals

            
	
              Allocation
                Statement

            	
              8.5(b)(iv)

            
	
              Antitrust
                Division

            	
              6.4(a)

            
	
              Antitrust
                Laws

            	
              6.4(b)

            
	
              Balance
                Sheet

            	
              4.7(a)

            
	
              Balance
                Sheet Date

            	
              4.7(a)

            
	
              Cap

            	
              8.4(c)

            
	
              Class
                A Shares

            	
              Recitals

            
	
              Class
                B Shares

            	
              Recitals

            
	
              Closing

            	
              2.4

            
	
              Closing
                Balance Sheet

            	
              2.7(b)

            
	
              Closing
                Date

            	
              2.4

            
	
              Closing
                Working Capital Statement

            	
              2.7(b)

            
	
              COBRA

            	
              4.15(p)

            
	
              Common
                Stock

            	
              4.4(a)

            
	
              Company

            	
              Recitals

            
	
              Company
                Documents

            	
              4.2

            
	
              Company
                Permits

            	
              4.18(b)

            
	
              Company
                Plans

            	
              4.15(a)

            
	
              Company
                Properties

            	
              4.11(b)

            
	
              Confidential
                Information

            	
              6.7(c)

            
	
              Confidentiality
                Agreement

            	
              6.1

            
	
              Covenant
                Basket

            	
              8.4(b)

            
	
              Distributable
                Assets

            	
              6.2(c)

            
	
              Employees

            	
              4.15(a)

            
	
              ERISA
                Affiliate

            	
              4.15(a)

            
	
              Escrow
                Agent

            	
              8.6

            
	
              Escrow
                Agreement

            	
              8.6

            
	
              Expenses

            	
              9.3

            
	
              Final
                Closing Working Capital

            	
              2.7(c)

            
	
              Financial
                Statements

            	
              4.7(a)

            
	
              Financing

            	
              5.7

            
	
              FIRPTA
                Affidavit

            	
              2.6(h)

            
	
              FTC

            	
              6.4(a)

            
	
              Government
                Contract

            	
              4.28

            
	
              Indemnity
                Escrow Amount

            	
              8.6

            
	
              Losses

            	
              8.2(a)

            
	
              Material
                Contracts

            	
              4.14(a)

            
	
              Multiemployer
                Plan

            	
              4.15(a)

            
	
              PBGC

            	
              4.15(i)

            
	
              Personal
                Property Leases

            	
              4.12(b)

            
	
              Purchase
                Price

            	
              2.2

            
	
              Purchaser

            	
              Recitals

            
	
              Purchaser
                Documents

            	
              5.2

            
	
              Purchaser’s
                Environmental Assessment

            	
              6.10(a)

            
	
              Purchaser
                Indemnified Parties

            	
              8.2(a)

            
	
              QSSS

            	
              4.10(v)

            
	
              Real
                Property Lease

            	
              4.11(b)

            
	
              Related
                Persons

            	
              4.23

            
	
              Rep
                Basket

            	
              8.4(a)

            
	
              Rep
                Deductible

            	
              8.4(a)

            
	
              Representatives

            	
              6.6(a)

            
	
              Restricted
                Business

            	
              6.7(a)

            
	
              Section
                338(h)(10) Election

            	
              8.5(b)(i)

            
	
              Selling
                Stockholders

            	
              Recitals

            
	
              Selling
                Stockholder Documents

            	
              3.2

            
	
              Selling
                Stockholder Indemnified Parties

            	
              8.2(b)

            
	
              Stockholder
                Representative

            	
              10.2(a)

            
	
              Straddle
                Period

            	
              8.5(d)

            
	
              Shares

            	
              Recitals

            
	
              Survival
                Period

            	
              8.1(a)

            
	
              Tax
                Claim

            	
              8.5(e)(i)

            
	
              Termination
                Date

            	
              9.1(a)

            
	
              Third
                Party Claim

            	
              8.3(b)

            
	
              Title
                IV Plans

            	
              4.15(a)

            
	
              Unresolved
                Claims

            	
              8.6

            

    

    

     

    1.2           Other
      Definitional and Interpretive Matters.  

     

    ·           Unless
      otherwise expressly provided, for purposes of this Agreement, the following
      rules of interpretation shall apply:

     

    
      Calculation
        of Time Period.  When calculating the period of time before which,
        within which or following which any act is to be done or step taken pursuant
        to
        this Agreement, the date that is the reference date in calculating such period
        shall be excluded.  If the last day of such period is a non-Business
        Day, the period in question shall end on the next succeeding Business
        Day.

      Dollars.  Any
        reference in this Agreement to $ shall mean U.S. dollars.

      Exhibits/Schedules.  The
        Exhibits and Schedules to this Agreement are hereby incorporated and made
        a part
        hereof and are an integral part of this Agreement.  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 be defined as set forth in this Agreement.

      Gender
        and Number.  Any reference in this Agreement to gender shall
        include all genders, and words imparting the singular number only shall include
        the plural and vice versa.

    

    
      Headings.  The
        provision of a Table of Contents, the division of this Agreement into Articles,
        Sections and other subdivisions and the insertion of headings are for
        convenience of reference only and shall not affect or be utilized in construing
        or interpreting this Agreement.  All references in this Agreement to
        any “Section” are to the corresponding Section of this Agreement unless
        otherwise specified.

      Herein.  The
        words such as “herein,” “hereinafter,” “hereof,” and
“hereunder” refer to this Agreement as a whole and not
        merely to a
        subdivision in which such words appear unless the context otherwise
        requires.

      Including.  The
        word “including” or any variation thereof means “including, without
        limitation” and shall not be construed to limit any general statement that
        it follows to the specific or similar items or matters immediately following
        it.

       

    

    ·           The
      parties hereto have participated jointly in the negotiation and drafting of
      this
      Agreement and, in the event an ambiguity or question of intent or interpretation
      arises, this Agreement shall be construed as jointly drafted by the parties
      hereto and no presumption or burden of proof shall arise favoring or disfavoring
      any party by virtue of the authorship of any provision of this
      Agreement.

     

    SALE
      AND PURCHASE OF SHARES, PURCHASE PRICE; CLOSING

     

    1.3           Sale
      and Purchase of Shares.  Upon the terms and subject to the
      conditions contained herein, on the Closing Date, each Selling Stockholder
      agrees to sell to Purchaser, free and clear of any and all Liens, and Purchaser
      agrees to purchase from each Selling Stockholder, the Shares owned by such
      Selling Stockholder set forth opposite such Selling Stockholder’s name on
Exhibit A hereto.

     

    1.4           Purchase
      Price.  The aggregate purchase price to be paid by Purchaser for
      the Shares shall be an amount in cash equal to $106,000,000.00 less an
      amount equal to (i) any consolidated Indebtedness of the Company and the
      Subsidiaries as of the close of business on the day immediately preceding the
      Closing Date plus (ii) the amount of Closing Bonuses (such amount as
      reduced under clauses (i) and (ii) hereof, the “Purchase
      Price”), subject to adjustment as provided under Sections
      2.7, 2.8 and 8.7.

     

    1.5           Payment
      of Purchase Price.

     

    ·           On
      the Closing Date, Purchaser shall pay the Purchase Price less the
      Indemnity Escrow Amount to the Selling Stockholders by wire transfer of
      immediately available funds into accounts designated in writing by the Selling
      Stockholders not less than three Business Days prior to the Closing Date and
      allocated among the Selling Stockholders in accordance with their respective
      aggregate percentage ownership of the Shares as set forth on Exhibit
      A.

     

    ·           On
      the Closing Date, Purchaser shall pay the Indemnity Escrow Amount to the Escrow
      Agent in cash payable by wire transfer of immediately available funds for
      deposit into the Indemnity Escrow Account.  The deposit of the
      Indemnity Escrow Amount to the Escrow Agent in accordance with the terms of
      this
      Agreement shall be deemed not to be a failure to pay the Purchase Price
      hereunder.

     

    ·           On
      the Closing Date, Purchaser (for and on behalf of the Company) shall pay, by
      wire transfer of immediately available funds, an amount equal to the Closing
      Bonuses to the Company for payment through its payroll system to the officers
      and employees of the Company that are the recipients thereof (and the Company
      shall be entitled to withhold in respect of such payments to such officers
      and
      employees any employment-related Taxes as required by applicable federal and
      state withholding Laws).

     

    1.6           Closing
      Date.  The consummation of the sale and purchase of the Shares
      provided for in Section 2.1 hereof (the
“Closing”) shall take place at the offices of McGrath
      North Mullin & Kratz, PC LLO located at First National Tower, Suite 3700,
      1601 Dodge Street, Omaha, Nebraska 68102-1627 (or at such other place as the
      parties may designate in writing) at 10:00 a.m. (Omaha time) on a date to be
      specified by the parties (the “Closing Date”), which
      date shall be no later than the third Business Day after the satisfaction or
      waiver of the conditions set forth in Article VII (other than conditions
      that by their nature are to be satisfied at Closing, but subject to the
      satisfaction or waiver of those conditions at such time), unless another time,
      date or place is agreed to in writing by the parties hereto.

     

    1.7           Deliveries
      Prior to the Closing Date.  No later than three Business Days
      prior to the Closing Date, the Company shall deliver to Purchaser the pay-off
      letters in respect of Indebtedness to be repaid as of the Closing and the
      certificate setting forth an estimate of Indebtedness, each as provided in
      the
      first sentence of Section 6.16.

     

    1.8           Deliveries
      on the Closing Date.  At the Closing, the Selling Stockholders
      shall deliver or cause the Company to deliver, as applicable, to
      Purchaser:

     

    ·           copies
      of resolutions, certified by the Secretary of the Company and an authorized
      person of each Selling Stockholder, respectively, as to the authorization of
      this Agreement and all of the transactions contemplated hereby;

     

    ·           copies
      of the releases from Affiliates of the Company, pursuant to
Section 6.12;

     

    ·           stock
      certificates from each of the Selling Stockholders representing the Shares,
      duly
      endorsed in blank or accompanied by stock transfer powers and with all requisite
      stock transfer tax stamps attached and otherwise sufficient to transfer the
      Shares to Purchaser free and clear of all Liens;

     

    ·           all
      documents required to transfer from Controlling Owner to Purchaser, free and
      clear of all Liens, all title and ownership of all shares or other equity
      interest (with all requisite transfer tax stamps attached and otherwise
      sufficient to transfer such shares and equity interest) held by the Controlling
      Owner in Precision de Mexico;

     

    ·           certificates
      of good standing dated not more than ten (10) Business Days prior to the Closing
      Date with respect to the Company issued by the Secretary of State of the State
      of Nebraska and for each state in which the Company is qualified to do business
      as a foreign corporation and with respect to each Subsidiary issued by the
      appropriate governmental official as to the good standing of such Subsidiary;
      provided that with respect to Precision de

     

    ·           Mexico,
      the Selling Stockholders shall deliver instead a joint certification from said
      Subsidiary’s chief executive officer and chief financial officer stating that as
      at the Closing Date no action has been taken to dissolve and liquidate said
      Subsidiary and that said Subsidiary is in substantial compliance with its
      obligations under the Laws of Mexico;

     

    ·           all
      instruments and documents necessary to release any and all Liens other than
      Permitted Exceptions, including appropriate UCC financing statement amendments
      (termination statements);

     

    ·           the
      certificate indicating the amount of Indebtedness to be repaid as of the
      Closing, pursuant to Section 6.16; and

     

    ·           affidavits
      of non-foreign status from each of the Selling Stockholders that complies with
      Section 1445 of the Code (a “FIRPTA
      Affidavit”).

     

    1.9           Purchase
      Price Adjustment.

     

    ·           Following
      the Closing, the Purchase Price shall be adjusted as provided in this Section
      2.7 to reflect the difference between Final Closing Working Capital and
      Target Working Capital.

     

    ·           Within
      ninety (90) days following the Closing Date, (i) Purchaser shall cause the
      Company to prepare a consolidated balance sheet of the Company and the
      Subsidiaries as of the open of business on the Closing Date (the
“Closing Balance Sheet”) and a statement of Closing
      Working Capital derived from the Closing Balance Sheet (the “Closing
      Working Capital Statement”), and such prepared Closing Balance
      Sheet and Closing Working Capital Statement shall be delivered to the
      Stockholder Representative and KPMG, LLP, the Company’s historical auditors and
      (ii) the Closing Balance Sheet shall be audited by KPMG, LLP, and KPMG, LLP
      shall perform the agreed-upon procedures as set forth in Schedule 2.7(b)
      hereto in order to determine that the Closing Balance Sheet and the Closing
      Working Capital Statement were prepared in accordance with GAAP applied using
      the same accounting methods, practices, principles, policies and procedures,
      with consistent classifications, judgments and valuation and estimation
      methodologies that were used in the preparation of the Company’s audited
      Financial Statements for the most recent fiscal year end as if such Closing
      Balance Sheet was as of a fiscal year end (provided, however, that
      such preparation and determination shall be subject to the limited adjustments,
      exceptions and other qualifications as set forth on Schedule 2.7 hereto
      so that the Closing Working Capital Statement will be determined on a basis
      consistent with the Company’s historical application and interpretations
      concerning determination and calculation of working capital).  The
      Company shall (and Purchaser shall cause the Company to) instruct KPMG, LLP
      to
      provide its report and any required adjustments pursuant to its audit under
      clause (ii) of the immediately preceding sentence prior to the date that is
      ninety (90) days following the Closing Date.  Purchaser shall cause
      the Company to accept any required adjustments to the Closing Balance Sheet
      and
      Closing Working Capital Statement as set forth in the report from KPMG, LLP,
      and
      each thereof, as so adjusted, shall constitute the final Closing Balance Sheet
      and Closing Working Capital Statement for purposes hereof.  Each of
      Purchaser, on the one hand, and the Stockholder Representative (on behalf of
      the
      Selling Stockholders), on the other hand, shall pay one-half (1/2) of the fees,
      costs and expenses of KPMG, LLP arising in

     

    ·           connection
      with such review and audit; provided, however, that Purchaser’s
      maximum aggregate responsibility for such fees, costs and expenses shall not
      exceed $30,000.  Each of the Company, Selling Stockholders and
      Purchaser shall, and shall cause their respective representatives and Affiliates
      to, cooperate and assist in the preparation of the Closing Balance Sheet and
      the
      Closing Working Capital Statement and in the conduct of the review referred
      to
      in this Section 2.7(b).  Each of Purchaser and the Stockholder
      Representative shall retain their rights to dispute the final Closing Working
      Capital Statement hereunder if the procedures and substance of this Section
      2.7 are not complied with.

     

    ·           The
      Closing Working Capital as set forth in the Closing Working Capital Statement,
      as adjusted in respect of the review and audit of KPMG, LLP, shall constitute
      the “Final Closing Working Capital”.  If Final
      Closing Working Capital is greater than Target Net Working Capital, then the
      Purchase Price shall be increased by the amount of such excess and Purchaser
      shall pay the Stockholder Representative an amount equal to such excess together
      with interest thereon from the Closing Date to the date of
      payment.  If Final Closing Working Capital is less than Target Net
      Working Capital, then the Purchase Price shall be decreased by the amount of
      such deficiency and the Selling Stockholders, jointly and severally, shall
      pay
      Purchaser an amount equal to such deficiency together with interest thereon
      from
      the Closing Date to the date of payment.

     

    ·           Any
      payment to be made pursuant to Section 2.7(c) shall be made at a mutually
      convenient time and place within five (5) Business Days after the date on which
      the applicable amount of such payment has been finally
      determined.  Any such payment shall be made by wire transfer of
      immediately available funds.  For purposes of Section 2.7(c),
      applicable interest will be payable at the “prime” rate, as announced by The
      Wall Street Journal, Eastern Edition, from time to time to be in effect,
      calculated based on a 365 day year and the actual number of days
      elapsed.  Any payment to be made by Purchaser to the Selling
      Stockholders under Section 2.7(c) shall be made to the Stockholder
      Representative, for distribution to the Selling Stockholders in accordance
      with
      their respective pro rata portion of the Purchase Price.

     

    1.10           Sellers’
      Earn Outs.  In addition to the amounts to be paid by the Purchaser
      under Section 2.3 and, if any, Section 2.7, Purchaser shall pay to
      the Stockholder Representative (for distribution to the Selling Stockholders
      in
      accordance with their respective pro rata portion of the Purchase
      Price) additional amounts as set forth on Schedule 2.8
      hereof.

     

    REPRESENTATIONS
      AND WARRANTIES RELATING TO THE SELLING STOCKHOLDERS

     

    Each
      Selling Stockholder, severally and jointly, hereby represents and warrants
      to
      Purchaser that:

     

    1.11           Organization
      and Good Standing.  Such Selling Stockholder (other than those
      that are individuals) is a limited liability company or irrevocable trust duly
      organized, validly existing and, to the extent such concept is applicable,
      in
      good standing under the laws of

     

    1.12           the
      jurisdiction of its organization and has all requisite limited liability company
      or other organizational power and authority to own, lease and operate its
      properties and to carry on its business as now conducted.

     

    1.13           Authorization
      of Agreement.  Such Selling Stockholder has all requisite power,
      authority and legal capacity to execute and deliver this Agreement and each
      other agreement, document, or instrument or certificate contemplated by this
      Agreement or to be executed by such Selling Stockholder in connection with
      the consummation of the transactions contemplated by this Agreement (the
“Selling Stockholder Documents”), and to consummate the
      transactions contemplated hereby and thereby.  The execution, delivery
      and performance of this Agreement and each of the Selling Stockholder Documents,
      and the consummation of the transactions contemplated hereby and thereby, has
      been duly authorized and approved by all required action on the part of such
      Selling Stockholder.  This Agreement has been, and each of the Selling
      Stockholder Documents will be at or prior to the Closing, duly and validly
      executed and delivered by such Selling Stockholder and (assuming due
      authorization, execution and delivery by Purchaser) this Agreement constitutes,
      and each of the Selling Stockholder Documents when so executed and delivered
      will constitute, legal, valid and binding obligations of such Selling
      Stockholder, enforceable against such Selling Stockholder in accordance with
      its
      terms.

     

    1.14           Conflicts;
      Consents of Third Parties.

     

    ·           None
      of the execution and delivery by such Selling Stockholder of this Agreement
      or
      the Selling Stockholder Documents, the consummation of the transactions
      contemplated hereby or thereby, or compliance by such Selling Stockholder with
      any of the provisions hereof or thereof will 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 or cancellation under any
      provision of (i) with respect to those Selling Stockholders that are not
      individuals, the articles of organization and operating agreement or comparable
      organizational documents of such Selling Stockholder; (ii) any Contract, or
      Permit to which any Selling Stockholder is a party or by which any of the
      properties or assets of such Selling Stockholder are bound; (iii) any Order
      of
      any Governmental Body applicable to such Selling Stockholder or by which any
      of
      the properties or assets of such Selling Stockholder are bound; or (iv) any
      applicable Law.

     

    ·           No
      consent, waiver, approval, Order, Permit or authorization of, or declaration
      or
      filing with, or notification to, any Person or Governmental Body is
      required on the part of such Selling Stockholder in connection with the
      execution and delivery of this Agreement, the Selling Stockholder Documents,
      the
      compliance by such Selling Stockholder with any of the provisions hereof, or
      the
      consummation of the transactions contemplated hereby, except for compliance
      with
      the applicable requirements of the HSR Act.

     

    1.15           Ownership
      and Transfer of Shares.  Such Selling Stockholder is the record
      (other than the Trust, of which Christopher W. Circo is the beneficial owner)
      and beneficial owner of the Shares indicated as being owned by such Selling
      Stockholder on Exhibit A, free and clear of any and all
      Liens.  Such Selling Stockholder has the power and authority to sell,
      transfer, assign and deliver such Shares as provided in this Agreement, and
      such
      delivery will

     

    1.16           convey
      to Purchaser good and marketable title to such Shares, free and clear of any
      and
      all Liens.  No payments made to the Selling Stockholders, who are (or
      were) employees of the Company, under this Agreement are subject to reduction
      for employment-related Taxes as required by applicable federal and state
      withholding Laws.

     

    1.17           Litigation.  There
      is no Legal Proceeding pending or, to the Knowledge of such Selling Stockholder,
      threatened against such Selling Stockholder or to which such Selling Stockholder
      is otherwise a party relating to this Agreement, the Selling Stockholder
      Documents or the transactions contemplated hereby or thereby.

     

    1.18           Financial
      Advisors.  None of the Company, its Subsidiaries, Purchaser or any
      other Purchaser Indemnified Party is or will be obligated or liable for the
      payment of any fee or commission or like payment in respect of any broker,
      finder or financial advisor for such Selling Stockholder in connection with
      the
      transactions contemplated by this Agreement.

     

    REPRESENTATIONS
      AND WARRANTIES RELATING TO THE COMPANY

     

    
      The
        Selling Stockholders, jointly and severally, hereby represent and warrant
        to
        Purchaser that:

       

    

    1.19           Organization
      and Good Standing.  The Company is a corporation duly organized,
      validly existing and in good standing under the laws of the State of Nebraska
      and has all requisite corporate power and authority to own, lease and operate
      its properties and to carry on its business as now conducted and as currently
      proposed to be conducted.  The Company is duly qualified or authorized
      to do business as a foreign corporation and is in good standing under the laws
      of each jurisdiction in which it owns or leases real property and each other
      jurisdiction in which the conduct of its business or the ownership of its
      properties requires such qualification or authorization, except where a failure
      to be so qualified and authorized could not reasonably be expected to be
      material.

     

    1.20           Authorization
      of Agreement.  The Company has all requisite power, authority and
      legal capacity to execute and deliver this Agreement and each other agreement,
      document, or instrument or certificate contemplated by this Agreement or to
      be
      executed by the Company in connection with the transactions contemplated by
      this
      Agreement (the “Company Documents”), to perform its
      obligations hereunder and thereunder and to consummate the transactions
      contemplated hereby and thereby.  The execution, delivery and
      performance of this Agreement and each of the Company Documents, and the
      consummation of the transactions contemplated hereby and thereby, have been
      duly
      authorized and approved by all required action on the part of the
      Company.  This Agreement has been, and each of the Company Documents
      will be at or prior to the Closing, duly and validly executed and delivered
      by
      the Company and (assuming due authorization, execution and delivery by
      Purchaser) this Agreement constitutes, and each of the Company Documents when
      so
      executed and delivered will constitute, legal, valid and binding obligations
      of
      the Company, enforceable against the Company in accordance with their respective
      terms.

     

    1.21           Conflicts;
      Consents of Third Parties.

     

    ·           None
      of the execution and delivery by the Company of this Agreement or the Company
      Documents, the consummation of the transactions contemplated hereby or thereby,
      or compliance by the Company with any of the provisions hereof or thereof will
      conflict with, or result in any violation or breach of, conflict with 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 give rise to any obligation of the Company
      to
      make any payment under, or to the increased, additional, accelerated or
      guaranteed rights or entitlements of any Person under, or result in the creation
      of any Liens upon any of the properties or assets of Company or any Subsidiary
      under, any provision of (i) the articles of incorporation and by-laws or
      comparable organizational documents of the Company or any Subsidiary;
      (ii) any Contract or Permit to which the Company or any Subsidiary is a
      party or by which any of the properties or assets of the Company or any
      Subsidiary are bound; (iii) any Order applicable to the Company or any
      Subsidiary or any of the properties or assets of the Company or any Subsidiary;
      or (iv) any applicable Law, except as set forth on Schedule
      4.3.

     

    ·           No
      consent, waiver, approval, Order, Permit or authorization of, or declaration
      or
      filing with, or notification to, any Person or Governmental Body is
      required on the part of the Company or any Subsidiary in connection with (i)
      the
      execution and delivery of this Agreement, the Company Documents, respectively,
      the compliance by the Company with any of the provisions hereof and thereof,
      or
      the consummation of the transactions contemplated hereby or thereby, or
      (ii) the continuing validity and effectiveness immediately following the
      Closing of any Permit or Contract of the Company or any Subsidiary, except
      for
      (A) compliance with the applicable requirements of the HSR Act and (B) those
      set
      forth on Schedule 4.3.

     

    1.22           Capitalization.

     

    ·           The
      authorized capital stock of the Company consists of 2,000 common shares, $100.00
      par value per share (the “Common Stock”), of which 1,500
      such shares are designated Common Stock, Class A, and 500 such shares are
      designated Common Stock, Class B.  As of the date hereof, there are
      472 Class A Shares issued and outstanding, and 160 Class B Shares issued and
      outstanding, and the Company does not hold any shares of Common Stock as
      treasury stock.  All of the issued and outstanding shares of Common
      Stock were duly authorized for issuance and are validly issued, fully paid
      and
      non-assessable and were not issued in violation of any purchase or call option,
      right of first refusal, subscription right, preemptive right or any similar
      rights.  All of the outstanding shares of Common Stock are owned of
      record by the holders and in the respective amounts as are set forth on
Exhibit A.

     

    ·           There
      is no existing option, warrant, call, right or Contract to which any Selling
      Stockholder or the Company is a party requiring, and there are no securities
      of
      the Company outstanding which upon conversion or exchange would require, the
      issuance, sale or transfer of any additional shares of capital stock or other
      equity securities of the Company or other securities convertible into,
      exchangeable for or evidencing the right to subscribe for or purchase shares
      of
      capital stock or other equity securities of the Company.  There are no
      obligations, contingent or otherwise, of the Company or any Subsidiary to (i)
      repurchase, redeem or otherwise acquire any shares of Common Stock or the
      capital stock or other equity interests of any
      Subsidiary, or (ii) provide material funds to, or make any material investment
      in (in the form of a loan, capital contribution or otherwise), or provide any
      guarantee with respect to the obligations of, any Person.  There are
      no outstanding stock appreciation, phantom stock, profit participation or
      similar rights with respect to the Company or any of the
      Subsidiaries.  There are no bonds, debentures, notes or other
      indebtedness of the Company or the Subsidiaries having the right to vote or
      consent (or, convertible into, or exchangeable for, securities having the right
      to vote or consent) on any matters on which stockholders (or other
      equityholders) of the Company of the Subsidiaries may vote.  There are
      no voting trusts, irrevocable proxies or other Contracts or understandings
      to
      which the Company or any Subsidiary or any Selling Stockholder is a party or
      is
      bound with respect to the voting or consent of any shares of Common Stock or
      the
      equity interests of any Subsidiary.

     

    1.23           Subsidiaries.  Schedule
      4.5 sets forth the name of each Subsidiary, and, with respect to each
      Subsidiary, the jurisdiction in which it is incorporated or organized, the
      jurisdictions, if any, in which it is qualified to do business, the number
      of
      shares of its authorized capital stock, the number and class of shares thereof
      duly issued and outstanding, the names of all stockholders or other equity
      owners and the number of shares of stock owned by each stockholder or the amount
      of equity owned by each equity owner.  Each Subsidiary is a duly
      organized and validly existing corporation, partnership or other entity in
      good
      standing under the laws of the jurisdiction of its incorporation or organization
      and is duly qualified or authorized to do business as a foreign corporation
      or
      entity and is in good standing under the laws of each jurisdiction in which
      the
      conduct of its business or the ownership of its properties requires such
      qualification or authorization, except where a failure to be so qualified and
      authorized could not reasonably be expected to be material.  Each
      Subsidiary has all requisite corporate or entity power and authority to own
      its
      properties and carry on its business as presently conducted.  The
      outstanding shares of capital stock or equity interests of each Subsidiary
      are
      validly issued, fully paid and non-assessable and were not issued in violation
      of any purchase or call option, right of first refusal, subscription right,
      preemptive right or any similar right.  All such shares or other
      equity interests represented as being owned by the Company or any of the
      Subsidiaries are owned by them free and clear of any and all
      Liens.  No shares of capital stock are held by any Subsidiary as
      treasury stock.  There is no existing option, warrant, call, right or
      Contract to which any Subsidiary is a party requiring, and there are no
      convertible securities of any Subsidiary outstanding which upon conversion
      would
      require, the issuance of any shares of capital stock or other equity interests
      of any Subsidiary or other securities convertible into shares of capital stock
      or other equity interests of any Subsidiary.  Except as set forth on
Schedule 4.5, the Company does not own, directly or indirectly, any
      capital stock or equity securities of any Person other than the
      Subsidiaries.  Except as set forth on Schedule 4.5, there are
      no material restrictions on the ability of the Subsidiaries to make
      distributions of cash to their respective equity holders.

     

    1.24           Corporate
      Records.

     

    ·           The
      Company has made available to Purchaser true, correct and complete copies of
      the
      articles of incorporation (each certified by the Secretary of State or other
      appropriate official of the applicable jurisdiction of organization) and by-laws
      (each certified by the secretary, assistant secretary or other appropriate
      officer) or comparable organizational documents of the Company and each of
      the
      Subsidiaries in each case as amended and in effect on the due date hereof,
      including all amendments thereto.

     

    ·      The
      minute books of the Company and each Subsidiary previously made available to
      Purchaser contain true and correct records of all meetings and accurately
      reflect all other corporate action of the shareholders and board of directors
      (including committees thereof) of the Company and the
      Subsidiaries.  The stock certificate books and stock transfer ledgers
      of the Company and the Subsidiaries previously made available to Purchaser
      are
      true, correct and complete.  All stock transfer taxes levied, if any,
      or payable with respect to all transfers of shares of the Company and the
      Subsidiaries prior to the date hereof have been paid and appropriate transfer
      tax stamps affixed.

     

    1.25           Financial
      Statements.  

     

    ·           The
      Company has delivered to Purchaser copies of (i) the audited consolidated
      balance sheets of the Company and the Subsidiaries as at December 31, 2006,
      2005
      and 2004 and the related audited consolidated statements of income and of cash
      flows of the Company and the Subsidiaries for the years then ended and
      (ii) the unaudited consolidated balance sheet of the Company and the
      Subsidiaries as at June 25, 2007 and the related consolidated statements of
      income and cash flows of the Company and the Subsidiaries for the six-month
      period then ended (such audited and unaudited statements, including the related
      notes and schedules thereto, are referred to herein as the “Financial
      Statements”).  Each of the Financial Statements is
      complete and correct, has been prepared in accordance with GAAP consistently
      applied by the Company without modification of the accounting principles used
      in
      the preparation thereof throughout the periods presented and presents fairly
      in
      all material respects the consolidated financial position, results of operations
      and cash flows of the Company and the Subsidiaries as at the dates and for the
      periods indicated therein (provided, however, that the existence
      of ineligible inventory or ineligible accounts receivable in the amounts as
      reflected in Schedule 2.7 shall not be a breach of this or any other
      representation in this Agreement).

     

    
      The
        consolidated balance sheet of the Company and the Subsidiaries as at December
        27, 2006 is referred to herein as the “Balance Sheet”
and December 27, 2006 is referred to herein as
        the “Balance Sheet
        Date.”

       

      All
        books, records and accounts of the
        Company and the Subsidiaries are accurate and complete and are maintained
        in all
        material respects in accordance with good business practice and all applicable
        Laws.

       

    

    ·           The
      financial projections and business plan provided by the Company to Purchaser
      prior to the date hereof were reasonably prepared on a basis reflecting
      management’s best estimates, assumptions and judgments, at the time provided to
      Purchaser, as to the future financial performance of the Company and the
      Subsidiaries.  Purchaser acknowledges that such projections and
      business plan are based on the current knowledge of the Company, as well as
      assumptions the Company’s management believes to be reasonable, that such
      information and assumptions contain known and unknown risks and uncertainties,
      and that actual results may differ due to factors, including changes in the
      Company’s operating environment, market changes, the success of the Company in
      implementing its business plan, competitive conditions in the Company’s industry
      and other factors.

     

    ·           The
      Company has provided to Purchaser copies of all issued auditors’ reports
      relating to the Company or any of the Subsidiaries and their respective
      operations, whether the same are issued to the Company or any of its
      Subsidiaries.  The Company has not received, or been provided, any
      letters to management regarding accounting practices relating to the Company
      or
      any of the Subsidiaries and their respective operations, whether the same are
      issued to the Company or any of its Subsidiaries, during any of the periods
      covered by the Financial Statements.

     

    1.26           No
      Undisclosed Liabilities.  Neither the Company nor any Subsidiary
      has any Liabilities of any kind that would have been required to be reflected
      in, reserved against or otherwise described on the Balance Sheet or in the
      notes
      thereto in accordance with GAAP and were not so reflected, reserved against
      or
      described, other than (i) Liabilities incurred in the Ordinary Course of
      Business since the Balance Sheet Date and (ii) Liabilities incurred in
      connection with the transactions contemplated hereby (including, without
      limitation, Company Transaction Expenses).

     

    1.27           Absence
      of Certain Developments.  Except as expressly contemplated by this
      Agreement or as set forth on Schedule 4.9, since the Balance Sheet
      Date (i) the Company and the Subsidiaries have conducted their respective
      businesses only in the Ordinary Course of Business and (ii) there has not been
      any event, change, occurrence or circumstance that, individually or in the
      aggregate with any such events, changes, occurrences or circumstances, has
      had
      or could reasonably be expected to have a Material Adverse
      Effect.  Without limiting the generality of the foregoing, except as
      set forth on Schedule 4.9, since the Balance Sheet Date:

     

    ·           there
      has not been any damage, destruction or loss, whether or not covered by
      insurance, with respect to the property and assets of the Company or any
      Subsidiary having a replacement cost of more than $100,000 for any single loss
      or $250,000 for all such losses;

     

    ·           there
      has not been any declaration, setting aside or payment of any dividend or other
      distribution in respect of any shares of capital stock of the Company or any
      repurchase, redemption or other acquisition by the Company or any Subsidiary
      of
      any outstanding shares of capital stock or other securities of, or other
      ownership interest in, the Company or any Subsidiary;

     

    ·           except
      in the Ordinary Course of Business, neither the Company nor any Subsidiary
      has
      awarded or paid any bonuses to employees of the Company or any Subsidiary except
      to the extent accrued on the Balance Sheet, or entered into any employment,
      deferred compensation, severance or similar agreement (nor amended any such
      agreement) or agreed to increase the compensation payable or to become payable
      by it to any of the Company’s or any Subsidiary’s directors, officers,
      employees, agents or representatives or agreed to increase the coverage or
      benefits available under any severance pay, termination pay, vacation pay,
      company awards, salary continuation for disability, sick leave, deferred
      compensation, bonus or other incentive compensation, insurance, pension or
      other
      employee benefit plan, payment or arrangement made to, for or with such
      directors, officers, employees, agents or representatives;

     

    ·           there
      has not been any change by the Company or any Subsidiary in accounting or Tax
      reporting principles, methods or policies;

     

    ·           neither
      the Company nor any Subsidiary has made or rescinded any election relating
      to
      Taxes or settled or compromised any claim relating to Taxes;

     

    ·           [omitted];

     

    ·           neither
      the Company nor any Subsidiary has failed to promptly pay and discharge current
      liabilities except where disputed in good faith by appropriate
      proceedings;

     

    ·           neither
      the Company nor any Subsidiary has made any loans, advances or capital
      contributions to, or investments in, any Person or paid any fees or expenses
      to
      any Selling Stockholder or any director, officer, partner, stockholder or
      Affiliate of any Selling Stockholder (other than reimbursements of business
      expenses incurred and reimbursed in the Ordinary Course of
      Business);

     

    ·           neither
      the Company nor any Subsidiary has (A) mortgaged, pledged or subjected to any
      Lien any of its assets, or (B) acquired any assets or sold, assigned,
      transferred, conveyed, leased or otherwise disposed of any assets of the Company
      or any Subsidiary, except, in the case of clause (B), for assets acquired,
      sold,
      assigned, transferred, conveyed, leased or otherwise disposed of in the Ordinary
      Course of Business;

     

    ·           [omitted];

     

    ·           neither
      the Company nor any Subsidiary has amended, canceled, terminated, relinquished,
      waived or released any Contract or right except in the Ordinary Course of
      Business or which, in the aggregate, would not be material to the Company and
      the Subsidiaries taken as a whole;

     

    ·           neither
      the Company nor any Subsidiary has made or committed to make any capital
      expenditures or capital additions or betterments in excess of $100,000
      individually or $2,500,000 in the aggregate;

     

    ·           [omitted];

     

    ·           the
      Company has not granted any license or sublicense of any rights under or with
      respect to any Intellectual Property owned by the Company or any of its
      Subsidiaries except in the Ordinary Course of Business;

     

    ·           neither
      the Company nor any Subsidiary has instituted or settled any Legal Proceeding
      resulting in a loss of revenue in excess of $250,000 in the aggregate;
      and

     

    ·           none
      of the Selling Stockholders or the Company has agreed, committed, arranged
      or
      entered into any understanding to do anything set forth in this Section
      4.9.

     

    1.28           Taxes.

     

    ·           Except
      as set forth on Schedule 4.10(a):  (i) (A) all material Tax
      Returns required to be filed by or on behalf of each of the Company, any
      Subsidiary and any Affiliated

     

    ·           Group
      of which the Company or any Subsidiary is or was a member have been duly and
      timely filed with the appropriate Taxing Authority in all jurisdictions in
      which
      such Tax Returns are required to be filed (after giving effect to any valid
      extensions of time in which to make such filings), and all such Tax Returns
      are
      true, complete and correct in all material respects; and (B) all Taxes required
      to be paid by or on behalf of each of the Company, any Subsidiary and any
      Affiliated Group of which the Company or any Subsidiary is or was a member
      have
      been fully and timely paid; (ii) with respect to any period for which Tax
      Returns have not yet been filed or for which Taxes are not yet due or owing,
      the
      Company has made due and sufficient accruals for such Taxes in the Financial
      Statements and its books and records; and (iii) all required estimated Tax
      payments sufficient to avoid any underpayment penalties or interest have been
      made by or on behalf of the Company and each Subsidiary.

     

    ·           The
      Company and each Subsidiary has complied in all material respects with all
      applicable Laws relating to the payment and withholding of Taxes and has duly
      and timely withheld and paid over to the appropriate Taxing Authority all
      amounts required to be so withheld and paid under all applicable
      Laws.

     

    ·           The
      Company has made available to Purchaser complete copies of (i) all federal,
      state, local and foreign income or franchise Tax Returns of the Company and
      the
      Subsidiaries relating to the taxable periods since January 1, 2001 and (ii)
      any
      audit report issued within the last three years relating to any Taxes due from
      or with respect to the Company or any Subsidiary.  Except as set forth
      on Schedule 4.10(c), all income and franchise Tax Returns filed by or on
      behalf of the Company or any Subsidiary have been examined by the relevant
      Taxing Authority or the statute of limitations with respect to such Tax Returns
      has expired.

     

    ·           Schedule
      4.10(d) lists (i) all material types of Taxes paid, and all material types
      of Tax Returns filed by or on behalf of Company or any Subsidiary, and (ii)
      all
      of the jurisdictions that impose such Taxes or with respect to which the Company
      or any Subsidiary has a duty to file such Tax Returns.  No claim has
      been made by a Taxing Authority in a jurisdiction where the Company or any
      Subsidiary does not file Tax Returns such that it is or may be subject to
      taxation by that jurisdiction.

     

    ·           All
      deficiencies asserted or assessments made as a result of any examinations by
      any
      Taxing Authority of the Tax Returns of, or including, the Company or any
      Subsidiary have been fully paid, and there are no other audits or investigations
      by any Taxing Authority in progress, nor has the Selling Stockholders, the
      Company or any of the Subsidiaries received any notice from any Taxing Authority
      that it intends to conduct such an audit or investigation.  No issue
      has been raised by a Taxing Authority in any prior examination of the Company
      or
      any Subsidiary which, by application of the same or similar principles, could
      reasonably be expected to result in a proposed deficiency for any subsequent
      taxable period.

     

    ·           Except
      as set forth on Schedule 4.10(f), none of the Company, any Subsidiary or
      any other Person on their behalf has (i) filed a consent pursuant to Section
      341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply to
      any
      disposition of a subsection (f) asset (as such term is defined in Section
      341(f)(4) of the Code) owned by the Company or such Subsidiary, (ii) agreed
      to
      or is required to make any adjustments pursuant to Section 481(a) of the Code
      or
      any similar provision of Law or has any knowledge that any

     

    ·           Taxing
      Authority has proposed any such adjustment, or has any application pending
      with
      any Taxing Authority requesting permission for any changes in accounting methods
      that relate to the Company or any Subsidiary, (iii) since January 1, 2000,
      executed or entered into a closing agreement pursuant to Section 7121 of the
      Code or any similar provision of Law with respect to the Company or any
      Subsidiary, (iv) requested any extension of time within which to file any Tax
      Return, which Tax Return has since not been filed, (v) granted any extension
      for
      the assessment or collection of Taxes, which Taxes have not since been paid,
      or
      (vi) granted to any Person any power of attorney that is currently in force
      with
      respect to any Tax matter.

     

    ·           No
      property owned by the Company or any Subsidiary is (i) property required to
      be
      treated as being owned by another Person pursuant to the provisions of Section
      168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect
      immediately prior to the enactment of the Tax Reform Act of 1986, (ii)
“tax-exempt use property” within the meaning of Section 168(h)(1) of the Code or
      (iii) “tax-exempt bond financed property” within the meaning of Section 168(g)
of the Code, (iv) “limited use property” within the meaning of Rev. Proc. 76-30,
      (v) subject to Section 168(g)(1)(A) of the Code, or (vi) subject to any
      provision of state, local or foreign Law comparable to any of the provisions
      listed above.

     

    ·           No
      Selling Stockholder is a foreign person within the meaning of Section 1445
      of the Code.

     

    ·           Neither
      the Company nor any Subsidiary is a party to any tax sharing, allocation,
      indemnity or similar agreement or arrangement (whether or not written) pursuant
      to which it will have any obligation to make any payments after the
      Closing.

     

    ·           There
      is no contract, agreement, plan or arrangement covering any person that,
      individually or collectively, could give rise to the payment of any amount
      that
      would not be deductible by Purchaser, the Company or any of their respective
      Affiliates by reason of Section 280G of the Code.

     

    ·           Neither
      the Company nor any Subsidiary is subject to any private letter ruling of the
      IRS or comparable rulings of any Taxing Authority.

     

    ·           There
      are no Liens as a result of any unpaid Taxes upon any of the assets of the
      Company or any Subsidiary.

     

    ·           Except
      with respect to any period(s) closed by the applicable statute of limitations
      regarding such Tax matters, neither the Company nor any of the Subsidiaries
      has
      ever been a member of any consolidated, combined, affiliated or unitary group
      of
      corporations for any Tax purposes other than a group in which the Company is
      the
      common parent.

     

    ·           Neither
      the Company nor any of the Subsidiaries has constituted either a “distributing
      corporation” or a “controlled corporation” (within the meaning of Section
      355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax-free
      treatment under Section 355 of the Code (A) in the two years prior to the date
      of this Agreement or (B) in a distribution which could otherwise constitute
      part
      of a “plan” or “series of related transactions”

     

    ·           (within
      the meaning of Section 355(e) of the Code) in conjunction with the transactions
      contemplated by this Agreement.

     

    ·           There
      is no taxable income of the Company or any of the Subsidiaries that will be
      required under applicable Tax Law to be reported by the Purchaser or any of
      its
      Affiliates, including the Company or any of the Subsidiaries, for a taxable
      period beginning after the Closing Date which taxable income was realized (and
      reflects economic income) arising prior to the Closing Date.

     

    ·           Except
      with respect to any period(s) closed by the applicable statute of limitations
      regarding such Tax matters, neither the Company nor any Subsidiary has (i)
      engaged in any “intercompany transactions” in respect of which gain was and
      continues to be deferred pursuant to Treasury Regulations Section 1.1502-13
      or
      any analogous or similar provision of Law or (ii) has any “excess loss accounts”
in respect of the stock of any Subsidiary pursuant to Treasury Regulations
      Section 1.1502-19, or any analogous or similar provision of Law.

     

    ·           The
      Selling Stockholders, the Company and the Subsidiaries are members of a “selling
      consolidated group” within the meaning of Treasury Regulation Section
      1.338(h)(10)-1(b)(2).

     

    ·           The
      Company and the Subsidiaries have disclosed on their federal income Tax Returns
      all positions taken therein that could give rise to substantial understatement
      of federal income tax within the meaning of Section 6662 of the
      Code.

     

    ·           Other
      than Precision de Mexico and I.N.T. Precision Industries of Canada, LTD./I.N.T.
      Les Industries Precision du Canada, LTEE (each of which is a Subsidiary of
      the
      Company), neither the Company nor any of the Subsidiaries has, or has ever
      had,
      a permanent establishment in any country other than the United States, or has
      engaged in a trade or business in any country other than the United States
      that
      subjected it to tax in such country.

     

    ·           The
      Company has been a validly electing “S” corporation within the meaning of
      Sections 1361 and 1362 of the Code at all times since November 1, 1990 and
      the
      Company will be an “S” corporation up to and including the day before the
      Closing Date.

     

    ·           Except
      as set forth on Schedule 4.10(u), the Company has been a validly electing
“S” corporation under each provision of state or local law analogous to
      Sections
      1361 and 1362 of the Code in each jurisdiction where the Company is required
      to
      file a Tax Return at all times since November 1, 1990 and the Company will
      be an
“S” corporation up to and including the day before the Closing
      Date.

     

    ·           Each
      Subsidiary of the Company has been a validly electing Qualified Subchapter
      S
      Subsidiary (a “QSSS”), within the meaning of Section
      1361(b)(3) of the Code at all times since inception and each Subsidiary will
      be
      a QSSS up to and including the day before the Closing Date.

     

    ·           The
      Company has no potential liability for any Tax under Section 1374 of the
      Code.  Neither the Company nor any Subsidiary has, in the past ten
      years, (i) acquired assets

     

    ·           from
      another corporation in a transaction in which such entity’s tax basis for the
      acquired asset was determined, in whole, or in part, by reference to the Tax
      basis of the acquired assets (or any other property) in the hands of the
      transferor or (ii) acquired the stock of any corporation which is a
      QSSS.

     

    1.29           Real
      Property.

     

    ·           Except
      as set forth on Schedule 4.11(a), neither the Company or any of the
      Subsidiaries owns on the date hereof or will own as of the Closing Date any
      real
      property and/or interests in real property (including improvements thereon
      and
      easements appurtenant thereto) in fee.

     

    ·           Schedule
      4.11(b) sets forth a complete list of all real property and interests in
      real property leased by the Company and the Subsidiaries as lessee or lessor
      (including three (3) real properties which are part of the Distributable Assets
      and will be distributed to an Affiliate of the Controlling Owner prior to the
      Closing and then leased to the Company, each a “Real Property
      Lease”, and collectively the “Company
      Properties”), including a description of each such Real Property
      Lease (including the name of the third party lessor or lessee and the date
      of
      the lease or sublease and all amendments thereto).  The Company
      Properties constitute all interests in real property currently used, occupied
      or
      currently held for use in connection with the business of the Company and the
      Subsidiaries and which are necessary for the continued operation of the business
      of the Company and the Subsidiaries as the business is currently
      conducted.  Each of the Company and the Subsidiaries, as applicable,
      has a valid, binding and enforceable leasehold interest under each of the Real
      Property Leases under which it is a lessee, free and clear of all Liens other
      than Permitted Exceptions.  Each of the Real Property Leases is in
      full force and effect.  Neither the Company nor an Subsidiary is in
      default under any Real Property Lease, and no event has occurred and no
      circumstance exists which, if not remedied, and whether with or without notice
      or the passage of time or both, would result in such a
      default.  Neither the Company nor any Subsidiary has received or given
      any notice of any default or event that with notice or lapse of time, or both,
      would constitute a default by the Company or any Subsidiary under any of the
      Real Property Leases and, to the Knowledge of the Company and the Selling
      Stockholders, no other party is in default thereof, and no party to any Real
      Property Lease has exercised any termination rights with respect
      thereto.  The Company has delivered to Purchaser true, correct and
      complete copies of the Real Property Leases, together with all amendments,
      modifications or supplements, if any, thereto.

     

    ·           To
      the Knowledge of the Company and the Selling Stockholders, all of the Company
      Properties and buildings, fixtures and improvements thereon (i) are in good
      operating condition (ordinary wear and tear excepted) without structural
      defects, and all mechanical and other systems located thereon are in good
      operating condition, and no condition exists requiring material repairs,
      alterations or corrections and (ii) are suitable, sufficient and appropriate
      in
      all respects for their current and contemplated uses.  None of the
      improvements located on the Company Properties constitute a legal non-conforming
      use or otherwise require any special dispensation, variance or special permit
      under any Laws.  The Company Properties are not subject to any leases,
      rights of first refusal, options to purchase or rights of occupancy, except
      the
      Real Property Leases set forth on Schedule 4.11(b).

     

    ·           The
      Company and the Subsidiaries have all certificates of occupancy and Permits
      of
      any Governmental Body necessary or useful for the current use and operation
      of
      each Company Property, and the Company and the Subsidiaries have fully complied
      with all material conditions of the Permits applicable to them.  No
      default or violation, or event that with the lapse of time or giving of notice
      or both would become a default or violation, has occurred in the due observance
      of any Permit.

     

    ·           There
      does not exist any actual or, to the Knowledge of the Company and the Selling
      Stockholders, threatened or contemplated condemnation or eminent domain
      proceedings that affect any Company Property or any part thereof, and none
      of
      the Company, and Subsidiary or any Selling Stockholder has received any notice,
      oral or written, of the intention of any Governmental Body or other Person
      to
      take or use all or any part thereof.

     

    ·           None
      of the Selling Stockholders, the Company or any Subsidiary has received any
      notice from any insurance company that has issued a policy with respect to
      any
      Company Property requiring performance of any structural or other repairs or
      alterations to such Company Property.

     

    ·           Neither
      the Company nor any Subsidiary owns, holds, is obligated under or is a party
      to,
      any option, right of first refusal or other contractual right to purchase,
      acquire, sell, assign or dispose of any real estate or any portion thereof
      or
      interest therein.

     

    1.30           Tangible
      Personal Property.

     

    ·           The
      Company and the Subsidiaries have good and marketable title to all of the items
      of tangible personal property used in the business of the Company and the
      Subsidiaries (except as sold or disposed of subsequent to the date thereof
      in
      the Ordinary Course of Business and not in violation of this Agreement), free
      and clear of any and all Liens, other than the Permitted
      Exceptions.  All such items of tangible personal property which,
      individually or in the aggregate, are material to the operation of the business
      of the Company and the Subsidiaries are in good condition and in a state of
      good
      maintenance and repair (ordinary wear and tear excepted) and are suitable for
      the purposes used.

     

    ·           Schedule
      4.12(b) sets forth all leases of personal property (“Personal
      Property Leases”) involving annual payments in excess of $25,000
      relating to personal property used in the business of the Company or any of
      the
      Subsidiaries or to which the Company or any of the Subsidiaries is a party
      or by
      which the properties or assets of the Company or any of the Subsidiaries is
      bound.  All of the items of personal property under the Personal
      Property Leases are in good condition and repair (ordinary wear and tear
      excepted) and are suitable for the purposes used, and such property is in all
      material respects in the condition required of such property by the terms of
      the
      lease applicable thereto during the term of the lease.  The Company
      has delivered to Purchaser true, correct and complete copies of the Personal
      Property Leases, together with all amendments, modifications or supplements
      thereto.

     

    ·           The
      Company and each of the Subsidiaries has a valid and enforceable leasehold
      interest under each of the Personal Property Leases under which it is a
      lessee.  Each of the Personal Property Leases is in full force and
      effect and neither the Company nor any

     

    ·           Subsidiary
      has received or given any notice of any default or event that with notice or
      lapse of time, or both, would constitute a default by the Company or any
      Subsidiary under any of the Personal Property Leases and, to the Knowledge of
      the Company and the Selling Stockholders, no other party is in default thereof,
      and no party to the Personal Property Leases has exercised any termination
      rights with respect thereto.

     

    1.31           Technology
      and Intellectual Property.

     

    ·           Schedule
      4.13(a) sets forth a complete and accurate list, as of the date of this
      Agreement, of (i) each issued patent owned by the Company or any of its
      Subsidiaries, (ii) each pending patent application filed by or on behalf of
      the
      Company or any of its Subsidiaries, (iii) each trademark registration, service
      mark registration, and copyright registration owned by the Company or any of
      its
      Subsidiaries, (iv) each application for trademark registration, service mark
      registration, and copyright registration made by or on behalf of the Company
      or
      any of its Subsidiaries, (v) each domain name registered by or on behalf of
      the
      Company or any of its Subsidiaries and (vi) each material trade name, d/b/a,
      unregistered trademark, and unregistered service mark used by the Company or
      any
      of its Subsidiaries in connection with its
      business.  Schedule 4.13(a) lists, for each such item of
      Intellectual Property owned by the Company or any of its Subsidiaries, the
      item,
      the jurisdiction, the filing and, if issued, issuance dates and any serial
      or
      registration numbers.  All such Intellectual Property is subsisting,
      and all necessary registration, maintenance, renewal, and other relevant filing
      fees due in connection therewith have been timely paid and all necessary
      documents and certificates in connection therewith have been timely filed with
      the relevant patent, copyright, trademark, or other authorities in the United
      States or foreign jurisdictions, as the case may be, for the purposes of
      maintaining such registered Intellectual Property in full force and
      effect.

     

    ·           The
      Company and its Subsidiaries own all right, title and interest in and to, or
      have valid and continuing rights to use, all Intellectual Property, Software
      and
      other Technology used in the conduct of the business and operations of the
      Company and its Subsidiaries as presently conducted and as currently proposed
      to
      be conducted, free and clear of all Liens or obligations to others.

     

    ·           Except
      with respect to licenses of Software (i) generally available for an annual
      or
      one-time license fee of no more than $10,000 in the aggregate, (ii) distributed
      as “freeware” or (iii) distributed via Internet access without charge and for
      use without charge, Schedule 4.13(c) sets forth a complete and accurate
      as of the date of this Agreement, of all agreements pursuant to which the
      Company or any of its Subsidiaries licenses in or otherwise is authorized to
      use
      all Intellectual Property, Software and other Technology used in the conduct
      of
      the business and operations of the Company and its Subsidiaries as presently
      conducted and as currently contemplated to be conducted.  The Company
      has delivered to Purchaser correct, complete and current copies of all such
      agreements.

     

    ·           Following
      the Closing, the Company and its Subsidiaries will have the right to exercise
      all of their current rights under agreements granting rights to the Company
      or
      any of its Subsidiaries with respect to Intellectual Property, Software and
      other Technology of a third party to the same extent and in the same manner
      they
      would have been able to had the transaction contemplated by this Agreement
      not
      occurred, and without the payment of any

     

    ·           additional
      consideration as a result of such transaction and without the necessity of
      any
      third party consent as a result of such transaction.

     

    ·           All
      of the material Intellectual Property owned by the Company or any of its
      Subsidiaries is valid and enforceable.  Since January 1, 2005 neither
      the Company nor any of its Subsidiaries has brought any action, suit or
      proceeding or asserted any claim (other than claims that have been resolved
      to
      the Company’s satisfaction) against any Person for infringing or
      misappropriating any Technology or, to the Company’s Knowledge, Intellectual
      Property owned by the Company or any of its Subsidiaries, nor is there any
      basis
      for any such action, suit or proceeding.

     

    ·           There
      is no action, suit, proceeding, hearing, investigation, notice or complaint
      pending or, to the Company’s Knowledge, threatened, by any third party before
      any court or tribunal (including, without limitation, the United States Patent
      and Trademark Office or equivalent authority anywhere in the world) relating
      to
      any of Company’s or any of its Subsidiaries’ Intellectual Property or
      Technology, nor has any claim or demand been made by any third party that (i)
      challenges the validity, enforceability, use or exclusive ownership of any
      Intellectual Property or Technology owned by the Company or any of its
      Subsidiaries or (ii) alleges any infringement, misappropriation, violation,
      or
      unfair competition or trade practices by the Company or any of its Subsidiaries
      of any Intellectual Property or Technology of any third party, nor is the
      Company aware of any basis for any such claim or demand.

     

    ·           None
      of the Company’s or any of its Subsidiaries’ Technology or Intellectual Property
      is subject to any outstanding injunction, decree, order, judgment, agreement
      or
      stipulation that restricts in any manner the use, transfer or licensing thereof
      by the Company or any of its Subsidiaries or affects the validity, use or
      enforceability of any such Technology or Intellectual Property.

     

    1.32           Material
      Contracts.

     

    ·           Schedule
      4.14(a) sets forth, by reference to the applicable subsection of this
Section 4.14(a), all of the following Contracts to which the Company or
      any of the Subsidiaries is a party or by which any of them or their respective
      assets of properties are bound (collectively, the “Material
      Contracts”):

     

    ·      Contracts
      with any Selling Stockholder or Affiliate thereof or any current or former
      officer, director, stockholder or Affiliate of the Company or any of the
      Subsidiaries;

     

    ·      Contracts
      with any labor union or association representing any employee of the Company
      or
      any of the Subsidiaries;

     

    ·      Contracts
      for the sale of any of the assets of the Company or any of the Subsidiaries
      other than in the Ordinary Course of Business or for the grant to any Person
      of
      any preferential rights to purchase any of its assets;

     

    ·      Contracts
      for joint ventures, strategic alliances, partnerships, licensing arrangements,
      or sharing of profits or proprietary information (excluding any general
      Contracts for marketing commissions or other purchasing incentive or rebate
      programs);

     

    ·      Contracts
      containing covenants of the Company or any of the Subsidiaries not to compete
      in
      any material line of business or with any Person in any material geographical
      area or not to solicit or hire any person with respect to employment or
      covenants of any other Person not to compete with the Company or any of the
      Subsidiaries in any material line of business or in any material geographical
      area or not to solicit or hire any person with respect to
      employment;

     

    ·      Contracts
      for the acquisition (by merger, purchase of stock or assets or otherwise) by
      the
      Company or any of the Subsidiaries of any operating business or material assets
      or the capital stock of any other Person of which any operative provision
      thereof is still in effect and creates an obligation of the Company or any
      of
      the Subsidiaries;

     

    ·      Contracts
      relating to the incurrence, assumption or guarantee of any Indebtedness or
      imposing a Lien on any of the assets of the Company or any Subsidiary, including
      indentures, guarantees, loan or credit agreements, sale and leaseback
      agreements, purchase money obligations incurred in connection with the
      acquisition of property, mortgages, pledge agreements, security agreements,
      or
      conditional sale or title retention agreements;

     

    ·      all
      Contracts providing for payments by or to the Company or any of the Subsidiaries
      in excess of $2,000,000 in any fiscal year or $5,000,000 in the aggregate during
      the term thereof;

     

    ·      all
      Contracts obligating the Company or any of the Subsidiaries to provide or obtain
      products or services for a period of one year or more (requiring the payment
      of
      $2,000,000 or more) or requiring the Company to purchase or sell a stated
      portion of its requirements or outputs;

     

    ·      Contracts
      under which the Company or any of the Subsidiaries has made advances or loans
      to
      any other Person (other than accounts payable arising in the Ordinary Course
      of
      Business);

     

    ·      Contracts
      providing for severance, retention, change in control or other similar
      payments;

     

    ·      Contracts,
      involving expected payment of $150,000 or more in any annual period, for the
      employment of any individual on a full-time, part-time or consulting
      basis;

     

    ·      material
      management Contracts and Contracts with independent contractors or consultants
      (or similar arrangements) that are not cancelable without penalty or further
      payment and without more than 30 days’ notice; and

     

    ·      outstanding
      Contracts of guaranty, surety or indemnification, direct or indirect, by the
      Company or any of the Subsidiaries.

     

    ·           Each
      of the Material Contracts is in full force and effect and is the legal, valid
      and binding obligation of the Company or any Subsidiary which is party thereto,
      and of the other parties thereto enforceable against each of them in accordance
      with its terms and, assuming that the consents or waivers (as applicable) set
      forth on Schedule 4.3 are obtained, upon consummation of the transactions
      contemplated by this Agreement shall continue in full force and effect without
      penalty or other adverse consequence.  Neither the Company nor any
      Subsidiary is in default under any Material Contract, nor, to the Knowledge
      of
      the Company or the Selling Stockholders, is any other party to any Material
      Contract in breach of or default thereunder, and no event has occurred that
      with
      the lapse of time or the giving of notice or both would constitute a breach
      or
      default on the Company, any Subsidiary or any other party
      thereunder.  No party to any of the Material Contracts has exercised
      any termination rights with respect thereto, and no party has given notice
      of
      any significant dispute with respect to any Material Contract.  The
      Company has made available to Purchaser true, correct and complete copies of
      all
      of the Material Contracts, together with all amendments, modifications or
      supplements thereto.

     

    1.33           Employee
      Benefits Plans.

     

    ·           Schedule
      4.15(a) sets forth a correct and complete list of:  (i) all
“employee benefit plans” (as defined in Section 3(3) of ERISA), and all other
      employee benefit plans, programs, agreements, policies, arrangements or payroll
      practices, including bonus plans, employment, consulting or other compensation
      agreements, collective bargaining agreements, incentive, equity or equity-based
      compensation, or deferred compensation arrangements, change in control,
      termination or severance plans or arrangements, stock purchase, severance pay,
      sick leave, vacation pay, salary continuation for disability, hospitalization,
      medical insurance, life insurance and scholarship plans and programs maintained
      by the Company or any of its Subsidiaries or to which the Company or any of
      the
      Subsidiaries contributed or is obligated to contribute thereunder for current
      or
      former employees of the Company or any of the Subsidiaries (the
“Employees”) (collectively, the “Company
      Plans”), and (ii) all “employee pension plans” (as defined in
      Section 3(2) of ERISA, subject to Title IV of ERISA or Section 412 of the Code,
      maintained by the Company or any of its Affiliates and any trade or business
      (whether or not incorporated) that is or has ever been under common control,
      or
      that is or has ever been treated as a single employer, with any of them under
      Section 414(b), (c), (m) or (o) of the Code (each, an “ERISA
      Affiliate”) or to which the Company or any ERISA Affiliate
      contributed or has ever been obligated to contribute thereunder (the
“Title IV Plans”).  Schedule 4.15(a)
      sets forth each Company Plan and Title IV Plan that is a “multiemployer plan”
(as defined in Section 3(37) of ERISA (a “Multiemployer
      Plan”)), or is or has been subject to Sections 4063 or 4064 of
      ERISA.

     

    ·           Correct
      and complete copies of the following documents, with respect to each of the
      Company Plans (other than a Multiemployer Plan), have been made available or
      delivered to Purchaser by the Company, to the extent
      applicable:  (i) any plans, all amendments thereto and related
      trust documents, insurance contracts or other funding arrangements, and
      amendments thereto; (ii) the most recent Forms 5500 and all schedules
      thereto and the most

     

    ·           recent
      actuarial report, if any; (iii) the most recent IRS determination letter;
      (iv) summary plan descriptions; (v) written communications to
      employees relating to the Company Plans; and (vi) written descriptions of
      all non-written agreements relating to the Company Plans.

     

    ·           The
      Company Plans have been maintained in all material respects in accordance with
      their terms and with all provisions of ERISA, the Code (including rules and
      regulations thereunder) and other applicable Federal and state Laws and
      regulations, and neither the Company (or any of the Subsidiaries) nor any “party
      in interest” or “disqualified person” with respect to the Company Plans has
      engaged in a non-exempt “prohibited transaction” within the meaning of Section
      4975 of the Code or Section 406 of ERISA.  No fiduciary has any
      liability for breach of fiduciary duty or any other failure to act or comply
      in
      connection with the administration or investment of the assets of any Company
      Plan.

     

    ·           The
      Company Plans intended to qualify under Section 401 of the Code are so qualified
      and any trusts intended to be exempt from Federal income taxation under Section
      501 of the Code are so exempt, and nothing has occurred with respect to the
      operation of the Company Plans that could cause the loss of such qualification
      or exemption or the imposition of any liability, penalty or tax under ERISA
      or
      the Code.

     

    ·           Each
      Company Plan that is intended to meet the requirements for tax-favored treatment
      under Subchapter B of Chapter 1 of Subtitle A of the Code meets such
      requirements.

     

    ·           Neither
      the Company nor any ERISA Affiliate has withdrawn in a complete or partial
      withdrawal from any Multiemployer Plan prior to the Closing Date, nor have
      any
      of them incurred any liability due to the termination or reorganization of
      a
      Multiemployer Plan.  Purchaser will not have (i) any obligation
      to make any contribution to any Multiemployer Plan or (ii) any withdrawal
      liability from any Multiemployer Plan under Section 4201 of ERISA, which it
      would not have had but for the consummation of the transactions contemplated
      by
      this Agreement.

     

    ·           Schedule
      4.15(g) sets forth on a plan by plan basis, the present value of benefits
      payable presently or in the future to Employees under each unfunded Company
      Plan.

     

    ·           All
      contributions (including all employer contributions and employee salary
      reduction contributions) required to have been made under any of the Company
      Plans (including workers compensation) or Title IV Plans or by Law (without
      regard to any waivers granted under Section 412 of the Code), to any funds
      or
      trusts established thereunder or in connection therewith have been made by
      the
      due date thereof (including any valid extension), and all contributions for
      any
      period ending on or before the Closing Date that are not yet due will have
      been
      paid or sufficient accruals for such contributions and other payments in
      accordance with GAAP are duly and fully provided for on the Balance
      Sheet.  No accumulated funding deficiencies exist in any of the
      Company Plans or Title IV Plans subject to Section 412 of the Code.

     

    ·           There
      is no “amount of unfunded benefit liabilities” (as defined in Section
      4001(a)(18) of ERISA) in any of the Title IV Plans.  Each of the Title
      IV Plans are fully funded in accordance with the actuarial assumptions used
      by
      the Pension Benefit Guaranty Corporation (“PBGC”) to
      determine the level of funding required in the event of the termination of
      a
      Title IV Plan and the “benefit liabilities” (as defined in Section 4001(a)(16)
      of ERISA) of such Title IV Plan using such PBGC assumptions do not exceed the
      assets of such Title IV Plan.

     

    ·           There
      has been no “reportable event” (as defined in Section 4043 of ERISA) with
      respect to the Title IV Plans that would require the giving of notice or any
      event requiring disclosure under Section 4041(c)(3)(C) or 4063(a) of
      ERISA.

     

    ·           Neither
      the Company nor any ERISA Affiliate has terminated any Title IV Plan, or
      incurred any outstanding liability under Section 4062 of ERISA to the PBGC
      or to
      a trustee appointed under Section 4042 of ERISA.  All premiums due the
      PBGC with respect to the Title IV Plans have been paid.

     

    ·           No
      liability under any Company Plan or Title IV Plan has been funded nor has any
      such obligation been satisfied with the purchase of a contract from an insurance
      company that is not rated AA by Standard & Poor’s Corporation or the
      equivalent by any other nationally recognized rating agency.

     

    ·           None
      of the Company, any ERISA Affiliate nor any organization to which the Company
      or
      any ERISA Affiliate is a successor or parent corporation within the meaning
      of
      Section 4069(b) of ERISA has engaged in any transaction within the meaning
      of
      Section 4069 or 4212(c) of ERISA.

     

    ·           There
      are no pending actions, claims or lawsuits that have been asserted or instituted
      against the Company Plans, the assets of any of the trusts under the Company
      Plans or the sponsor or administrator of any of the Company Plans, or against
      any fiduciary of the Company Plans with respect to the operation of any of
      the
      Company Plans (other than routine benefit claims), nor does the Company or
      the
      Selling Stockholders have any Knowledge of facts that could form the basis
      for
      any such claim or lawsuit.

     

    ·           There
      is no material violation of ERISA or the Code with respect to the filing of
      applicable reports, documents and notices regarding the Company Plans with
      the
      Secretary of Labor or the Secretary of the Treasury or the furnishing of such
      documents to the participants in or beneficiaries of the Company
      Plans.  All amendments and actions required to bring the Company Plans
      into conformity in all material respects with all of the applicable provisions
      of the Code, ERISA and other applicable Laws have been made or
      taken.  Any bonding required with respect to the Company Plans in
      accordance with applicable provisions of ERISA has been obtained and is in
      full
      force and effect.

     

    ·           Except
      as set forth on Schedule 4.15(p), none of the Company Plans provides for
      post-employment life or health insurance, benefits or coverage for any
      participant or any beneficiary of a participant, except as may be required
      under
      the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
      (“COBRA”), and at the expense of the participant or the
      participant’s beneficiary.  Each of the Company and any ERISA
      Affiliate

     

    ·           which
      maintains a “group health plan” within the meaning Section 5000(b)(1) of the
      Code has complied with the notice and continuation requirements of Section
      4980B
      of the Code, COBRA, Part 6 of Subtitle B of Title I of ERISA and the regulations
      thereunder.

     

    ·           Neither
      the execution and delivery of this Agreement nor the consummation of the
      transactions contemplated hereby will (i) result in any payment becoming due
      to
      any Employee from the Company or any Subsidiary, (ii) increase any benefits
      otherwise payable under any Company Plan or Title IV Plan or (iii) result in
      the
      acceleration of the time of payment or vesting of any such benefits under any
      Company Plan or Title IV Plan.

     

    ·           Neither
      the Company nor any of the Subsidiaries has a contract, plan or commitment,
      whether legally binding or not, to create any additional Company Plan or to
      modify any existing Company Plan.

     

    ·           No
      stock or other security issued by the Company or any of the Subsidiaries forms
      or has formed a material part of the assets of any Company Plan.

     

    ·           Any
      individual who performs services for the Company or any of the Subsidiaries
      (other than through a contract with an organization other than such individual)
      and who is not treated as an employee of the Company or any of the Subsidiaries
      for Federal income tax purposes by the Company or any of the Subsidiaries is
      not
      an employee for such purposes.

     

    1.34           Labor.

     

    ·           Neither
      the Company nor any of the Subsidiaries is a party to any labor or collective
      bargaining agreement and there are no labor or collective bargaining agreements
      which pertain to employees of the Company or any of the
      Subsidiaries.

     

    ·           No
      Employees are represented by any labor organization.  No labor
      organization or group of Employees has made a pending demand for recognition,
      and there are no representation proceedings or petitions seeking a
      representation proceeding presently pending or, to the Knowledge of the Company
      or the Selling Stockholders, threatened to be brought or filed, with the
      National Labor Relations Board or other labor relations
      tribunal.  There is no organizing activity involving the Company or
      any of the Subsidiaries pending or, to the Knowledge of the Company or the
      Selling Stockholders, threatened by any labor organization or group of
      Employees.

     

    ·           There
      are no (i) strikes, work stoppages, slowdowns, lockouts or arbitrations or
      (ii) material grievances or other labor disputes pending or, to the
      Knowledge of the Company or the Selling Stockholders, threatened against or
      involving the Company or any of the Subsidiaries.  There are no unfair
      labor practice charges, grievances or complaints pending or, to the Knowledge
      of
      the Company or the Selling Stockholders, threatened by or on behalf of any
      Employee or group of Employees.

     

    ·           There
      are no material complaints, charges or claims against the Company or any of
      the
      Subsidiaries pending or, to Knowledge of the Company or the Selling
      Stockholders,

     

    ·           threatened
      that could be brought or filed, with any Governmental Body based on, arising
      out
      of, in connection with or otherwise relating to the employment or termination
      of
      employment of or failure to employ, any individual.  Each of the
      Company and the Subsidiaries is in material compliance with all Laws relating
      to
      the employment of labor, including all such Laws relating to wages, hours,
      WARN
      and any similar state or local “mass layoff” or “plant closing” Law, collective
      bargaining, discrimination, civil rights, safety and health, workers’
compensation and the collection and payment of withholding and/or social
      security taxes and any similar tax.  There has been no “mass layoff”
or “plant closing” (as defined by WARN) with respect to the Company or any of
      the Subsidiaries within the six (6) months prior to Closing.

     

    1.35           Litigation.  Except
      as set forth in Schedule 4.17, there is no Legal Proceeding pending or,
      to the Knowledge of the Company or the Selling Stockholders, threatened against
      the Company or any of the Subsidiaries (or to the Knowledge of the Company
      or
      the Selling Stockholders, pending or threatened, against any of the officers,
      directors or employees of the Company or any of the Subsidiaries with respect
      to
      their business activities on behalf of the Company), or to which the Company
      or
      any of the Subsidiaries is otherwise a party before any Governmental
      Body.  Except as set forth on Schedule 4.17, neither the
      Company nor any Subsidiary is subject to any Order, and neither the Company
      nor
      any Subsidiary is in breach or violation of any Order.  Except as set
      forth on Schedule 4.17, neither the Company nor any Subsidiary is engaged
      in any legal action to recover monies due it or for damages sustained by
      it.  There are no Legal Proceedings pending or, to the Knowledge of
      the Company or the Selling Stockholders, threatened against the Company or
      to
      which the Company is otherwise a party relating to this Agreement or, any
      Company Document or the transactions contemplated hereby or
      thereby.

     

    1.36           Compliance
      with Laws; Permits.

     

    ·           The
      Company and the Subsidiaries are in compliance in all material respects with
      all
      Laws applicable to its business, operations or assets.  Neither the
      Company nor any Subsidiary has received any notice of or, to the Knowledge
      of
      the Company or the Selling Stockholders, been charged with the violation of
      any
      Laws.  To the Knowledge of the Company or the Selling Stockholders,
      neither the Company nor any Subsidiary is under investigation with respect
      to
      the violation of any Laws and there are no facts or circumstances which could
      form the basis for any such violation.

     

    ·           Schedule 4.18
      contains a list of all Permits which are required for the operation of the
      business of the Company and the Subsidiaries as presently conducted and as
      presently intended to be conducted (“Company Permits”),
      other than those the failure of which to possess is immaterial.  The
      Company and the Subsidiaries currently have all Permits which are required
      for
      the operation of their respective businesses as presently conducted and as
      presently intended to be conducted, other than those the failure of which to
      possess is immaterial.  Neither the Company nor any Subsidiary is in
      default or violation, and no event has occurred which, with notice or the lapse
      of time or both, would constitute a default or violation, in any material
      respect of any term, condition or provision of any Company Permit, and to the
      Knowledge of the Company or the Selling Stockholders, there are no facts or
      circumstances which could form the basis for any such default or
      violation.  There are no Legal Proceedings pending or, to
      the

     

    ·           Knowledge
      of the Company or the Selling Stockholders, threatened, relating to the
      suspension, revocation or modification of any Company
      Permit.  Assuming that the consents or waivers (as applicable) set
      forth on Schedule 4.3 are obtained, none of the Company Permits will be
      impaired or in any way affected by the consummation of the transactions
      contemplated by this Agreement.

     

    1.37           Environmental
      Matters.  Except as set forth on Schedule 4.19
      hereto:

     

    ·           the
      operations of the Company and each of the Subsidiaries are and have been in
      material compliance with all applicable Environmental Laws, which compliance
      includes obtaining, maintaining in good standing and complying with all
      Environmental Permits and no action or proceeding is pending or, to the
      Knowledge of the Company or the Selling Stockholders, threatened to revoke,
      modify or terminate any such Environmental Permit, and, to the Knowledge of
      the
      Company or the Selling Stockholders, no facts, circumstances or conditions
      currently exist that could adversely affect such continued compliance with
      Environmental Laws and Environmental Permits or require currently unbudgeted
      capital expenditures to achieve or maintain such continued compliance with
      Environmental Laws and Environmental Permits;

     

    ·           neither
      the Company nor any of the Subsidiaries is the subject of any outstanding
      written Order or Contract with any Governmental Body or Person with respect
      to
      (i) Environmental Laws, (ii) Remedial Action or (iii) any Release or threatened
      Release of a Hazardous Material;

     

    ·           no
      claim has been made or is pending or, to the Knowledge of the Company or the
      Selling Stockholders, threatened against the Company or any Subsidiary alleging
      either or both that the Company or any of the Subsidiaries may be in violation
      of any Environmental Law or Environmental Permit or may have any material
      liability under any Environmental Law;

     

    ·           to
      the Knowledge of the Company or the Selling Stockholders, no facts,
      circumstances or conditions exist with respect to the Company or any of the
      Subsidiaries or any property currently or formerly owned, operated or leased
      by
      the Company or any of the Subsidiaries or any property to which the Company
      or
      any of the Subsidiaries arranged for the disposal or treatment of Hazardous
      Materials that could reasonably be expected to result in the Company or any
      of
      the Subsidiaries incurring material unbudgeted Environmental Costs and
      Liabilities;

     

    ·           there
      are no investigations of the business or operations, currently or, to the
      Knowledge of the Company or the Selling Stockholders, previously owned, operated
      or leased property of the Company or any of the Subsidiaries pending or, to
      the
      Knowledge of the Company or the Selling Stockholders, threatened which could
      lead to the imposition of any material Environmental Costs and Liabilities
      or
      Liens under Environmental Law;

     

    ·           the
      transactions contemplated hereunder do not require the consent of or filings
      with any Governmental Body with jurisdiction over the Company or any Subsidiary
      with respect to environmental matters;

     

    ·           there
      is not located at any of the properties currently or (while owned, operated
      or
      leased by the Company or any Subsidiary) previously owned, operated or leased
      by
      the Company or any of the Subsidiaries any (i) underground storage tanks, (ii)
      landfill, (iii) surface impoundment, (iii) asbestos-containing material or
      (iv)
      equipment containing polychlorinated biphenyls; and

     

    ·           the
      Company has provided to Purchaser all environmentally related audits, studies,
      reports, analyses, and results of investigations that have been performed by
      or
      on behalf of the Selling Stockholders, the Company or any of its Subsidiaries
      with respect to the currently or previously owned, leased or operated properties
      of the Company or any of the Subsidiaries.

     

    1.38           Insurance.  The
      Company and the Subsidiaries have insurance policies in full force and effect
      (a) for such amounts as are reasonable for all requirements of Law and all
      agreements to which the Company or any of the Subsidiaries is a party or by
      which it is bound, and (b) which are in such amounts, with such deductibles
      and
      against such risks and losses, as are reasonable for the business, assets and
      properties of the Company and the Subsidiaries.  Set forth in
Schedule 4.20 is a list of all insurance policies and all fidelity bonds
      held by or applicable to the Company or any of the Subsidiaries setting forth,
      in respect of each such policy, the policy name, policy number, carrier, term,
      type and amount of coverage and annual premium, whether the policies may be
      terminated upon consummation of the transactions contemplated hereby and if
      and
      to what extent events being notified to the insurer after the Closing Date
      are
      generally excluded from the scope of the respective policy.  Except as
      set forth on Schedule 4.20, no event relating to the Company or any of
      the Subsidiaries has occurred which could reasonably be expected to result
      in a
      retroactive upward adjustment in premiums under any such insurance policies
      or
      which could reasonably be expected to result in a prospective upward adjustment
      in such premiums.  Excluding insurance policies that have expired and
      been replaced in the Ordinary Course of Business, no insurance policy has been
      cancelled within the last two years and, to the Knowledge of the Company or
      the
      Selling Stockholders, no threat has been made to cancel any insurance policy
      of
      the Company or any of the Subsidiaries during such period.  Except as
      noted on Schedule 4.20, all such insurance will remain in full force and
      effect immediately following the consummation of the transactions contemplated
      hereby.  No event has occurred, including the failure by the Company
      or any of the Subsidiaries to give any notice or information or the Company
      or
      any of the Subsidiaries giving any inaccurate or erroneous notice or
      information, which limits or impairs the rights of the Company or any of the
      Subsidiaries under any such insurance policies.

     

    1.39           Inventories.  Subject,
      in each instance, to the effects of the proviso contained in the last
      sentence of the first paragraph of Section 4.7(a):  (a) the
      inventories of the Company and the Subsidiaries are in good and marketable
      condition, and are usable and of a quantity and quality saleable in the Ordinary
      Course of Business; (b) the inventories of the Company and the Subsidiaries
      set
      forth in the Balance Sheet were valued at the lower of cost (on a FIFO/LIFO
      basis) or market and were properly stated therein in accordance with GAAP
      consistently applied; (c) adequate reserves have been reflected in the Balance
      Sheet for obsolete, excess, damaged, slow-moving, or otherwise unusable
      inventory, which reserves were calculated in a manner consistent with past
      practice and in accordance with GAAP consistently applied; and (d) the
      inventories of the Company and the Subsidiaries constitute sufficient quantities
      for the normal operation of business in accordance with past
      practice.

     

    1.40           Accounts
      and Notes Receivable and Payable

     

    ·           Subject,
      in each instance, to the effects of the proviso contained in the last
      sentence of the first paragraph of Section 4.7(a):  (i) all
      accounts and notes receivable of the Company and the Subsidiaries have arisen
      from bona fide transactions in the Ordinary Course of Business consistent with
      past practice and are payable on ordinary trade terms; (ii) all accounts and
      notes receivable of the Company and the Subsidiaries reflected on the Balance
      Sheet are good and collectible at the aggregate recorded amounts thereof, net
      of
      any applicable reserve for returns or doubtful accounts reflected thereon,
      which
      reserves are adequate and were calculated in a manner consistent with past
      practice and in accordance with GAAP consistently applied; (iii) all accounts
      and notes receivable arising after the Balance Sheet Date are good and
      collectible at the aggregate recorded amounts thereof, net of any applicable
      reserve for returns or doubtful accounts, which reserves are adequate and were
      calculated in a manner consistent with past practice and in accordance with
      GAAP
      consistently applied; and (iv) none of the accounts or the notes receivable
      of
      the Company or any of the Subsidiaries (A) are subject to any setoffs or
      counterclaims or (B) represent obligations for goods sold on consignment, on
      approval or on a sale-or-return basis or subject to any other repurchase or
      return arrangement.

     

    ·           All
      accounts payable of the Company and the Subsidiaries reflected in the Balance
      Sheet or arising after the date thereof are the result of bona fide transactions
      in the Ordinary Course of Business and have been paid or are not yet due and
      payable.

     

    1.41           Related
      Party Transactions.  Except as set forth on Schedule 4.23,
      no employee, officer, director, stockholder, partner or member of the Company
      of
      any of the Subsidiaries, any member of his or her immediate family or any of
      their respective Affiliates (“Related Persons”) (i) owes
      any amount to the Company or any of the Subsidiaries nor does the Company or
      any
      of the Subsidiaries owe any amount to, or has the Company or any of the
      Subsidiaries committed to make any loan or extend or guarantee credit to or
      for
      the benefit of, any Related Person, (ii) is involved in any business arrangement
      or other relationship with the Company or any of the Subsidiaries (whether
      written or oral), (iii) owns any property or right, tangible or intangible,
      that
      is used by the Company or any of the Subsidiaries, (iv) has any claim or cause
      of action against the Company or any of the Subsidiaries or (v) owns any direct
      or indirect interest of any kind in, or controls or is a director, officer,
      employee or partner of, or consultant to, or lender to or borrower from or
      has
      the right to participate in the profits of, any Person which is a competitor,
      supplier, customer, landlord, tenant, creditor or debtor of the Company or
      any
      Subsidiary.

     

    1.42           Customers
      and Suppliers.  

     

    ·           Schedule
      4.24(a) sets forth a list of the thirty (30) largest customers and the ten
      (10) largest suppliers of the Company and the Subsidiaries, as measured by
      the
      dollar amount of purchases therefrom or thereby, during each of the fiscal
      years
      ended December 31, 2006 and 2005, showing the approximate total sales by the
      Company and the Subsidiaries to each such customer and the approximate total
      purchases by the Company and the Subsidiaries from each such supplier, during
      such period.

     

    ·           Except
      as set forth on Schedule 4.24(b), since the Balance Sheet Date, no
      customer or supplier listed on Schedule 4.24(a) has terminated its
      relationship with the Company or any of the Subsidiaries or materially reduced
      or changed the pricing or other terms of its business with the Company or any
      of
      the Subsidiaries and, to the Knowledge of the Company or the Selling
      Stockholders, no customer or supplier listed on Schedule 4.24(a) has
      notified the Company or the Subsidiaries that it intends to terminate or
      materially reduce or change the pricing or other terms of its business with
      the
      Company or any of the Subsidiaries.

     

    1.43           Product
      Warranty; Product Liability.  

     

    ·           To
      the Knowledge of the Company and the Selling Stockholders, each product
      manufactured, sold or delivered by the Company or any of the Subsidiaries in
      conducting its business has been in material conformity with all product
      specifications, all express and implied warranties and all applicable
      Laws.  Neither the Company nor any of the Subsidiaries has any
      material liability for replacement or repair of any such products or other
      damages in connection therewith or any other customer or product obligations
      not
      reserved against on the Balance Sheet.

     

    ·           Neither
      the Company nor any of the Subsidiaries has any material liability arising
      out
      of any injury to individuals or property as a result of the ownership,
      possession, or use of any product designed, manufactured, assembled, repaired,
      maintained, delivered, sold or installed, or services rendered, by or on behalf
      of the Company or any of the Subsidiaries.  Neither the Company nor
      any of the Subsidiaries has committed any act or failed to commit any act,
      which
      would result in, and there has been no occurrence which would give rise to
      or
      form the basis of, any material product liability or liability for breach of
      warranty (whether covered by insurance or not) on the part of the Company or
      any
      of the Subsidiaries with respect to products designed, manufactured, assembled,
      repaired, maintained, delivered, sold or installed or services rendered by
      or an
      behalf of the Company or any of the Subsidiaries.

     

    1.44           Banks;
      Power of Attorney.  Schedule 4.26 contains a complete and
      correct list of the names and locations of all banks in which the Company or
      any
      Subsidiary has accounts or safe deposit boxes and the names of all persons
      authorized to draw thereon or to have access thereto.  Except as set
      forth on Schedule 4.26, no person holds a power of attorney to act on
      behalf of the Company or any Subsidiary.

     

    1.45           Certain
      Payments.  To the Knowledge of the Company or the Selling
      Stockholders, none of the Company, any Subsidiary or any Selling Stockholder
      or
      any director, officer, employee, or other Person associated with or acting
      on
      behalf of any of them, has directly or indirectly (a) made in violation of
      any
      Law any contribution, gift, bribe, rebate, payoff, influence payment, kickback,
      or other payment to any Person, private or public, regardless of form, whether
      in money, property, or services (i) to obtain favorable treatment in securing
      business for the Company or any Subsidiary, (ii) to pay for favorable treatment
      for business secured by the Company or any Subsidiary, (iii) to obtain special
      concessions or for special concessions already obtained, for or in respect
      of
      the Company or any Subsidiary, or (b) established or maintained any fund or
      asset with respect to the Company or any Subsidiary that has not be recorded
      in
      the books and records of the Company and the Subsidiaries.

     

    1.46           Certain
      Governmental Matters.  Neither the Company nor any Subsidiary has
      received from any U.S. Governmental Body or any prime contractor or
      subcontractor from a U.S. Governmental Body any special, preferential or
      advantageous treatment in the award of a Government Contract, or in any other
      manner, including as a “small business concern,” “small disadvantaged business”
(or “minority-owned business”), “women-owned” concern, or any other socially and
      economically disadvantaged classification, as defined in the Small Business
      Act
      (15 U.S.C. Sec. 631, et. seq.), the Federal Property and Administrative Services
      Act (41 U.S.C. Sec. 252), section 7102 of the Federal Acquisition Streamlining
      Act of 1994 (Public Law 103-355), 10 U.S.C. Sec 2323, Executive Order 12138,
      May
      18, 1979, or regulations implementing these requirements, including the Federal
      Acquisition Regulations.  “Government
      Contract” means any prime contract with a U.S. Governmental Body
      and any subcontract with a prime contractor or higher tier subcontractor under
      a
      prime contract with a U.S. Governmental Body.

     

    1.47           Financial
      Advisors.  Except as set forth on Schedule 4.29, no Person
      has acted, directly or indirectly, as a broker, finder or financial advisor
      for
      the Company or any Subsidiary in connection with the transactions contemplated
      by this Agreement.  On and after the Closing Date, none of the
      Company, its Subsidiaries, Purchaser or any other Purchaser Indemnified Party
      is
      or will be obligated or liable for the payment of any fee or commission or
      like
      payment in respect of any broker, finder or financial advisor for the Company
      or
      any Subsidiary in connection with the transactions contemplated by this
      Agreement.

     

     

    REPRESENTATIONS
      AND WARRANTIES OF PURCHASER

     

    
      Purchaser
        hereby represents and warrants to the Selling Stockholders that:

       

    

    1.48           Organization
      and Good Standing.  Purchaser is a corporation duly organized,
      validly existing and in good standing under the laws of the State of Texas
      and
      has all requisite corporate power and authority to own, lease and operate
      properties and carry on its business.

     

    1.49           Authorization
      of Agreement.  Purchaser has full corporate power and authority to
      execute and deliver this Agreement and each other agreement, document,
      instrument or certificate contemplated by this Agreement or to be executed
      by
      Purchaser in connection with the consummation of the transactions contemplated
      hereby and thereby (the “Purchaser Documents”), and to
      consummate the transactions contemplated hereby and thereby.  The
      execution, delivery and performance by Purchaser of this Agreement and each
      Purchaser Document have been duly authorized by all necessary corporate action
      on behalf of Purchaser.  This Agreement has been, and each Purchaser
      Document will be at or prior to the Closing, duly executed and delivered by
      Purchaser and (assuming the due authorization, execution and delivery by the
      other parties hereto and thereto) this Agreement constitutes, and each Purchaser
      Document when so executed and delivered will constitute, the legal, valid and
      binding obligation of Purchaser, enforceable against Purchaser in accordance
      with its respective terms.

     

    1.50           Conflicts;
      Consents of Third Parties.

     

    ·           None
      of the execution and delivery by Purchaser of this Agreement and of the
      Purchaser Documents, the consummation of the transactions contemplated hereby
      or
      thereby, or compliance by Purchaser with any of the provisions hereof or thereof
      will conflict with, or result in violation or breach of, conflict with 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 under any provision of (i) the certificate of incorporation and
      by-laws or comparable organizational documents of such Purchaser; (ii) any
      Contract, or Permit to which Purchaser is a party or by which any of the
      properties or assets of Purchaser are bound; (iii) any Order of any Governmental
      Body applicable to Purchaser or by which any of the properties or assets of
      Purchaser are bound; or (iv) any applicable Law.

     

    ·           No
      consent, waiver, approval, Order, Permit or authorization of, or declaration
      or
      filing with, or notification to, any Person or Governmental Body is required
      on
      the part of Purchaser in connection with the execution and delivery of this
      Agreement or the Purchaser Documents or the compliance by Purchaser with any
      of
      the provisions hereof or thereof, except for compliance with the applicable
      requirements of the HSR Act.

     

    1.51           Litigation.  There
      are no Legal Proceedings pending or, to the Knowledge of Purchaser, threatened
      against Purchaser or to which Purchaser is otherwise a party relating to this
      Agreement, the Purchaser Documents or the transactions contemplated hereby
      and
      thereby.

     

    1.52           Investment
      Intention.  Purchaser is acquiring the Shares for its own account,
      for investment purposes only and not with a view to the distribution (as such
      term is used in Section 2(11) of the Securities Act
      thereof.  Purchaser understands that the Shares have not been
      registered under the Securities Act and cannot be sold unless subsequently
      registered under the Securities Act or an exemption from such registration
      is
      available.

     

    1.53           Financial
      Advisors.  Except for Stephens, Inc., no Person has acted,
      directly or indirectly, as a broker, finder or financial advisor for Purchaser
      in connection with the transactions contemplated by this Agreement and no Person
      is entitled to any fee or commission or like payment in respect
      thereof.

     

    1.54           Financing.  Schedule
      5.7 sets forth complete and correct copies of firm commitment letters from
      the financial institutions signatories thereto for the debt financing to be
      used
      in connection with the transactions contemplated hereby (the
“Financing”).  The amount of the Financing,
      together with other financing to be provided by Purchaser, will provide
      sufficient funds for Purchaser to consummate the transactions contemplated
      by
      this Agreement.

     

     

    COVENANTS

     

    1.55           Access
      to Information; Confidentiality.  The Company shall, and the
      Company shall cause the Subsidiaries to, afford to Purchaser and its
      accountants, counsel, financial advisors and other representatives, and to
      prospective lenders and other financing

     

    1.56           sources
      and each of their respective representatives, access, during normal business
      hours upon reasonable notice throughout the period prior to the Closing, to
      the
      Company’s and the Subsidiaries’ respective properties and facilities (including
      all owned or leased real property and the buildings, structures, fixtures,
      appurtenances and improvements erected, attached or located thereon), books,
      financial information (including working papers and data in the possession
      of
      the Company’s or the Subsidiaries’ or their respective independent public
      accountants, internal audit reports, and “management letters” from such
      accountants with respect to the Company’s or any of the Subsidiaries’ systems of
      internal control), Contracts and records of the Company and the Subsidiaries
      and, during such period, shall furnish promptly such information concerning
      the
      businesses, properties and personnel of the Company and the Subsidiaries as
      Purchaser shall reasonably request; provided, however, such
      investigation shall not unreasonably disrupt the Company’s
      operations.  Prior to the Closing, the Company shall generally keep
      Purchaser informed as to all material matters involving the operations and
      businesses of the Company and each of the Subsidiaries.  The Company
      shall authorize and direct the appropriate directors, managers and employees
      of
      each such Subsidiary to discuss matters involving the operations and business
      of
      the Company or such Subsidiary, as the case may be, with representatives of
      Purchaser and its prospective lenders or placement agents and other financial
      sources.  All nonpublic information provided to, or obtained by,
      Purchaser in connection with the transactions contemplated hereby shall be
      “Confidential Information” for purposes of (a) the Confidentiality Agreement
      dated January 9, 2007 among Purchaser and the Company, (b) the Non-Disclosure
      Non-Use and Confidentiality Agreement dated March 21, 2007 among Purchaser
      and
      the Company and certain of their Affiliates and certain representative persons
      thereof, and (c) the Mutual Non-Disclosure Agreement dated June 13, 2007 among
      Purchaser and the Company (collectively, the “Confidentiality
      Agreement”), the terms of which shall continue in force until the
      Closing; provided that Purchaser and the Company may disclose such
      information as may be necessary in connection with seeking necessary consents
      and approvals as contemplated hereby.  Notwithstanding the foregoing,
      the Company and the Subsidiaries shall not be required to disclose any
      information if such disclosure would contravene any applicable Law.

     

    1.57           Conduct
      of the Business Pending the Closing.

     

    ·           Except
      as otherwise expressly provided in this Agreement or with the prior written
      consent of Purchaser, between the date hereof and the Closing, the Selling
      Stockholders and the Company shall, and the Company shall cause the Subsidiaries
      to:

     

    ·       conduct
      the respective businesses of the Company and the Subsidiaries only in the
      Ordinary Course of Business;

     

    ·       use
      their commercially reasonable efforts to (A) preserve the present business
      operations, organization (including officers and employees) and goodwill of
      the
      Company and the Subsidiaries and (B) preserve the present relationships with
      Persons having business dealings with the Company and the Subsidiaries
      (including customers and suppliers);

     

    ·       maintain
      (A) all of the assets and properties of, or used by, the Company and the
      Subsidiaries in their current condition, ordinary wear and tear excepted, and
      (B)

     

    ·       insurance
      upon all of the properties and assets of the Company and the Subsidiaries in
      such amounts and of such kinds comparable to that in effect on the date of
      this
      Agreement;

     

    ·      (A)
      maintain the books, accounts and records of the Company and the Subsidiaries
      in
      the Ordinary Course of Business, (B) continue to collect accounts
      receivable and pay accounts payable utilizing normal procedures and without
      discounting or accelerating payment of such accounts, and (C) comply in all
      material respects with all contractual and other obligations of the Company
      and
      the Subsidiaries;

     

    ·      comply
      with the capital expenditure plan of the Company and the Subsidiaries for the
      current fiscal year, including making such capital expenditures in the amounts
      and at the times set forth in such plan; and

     

    ·      comply
      in all material respects with all applicable Laws.

     

    ·           Without
      limiting the generality of the foregoing, except as otherwise expressly provided
      in this Agreement or with the prior written consent of Purchaser, the Selling
      Stockholders and the Company shall not, and the Company shall cause the
      Subsidiaries not to:

     

    ·       declare,
      set aside, make or pay any dividend or other distribution in respect of the
      capital stock of, or other ownership interests in, the Company or any of the
      Subsidiaries or repurchase, redeem or otherwise acquire any outstanding shares
      of the capital stock or other securities of, or other ownership interests in,
      the Company or any of the Subsidiaries;

     

    ·       transfer,
      issue, sell, pledge, encumber or dispose of any shares of capital stock or
      other
      securities of, or other ownership interests in, the Company or any of the
      Subsidiaries or grant options, warrants, calls or other rights to purchase
      or
      otherwise acquire shares of the capital stock or other securities of, or other
      ownership interests in,  the Company or any of the
      Subsidiaries;

     

    ·       effect
      any recapitalization, reclassification, stock split, combination or like change
      in the capitalization of the Company or any of the Subsidiaries, or amend the
      terms of any outstanding securities of the Company or any
      Subsidiary;

     

    ·       amend
      the certificate of incorporation or by-laws or equivalent organizational or
      governing documents of the Company or any of the Subsidiaries;

     

    ·       except
      in the Ordinary Course of Business, (A) increase the salary or other
      compensation of any director, officer or employee of the Company or any of
      the
      Subsidiaries, (B) grant any unusual or extraordinary bonus, benefit or other
      direct or indirect compensation to any director, officer, employee or
      consultant, (C) increase the coverage or benefits available under any (or create
      any new) severance pay, termination pay, vacation pay, company awards, salary
      continuation for disability, sick leave, deferred compensation, bonus or other
      incentive compensation, insurance, pension or other employee benefit plan or
      arrangement made to, for, or with any of the directors,

     

    ·       officers,
      employees, agents or representatives of the Company or any of the Subsidiaries
      or otherwise modify or amend or terminate any such plan or arrangement or
      (D) enter into any employment, deferred compensation, severance, special
      pay, consulting, non-competition or similar agreement or arrangement with any
      directors or officers of the Company or any Subsidiary (or amend any such
      agreement to which the Company or any of the Subsidiaries is a
      party);

     

    ·       issue,
      create, incur, assume, guarantee, endorse or otherwise become liable or
      responsible with respect to (whether directly, contingently or otherwise) any
      Indebtedness; pay, repay, discharge, purchase, repurchase or satisfy any
      Indebtedness of the Company or any of the Subsidiaries, except in the Ordinary
      Course of Business; or modify the terms of any Indebtedness or other
      Liability;

     

    ·       subject
      to any Lien or otherwise encumber or, except for Permitted Exceptions, permit,
      allow or suffer to be encumbered, any of the properties or assets (whether
      tangible or intangible) of, or used by, the Company or any of the
      Subsidiaries;

     

    ·       acquire
      any material properties or assets or sell, assign, license, transfer, convey,
      lease or otherwise dispose of any of the material properties or assets of,
      or
      used by, the Company and the Subsidiaries, other than in the Ordinary Course
      of
      Business;

     

    ·       enter
      into or agree to enter into any merger or consolidation with any corporation
      or
      other entity; or engage in any new business or invest in, make a loan, advance
      or capital contribution to, or otherwise acquire the securities, of any other
      Person;

     

    ·       cancel
      or compromise any debt or claim or waive or release any material right of the
      Company or any of the Subsidiaries except in the Ordinary Course of
      Business;

     

    ·       enter
      into any commitment for capital expenditures of the Company and the Subsidiaries
      in excess of $50,000 for any individual commitment and $250,000 for all
      commitments in the aggregate;

     

    ·       enter
      into, modify or terminate any labor or collective bargaining agreement of the
      Company or any of the Subsidiaries or, through negotiation or otherwise, make
      any commitment or incur any liability to any labor organization with respect
      to
      the Company or any of the Subsidiaries;

     

    ·       introduce
      any material change with respect to the operation of the Company or any of
      the
      Subsidiaries, including any material change in the types, nature, composition
      or
      quality of its products or services, or, other than in the Ordinary Course
      of
      Business, make any change in product specifications or prices or terms of
      distributions of such products or change its pricing, discount, allowance or
      return policies or grant any pricing, discount, allowance or return terms for
      any customer or supplier not in accordance with such policies;

     

    ·       except
      for transfers of cash pursuant to normal cash management practices in the
      Ordinary Course of Business, make any investments in or loans to, or pay any
      fees or expenses to, or enter into or modify any Contract with any Related
      Persons;

     

    ·       make
      a change in its accounting or Tax reporting principles, methods or
      policies;

     

    ·       (A)
      make, change or revoke any Tax election, settle or compromise any Tax claim
      or
      liability or enter into a settlement or compromise, or change (or make a request
      to any taxing authority to change) any material aspect of its method of
      accounting for Tax purposes, or (B) prepare or file any Tax Return (or any
      amendment thereof) unless such Tax Return shall have been prepared in a manner
      consistent with past practice and the Company shall have provided Purchaser
      a
      copy thereof (together with supporting papers) at least three Business Days
      prior to the due date thereof for Purchaser to review and approve (such approval
      not to be unreasonably withheld or delayed);

     

    ·       enter
      into any Contract, understanding or commitment that restrains, restricts, limits
      or impedes the ability of the Company or any Subsidiary to compete with or
      conduct any business or line of business in any geographic area or solicit
      the
      employment of any persons;

     

    ·       terminate,
      amend, restate, supplement or waive any rights under any (A) Material Contract,
      Real Property Lease, Personal Property Lease or Intellectual Property License,
      other than in the Ordinary Course of Business or (B) Permit;

     

    ·       settle
      or compromise any pending or threatened Legal Proceeding or any claim or claims
      for, or that would result in a loss of revenue of, an amount that could,
      individually or in the aggregate, reasonably be expected to be greater than
      $150,000;

     

    ·       change
      or modify its credit, collection or payment policies, procedures or practices,
      including acceleration of collections or receivables (whether or not past due)
      or fail to pay or delay payment of payables or other liabilities;

     

    ·       take
      any action which would adversely affect the ability of the parties to consummate
      the transactions contemplated by this Agreement;

     

    ·       agree
      to do anything (A) prohibited by this Section 6.2, (B) which would make
      any of the representations and warranties of the Selling Stockholders in this
      Agreement or any of the Selling Stockholder Documents or Company Documents
      untrue or incorrect in any material respect or could result in any of the
      conditions to the Closing not being satisfied or (C) that would be reasonably
      expected to have a Material Adverse Effect; and

     

    ·       fail
      to pay any required maintenance or other similar fees or otherwise fail to
      make
      required filings or payments required to maintain and further prosecute any
      applications for registration of Intellectual Property.

     

    ·       Notwithstanding
      any of the foregoing terms of this Section 6.2 or any other terms and
      provisions of this Agreement to the contrary, on or prior to the Closing, the
      Company shall sell, transfer, assign, convey or otherwise deliver those assets
      identified on Schedule 6.2 hereto (the “Distributable
      Assets”) to the Selling Stockholders or such other Person(s) as
      they may choose and such actions (subject to their being taken in the manner
      described in this Section 6.2) shall not cause a failure of any of the
      representations and warranties made by the Selling Stockholders in this
      Agreement or any Selling Stockholder Document or Company to be true and correct
      or otherwise constitute a breach of any other covenant or other agreement on
      the
      part of the Company or the Selling Stockholders pursuant to this
      Agreement.  The sale, transfer, assignment, conveyance or other
      delivery of the Distributable Assets shall in any event be pursuant to
      agreements, instruments and other documentation in form and substance reasonably
      acceptable to Purchaser, including, without limitation, that, other than as
      specifically identified on Schedule 6.2, none of the Company, its
      Subsidiaries or any Purchaser Indemnified Parties shall retain or otherwise
      be
      responsible or obligated for any Liabilities relating to any of the
      Distributable Assets (including any thereof based upon, attributable to or
      resulting from the Company’s or an applicable Subsidiary’s maintenance,
      operation and ownership of any such Distributable Assets prior to such sale,
      transfer, assignment, conveyance or other delivery).

     

    1.58           Third
      Party Consents.  The Selling Stockholders and the Company shall
      use, and the Company shall cause the Subsidiaries to use, their commercially
      reasonable efforts to obtain at the earliest practicable date all consents,
      waivers and approvals from, and provide all notices to, all Persons that are
      not
      a Governmental Body, which consents, waivers, approvals and notices are required
      to consummate, or in connection with, the transactions contemplated by this
      Agreement, including the consents, waivers, approvals and notices referred
      to in
Sections 3.3(b) and 4.3(b) hereof (except for such matters covered
      by Section 6.4).  All such consents, waivers, approvals and
      notices shall be in writing and in form and substance satisfactory to Purchaser,
      and executed counterparts of such consents, waivers and approvals shall be
      delivered to Purchaser promptly after receipt thereof, and copies of such
      notices shall be delivered to Purchaser promptly after the making
      thereof.  Notwithstanding anything to the contrary in this Agreement,
      neither Purchaser nor any of its Affiliates (which for purposes of this sentence
      shall include the Company) shall be required to pay any amounts in connection
      with obtaining any such consent, waiver or approval.

     

    1.59           Governmental
      Consents and Approvals.

     

    ·           Each
      of Purchaser, the Selling Stockholders and the Company shall use, and the
      Company shall cause each of the Subsidiaries to use, its commercially reasonable
      efforts to obtain at the earliest practical date all consents, waivers,
      approvals, Orders, Permits, authorizations and declarations  from,
      make all filings with, and provide all notices to, all Governmental Bodies
      which
      are required to consummate, or in connection with, the transactions contemplated
      by this Agreement, including the consents, waivers, approvals, Orders, Permits,
      authorizations, declarations, filings and notices referred to in Sections
      3.3(b), 4.3(b) and 5.3(b).  Without limiting the
      foregoing, Purchaser, Selling Stockholders and the Company shall (i) make all
      filings required of each of them or any of their respective Subsidiaries or
      Affiliates under the HSR Act or other Antitrust Laws with respect to the
      transactions contemplated hereby as

     

    ·           promptly
      as practicable and, in any event, within three (3) Business Days after the
      date
      of this Agreement in the case of all filings required under the HSR Act, (ii)
      comply at the earliest practicable date with any request under the HSR Act
      for
      additional information, documents, or other materials received by each of them
      or any of their respective Subsidiaries or Affiliates from the U.S. Federal
      Trade Commission (the “FTC”), the Antitrust Division of
      the U.S. Department of Justice (the “Antitrust
      Division”) or any other Governmental Body in respect of such
      filings or such transactions, and (iii) cooperate with each other in connection
      with any such filing (including, to the extent permitted by applicable Law,
      providing copies of all such documents to the non-filing parties prior to filing
      and considering all reasonable additions, deletions or changes suggested in
      connection therewith) and in connection with resolving any investigation or
      other inquiry of any of the FTC, the Antitrust Division or other Governmental
      Body under any Antitrust Laws with respect to any such filing or any such
      transaction.  Each such party shall use commercially reasonable
      efforts to furnish to each other party hereto all information required for
      any
      application or other filing to be made pursuant to any applicable Law in
      connection with the transactions contemplated by this Agreement.  Each
      such party shall promptly inform the other parties hereto of any oral
      communication with, and provide copies of written communications with, any
      Governmental Body regarding any such filings or any such transaction and permit
      the other party to review in advance any proposed communication by such party
      to
      any Governmental Body.  No party hereto shall independently
      participate in any formal meeting with any Governmental Body in respect of
      any
      such filings, investigation, or other inquiry without giving the other parties
      hereto prior notice of the meeting and, to the extent permitted by such
      Governmental Body, the opportunity to attend and/or
      participate.  Subject to applicable Law, the parties hereto shall
      consult and cooperate with one another in connection with the matters described
      in this Section 6.4, including in connection with any analyses,
      appearances, presentations, memoranda, briefs, arguments, opinions and proposals
      made or submitted by or on behalf of any party hereto relating to proceedings
      under the HSR Act or other Antitrust Laws.

     

    ·           Each
      of Purchaser, the Selling Stockholders and the Company shall use commercially
      reasonable efforts to resolve such objections, if any, as may be asserted by
      any
      Governmental Body with respect to the transactions contemplated by this
      Agreement under any Law, including the HSR Act, the Sherman Act, as amended,
      the
      Clayton Act, as amended, the Federal Trade Commission Act, as amended, and
      any
      other Laws that are designed to prohibit, restrict or regulate actions having
      the purpose or effect of monopolization or restraint of trade (collectively,
      the
“Antitrust Laws”).  In connection therewith,
      if any Legal Proceeding is instituted (or threatened to be instituted)
      challenging any transaction contemplated by this Agreement as in violation
      of
      any Law, the Selling Stockholders and the Company shall use commercially
      reasonable efforts, and Purchaser shall cooperate with the Selling Stockholders
      and the Company, to contest and resist any such Legal Proceeding, and to have
      vacated, lifted, reversed, or overturned any decree, judgment, injunction or
      other order whether temporary, preliminary or permanent, that is in effect
      and
      that prohibits, prevents, or restricts consummation of the transactions
      contemplated by this Agreement, including by pursuing all available avenues
      of
      administrative and judicial appeal unless, by mutual agreement, Purchaser and
      the Selling Stockholders decide that litigation is not in their respective
      best
      interests.  Each of Purchaser, the Selling Stockholders and the
      Company shall use commercially reasonable efforts to take such action as may
      be
      required to cause the expiration of the notice periods under the HSR Act
      or

     

    ·           other
      Antitrust Laws with respect to such transactions as promptly as possible after
      the execution of this Agreement.  Notwithstanding anything to the
      contrary in this Agreement, neither Purchaser nor any of its Affiliates (which
      for purposes of this sentence shall include the Company) shall be required,
      in
      connection with the matters covered by this Section 6.4, (i) to pay any
      amounts (other than the payment of filing fees and expenses and fees of
      counsel), (ii) to commence or defend any litigation, (iii) to hold separate
      (including by trust or otherwise) or divest any of their respective businesses,
      product lines or assets, (iv) to agree to any limitation on the operation or
      conduct of their or the Company’s or any of the Subsidiaries’ respective
      businesses or (v) to waive any of the conditions set forth in Article VII
      of this Agreement.  Purchaser shall pay the fees associated with
      filings required by the HSR Act.

     

    1.60           Further
      Assurances.  Subject to, and not in limitation of,
Section 6.4, each of the Selling Stockholders, the Company and
      Purchaser shall use its commercially reasonable efforts to (a) take, or cause
      to
      be taken, all actions necessary or appropriate to consummate the transactions
      contemplated by this Agreement and (b) cause the fulfillment at the earliest
      practicable date of all of the conditions to their respective obligations to
      consummate the transactions contemplated by this Agreement.

     

    1.61           No
      Shop.

     

    ·           The
      Selling Stockholders and the Company shall not, and shall not permit the
      Subsidiaries or any of the Affiliates, directors, officers, employees,
      representatives or agents of the Selling Stockholders, the Company or any of
      the
      Subsidiaries (collectively, the “Representatives”) to,
      directly or indirectly, (i) discuss, encourage, negotiate, undertake,
      initiate, authorize, recommend, propose or enter into, whether as the proposed
      surviving, merged, acquiring or acquired corporation or otherwise, any
      transaction involving a merger, consolidation, business combination, purchase
      or
      disposition of any material amount of the assets of the Company or any of the
      Subsidiaries or any capital stock or other ownership interests of the Company
      or
      any of the Subsidiaries other than the transactions contemplated by this
      Agreement (an “Acquisition Transaction”),
      (ii) facilitate, encourage, solicit or initiate discussions, negotiations
      or submissions of proposals or offers in respect of an Acquisition Transaction,
      (iii) furnish or cause to be furnished, to any Person, any information
      concerning the business, operations, properties or assets of the Company or
      the
      Subsidiaries in connection with an Acquisition Transaction, or
      (iv) otherwise cooperate in any way with, or assist or participate in,
      facilitate or encourage, any effort or attempt by any other Person to do or
      seek
      any of the foregoing.

     

    ·           The
      Selling Stockholders and the Company shall (and the Selling Stockholders and
      the
      Company shall cause their Representatives to, and the Company shall cause the
      Subsidiaries and their Representatives to) immediately cease and cause to be
      terminated any existing discussions or negotiations with any Persons (other
      than
      Purchaser) conducted heretofore with respect to any Acquisition
      Transaction.  The Selling Stockholders and the Company agree not to
      (and the Company agrees to cause the Subsidiaries not to) release any third
      party from the confidentiality and standstill provisions of any agreement to
      which the Company or any of the Subsidiaries is a party.

     

    1.62           Non-Competition;
      Non-Solicitation; Confidentiality.

     

    1.63           In
      consideration of Purchaser’s purchase of the goodwill and business relationships
      of the Company and its Subsidiaries hereunder, for a period of three (3) years
      from and after the Closing Date, the Selling Stockholders shall not, and shall
      cause their Affiliates not to, directly or indirectly, own, manage, engage
      in,
      operate, control, work for, consult with, maintain any interest in (proprietary,
      financial or otherwise) or participate in the ownership, management, operation
      or control of, any business, whether in corporate, proprietorship or partnership
      form or otherwise, engaging in the Territory in a business the same or similar
      to that, or that otherwise competes with, Purchaser, the Company or any of
      the
      Subsidiaries (a “Restricted Business”); provided,
however, that the restrictions contained
      in this
Section 6.7(a) shall not restrict (i) the acquisition by the Selling
      Stockholders, directly or indirectly, of less than two percent (2%) of the
      outstanding capital stock of any publicly traded company engaged in a Restricted
      Business and (ii) the business and activities of the trustee of the Trust other
      than solely those business and activities engaged in on behalf of the
      Trust.  The automated payment processing and cash flow management
      system business of CFO-PE Strategies, LLC, and incidental activities relating
      thereto, as engaged in as of the date hereof, shall not constitute a Restricted
      Business; provided, however, that the foregoing shall not permit
      CFO-PE Strategies, LLC to engage in business (other than in Canada, which shall
      be excluded from the Territory for this purpose) with (A) the industrial
      distribution companies that have over ninety percent (90%) of their aggregate
      business and operations or revenues in supplying the following industrial
      products:  bearings and power transmission, pumps, pipes, valves and
      fittings, fluid power, rubber belts and hoses; or (B) those supply chain service
      businesses listed on Schedule 6.7(a).

     

    ·           Additionally,
      in consideration of Purchaser’s purchase of the goodwill and business
      relationships of the Company and its Subsidiaries hereunder, for a period of
      three (3) years from and after the Closing Date, the Selling Stockholders shall
      not, and shall cause their directors, officers and Affiliates not to, directly
      or indirectly:  (i) cause, solicit, induce or encourage any
      employees of Purchaser, the Company or the Subsidiaries to leave such employment
      or (ii) cause, induce or encourage any material actual or prospective
      client, customer, supplier, or licensor of Purchaser, the Company or any of
      the
      Subsidiaries (including any existing or former customer of the Company or the
      Subsidiaries and any Person that becomes a client or customer of Purchaser,
      the
      Company or any of the Subsidiaries after the Closing) or any other Person who
      has a material business relationship with Purchaser, the Company or any of
      the
      Subsidiaries, to terminate or modify any such actual or prospective
      relationship.

     

    ·           From
      and after the Closing Date, the Selling Stockholders shall not and shall cause
      their directors, officers and Affiliates not to, directly or indirectly,
      disclose, reveal, divulge or communicate to any Person other than authorized
      officers, directors and employees of Purchaser or use or otherwise exploit
      for
      its own benefit or for the benefit of anyone other than Purchaser, any
      Confidential Information (as defined below).  The Selling Stockholders
      shall not have any obligation to keep confidential (or cause its officers,
      directors or Affiliates to keep confidential) any Confidential Information
      if
      and to the extent disclosure thereof is specifically required by applicable
      Law;
provided, however, that in the event disclosure is required by
      applicable Law, the Selling Stockholders shall, to the extent reasonably
      possible, provide Purchaser with prompt notice of such requirement prior to
      making any disclosure so that Purchaser may seek an appropriate protective
      order.  For purposes of this Section 6.7(c),
“Confidential Information” means any information with
      respect to Purchaser, the Company or

     

    ·           any
      of the Subsidiaries, including methods of operation, customer lists, products,
      prices, fees, costs, Technology, inventions, trade secrets, know-how, Software,
      marketing methods, plans, personnel, suppliers, competitors, markets or other
      specialized information or proprietary
      matters.  “Confidential Information” does not
      include, and there shall be no obligation hereunder with respect to, information
      that (i) is generally available to the public on the date of this Agreement,
      (ii) becomes generally available to the public other than as a result of a
      disclosure not otherwise permissible hereunder, (iii) is or has been
      independently developed by a Selling Stockholder or an Affiliate without use
      or
      reference to or other derivation from any Confidential Information, or (iv)
      refers to Purchaser, the Company or any of the Subsidiaries as customers of
      CFO-PE Strategies, LLC or that provides historical information of benefits
      or
      services CFO-PE Strategies, LLC has provided them (or makes them available
      as a
      customer reference thereof), provided, however, that such
      information does not disclose or make reference to any customers or suppliers
      relationships of Purchaser, the Company and any of the Subsidiaries and of
      Confidential Information relating to any such customer or supplier
      relationships.

     

    ·           The
      covenants and undertakings contained in this Section 6.7 relate to
      matters which are of a special, unique and extraordinary character and a
      violation of any of the terms of this Section 6.7 will cause
      irreparable injury to Purchaser, the Company or its Subsidiaries (as
      applicable), the amount of which will be impossible to estimate or determine
      and
      which cannot be adequately compensated.  Accordingly, the remedy at
      law for any breach of this Section 6.7 will be
      inadequate.  Therefore, Purchaser and the Company will be entitled to
      a temporary and permanent injunction, restraining order or other equitable
      relief from any court of competent jurisdiction in the event of any breach
      of
      this Section 6.7 without the necessity of proving actual damage or
      posting any bond whatsoever.  The rights and remedies provided by this
Section 6.7 are cumulative and in addition to any other rights and
      remedies which Purchaser may have hereunder or at law or in
      equity.  In the event that Purchaser were to seek damages for any
      breach of this Section 6.7, the portion of the consideration
      delivered to the Selling Stockholders hereunder which is allocated by the
      parties to the foregoing covenant shall not be considered a measure of or limit
      on such damages.

     

    ·           The
      parties hereto agree that, if any court of competent jurisdiction determines
      that a specified time period, a specified geographical area, a specified
      business limitation or any other relevant feature of this Section 6.7 is
      unreasonable, arbitrary or against public policy, then a lesser period of time,
      geographical area, business limitation or other relevant feature which is
      determined by such court to be reasonable, not arbitrary and not against public
      policy may be enforced against the applicable party.

     

    1.64           Preservation
      of Records.  Subject to any retention requirements relating to the
      preservation of Tax records, the Selling Stockholders and Purchaser agree that
      each of them shall (and Purchaser shall cause the Company and the Subsidiaries
      to) preserve and keep the records held by them on the date of this Agreement
      relating to the respective businesses of the Company and the Subsidiaries for
      a
      period of seven (7) years from the Closing Date and shall make such records
      and
      personnel available to the other as may be reasonably required by such party
      in
      connection with, among other things, any insurance claims by, legal proceedings
      against or governmental investigations of the Selling Stockholders, the Company,
      the Subsidiaries or Purchaser or any of their Affiliates or in order to enable
      the Selling Stockholders or Purchaser to

     

    1.65           comply
      with their respective obligations under this Agreement and each other agreement,
      document or instrument contemplated hereby or thereby.

     

    1.66           Publicity.  

     

    ·           None
      of the Purchaser, Selling Stockholders or the Company shall issue any press
      release or public announcement concerning this Agreement or the transactions
      contemplated hereby without obtaining the prior written approval of the other
      party hereto, which approval will not be unreasonably withheld or delayed,
      unless, in the sole judgment of Purchaser, disclosure is otherwise required
      by
      applicable Law or by the applicable rules of any stock exchange on which
      Purchaser or its Affiliates lists securities, provided that, to the
      extent required by applicable Law, the party intending to make such release
      shall use its commercially reasonable efforts consistent with such applicable
      Law to consult with the other party with respect to the text
      thereof.

     

    ·           Each
      of Purchaser, the Selling Stockholders and the Company agrees that the terms
      of
      this Agreement shall not be disclosed or otherwise made available to the public
      and that copies of this Agreement shall not be publicly filed or otherwise
      made
      available to the public, except where such disclosure, availability or filing
      is
      required by applicable Law and only to the extent required by such
      Law.

     

    1.67           Environmental
      Matters.  

     

    ·           The
      Company shall permit Purchaser and Purchaser's environmental consultant, to
      conduct such additional investigations (including investigations known as “Phase
      I” and “Phase II” environmental Site Assessments) of the environmental
      conditions of any real property owned, operated or leased by or for the Company
      or any Subsidiary and the operations conducted thereat (subject to any
      limitations contained in valid, previously executed leases) as Purchaser, in
      its
      reasonable discretion, shall deem necessary (“Purchaser's
      Environmental Assessment”).  Purchaser
      acknowledges that it has used commercially reasonable efforts to complete the
      Purchaser’s Environmental Assessment prior to the date hereof and agrees that
      any further investigations from and after the date hereof shall be limited
      to
      those that the Purchaser believes absolutely are necessary.  Purchaser
      agrees that any such remaining investigation as part of Purchaser’s
      Environmental Assessment shall be conducted by a qualified environmental
      consulting firm, possessing reasonable levels of insurance, in compliance with
      applicable Laws and in a manner that minimizes the disruption of the operations
      of the Company.

     

    ·           The
      Company shall promptly file all materials required by Environmental Laws as
      a
      result of or in furtherance of the transaction contemplated hereunder, including
      any notifications or approvals required under environmental property transfer
      laws, and all requests required or necessary for the transfer or re-issuance
      of
      Environmental Permits required to conduct the Company’s
      business.  Purchaser shall cooperate in all reasonable respects with
      the Company with respect to such filings.

     

    1.68           Cooperation
      with Financing.  In order to assist with obtaining the Financing,
      the Selling Stockholders and the Company shall, and the Company shall cause
      the
      Subsidiaries to, provide such assistance and cooperation as Purchaser may
      reasonably request,

     

    1.69           including
      (i) cooperating with prospective lenders and their respective advisors in
      performing their due diligence and (ii) helping procure other definitive
      financing documents or other reasonably requested certificates or documents
      at
      Purchaser’s cost.

     

    1.70           Related-Party
      Transactions with Non-Management Affiliates.  On or prior to the
      Closing Date, the Company and the Subsidiaries shall (a) terminate all Contracts
      with any of the Selling Stockholders or their respective Affiliates (other
      than
      (i) those Contracts set forth on Schedule 6.12 and (ii) Contracts between
      the Company and the Subsidiaries, Contracts between the Company and the
      Subsidiaries and their respective officers and employees and Contracts the
      continuation of which Purchaser has approved in writing) and (b) deliver
      releases executed by such Affiliates with whom the Company has terminated such
      Contracts pursuant to this Section 6.12 providing that no further
      payments are due, or may become due, under or in respect of any such terminated
      Contacts; provided that in no event shall the Company or any of the
      Subsidiaries pay any fee or otherwise incur any expense or financial exposure
      with respect to any such termination or release.

     

    1.71           Monthly
      Financial Statements.  As soon as reasonably practicable, but in
      no event later than twenty (20) days after the end of each calendar month during
      the period from the date hereof to the Closing, the Company shall provide
      Purchaser with (a) unaudited monthly financial statements and (b) operating
      or
      management reports (such reports to be in the form prepared by the Company
      in
      the Ordinary Course of Business) of the Company for such preceding
      month.  As soon as reasonably practicable, but in no event later than
      twenty (20) days after the end of each calendar month, during the period from
      the date hereof to the Closing, the Company shall provide Purchaser with (i)
      unaudited monthly financial statements and (ii) operating or management reports
      (such reports to be in the form prepared by the Company and the Subsidiaries
      in
      the Ordinary Course of Business) of each of the Subsidiaries for which financial
      statements are prepared (to the extent the same are prepared in the Ordinary
      Course of Business) for such preceding month.

     

    1.72           Employee
      Matters.  From and after the date hereof, and after the Closing
      Date Purchaser shall cause, the Company and its Subsidiaries to retain their
      current employees subject, except with respect to those employees that are
      executive officers of the Company and its Subsidiaries, to the discretion of
      the
      Company’s president and chief financial officer (including from and after the
      Closing Date when Purchaser has purchased the Company and its Subsidiaries
      pursuant hereto), and the employment of such employees shall be on terms and
      conditions, including in respect of benefits and other compensation programs,
      no
      less favorable, in the aggregate, than as those that the Company and its
      Subsidiaries provides as of the date hereof; the retained employees shall not
      be
      required to complete any additional pre-employment screening or testing as
      a
      condition of continued employment as of the Closing with the Company or its
      Subsidiaries; provided, however, that the foregoing shall not
      change the “at-will” condition of employment generally of such employees or
      limit Purchaser’s, the Company’s or any applicable Subsidiary’s ability to
      conduct random drug testing of the retained employees.  If, in the
      future, Purchaser determines that the employees of the Company and its
      Subsidiaries should be transferred from the employee benefit programs maintained
      by the Company and its Subsidiaries to those provided or otherwise maintained
      by
      Purchaser generally for its employees (other than those that may have been
      previously provided or maintained generally for the employees of the Company
      and
      its Subsidiaries), then Purchaser shall provide such employee

     

    1.73           benefits
      that are no less favorable, in the aggregate, than those provided and maintained
      by the Company and its Subsidiaries for such employees as of the date hereof
      and
      shall, for purposes of eligibility, vesting and levels of benefits under any
      such employee benefit programs of Purchaser, credit each such employee with
      his
      or her years of service with the Company and its Subsidiaries to the same extent
      as such employee was entitled under those employee benefit programs maintained
      by the Company and its Subsidiaries for such employees as of the date
      hereof.  Additionally, any such employee benefit programs provided or
      otherwise maintained by Purchaser generally for its employees to which Purchaser
      transfers the employees of the Company and its Subsidiaries (if any transfer
      shall occur) shall not deny such employees coverage on the basis of pre-existing
      conditions (and shall not require any conditional screening or testing for
      purposes thereof) and shall credit such transferred employees for any
      deductibles and out-of-pocket expenses paid in the year of such transfer in
      the
      employee benefit programs of the Company and its Subsidiaries.

     

    1.74           Notification
      of Certain Matters.  The Selling Stockholders shall give notice to
      Purchaser and Purchaser shall give notice to the Selling Stockholders, as
      promptly as reasonably practicable upon becoming aware of (a) any fact, change,
      condition, circumstance, event, occurrence or non-occurrence that has caused
      or
      is reasonably likely to cause any representation or warranty in this Agreement
      made by it to be untrue or inaccurate in any material respect at any time after
      the date hereof and prior to the Closing, (b) any material failure on its part
      to comply with or satisfy any covenant, condition or agreement to be complied
      with or satisfied by it hereunder or (c) the institution of or the threat of
      institution of any Legal Proceeding against any of the Selling Stockholders,
      the
      Company or any of the Subsidiaries related to this Agreement or the transactions
      contemplated hereby; provided that the delivery of any notice pursuant to
      this Section 6.15 shall not limit or otherwise affect the remedies
      available hereunder to the party receiving such notice, or the representations
      or warranties of, or the conditions to the obligations of, the parties
      hereto.

     

    1.75           Debt.  No
      later than the third Business Day prior to the Closing Date, the Company shall
      provide Purchaser with (i) a certificate of the Company setting forth an
      estimate of the balance of all Indebtedness of the Company and the Subsidiaries
      as of the close of business on the day immediately preceding the Closing Date
      and (ii) customary pay-off letters from all holders of Indebtedness to be repaid
      as of or prior to the Closing.  The Company shall also make
      arrangements reasonably satisfactory to Purchaser for such holders to provide
      to
      Purchaser recordable form mortgage and lien releases, canceled notes and other
      documents reasonably requested by Purchaser prior to the Closing such that
      all
      Liens on the assets or properties of the Company or any of the Subsidiaries
      that
      are not Permitted Exceptions shall be satisfied, terminated and discharged
      on or
      prior to the Closing Date.  On the Closing Date prior to the Closing,
      the Company shall deliver to Purchaser a certificate of the Company setting
      forth all Indebtedness of the Company and the Subsidiaries as of the close
      of
      business on the day immediately preceding the Closing Date.

     

    1.76           Resignation
      of Directors.  The Selling Stockholders shall cause each of the
      directors of the Company and the Subsidiaries to submit a letter of resignation
      effective on or before the Closing Date.

     

    1.77           Nomination
      of Director for Purchaser Board.  Upon consummation of the
      Closing, Purchaser shall use reasonable efforts to appoint a person named by
      the
      Controlling Owner to the Board of Directors of Purchaser; provided,
however, that such right and appointment of such person named by the
      Controlling Owner shall be subject to (a) the rules and requirements of
      applicable Law as well as the rules and regulation promulgated by the United
      States Securities and Exchange Commission and by any other self-regulatory
      organization applicable to Purchaser’s securities and governance obligations in
      respect thereof and (b) such person’s meeting the applicable requirements for
      serving on Purchaser’s Board of Directors (whether under Purchaser’s
      organizational documents or applicable Law, including the rules and regulations
      noted under clause (a)).  In recognition of such foregoing provision,
      Purchaser shall undertake to have liability coverage under Purchaser’s director
      and office insurance policy as set forth on Schedule 6.18.

     

     

    CONDITIONS
      TO CLOSING

     

    1.78           Conditions
      Precedent to Obligations of Purchaser.  The obligation of
      Purchaser to consummate the transactions contemplated by this Agreement is
      subject to the fulfillment, on or prior to the Closing Date, of each of the
      following conditions precedent (any or all of which may be waived by Purchaser
      in whole or in part to the extent permitted by applicable Law):

     

    ·           the
      representations and warranties of the Selling Stockholders 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 Closing as though made at and
      as
      of the Closing, except to the extent such representations and warranties
      expressly speak as of 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);

     

    ·           the
      Selling Stockholders and the Company shall have performed and complied in all
      material respects with all obligations and agreements required in this Agreement
      to be performed or complied with by them on or prior to the Closing
      Date;

     

    ·           there
      shall not have been or occurred any event, change, occurrence or circumstance
      that, individually or in the aggregate with any such events, changes,
      occurrences or circumstances, has had or could reasonably be expected to have
      a
      Material Adverse Effect since the date of this Agreement;

     

    ·           there
      shall not be in effect any Order by a Governmental Body of competent
      jurisdiction restraining, enjoining or otherwise prohibiting the consummation
      of
      the transactions contemplated hereby;

     

    ·           Purchaser
      shall have received (i) a certificate signed by the Stockholder Representative,
      for and on behalf of each of the Selling Stockholders and (ii) a certificate
      signed by each of the chief executive officer, chief operating officer and
      chief
      financial officer of the Company, each in form and substance reasonably
      satisfactory to Purchaser, dated the Closing

     

    ·           Date,
      to the effect that each of the conditions specified above in Sections
      7.1(a)-(d) have been satisfied in all respects; provided
      that with respect to Section 7.1(a), the chief executive officer, chief
      operating officer and chief financial officer of the Company shall only be
      required to certify as to the representations and warranties contained in
Article IV;

     

    ·           the
      waiting period under the HSR Act shall have expired or early termination shall
      have been granted;

     

    ·           the
      Selling Stockholders and the Company shall have obtained those consents,
      approvals, orders and authorizations, the issuance, reissuance and transfer
      of
      Permits, and made the registrations, declarations and filings listed on
Schedule 7.1(g) in a form satisfactory to Purchaser and copies thereof
      shall have been delivered to Purchaser;

     

    ·           Purchaser
      shall have received the written resignations and release of claims to fees
      or
      expenses of each of the directors and officers of the Company and the
      Subsidiaries identified by Purchaser prior to Closing, each in form and
      substance reasonably satisfactory to Purchaser;

     

    ·           each
      of the employment agreements of Christopher W. Circo, as the Company’s
      president, and Chuck Strader, as its chief financial officer, dated as of the
      date hereof to be effective upon the Closing Date (and set forth in Schedule
      7.1(i)), shall be (subject only to such condition of effectiveness) in full
      force and effect;

     

    ·           all
      stock or other outstanding equity interests in Subsidiaries of the Company
      or
      any of the Company’s Subsidiaries not owned by the Company or such Subsidiary as
      of the date hereof (including, without limitation, with respect to Precision
      de
      Mexico) shall have been transferred to Purchaser (or as directed by Purchaser),
      free and clear of all Liens;

     

    ·           [omitted];

     

    ·           Purchaser
      shall have received any material items listed in Sections 2.5 and 2.6 (and,
      for
      purposes hereof, any items that are required for delivery by Purchaser or the
      Company as a condition to closing the Financing shall be deemed to be
      material);

     

    ·           the
      Stockholder Representative and the Escrow Agent shall have entered into and
      executed the Escrow Agreement, substantially in the form of Exhibit B
      hereto;

     

    ·           the
      Controlling Owner shall have entered into and executed an Access Agreement,
      substantially in the form of Exhibit C hereto;

     

    ·           the
      sale, transfer, assignment, conveyance or other delivery of the Distributable
      Assets in accordance with Section 6.2(c) shall be pursuant to agreements,
      instruments and other documentation in form and substance reasonably acceptable
      to Purchaser;

     

    ·           the
      Company and Controlling Owner or the applicable Affiliates or Related Persons
      thereof shall have entered into and executed leases (or other lease
      documentation) for the facilities of the Company and its Subsidiaries listed
      on
Schedule 7.1(p)

     

    ·           hereto,
      in each case subject to the basic terms and provisions as described on
Schedule 7.1(p) and otherwise in form and substance reasonably acceptable
      to Purchaser, and each of the Affiliates or Related Persons (as applicable)
      of
      the Company and the Subsidiaries that leases real property to the Company or
      a
      Subsidiary (as applicable) shall have executed and delivered a form of release
      document, dated as of the Closing Date and substantially in the form included
      with Schedule 7.1(p) hereto, regarding each such leased
      property;

     

    ·           (i)
      Neterprise, Inc., an Affiliate of the Controlling Owner, shall have entered
      into
      and executed an amendment to the Software License Agreement, dated and effective
      July 22, 1999, with the Company, substantially in the form included in
Schedule 7.1(q), with the Company, and (ii) CFO-PE Strategies, LLC,
      another Affiliate of the Controlling Owner, shall have entered into and executed
      a technology license agreement, substantially in the form also included in
      Schedule 7.1(q), with Purchaser and, subject to the payment by Purchaser
      for the license under clause (ii) at the time of Closing, such agreements shall
      be in full force and effect; and

     

    ·           Purchaser
      shall have received written evidence, in the form and substance provided by
      Purchaser to Controlling Owner on or prior to the date hereof, that the Selling
      Stockholders and their Affiliates have irrevocably and unconditionally released
      the Company and the Subsidiaries from any and all Liabilities to the Selling
      Stockholders and their Affiliates (other than pursuant to arrangements as
      specifically contemplated by the terms and conditions hereof).

     

    1.79           Conditions
      Precedent to Obligations of the Selling Stockholders.  The
      obligations of the Selling Stockholders to consummate the transactions
      contemplated by this Agreement are subject to the fulfillment, prior to or
      on
      the Closing Date, of each of the following conditions precedent (any or all
      of
      which may be waived by the Selling Stockholders in whole or in part to the
      extent permitted by applicable Law):

     

    ·           the
      representations and warranties of Purchaser set forth in this Agreement
      qualified as to materially shall be true and correct, and those not so qualified
      shall be true and correct in all material respects as of the Closing as though
      made at and as of the Closing, except to the extent such representations and
      warranties expressly relate to an earlier date (in which case such
      representations and warranties qualified as to materially 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 performed and complied in all material respects with all obligations
      and agreements required by this Agreement to be performed or complied with
      by
      Purchaser on or prior to the Closing Date;

     

    ·           there
      shall not be in effect any Order by a Governmental Body of competent
      jurisdiction restraining, enjoining or otherwise prohibiting the consummation
      of
      the transactions contemplated hereby;

     

    ·           Purchaser
      and the Escrow Agent shall have entered into and executed the Escrow Agreement,
      substantially in the form of Exhibit B hereto;

     

    ·           the
      Selling Stockholders shall have obtained those, consents, approvals, orders,
      authorizations, the issuance, reissuance and transfer of Permits, and made
      the
      registrations, declarations and filings listed on Schedule
      7.2(e);

     

    ·           Purchaser
      and the Company shall have entered into and executed an Access Agreement,
      substantially in the form of Exhibit C hereto; and

     

    ·           the
      waiting period under the HSR Act shall have expired or early termination shall
      have been granted and Purchaser shall have obtained or made any other consent,
      approval, order or authorization of, or registration, declaration or filing
      with, any Governmental Body required to be obtained or made by it in connection
      with the execution and delivery of this Agreement or the consummation of the
      transactions contemplated hereby.

     

     

    INDEMNIFICATION

     

    1.80           Survival
      of Provisions.

     

    ·           The
      representations and warranties of the parties contained in this Agreement,
      any
      certificate delivered pursuant hereto or any Selling Stockholder Document,
      Company Document or Purchaser Document shall survive the Closing through and
      including the first (1st) anniversary of the Closing Date; provided,
however, that the representations and warranties set forth in Sections
      3.1 (Organization), 3.2 (Authorization), 3.4 (Ownership),
3.6 (Financial Advisors), 4.1 (Organization), 4.2
      (Authorization), 4.4 (Capitalization), 4.5 (Subsidiaries),
4.10 (Taxes), 4.29 (Financial Advisors), 5.1
      (Organization), 5.2 (Authorization) and 5.6 (Financial Advisors)
      shall survive the Closing until 90 days following the expiration of the
      applicable statute of limitations with respect to the particular matter that
      is
      the subject matter thereof (in each case, the “Survival
      Period”).

     

    ·           No
      claim for a breach of a Pre-Closing Covenant may be made or brought by any
      party
      hereto after the first (1st) anniversary
      of
      the Closing Date.

     

    ·           Notwithstanding
      any of the foregoing provisions to the contrary, the obligations for
      indemnification as provided under Section 8.2 shall not terminate with
      respect to any Losses as to which the Person to be indemnified shall have given
      notice (stating in reasonable detail the basis of the claim for indemnification)
      to the indemnifying party in accordance with Section 8.3 before the
      termination of the applicable Survival Period.

     

    1.81           Indemnification.

     

    ·           Subject
      to Sections 8.1, 8.4 and 8.5 hereof, the Selling
      Stockholders hereby agree, jointly and severally (except as provided in
Section 8.4(d)), to indemnify and hold Purchaser, the Company, and their
      respective directors, officers, employees, Affiliates, stockholders, agents,
      attorneys, representatives, successors and assigns (collectively, the
“Purchaser Indemnified Parties”) harmless from and
      against, and pay to the applicable Purchaser Indemnified Parties the amount
      of,
      any and all losses, liabilities, claims, obligations,

     

    ·           deficiencies,
      demands, judgments, damages, interest, fines, penalties, claims, suits, actions,
      causes of action, assessments, awards, costs and expenses (including attorneys’
and other professionals’ fees), whether or not involving a third party claim
      (individually, a “Loss” and, collectively,
“Losses”):

     

    ·      based
      upon, attributable to or resulting from the failure of any of the
      representations and warranties made by the Selling Stockholders in this
      Agreement to be true and correct at of the date hereof and at and as of the
      Closing Date;

     

    ·      based
      upon, attributable to or resulting from the breach of any Pre-Closing Covenant
      on the part of the Company or any Selling Stockholders;

     

    ·      based
      upon, attributable to or resulting from the breach of any covenant or other
      agreement under Sections 2.7, 2.8, 6.7, 6.8,
6.9, 9.3, Article X and this Article VIII, as well
      as those covenants and agreements related to certain state tax matters set
      forth
      in Schedule 4.10(a) and relating to certain federal and state tax matters
      set forth in Schedule 6.2, on the part of the Selling Stockholders under
      this Agreement;

     

    ·      arising
      from or related to (A) any Company Transaction Expenses (to the extent and
      only
      if any such Company Transaction Expenses (I) are an obligation or Liability
      of a
      Purchaser Indemnified Party after the Closing and (II) are not included in
      Included Current Liabilities for purposes of calculation of the Closing Working
      Capital and, thus, not incorporated into the adjustment as provided under
Section 2.7) or (B) Indebtedness of the Company or any of its
      Subsidiaries, in each case to the extent not paid by the Selling Stockholders
      or
      the Company or the Subsidiaries prior to the Closing or paid contemporaneously
      with the Closing; and

     

    ·      based
      upon, attributable to or resulting from any Legal Proceeding that on or prior
      to
      the Closing Date shall have been instituted against the Selling Stockholders,
      the Company or any of the Subsidiaries, or Purchaser, seeking to restrain or
      prohibit or obtain substantial damages with respect to the consummation of
      the
      transactions contemplated by this Agreement.

     

    ·           Subject
      to Sections 8.1, 8.4 and 8.5 hereof, Purchaser hereby
      agrees to indemnify and hold the Selling Stockholders and their respective
      Affiliates, stockholders, agents, attorneys, representatives, successors and
      permitted assigns (collectively, the “Selling Stockholder Indemnified
      Parties”) harmless from and against, and pay to the applicable
      Selling Stockholder Indemnified Parties the amount of any and all
      Losses:

     

    ·      based
      upon, attributable to or resulting from the failure of any of the
      representations or warranties made by Purchaser in this Agreement to be true
      and
      correct at the date hereof and as of the Closing Date;

     

    ·      based
      upon, attributable to or resulting from the breach of any covenant or other
      agreement on the part of Purchaser under this Agreement.

     

    ·      The
      waiver of any condition based on the accuracy of any such representation or
      warranty, or on the performance of or compliance with any such covenant or
      agreements, will not affect the right to indemnification or any other remedy
      based on such representations, warranties, covenants and
      agreements.

     

    1.82           Indemnification
      Procedures.

     

    ·           A
      claim for indemnification for any matter not involving a third party claim
      may
      be asserted by notice to the party from whom indemnification is sought;
provided, however, that failure to so notify the indemnifying
      shall not preclude the indemnified party from any indemnification which it
      may
      claim in accordance with this Article VIII.

     

    ·           In
      the event that any Legal Proceedings shall be instituted or that any claim
      or
      demand shall be asserted by any third party in respect of which indemnification
      may be sought under Section 8.2 hereof (regardless of the limitations set
      forth in Section 8.4) (a “Third Party Claim”),
      the indemnified party shall promptly cause written notice of the assertion
      of
      any Third Party Claim of which it has knowledge which is covered by this
      indemnity to be forwarded to the indemnifying party.  The failure of
      the indemnified party to give reasonably prompt notice of any Third Party Claim
      shall not release, waive or otherwise affect the indemnifying party’s
      obligations with respect thereto except to the extent that the indemnifying
      party can demonstrate actual loss and prejudice as a result of such
      failure.  Subject to the provisions of this Section 8.3,
      the indemnifying party shall have the right, at its sole expense, to be
      represented by counsel of its choice, which must be reasonably satisfactory
      to
      the indemnified party, and to defend against, negotiate, settle or otherwise
      deal with any Third Party Claim which relates to any Losses indemnified against
      hereunder; provided that the indemnifying party shall have acknowledged
      in writing to the indemnified party its unqualified obligation (subject to
      the
      limitations of Section 8.4) to indemnify the indemnified party as
      provided hereunder.  If the indemnifying party elects to defend
      against, negotiate, settle or otherwise deal with any Third Party Claim which
      relates to any Losses indemnified by it hereunder, it shall within five days
      of
      the indemnified party’s written notice of the assertion of such Third Party
      Claim (or sooner, if the nature of the Third Party Claim so requires) notify
      the
      indemnified party of its intent to do so; provided, that the indemnifying
      party must conduct the defense of the Third Party Claim actively and diligently
      thereafter in order to preserve its rights in this regard.  If the
      indemnifying party elects not to defend against, negotiate, settle or otherwise
      deal with any Third Party Claim which relates to any Losses indemnified against
      hereunder, fails to notify the indemnified party of its election as herein
      provided or contests its obligation to indemnify the indemnified party for
      such
      Losses under this Agreement, the indemnified party may defend against,
      negotiate, settle or otherwise deal with such Third Party Claim.  If
      the indemnified party defends any Third Party Claim, then the indemnifying
      party
      shall reimburse the indemnified party for the expenses of defending such Third
      Party Claim upon submission of periodic bills.  If the indemnifying
      party shall assume the defense of any Third Party Claim, the indemnified party
      may participate, at his or its own expense, in the defense of such Third Party
      Claim; provided, however, that such indemnified party shall be
      entitled to participate in any such defense with separate counsel at the expense
      of the indemnifying party if (i) so requested by the indemnifying party to
      participate or (ii) in the reasonable opinion of counsel to the indemnified
      party, a conflict or potential conflict exists between the indemnified party
      and
      the indemnifying party that would make such separate representation advisable;
      and provided, further, that the indemnifying party shall not be
      required

     

    ·           to
      pay for more than one such counsel for all indemnified parties in connection
      with any Third Party Claim.  The parties hereto agree to provide
      reasonable access to the other to such documents and information as may be
      reasonably requested in connection with the defense, negotiation or settlement
      of any such Third Party Claim.  Notwithstanding anything in this
Section 8.3 to the contrary, neither the indemnifying party nor the
      indemnified party shall, without the written consent of the other party, settle
      or compromise any Third Party Claim or permit a default or consent to entry
      of
      any judgment unless the claimant or claimants and such party provide to such
      other party an unqualified release from all liability in respect of the Third
      Party Claim.  If the indemnifying party makes any payment on any Third
      Party Claim, the indemnifying party shall be subrogated, to the extent of such
      payment, to all rights and remedies of the indemnified party to any insurance
      benefits or other claims of the indemnified party with respect to such Third
      Party Claim.

     

    ·           After
      any final decision, judgment or award shall have been rendered by a Governmental
      Body of competent jurisdiction and the expiration of the time in which to appeal
      therefrom, or a settlement shall have been consummated, or the indemnified
      party
      (or the Stockholder Representative, in the case of a claim for indemnification
      for which payment may be sought under Section 8.2(b), and the
      indemnifying party (or, in the case of a claim for indemnification for which
      payment may be sought under Section 8.2(a), the Stockholder
      Representative) shall have arrived at a mutually binding agreement with respect
      to a claim for indemnification hereunder, the indemnified party (or, as
      applicable, the Stockholder Representative) shall forward to the indemnifying
      party (or, in the case of a claim for indemnification for which payment may
      be
      sought under Section 8.2(a), the Stockholder Representative) notice of
      any sums due and owing by the indemnifying party pursuant to this Agreement
      with
      respect to such matter.

     

    ·           Following
      the determination of any applicable amount that the Selling Stockholders shall
      be obligated to indemnify pursuant to Section 8.2(a)(i) or
8.2(a)(ii), the Stockholder Representative shall (i) promptly direct,
      in
      accordance with Section 8.6, the Escrow Agent to distribute to the
      applicable Purchaser Indemnified Party such amount in satisfaction of such
      obligations and (ii) to the extent such applicable amounts are not within the
      Cap but are properly payable pursuant to Sections 8.2 and 8.4,
      notify the Selling Stockholders so that payment may be made to the applicable
      Purchaser Indemnified Party by each such Selling Stockholder in satisfaction
      of
      its respective obligations under Section 8.2(a).

     

    1.83           Limitations
      on Indemnification.  

     

    (a)           An
      indemnifying party shall not have any liability under Section 8.2(a)(i)
      hereof unless the aggregate amount of Losses incurred by the indemnified parties
      and indemnifiable thereunder based upon, attributable to or resulting from
      the
      failure of any of the representations or warranties to be true and correct
      exceeds $1,000,000 (the “Rep Basket”) and, in such
      event, the indemnifying party shall be required to pay only the amount of such
      Losses in excess of $250,000 (the “Rep Deductible”);
provided that the Rep Basket and Rep Deductible limitations
      shall not
      apply to Losses related to breaches of representations and warranties as set
      forth in Sections 3.1 (Organization), 3.2 (Authorization),
3.4 (Ownership), 3.6 (Financial Advisors), 4.1
      (Organization), 4.2 (Authorization), 4.4 (Capitalization),
4.5 (Subsidiaries), 4.10 (Taxes) and  4.29
      (Financial Advisors).

     

    (b)           The
      Selling Stockholders shall not have any liability for indemnification under
      Section 8.2(a)(ii) hereof unless the aggregate amount of Losses incurred
      by Purchaser Indemnified Parties and indemnifiable thereunder based upon,
      attributable to or resulting from the breach of any Pre-Closing Covenant on
      the
      part of the Company or any Selling Stockholders exceeds $100,000 (the
“Covenant Basket”) and, in such event the Selling
      Stockholders shall be required to pay the amount of such Losses only to the
      extent of such excess.  Notwithstanding any of the foregoing
      provisions to the contrary, to the extent that any liability for indemnification
      by the Selling Stockholders based upon, attributable to or resulting from a
      breach of a Pre-Closing Covenant on the part of the Company or any Selling
      Stockholders is also covered under this Agreement under indemnification
      obligations of the Selling Stockholders relating to a breach of a representation
      or warranty of the Selling Stockholders, then such liability shall be deemed
      to
      arise and be incurred pursuant to Section 8.2(a)(i) and, thus, be subject
      to the Rep Basket and Rep Deductible for purposes of the limitations set forth
      in this Section 8.4.

     

    (a)           The
      Selling Stockholders shall not be required to indemnify any Person under
Sections 8.2(a)(i) and 8.2(a)(ii) for an aggregate amount of
      Losses exceeding an amount equal to $5,000,000 of the Purchase Price (the
“Cap”); provided that there shall be no Cap with
      respect to Losses related to breaches of any representations or warranties
      contained in Sections 3.1 (Organization), 3.2 (Authorization),
3.4 (Ownership), 3.6 (Financial Advisors), 4.1
      (Organization), 4.2 (Authorization), 4.4 (Capitalization),
4.5 (Subsidiaries), 4.10 (Taxes) and 4.29 (Financial
      Advisors) of this Agreement.

     

    (b)           Notwithstanding
      anything herein to the contrary, (i) no Selling Stockholder, other than the
      Controlling Owner, shall be liable for indemnification obligations in an amount
      in excess of its respective portion of the Purchase Price received (or, in
      respect of the Indemnity Escrow Amount, receivable) pursuant hereto and (ii)
      the
      Trust shall have no liability for indemnification obligations
      hereunder

     

    (c)           The
      amount of any Losses for which indemnification is provided under this Article
      VIII shall be net of any (i) amounts actually recovered by the indemnified
      party pursuant to any indemnification by or indemnification or other agreement
      with any third party or (ii) insurance proceeds or other cash receipts or
      sources of reimbursement actually received (in each case, net of any costs
      of
      collection or increased premiums relating thereto); provided,
however, that clause (ii) shall apply only if the effect of such
      provision does not constitute an impermissible waiver of the insurer’s rights of
      subrogation against the indemnifying party.  The parties acknowledge
      and agree that nothing in this Section 8.4(e) shall (i) create an
      obligation of any party to maintain any form or level of insurance or other
      arrangements after the Closing, (ii) name any other party as an additional
      indemnitee, insured or other party or (iii) obtain approval for any waiver
      of
      rights of subrogation.

     

    (d)           For
      purposes of calculating Losses hereunder, any materiality or Material Adverse
      Effect qualifications in the representations, warranties, covenants and
      agreements shall be disregarded.

     

    (e)           The
      Selling Stockholders shall have no right of contribution or other recourse
      against the Company or the Subsidiaries or their respective directors, officers,
      employees, Affiliates, agents, attorneys, representatives, assigns or successors
      for any Third

     

    (f)           Party
      Claims asserted by Purchaser Indemnified Parties, it being acknowledged and
      agreed that the covenants and agreements of the Company are solely for the
      benefit of the Purchaser Indemnified Parties.

     

    1.84           Tax
      Matters.

     

    ·           Tax
      Indemnification.  The Selling Stockholders hereby agree to be
      liable for and to indemnify and hold the Purchaser Indemnified Parties harmless
      from and against, and pay to the Purchaser Indemnified Parties the amount of,
      any and all Losses respect of (i) all Taxes of the Company and the Subsidiaries
      (or any predecessor thereof) (A) for any taxable period ending on or before
      the
      Closing Date, and (B) for the portion of any Straddle Period ending at the
      close
      of business on the Closing Date (determined as provided in Section
      8.5(d)); (ii) any and all Taxes imposed on any member of a consolidated,
      combined or unitary group of which the Company or any Subsidiary (or any
      predecessor thereof) is or was a member on or prior to the Closing Date, by
      reason of the liability of the Company or any Subsidiary (or any predecessor
      thereof), pursuant to Treasury Regulation Section 1.1502-6(a) (or any
      predecessor or successor thereof or any analogous or similar provision under
      state, local or foreign Law); (iii) the failure of any of the representations
      and warranties contained in Section 4.10 to be true and correct in all
      respects or the failure to perform any covenant contained in this Agreement
      with
      respect to Taxes; (iv) any recapture of Nebraska LB 775 tax credits from the
      Company due to the failure to meet or maintain the requirements of LB 775 prior
      to the Closing Date; and (v) any Taxes resulting from, arising out of or based
      on the Section 338(h)(10) Election (as defined in Section
      8.5(b)).

     

    ·           338(h)(10)
      Election.

     

    ·      The
      Selling Stockholders shall join with Purchaser in making an election under
      Section 338(h)(10) of the Code and the Treasury Regulations and any
      corresponding or similar elections under state, local or foreign tax law
      (collectively, the “Section 338(h)(10) Election”) with
      respect to the Company and each of the Subsidiaries.  For the purpose
      of making the Section 338(h)(10) Election for federal income Tax purposes,
      on or
      prior to the Closing Date, the Selling Stockholders shall deliver to Purchaser
      an executed original IRS Form 8023 (or successor form).  If no Section
      338(h)(10) Election is to be made, the Form 8023 will be returned to the Selling
      Stockholders within 120 days after the Closing Date.  If a Section
      338(h)(10) Election is to be made, Purchaser will file the Form 8023 with the
      IRS.  At least 30 days prior to the due date of such form Purchaser
      will provide the Stockholder Representative a copy of the proposed Form 8023
      and
      all attachments thereto and Purchaser shall negotiate in good faith with the
      Stockholder Representative concerning any reasonable adjustments
      thereto.

     

    ·      Purchaser
      shall be responsible for the preparation and filing of all forms and documents
      required to effectuate the Section 338(h)(10) Election.  In addition
      to the Form 8023, the Selling Stockholders shall execute (or cause to be
      executed) and deliver to Purchaser such additional documents or forms as are
      reasonably requested to complete properly the Section 338(h)(10) Election at
      least 15 days prior to the date such Section 338(h)(10) Election is required
      to
      be filed.

     

    ·      Purchaser
      and the Selling Stockholders shall file, and shall cause their Affiliates to
      file, all Tax Returns and statements, form and schedules in connection therewith
      in a manner consistent with the Section 338(h)(10) Election and shall take
      no
      position contrary thereto unless required to do so by applicable Tax
      Laws.

     

    ·      If
      Purchaser notifies the Selling Stockholders of its intent to make a Section
      338(h)(10) Election, the allocation statement set forth on Schedule
      8.5(b) (the “Allocation Statement”), which allocates
      the Purchase Price and any other items that are treated as additional Purchase
      Price for tax purposes among the Company and the Subsidiaries and among the
      different items of assets of the Company and the Subsidiaries, shall be
      applicable.  All Tax Returns and reports filed by Purchaser, the
      Selling Stockholders and their respective Affiliates shall be prepared
      consistently with such Allocation Statement.

     

    ·           Filing
      of Tax Returns; Payment of Taxes.

     

    ·      The
      Company shall (and shall cause the Subsidiaries to) timely file all Tax Returns
      required to be filed by it on or prior to the Closing Date and shall pay or
      cause to be paid all Taxes shown due thereon.  All such Tax Returns
      shall be prepared in all material respects in a manner consistent with prior
      practice.  The Company shall provide Purchaser with copies of such
      completed Tax Returns at least twenty (20) days prior to the due date for filing
      thereof, along with supporting workpapers, for Purchaser’s review and
      approval.  The Selling Stockholders and Purchaser shall attempt in
      good faith to resolve any disagreements regarding such Tax Returns prior to
      the
      due date for filing.  In the event that the Selling Stockholders and
      the Purchaser are unable to resolve any dispute with respect to such Tax Return
      at least ten days prior to the due date for filing, such dispute shall be
      resolved pursuant to Section 8.5(g), which resolution shall be binding on
      the parties.

     

    ·      Following
      the Closing, Purchaser shall cause to be timely filed all Tax Returns required
      to be filed by the Company and the Subsidiaries after the Closing Date and,
      subject to the rights to payment from the Selling Stockholders under
Section 8.5(c)(iii), pay or cause to be paid all Taxes shown due
      thereon; provided that, if an applicable Tax Return sets forth Taxes for
      which the Selling Stockholders are responsible (including, without limitation,
      as an indemnification obligation under this Section 8.5) then Purchaser
      shall provide a copy of such Tax Return to the Stockholder Representative at
      least ten (10) days prior to filing and shall negotiate in good faith with
      the
      Stockholder Representative concerning any reasonable adjustments
      thereto.

     

    ·      Not
      later than ten (10) days prior to the due date for the payment of Taxes on
      any
      Tax Returns which Purchaser has the responsibility to cause to be filed pursuant
      to Section 8.5(c)(ii), the Selling Stockholders shall pay to Purchaser or
      the applicable Governmental Body the amount of Taxes, as reasonably determined
      by Purchaser, owed by the Selling Stockholders pursuant to the provisions of
      Section 8.5(a).  No payment pursuant to this
Section 8.5(c)(iii) shall excuse the Selling Stockholders from its
      indemnification obligations pursuant to Section 8.5(a) if the amount of
      Taxes as ultimately determined (on audit or otherwise) for the periods covered
      by such Tax

     

    ·      Returns
      exceeds the amount of the Selling Stockholders’ payment under this Section
      8.5(c)(iii)

     

    ·           Straddle
      Period Tax Allocation.  The Company will, unless prohibited by
      applicable Law, close the taxable period of the Company and the Subsidiaries
      as
      of the close of business on the Closing Date.  If applicable Law does
      not permit the Company or a Subsidiary to close its taxable year on the Closing
      Date or in any case in which a Tax is assessed with respect to a taxable period
      which includes the Closing Date (but does not begin or end on that day) (a
      “Straddle Period”), the Taxes, if any, attributable to a
      Straddle Period shall be allocated (i) to the Selling Stockholders for the
      period up to and including the close of business on the day immediately
      preceding the Closing Date and (ii) to Purchaser for the period subsequent
      to
      the day immediately preceding the Closing Date; provided, however,
      that such allocation shall in no way affect the obligation of the Selling
      Stockholders to be responsible and liable for any and all Taxes (including,
      without limitation, arising out of or based on the Section 338(h)(10) Election)
      relating to the consummation of the transactions under this Agreement, other
      than such Taxes for which Purchaser is responsible as set forth under Section
      8.5(f) hereof.  Any allocation of income or deductions required to
      determine any Taxes attributable to a Straddle Period shall be made by means
      of
      a closing of the books and records of the Company and the Subsidiaries as of
      the
      close of the Closing Date, provided that exemptions, allowances or
      deductions that are calculated on an annual basis (including, but not limited
      to, depreciation and amortization deductions) shall be allocated between the
      period ending on the Closing Date and the period after the Closing Date in
      proportion to the number of days in each such period.

     

    ·           Tax
      Audits.

     

    ·      If
      notice of any Legal Proceeding with respect to Taxes of the Company or any
      of
      the Subsidiaries (a “Tax Claim”) shall be received by
      either party for which the other party may reasonably be expected to be liable
      pursuant to Section 8.5(a), the notified party shall notify such other
      party in writing of such Tax Claim; provided, however, that the
      failure of the notified party to give the other party notice as provided herein
      shall not relieve such failing party of its obligations under this Section
      8.5 except to the extent that the other party is actually and materially
      prejudiced thereby.

     

    ·      Purchaser
      shall have the right, at the expense of the Selling Stockholders to the extent
      such Tax Claim is subject to indemnification by the Selling Stockholders
      pursuant to Section 8.5(a) hereof, to represent the interests of the
      Company and the Subsidiaries in any Tax Claim, provided that with respect
      to a Tax Claim relating exclusively to taxable periods ending on or before
      the
      Closing Date, the Stockholder Representative shall represent the interests
      of
      the Company and shall not settle such claim without the consent of Purchaser,
      which consent shall not be unreasonably withheld.

     

    ·           Transfer
      Taxes.  Purchaser shall be liable for and shall pay (and shall
      indemnify and hold harmless the Selling Stockholders against) all sales, use,
      stamp, documentary, filing, recording, transfer or similar fees or taxes or
      governmental charges as levied by any Governmental Body including any interest
      and penalties) in connection with the transactions contemplated by this
      Agreement.

     

    ·           Disputes.  Any
      dispute as to any matter covered hereby shall be resolved by an independent
      accounting firm mutually acceptable to the Stockholder Representative and the
      Purchaser.  The fees and expenses of such accounting firm shall be
      borne equally by the Selling Stockholders, on the one hand, and the Purchaser
      on
      the other.  If any dispute with respect to a Tax Return is not
      resolved prior to the due date of such Tax Return, such Tax Return shall be
      filed in the manner which the party responsible for preparing such Tax Return
      deems correct.

     

    ·           Time
      Limits.  Any claim for indemnity under this Section 8.5 may
      be made at any time prior to ninety (90) days after the expiration of the
      applicable Tax statute of limitations with respect to the relevant taxable
      period (including all periods of extension, whether automatic or
      permissive).

     

    ·           Exclusivity.  The
      indemnification provided for in this Section 8.5 shall be the sole remedy
      for any claim in respect of Taxes, including any claim arising out of or
      relating to a breach of Section 4.10.  In the event of a
      conflict between the provisions of this Section 8.5, on the one hand, and
      the provisions of Sections 8.1 through 8.4, on the other, the
      provisions of this Section 8.5 shall control.

     

    1.85           Indemnity
      Escrow.  On the Closing Date, Purchaser shall deposit with First
      National Bank of Omaha (the “Escrow Agent”), as agent to
      Purchaser and the Stockholder Representation (on behalf of the Selling
      Stockholders), in immediately available funds, to the account designated by
      the
      Escrow Agent, and amount equal to $5,000,000.00 (the “Indemnity
      Escrow Amount”), in accordance with the terms of this Agreement and
      the Escrow Agreement, which will be executed at the Closing, by and among
      Purchaser, the Stockholder Representative and the Escrow Agent (the
“Escrow Agreement”).  Any payment the Selling
      Stockholders are obligated to make to any Purchaser Indemnified Parties pursuant
      to this Article VIII shall be paid first, to the extent there are
      sufficient funds in the Indemnity Escrow Account, by release of funds to the
      Purchaser Indemnified Parties from the Indemnity Escrow Account by the Escrow
      Agent in accordance with the terms of the Escrow Agreement and shall accordingly
      reduce the Indemnity Escrow Amount and, second, to the extent the Indemnity
      Escrow Amount is insufficient (and such claims are not subject to the Cap
      limitation under Section 8.4(c)) to pay any remaining sums due, then the
      Selling Stockholders shall be required to pay all of such additional sums due
      and owing to the applicable Purchaser Indemnified Party by wire transfer of
      immediately available funds within five (5) Business Days after the date of
      such
      notice.  On the first (1st) anniversary
      of
      the Closing Date, the Escrow Agent shall release the Indemnity Escrow Amount
      (to
      the extent not utilized to pay any Purchaser Indemnified Parties for any
      indemnification claim) to the Stockholder Representative (for distribution
      to
      the Selling Stockholders in accordance with their respective pro rata
      portion of the Purchase Price), except that the Escrow Agent shall retain an
      amount (up to the total amount then held by the Escrow Agent) equal to the
      amount of claims for indemnification under this Article VIII asserted
      prior to such first (1st) anniversary
      but
      not yet resolved (“Unresolved Claims”).  The
      Indemnity Escrow Amount retained for Unresolved Claims shall be released by
      the
      Escrow Agent (to the extent not utilized to pay Purchaser Indemnified Parties
      for any such claims resolved in favor thereof) upon their resolution in
      accordance with this Article VIII and the terms of the Escrow
      Agreement.

     

    1.86           Treatment
      of Indemnity Payments.  The Selling Stockholders and the Purchaser
      agree to treat any indemnity payment made pursuant to this Article VIII
      as an adjustment to the Purchase Price for all purposes, including relating
      to
      income Taxes.

     

    1.87           Exclusive
      Remedy.  Except for claims for intentional acts of fraud by any of
      the Controlling Owner, the chief financial officer or chief operating officer
      of
      the Company, from and after the Closing, the sole and exclusive remedy available
      to the parties hereto for claims arising out of the subject matter of this
      Agreement shall be indemnification in accordance with this Article
      VIII.  Notwithstanding the foregoing, this Section 8.8
      shall not (i) operate to interfere with or impede the operation under
Sections 2.7, 2.8, 9.3 or this Article VIII for the
      resolution of certain disputes and payment of funds in respect thereof or (ii)
      limit the rights of the parties to seek non-monetary equitable remedies
      (including specific performance or injunctive relief).

     

     

    TERMINATION

     

    1.88           Termination
      of Agreement.  This Agreement may be terminated prior to the
      Closing as follows:

     

    ·           At
      the election of the Stockholder Representative or Purchaser after October 1,
      2007 (such date, as it may be extended under this Section 9.1(a), the
“Termination Date”), if the Closing shall not have
      occurred by the close of business on such date, provided that the
      terminating party is not in material default of any of its obligations
      hereunder; and provided, further, that either Purchaser or the
      Stockholder Representative shall have the option to extend, from time to time,
      the Termination Date for additional periods of time not to exceed 60 days in
      the
      aggregate if all other conditions to the Closing are satisfied or capable of
      then being satisfied and the sole reason that the Closing has not been
      consummated is that the condition set forth in Section 7.1(f) has not
      been satisfied due to the failure to obtain the necessary consents and approvals
      under applicable Laws;

     

    ·           by
      mutual written consent of the Stockholder Representative and
      Purchaser;

     

    ·           by
      the Stockholder Representative or Purchaser if there shall be in effect a final
      nonappealable Order of a Governmental Body of competent jurisdiction
      restraining, enjoining or otherwise prohibiting the consummation of the
      transactions contemplated hereby; provided, however, that the
      right to terminate this Agreement under this Section 9.1(c) shall not be
      available to a party if such Order was primarily due to the failure of such
      party to perform any of its obligations under this Agreement;

     

    ·           by
      Purchaser if any Selling Stockholder or the Company shall have breached or
      failed to perform any of its representations, warranties, covenants or
      agreements set forth in this Agreement, or if any representation or warranty
      of
      any Selling Stockholder or the Company shall have become untrue, in either
      case
      such that the conditions set forth in Sections 7.1(a) or
7.1(b) would not be satisfied and such breach is incapable of being
      cured
      or, if

     

    ·           capable
      of being cured, shall not have been cured within ten (10) days following receipt
      by the Stockholder Representative of notice of such breach from the Purchaser;
      or

     

    ·           by
      the Stockholder Representative if Purchaser shall have breached or failed to
      perform any of its representations, warranties, covenants or agreements set
      forth in this Agreement, or if any representation or warranty of Purchaser
      shall
      have become untrue, in either case such that the conditions set forth in
Sections 7.2(a) or 7.2(b) would not be satisfied and such breach
      is incapable of being cured or, if capable of being cured, shall not have been
      cured within ten (10) days following receipt by Purchaser of notice of such
      breach from the Stockholder Representative.

     

    1.89           Procedure
      Upon Termination.  In the event of termination and abandonment by
      Purchaser or the Stockholder Representative, or both, pursuant to Section
      9.1, written notice thereof shall forthwith be given to the other party or
      parties, and this Agreement shall terminate, and the purchase of the Shares
      hereunder shall be abandoned, without further action by Purchaser, the Company
      or the Selling Stockholders; provided, however, that the
      obligations of the parties under Section 6.9, Section 9.3 and
Article X shall remain in full force and effect.

     

    1.90           Effect
      of Termination.  In the event that this Agreement is validly
      terminated as provided herein, then each of the parties shall be relieved of
      their duties and obligations arising under this Agreement after the date of
      such
      termination and such termination shall be without liability to Purchaser, any
      Selling Stockholder or the Company; provided, however, that in the
      event that this Agreement is terminated by the Stockholder Representative
      pursuant to Section 9.1(e) (for any reason other than solely for to the
      failure of the Closing to be consummated due to the failure to satisfy the
      conditions set forth in Section 7.1(f) or Section 7.1(g) at such
      time as the Stockholder Representative, the other Selling Stockholders and
      the
      Company are not in material default of any of their respective obligations
      hereunder) or by Purchaser pursuant to Sections 9.1(d) (for any reason
      other than solely for to the failure of the Closing to be consummated due to
      the
      failure to satisfy the conditions set forth in Section 7.1(f) or
Section 7.1(g) at such time as Purchaser is not in material default of
      any of its obligations hereunder), then the Company, if the Stockholder
      Representative is such terminating party, or Purchaser, if Purchaser is such
      terminating party, shall pay to Purchaser (if the Stockholder Representative
      is
      such terminating party) or the Company (if Purchaser is such terminating party)
      a termination fee equal to $2,500,000.00 (as liquidated damages for any such
      termination.  Any payment required by the immediately foregoing
      sentence shall be made by the applicable party within five (5) Business Days
      after such applicable termination.  The obligations of the parties set
      forth in this Section 9.3, Section 6.9 and Article X hereof
      shall survive any such termination and shall be enforceable
      hereunder.

     

     

    MISCELLANEOUS

     

    1.91           Expenses.  Except
      as otherwise provided in this Agreement, each of the Selling Stockholders and
      Purchaser shall each bear its own expenses incurred in connection
      with

     

    1.92           the
      negotiation and execution of this Agreement and each other agreement, document
      and instrument contemplated by this Agreement and the consummation of the
      transactions contemplated hereby.  Unpaid Company Transaction Expenses
      shall be accrued by the Company and its Subsidiaries and shall either be
      incorporated into the adjustment as provided under Section 2.7 as
      Included Current Liabilities for purposes of calculation of Closing Working
      Capital or otherwise be an obligation of the Selling Stockholders as provided
      under Section 8.2(a)(iv).  Notwithstanding anything to the
      contrary herein, Purchaser shall be responsible for and shall pay the fees
      associated with filings required by the HSR Act.

     

    1.93           Stockholder
      Representative.  

     

    ·           Each
      Selling Stockholder hereby irrevocably appoints Dennis P. Circo (the
“Stockholder Representative”) as such Selling
      Stockholder’s representative, attorney-in-fact and agent, with full power of
      substitution to act in the name, place and stead of such Selling Stockholder
      with respect to the transfer of such Selling Stockholder’s Shares to Purchaser
      in accordance with the terms and provisions of this Agreement and to act on
      behalf of such Selling Stockholder in any amendment of or litigation or
      arbitration involving this Agreement and to do or refrain from doing all such
      further acts and things, and to execute all such documents, as such Stockholder
      Representative shall deem necessary or appropriate in conjunction with any
      of
      the transactions contemplated by this Agreement, including the
      power:

     

    ·      to
      take all action necessary or desirable in connection with the waiver of any
      condition to the obligations of the Selling Stockholders to consummate the
      transactions contemplated by this Agreement;

     

    ·      to
      negotiate, execute and deliver all ancillary agreements, statements,
      certificates, statements, notices, approvals, extensions, waivers, undertakings,
      amendments and other documents required or permitted to be given in connection
      with the consummation of the transactions contemplated by this Agreement (it
      being understood that such Selling Stockholder shall execute and deliver any
      such documents which the Stockholder Representative agrees to
      execute);

     

    ·      to
      terminate this Agreement if the Selling Stockholders are entitled to do
      so;

     

    ·      to
      give and receive all notices and communications to be given or received under
      this Agreement and to receive service of process in connection with the any
      claims under this Agreement, including service of process in connection with
      arbitration; and

     

    ·      to
      take all actions which under this Agreement may be taken by the Selling
      Stockholders and to do or refrain from doing any further act or deed on behalf
      of the Selling Stockholder which the Stockholder Representative deems necessary
      or appropriate in his sole discretion relating to the subject matter of this
      Agreement as fully and completely as such Selling Stockholder could do if
      personally present.

     

    ·      If
      Dennis P. Circo becomes unable to serve as Stockholder
      Representative,  Christopher W. Circo, or such other Person or Persons
      as may be designated by a majority of the Selling Stockholders, shall succeed
      as
      the Stockholder Representative.

     

    1.94           Specific
      Performance.  The Selling Stockholders acknowledge and agree that
      a breach of this Agreement would cause irreparable damage to Purchaser and
      that
      Purchaser will not have an adequate remedy at law.  Therefore, the
      obligations of the Selling Stockholders under this Agreement to sell the Shares
      to Purchaser, shall be enforceable by a decree of specific performance issued
      by
      any court of competent jurisdiction, and appropriate injunctive relief may
      be
      applied for and granted in connection therewith.  Such remedy shall,
      however, be cumulative and not exclusive and shall be in addition to any other
      remedies which any party may have under this Agreement.

     

    1.95           Submission
      to Jurisdiction; Consent to Service of Process; Waiver of Jury
      Trial.

     

    ·           Except
      as otherwise specifically provided under Sections 2.7(b), 2.8
      (with respect to clauses (a)(iii) and (b)(iii) of Schedule 2.8) and
8.5(g), the parties hereto hereby irrevocably submit to the non-exclusive
      jurisdiction of any federal or state court located within the State of Nebraska
      over any dispute arising out of or relating to this Agreement or any of the
      transactions contemplated hereby and each party hereby irrevocably agrees that
      all claims in respect of such dispute or any suit, action proceeding related
      thereto may be heard and determined in such courts.  The parties
      hereby irrevocably waive, to the fullest extent permitted by applicable law,
      any
      objection which they may now or hereafter have to the laying of venue of any
      such dispute brought in such court or any defense of inconvenient forum for
      the
      maintenance of such dispute.  Each of the parties hereto agrees that a
      judgment in any such dispute may be enforced in other jurisdictions by suit
      on
      the judgment or in any other manner provided by law.

     

    ·           Each
      of the parties hereto hereby consents to process being served by any party
      to
      this Agreement in any suit, action or proceeding by delivery of a copy thereof
      in accordance with the provisions of Section 10.7.

     

    ·           THE
      PARTIES TO THIS AGREEMENT EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
      BY
      LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION
      (i) ARISING UNDER THIS AGREEMENT OR (ii) IN ANY WAY CONNECTED WITH OR RELATED
      OR
      INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT
      OR
      ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR
      HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR
      OTHERWISE.  THE PARTIES TO THIS AGREEMENT EACH HEREBY AGREES AND
      CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION SHALL BE
      DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT
      MAY
      FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS
      WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
      RIGHT TO TRIAL BY JURY.

     

    ·           Entire
      Agreement; Amendments and Waivers.  This Agreement (including the
      schedules and exhibits hereto), the Confidentiality Agreement, the Selling
      Stockholder Documents and the Purchaser Documents represent the entire
      understanding and agreement between the parties hereto with respect to the
      subject matter hereof and can be amended, supplemented or changed, and any
      provision hereof can be waived, only by written instrument making specific
      reference to this Agreement signed by the party against whom enforcement of
      any
      such amendment, supplement, modification or waiver is sought.  No
      action taken pursuant to this Agreement shall be deemed to constitute a waiver
      by the party taking such action of compliance with any representation, warranty,
      covenant or agreement contained herein.  The waiver by any party
      hereto of a breach of any provision of this Agreement shall not operate or
      be
      construed as a further or continuing waiver of such breach or as a waiver of
      any
      other or subsequent breach.  No failure on the part of any party to
      exercise, and no delay in exercising, any right, power or remedy hereunder
      shall
      operate as a waiver thereof, nor shall any single or partial exercise of such
      right, power or remedy by such party preclude any other or further exercise
      thereof or the exercise of any other right, power or remedy.

     

    1.96           Governing
      Law.  This Agreement shall be governed by and construed in
      accordance with the laws of the State of Nebraska applicable to contracts made
      and performed in such state.

     

    1.97           Notices.  All
      notices and other communications under this Agreement shall be in writing and
      shall be deemed given (i) when delivered personally by hand (with written
      confirmation of receipt), (ii) when sent by facsimile (with written confirmation
      of transmission) or (iii) one Business Day following the day sent by overnight
      courier (with written confirmation of receipt), in each case at the following
      addresses and facsimile numbers (or to such other address or facsimile number
      as
      a party may have specified by notice given to the other party pursuant to this
      provision):

     

    
      If
        to the
        Company (on or prior to the Closing Date) or any Selling Stockholder,
        to:

    

    
          c/o
        Precision
        Industries, Inc.

          4611
        S.
        96th
        Street

          Omaha,
        NE
        68127

          Facsimile:  (402)
        827-1393

          Attention:  Dennis
        P. Circo, Chairman of the Board and Chief Executive Officer

       

    

    
      With
        a
        copy to:

    

    
          McGrath
        North
        Mullin & Kratz, PC LLO

          First
        National Tower, Suite 3700

          1601
        Dodge
        Street

          Omaha,
        NE
        68102-1627

          Facsimile:  (402)
        341-0216

          Attention:  David
        L. Hefflinger

       

    

    
      If
        to
        Purchaser, to:

    

    
          DXP
        Enterprises, Inc.

          7272
        Pinemont

          Houston,
        TX
        77040

          Facsimile:  (713)
        996-4701

          Attention:  David
        R. Little, Chief Executive Officer

       

    

    
       

      With
        a
        copy to:

    

    
          Looper
        Reed
& McGraw, P.C.

          1300
        Post Oak
        Blvd., Suite 2000

          Houston,
        TX
        77056

          Facsimile:  (713)
        986-7100

          Attention:  Jeffrey
        D. Hopkins

    

    
      

    

    1.98           Severability.  If
      any term or other provision of this Agreement is invalid, illegal, or incapable
      of being enforced by any law or public policy, all other terms or provisions
      of
      this Agreement shall nevertheless remain in full force and effect so long as
      the
      economic or legal substance of the transactions contemplated hereby is not
      affected in any manner materially adverse to any party.  Upon such
      determination that any term or other provision is invalid, illegal, or incapable
      of being enforced, the parties hereto shall negotiate in good faith to modify
      this Agreement so as to effect the original intent of the parties as closely
      as
      possible in an acceptable manner in order that the transactions contemplated
      hereby are consummated as originally contemplated to the greatest extent
      possible.

     

    1.99           Binding
      Effect; Assignment.  This Agreement shall be binding upon and
      inure to the benefit of the parties and their respective successors and
      permitted assigns.  Nothing in this Agreement shall create or be
      deemed to create any third party beneficiary rights in any person or entity
      not
      a party to this Agreement except as provided below.  No assignment of
      this Agreement or of any rights or obligations hereunder may be made by either
      the Selling Stockholders or Purchaser (by operation of law or otherwise) without
      the prior written consent of the other parties hereto and any attempted
      assignment without the required consents shall be void; provided,
however, that Purchaser may assign this Agreement and any or all rights
      or obligations hereunder (including Purchaser’s rights to purchase the Shares
      and Purchaser’s rights to seek indemnification hereunder) to any Affiliate of
      Purchaser, any Person from which it has borrowed money or any Person to which
      Purchaser or any of its Affiliates proposes to sell all or substantially all
      of
      the assets relating to the business, provided, Purchaser shall remain primarily
      liable under this Agreement.  Upon any such permitted assignment, the
      references in this Agreement to Purchaser shall also apply to any such assignee
      unless the context otherwise requires. 

     

    1.100                      Non-Recourse.  No
      past, present or future director, officer, employee, incorporator, member,
      partner, stockholder, Affiliate, agent, attorney or representative of Purchaser
      shall have any liability for any obligations or liabilities of Purchaser under
      this Agreement or for any claim based on, in respect of, or by reason of, the
      transactions contemplated hereby.

     

    1.101                      Counterparts.  This
      Agreement may be executed in one or more counterparts (including by facsimile),
      each of which will be deemed to be an original copy of this Agreement and all
      of
      which, when taken together, will be deemed to constitute one and the same
      agreement, and shall become effective when one or more counterparts have been
      signed by each of the parties and delivered to the other parties.

     

    
      

    

    
      **
        REMAINDER OF PAGE INTENTIONALLY LEFT BLANK**

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

    

    DXP
      ENTERPRISES, INC.

     

    By:
      /s/David R.
      Little                                                                

    David
      R.
      Little, Chief Executive Officer

    

     

    PRECISION
      INDUSTRIES, INC.

     

    By:
      /s/Dennis P.
      Circo                                                                

    Dennis
      P.
      Circo, Chief Executive Officer

    

     

    SELLING
      STOCKHOLDERS:

     

    DENNIS
      P.
      CIRCO

    

    /s/Dennis
      P.
      Circo                                                                

     

    CHRISTOPHER
      W. CIRCO

     

    /s/Christopher
      W.
      Circo                                                                

     

    CIRCO
      ENTERPRISES, LLC

     

    By:
      /s/Dennis P.
      Circo                                                                

    Name:  Dennis
      P. Circots:

    Its:  Manager

    

    CIRCO
      HOLDINGS, LLC

     

    By:
      /s/Dennis P.
      Circo                                                                

    Name:
      Dennis P. Circo

     

    Its:  Manager

     

    DENNIS
      P.
      CIRCO IRREVOCABLE TRUST NO. 4

    

    By:
      Security National Bank, Trustee

           /s/Douglas
      S.
      Oldaker                                                                           

    Name:  Douglas
      S. Oldaker

     

    Its:  Senior
      Vice President

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedules
      and exhibits omitted pursuant to Item 601(b)(3) of Regulation
      S-K.exhibi10_2.htm

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    News
      Release

    Contact:    Mac
      McConnell

            Sr.
      Vice President
& CFO

            713-996-4700

            www.dxpe.com

            

    

    

    DXP
      Enterprises, Inc. and Precision Industries, Inc. Announce Definitive
      Agreement

    For
      the Acquisition of Precision Industries, Inc.

    

    Houston,
      Texas, August 19, 2007 – DXP Enterprises, Inc. (NASDAQ Global
      Market:  DXPE) and Precision Industries, Inc. announced today that DXP
      and Precision have entered into an all-cash definitive purchase agreement for
      DXP to acquire Precision.  The acquisition is subject to certain
      customary conditions, including regulatory approvals.  DXP expects to
      fund the cash consideration of approximately $106 million using available cash
      and borrowings under a new credit facility.

    

    Precision
      Industries, Inc., with headquarters in Omaha, Nebraska, was founded in 1945
      and
      has annualized 2007 sales of approximately $250 million.  Precision is
      a national industrial distribution leader with 160 locations providing
      innovative supply chain management solutions through branch-served custom
      contract solutions, integrated supply and e-Commerce
      programs.  Additional company information can be found on Precision’s
      website at www.precisionind.com.

    

    “By
      acquiring Precision, a company with a long and established reputation for
      excellence and service, we continue to execute our growth strategy,” said David
      Little, Chairman and CEO of DXP.  “We believe that DXP and Precision
      are an ideal strategic and operational fit for each other and look forward
      to
      welcoming the Precision team to the DXP family.  Precision has a
      culture and business model that is similar to ours, and a successful management
      team with considerable experience and success in supply chain
      management.  Together, we believe we can better serve local and
      national customers, offer a broader range of products and services, and derive
      synergies by leveraging our combined purchasing power and customer
      service.”

    

    “We
      are
      excited about joining DXP through this transaction, which will offer great
      opportunities for our customers and our employees,” said Dennis Circo, CEO of
      Precision.  He added, “DXP is gaining a talented team of employees who
      have worked very hard over the years to build Precision into the company it
      is
      today.”

    

    “This
      transaction will be positive for Precision and DXP’s customers and employees,”
said Mac McConnell, DXP’s Chief Financial Officer.”

    

    DXP
      is
      represented by Stephens Inc. in this transaction.

    

    DXP
      Enterprises, Inc. is a leading products and service distributor focused on
      adding value and total cost savings solutions to MRO and OEM customers in
      virtually every industry since 1908.  DXP provides innovative pumping
      solutions, integrated supply and MROP (maintenance, repair, operating and
      production) services that emphasize and utilize DXP’s vast product knowledge and
      technical expertise in pumps, bearings, power transmission, seals, hose, safety,
      fluid power, and electrical and industrial supplies.  DXP’s breadth of
      MROP products and service solutions allows DXP to be flexible and customer
      driven, creating competitive advantages for its customers.

    

    The
      Private Securities Litigation Reform Act of 1995 provides a “safe-harbor” for
      forward-looking statements.  Certain information included in this
      press release (as well as information included in oral statements or other
      written statements made by or to be made by the Company) contains statements
      that are forward-looking.  Such forward-looking information involves
      important risks and uncertainties that could significantly affect anticipated
      results in the future; and accordingly, such results may differ from those
      expressed in any forward-looking statement made by or on behalf of the
      Company.  These risks and uncertainties include, but are not limited
      to; ability to obtain needed capital, dependence on existing management,
      leverage and debt service, domestic or global economic conditions, and changes
      in customer preferences and attitudes. For more information, review the
      Company's filings with the Securities and Exchange Commission.

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