Document:

Exhibit
10.10

 

PIERRE
HOLDING CORP.

9990
Princeton Road

Cincinnati,
Ohio 45246

 

RESTRICTED STOCK AGREEMENT

 

 

                                  ,
20  

 

Name

Address

City, State ZIP

 

Re:                             Purchase of Restricted Stock in Pierre
Holding Corp. (the “Company”)

 

Dear
                                :

 

In connection with your promotion to
                            
of Pierre Foods, Inc., the Board of Directors has agreed to issue to you
             shares
of Common Stock of the Company at a purchase price of [$      ]
per share, under the Pierre Holding Corp. 2008 Restricted Stock Plan (the “Plan”),
and in accordance with the terms of this Agreement (the “Restricted Shares”).

 

1.                                      Definitions. 
For the purposes of this Agreement, the following terms shall have the meanings
set forth below:

 

“Affiliate” of any particular Person shall mean
any other Person controlling, controlled by or under common control with such
particular Person, where “control” means the possession, directly or
indirectly, of the power to direct the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.

 

“Available Shares” shall have the meaning set
forth in paragraph 5(a)(ii).

 

“Available Shares Repurchase Notice” shall have
the meaning set forth in paragraph 5(a)(ii).

 

“Board” shall mean the Board of Directors of
the Company.

 

“Code” shall mean the Internal Revenue Code of
1986, as amended, and any successor statute.

 

“Committee” shall mean the Compensation
Committee of the Board, or if no such committee is in existence, the Board
itself.

 

“Common Stock” shall mean the Company’s Common
Stock, par value $0.01 per share, or, in the event that the outstanding Common
Stock is hereafter changed into or exchanged for different stock or securities
of the Company, such other stock or securities.

 

“Company” shall mean Pierre Holding Corp., a
Delaware corporation.

 

 

“Fair Market Value” of the Common Stock shall
be determined in good faith by the Committee taking into account all relevant
factors determinative of value (including the lack of liquidity of such Common
Stock due to the Company’s status as a privately held corporation, but without
regard to any discounts for minority interests).

 

“Independent Third Party” shall mean any Person
who, immediately prior to the contemplated transaction, does not own in excess
of 5% of the Common Stock on a fully-diluted basis (a “5% Owner”), who
is not controlling, controlled by or under common control with any such 5%
Owner and who is not the spouse or descendant (by birth or adoption) of any
such 5% Owner or a trust for the benefit of such 5% Owner and/or such other
Persons.

 

“MDCP” shall mean Madison Dearborn Capital
Partners IV, L.P. and its Affiliates.

 

“Original Cost” shall have the meaning set
forth in paragraph 2(a).

 

“Person” shall mean a natural person,
partnership (whether general or limited), limited liability company, trust,
estate, association, corporation, custodian, nominee or any other individual or
entity in its own or any representative capacity.

 

“Pierre Foods, Inc.” shall mean Pierre
Foods, Inc., a North Carolina corporation and Subsidiary of the Company.

 

“Public Sale” shall mean any sale of Common
Stock to the public pursuant to an offering registered under the Securities Act
or to the public through a broker, dealer or market maker pursuant to the
provisions of Rule 144 adopted under the Securities Act.

 

“Registration Agreement” shall mean that
certain Registration Agreement dated as of June 30, 2004 between the
Company and certain Investors (as defined therein).

 

“Restricted Shares” shall mean the
              
shares of Common Stock purchased by you in accordance with paragraph 2(a) of
this Agreement and any Common Stock issued to you by way of stock dividend or
stock split or in connection with any conversion, merger, consolidation or
recapitalization or other reorganization affecting the Restricted Shares.  Restricted Shares shall continue to be
Restricted Shares in the hands of any holder other than you (except for the
Company or MDCP and, to the extent that you are permitted to transfer
Restricted Shares pursuant to the Stockholders Agreement, purchasers pursuant
to a public offering under the Securities Act), and each such transferee
thereof shall succeed to the rights and obligations of a holder of Restricted
Shares hereunder.

 

“Sale of the Company” shall mean the sale of
the Company to an Independent Third Party or group of Independent Third Parties
pursuant to which such party or parties acquire (i) capital stock of the
Company possessing the voting power under normal circumstances (without regard
to the occurrence of any contingency) to elect a majority of the Company’s
board of directors (whether by merger, consolidation or sale or transfer of the
Company’s capital stock) or (ii) all or substantially all of the Company’s
assets determined on a consolidated basis.

 

“Stockholders Agreement” shall mean that
certain Stockholders Agreement dated June 30, 2004 between the Company and
certain of its stockholders.

 

 

“Securities Act” shall mean the Securities Act
of 1933, as amended, and any successor statute.

 

“Subsidiary” shall mean, with respect to any
Person, any corporation, limited liability company, partnership, association or
other business entity of which (i) if a corporation, a majority of the
total voting power of shares of stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or indirectly,
by that Person, one or more Subsidiaries of that Person or a combination
thereof, or (ii) if a limited liability company, partnership, association
or other business entity, a majority of the partnership or other similar
ownership interest thereof is at the time owned or controlled, directly or
indirectly, by any Person, one or more Subsidiaries of that person or a
combination thereof.  For purposes
hereof, a Person or Persons shall be deemed to have a majority ownership
interest in a limited liability company, partnership, association or other
business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or shall control the managing general partner of such
limited liability company, partnership, association or other business entity.

 

“Supplemental Repurchase Notice” shall have the
meaning set forth in paragraph 5(a)(ii).

 

“Termination” shall have the meaning set forth
in paragraph 5(a).

 

“Termination Date” shall have the meaning set
forth in paragraph 5(a).

 

“Unvested Shares” shall have the meaning set
forth in paragraph 5(a).

 

“Unvested Share Repurchase Option” shall have
the meaning set forth in paragraph 5(a).

 

“Vested Shares” shall have the meaning set
forth in paragraph 5(a).

 

“Vested Share Repurchase Option” shall have the
meaning set forth in paragraph 5(a).

 

2.                                      Purchase of Restricted Shares.

 

(a)           Upon
execution of this Agreement, you shall purchase
            
Restricted Shares from the Company for
[$        ] per Share (the “Original
Cost”), which shares shall be subject to the vesting and forfeiture
provisions set forth in this Agreement. 
The Original Cost shall be paid by you by check payable to the
Company.  As soon as practicable after
the execution of this Agreement, the Company shall direct that a stock
certificate representing the Restricted Shares be registered in your name and
issued to you.  Such certificate shall be
held in the custody of the Company or its designee until such Restricted Shares
are no longer considered restricted and are released to you in accordance with
paragraph 2(c).

 

(b)           By
executing this Agreement, you hereby irrevocably appoint the President, each
Vice President, and the Secretary of the Company, and each of them, as your
true and lawful attorney-in-fact, with power (i) to sign in your name and
on your behalf stock certificates and stock powers covering the Restricted
Shares and such other documents and 

 

 

instruments as the Committee deems necessary or desirable to carry out
the terms of this Agreement, and (ii) to take such other action as the
Committee deems necessary or desirable to effectuate the terms of this
Agreement.  This power, being couple with
an interest, is irrevocable.  You agree
to execute such stock powers and documents as may be reasonably requested from
time to time by the Committee to effectuate the terms of this Agreement.

 

(c)           As
soon as practicable following the vesting of all Restricted Shares in
accordance with this Agreement, and upon satisfaction of all other applicable
conditions with respect to the Restricted Shares, the Company shall deliver or
cause to be delivered to you a certificate or certificates for the Restricted
Shares.  Upon your written request to the
Company prior to the vesting of all Restricted Shares, the Company shall
deliver or cause to be delivered to you a certificate or certificates
representing the number of vested Restricted Shares, if any, as of the date of
such request.

 

(d)           Within
30 days following the date hereof, you shall make an effective election with
the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code and the regulations promulgated thereunder in the form of Annex A
attached hereto.

 

(e)           All
of your vested Restricted Shares shall be subject to, and shall be “Stockholder
Shares” under the Stockholders Agreement and “Registrable Securities” under the
Registration Agreement, and shall be subject to restrictions on transfer and
the other provisions of such agreements; provided, however, that the repurchase
rights of the Company and MDCP in paragraph 5 hereof shall not be considered a
“Transfer” for purposes of Section 3 of the Stockholders Agreement.  As a condition to the Company’s issuance of
the Restricted Shares to you in accordance with paragraph 2, you agree to
execute a joinder to each of the Stockholders Agreement and the Registration
Agreement to evidence your becoming a party to such Agreements with respect to
the Restricted Shares.

 

3.                                      Vesting.  Your
Restricted Shares shall vest as follows: Between the date of this Agreement and
                      ,
20    , provided you are continuously employed by the
Company, Pierre Foods, Inc. or its Subsidiaries from the date of this
Agreement through the date of determination, your Restricted Shares will vest
on a daily pro rata basis such that, on the date of determination, the amount
of your Restricted Shares which shall have vested as of that date shall be
equal to (rounded to the nearest whole share) the product of (A)           
multiplied by (B) a fraction, the numerator of which shall be the
number of calendar days from the date of this Agreement through the date of
determination, inclusive, and the denominator of which shall be [1,460].  Notwithstanding the foregoing, if you have been
continuously employed by the Company, Pierre Foods, Inc. or its
Subsidiaries from the date of this Agreement until a Sale of the Company or
until your Restricted Shares are transferred in a Public Sale, the portion of
your Restricted Shares which has not become vested at the date of such event
and which is transferred in such event shall vest immediately prior to the
consummation of the Sale of the Company or a Public Sale, as applicable.

 

4.                                      Restrictions. 
You shall have all rights and privileges of a shareholder of the Company
with respect to the Restricted Shares, including the right to vote and receive
dividends or other distributions with respect to the Restricted Shares, except
that the following restrictions shall apply:

 

 

(i)            You
shall not be entitled to delivery of the certificate or certificates for the
Restricted Shares until such Restricted Shares have vested and upon
satisfaction of all other applicable conditions;

 

(ii)           Restricted
Shares may not be sold, transferred or assigned or subject to any encumbrance,
pledge or charge or disposed of for any reason until such Restricted Shares
have vested;

 

(iii)          All
vested and unvested Restricted Shares shall be subject to repurchase by the
Company and/or MDCP in accordance with paragraph 5; and

 

(iv)          Any
attempt to dispose of any Restricted Shares or any interest in such shares in a
manner contrary to this Agreement shall be void and of no effect.

 

5.                                      Repurchase of Restricted Shares.

 

(a)           Repurchase
of Restricted Shares.  If your
employment by the Company, Pierre Foods, Inc. or its Subsidiaries shall
cease for any reason whatsoever, including but not limited to, upon your death,
disability, resignation or termination with or without cause (such cessation of
service a “Termination” and the date on which such cessation occurs
being referred to as the “Termination Date”), the Company and/or MDCP
shall have the option to repurchase your unvested Restricted Shares (the “Unvested
Shares”) and vested Restricted Shares (the “Vested Shares”), in
accordance with this paragraph 5(a), at the price determined in accordance with
the provisions of paragraph 5(c) (the option to purchase Unvested Shares
is referred to herein as the “Unvested Share Repurchase Option” and the
option to purchase Vested Shares is referred to herein as the “Vested Share
Repurchase Option”).

 

(i)            The Company may
elect to purchase all or any portion of your Restricted Shares by delivery of a
Repurchase Notice to you (and with respect to Vested Shares, any other holder(s) of
Vested Shares) within 30 days after the date that is six months after the
applicable Termination Date.  The
Repurchase Notice shall set forth the number of Vested Shares and/or Unvested
Shares to be acquired from you and such other holder(s), the aggregate
consideration to be paid for such shares and the time and place for the closing
of the transaction.  The number of Vested
Shares to be repurchased by the Company shall first be satisfied, to the extent
possible, from the Vested Shares held by you at the time of delivery of the
Repurchase Notice.  If the number of
Vested Shares then held by you is less than the total number of Vested Shares
the Company has elected to purchase, then the Company shall purchase the
remaining shares elected to be purchased from the other holders thereof, pro
rata according to the number of shares held by each such holder at the time of
delivery of such Repurchase Notice (determined as close as practical to the
nearest whole share).

 

(ii)           If for any reason
the Company does not elect to purchase all of your Restricted Shares pursuant
to the Vested Repurchase Option and/or the Unvested Repurchase Option, then
MDCP shall be entitled to exercise the Company’s Vested Repurchase Option
and/or Unvested Repurchase Option in the manner set forth in this paragraph
5(a)(ii) for all or any portion of the number of Restricted Shares the
Company has not elected to purchase (the “Available Shares”).  As soon as practicable after the Company has
determined that there shall be Available Shares, but in any event within 30 

 

 

days after the
applicable expiration date in accordance with paragraph 5(a)(i), the Company
shall deliver written notice (the “Available Share Repurchase Notice”)
to MDCP setting forth the number of Available Shares and the price for each
Available Share.  MDCP may elect to
purchase any number of Available Shares by delivering written notice to the
Company within 45 days after receipt of the Available Share Repurchase Notice
from the Company.  As soon as
practicable, and in any event within 15 days after the expiration of such
45-day period, the Company shall notify you (and any other holder(s) of
Vested Shares) as to the number of Restricted Shares being purchased from you
(and such other holder(s) of Vested Shares) by MDCP (the “Supplemental
Repurchase Notice”).  At the time the
Company delivers the Supplemental Repurchase Notice to you (and such other
holder(s) of Vested Shares), MDCP shall also receive written notice from
the Company setting forth the number of shares the Company is entitled to purchase,
the aggregate purchase price and the time and place of the closing of the
transaction.  The number of Unvested
Shares and Vested Shares to be repurchased hereunder shall be allocated among
the Company and MDCP pro rata according to the number of shares of Restricted
Stock to be purchased by each of them.

 

(b)           Closing
of Repurchase of Restricted Shares. 
Any repurchase of Restricted Shares pursuant to this paragraph 5 shall
be closed at the Company’s executive offices within 45 days after the delivery
of the applicable Repurchase Notice or Supplemental Repurchase Notice referred
to in paragraphs 5(a)(i) or 5(a)(ii), as applicable.  At the closing, the purchaser or purchasers
shall pay the purchase price in the manner specified in paragraph 5(d) and
you and any other holder of Vested Shares being purchased shall deliver the
certificate or certificates representing such shares to the purchaser or
purchasers or their nominees, accompanied by duly executed stock powers.  Any purchaser of Restricted Shares under this
paragraph 5 shall be entitled to receive customary representations and
warranties from you and any other selling holders of Restricted Shares
regarding the sale of such shares (including representations and warranties
regarding good title to such shares, free and clear of any liens or
encumbrances).

 

(c)           Purchase
Price.  The purchase price per share
to be paid for Unvested Shares purchased by the Company and/or MDCP pursuant to
paragraph 5(a) shall be the Original Cost (set forth in paragraph 2(a))
for such Unvested Shares.  The purchase
price per share to be paid for the Vested Shares purchased by the Company
and/or MDCP pursuant to paragraph 5(a) shall be the Fair Market Value of
such Vested Shares as of the time of the exercise of the Vested Share
Repurchase Option.

 

(d)           Manner
of Payment.  The Company shall pay
the purchase price for all Unvested Shares repurchased pursuant to the Unvested
Share Repurchase Option by certified check or wire transfer to you.  If the Company elects to purchase all or any
part of the Vested Shares, including Vested Shares held by one or more
transferees, the Company shall pay for such shares: (i) first, by
certified check or wire transfer of funds to the extent such payment would not
cause the Company to violate the General Corporation Law of the State of
Delaware and would not cause the Company or its Subsidiaries to breach any
agreement to which they are a party relating to the indebtedness for borrowed
money or other material agreement; and (ii) thereafter, with a
subordinated promissory note of the Company. 
Such subordinated promissory note shall bear interest at the rate of 5%
per annum (which shall be payable annually in cash unless otherwise
prohibited), shall have all principal payment due on the third anniversary of
the date of issuance and shall be subordinated on terms and conditions
satisfactory to the holders of the Company’s or its Subsidiaries’ indebtedness
for borrowed money.  If MDCP elects to
purchase 

 

 

all or any portion of the Available Shares, MDCP shall pay for that
portion of such Available Shares by certified check or wire transfer of funds.

 

6.                                      Rights of Participants. 
Nothing in this Agreement shall interfere with or limit in any way the
right of the Company, Pierre Foods, Inc., or its Subsidiaries to terminate
your employment at any time (with or without Cause), nor confer upon you any
right to continue in the employ of the Company, Pierre Foods, Inc., or any
of its Subsidiaries for any period of time or to continue you present (or any
other) rate of compensation, and in the event of the termination of your
employment (including, but not limited to, termination by the Company without
Cause), any Unvested Shares shall expire and be forfeited, except as otherwise
provided herein.  Nothing in this
Agreement shall confer upon you any right to be selected again as a Plan
participant, and nothing the Plan or this Agreement shall provide for any
adjustment to the number of Restricted Shares upon the occurrence of subsequent
events except as specifically provided in the Plan.

 

7.                                      Restrictions on Transfer.

 

(a)           Other
Agreements; Legends.  You agree that
any certificates evidencing the Restricted Shares shall bear the following
legend and such other legend or legends as the Company deems necessary or desirable
in connection with the restrictions on transfer applicable to such Restricted
Shares under the Stockholders Agreement.

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED AS OF
                            ,
20    , HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM
REGISTRATION THEREUNDER.  THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO CERTAIN TERMS AND
CONDITIONS (INCLUDING FORFEITURE) SET FORTH IN THAT CERTAIN RESTRICTED STOCK
AGREEMENT DATED                                   ,
20     BETWEEN
                                      
AND PIERRE HOLDING CORP., AND THAT CERTAIN STOCKHOLDERS AGREEMENT BETWEEN THE
COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY FROM TIME TO TIME A PARTY
THERETO.  A COPY OF EACH OF THESE
AGREEMENTS MAY BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY’S PRINCIPAL
PLACE OF BUSINESS WITHOUT CHARGE.”

 

(b)           Opinion
of Counsel.  You may not sell,
transfer or dispose of any Restricted Shares (except pursuant to an effective
registration statement under the Securities Act) without first delivering to
the Company an opinion of counsel reasonably acceptable in form and substance
to the Company that registration under the Securities Act or any applicable
state securities law is not required in connection with such transfer.

 

8.                                      Conformity with Plan. 
This Agreement is intended to conform in all respects with, and is
subject to all applicable provisions of the Plan (which is incorporated herein
by 

 

 

reference).  Inconsistencies
between this Agreement and the Plan shall be resolved in accordance with the
terms of the Plan.  By executing and
returning a copy of this Agreement, you acknowledge your receipt of this
Agreement and the Plan and agree to be bound by all of the terms of this Agreement
and the Plan.

 

9.                                      Withholding of Taxes. 
The Company, Pierre Foods, Inc., or any of its Subsidiaries shall
be entitled to withhold from any amounts due and payable by the Company, Pierre
Foods, Inc., or any of its Subsidiaries to you, the amount of any federal,
state, local or other tax which, in the opinion of the Company, is required to
be withheld in connection with the delivery or vesting of your Restricted
Shares or the receipt of dividends thereon. 
To the extent that the amounts available to the Company, Pierre Foods, Inc.,
or any of its Subsidiaries for such withholding are insufficient, it shall be a
condition to the delivery or vesting, as applicable, of the Restricted Shares
that you make arrangements satisfactory to the Company for the payment of the
balance of such taxes required to be withheld.

 

10.                               Remedies.  Each party
hereto (and MDCP as third-party beneficiary) shall be entitled to enforce its
rights under this Agreement specifically, to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights
existing in its favor.  The parties
hereto acknowledge and agree that money damages would not be an adequate remedy
for any breach of the provisions of this Agreement and that any party hereto (and
MDCP as a third-party beneficiary) shall be entitled to specific performance
and/or injunctive relief (without posting bond or other security) from any
court of law or equity of competent jurisdiction in order to enforce or prevent
any violation of the provisions of this Agreement.

 

11.                               Amendment.  Except as
otherwise provided herein, any provision of this Agreement may be amended or
waived only with the prior written consent of you and the Company; provided
that no provision of paragraph 5, 7, 10, or of this paragraph 11 (including the
definitions of the defined terms used therein) may be amended or waived without
the prior written consent of MDCP.

 

12.                               Successors and Assigns. 
Except as otherwise expressly provided herein, all covenants and
agreements contained in this Agreement by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors and
permitted assigns of the parties hereto whether so expressed or not.

 

13.                               Severability. 
Whenever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of this
Agreement.

 

14.                               Counterparts. 
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall constitute an original, but all of which
taken together shall constitute one and the same Agreement.

 

15.                               Descriptive Headings. 
The descriptive headings of this Agreement are inserted for convenience
only and do not constitute a part of this Agreement.

 

 

16.                               Governing Law. 
All questions concerning the construction, validity and interpretation
of this Agreement shall be governed by the internal law, and not the law of
conflicts, of Delaware.

 

17.                               Notices.  All notices,
demands or other communications to be given or delivered under or by reason of
the provisions of this Agreement shall be in writing and shall be deemed to
have been given when delivered personally or mailed by certified or registered
mail, return receipt requested and postage prepaid, to the recipient.  Such notices, demands and other
communications shall be sent to you at the then current address of record in
the Company’s files and to the Company and MDCP at the addresses indicated
below:

 

If to the Company:

Pierre Holding Corp.

9990 Princeton Road

Cincinnati, Ohio 45246

Attn: Board of Directors

 

If to MDCP:

Madison Dearborn Partners
IV, L.P.

Three First National
Plaza

Suite 3800

Chicago, IL 60602

Telephone:  312-895-1000

Attention:  Robin P. Selati

 

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

 

Kirkland & Ellis
LLP

200 East Randolph Drive

Chicago, IL 60601

Telecopy:  (312) 861-2200

Attention:  Michael D. Paley

 

or to such other address or to the attention of such
other person as the recipient party has specified by prior written notice to
the sending party.

 

18.                               Third Party Beneficiary. 
The Company and you acknowledge that MDCP is a third-party beneficiary
under this Agreement.

 

19.                               Entire Agreement. 
This Agreement constitutes the entire understanding between you and the
Company, and supersede all other agreements, whether written or oral, with
respect to the acquisition by you of Restricted Shares.

 

 

Please execute the extra
copy of this Agreement in the space below and return it to the Company’s
Secretary at its executive offices to confirm your understanding and acceptance
of the agreements contained in this Agreement.

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  PIERRE HOLDING
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

Enclosure:             (1)           Extra copy of this Agreement

 

The undersigned hereby
acknowledges having read this Agreement and hereby agrees to be bound by all
provisions set forth herein.

 

	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
  Date:Exhibit 10.8

 

[EXECUTION COPY]

 

MEMBERSHIP PURCHASE AGREEMENT

BY AND AMONG

 

CAROLINA INVESTMENT COMPANY, LLC,

STEEL DYNAMICS, INC.,

ASAP INVESTORS, LLC,

CRG INVESTORS, LLC,

RECYCLE SOUTH, LLC

 

THE SELLER MEMBERS ON EXHIBIT A AND

THE INDIVIDUAL OWNERS ON EXHIBIT B

 

 

Table of Contents

 

	
  Article
  I – Definitions

  	
   

  	
  1

  
	
   

  	
  1.1

  	
   

  	
  Defined
  Terms

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  II – Purchase and Sale

  	
   

  	
  12

  
	
   

  	
  2.1

  	
   

  	
  Membership
  Interest Purchase

  	
   

  	
  12

  
	
   

  	
  2.2

  	
   

  	
  Purchase
  Price

  	
   

  	
  12

  
	
   

  	
  2.3

  	
   

  	
  Payment
  of Purchase Price

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  III – Representations and Warranties of the Sellers and Equity Owners

  	
   

  	
  12

  
	
   

  	
  3.1

  	
   

  	
  Organization
  and Good Standing

  	
   

  	
  12

  
	
   

  	
  3.2

  	
   

  	
  No
  Conflict

  	
   

  	
  13

  
	
   

  	
  3.3

  	
   

  	
  Capitalization

  	
   

  	
  14

  
	
   

  	
  3.4

  	
   

  	
  Financial
  Statements

  	
   

  	
  14

  
	
   

  	
  3.5

  	
   

  	
  Books
  and Records

  	
   

  	
  15

  
	
   

  	
  3.6

  	
   

  	
  Owned
  Property

  	
   

  	
  15

  
	
   

  	
  3.7

  	
   

  	
  Leased
  Property

  	
   

  	
  16

  
	
   

  	
  3.8

  	
   

  	
  Condition
  and Sufficiency of Assets

  	
   

  	
  17

  
	
   

  	
  3.9

  	
   

  	
  Accounts
  Receivable

  	
   

  	
  17

  
	
   

  	
  3.10

  	
   

  	
  Inventories

  	
   

  	
  17

  
	
   

  	
  3.11

  	
   

  	
  Liabilities

  	
   

  	
  17

  
	
   

  	
  3.12

  	
   

  	
  Taxes

  	
   

  	
  18

  
	
   

  	
  3.13

  	
   

  	
  Customers
  and Suppliers

  	
   

  	
  19

  
	
   

  	
  3.14

  	
   

  	
  Employee
  Benefit Plans

  	
   

  	
  19

  
	
   

  	
  3.15

  	
   

  	
  Compliance
  with Legal Requirements; Governmental Authorizations

  	
   

  	
  23

  
	
   

  	
  3.16

  	
   

  	
  Legal
  Proceedings; Orders

  	
   

  	
  24

  
	
   

  	
  3.17

  	
   

  	
  Absence
  of Certain Changes and Events

  	
   

  	
  25

  
	
   

  	
  3.18

  	
   

  	
  Applicable
  Contracts; No Defaults

  	
   

  	
  26

  
	
   

  	
  3.19

  	
   

  	
  Insurance

  	
   

  	
  28

  
	
   

  	
  3.20

  	
   

  	
  Environmental
  Matters

  	
   

  	
  28

  
	
   

  	
  3.21

  	
   

  	
  Employees

  	
   

  	
  31

  
	
   

  	
  3.22

  	
   

  	
  Labor
  Relations; Compliance

  	
   

  	
  31

  
	
   

  	
  3.23

  	
   

  	
  Intellectual
  Property

  	
   

  	
  31

  
	
   

  	
  3.24

  	
   

  	
  Relationships
  with Affiliates

  	
   

  	
  33

  
	
   

  	
  3.25

  	
   

  	
  Brokers
  or Finders

  	
   

  	
  33

  
	
   

  	
  3.26

  	
   

  	
  Recently
  Acquired Assets

  	
   

  	
  33

  
	
   

  	
  3.27

  	
   

  	
  Disclosure

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  IVA – Representations and Warranties of ASAP Investors and Its

  	
   

  	
   

  
	
   

  	
  Equity
  Owners

  	
   

  	
  33

  
	
   

  	
  4A.1

  	
   

  	
  Status
  and Authority

  	
   

  	
  33

  
	
   

  	
  4A.2

  	
   

  	
  Validity

  	
   

  	
  34

  

 

i

 

	
   

  	
  4A.3

  	
   

  	
  Violations
  and Approvals

  	
   

  	
  34

  
	
   

  	
  4A.4

  	
   

  	
  Ownership
  of ASAP Investors

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  IVB – Representations and Warranties of CRG Investors and Its

  	
   

  	
   

  
	
   

  	
  Equity
  Owners

  	
   

  	
  34

  
	
   

  	
  4B.1

  	
   

  	
  Status
  and Authority

  	
   

  	
  34

  
	
   

  	
  4B.2

  	
   

  	
  Validity

  	
   

  	
  35

  
	
   

  	
  4B.3

  	
   

  	
  Violations
  and Approvals

  	
   

  	
  35

  
	
   

  	
  4B.4

  	
   

  	
  Ownership
  of CRG Investors

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  IVC – Representations and Warranties of Each Equity Owner

  	
   

  	
  35

  
	
   

  	
  4C.1

  	
   

  	
  Status
  and Authority

  	
   

  	
  35

  
	
   

  	
  4C.2

  	
   

  	
  Validity

  	
   

  	
  36

  
	
   

  	
  4C.3

  	
   

  	
  Violations
  and Approvals

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  V – Representations and Warranties of Buyer and Parent

  	
   

  	
  36

  
	
   

  	
  5.1

  	
   

  	
  Status
  and Authority

  	
   

  	
  36

  
	
   

  	
  5.2

  	
   

  	
  Validity

  	
   

  	
  37

  
	
   

  	
  5.3

  	
   

  	
  Violations
  and Approvals

  	
   

  	
  37

  
	
   

  	
  5.4

  	
   

  	
  Parent
  Common Stock

  	
   

  	
  37

  
	
   

  	
  5.5

  	
   

  	
  Parent
  SEC Reports; Financial Statements

  	
   

  	
  38

  
	
   

  	
  5.6

  	
   

  	
  Subsequent
  Events

  	
   

  	
  38

  
	
   

  	
  5.7

  	
   

  	
  Availability
  of Funds

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  VI – Additional Agreements

  	
   

  	
  38

  
	
   

  	
  6.1

  	
   

  	
  General

  	
   

  	
  38

  
	
   

  	
  6.2

  	
   

  	
  Conduct
  of Business Pending the Closing

  	
   

  	
  38

  
	
   

  	
  6.3

  	
   

  	
  Notices
  and Consents; Hart-Scott-Rodino Compliance

  	
   

  	
  40

  
	
   

  	
  6.4

  	
   

  	
  Access

  	
   

  	
  40

  
	
   

  	
  6.5

  	
   

  	
  Notice
  of Developments

  	
   

  	
  41

  
	
   

  	
  6.6

  	
   

  	
  Exclusivity

  	
   

  	
  41

  
	
   

  	
  6.7

  	
   

  	
  Reserved

  	
   

  	
  41

  
	
   

  	
  6.8

  	
   

  	
  Leases

  	
   

  	
  41

  
	
   

  	
  6.9

  	
   

  	
  Title
  Insurance and Surveys

  	
   

  	
  41

  
	
   

  	
  6.10

  	
   

  	
  Confidentiality;
  Publicity

  	
   

  	
  43

  
	
   

  	
  6.11

  	
   

  	
  Appointment
  of Representatives

  	
   

  	
  43

  
	
   

  	
  6.12

  	
   

  	
  Interim
  Financial Statements

  	
   

  	
  44

  
	
   

  	
  6.13

  	
   

  	
  Release

  	
   

  	
  45

  
	
   

  	
  6.14

  	
   

  	
  Financing
  Cooperation

  	
   

  	
  47

  
	
   

  	
  6.15

  	
   

  	
  Directors
  and Officers’ Indemnification and Insurance

  	
   

  	
  47

  
	
   

  	
  6.16

  	
   

  	
  Cooperation
  of Buyer

  	
   

  	
  48

  

 

ii

 

	
  Article
  VII – Post-Closing Covenants

  	
   

  	
  48

  
	
   

  	
  7.1

  	
   

  	
  General

  	
   

  	
  48

  
	
   

  	
  7.2

  	
   

  	
  Litigation
  Support

  	
   

  	
  48

  
	
   

  	
  7.3

  	
   

  	
  Closing
  Date Audit; Allocations; Distributions

  	
   

  	
  48

  
	
   

  	
  7.4

  	
   

  	
  Non-Disclosure,
  Non-Solicitation, Non-Competition and Other Covenants

  	
   

  	
  49

  
	
   

  	
  7.5

  	
   

  	
  Performance
  Bonuses

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  VIII – Conditions to Obligation to Close

  	
   

  	
  54

  
	
   

  	
  8.1

  	
   

  	
  Conditions
  to Buyer’s and Parent’s Obligation

  	
   

  	
  54

  
	
   

  	
  8.2

  	
   

  	
  Conditions
  to the Sellers’ and the Equity Owners’ Obligations

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  IX – Closing

  	
   

  	
  57

  
	
   

  	
  9.1

  	
   

  	
  Closing

  	
   

  	
  57

  
	
   

  	
  9.2

  	
   

  	
  Deliveries
  at Closing by Buyer

  	
   

  	
  57

  
	
   

  	
  9.3

  	
   

  	
  Deliveries
  at Closing by the Sellers

  	
   

  	
  58

  
	
   

  	
  9.4

  	
   

  	
  Closing
  Agreements

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  X – Remedies for Breaches of this Agreement

  	
   

  	
  58

  
	
   

  	
  10.1

  	
   

  	
  Agreement
  to Indemnify

  	
   

  	
  58

  
	
   

  	
  10.2

  	
   

  	
  Survival

  	
   

  	
  61

  
	
   

  	
  10.3

  	
   

  	
  Defense
  of Third Party Claims

  	
   

  	
  61

  
	
   

  	
  10.4

  	
   

  	
  Payment
  of Indemnification Claims against Sellers and Equity Owners

  	
   

  	
  62

  
	
   

  	
  10.5

  	
   

  	
  Third
  Party Indemnification; Subrogation

  	
   

  	
  62

  
	
   

  	
  10.6

  	
   

  	
  Indemnification
  Accounted for in Distributions

  	
   

  	
  63

  
	
   

  	
  10.7

  	
   

  	
  Exclusive
  Remedy

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  XI – Tax Matters

  	
   

  	
  64

  
	
   

  	
  11.1

  	
   

  	
  Tax
  Indemnification

  	
   

  	
  64

  
	
   

  	
  11.2

  	
   

  	
  Tax
  Periods Ending on or Before Closing Date

  	
   

  	
  64

  
	
   

  	
  11.3

  	
   

  	
  Cooperation
  on Tax Matters

  	
   

  	
  64

  
	
   

  	
  11.4

  	
   

  	
  Tax-Sharing
  Agreements

  	
   

  	
  64

  
	
   

  	
  11.5

  	
   

  	
  Certain
  Taxes

  	
   

  	
  65

  
	
   

  	
  11.6

  	
   

  	
  Purchase
  Price Allocation

  	
   

  	
  65

  
	
   

  	
  11.7

  	
   

  	
  Amended
  Returns, etc.

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  XII – Termination

  	
   

  	
  65

  
	
   

  	
  12.1

  	
   

  	
  Termination

  	
   

  	
  65

  
	
   

  	
  12.2

  	
   

  	
  Effect
  of Termination

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  XIII – Miscellaneous

  	
   

  	
  67

  
	
   

  	
  13.1

  	
   

  	
  No
  Third-Party Beneficiaries

  	
   

  	
  67

  
	
   

  	
  13.2

  	
   

  	
  Entire
  Agreement

  	
   

  	
  67

  
	
   

  	
  13.3

  	
   

  	
  Succession
  and Assignment

  	
   

  	
  67

  
	
   

  	
  13.4

  	
   

  	
  Counterparts

  	
   

  	
  67

  

 

iii

 

	
   

  	
  13.5

  	
   

  	
  Headings

  	
   

  	
  67

  
	
   

  	
  13.6

  	
   

  	
  Notices

  	
   

  	
  67

  
	
   

  	
  13.7

  	
   

  	
  Governing
  Law

  	
   

  	
  68

  
	
   

  	
  13.8

  	
   

  	
  Amendments
  and Waivers

  	
   

  	
  68

  
	
   

  	
  13.9

  	
   

  	
  Severability

  	
   

  	
  68

  
	
   

  	
  13.10

  	
   

  	
  Expenses

  	
   

  	
  68

  
	
   

  	
  13.11

  	
   

  	
  Construction

  	
   

  	
  69

  
	
   

  	
  13.12

  	
   

  	
  Incorporation
  of Exhibits and Schedules

  	
   

  	
  69

  
	
   

  	
  13.13

  	
   

  	
  Specific
  Performance

  	
   

  	
  69

  
	
   

  	
  13.14

  	
   

  	
  Submission
  to Jurisdiction

  	
   

  	
  69

  
	
   

  	
  13.15

  	
   

  	
  Arm’s
  Length Negotiations; Drafting

  	
   

  	
  69

  

 

	
   

  	
  SCHEDULES

  
	
   

  	
  2.2

  	
   

  	
  Allocation
  of Purchase Price

  
	
   

  	
  3.1

  	
   

  	
  Foreign
  Qualifications

  
	
   

  	
  3.2(a)

  	
   

  	
  No
  Conflicts

  
	
   

  	
  3.2(b)

  	
   

  	
  Consents
  Required from Third Parties

  
	
   

  	
  3.4

  	
   

  	
  Financial
  Statements

  
	
   

  	
  3.6(a)

  	
   

  	
  Owned
  Real Property

  
	
   

  	
  3.6(b)

  	
   

  	
  Facilities
  Access, Utilities, Zoning

  
	
   

  	
  3.7(a)

  	
   

  	
  Company
  Real Estate Leases

  
	
   

  	
  3.7(b)

  	
   

  	
  Personal
  Property Leases

  
	
   

  	
  3.8

  	
   

  	
  Condition
  and Sufficiency of Assets

  
	
   

  	
  3.9

  	
   

  	
  Company
  Accounts Receivable

  
	
   

  	
  3.10

  	
   

  	
  Inventories

  
	
   

  	
  3.11

  	
   

  	
  Liabilities

  
	
   

  	
  3.12(a)

  	
   

  	
  Extensions
  of Time to File Tax Returns

  
	
   

  	
  3.12(b)

  	
   

  	
  Extensions,
  Waivers of Statutes of Limitations Regarding Tax Returns

  
	
   

  	
  3.12(c)

  	
   

  	
  Other
  Tax Matters

  
	
   

  	
  3.13(a)

  	
   

  	
  Company
  Customers

  
	
   

  	
  3.13(b)

  	
   

  	
  Company
  Suppliers

  
	
   

  	
  3.14(c)

  	
   

  	
  Identification
  of Company Benefit Plans

  
	
   

  	
  3.14(d)

  	
   

  	
  Compliance
  with All Statutes, Orders and Rules

  
	
   

  	
  3.14(e)

  	
   

  	
  MEPPA
  & Title IV Liability/Post Retirement Medical Benefits

  
	
   

  	
  3.14(f)

  	
   

  	
  Documents
  Regarding Company Benefit Plans

  
	
   

  	
  3.14(g)

  	
   

  	
  Administrative
  Compliance

  
	
   

  	
  3.14(h)

  	
   

  	
  Legal
  Actions Regarding Company Benefit Plans

  
	
   

  	
  3.14(i)

  	
   

  	
  Funding
  of Company Benefit Plans

  
	
   

  	
  3.14(j)

  	
   

  	
  Liabilities
  Regarding Benefit Plans

  
	
   

  	
  3.14(k)

  	
   

  	
  No
  Acceleration of Liability under Benefit Plans

  
	
   

  	
  3.14(l)

  	
   

  	
  COBRA
  Continuees

  
	
   

  	
  3.14(m)

  	
   

  	
  Amendment
  and Termination of Company Benefit Plans

  

 

iv

 

	
   

  	
  3.14(n)

  	
   

  	
  Deferred
  Compensation Plans Subject to Code §409A

  
	
   

  	
  3.15(a)

  	
   

  	
  Compliance
  with Legal Requirements

  
	
   

  	
  3.15(b)

  	
   

  	
  Governmental
  Authorizations

  
	
   

  	
  3.16(a)

  	
   

  	
  Litigation

  
	
   

  	
  3.16(b)

  	
   

  	
  Orders

  
	
   

  	
  3.17

  	
   

  	
  Absence
  of Changes Regarding the Business

  
	
   

  	
  3.18(a)

  	
   

  	
  Applicable
  Contracts

  
	
   

  	
  3.18(b)

  	
   

  	
  Enforceability
  of Material Company Contracts

  
	
   

  	
  3.18(c)

  	
   

  	
  Exceptions
  to Compliance with Applicable Contracts

  
	
   

  	
  3.18(d)

  	
   

  	
  Renegotiations
  of Applicable Contracts

  
	
   

  	
  3.19

  	
   

  	
  Insurance
  Policies

  
	
   

  	
  3.20

  	
   

  	
  Environmental
  Matters

  
	
   

  	
  3.21(a)

  	
   

  	
  Employment
  Contracts

  
	
   

  	
  3.22

  	
   

  	
  Labor
  Relations; Compliance

  
	
   

  	
  3.23(b)

  	
   

  	
  Contracts
  Regarding Company Intellectual Property Assets

  
	
   

  	
  3.23(e)

  	
   

  	
  Company
  Marks

  
	
   

  	
  3.24

  	
   

  	
  Relationships
  with Affiliates

  
	
   

  	
  3.26

  	
   

  	
  Recently
  Acquired Assets

  
	
   

  	
  4A.4

  	
   

  	
  Ownership of ASAP Investors

  
	
   

  	
  4B.4

  	
   

  	
  Ownership of CRG Investors

  
	
   

  	
  6.2

  	
   

  	
  Conduct
  of Business Pending Closing

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EXHIBITS

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A

  	
   

  	
  Members
  of the Sellers

  
	
   

  	
  B

  	
   

  	
  Individual
  Owners

  
	
   

  	
  C

  	
   

  	
  Exceptions
  to Noncompetition and Nonsolicitation

  
	
   

  	
  D

  	
   

  	
  Seller’s
  Legal Opinion

  
	
   

  	
  E

  	
   

  	
  Buyer’s
  Legal Opinion

  
	
   

  	
  F

  	
   

  	
  Escrow
  Agreement

  
	
   

  	
  G

  	
   

  	
  Real
  Estate Purchase Agreements

  
	
   

  	
  H

  	
   

  	
  Shareholders
  Agreement

  

 

v

 

MEMBERSHIP PURCHASE AGREEMENT

 

This Membership Purchase
Agreement (“Agreement”) is made and entered
into as of May 8, 2008, by and among ASAP Investors, LLC (“ASAP Investors”), CRG Investors, LLC (“CRG
Investors”) (ASAP Investors and CRG Investors may individually be
referred to as a “Seller” and collectively as the “Sellers”), the Persons listed on Exhibit A and
identified as the members of each of the Sellers (individually, a “Seller Member,” and collectively, the “Seller
Members”), the individuals or estates listed on Exhibit B
and identified as the shareholders or equity owners of the Seller Members
(individually, an “Individual Owner,”
and collectively, the “Individual Owners”)
(the Seller Members and the Individual Owners may individually be referred to
as an “Equity Owner” and collectively as the “Equity Owners”), Carolina Investment Company, LLC (“Buyer”), Steel Dynamics, Inc. (“Parent”),
and Recycle South, LLC (the “Company”).

 

This Agreement is entered into
under the following circumstances:

 

a.             The Sellers and Buyer are the members of
the Company and own 100% of the issued and outstanding equity and membership
interest in the Company.

 

b.             Sellers have agreed to sell and Buyer has
agreed to purchase all the Sellers’ equity and membership interest in the
Company.

 

c.             The Equity Owners acknowledge and agree
that (i) the Equity Owners will benefit by the sale and purchase of the
Sellers’ equity and membership interest in the Company, (ii) the Equity
Owners will receive the sale proceeds of such sale directly or indirectly, (iii) the
Equity Owners will receive consideration to support their covenants and other
obligations under this Agreement, (iv) Buyer would not have entered into
this Agreement if the Equity Owners do not become parties hereto, and (v) the
Equity Owners’ obligations and covenants with respect to non-competition will
be incurred in connection with the sale of a business of which they are direct
or indirect owners.

 

NOW,
THEREFORE, in mutual consideration of the promises
contained herein, the Parties agree as follows:

 

ARTICLE I –
DEFINITIONS

 

1.1          Defined Terms.  The following terms when used in this
Agreement (including the Exhibits and the Schedules) have the
meaning set forth below:

 

“2004
Prior Agreement” means the Membership Purchase Agreement
by and among Industrial Acquisition Corporation, Spartan Iron and Metal
Corporation of Spartanburg, S.C., Spartan Iron and Metal Corporation of
Wellford, S.C., K&W Recycling, Inc., Carolina Scrap Processors, Inc.,
James W. Knight, Jr., Thomas E. Davis, Larry E. Seay, Michael E. Munafo,
Carolina Investment Company, LLC, and Carolinas Recycling Group, LLC, dated June 18,
2004.

 

1

 

“2007
Prior Agreement” means the Consolidation Agreement and
Plan of Merger by and among Atlantic Scrap & Processing, LLC,
Carolinas Recycling Group, LLC, Carolina Investment Company, LLC, CRG
Investors, LLC, ASAP Investors, LLC, the ASAP Investors described therein, the
CRG Investors described therein, and South Atlantic Recycling Group, LLC, dated
August 31, 2007.

 

“Acquired
Companies” means Recycle South, LLC, Carolinas
Recycling Group, LLC, and ASAP-Wilmington, LLC.

 

“Affiliate”
of a Person means any other Person who directly or
indirectly controls, is controlled by, or is under common control with, the
specified Person. For purposes of the preceding sentence, “control” of a Person
means possession, directly or indirectly (through one or more intermediaries or
other means), of the power to direct or cause the direction of management and
policies of that Person through the ownership of voting securities (or any
other interest or interests), contract or other means.

 

“Agreement”
means this Agreement and all Exhibits and Schedules hereto, as the same may be
amended or modified in accordance with the terms hereof.

 

“Applicable
Contract” means any contract to which an Acquired
Company is a party.

 

“Applicable
Term” means, for purposes of Section 7.4, (i) as
it applies to each Seller and all the Equity Owners other than the Griffin and
Gordon Individual Owners, the period of time beginning on the Closing Date and
ending five (5) years thereafter, and (ii) as it applies to the
Griffin and Gordon Individual Owners, the period of time beginning on the
Closing Date and ending four (4) years thereafter.

 

“ASAP
Investors” is defined in the preamble to this
Agreement.

 

“ASAP
Representative” has the meaning set forth in Section 6.11.

 

“ASAP–Wilmington”
means Atlantic Scrap and Processing—Wilmington, LLC, a
wholly owned Subsidiary of the Company.

 

“Business”
means the business engaged in by the Acquired
Companies of buying, selling, brokering, processing and transporting ferrous
and non-ferrous scrap metals.

 

“Buyer” is
defined in the preamble to this Agreement.

 

“Buyer
Affiliated Leases” means (i) the Lease Agreement
effective as of June 1, 2004 between OmniSource Athens Division, LLC and
CRG, (ii) the Lease Agreement effective as of June 1, 2004 between
Jackson Iron & Metal Company, Inc. and CRG, and (iii) the
Sublease Agreement effective as of June 1, 2004 between OmniSource
Corporation and CRG.

 

“Buyer’s Article VIII
Certificate” has the meaning set forth in Section 8.2.

 

“Buyer’s
Closing Certificate” has the meaning set forth in Section 9.2.

 

2

 

“Buyer
Indemnified Parties” has the meaning set forth in Section 10.1.

 

“Buyer’s
Legal Opinion” has the meaning set forth in Section 8.2.

 

“Buyer’s
Resolutions Certificates” has the meaning set forth in
Section 8.2.

 

“Cash
Amount” has the meaning set forth in Section 2.2.

 

“CERCLA” means
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. 9601, et seq., as amended and reauthorized.

 

“Cleanup” has
the meaning set forth in the definition of Environmental, Health, and Safety Liabilities.

 

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

 

“Closing
Date” has the meaning set forth in Section 9.1.

 

“Closing
Shares” has the meaning set forth in Section 2.2.

 

“Code”
means the Internal Revenue Code of 1986, as amended (all citations to the Code,
or to the Treasury Regulations promulgated thereunder, shall include any
amendments or any substitute or successor provisions thereto).

 

“Company”
is defined in the preamble to this Agreement.

 

“Company
Accounts Receivable” has the meaning set forth in Section 3.9.

 

“Company
Balance Sheet” has the meaning set forth in Section 3.4.

 

“Company
Benefit Plan” has the meaning set forth in Section 3.14.

 

“Company
Copyrights” has the meaning set forth in Section 3.23.

 

“Company
Debt for Borrowed Money” has the meaning set forth in Section 3.11.

 

“Company
ERISA Affiliate” has the meaning set forth in Section 3.14.

 

“Company
Facilities” has the meaning set forth in Section 3.6

 

“Company
Financial Statements” has the meaning set forth in Section 3.4.

 

“Company
Intellectual Property Assets” has the meaning set
forth in Section 3.23.

 

“Company
Interim Balance Sheet” has the meaning set forth in Section 3.4.

 

“Company
Leased Personal Property” has the meaning set forth in
Section 3.7.

 

“Company
Leased Real Property” has the meaning set forth in Section 3.7.

 

3

 

“Company
Marks” has the meaning set forth in Section 3.23.

 

“Company
Owned Real Property” has the meaning set forth in Section 3.6.

 

“Company
Personal Property Leases” has the meaning set forth in
Section 3.7

 

“Company
Real Estate Leases” has the meaning set forth in Section 3.7.

 

“Company
Responsible Person” means a Person such as an
employee, independent contractor, landlord or agent of the Acquired Companies
or the Equity Owners and for whose conduct an Acquired Company is or may be
held responsible with respect to the Environmental Laws. For purposes of this
Agreement, each Equity Owner shall also be deemed a Company Responsible Person.

 

“Company’s
Customers” has the meaning set forth in Section 3.13.

 

“Company’s
Suppliers” has the meaning set forth in Section 3.13.

 

“Company
Trade Secrets” has the meaning set forth in Section 3.23.

 

“Confidential
Information” shall mean any and all information
concerning the Protected Business of any Acquired Company that is not readily
available to the public, including but not limited to any information related
to past, present or targeted suppliers and customers, methods of obtaining
business, prices, expenses, profits, procedures, processes or applications
developed in, by, or for the Protected Business of any Acquired Company,
including projects, goals, activities or business strategies relating to the
Protected Business of any Acquired Company, and the identities or addresses of
any Acquired Company’s employees. Confidential Information includes, but is not
limited to, trade secrets of the Acquired Companies. If any Confidential
Information becomes publicly known or readily accessible through a breach of
this Agreement, then for purposes of this Agreement, such Confidential
Information shall continue to be treated as Confidential Information
notwithstanding such disclosure.

 

“Containers”
means barrels, drums, above-ground and under-ground
storage tanks, vessels and related equipment and containers.

 

“Credit
Agreement” means that certain Credit Agreement dated
as of September 4, 2007 among the Company, the Guarantors, the Lenders,
the Administrative Agent, the Co-Syndication Agents and the Sole Lead Arranger,
each as described therein.

 

“CRG” means
Carolinas Recycling Group, LLC.

 

“CRG
Representative” has the meaning set forth in Section 6.11.

 

“Deductible
Amount” has the meaning set forth in Section 10.1.

 

“Employment
Agreements” has the meaning set forth in Section 8.1.

 

4

 

“Encumbrance”
means any charge, claim, community property interest,
lien, option (other than an option included within the Operating Agreement),
pledge, security interest, mortgage, or right of first refusal.

 

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

 

“Environmental,
Health and Safety Liabilities” means any cost,
damages, expense, liability, obligation, or other responsibility arising from
or under Environmental Laws or under the Occupational Safety & Health
Act (29 U.S.C §651 et seq.) (“OSHA”) and
consisting of or relating to:

 

a.             any environmental, health, or
safety matters or conditions (including on-site or off-site contamination,
occupational safety and health, and regulation of chemical substances or
products);

 

b.             fines, penalties, judgments,
awards, settlements, legal or administrative proceedings, damages, losses,
claims, demands and response, investigative, remedial, or inspection costs and
expenses arising under Environmental Laws or OSHA;

 

c.             financial responsibility under
Environmental Laws or OSHA for cleanup costs or corrective action, including
any investigation, permitting, monitoring, cleanup, removal, containment, or
other remediation or response actions (“Cleanup”)
required by applicable Environmental Laws or OSHA (whether or not such Cleanup
has been required or requested by any Governmental Body or any other Person)
and for any natural resource damages; or

 

d.             any other compliance,
corrective, investigative, or remedial measures required under Environmental
Laws or OSHA.

 

The terms “removal,” “remedial,” and “response
action” include the types of activities covered by CERCLA.

 

“Environmental
Laws” means all federal, state and local statutes,
regulations, ordinances, and policies, all court orders and decrees and
arbitration awards, and the common law, which pertain to environmental matters
or contamination of any type whatsoever. Environmental Laws include those
relating to: manufacture, processing, use, distribution, treatment, storage,
disposal, generation or transportation of Hazardous Materials; air, surface or
ground water or noise pollution; Releases; protection of wildlife, endangered
species, wetlands or natural resources; Containers; health and safety of
employees and other Persons; and notification requirements relating to the
foregoing.

 

“Environmental
Permits” means every license, permit, registration,
governmental approval, agreement and consent applied for, pending by, issued or
given to an Acquired Company, and every agreement with governmental authorities
(federal, state, local or foreign) 

 

5

 

entered into by an Acquired
Company, as the case may be, which is in effect or has been applied for or is
pending in each case which are required under or are issued pursuant to
Environmental Laws.

 

“Equity
Owner” is defined in the preamble to this Agreement.

 

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

 

“Escrow
Agreement” means the Escrow Agreement to be entered
into by the Sellers and Buyer substantially in the form of Exhibit F.

 

“Escrow
Shares” has the meaning set forth in Section 9.2.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

 

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

 

“GAAP” means
generally accepted accounting principles consistently applied.

 

“Governmental
Authorization” means any approval, consent, license
permit, waiver, or other authorization issued, granted, given, or otherwise
made available by or under the authority of any Governmental Body or pursuant
to any Legal Requirement.

 

“Governmental
Body” means any:

 

a.             nation, state, county, city,
town, village, district, or other jurisdiction of any nature;

 

b.             federal, state, local or
municipal government; or

 

c.             governmental authority of any
nature (including any governmental agency, branch, department, official, or
entity and any court or other tribunal).

 

“Griffin
and Gordon Individual Owners” means those individuals
identified in Exhibit B as “Griffin Individual Owners” or “Gordon
Individual Owners.”

 

“Hart-Scott-Rodino
Act” means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.

 

“Hazardous
Activity” means the distribution, generation,
handling, importing, management, manufacturing, processing, production,
refinement, Release, storage, transfer, transportation, treatment, or use
(including any withdrawal or other use of groundwater) of Hazardous Materials
in, on, under, about, or from the Company Facilities, or any part thereof into
the Environment.

 

6

 

“Hazardous
Materials” means:

 

a.             pollutants, contaminants,
pesticides, radioactive substances or hazardous or extremely hazardous,
special, dangerous or toxic wastes, substances, chemicals or materials within
the meaning of any Environmental Law, specifically including petroleum and all
derivatives thereof, polychlorinated biphenyls, and asbestos and any (i) “hazardous
substance” as defined in CERCLA, and (ii) any “hazardous waste” as defined
in RCRA; and

 

b.             even if not prohibited, limited
or regulated by Environmental Laws, all pollutants, contaminants, hazardous,
dangerous or toxic chemical materials, wastes or any other substances,
including any industrial process or pollution control waste (whether or not
hazardous within the meaning of RCRA) which could pose a hazard to the
environment or the health and safety of any Person).

 

“Indemnified
Party” has the meaning set forth in Section 10.3.

 

“Indemnifying
Party” has the meaning set forth in Section 10.3.

 

“Individual
Owner” is defined in the preamble to this Agreement.

 

“Insurance
Policies” has the meaning set forth in Section 6.9.

 

“Interest”
has the meaning set forth in the Operating Agreement.

 

“Knowledge
of the Company” and similar phrases means the actual
knowledge of Frank Brenner, William Perry, Keith Rosen, Marvin Siegel, Ken
Siegel, Steve Siegel, Paul Siegel, Jeff Kennedy, Kym Cleveland, and Mike Munafo.

 

“Legal
Requirement” means any federal, state, local, foreign,
municipal government or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute, or treaty.

 

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

 

“Material
Adverse Effect” means any effect or change that would
be materially adverse to (a) the Business of the Acquired Companies taken
as a whole, with respect to the Acquired Companies, and (b) Parent and its
direct and indirect subsidiaries taken as a whole, with respect to Parent;
provided that none of the following shall be deemed to constitute, and none of
the following shall be taken into account in determining whether there has
been, a Material Adverse Effect:  any
adverse change, event, development or effect arising from or relating to (i) general
business or economic conditions, including conditions related to the scrap
metal industry (or with respect to Parent, the steel industry), (ii) national
or international political or social conditions, including the engagement by
the United States in hostilities, or the occurrence of any military or
terrorist attack upon the United States or its agencies or personnel, (iii) financial,
banking or securities markets (including any disruption thereof), or (iv) the
taking of any action contemplated by this Agreement or the agreements to be
executed in connection herewith.

 

7

 

“Material
Company Contract” has the meaning set forth in Section 3.18.

 

“Membership
Interest” means all the Interest, as defined in the
Operating Agreement, of the Sellers in the Company.

 

“Off-Site
Facility” has the meaning set forth in Section 3.20(h).

 

“Operating
Agreement” means that certain Amended and Restated
Limited Liability Company Agreement of the Company dated August 31, 2007.

 

“Order” means
any award, decision, injunction, judgment, order, ruling, subpoena, or verdict
entered, issued, made, or rendered by any court, administrative agency, or
other Governmental Body or by any arbitrator.

 

“Ordinary
Course of Business” or “Ordinary
Course” means an action taken by a Person will be deemed to have
been taken in the “Ordinary Course of Business” only if such action is
consistent with the past practices of such Person and is taken in the ordinary
course of the normal day-to-day operations of such Person.

 

“Organizational
Documents” means (a) the articles of
incorporation and the bylaws of a corporation; (b) the articles of
organization or similar document adopted or filed in connection with the
creation, formation, or organization of a limited liability company and the
operating agreement or limited liability company agreement of a limited
liability company; and (c) any amendment to any of the foregoing.

 

“OSHA” has
the meaning set forth in the definition of Environmental, Health and Safety
Liabilities.

 

“Party” means
those Persons signing this Agreement.

 

“Payoff
Letter” has the meaning set forth in Section 8.1.

 

“Parent” is
defined in the preamble to this Agreement.

 

“Parent
Common Stock” has the meaning set forth in Section 2.2.

 

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

 

“Patents”
has the meaning set forth in Section 3.23.

 

“PBGC” has
the meaning set forth in Section 3.14.

 

“Permits” means
every license, permit, registration, governmental approval, agreement and
consent applied for, pending by, issued or given to an Acquired Company and
every agreement with governmental authorities (federal, state, or local or foreign)
entered into by an Acquired Company which is in effect or has been applied for
or is pending, exclusive of Environmental Permits.

 

8

 

“Permitted
Encumbrances” means (a) Encumbrances for Taxes
not yet due and payable, (b) Encumbrances of landlords, carriers,
warehousemen, mechanics and materialmen arising in the Ordinary Course of
Business securing amounts that are not delinquent or past due, (c) Encumbrances
arising from governmental restrictions on use, including those arising under
the securities laws, (d) immaterial easements relating to Company
Facilities that do not unreasonably interfere with the use of such real estate,
and (e) Encumbrances arising from or related to a Material Company
Contract listed on Schedule 3.18(a).

 

“Person” means
an individual or a corporation, partnership, limited liability company, trust,
incorporated or unincorporated association, joint venture, joint stock company,
or other entity of any kind.

 

“Pre-Closing
Tax Period” has the meaning set forth in Section 11.1.

 

“Proceeding”
means any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.

 

“Protected
Business” shall mean (i) the business of
purchasing, collecting, processing, marketing and selling ferrous and
non-ferrous scrap metals, and (ii) providing consulting services with
respect to any of the foregoing activities.

 

“Protected
Parties” has the meaning set forth in Section 7.3.

 

“RCRA”
means the Resource Conservation and Recovery Act, 42 U.S.C. Sec. 6901 et seq.,
as amended and reauthorized.

 

“Real
Estate Purchase Agreements” means the “Real Estate
Purchase and Sale Agreements” executed contemporaneously with, or to be
executed promptly following, the execution of this Agreement, unexecuted copies
of which are attached hereto and marked as Exhibit G.

 

“Related
Person” means (a) with respect to a specified
natural person, any member of that individual’s immediate family and any
Affiliate of that individual or Affiliate of any member of that individual’s
immediate family, and (b) with respect to an entity, any Affiliate of that
entity and any member of the immediate family of any of those Affiliates who
are individuals.  For purposes of this
definition, the “immediate family” of a specified individual means that
individual’s spouse, parent, child, sibling, or spouse of a sibling (by blood
or adoption), and any other individual who resides with that individual.

 

“Release” means
any spill, discharge, leak, emission, escape, leaching, disposing, emptying,
pouring, pumping, injection, dumping, or other release or threatened release of
any Hazardous Materials into the environment, whether or not notification or
reporting to any governmental agency was or is required, including any Release
which is subject to CERCLA.

 

“Released
Parties” has the meaning set forth in Section 6.13.

 

“Released
Claims” has the meaning set forth in Section 6.13.

 

9

 

“Releasing
Parties” has the meaning set forth in Section 6.13.

 

“Representative”
has the meaning set forth in Section 6.11.

 

“Representatives’
Certificates” means the Sellers’ and Equity Owners’ Article VIII
Certificates and the Sellers’ and Equity Owners’ Closing Certificates.

 

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

 

“Restrictions”
means any restriction on the exercise of any rights
related to the Membership Interest, including without limitation, proxies,
voting agreements, transfer restrictions, agreements to sell or purchase and
similar items, but excluding any restrictions generally applicable to
membership interests in Delaware limited liability companies, including
(without limitation) those arising under the federal and state securities laws
and those arising under the Delaware Limited Liability Company Act.

 

“SEC” means
the Securities and Exchange Commission.

 

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

 

“Seller” is
defined in the preamble to this Agreement.

 

“Seller
Member” is defined in the preamble to this Agreement.

 

“Sellers’
and Equity Owners’ Article VIII Certificates” has
the meaning set forth in Section 8.1.

 

“Sellers’
and Equity Owners  Closing Certificates”
has the meaning set forth in Section 9.3.

 

“Seller’s
Legal Opinion” has the meaning set forth in Section 8.1.

 

 “Sellers’ Resolutions Certificates” has
the meaning set forth in Section 8.1.

 

“Shareholders
Agreement” means the Shareholders Agreement to be
entered into by the Sellers and Parent substantially in the form of Exhibit H.

 

“Subsidiary”
means with respect to each Acquired Company, any
corporation or other Person whose securities or other interests having the
power to elect a majority of that corporation’s or other Person’s board of
directors or similar governing body, or otherwise having the power to direct
the business and policies of that corporation or other Person, are held by an
Acquired Company.

 

“Super
Board Approval” has the meaning set forth in the
Operating Agreement.

 

“Survey” has
the meaning set forth in Section 6.9.

 

10

 

“Taxes” means
all federal, state, local, foreign and other net income, gross income, gross
receipts, sales, use ad valorem, transfer, franchise, profits, license, lease,
service, service use, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, property, windfall profits, customs, duties or
other taxes, fees, assessments or charges of any kind whatever, together with
any interest and any penalties, additions to tax or additional amounts with
respect thereto, and the term “Tax” means any one of the foregoing Taxes.

 

“Tax
Return” means any return (including any information
return), report, statement, schedule, notice, form, or other document or
information filed with or submitted to, or required to be filed with or
submitted to, any Governmental Body in connection with the determination,
assessment, collection, or payment of any Tax of any Acquired Company or in
connection with the administration, implementation, or enforcement of or
compliance with any Legal Requirement relating to any Tax of an Acquired
Company and required to be filed by an Acquired Company.

 

“Term”
has the meaning set forth in Section 7.3.

 

“Territory”
shall mean the State of North Carolina, the State of South Carolina, and the
State of Georgia.

 

“Third
Party Claim” has the meaning set forth in Section 10.3.

 

“Third
Party Consent” has the meaning set forth in Section 3.2.

 

“Threatened”
means, with respect to a claim, Proceeding, dispute,
action, or other matter, that (i) a written demand or written notice of
intent to commence a Proceeding has been made or delivered to an Acquired
Company, and (ii) an individual listed in the definition of “Knowledge of
the Company” has received, within the three (3) month time period prior to
the Closing Date, an oral demand or oral notice of intent to commence a
Proceeding.

 

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

 

“Title
Commitments” has the meaning set forth in Section 6.9.

 

“Title
Company” has the meaning set forth in Section 6.9.

 

“Title
Policies” has the meaning set forth in Section 6.9.

 

“Transaction
Expenses” means all legal, accounting, tax, financial
advisory, brokers, finders and other professional or transaction expenses
incurred by the Sellers and the Equity Owners in connection with the
transactions contemplated by this Agreement, together with premiums for title
insurance (including endorsements) obtained for the benefit of Recycle South or
CRG in connection with the transactions contemplated by this Agreement;
provided however, “Transaction Expenses” do not include the costs of surveys,
filing fees under the Hart-Scott-Rodino Act, and environmental reports ordered
by Buyer, or premiums for title insurance (including endorsements) obtained for
the benefit of CRG in connection with the Real Estate Purchase Agreements,
which premiums will be paid by the sellers as contemplated therein.

 

11

 

ARTICLE II
– PURCHASE AND SALE

 

2.1          Membership Interest
Purchase.  Subject to the terms and
conditions of this Agreement, at the Closing, the Sellers shall sell and Buyer
shall purchase and acquire good and valid title to all the Sellers’ Membership
Interest free and clear of all Encumbrances (including Permitted Encumbrances)
and Restrictions.

 

2.2          Purchase Price.  The purchase price for the Membership Interest
is as follows:

 

a.             Two Hundred Thirty-Two Million Dollars
($232,000,000.00) (“Cash Amount”),
and

 

b.             Three Million Nine Hundred Thirty-Eight Thousand
(3,938,000) shares (“Closing Shares”)
of the Parent’s common stock (“Parent Common Stock”).  In the event Parent fixes a record date prior to the Closing
for any stock dividend or stock split into a larger or smaller number of
shares, whether by reclassification of shares, recapitalization of Parent or
otherwise, with respect to shares of Parent Common Stock, the number of Closing
Shares shall be adjusted accordingly.

 

c.             The purchase price shall be allocated among and
paid to the Sellers in the manner as set forth in Schedule 2.2, which is
consistent with the terms and conditions of Section 9A.12 of the Operating
Agreement. Pursuant to Sections 9A.2(b) and 9A.12 of the Operating Agreement,
at the Closing, the Adjusted Priority Capital Interest (as defined in the
Operating Agreement) will be redeemed. 
The Sellers and their respective Seller Members agree that the
certificates representing the Closing Shares payable to the Sellers at the
Closing shall be issued in the names of the Individual Owners.

 

2.3          Payment of Purchase
Price.  The purchase price shall be
paid as provided in Article IX below.

 

ARTICLE III – REPRESENTATIONS AND WARRANTIES
OF THE SELLERS AND EQUITY OWNERS

 

Each Seller and each Equity
Owner jointly and severally represents and warrants to Buyer, Parent, and the
Acquired Companies, as of the date hereof, as follows:

 

3.1          Organization and Good
Standing.  The Acquired Companies are
limited liability companies duly organized and validly existing under the laws
of the state of their respective organization, with full limited liability
company power and authority to conduct the Business as it is now being
conducted, to own or use the properties and assets that each purports to own or
use, and to perform all their obligations under the Applicable Contracts.  The Company has provided Buyer with true and
complete copies of the Organizational Documents of the Acquired Companies as
currently in effect. Each Acquired Company is duly qualified to do business as
a foreign limited liability company and is in good standing under the laws of
each state or other jurisdiction in which either the ownership or use of the
properties owned or used by 

 

12

 

them, or the nature of the
activities conducted by them, requires such qualification, except where the
failure to qualify or be in good standing would not have a Material Adverse
Effect.  Schedule 3.1 contains a
complete and accurate list of the jurisdictions outside their respective state
of organization in which an Acquired Company has been formally authorized to do
business.

 

3.2          No Conflict.

 

a.             No Conflict.  Except as set forth on Schedule 3.2(a),
neither the execution and delivery of this Agreement nor the consummation or
performance of any of the transactions contemplated by this Agreement will,
directly or indirectly (with or without notice or lapse of time):

 

i.                                         contravene, conflict with, or
result in a violation of (1) any provision of the Organizational Documents
of an Acquired Company, or (2) any resolution adopted by the managers or
members, or any committee thereof;

 

ii.                                     contravene, conflict with, or
result in a violation of any Legal Requirement or any Order to which an
Acquired Company, or any of the assets owned or used by an Acquired Company,
may be subject;

 

iii.                                 contravene, conflict with, or
result in a violation of any of the terms or requirements of, or give any
Governmental Body the right to revoke, withdraw, suspend, cancel, terminate, or
modify, any Governmental Authorization that is held by an Acquired Company or
that otherwise relates to the Business of, or any of the assets owned or used
by, an Acquired Company;

 

iv.            contravene, conflict with, or
result in a violation or breach of any provision of, or give any Person the
right to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or modify, any Applicable
Contract; or

 

v.             result in the imposition or
creation of any Encumbrance upon or with respect to any of the assets or rights
owned or used by an Acquired Company.

 

b.             Required
Consents.  Except for the consents with respect to the
Hart-Scott-Rodino Act, and except for the consents set forth in Schedule 3.2(b) (such consents, excluding any under the
Hart-Scott-Rodino Act, “Third Party Consents”),
the Acquired Companies are not required to give any notice to or obtain any
consent, approval, waiver, or other authorization (including any Governmental
Authorization) from any Person in connection with the execution and delivery of
this Agreement or the consummation or performance by it of any of the
transactions contemplated by this Agreement.

 

13

 

3.3          Capitalization.

 

a.             Company. 
The only members or other holders of an equity interest in the Company
prior to the transactions contemplated by this Agreement are the Sellers and
Buyer. Except for the preferred interest in the Company held by ASAP Investors,
each Acquired Company has only a single class of equity or membership interests
authorized and issued and outstanding. No legend or other reference to any
purported Encumbrance appears upon any certificate representing the Membership
Interest of the Sellers. There are no authorized or outstanding options,
warrants, preemptive rights, purchase rights, subscription, conversion, phantom
rights, profit participation, or exchange rights, or any other contracts or
commitments relating to the issuance, sale, or transfer by an Acquired Company
of membership interests or any other equity interests or other securities of an
Acquired Company, except for those described in the Organizational Documents of
an Acquired Company.

 

b.             No Subsidiaries
or Other Businesses.  Except for CRG and ASAP-Wilmington, the Company
does not own any Subsidiaries. CRG and ASAP-Wilmington do not have any
Subsidiaries. The Acquired Companies do not own or have any contract to acquire
any equity securities or other ownership interests in any other Person or any
direct or indirect equity or ownership interest in any other business, other
than investments in “money market” or similar short-term investment funds.

 

3.4          Financial Statements.

 

a.             Schedule 3.4 contains complete and accurate
copies of the following:

 

i.                                         an audited consolidated balance
sheet of the Acquired Companies (the “Company
Balance Sheet”) and statements of income, changes in members’
capital accounts, and cash flows, including the notes thereto, for the fiscal
year ended December 31, 2007, and

 

ii.                                     an unaudited consolidated
balance sheet of the Acquired Companies (the “Company
Interim Balance Sheet”) and statement of income for the three months
ended March 31, 2008 (the foregoing financial statements described in Section 3.4(a)(i) above
and this 3.4(a)(ii) may collectively be referred to as the “Company Financial Statements”).

 

b.             The Company Financial
Statements:

 

i.              fairly present in all material
respects the financial condition and the results of operations, and with
respect to the financial statements described in Section 3.4(a)(i),
changes in members’ capital accounts, and cash flows of the Acquired Companies
as of the respective dates of and for the periods referred to therein;
provided, however, that the results of operations for only a portion of the
fiscal year of Atlantic Scrap & Processing, LLC are included in the
financial statements described in Section 3.4(a)(i), as further described
in the footnotes thereto, and

 

14

 

ii.                                     have been prepared in accordance
with GAAP consistently applied 
throughout the periods indicated, except that the Company Financial
Statements described in Section 3.4(a)(ii) are subject to normal
year-end adjustments and lack complete footnotes and other presentation items.

 

c.                                       No financial statements of any
Person other than the Acquired Companies are required by GAAP to be included in
the Company Financial Statements.

 

3.5          Books and Records.  The financial and other books and records of
the Acquired Companies made available to Buyer are complete and correct in all
material respects and have been maintained in accordance with sound business
practices. The minute books and records of proceedings, as reviewed and made
available to Buyer, contain all the written minutes that exist for meetings of the
Acquired Companies’ managers, board members, or members, or any committee
thereof, for the period since August 31, 2007. Since the date of
formation, with respect to any action taken by each Acquired Company, which
under applicable law required the approval of the members or managers, the
members or the managers (or a duly authorized committee thereof) have approved
of or ratified all such actions. The record books with respect to the transfer
of membership interests are true, correct and complete, and record all
issuances, transfers, and cancellations of members’ equity interests in the
Acquired Companies.

 

3.6          Owned Property.

 

a.             The parcels of property
described on Schedule 3.6(a) are the only real estate owned by the
Acquired Companies (“Company Owned Real
Property”). The Acquired Companies own good and marketable fee
simple title to the Company Owned Real Property and to all of the buildings,
fixtures and other improvements located on the Company Owned Real Property,
free and clear of any Encumbrances except Permitted Encumbrances.

 

b.             The Company Owned Real Property
and the Company Leased Real Property (as defined below) constitute all of the
real property owned or used by the Acquired Companies in the Business (such
real property collectively referred to as the “Company
Facilities”). Except as set forth on Schedule 3.6(b), with
respect to each Company Facility:

 

i.                                         Each of the Company Facilities (1) has
access to public roads, such access being sufficient to satisfy the current and
reasonably anticipated normal transportation requirements of the Business as
presently conducted at such Company Facility, (2) is served by all
utilities in such quantity and quality as are sufficient to satisfy the current
normal business activities as conducted at such Company Facility, and (3) is
zoned under a zoning classification so as to permit the Acquired Companies to
continue its present use; and

 

ii.            The Acquired Companies have not
received notice of (1) any condemnation proceeding with respect to any
portion of any Company Facility or any access thereto, and to the Knowledge of
the Company, no

 

15

 

such proceeding is contemplated by any
Governmental Body; or (2) any special assessment which may affect any of
the Company Facilities.

 

	
  c.

  	
   

  	
  The Acquired
  Companies own and have good title to (free and clear of any Encumbrances
  except Permitted Encumbrances) all the properties and assets (whether
  personal, fixtures or mixed and whether tangible or intangible) that they
  purport to own and which are located at the Company Facilities (other than
  the Company Owned Real Property, which is addressed in Section 3.6(b) above)
  or at customer facilities, or that are reflected in the books and records of
  the Acquired Companies, including all of the properties and assets reflected
  in the Company Interim Balance Sheet (except for personal property or
  fixtures sold since the date of the Company Interim Balance Sheet in the
  Ordinary Course of Business), and including all the properties and assets
  purchased or otherwise acquired by an Acquired Company since the date of the
  Company Interim Balance Sheet (except for personal property or fixtures
  acquired and sold since the date of the Company Interim Balance Sheet in the
  Ordinary Course of Business and consistent with past practice).

  
	
   

  	
   

  	
   

  
	
  3.7

  	
   

  	
  Leased
  Property.

  
	
   

  	
   

  	
   

  
	
  a.

  	
   

  	
  Schedule 3.7(a) sets forth a list of all
  leases and material licenses or similar agreements (“Company Real Estate Leases”) to which an
  Acquired Company is a party and that relate to real property leased to an
  Acquired Company. The Acquired Companies have a valid leasehold interest in
  each parcel of real property which is the subject of a Company Real Estate
  Lease (“Company Leased Real Property”),
  free and clear of any Encumbrances except Permitted Encumbrances. Except as
  set forth in Schedule 3.7(a), the Company Real Estate Leases are in
  full force and effect, have not been further amended, and to the Knowledge of
  the Company, no party thereto is in default or breach under any such Company
  Real Estate Lease. To the Knowledge of the Company, no event has occurred
  which, with the passage of time or the giving of notice or both, would cause
  a material breach of or default under any of such Company Real Estate Leases.

  
	
   

  	
   

  	
   

  
	
  b.

  	
   

  	
  Schedule 3.7(b) sets forth a list of all
  leases, licenses or similar agreements (the “Company
  Personal Property Leases”) to which an Acquired Company is a party
  that relate to personal property leased to an Acquired Company (whether under
  an operating lease or a capital lease) and which has a value in excess of
  $50,000.00 (“Company Leased Personal
  Property”). Except as set forth in Schedule 3.7(b), the
  Company Personal Property Leases are in full force and effect, have not been
  further amended, and, to the Knowledge of the Company, no party thereto is in
  default or breach under any such Company Personal Property Lease. To the
  Knowledge of the Company, no event has occurred which, with the passage of
  time or the giving of notice or both, would cause a material breach of or
  default under any of such Company Personal Property Leases.

  

 

16

 

	
  c.

  	
   

  	
  Notwithstanding
  anything in this Section 3.7 to the contrary, no representations or
  warranties are made with respect to any Company Real Estate Lease to which
  Buyer or any of its Affiliates are a party.

  

 

3.8          Condition and Sufficiency of Assets.  Except as disclosed on Schedule 3.8,
to the Knowledge of the Company, the improvements on the Company Facilities,
the machinery and equipment (both owned and leased), the vehicles (both owned
and leased) and other assets currently in use or necessary for the Business,
including, without limitation, the Company Leased Personal Property, are
structurally sound, in good operating condition, normal wear and tear excepted,
and have been maintained in accordance with sound industry practices, and are
sufficient for the continued conduct of the Business by the Acquired Companies
immediately after the Closing Date.

 

3.9          Accounts Receivable.  All accounts receivable of the Acquired
Companies that are reflected in the Company Interim Balance Sheet or that will
be reflected in the accounting records of an Acquired Company as of the Closing
Date (collectively, the “Company Accounts
Receivable”) represent or will represent valid obligations arising
from sales actually made or services actually performed. All of the Company
Accounts Receivable are and will be good and collectible and will be collected
in full in any event within 120 days following the Closing Date, without
set-off or counterclaim, subject to the allowance for doubtful accounts set
forth in the Company Interim Balance Sheet, as adjusted for the passage of time
through the Closing Date. Except as disclosed in Schedule 3.9, there is
no contest, claim, or right of set-off, under any contract with any obligor of
a Company Accounts Receivable relating to the amount or validity of such
Company Accounts Receivable. Schedule 3.9 contains a complete and
accurate list of all Company Accounts Receivable as of May 5, 2008, which
list sets forth the aging of such Company Accounts Receivable.  Notwithstanding anything in this Section 3.9
to the contrary, no representations or warranties are made with respect to any
Company Accounts Receivable to which Buyer or any of its Affiliates is an
obligor.

 

3.10        Inventories.  All scrap and other inventories (including raw
materials and work in process) that are owned by the Acquired Companies are
physically located at the Company Facilities, except for inventories already
shipped but not yet invoiced, in transit to an Acquired Company or as otherwise
disclosed on Schedule 3.10. All inventory of the Acquired Companies,
whether or not reflected in the Company Interim Balance Sheet, consists of a
quality and quantity usable and salable in the Ordinary Course of Business,
except for obsolete items and items of below-standard quality, all of which
have been written off or written down to lower of cost or market in the Company
Interim Balance Sheet. Except as set forth on Schedule 3.10, the
quantities of each item of inventory (whether raw materials, work-in-process,
or finished goods) are not excessive, but are reasonable in the present
circumstances of the Acquired Companies.

 

3.11        Liabilities.  Except as set forth on Schedule 3.11,
the Acquired Companies have no liabilities or obligations, whether accrued,
absolute, known, contingent or otherwise, that are required under GAAP to be
listed on a balance sheet, except (i) to the extent set forth in the
Company Interim Balance Sheet, and (ii) liabilities incurred in the
Ordinary Course of Business after the date of the Company Interim Balance
Sheet.  All indebtedness for borrowed
money of the Acquired Companies, whether owed to a bank or any other Person,
including capitalized leases and guarantees of indebtedness for the benefit of
a Person other than an Acquired 

 

17

 

Company, but excluding accrued
distributions to Sellers and Buyer under the Operating Agreement (collectively,
“Company Debt for Borrowed Money”) does
not exceed $135,000,000.00 as of the date of this Agreement.

 

	
  3.12

  	
   

  	
  Taxes.

  
	
   

  	
   

  	
   

  
	
  a.

  	
   

  	
  The Acquired Companies have filed or caused
  to be filed on a timely basis all Tax Returns or valid extensions thereof
  that are or were required to be filed by or with respect to an Acquired
  Company pursuant to applicable Legal Requirements, except for Tax Returns
  that are not yet due, and no claim has ever been made by any Governmental
  Body in a jurisdiction where an Acquired Company does not file Tax Returns
  that it is or may be subject to taxation in that jurisdiction. All such Tax
  Returns were correct and complete in all respects. Each Acquired Company has
  always been taxed as a partnership under Subchapter K of the Code; provided
  however, effective as of August 31, 2007, CRG has been treated as a
  disregarded entity for tax purposes, and effective as of February 2,
  2005, ASAP-Wilmington has been treated as a disregarded entity. The Acquired
  Companies have paid all Taxes, if any, that have or may have become due and
  payable with respect to each Acquired Company pursuant to any assessment
  received by the Acquired Companies and without limiting the foregoing, all
  Taxes of any Person with respect to Acquired Companies (whether or not shown
  on any Tax Return), if any, have been paid or will be paid on a timely basis.
  Except as described in Schedule 3.12(a), none of the Acquired Companies
  are currently the beneficiary of any extension of time within which to file
  any Tax Return. The Company has allowed Buyer to participate in the
  preparation of the proposed Tax Returns for the Company’s taxable year ending
  September 30, 2007 and short taxable year ending December 31, 2007.
  There are no additional Taxes for any periods for which Tax Returns have been
  filed that have been asserted or claimed to be owing or that have been
  Threatened to be assessed.

  
	
   

  	
   

  	
   

  
	
  b.

  	
   

  	
  None of the Tax
  Returns of the Acquired Companies are currently subject to an audit. Except
  as described in Schedule 3.12(b), the Acquired Companies have not
  given or been requested to give waivers or extensions (or are or would be
  subject to a waiver or extension given by any other Person) of any statute of
  limitations relating to the payment of Taxes that are still in effect.

  
	
   

  	
   

  	
   

  
	
  c.

  	
   

  	
  The charges,
  accruals, and reserves with respect to Taxes, if any, on the Company Interim
  Balance Sheet are adequate and are at least equal to the Acquired Companies’
  liability, if any, for unpaid Taxes. To the Knowledge of the Company, there
  exists no proposed Tax assessment against an Acquired Company except as
  disclosed in the Company Interim Balance Sheet or Schedule 3.12(c).
  All Taxes that an Acquired Company is or was required by Legal Requirements
  to withhold or collect have been duly withheld or collected and, to the
  extent required, have been paid to the proper Governmental Body or other
  Person.

  
	
   

  	
   

  	
   

  
	
  d.

  	
   

  	
  No authority will
  assess any additional Taxes for any period for which Tax Returns have been
  filed. No foreign, federal, state, or local tax audits or

  

 

18

 

	
   

  	
   

  	
  administrative or
  judicial Tax proceedings are pending or being conducted with respect to an
  Acquired Company. None of the Acquired Companies have received from any
  foreign, federal, state, or local taxing authority (including jurisdictions
  where the Acquired Companies have not filed Tax Returns) any pending or
  active (i) notice indicating an intent to open an audit or other review,
  (ii) request for information related to Tax matters, or
  (iii) notice of deficiency or proposed adjustment for any amount of Tax
  proposed, asserted, or assessed by any taxing authority against an Acquired Company.

  
	
   

  	
   

  	
   

  
	
  e.

  	
   

  	
  The Acquired
  Companies have disclosed on their federal income Tax Returns all positions
  taken thereon that could give rise to a substantial understatement of federal
  income Tax within the meaning of Code §6662. The Equity Owners have disclosed
  on their federal income tax returns all positions taken thereon with respect
  to an Acquired Company that could give rise to a substantial understatement
  of federal income Tax within the meaning of Code §6662. The Acquired
  Companies are not a party to or bound by any Tax allocation or sharing
  agreement. The Acquired Companies do not have any liability for the Taxes of
  any Person (other than the Acquired Companies) under transferee or successor
  liability rules, by contract, or otherwise.

  
	
   

  	
   

  	
   

  
	
  3.13

  	
   

  	
  Customers
  and Suppliers.

  
	
   

  	
   

  	
   

  
	
  a.

  	
   

  	
  Except as
  disclosed in Schedule 3.13(a), to the Knowledge of the Company, none
  of the Company’s Customers will stop buying products or services from an
  Acquired Company, or materially decrease the amount of purchases of products
  or services from an Acquired Company. As used herein, the “Company’s Customers” means customers of
  the Acquired Companies who purchased products or services from an Acquired
  Company during 2007 in an amount exceeding $600,000.

  
	
   

  	
   

  	
   

  
	
  b.

  	
   

  	
  Except as
  disclosed in Schedule 3.13(b), to the Knowledge of the Company, none
  of the Company’s Suppliers will stop selling products or services to an
  Acquired Company, or materially decrease the amount of sales of products or
  services to an Acquired Company. As used herein, the “Company’s Suppliers” means suppliers of
  the Acquired Companies who sold products or services to an Acquired Company
  during 2007 in an amount exceeding $300,000.

  
	
   

  	
   

  	
   

  
	
  3.14

  	
   

  	
  Employee
  Benefit Plans.

  
	
   

  	
   

  	
   

  
	
  a.

  	
   

  	
  Definition
  of Benefit Plans. For purposes of this Section 3.14, the term “Company Benefit Plan” means any plan,
  program, arrangement, fund, policy, practice or contract which, through which
  or under which an Acquired Company or any Company ERISA Affiliate (as
  hereinafter defined) provides benefits or compensation to or on behalf of an
  employee or employees or former employees of an Acquired Company or any
  Company ERISA Affiliate, whether formal or informal, whether or not written,
  including but not limited to the following:

  

 

19

 

	
  i.

  	
   

  	
  Arrangements.
  Any
  bonus, incentive compensation, membership option, deferred compensation,
  commission, severance pay, golden parachute or other compensation plan or
  rabbi trust;

  
	
   

  	
   

  	
   

  
	
  ii.

  	
   

  	
  ERISA
  Plans. Any
  “employee benefit plan” as defined in Section 3(3) of ERISA,
  including, but not limited to, any multiemployer plan (as defined in
  Section 3(37) and Section 4001(a)(3) of ERISA), employee
  welfare benefit plans (as defined in Section 3(1) of ERISA), employee
  pension benefit plan (as defined in Section 3.(2) of ERISA),
  defined benefit plan, profit sharing plan, money purchase pension plan,
  401(k) plan, savings or thrift plan, deferred compensation plan, or any
  plan, fund, program, arrangement or practice providing for medical (including
  post-retirement medical), hospitalization, accident, sickness, disability, or
  life insurance benefits; and

  
	
   

  	
   

  	
   

  
	
  iii.

  	
   

  	
  Other
  Employee Fringe Benefits. Any stock purchase, vacation, scholarship, day care,
  prepaid legal services, dependent care or other fringe benefits plans,
  programs, arrangements, contracts or practices.

  

 

	
  b.

  	
   

  	
  Company
  ERISA Affiliate. For purposes of this Section 3.14, the term “Company ERISA Affiliate” means each
  trade or business (whether or not incorporated) which together with an
  Acquired Company is treated as a single employer under Section 414(b),
  (c), (m) or (o) of the Code.

  
	
   

  	
   

  	
   

  
	
  c.

  	
   

  	
  Identification
  of Company Benefits Plans. Except as disclosed in Schedule 3.14(c), and
  except for Company Benefit Plans which have been terminated and with respect
  to which none of the Acquired Companies nor any Company ERISA Affiliate has
  any actual or potential financial, administrative or other liability,
  obligation or responsibility, none of the Acquired Companies nor any Company
  ERISA Affiliate maintains, or has at any time established or maintained, or
  has at any time been obligated to make, or otherwise made, contributions to
  or under or otherwise participated in any Company Benefit Plan.

  
	
   

  	
   

  	
   

  
	
  d.

  	
   

  	
  Compliance
  with All Statutes, Orders and Rules. Except as disclosed in Schedule
  3.14(d), the Acquired Companies and each Company ERISA Affiliate are in
  compliance in all material respects with the requirements prescribed by any
  and all statutes, orders and governmental rules and regulations
  applicable to Company Benefit Plans and has operated each Company Benefit
  Plan in all material respects in compliance with the written terms of the
  plan, and all reports and disclosures relating to Company Benefit Plans
  required to be filed with or furnished to any governmental entity,
  participants or beneficiaries prior to the Closing Date have been or will be
  filed or furnished in a timely manner and in accordance with applicable laws.

  
	
   

  	
   

  	
   

  
	
  e.

  	
   

  	
  MEPPA &
  Title IV Liability/Post Retirement Medical Benefits. Except as disclosed in Schedule
  3.14(e), neither the Acquired Companies nor any Company ERISA Affiliate
  maintains, or has at any time established or maintained, or has at

  

 

20

 

	
   

  	
   

  	
  any time been
  obligated to make, or made, contributions to or under any multiemployer plan
  (as defined in Section 3(37) and Section 4001(a)(3) of ERISA)
  or any plan subject to Title IV of ERISA. Except as disclosed in Schedule
  3.14(e), the Acquired Companies do not maintain, nor have at any time
  established or maintained, nor have they at any time been obligated to make,
  or made, contributions to or under any plan, which provides post-retirement
  medical or health benefits with respect to employees of the Acquired
  Companies or any Company ERISA Affiliate (other than COBRA continuation
  coverage as required by ERISA and the Code). There is no lien upon any
  property of the Acquired Companies or any Company ERISA Affiliate outstanding
  pursuant to Section 412(n) of the Code in favor of any Company Benefit
  Plan. No assets of the Acquired Companies or any Company ERISA Affiliate have
  been provided as security for any Company Benefit Plan pursuant to
  Section 401(a)(29) of the Code.

  
	
   

  	
   

  	
   

  
	
  f.

  	
   

  	
  Documentation. Except as disclosed in Schedule
  3.14(f), the Company has provided Buyer with a true and complete copy of
  the following documents, if applicable, with respect to each Company Benefit
  Plan: (1) all documents, including any insurance contracts and trust
  agreements, setting forth the terms of any Company Benefit Plan, or if there
  are no such documents evidencing a Company Benefit Plan, a full description
  of such Company Benefit Plan, (2) the ERISA summary plan description and
  any other summary of plan provisions provided to participants or
  beneficiaries for each such Company Benefit Plan, (3) the annual reports
  filed for the most recent three plan years and most recent financial
  statements or periodic accounting or related plan assets with respect to each
  Company Benefit Plan, (4) each favorable determination letter, opinion
  or ruling from the Internal Revenue Service for each Company Benefit Plan,
  the assets of which are held in trust, to the effect that the form of Company
  Benefit Plan meets the requirements of Section 401(a) of the Code,
  including any outstanding request for a determination letter and
  (5) each opinion or ruling from the Department of Labor or the Pension
  Benefit Guaranty Corporation (“PBGC”)
  with respect to such Company Benefit Plans.

  
	
   

  	
   

  	
   

  
	
  g.

  	
   

  	
  Administrative
  Compliance. Except
  as disclosed in Schedule 3.14(g), each Company Benefit Plan that is
  funded through a trust or insurance contract has at all times satisfied in
  all material respects, by its terms and in its operation, all applicable
  requirements for an exemption from federal income taxation under Section 501(a) of
  the Code. Except as disclosed in Schedule 3.14(g), neither the
  Acquired Companies nor any Company ERISA Affiliate maintains or previously
  maintained a Company Benefit Plan which meets or was intended to meet the
  requirements of Section 401(a) of the Code. With respect to each
  qualified retirement plan disclosed on Schedule 3.14(c), any
  determination letter issued by the Internal Revenue Service to the effect
  that the form of such plan qualifies under Section 401(a) of the
  Code is current and has not been revoked; such plan currently complies in
  form with the requirements under Section 401(a) of the Code, other
  than changes required by statutes, regulations or rulings for which
  amendments are not yet required; such plan has been administered according to
  its

  

 

21

 

	
   

  	
   

  	
  terms (except for
  those terms which are inconsistent with the changes required by statutes,
  regulations, and rulings for which changes are not yet required to be made,
  in which case such plan has been administered in accordance with the
  provisions of those statutes, regulations and rulings) and in accordance with
  the requirements of Section 401(a) of the Code; and such plan has
  been tested for compliance with (to the extent that the form of the plan does
  not automatically ensure compliance with), and has satisfied the requirements
  of, all applicable coverage, discrimination, and contribution limitation
  requirements imposed under the Code for each plan year ending prior to the
  Closing Date.

  
	
   

  	
   

  	
   

  
	
  h.

  	
   

  	
  Legal
  Actions.
  Except as disclosed in Schedule 3.14(h), there are no actions, audits,
  suits, claims, or appeals which are pending or, to the Knowledge of the
  Company, Threatened against any Company Benefit Plan or any fiduciary of any
  of Company Benefit Plans or against the assets of any of Company Benefit
  Plans, including a demand or request for payment or reconsideration of any
  prior administrative action on behalf of a Company Benefit Plan or a
  fiduciary of a Company Benefit Plan, other than routine requests for
  distributions or payment/reimbursement of eligible expenses under such plans.
  Additionally, except as disclosed in Schedule 3.14(h), there are no
  pending or Threatened audits of any Company Benefit Plan by the Internal
  Revenue Service, Pension Benefit Guaranty Corporation, Department of Labor,
  Equal Employment Opportunity Commission or any other state or federal agency
  or instrumentality.

  
	
   

  	
   

  	
   

  
	
  i.

  	
   

  	
  Funding. Except as disclosed in Schedule
  3.14(i), the Acquired Companies and each Company ERISA Affiliate have
  made full and timely payment of all amounts required to be contributed under
  the terms of each Company Benefit Plan and applicable law or required to be
  paid as expenses under such Company Benefit Plan and no excise taxes or other
  fines or penalties are assessable as a result of any nondeductible or other
  contributions made or not made to a Company Benefit Plan. The assets of all
  Company Benefit Plans which are required under applicable laws to be held in
  trust are in fact held in trust, and the assets of each such Company Benefit
  Plan equal or exceed the liabilities of each such plan. The liabilities of
  each other plan are a properly and accurately reported on the financial
  statements and records of the Acquired Companies. The assets of each Company
  Benefit Plan are reported at their fair market value on the books and records
  of each plan.

  
	
   

  	
   

  	
   

  
	
  j.

  	
   

  	
  Liabilities. Except as disclosed in Schedule
  3.14(j), neither the Acquired Companies nor any Company ERISA Affiliate
  is subject to any liability, tax or penalty whatsoever to any person
  whomsoever including the obligation to pay separation, severance, termination
  or similar benefits as a result of the Company’s or any Company ERISA
  Affiliate’s engaging in a prohibited transaction under ERISA or the Code.

  
	
   

  	
   

  	
   

  
	
  k.

  	
   

  	
  No
  Acceleration of Liability Under Benefit Plans. Except as disclosed in Schedule
  3.14(k), the consummation of the transactions contemplated by this
  Agreement will not (as to any benefit to become vested) accelerate vesting,
  result

  

 

22

 

	
   

  	
   

  	
  in any payment of
  benefits or create or increase any liability under any Company Benefit Plan.
  No payment that is owed or may become due to any director, manager, officer
  or employee of any Acquired Company or any Company ERISA Affiliate will be
  non-deductible or subject to tax under Code Section 280G or Code
  Section 4999; nor will the Company or any Company ERISA Affiliate be
  required to “gross up” or otherwise compensate any such person because of the
  imposition of any excise tax on a payment to such person.

  
	
   

  	
   

  	
   

  
	
  l.

  	
   

  	
  COBRA
  Continuees.
  Schedule 3.14(1) lists all individuals (both employees and
  dependents) as of April 30, 2008 who have elected to continue (or who
  have an option to elect to continue) their group health coverage (or are
  eligible to elect coverage) under the Acquired Companies’ health or medical
  plans, together with the date of each such election and the date continued
  coverage expires.

  
	
   

  	
   

  	
   

  
	
  m.

  	
   

  	
  Amendment
  and Termination. Except as provided in Schedule 3.14(m), each
  Company Benefit Plan can be terminated within thirty days, without payment of
  any additional contribution or amount and without the vesting or acceleration
  of any benefits promised by such plan, and each Company Benefit Plan can be amended
  at any time to the fullest extent permitted under applicable law.

  
	
   

  	
   

  	
   

  
	
  n.

  	
   

  	
  409A
  Plans.
  Except as listed in Schedule 3.14(n), the Acquired Companies do not
  and have never maintained, established or sponsored any deferred compensation
  plan subject to Code §409A. With respect to any such deferred compensation
  plan listed in Schedule 3.14(n), (i) all such plans have been
  operated in good faith compliance with Code §409A, (ii) Schedule
  3.14(n) describes any changes or amendments that are required to be
  made to such plans under the applicable Code §409A regulations, and
  (iii) the transaction contemplated by this Agreement will not result in
  Code §409A imposing any tax consequences to the participants in such plan
  (including the inclusion in income of deferred amounts, or any additional tax
  pursuant to Code §409A(a)(1)(B)).

  
	
   

  	
   

  	
   

  
	
  3.15

  	
   

  	
  Compliance
  with Legal Requirements; Governmental Authorizations.

  
	
   

  	
   

  	
   

  
	
  a.

  	
   

  	
  Except as set
  forth in Schedule 3.15(a):

  

 

	
  i.

  	
   

  	
  the Acquired
  Companies are, and at all times have been, in substantial compliance with
  each Legal Requirement that is or was applicable to it or to the conduct or
  operation of its Business or the ownership or use of any of its assets; and

  
	
   

  	
   

  	
   

  
	
  ii.

  	
   

  	
  the Acquired
  Companies have not received any notice or other written communication from
  any Governmental Body or any other Person regarding any actual, alleged,
  possible, or potential violation of, or failure to comply with, any Legal
  Requirement.

  

 

	
  b.

  	
   

  	
  Schedule 3.15(b) contains a complete and
  accurate list of each material Governmental Authorization that is held by
  each Acquired Company. Each such

  

 

23

 

	
   

  	
   

  	
  Governmental
  Authorization listed or required to be listed in Schedule 3.15(b) is
  valid and in full force and effect. Except as set forth in Schedule
  3.15(b):

  
	
   

  	
   

  	
   

  
	 
	
  i.

  	
   

  	
  To the Knowledge
  of the Company, the Acquired Companies are, and at all times have been, in
  substantial compliance with all of the terms and requirements of each
  Governmental Authorization identified or required to be identified in Schedule
  3.15(b);

  
	 
	
   

  	
   

  	
   

  
	 
	
  ii.

  	
   

  	
  None of the
  Acquired Companies has received any notice or other written communication
  from any Governmental Body or any other Person regarding (1) any actual,
  alleged, possible, or potential violation of or failure to comply with any
  term or requirement of any Governmental Authorization, or (2) any
  actual, proposed, possible, or potential revocation, withdrawal, suspension,
  cancellation, termination of, or modification to any Governmental Authorization;
  and

  
	 
	
   

  	
   

  	
   

  
	 
	
  iii.

  	
   

  	
  all applications
  required to have been filed for the renewal of the Governmental
  Authorizations listed or required to be listed in Schedule 3.15(b) have
  been duly filed on a timely basis with the appropriate Governmental Bodies,
  and all other filings required to have been made with respect to such
  Governmental Authorizations have been duly made on a timely basis with the
  appropriate Governmental Bodies.

  

 

The Governmental Authorizations listed in Schedule 3.15(b) collectively
constitute all of the material Governmental Authorizations necessary to permit
the Acquired Companies to lawfully conduct and operate the Business in the
manner currently conducted and operated and to permit the Acquired Companies to
own and use their assets in the manner in which they currently own and use such
assets.

 

	
  3.16

  	
   

  	
  Legal
  Proceedings; Orders.

  
	
   

  	
   

  	
   

  
	
  a.

  	
   

  	
  Except as set
  forth in Schedule 3.16(a), there is no pending Proceeding or, to the
  Knowledge of the Company, Threatened Proceeding that:

  
	
   

  	
   

  	
   

  
	 
	
  i.

  	
   

  	
  has been commenced
  by or against the Acquired Companies;

  
	 
	
   

  	
   

  	
   

  
	 
	
  ii.

  	
   

  	
  to the Knowledge
  of the Company would have a Material Adverse Effect; or

  
	 
	
   

  	
   

  	
   

  
	 
	
  iii.

  	
   

  	
  challenges, or
  that may have the effect of preventing, delaying, making illegal, or
  otherwise interfering with, any of the transactions contemplated by this
  Agreement.

  
	 
	
   

  	
   

  	
   

  
	 
	
  Except as
  otherwise provided in Schedule 3.16(a) (where Schedule 3.16(a) identifies
  the Proceedings in which such copies have not been provided), the Company has
  delivered to Buyer copies of all pleadings, and if a Proceeding is
  Threatened, correspondence, relating to each Proceeding listed in Schedule
  3.16(a).

  
						

 

24

 

	
  b.

  	
   

  	
  Except as set
  forth in Schedule 3.16(b):

  
	
   

  	
   

  	
   

  
	 
	
  i.

  	
   

  	
  there is no Order
  to which the Acquired Companies, or any of the assets owned or used by the
  Acquired Companies, are subject;

  
	 
	
   

  	
   

  	
   

  
	 
	
  ii.

  	
   

  	
  the Acquired
  Companies are in substantial compliance with all of the terms and
  requirements of each Order to which they, or any of the assets owned or used
  by them, is or has been subject; and

  
	 
	
   

  	
   

  	
   

  
	 
	
  iii.

  	
   

  	
  the Acquired
  Companies have not received any notice or other written communication from
  any Governmental Body or any other Person regarding any actual, alleged,
  possible, or potential violation of, or failure to comply with, any term or
  requirement of any Order to which the Acquired Companies, or any of the
  assets owned or used by them, is or has been subject.

  

 

3.17        Absence of Certain Changes and Events.  Except as set forth in Schedule 3.17,
since the date of the Company Balance Sheet, the Acquired Companies have
conducted the Business only in the Ordinary Course of Business, and there has
not been any:

 

	
  a.

  	
   

  	
  change in the
  authorized or issued equity interests of the Acquired Companies; grant by any
  Acquired Company of any option or right to purchase an equity interest of an
  Acquired Company; purchase, redemption, retirement, or other acquisition by
  any Acquired Company of any equity interest;

  
	
   

  	
   

  	
   

  
	
  b.

  	
   

  	
  distributions or
  payments, whether in the form of property or otherwise, to the Sellers,
  except to the extent permitted by the Operating Agreement;

  
	
   

  	
   

  	
   

  
	
  c.

  	
   

  	
  amendment to the
  Organizational Documents of any Acquired Company;

  
	
   

  	
   

  	
   

  
	
  d.

  	
   

  	
  payment of any
  bonuses or an increase in the salaries, or other compensation to any officer,
  Equity Owner or, except in the Ordinary Course of Business, any other
  employee,

  
	
   

  	
   

  	
   

  
	
  e.

  	
   

  	
  entry into any
  employment, severance, or similar contract with any officer, Equity Owner or,
  except in the Ordinary Course of Business, any other employee;

  
	
   

  	
   

  	
   

  
	
  f.

  	
   

  	
  adoption of, or
  increase in the payments to or benefits under, any profit sharing, bonus,
  deferred compensation, savings, insurance, pension, retirement, or other
  employee benefit plan for or with any employees of an Acquired Company;

  
	
   

  	
   

  	
   

  
	
  g.

  	
   

  	
  damage to or
  destruction or loss of the assets or properties of any Acquired Companies, in
  the aggregate, in excess of $250,000, whether or not covered by insurance;

  
	
   

  	
   

  	
   

  
	
  h.

  	
   

  	
  other than in the
  Ordinary Course of Business, entry into, termination of, or receipt of notice
  of termination of any Material Company Contract or transaction;

  

 

25

 

	
  i.

  	
   

  	
  sale (other than
  sales of inventory in the Ordinary Course of Business), lease, or other
  disposition of any material asset or property of an Acquired Company or
  mortgage, pledge, or imposition of any Encumbrance on any material asset,
  property, or rights of an Acquired Company, other than Permitted
  Encumbrances;

  
	
   

  	
   

  	
   

  
	
  j.

  	
   

  	
  material change in
  the accounting methods used by an Acquired Company;

  
	
   

  	
   

  	
   

  
	
  k.

  	
   

  	
  material change in
  the manner in which the Business has been operated; or

  
	
   

  	
   

  	
   

  
	
  l.

  	
   

  	
  agreement, whether
  oral or written, by an Acquired Company to do any of the foregoing.

  
	
   

  	
   

  	
   

  
	
  3.18

  	
   

  	
  Applicable
  Contracts; No Defaults.

  
	
   

  	
   

  	
   

  
	
  a.

  	
   

  	
  Schedule 3.18(a) contains a complete and
  accurate list of:

  
	
   

  	
   

  	
   

  
	 
	
  i.

  	
   

  	
  each Applicable
  Contract that involves performance of services or delivery of goods or
  materials by an Acquired Company of an amount or value in excess of Three
  Hundred Thousand Dollars ($300,000.00) and that cannot be completed or
  canceled without penalty by an Acquired Company within 60 days from the date
  of this Agreement;

  
	 
	
   

  	
   

  	
   

  
	 
	
  ii.

  	
   

  	
  each Applicable
  Contract that involves the purchase by an Acquired Company of services or
  goods or materials of an amount or value in excess of Three Hundred Thousand
  Dollars ($300,000.00) and that cannot be completed or canceled without
  penalty by the Acquired Company within 60 days from the date of this
  Agreement;

  
	 
	
   

  	
   

  	
   

  
	 
	
  iii.

  	
   

  	
  each agreement
  under which an Acquired Company has (1) incurred, assumed or guaranteed
  any indebtedness for borrowed money, or any capitalized leases, or
  (2) granted a lien, security interest, or mortgage, other than a
  purchase money security interest in the Ordinary Course of Business;

  
	 
	
   

  	
   

  	
   

  
	 
	
  iv.

  	
   

  	
  each employment
  agreement to which an Acquired Company is a party;

  
	 
	
   

  	
   

  	
   

  
	 
	
  v.

  	
   

  	
  each lease, rental
  or occupancy agreement, license, installment and conditional sale agreement,
  and other Applicable Contract affecting the ownership of, leasing of, title
  to, use of, or any leasehold or other interest in, any real property or
  personal property whose value exceeds Fifty Thousand Dollars ($50,000.00);

  
	 
	
   

  	
   

  	
   

  
	 
	
  vi.

  	
   

  	
  each licensing
  agreement or other Applicable Contract with respect to patents, trademarks,
  copyrights, or other intellectual property, including agreements with current
  or former employees, consultants, or contractors regarding the appropriation
  or the non-disclosure of any of the Company Intellectual Property Assets;

  

 

26

 

	 
	
  vii.

  	
   

  	
  each collective
  bargaining agreement and other Applicable Contract to or with any labor union
  or other employee representative of a group of employees, if any;

  
	 
	
   

  	
   

  	
   

  
	 
	
  viii.

  	
   

  	
  each joint
  venture, partnership, and other Applicable Contract (however named) involving
  a sharing of profits, losses, costs, or liabilities by an Acquired Company
  with any other Person (other than the Operating Agreement);

  
	 
	
   

  	
   

  	
   

  
	 
	
  ix.

  	
   

  	
  each Applicable
  Contract containing covenants that in any way purport to restrict the business
  activity of an Acquired Company or limit the freedom of an Acquired Company
  to engage in any line of business or to compete with any Person;

  
	 
	
   

  	
   

  	
   

  
	 
	
  x.

  	
   

  	
  each power of
  attorney of the Acquired Companies that is currently effective and
  outstanding;

  
	 
	
   

  	
   

  	
   

  
	 
	
  xi.

  	
   

  	
  each Applicable
  Contract entered into other than in the Ordinary Course of Business;

  
	 
	
   

  	
   

  	
   

  
	 
	
  xii.

  	
   

  	
  each Applicable
  Contract for capital expenditures in excess of Twenty Thousand Dollars
  ($20,000.00);

  
	 
	
   

  	
   

  	
   

  
	 
	
  xiii.

  	
   

  	
  each written
  warranty form, guaranty form, purchase order form, and sales order form
  presently used by the Acquired Companies; and

  
	 
	
   

  	
   

  	
   

  
	 
	
  xiv.

  	
   

  	
  each written
  amendment, supplement, and modification in respect of any of the foregoing.

  
	 
	
   

  	
   

  	
   

  
	
  b.

  	
   

  	
  Except as set
  forth in Schedule 3.18(b), each Applicable Contract identified or
  required to be identified in Schedule 3.18(a) (“Material Company Contract”) is in full
  force and effect and is valid and enforceable in accordance with its terms,
  except as enforceability may be limited by applicable equitable principles or
  by bankruptcy, insolvency, reorganization, moratorium or similar laws from
  time to time in effect affecting the enforcement of creditor’s rights
  generally.

  
	
   

  	
   

  	
   

  
	
  c.

  	
   

  	
  Except as set
  forth in Schedule 3.18(c):

  
	
   

  	
   

  	
   

  
	 
	
  i.

  	
   

  	
  The Acquired
  Companies are in substantial compliance with all applicable terms and
  requirements of each Applicable Contract under which an Acquired Company has
  or had any obligation or liability or by which an Acquired Company or any of
  the assets owned or used by an Acquired Company is or was bound; and

  
	 
	
   

  	
   

  	
   

  
	 
	
  ii.

  	
   

  	
  to the Knowledge
  of the Company, each other Person that has any obligation or liability under
  any Applicable Contract under which an Acquired Company has any rights is in
  substantial compliance with all applicable terms and requirements of such
  Applicable Contract.

  

 

27

 

	
  d.

  	
   

  	
  To the Knowledge
  of the Company, except as set forth in Schedule 3.18(d), there are no
  renegotiations of, or outstanding contractual rights to renegotiate, any material
  amounts paid or payable to an Acquired Company under current Applicable
  Contracts with any Person and, no such Person has made written demand for
  such renegotiation.

  
	
   

  	
   

  	
   

  
	
  e.

  	
   

  	
  Notwithstanding
  anything in this Section 3.18 to the contrary, no representations or
  warranties are made with respect to any Applicable Contract (excluding this
  Agreement and any agreement entered into pursuant to this Agreement) to which
  Buyer or any of its Affiliates are a party.

  

 

3.19        Insurance.  Schedule 3.19
sets forth a list of, or attaches copies of certificates of insurance relating
to, each insurance policy (excluding any relating to Company Benefit Plans)
covering the assets, rights, business equipment, properties, operations,
employees, consultants and directors of the Acquired Companies, including the
name of the insurer, policy number, policy limits, expiration dates, and a
brief description of coverage (copies of which, including all amendments and
riders, have been provided to Buyer) (“Insurance Policies”).  Such Insurance Policies are in full force and
effect, all premiums due thereon have been paid and no Acquired Company is in
breach or default and, to the Knowledge of the Company, no event has occurred
that with notice or the lapse of time, would constitute a breach or default
thereunder. As of the Closing, each of the Insurance Policies will be in full
force and effect.  Except as set forth in
Schedule 3.19, none of the Insurance Policies will lapse or terminate as
a result of the transactions contemplated by this Agreement. The Acquired
Companies have complied with all provisions of such Insurance Policies, have
not received any notice or other communication from any insurance company
canceling or materially amending any Insurance Policy and, to the Knowledge of the
Company, no such cancellation or amendment is threatened. Except as set forth
in Schedule 3.19, during the past three (3) years there  have been no claims made (including pending
claims) under any of the Insurance Policies where the amounts paid or expected
to be paid or reserved against exceed $250,000.00.  To the Knowledge of the Company, no Acquired
Company has failed to give, in a timely manner, any notice required under any
of the Insurance Policies to preserve its rights thereunder.

 

	
  3.20

  	
   

  	
  Environmental
  Matters.

  
	
   

  	
   

  	
   

  
	
  a-1.

  	
   

  	
  Except as set
  forth in Schedule 3.20(a-1), the Acquired Companies are not in
  violation of or liable under, any Environmental Law, and the Acquired
  Companies have not been in violation of or liable under, any Environmental
  Law which have not been corrected, settled, discharged or otherwise resolved;
  there are no pending or Threatened claims, Encumbrances, or other
  restrictions of any nature, resulting from any Environmental, Health, and
  Safety Liabilities or arising under or pursuant to any Environmental Law,
  with respect to or affecting any of the Company Facilities or any other
  properties and assets (whether real, personal, or mixed) in which an Acquired
  Company has or had an interest;

  
	
   

  	
   

  	
   

  
	
  a-2.

  	
   

  	
  except as set
  forth in Schedule 3.20(a-2), to the Knowledge of the Company, none of
  the Acquired Companies or any Company Responsible Person has any
  Environmental, Health, and Safety Liabilities at any property geologically or

  

 

28

 

	
   

  	
   

  	
  hydrologically
  adjoining the Company Facilities which have not been corrected, settled,
  discharged or otherwise resolved;

  
	
   

  	
   

  	
   

  
	
  a-3.

  	
   

  	
  except as set
  forth in Schedule 3.20(a-3), to the extent there are any Hazardous
  Materials present on or in the Environment at the Company Facilities or, to
  the Knowledge of the Company, at any geologically or hydrologically adjoining
  property, such presence is in the Ordinary Course of Business and in
  compliance with all applicable Environmental Law;

  
	
   

  	
   

  	
   

  
	
  a-4.

  	
   

  	
  except as set
  forth in Schedule 3.20(a-4), none of the Acquired Companies or any
  Company Responsible Person has permitted or conducted any Hazardous Activity
  with respect to the Company Facilities or any other properties or assets
  (whether real, personal, or mixed) in which an Acquired Company has or had an
  interest except in the Ordinary Course of Business and in substantial
  compliance with all applicable Environmental Laws;

  
	
   

  	
   

  	
   

  
	
  a-5.

  	
   

  	
  except as set
  forth in Schedule 3.20(a-5) and except for matters described hereafter
  which have been corrected, settled, discharged or otherwise resolved, none of
  the Acquired Companies and no Company Responsible Person has received any
  actual or Threatened Order, notice, or other communication from (i) any
  Governmental Body or private citizen acting in the public interest, or
  (ii) the current or prior owner or operator of any Company Facilities,
  of any actual or potential violation of, or failure to comply with, any
  Environmental Law, or of any actual or Threatened obligation to undertake or
  bear the cost of any Environmental, Health, and Safety Liabilities with
  respect to any of the Company Facilities or any other properties or assets
  (whether real, personal, or mixed) in which an Acquired Company has or had an
  interest, or with respect to any property or Company Facilities at or to
  which Hazardous Materials were generated, manufactured, refined, recycled,
  transferred, imported, used, or processed by an Acquired Company, or any
  Company Responsible Person or from which Hazardous Materials have been
  transported, treated, stored, handled, transferred, disposed, recycled, or
  received;

  
	
   

  	
   

  	
   

  
	
  b.

  	
   

  	
  except as set
  forth in Schedule 3.20(b), there are no pending or Threatened
  Encumbrances on or affecting any of the Company Facilities or any other
  properties or assets (whether real, personal, or mixed) in which an Acquired
  Company has or had an interest resulting from any Environmental, Health, and
  Safety Liabilities or arising under or pursuant to any Environmental Law;

  
	
   

  	
   

  	
   

  
	
  c.

  	
   

  	
  this section has
  been intentionally left blank;

  
	
   

  	
   

  	
   

  
	
  d.

  	
   

  	
  this section has
  been intentionally left blank;

  
	
   

  	
   

  	
   

  
	
  e.

  	
   

  	
  this section has
  been intentionally left blank;

  
	
   

  	
   

  	
   

  
	
  f-1.

  	
   

  	
  except in
  compliance with Environmental Laws, no underground storage tanks, as defined
  in RCRA or under applicable state law, are present at any of the Company
  Facilities or are operated by any of the Acquired Companies at any of the

  

 

29

 

	
   

  	
   

  	
  Company
  Facilities, and to the Knowledge of the Company, except as set forth in Schedule
  3.20(f-1), no such tanks were previously abandoned or removed except in
  compliance with then existing Environmental Laws;

  
	
   

  	
   

  	
   

  
	
  f-2.

  	
   

  	
  Schedule 3.20 contains a list of all
  underground storage tanks, as defined in RCRA or under applicable state law
  ,that are present at any of the Company Facilities or are operated by any of
  the Acquired Companies at the Company Facilities;

  
	
   

  	
   

  	
   

  
	
  f-3.

  	
   

  	
  any Containers at
  any of the Company Facilities which contain Hazardous Materials are present
  in the Ordinary Course of Business and in substantial compliance with all
  applicable Environmental Law;

  
	
   

  	
   

  	
   

  
	
  g.

  	
   

  	
  except as
  expressly set forth in Schedule 3.20(f-1) and except for Releases that
  are specifically identified in Schedule 3.20(a-1) as violations of
  Environmental Laws or result in liability under Environmental Laws and except
  for matters described hereafter which have been corrected, settled,
  discharged or otherwise resolved, there has been no Release or Threat of
  Release of any Hazardous Materials at or from the Company Facilities or at or
  from any other locations to which any Hazardous Materials generated,
  manufactured, refined, recycled, transferred, produced, imported, used, or
  processed from or by the Company Facilities were sent, or from or by any
  other properties and assets (whether real, personal, or mixed) in which an
  Acquired Company has or had an interest, or to the Knowledge of the Company,
  from any geologically or hydrologically adjoining property;

  
	
   

  	
   

  	
   

  
	
  h.

  	
   

  	
  except for matters
  described hereafter which have been corrected, settled, discharged or
  otherwise resolved, none of the Acquired Companies have received notice that
  (i) it, or any of its subsidiaries have sent, arranged for disposal or
  treatment, arranged with a transporter for transport for disposal or treatment,
  transported, or accepted for transport any Hazardous Materials, to a vessel,
  facility, site or location (collectively, “Off-Site
  Facility”) which (A) has been placed or has been publicly
  proposed by authorities having jurisdiction to be placed, on the National
  Priorities List or its state equivalent, or (B) which is subject to a
  claim, administrative order or other request to take removal or remedial
  action by any person having jurisdiction and authority over the matter; or
  (ii) it or any of its subsidiaries have any Environmental, Health, and
  Safety Liabilities related to any such Off-Site Facility; and

  
	
   

  	
   

  	
   

  
	
  i.

  	
   

  	
  Schedule 3.20 contains a true and complete
  list of any reports, assessments, audits, investigations, studies, analyses,
  tests, or monitoring possessed or initiated by an Acquired Company or any
  Equity Owner pertaining to Hazardous Materials or Hazardous Activities in,
  on, or under the Company Facilities, or concerning compliance by the Acquired
  Companies with Environmental Laws that were performed after September 1,
  2007.

  

 

30

 

Notwithstanding anything in this Section 3.20 to the contrary, no
representations or warranties are made with respect to the state or condition
as of June 1, 2004, or operations or use occurring on or before June 1,
2004, of any Company Facility that is the subject of the Buyer Affiliated
Leases.

 

3.21                        Employees.

 

a.                                       Except as disclosed in Schedule
3.21(a), the Acquired Companies are not a party to any written or, to the
Knowledge of the Company, oral contracts of employment with any employee.

 

b.                                       The Company has provided Buyer
with a complete and accurate list of the following information with respect to
the salaried employees of the Acquired Companies: name; job title; current
compensation paid or payable and any change in compensation since December 31,
2007.

 

3.22                        Labor
Relations; Compliance.  The Acquired
Companies are not a party to and have no obligation under collective bargaining
or other similar labor contracts. Except as set forth in Schedule 3.22,
since January 1, 2007, there has not been, there is not presently pending
or existing, and there is not Threatened (a) any strike, slowdown,
picketing, or work stoppage, (b) any Proceeding against or affecting the
Acquired Companies relating to the alleged violation of any Legal Requirement
pertaining to labor relations or employment matters, including any charge or
complaint filed by an employee or union with the National Labor Relations
Board, the Equal Employment Opportunity Commission, or any comparable
Governmental Body, organizational activity, or other labor or employment
dispute against or affecting the Acquired Companies or their premises, or (c) any
application for certification of a collective bargaining agent. There is no
lockout of any employees by an Acquired Company, and no such action is contemplated
by an Acquired Company. The Acquired Companies have complied with all Legal
Requirements relating to employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective bargaining,
the payment of social security and similar taxes, occupational safety and
health, and plant closing. The Acquired Companies are not liable for the
payment of any compensation, damages, taxes, fines, penalties, or other
amounts, however designated, for failure to comply with any of the foregoing
Legal Requirements.

 

3.23                        Intellectual
Property.

 

a.                                       Company Intellectual Property
Assets.  The term “Company Intellectual Property Assets”
includes:

 

i.                                         the names “Atlantic Scrap and
Processing,” “Carolinas Recycling Group,” “Recycle South,” all fictional
business names, trading names, registered and unregistered trademarks, service
marks, and applications of the Acquired Companies (collectively, “Company Marks”);

 

ii.                                     all copyrights in both published
works and unpublished works of the Acquired Companies (collectively, “Company Copyrights”); and

 

31

 

iii.                                 all know-how, trade secrets,
confidential information, customer lists, software, technical information,
data, process technology, plans, drawings, and blue prints of the Acquired
Companies that constitute a trade secret under applicable law (collectively, “Company Trade Secrets”),

 

in each case, owned, used, or licensed by an
Acquired Company as licensee or licensor.

 

b.                                       Agreements.  Except for generally available “off the shelf”
software, Schedule 3.23(b) contains a complete and accurate list of
all contracts relating to the Company Intellectual Property Assets to which an
Acquired Company is a party or by which an Acquired Company is bound. There are
no outstanding, or Threatened, disputes or disagreements with respect to any
such agreement.

 

c.                                       Know-How Necessary for the
Business.  Other than “off the shelf”
software licensed by the Acquired Companies or licenses disclosed on Schedule
3.23(b), the Company Intellectual Property Assets are all those necessary
for the operation of the Business as it is currently conducted. The Acquired
Companies are the owners of all right, title, and interest in and to each of
the Company Intellectual Property Assets owned by it, free and clear of all
Encumbrances (except Permitted Encumbrances), and each has the right to use
without payment to a third party all of the Company Intellectual Property
Assets owned by it.

 

d.                                       Patents.  The Acquired Companies do not own any
patents, patent applications, inventions or discoveries that may be patentable
(collectively, “Patents”).

 

e.                                       Trademarks.

 

i.                                         Schedule 3.23(e) contains a complete and
accurate list of all Company Marks owned and currently used by any Acquired Company.
The Acquired Companies are the owners of all right, title, and interest in and
to each of the Company Marks, free and clear of all Encumbrances except
Permitted Encumbrances.

 

ii.                                     To the Knowledge of the Company,
there is no potentially interfering trademark or trademark application of any
third party.

 

iii.                                 To the Knowledge of the Company,
the right of the Acquired Companies to use any of the Company Marks has not
been infringed or challenged. To the Knowledge of the Company, none of the
Company Marks infringes or is alleged to infringe any trade name, trademark, or
service mark of any third party.

 

f.                                         No Infringement.  To the Knowledge of the Company, the Acquired
Companies have not interfered with, infringed upon, misappropriated or violated
any copyrights, software rights, trade secrets or other intellectual property
rights of third parties. The Acquired Companies and the Sellers have not
received any 

 

32

 

charge, complaint, claim, demand or notice alleging
any such interference, infringement, misappropriation or violation by the
Acquired Companies.

 

3.24                        Relationships
with Affiliates.  To the Knowledge of
the Company, and except as set forth in Schedule 3.24, the Sellers, the
Equity Owners, the Affiliates of the Sellers and Equity Owners, and the Related
Persons of the Equity Owners do not have any interest in any property (whether
real, personal, or mixed and whether tangible or intangible) used in or
pertaining to the Business. To the Knowledge of the Company, and except as set
forth in Schedule 3.24, the Sellers, the Equity Owners, the Affiliates
of the Sellers and Equity Owners, and the Related Persons of the Equity Owners
do not own (of record or as a beneficial owner) an equity interest or any other
financial or profit interest in a Person that has (i) had business
dealings or a material financial interest in any transaction with an Acquired
Company other than business dealings or transactions conducted in the Ordinary
Course of Business with the Acquired Companies at substantially prevailing
market prices and on substantially prevailing market terms, or (ii) engaged
in competition with an Acquired Company with respect to any line of the
products or services of any Acquired Company in any market presently served by
any Acquired Company.

 

3.25                        Brokers or
Finders.  The Sellers and the
Acquired Companies have incurred no obligation or liability, contingent or
otherwise, for brokerage or finders’ fees or agents’ commissions or other
similar payment in connection with this Agreement.

 

3.26                        Recently
Acquired Assets.   Since January 1, 2008, one or more of the
Acquired Companies has acquired, or entered into discussion to acquire, certain
real property or scrap businesses described on Schedule 3.26.  In connection with the acquisition of such
assets, an Acquired Company has entered, or will enter, into a purchase
agreement whereby the seller of such assets makes certain representations and
warranties to the Acquired Company. 
Accordingly, notwithstanding anything in this Agreement to the contrary,
no representations or warranties are made by any Seller or Equity Owner with
respect to such assets.

 

3.27                        Disclosure.
To the Knowledge of the Company, no representation or warranty by the Sellers
and the Equity Owners included in this Agreement contains any untrue statement
of a material fact or omits any material fact necessary to make the information
contained herein not misleading. As of the date of this Agreement, the Company
has provided Buyer with true, accurate and complete copies of all documents
listed or described in all the various Schedules unless otherwise expressly
noted in such Schedules.

 

ARTICLE
IVA – REPRESENTATIONS AND WARRANTIES 

OF ASAP INVESTORS AND ITS EQUITY OWNERS

 

ASAP Investors and each direct
and indirect Equity Owner of ASAP Investors jointly and severally represent and
warrant to Buyer, Parent, and the Acquired Companies as of the date hereof, as
follows:

 

4A.1                      Status and
Authority.  ASAP Investors is duly
organized and validly existing under the laws of its state of organization.
ASAP Investors has the power and authority, without the consent of any other
Person, to execute and deliver this Agreement and the agreements 

 

33

 

contemplated
hereby to which it is a party, and subject to the satisfaction of the condition
described in Section 8.2(e), to perform its obligations hereunder and to
consummate the transactions contemplated hereby and thereby.  Subject to the Parties’ performance of the covenants
described in Section 6.3, all legal acts required to be taken by ASAP
Investors to authorize the execution, delivery and performance of this
Agreement and the agreements contemplated hereby and all transactions
contemplated hereby and thereby have been duly and properly taken.

 

4A.2                      Validity.  This Agreement has been, and the agreements
and other documents to be executed and delivered by ASAP Investors at Closing
will be, duly executed and delivered by ASAP Investors and constitute the
legal, valid and binding obligations of ASAP Investors, enforceable in
accordance with their respective terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and general equitable
principles regardless of whether such enforceability is considered in a
proceeding at law or in equity.

 

4A.3                      Violations
and Approvals.  The execution and
delivery by ASAP Investors of this Agreement and the agreements contemplated
hereby, the performance by ASAP Investors of its obligations hereunder and
thereunder and the consummation of the transactions contemplated hereby and
thereby will not (with or without notice or the passage of time) result in the
creation of any lien, charge or encumbrance or the acceleration of any
indebtedness or other obligation of ASAP Investors and are not prohibited by,
do not violate or conflict with any provision of, and do not and will not (with
or without notice or the passage of time) result in a default under or a breach
of (i) the Organizational Documents of ASAP Investors, (ii) any
contract, agreement, permit, license or other instrument to which ASAP
Investors is a party or by which it is bound, (iii) any order, writ,
injunction, decree or judgment of any court or governmental agency applicable
to ASAP Investors, or (iv) any law, statute, ordinance, rule or
regulation, decree, writ, injunction, judgment or order of any Governmental
Authority or of any arbitration award which is binding upon, enforceable
against or applicable to ASAP Investors, except for antitrust filings under the
Hart-Scott-Rodino Act or any applicable foreign jurisdictions.

 

4A.4                      Ownership of
ASAP Investors.  The record and
beneficial owners and holders of all of the equity or membership interests of
ASAP Investors are as set forth in Schedule 4A.4. The Individual Owners
of the Seller Members set forth on Schedule 4A.4 are as set forth on Exhibit B.

 

ARTICLE
IVB – REPRESENTATIONS AND WARRANTIES 

OF CRG INVESTORS AND ITS EQUITY OWNERS

 

CRG Investors and each direct
and indirect Equity Owner of CRG Investors jointly and severally represent and
warrant to Buyer, Parent, and the Acquired Companies as of the date hereof, as
follows:

 

4B.1                      Status and
Authority.  CRG Investors is duly
organized and validly existing under the laws of its state of organization. CRG
Investors has the power and authority, without 

 

34

 

the consent of
any other Person, to execute and deliver this Agreement and the agreements
contemplated hereby to which it is a party, and subject to the satisfaction of
the condition described in Section 8.2(e), to perform its obligations
hereunder and to consummate the transactions contemplated hereby and thereby.  Subject to the Parties’ performance of the
covenants described in Section 6.3, all legal acts required to be taken by
CRG Investors to authorize the execution, delivery and performance of this
Agreement and the agreements contemplated hereby and all transactions
contemplated hereby and thereby have been duly and properly taken.

 

4B.2                      Validity.  This Agreement has been, and the agreements
and other documents to be executed and delivered by CRG Investors at Closing
will be, duly executed and delivered by CRG Investors and constitute the legal,
valid and binding obligations of CRG Investors, enforceable in accordance with
their respective terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally and general equitable principles
regardless of whether such enforceability is considered in a proceeding at law
or in equity.

 

4B.3                      Violations
and Approvals.  The execution and
delivery by CRG Investors of this Agreement and the agreements contemplated
hereby, the performance by CRG Investors of its obligations hereunder and
thereunder and the consummation of the transactions contemplated hereby and
thereby will not (with or without notice or the passage of time) result in the
creation of any lien, charge or encumbrance or the acceleration of any
indebtedness or other obligation of CRG Investors and are not prohibited by, do
not violate or conflict with any provision of, and do not and will not (with or
without notice or the passage of time) result in a default under or a breach of
(i) the Organizational Documents of CRG Investors, (ii) any contract,
agreement, permit, license or other instrument to which CRG Investors is a
party or by which it is bound, (iii) any order, writ, injunction, decree
or judgment of any court or governmental agency applicable to CRG Investors, or
(iv) any law, statute, ordinance, rule or regulation, decree, writ,
injunction, judgment or order of any Governmental Authority or of any
arbitration award which is binding upon, enforceable against or applicable to
CRG Investors, except for antitrust filings under the Hart-Scott-Rodino Act or
any applicable foreign jurisdictions.

 

4B.4                      Ownership of
CRG Investors.  The record and beneficial
owners and holders of all of the equity or membership interests of CRG
Investors are as set forth in Schedule 4B.4. The Individual Owners of
the Seller Members set forth on Schedule 4B.4  are as set forth on Exhibit B.

 

ARTICLE
IVC – REPRESENTATIONS AND WARRANTIES 

OF EACH EQUITY OWNER

 

Each Equity Owner represents
and warrants to Buyer, Parent, and the Acquired Companies as of the date
hereof, as follows:

 

4C.1                      Status and
Authority.  If the Equity Owner is an
entity, such entity is duly organized and validly existing under the laws of
its state of organization. The Equity Owner has the power and authority,
without the consent of any other Person, to execute and deliver this 

 

35

 

Agreement and
the agreements contemplated hereby to which it, he or she is a party, and
subject to the satisfaction of the condition described in Section 8.2(e),
to perform its, his or her obligations hereunder and to consummate the
transactions contemplated hereby and thereby. 
Subject to the Parties’ performance of the covenants described in Section 6.3,
all legal acts required to be taken by such Equity Owner to authorize the
execution, delivery and performance of this Agreement and the agreements
contemplated hereby and all transactions contemplated hereby and thereby have
been duly and properly taken.

 

4C.2                      Validity.  This Agreement has been, and the agreements
and other documents to be executed and delivered at Closing by the Equity Owner
will be, duly executed and delivered by the Equity Owner and constitute the
legal, valid and binding obligations of such Equity Owner, enforceable in
accordance with their respective terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and general equitable
principles regardless of whether such enforceability is considered in a
proceeding at law or in equity.

 

4C.3                      Violations
and Approvals.  The execution and
delivery by the Equity Owner of this Agreement and the agreements contemplated
hereby, the performance by the Equity Owner of its, his, or her obligations
hereunder and thereunder and the consummation of the transactions contemplated
hereby and thereby will not (with or without notice or the passage of time)
result in the creation of any lien, charge or encumbrance or the acceleration
of any indebtedness or other obligation of such Equity Owner and are not
prohibited by, do not violate or conflict with any provision of, and do not and
will not (with or without notice or the passage of time) result in a default
under or a breach of (i) the Organizational Documents (if any and as
applicable) of such Equity Owner, (ii) any contract, agreement, permit,
license or other instrument to which such Equity Owner is a party or by which
it, he or she is bound, (iii) any order, writ, injunction, decree or
judgment of any court or governmental agency applicable to such Equity Owner,
or (iv) any law, statute, ordinance, rule or regulation, decree,
writ, injunction, judgment or order of any Governmental Authority or of any
arbitration award which is binding upon, enforceable against or applicable to
such Equity Owner, except for antitrust filings under the Hart-Scott-Rodino Act
or any applicable foreign jurisdictions.

 

ARTICLE V –
REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT

 

Buyer and Parent jointly and
severally represent and warrant to the Sellers and the Equity Owners as of the
date hereof, as follows:

 

5.1                               Status
and Authority.

 

a.                                       Parent is a corporation duly
organized and validly existing under the laws of Indiana. Parent has the power
and authority, without the consent of any other Person, to execute and deliver
this Agreement and the agreements contemplated hereby to which it is a party,
and subject to the satisfaction of the conditions described in Section 8.2(e),
to perform its obligations hereunder and to consummate the transactions
contemplated hereby and thereby. Subject to the Parties’ performance of the
covenants described in Section 6.3, all corporate and other acts or
proceedings required to be taken by Parent to authorize the 

 

36

 

execution, delivery and performance of this
Agreement and the agreements contemplated hereby and all transactions
contemplated hereby and thereby have been duly and properly taken.

 

b.                                       Buyer is a limited liability
company duly organized, validly existing and in good standing under the laws of
Indiana. Buyer has the power and authority, without the consent of any other
Person, to execute and deliver this Agreement and the agreements contemplated
hereby to which it is a party, and subject to the satisfaction of the
conditions described in Section 8.2(e), to perform its obligations
hereunder and to consummate the transactions contemplated hereby and thereby.
Subject to the Parties’ performance of the covenants described in Section 6.3,
all acts or proceedings required to be taken by Buyer to authorize the
execution, delivery and performance of this Agreement and the agreements
contemplated hereby and all transactions contemplated hereby and thereby have
been duly and properly taken.

 

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

 

5.3                               Violations
and Approvals.  The execution and
delivery by the Parent and Buyer of this Agreement and the agreements
contemplated hereby, the performance by Buyer and Parent of their obligations
hereunder and thereunder and the consummation of the transactions contemplated
hereby and thereby will not (with or without notice or the passage of time)
result in the creation of any lien, charge or encumbrance or the acceleration
of any indebtedness or other obligation of Buyer or Parent and are not
prohibited by, do not violate or conflict with any provision of, and do not and
will not (with or without notice or the passage of time) result in a default
under or a breach of (i) the Organizational Documents of Buyer or Parent, (ii) any
contract, agreement, permit, license or other instrument to which Buyer or
Parent is a party or by which either of them is bound, (iii) any order,
writ, injunction, decree or judgment of any court or governmental agency
applicable to Buyer or Parent, or (iv) any law, statute, ordinance, rule or
regulation, decree, writ, injunction, judgment or order of any Governmental
Authority or of any arbitration award which is binding upon, enforceable
against or applicable to Buyer or Parent, except for antitrust filings under
the Hart-Scott-Rodino Act or any applicable foreign jurisdictions, compliance
with applicable requirements of the Securities Act and compliance with any
applicable foreign or state securities or “blue sky” laws.

 

5.4                               Parent
Common Stock.  The Closing Shares of
Parent Common Stock to be issued pursuant to Article II hereof have been
duly authorized and when issued and delivered in accordance with the terms of
this Agreement will be fully paid and non-assessable and the issuance thereof
is not subject to any pre-emptive or similar right.

 

37

 

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

 

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

 

5.7                               Availability
of Funds.  Parent has cash available,
or binding commitments available under its existing credit facilities, to
enable it, and to cause Buyer, to consummate on a timely basis the transactions
contemplated by this Agreement.

 

ARTICLE VI
– ADDITIONAL AGREEMENTS

 

6.1                               General.
 Each Party will use his, her or its
reasonable best efforts to take all actions and to do all things necessary,
proper, or advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
Closing conditions set forth in Article VIII below).

 

6.2                               Conduct
of Business Pending the Closing.  Between
the date of this Agreement and the Closing Date, the Sellers shall cause the
Business to be conducted only in the Ordinary Course of Business, consistent
with past practice or as specifically permitted by this Agreement.  The Sellers shall use their reasonable
efforts to preserve intact the business organization of the Acquired Companies
and to keep available the services of the Acquired Companies’ current officers,
employees and consultants, and to preserve the Acquired Companies’ present
relationships with customers, suppliers and other persons with which they have
significant business relations.  The
Sellers shall also use their reasonable efforts to cause the Acquired Companies
to maintain all their assets and properties (real and personal) in
substantially the same condition as existed on the date of this Agreement,
ordinary wear and tear excepted. Notwithstanding the foregoing, except as
contemplated by this Agreement, or as set forth on Schedule 6.2, the
Sellers shall not permit the Acquired Companies to, between the date of this
Agreement and the Closing Date, directly or indirectly, do or propose or agree
to do any of the 

 

38

 

following
without the prior written consent of the Buyer (which consent may also be
evidenced by Super Board Approval of such matter):

 

a.                                       Grant a security interest in or
allow an Encumbrance to be placed upon the Membership Interest or grant or sell
any option to acquire the Membership Interest;

 

b.                                       sell, pledge, dispose of, or
authorize the sale, pledge, disposition or Encumbrance (other than Permitted
Encumbrances) of, any asset or property of the Acquired Companies, except sales
of inventory or non-material assets not necessary for the conduct of the
Business, each in the Ordinary Course of Business;

 

c.                                       declare, set aside, make or pay
any distributions, other than distributions to the Sellers and the Buyer to the
extent permitted by the Operating Agreement;

 

d.                                       acquire (including, without
limitation, for cash or shares of stock, by merger, consolidation, or
acquisition of stock or assets) any interest in any Person, or make any
investment either by purchase of stock or securities or contribution of capital
or property, or, except in the Ordinary Course of Business, purchase any
property or assets of any other Person;

 

e.                                       incur any indebtedness for
borrowed money or issue any debt securities or assume, guarantee or endorse or
otherwise as an accommodation become responsible for, the obligations of any
Person, in each case, other than pursuant to the Credit Agreement and in the
Ordinary Course of Business, or make any loans or advances to any Equity Owner
or, except in the Ordinary Course of Business, to any other Person;

 

f.                                         enter into, amend or terminate
any Material Company Contract other than in the Ordinary Course of Business;

 

g.                                      increase the compensation
payable or to become payable to its officers or Equity Owners or, except in the
Ordinary Course of Business, employees, or grant any severance or termination
pay to, or enter into any employment or severance agreement with, any of its
directors, officers, Equity Owners or, except in the Ordinary Course of Business,
other employees, or establish, adopt, enter into or amend or take any action to
accelerate any rights or benefits under any collective bargaining, bonus,
profit sharing, trust, compensation, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any directors, officers,
Equity Owners or, except in the Ordinary Course of Business, employees or grant
or pay any bonuses to any Equity Owner;

 

h.                                      pay, discharge or satisfy any
material claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction in the Ordinary Course of Business;

 

39

 

i.                                         delay any budgeted or reasonably
necessary capital expenditure or make or incur any unbudgeted capital
expenditure in excess of $20,000.00 in the aggregate; provided, that the
limitation in this Section 6.2(i) shall not apply to (1) capital
expenses approved prior to the date of this Agreement and disclosed to the
Buyer prior to the date of this Agreement, or (2) capital expenditures to
repair or replace assets used in the Business reasonably necessary to continue
or preserve the Business;

 

j.                                         cancel any material indebtedness
of any Person to the Acquired Companies (individually or in the aggregate) or
waive any claims or rights of substantial value;

 

k.                                     enter into any transaction with
the Sellers, the Equity Owners or any Affiliates of the Sellers or Equity
Owners, except transactions in the Ordinary Course of Business;

 

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

 

m.                                   make any Tax election
inconsistent with past practice, revoke any Tax election, agree to an extension
of the statute of limitations, or settle or compromise any federal, state,
local or foreign Tax liability; or

 

n.                                      agree, in writing or otherwise,
to take or authorize any of the foregoing actions.

 

6.3                               Notices
and Consents; Hart-Scott-Rodino Compliance. 
Each Party will and the Sellers will cause the Acquired Companies to
give any notices to, make any filings with, and use their reasonable best
efforts to comply with the applicable filing requirements of the
Hart-Scott-Rodino Act and obtain the Third-Party Consents; provided however, in
connection with compliance with the Hart-Scott-Rodino Act, no Party will be
required to divest any business or assets or otherwise materially change the
way such Party does or intends to conduct business. Without limiting the
generality of the foregoing, within 10 business days following the date of this
Agreement, the Parties will file any Notification and Report Forms and related
material that he, she or it may be required to file with the Federal Trade
Commission and the Antitrust Division of the U.S. Department of Justice under
the Hart-Scott-Rodino Act, will use his, her or its reasonable best efforts to
obtain an early termination of the applicable waiting period, and will make
(and the Sellers will cause the Company to make) any further filings pursuant
thereto that may be necessary, proper, or advisable in connection therewith.  Parent shall take such actions as are
necessary to authorize for listing on the NASDAQ Global Select Market, upon
official notice of issuance, all of the Closing Shares.

 

6.4                               Access.
 The Sellers will permit, and the
Sellers will cause the Acquired Companies to permit, representatives of Buyer
(including legal counsel and accountants) to have reasonable access at all
reasonable times, and in a manner so as not to interfere with the normal
business operations of the Acquired Companies, to all premises, properties,
personnel, books, records (including Tax records), contracts, and documents of
or pertaining to the Acquired 

 

40

 

Companies.  Notwithstanding the foregoing, the Acquired
Companies shall not be required to permit Buyer to have access to any
information of the Acquired Companies that is subject to attorney-client
privilege, competitively sensitive, or any other information the disclosure of
which in the reasonable determination of the Company’s Board of Directors would
be detrimental to the Business; provided however, before denying access to any
such information, such denial shall be approved by the Company’s Board of
Directors and Buyer shall be given notice that access to certain information is
being denied.

 

6.5                               Notice
of Developments.  Each Party shall
give prompt notice to the other Parties of the occurrence or non-occurrence of
any event which would likely cause any representation or warranty of such Party
contained herein to be untrue or inaccurate, or any covenant, condition, or
agreement contained herein not to be complied with or satisfied. From the date
of this Agreement through the Closing Date, the Parties shall have the
continuing obligation to promptly supplement the information contained in any
Schedule with respect to any matter hereafter arising or discovered, which, if
in existence on the date hereof and known on the date of this Agreement, would
have been required to be set forth or described in a Schedule. Neither the
supplementation of any Schedule pursuant to the obligation in this Section 6.5
nor any disclosure after the date hereof of the untruth of any representation
or warranty made in this Agreement shall operate as a cure of the failure to
disclose the information, or a cure of any breach of a representation or
warranty made herein.

 

6.6                               Exclusivity.  From the date hereof to the Closing Date, no
Seller will (and the Equity Owners will not cause or permit any Seller to) (i) solicit,
initiate, or encourage the submission of any proposal or offer from any Person
relating to the acquisition of any equity interest or other voting securities,
or any substantial portion of the assets, of the Acquired Companies (including
any acquisition structured as a liquidation, merger, consolidation,
recapitalization, joint venture, strategic alliance, or share exchange), (ii) enter
into any agreement or commitment (whether or not binding) with respect to any
of the foregoing, or (iii) participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate in,
or facilitate in any other manner any effort or attempt by any Person to do or
seek any of the foregoing. No Seller will vote their equity interest in favor
of any such acquisition. Each Seller will notify Buyer promptly if any Person
makes any proposal, offer, inquiry, or contact with respect to any of the
foregoing.

 

6.7                               [Reserved]

 

6.8                               Leases.
 The Sellers will not cause or permit
any Company Real Estate Lease to be amended, modified, extended, renewed or
terminated, except to the extent contemplated by this Agreement, nor shall the
Sellers permit any Acquired Company to enter into any new lease, sublease,
license or other agreement for the use or occupancy of any real property,
without the prior written consent of Buyer.

 

6.9                               Title
Insurance and Surveys.

 

a.                                       Within fourteen (14) business
days from the date hereof, the Sellers shall use reasonable efforts to cause
the Company to furnish to Buyer current title commitments (collectively, the “Title Commitments”) issued by Chicago
Title 

 

41

 

Insurance Company (the “Title Company”) together with copies of
all exceptions to title referenced therein. Sellers shall use reasonable
efforts to cause the Title Commitments to set forth the state of title of the
Owned Real Property and the Leased Real Property (together with the Owned Real
Property, the “Insured Property”),
together with all exceptions or conditions to such title, including, without
limitation, all easements, restrictions, rights-of-way, covenants,
reservations, and all other encumbrances affecting the Insured Properties,
which would appear in an owner’s or leasehold owners’ title policy, if issued.

 

b.                                       Sellers shall use reasonable
efforts to cause the Title Commitments to contain the express commitment of the
Title Company to issue one or more owners’ or leasehold owners’ title policies
(the “Title Policies”) to the
Company on the current ALTA Form 2006 in amounts as Buyer may determine
not in excess of the fair market value of the Real Property insured thereunder
(including all improvements located thereon), subject to the Permitted
Encumbrances. Sellers shall use reasonable efforts to cause each Title Policy
delivered pursuant to this Agreement to, at Buyer’s election, and to the extent
legally permissible and commercially available, (i) insure title to the
Insured Properties and all recorded easements benefiting such Insured
Properties as of the date of Closing or the recording of any subsequent deed or
article of merger, whichever occurs last, (ii) contain an “extended
coverage endorsement” insuring over the general exceptions contained
customarily in such policies, (iii) contain an ALTA Zoning Endorsement 3.1
(or equivalent), (iv) contain an endorsement insuring that the Insured
Properties described in the title insurance policy is the same real estate as
shown on the Survey delivered with respect to such Real Property, (v) contain
an endorsement insuring that each street adjacent to the real property is a
public street and that there is direct and unencumbered pedestrian and
vehicular access to such street from the Real Property, (vi) if the Real
Property consists of more than one record parcel, contain a “contiguity”
endorsement insuring that all the record parcels are contiguous to one another,
(vii) contain a tax parcel endorsement, (viii) contain a “non
imputation” endorsement to the effect that title defects known to the officers,
directors, and stockholders of the owner prior to the Closing shall not be
deemed “facts known to the insured” for purposes of the policy, (ix) contain
an ALTA Form 9.2 comprehensive endorsement and (x) contain an
endorsement insuring against loss or damage sustained by the non-availability
of utilities. The insurance premium and other costs for each Title Policy shall
be a Transaction Expense. The inability of the Title Company to issue a zoning
endorsement on a Title Commitment due to a legal non-conforming use of such
property shall not be grounds for objection by Buyer so long as the inability
of the Title Company to issue such an endorsement is due to immaterial
non-compliance with applicable zoning laws and regulations.

 

c.                                       No later than fourteen (14)
business days prior to the Closing Date, the Sellers shall use reasonable
efforts to cause the Company to furnish to Buyer copies of a survey of each
Insured Property (“Survey”)
prepared by a land surveyor licensed in the state in which the Insured Property
is located and prepared in accordance with the minimum standard detail
requirements for land title surveys as most 

 

42

 

recently adopted by the American Land Title
Association, the American Congress on Surveying and Mapping, and the National
Society of Professional Surveyors (2005), including the following Table A
optional requirements: 1, 2, 3, 4, 6, 7(a), 7(b)(1), 7(b)(2), 7(c), 8, 9, 10,
11(a), 13, 14, and 17, and without limiting the foregoing, is certified to the
Company or either Subsidiary and the Title Company, and is in a form and has
been certified as of a date satisfactory to the Title Company to delete
standard survey exceptions from the Title Commitment.  Each Survey will be approved by Buyer prior
to the Closing Date provided that the Surveys do not show any defects,
encroachments or encumbrances that would materially affect the ordinary and
normal operation of any of the subject properties consistent with historical
practices. The cost and expense of the Surveys shall not be a Transaction
Expense.

 

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

 

6.11                        Appointment
of Representatives.

 

a.                                       Stephen W. Earp is hereby
appointed the agent and attorney-in-fact of ASAP Investors, its respective
Seller Members and their respective Individual Owners (the “ASAP Representative”) and Marvin Siegel is
hereby appointed the agent and attorney-in-fact of CRG Investors, its
respective Seller Members and their respective Individual Owners (the “CRG Representative”)(the ASAP
Representative and the CRG Representative may individually be referred to as a “Representative” and collectively as the “Representatives”) for purposes of this
Agreement and the Escrow Agreement, and the Buyer Indemnified Parties may rely
upon this appointment and the power and authority of the Representative to
legally act on behalf of and to bind the Seller Members and Individual Owners
that hereby appoint such Representative. 
The ASAP Representative and the CRG Representative shall have the sole
authority to act on behalf of and to legally bind, respectively, ASAP
Investors, its respective Seller Members and their respective Individual
Owners, and CRG Investors, its respective Seller Members and their respective
Individual Owners for all purposes of this Agreement and the Escrow Agreement,
including without limitation pursuant to Articles VIII, IX, X, XI, and XII of
this Agreement.  Without otherwise
limiting the foregoing, with respect to the ASAP Representative, each of its Seller
Members and their respective Individual Owners acknowledge and agree that they
shall be legally bound by the representations and warranties set forth in the
Sellers’ and Equity Owners’ Article VIII Certificate delivered by the ASAP
Representative pursuant to this Agreement. Without otherwise limiting the
foregoing, with respect to the CRG Representative, each of its Seller Members
and their respective Individual Owners acknowledge and agree that they shall be
legally bound by the representations and 

 

43

 

warranties set forth in the Sellers’ and
Equity Owners’ Article VIII Certificate delivered by the CRG
Representative pursuant to this Agreement.

 

b.                                       Each of the Sellers, the Seller
Members and the Individual Owners agrees that the foregoing appointment of the
Representatives is, subject to the right to substitute a Representative
described below, irrevocable.  Each of
the Sellers, the Seller Members and the Individual Owners agrees that the
foregoing appointment of the Representatives is coupled with an interest and
shall survive the incapacity, bankruptcy, insolvency, dissolution or death of
any of the Sellers, the Seller Members and the Individual Owners, as the case
may be.  In furtherance of the foregoing,
each  of the Sellers, the Seller Members
and the Individual Owners shall take all such actions as are necessary to bind
such Party’s successors, assigns, executors, personal representatives and
heirs, as the case may be, to the foregoing appointment of the ASAP
Representative or CRG Representative, as the case may be, and each such Party
shall indemnify the other Sellers, the Seller Members, the Individual Owners,
and the Buyer Indemnified Parties from any losses incurred by them in the event
any such successor, assign, executor, personal representative or heir is not
bound by the foregoing appointment of the ASAP Representative or CRG
Representative, as the case may be.

 

c.                                       Either Representative may be
changed from time to time with the consent of the respective Seller Members
that such Representative represents. 
Either Representative may resign at any time by giving at least thirty
(30) days’ written notice to Buyer, provided that such Representative shall
continue to serve until his successor accepts the duties of the ASAP
Representative or the CRG Representative, as the case may be.  If a successor Representative is not
appointed within twenty (20) days after the resignation, death or incapacity of
the then-serving Representative, then such Representative (or his executor or
other personal representative) or a majority of the Seller Members that such
Representative represents may petition any court of competent jurisdiction for
the appointment of a successor Representative.

 

d.                                       Upon having actual knowledge of
the death of an Individual Owner, each Seller and Equity Owner shall use his,
her or its reasonable efforts to promptly notify the Buyer of such death.  The obligation described in this Section 6.11(d) shall
expire on the third (3rd) anniversary of the Closing Date.

 

6.12                        Interim
Financial Statements.  The Sellers
shall cause the Company to provide Buyer as soon as practicable after the end
of each calendar month prior to the Closing Date, and in any event no later
than 30 days after the end of each calendar month, a consolidated unaudited
balance sheet and income statement of the Company as of the end of such month
and for that portion of the year then ended which shall be prepared in a manner
consistent with the preparation of the statements referenced in Section 3.4(a)(ii).

 

44

 

6.13                        Release.

 

a.                                       Effective as of the Closing Date, each of the Sellers and
all their Equity Owners, on their own behalf and on behalf of their past,
present or future Affiliates, heirs, beneficiaries, representatives, successors
and assigns (“Seller Releasing Parties”),
hereby absolutely, unconditionally and irrevocably RELEASES and FOREVER
DISCHARGES the Acquired Companies, Parent, and Buyer and each of their
respective Affiliates, shareholders, members, partners, and their respective
present and former directors, officers, shareholders, employees, successors and
assigns (“Seller Released Parties”)
from any and all claims, actions, causes of action, suits, debts, liabilities,
obligations, sums of money, accounts, covenants, contracts, controversies,
agreements, promises, damages, judgments, executions, claims and demands,
whether known or unknown, suspected or unsuspected, absolute or contingent,
direct or indirect or nominally or beneficially possessed or claimed by any of
the Seller Releasing Parties, whether the same be at law, in equity or mixed,
which such Seller Releasing Party ever had, now has, or hereafter can, shall or
may have against the Seller Released Parties, in respect of or arising from any
and all agreements and obligations incurred on or prior to the Closing, or in
respect of or arising from any event occurring or circumstances existing on or
prior to the Closing (“Seller Released Claims”);
provided, however, that the Seller Released Parties shall not be released from
any of their obligations or liabilities to the Seller Releasing Parties (and
such obligations and liabilities shall not be Seller Released Claims) related
to or arising under (A) this Agreement or any agreement to be executed in
connection with the Closing, (B) rights to reimbursement for claims as an
employee incurred prior to the Closing under any employee benefit plans, (C) any
base salary and normal perquisites accrued as an employee since the last
payroll date of any Acquired Company, (D) rights to allocations under Article VI
and distributions under Articles VII and X in the Operating Agreement as
expressly modified by this Agreement, (E) rights under any written
employment agreement existing on the date hereof, or (F) any rights
relating to that certain Agreement dated August 31, 2007 between the
Company and ASAP Investors regarding a landfill in Kernersville, North Carolina
(the “Landfill Agreement”).
Without otherwise limiting the foregoing, the Seller Released Parties shall be
released from any and all obligations (whether indemnification obligations or
otherwise) of any Seller Released Party arising under the 2004 Prior Agreement
or the 2007 Prior Agreement, and any such obligations shall be Released Claims.

 

b.                                       Effective
as of the Closing Date, Parent, Buyer, and each Acquired Company, on their own
behalf and on behalf of their past, present or future Affiliates, heirs,
beneficiaries, representatives, successors and assigns (“Buyer
Releasing Parties”)(Seller Releasing Parties and Buyer Releasing
Parties may individually be referred to as a “Releasing
Party” and collectively as the “Releasing Parties”),
hereby absolutely, unconditionally and irrevocably RELEASES and FOREVER
DISCHARGES each Seller and Equity Owner and each of their respective
Affiliates, shareholders, members, partners, and their respective present and
former directors, officers, shareholders, employees, successors and assigns 

 

45

 

(“Buyer Released Parties”) (Seller
Released Parties and Buyer Released Parties may individually be referred to as
a “Released Party” and collectively as
the “Released Parties”) from any and all
claims, actions, causes of action, suits, debts, liabilities, obligations, sums
of money, accounts, covenants, contracts, controversies, agreements, promises,
damages, judgments, executions, claims and demands, whether known or unknown,
suspected or unsuspected, absolute or contingent, direct or indirect or
nominally or beneficially possessed or claimed by any of the Buyer Releasing
Parties, whether the same be at law, in equity or mixed, which such Buyer
Releasing Party ever had, now has, or hereafter can, shall or may have against
the Buyer Released Parties, in respect of or arising from any and all
agreements and obligations incurred on or prior to the Closing, including or in
respect of or arising from any event occurring or circumstances existing on or
prior to the Closing (“Buyer Released Claims”)(Seller
Released Claims and Buyer Released Claims may individually be referred to as a “Released Claim” and collectively as the “Released Claims”); provided, however, (x) that Buyer
Released Parties shall not be released from any of their obligations or
liabilities to Buyer Releasing Parties (and such obligations and liabilities
shall not be Buyer Released Claims) related to or arising under (A) this
Agreement or any agreement to be executed in connection with the Closing, (B) allocations
under Article VI and distributions under Articles VII and X in the
Operating Agreement as expressly modified by this Agreement, (C) any
written employment agreement existing on the date hereof, or (D) the
Landfill Agreement; (y) without limiting the generality of the foregoing,
the Buyer Released Parties shall be released from any and all obligations
(whether indemnification obligations or otherwise) of the Buyer Released
Parties arising under the 2004 Prior Agreement or the 2007 Prior Agreement, and
any such obligations shall be Released Claims; and (z) the Buyer Released
Parties do not include Industrial Acquisition Corporation (defined as the “Seller”
in the 2004 Prior Agreement) and James W. Knight Jr., Thomas E. Davis, Larry E.
Seay and Michael F. Munafo (defined as “Seller’s Shareholders” in the 2004
Prior Agreement) (the foregoing Seller and Seller’s Shareholders may be
referred to as the “Non-Released Parties”)
and without otherwise limiting the foregoing, the Buyer Released Claims do not
include any obligations or liabilities of the Non-Released Parties under the
2004 Prior Agreement or otherwise.

 

c.                                       Each Releasing Party hereby expressly waives any rights such
Releasing Party may have under the statutes of any jurisdiction or common law
principles of similar effect, to preserve Released Claims which such Releasing
Party does not know or suspect to exist in such Releasing Party’s favor at the
time of executing this Agreement. Each Releasing Party understands and
acknowledges that it may discover facts different from, or in addition to,
those which it knows or believes to be true with respect to the claims released
herein, and agrees that the terms of this release shall be and remain effective
in all respects notwithstanding any subsequent discovery of different and/or
additional facts. Should any Releasing Party discover that any fact relied upon
in entering into this release was untrue, or that any fact was concealed, or
that an understanding of the facts or law was incorrect, no Releasing Party
shall be entitled to any relief as a result thereof, and 

 

46

 

the Releasing Parties surrender any
rights they might have to rescind this release on any ground. This release is
intended to be and is final and binding regardless of any claim of
misrepresentation, promise made with the intention of performing, concealment of
fact, mistake of law, or any other circumstances whatsoever. Each Releasing
Party hereby irrevocably covenants to refrain from asserting any claim or
demand, or commencing, instituting or causing to be commenced, any proceeding
of any kind against any Released Party based upon any Released Claim.

 

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

 

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

 

6.15                        Directors
and Officers’ Indemnification and Insurance.  
Prior to the Closing, the Acquired Companies shall purchase run-off
extended reporting coverage for a period of up to three (3) years under
the Acquired Companies’ existing liability insurance policy covering Directors
and Officers Liability, Employment Practices Liability and Fiduciary Liability;
provided, however, such extended coverage shall not exceed 250% of the premium
for the Acquired Companies’ existing coverage for such risks.

 

47

 

6.16                        Cooperation
of Buyer.   Whenever this
Agreement requires the Sellers or the Equity Owners to cause or permit the
Acquired Companies (or any of them) to take any action or refrain from taking
any action, Parent and Buyer shall cooperate with the Sellers and the Equity
Owners in connection with taking such action or refraining from taking such
action, including providing or obtaining all necessary approvals or consents
that may be required under the Organizational Documents of the Acquired
Companies.  Unless such expense is
expressly described as a Buyer or Parent expense, any expense related to
matters described in Sections 6.2, 6.4, 6.12, 6.14, 6.15 and 6.16 shall be an
expense of the Acquired Companies and not a Transaction Expense, except to the
extent the Sellers or the Equity Owners incur professional fees for advice
relating to their respective obligations under such sections and the
preparation of Schedules or Exhibits to this Agreement.

 

ARTICLE VII – POST-CLOSING
COVENANTS

 

The Parties agree as follows with respect to
the period following the Closing:

 

7.1                               General.  In case at any time after the Closing any
further actions are necessary or desirable to carry out the purposes of this
Agreement, each of the Parties will take such further actions (including the
execution and delivery of such further instruments and documents) as any other
Party may reasonably request, all at the sole cost and expense of the
requesting Party (unless the requesting Party is entitled to indemnification therefor
under Article X below).

 

7.2                               Litigation
Support.  In the event
and for so long as any Party actively is contesting or defending against any
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand in connection with (i) any transaction contemplated under this
Agreement or (ii) any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure to act,
or transaction on or prior to the Closing Date involving any Acquired Company,
the Parties will reasonably cooperate with him, her, or it and his, her or its
counsel in the contest or defense, reasonably make available his, her or its
personnel, and provide such testimony and access to his, her or its books and
records as shall be necessary in connection with the contest or defense, all at
the sole cost and expense of the contesting or defending Party (unless the
contesting or defending Party is entitled to indemnification therefor under Article X
below).

 

7.3                               Closing
Date Audit; Allocations; Distributions.

 

a.                                       Following the Closing, the Parties shall cooperate to cause
the Acquired Companies’ to prepare audited Financial Statements as of the
Closing Date with the audit to be done by the Acquired Companies’ regular
outside accountants (“Closing Date Audit”),
at the expense of Buyer and Parent.

 

b.                                       Following the completion of the Closing Date Audit, and
subject to the provisions of this Section 7.3, Buyer shall cause the
Company to make, with respect to the operations of the Acquired Companies up to
and including the Closing Date (i) allocations of Net Income (as defined
in the Operating Agreement) and other items to be allocated as provided in Article VI
of the Operating Agreement, and 

 

48

 

(ii) distributions of Free Cash
Flow (as defined in the Operating Agreement) as provided in Article VII of
the Operating Agreement, including (without limitation) partial distributions
relating to the Company’s fiscal quarter ended March 31, 2008.   Within five (5) days after the
completion of the Closing Date Audit and subject to Sections 7.5 and 10.6
hereof, the Parties shall determine the Free Cash Flow (the “Stub Period Free Cash
Flow”) for the period
commencing January 1, 2008 and ending on the Closing Date (the “Stub Period”). 
The determination of the Stub Period Free Cash Flow in accordance with
this Section 7.3 shall be made in a manner consistent with the Parties’
prior practice in determining Free Cash Flow. 
For purposes of clarification, any accruals made on or prior to the
Closing Date shall be appropriately adjusted to reflect facts known at the time
the Stub Period Free Cash Flow is determined. 
Within five (5) business days following the determination of the
Stub Period Free Cash Flow, the Company shall distribute, and Buyer shall cause
the Company to distribute, to ASAP Investors and CRG Investors 50% and 25%,
respectively, of the Stub Period Free Cash Flow, less any amounts relating to
the Stub Period previously distributed pursuant to the Operating
Agreement.  For federal and state income
tax return reporting purposes, the Acquired Companies shall report profits or
losses during the Stub Period based upon a closing of the books as of the
Closing Date and not a pro rata allocation based on the Acquired Companies’
operations following the Closing.

 

7.4                               Non-Disclosure,
Non-Solicitation, Non-Competition, and Other Covenants.

 

a.                                       Recitals.  As a material inducement to Buyer and Parent
to enter into this Agreement and for Buyer and Parent to consummate the
transactions contemplated by this Agreement and to pay Sellers the purchase
price as provided in Article II above, each Seller and each Equity Owner
makes the covenants in this Section 7.4. Each Seller and each Equity Owner
acknowledges that (i) in the absence of the covenants in this Section 7.4,
neither Buyer nor Parent would have entered into this Agreement and Buyer would
not have purchased the Membership Interest, and (ii) the covenants in this
Section 7.4 are separate, divisible and distinct covenants given
individually by each Seller and each Equity Owner for the benefit of Buyer,
Parent and the Acquired Companies (collectively, the “Protected Parties”) and are assignable by the Protected
Parties to the extent provided in Section 7.4(k). Each Equity Owner
further acknowledges that, as the direct and indirect owners of Sellers, they
have benefited, directly or indirectly, as a result of the payment to the
Sellers by Buyer and Parent of the purchase price for the Membership Interest
in accordance with Article II above.

 

b.                                       Non-Disclosure of Confidential Information.

 

i.                                         Each Seller and each Equity Owner acknowledges that he, she
or it has been privy to Confidential Information and for the benefit of the
Protected Parties, each Seller and each Equity Owner covenants and agrees that,
during the Applicable Term, he, she or it shall:

 

49

 

a)                                      not use,
divulge or disclose, directly or indirectly, (other than to their respective
advisors who are subject to the same duty of confidentiality as the Sellers and
Equity Owners are) any Confidential Information (unless disclosure is required
by law or compelled by judicial or administrative process or required for a
Party to enforce its rights under this Agreement or the agreements to be
entered into at the Closing) for any purpose whatsoever; and

 

b)                                      take reasonable
security precautions, to protect the Confidential Information that is in their
possession or in the possession of their officers, directors, employees,
agents, or advisors, from disclosure and to keep it confidential, including
without limitation, providing reasonable protection from theft, unauthorized
duplication or discovery, and reasonably restricting access to the Confidential
Information.

 

ii.                                     In the event that disclosure to a third party is required by
applicable law during the Term, each Seller and each Equity Owner agrees to
promptly notify the Parent, on behalf of the Protected Parties (unless
notification is prohibited by law), of such requirement to afford the Protected
Parties, at their expense, the opportunity to seek a protective order or other
injunctive relief prior to disclosure. Each Seller and each Equity Owner agrees
to reasonably cooperate with the Protected Parties in pursuit of such relief.

 

c.                                       Covenants against Competition.  For
the benefit of the Protected Parties, each Seller and each Equity Owner
covenants and agrees that during the Applicable Term, he, she or it shall not,
directly or indirectly:

 

i.                                         Have any ownership interest (as an owner, sole proprietor,
shareholder, partner, member, joint venturer, or otherwise) in any Person
engaged in any business that competes, directly or indirectly, with the
Protected Business of any Acquired Company in the Territory unless such
ownership interest is a passive investment whereby the Seller or Equity Owner
acquires or holds no more than an aggregate of 5% of the publicly traded
securities of a corporation or other legal entity whose securities are traded
on the NASDAQ Global Market, NASDAQ Global Select Market, the New York Stock
Exchange or the American Stock Exchange; or

 

ii.                                     Invest in or otherwise provide or make financing available
to any Person engaged in any business that competes, directly or indirectly,
with the Protected Business of any Acquired Company in the Territory unless
such investment is a passive investment whereby the Seller or Equity Owner
acquires or holds no more than an aggregate of 5% of the publicly traded
securities of a corporation or other legal entity whose securities are traded
on the NASDAQ Global Market, NASDAQ Global Select Market, the New York Stock
Exchange or the American Stock Exchange; or

 

50

 

iii.                                 Engage in, own or operate any business that competes,
directly or indirectly, with the Protected Business of any Acquired Company in
the Territory; or

 

iv.                                    Perform services as a consultant, employee, officer,
director, independent contractor, or otherwise, for or with any Person engaged
in any business that competes, directly or indirectly, with the Protected
Business of any Acquired Company in the Territory;

 

provided, however, nothing
herein shall prevent a Seller or an Equity Owner from having a personal or
non-competitive business relationship with any third party.

 

d.                                       Covenants against Solicitation or Doing
Business with a Scrap Customer or Supplier of an Acquired Company.  For
the benefit of the Protected Parties, each Seller and each Equity Owner
covenants and agrees that during the Applicable Term, he, she or it shall not,
directly or indirectly, as owner (sole proprietor, shareholder, partner,
member, joint venturer, or otherwise), employee, consultant, officer, director,
lender, or in any other capacity, for himself, herself or itself or on behalf
of any other Person, attempt to or actually (i) enter into any Protected
Business transaction with a Scrap Customer or Supplier of an Acquired Company
in the Territory, or (ii) otherwise solicit any Protected Business
transaction with a Scrap Customer or Supplier of an Acquired Company in the
Territory for the purpose of or otherwise having the effect of competing with
an Acquired Company for the Protected Business of a Scrap Customer or Supplier
of an Acquired Company or reduce the level of services provided by an Acquired
Company for such Scrap Customer or Supplier of an Acquired Company.  For purposes of this Agreement, a “Scrap Customer or Supplier of an Acquired Company”
means any one or more of the following:

 

i.                                         any Person that engaged in the Protected Business with any
Acquired Company within the one (1) year period preceding the Closing
Date;

 

ii.                                     any Person that engaged in the Protected Business with any
Acquired Company within the two (2) year period preceding the Closing
Date; or

 

iii.                                 any Person that, as of the Closing Date, is a current
customer of, or supplier to, the Protected Business of any Acquired Company.

 

e.                                       Exceptions to Noncompetition and
Nonsolicitation of Scrap Customers or Suppliers.  Notwithstanding anything contained in Section 7.4
to the contrary, the provisions of Section 7.4(c) and 7.4(d):  (i) shall not apply to any Protected
Business described or otherwise identified on Exhibit C hereto but
only to the extent provided therein; and (ii) are limited with respect to
the Griffin and Gordon Individual Owners as provided in Exhibit C.

 

f.                                         Covenants as to Employees of the Acquired
Companies.  During the Applicable Term, each Seller and each Equity
Owner shall not, directly or indirectly, on their own behalf, or in the service
of or on behalf of any Person, or 

 

51

 

in any capacity whatsoever (including
without limitation as an owner, sole proprietor, shareholder, partner, member,
consultant, employee, officer, director, independent contractor, joint
venturer, or otherwise), and in connection with any business that competes,
directly or indirectly, with the Protected Business of any Acquired Company in
the Territory, solicit for hire, hire or cause to be hired any individual who:

 

i.                                         was an employee of any Acquired Company at any time during
the one (1) year period preceding the Closing Date; or

 

ii.                                     is employed by any Acquired Company as of the Closing Date.

 

g.                                      Duration. 
The duration of the covenants of
each Seller and each Equity Owner set forth in this Section 7.4 shall be
extended with respect to a Seller (but not with respect to any other Seller) or
an Equity Owner (but not with respect to any other Equity Owner) by any period
of time during which such Seller or Equity Owner is in violation of such
covenants.

 

h.                                      Consideration.  In
consideration for each Seller’s and each Equity Owner’s covenants contained in
this Section 7.4, Buyer and Parent shall enter into this Agreement, shall
consummate the purchase of the Membership Interest and pay to Sellers the
purchase price as set forth in this Agreement.

 

i.                                         Reasonableness of Restrictions.

 

i.                                         Each Seller and each Equity Owner represents and warrants
that he, she or it has carefully read and considered the provisions of this Section 7.4
and, having done so, agrees that the restrictions set forth in this Section 7.4,
including, but not limited to, the time period of restriction and geographical
areas of restriction are fair and reasonable and are reasonably required for
the protection of the interests of Protected Parties.

 

ii.                                     The parties in no way intend to include a provision that
contravenes public policy. The parties intend that the covenants and
restrictions or any portions thereof contained in this Agreement be severable,
divisible, and distinct and that they be given meaning and effect separately,
together, or in any combination thereof. The parties first intend and authorize
a court to rewrite this Section 7.4 to allow for this Section 7.4 to
be enforced to the maximum extent permitted by law. Further, the parties
authorize a court to “blue pencil” the language in this Section 7.4 such
that the covenants agreed to by each Seller and each Equity Owner are enforced
to the maximum extent permitted by law. The parties further intend that should
any one or more of such covenants or restrictions (or any part thereof) be
determined by a court to be invalid or unenforceable, the remaining covenant or
covenants and remaining restriction or restrictions, being severable and
divisible, shall be fully enforceable and binding obligations of each Seller
and each Equity Owner. In addition, and without 

 

52

 

limiting the foregoing, in the event a
court determines that any of the terms, provisions, or covenants contained in
this Section 7.4 are unenforceable, a court may limit the application of
any such term, provision, or covenant and proceed to enforce this Section 7.4
as so limited or modified.

 

j.                                         Remedies for Breach of Covenants.  Each  Seller and each Equity Owner acknowledges
and agrees that the injury the Protected Parties would suffer in the event of a
breach of this Section 7.4 would be irreparable and not adequately
compensated by monetary damages alone. Thus, in the event of a breach or threatened
or intended breach of this Section 7.4 by a Seller or an Equity Owner, the
Protected Parties are entitled to seek and obtain injunctions, both temporary
and final, enjoining and restraining such breach or threatened or intended
breach. The Protected Parties may further assert such claims, including any
claims available under statutory or common law, as they may have against a
Seller or an Equity Owner for damages resulting from their breach of this Section 7.4.
If the Protected Parties prevail in whole or in part in obtaining any such
relief, the Protected Parties shall be entitled to be reimbursed by the
breaching party for the reasonable expenses associated with such litigation,
including reasonable attorneys’ fees, expert witness fees, costs and other
expenses. The limitations on a Seller’s or Equity Owner’s liability set forth
in Sections 10.1(e) and 10.2 shall not apply to limit, restrict, or modify
(i) a Seller’s or Equity Owner’s liability under this Section 7.4, or
(ii) the rights and remedies of the Protected Parties under this Section 7.4.

 

k.                                     Assignment. 
This Section 7.4 and the
covenants of each Seller and each Equity Owner herein shall be binding upon
each Seller’s and each Equity Owner’s respective successors and shall inure to
the benefit of the Protected Parties’ permitted successors and assigns and
without limiting the foregoing, this Section 7.4 and the covenants of each
Seller and each Equity Owner in this Section 7.4 may be assigned by the
Protected Parties without the consent of any Seller or any Equity Owner to the
extent all or a substantial part of the Protected Business of the Acquired
Companies is assigned or otherwise transferred and the obligations of each
Seller and each Equity Owner shall be fully enforceable by the assignee or the
transferee; provided, further, that the Protected Parties shall provide notice
to the Representatives of such assignment or transfer within a reasonable
period of time thereafter.

 

l.                                         Termination of Prior Covenant.  For purposes of
clarification, and without otherwise modifying Section 6.13 of this
Agreement, immediately as of the Closing, none of the Sellers or Equity Owners
will have any on-going obligations or restrictions under Section 2.4 or
8.8 of the Operating Agreement (and those sections shall be superseded by the
terms of this Section 7.4).

 

7.5                                       Performance
Bonuses.  The Acquired Companies shall
pay performance bonuses (the “Performance Bonuses”) to certain employees
and officers of the Acquired Companies on or before two and one-half (21⁄2) months
after the Closing Date.  The Performance 

 

53

 

Bonuses
shall be accrued as a pre-closing expense of the Acquired Companies, which
expense shall be reflected in the determination of Stub Period Free Cash Flow
described in Section 7.3.  Those
individuals included within the definition of “Knowledge” shall determine in
good faith, and obtaining the approval of the Buyer (and such approval shall
not be unseasonably withheld or delayed), the eligibility of individuals and
amounts payable thereto.  No third party
beneficiaries are intended hereby.

 

ARTICLE VIII – CONDITIONS
TO OBLIGATION TO CLOSE

 

8.1                               Conditions
to Buyer’s and Parent’s Obligation.  The obligation
of Buyer and Parent to consummate the transactions to be performed by them in
connection with the Closing is subject to satisfaction of the following
conditions:

 

a.                                       the representations and warranties of the Sellers and the
Equity Owners contained in this Agreement shall be true and correct in all
material respects at and as of the Closing Date, except (i) for changes
specifically permitted by this Agreement, (ii) those representations and
warranties which address matters as of a particular date shall remain true and
correct as of such date, and (iii) those representations and warranties
which by their terms are qualified by materiality or “Material Adverse Effect”
shall be true and correct in all respects;

 

b.                                       the Sellers shall have performed and complied with all their
covenants hereunder in all material respects through the Closing;

 

c.                                       the Sellers shall have procured all the Third-Party
Consents;

 

d.                                       no Proceeding shall be pending or Threatened before (or that
could come before) any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before (or that could come
before) any arbitrator wherein an unfavorable injunction, judgment, order,
decree, ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation;

 

e.                                       each of the Representatives, on behalf of all the respective
parties they represent, and the estate of any deceased Individual Owner (if
any), shall have delivered to Buyer a certificate (“Sellers’ and Equity Owners’ Article VIII Certificates”)
to the effect that each of the conditions specified in Sections 8.1(a)-(d) and
Section 8.1(h) is satisfied in all respects;

 

f.                                         all applicable waiting periods (and any extensions thereof)
under the Hart-Scott-Rodino Act shall have expired or otherwise been
terminated;

 

g.                                      the Sellers shall have procured a payoff letter from
Wachovia Bank, National Association, as Administrative Agent under the Credit
Agreement, indicating the 

 

54

 

amount necessary to pay in full the
amounts outstanding under the Credit Agreement at Closing (“Payoff Letter”) together with all
necessary releases of, or covenants to release, mortgages and security
interests arising thereunder;

 

h.                                      since the date of this Agreement, the Acquired Companies
shall not have incurred Company Debt for Borrowed Money other than pursuant to
the Credit Agreement and in the Ordinary Course of Business or to the extent
such incurrence received Super Board Approval; provided, further, that the
approval of the acquisition of assets (including capital equipment, real estate
and the stock of another company) by Super Board Approval shall be deemed to
have been Super Board Approval of any incurrence of Company Debt for Borrowed
Money to fund such acquisition pursuant to the Credit Agreement;

 

i.                                         the Sellers and Equity Owners shall have delivered all the
documents, instruments, agreements and other items to be delivered by them as
set forth in Article IX;

 

j.                                         Buyer shall have received from counsel to each Seller a
legal opinion substantially in form and substance as set forth in Exhibit D
attached hereto (“Seller’s Legal Opinion”),
addressed to Buyer and Parent, and dated as of the Closing Date;

 

k.                                     the Company shall have received the resignations, effective
as of the Closing, of each member of the Board of Directors of each Acquired
Company who is an Equity Owner (“Resignations”);

 

l.                                         all actions to be taken by the Sellers in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby shall be reasonably satisfactory in form and substance to
Buyer;

 

m.                                   Buyer shall have received the Title Commitments in the form
and substance necessary for the issuance of the Title Policies as required by
this Agreement and the Real Estate Purchase Agreements;

 

n.                                      Buyer shall have received the Surveys in the form and
substance necessary for the issuance of the Title Policies as required by this
Agreement and the Real Estate Purchase Agreements;

 

o.                                       the “Closing,” as defined in the Real Estate Purchase
Agreements, shall have occurred with respect to all the Real Estate Purchase
Agreements;

 

p.                                       the Representatives shall have delivered to Buyer an officer’s,
members’ or manager’s certificate (“Sellers’
Resolutions Certificates”), as the case may be, of the Sellers,
dated as of the Closing Date, in form and substance reasonably satisfactory to
Buyer, as to: the resolutions of the members or managers of the Sellers, as the
case may be, approving of this Agreement and authorizing the 

 

55

 

execution of this Agreement by a duly
authorized representative of each Seller; and

 

q.                                       since the date of this Agreement, there has not occurred a
Material Adverse Effect.

 

Buyer may waive any condition specified in this Section 8.1
if it executes a writing so stating at or prior to the Closing. With respect to
the “Closing” condition in Section 8.1(o) above, Buyer may waive the “Closing”
on any of one or all of such “Closings.”

 

8.2                               Conditions
to the Sellers’ and the Equity Owners’ Obligations.  The obligation of the Sellers and the Equity
Owners to consummate the transactions to be performed by them in connection
with the Closing is subject to satisfaction of the following conditions:

 

a.                                       the representations and warranties of Buyer and the Parent
contained in this Agreement shall be true and correct in all material respects
at and as of the Closing Date, except (i) for changes specifically
permitted by this Agreement, (ii) those representations and warranties
which address matters as of a particular date shall remain true and correct as
of such date, and (iii) those representations and warranties which by
their terms are qualified by materiality or “Material Adverse Effect” shall be
true and correct in all respects;

 

b.                                       Buyer and Parent shall have performed and complied with all
their covenants hereunder in all material respects through the Closing;

 

c.                                       no Proceeding shall be pending or Threatened before (or that
could come before) any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before (or that could come
before) any arbitrator wherein an unfavorable injunction, judgment, order,
decree, ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation;

 

d.                                       Buyer shall have delivered to the Representatives a
certificate of Parent and Buyer (“Buyer’s Article VIII
Certificate”) to the effect that each of the conditions specified
above in Sections 8.2(a)-(c) is satisfied in all respects;

 

e.                                       all applicable waiting periods (and any extensions thereof)
under the Hart-Scott-Rodino Act shall have expired or otherwise been
terminated;

 

f.                                         Parent and Buyer shall have delivered all the documents,
instruments, agreements and other items to be delivered by them as set forth in
Article IX;

 

g.                                      the Representatives shall have received from counsel to
Buyer and Parent a legal opinion substantially in form and substance as set
forth in Exhibit E attached hereto (“Buyer’s Legal Opinion”), addressed to the Sellers and Equity
Owners, and dated as of the Closing Date;

 

56

 

h.             all actions to be taken by Buyer and Parent in connection
with consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby shall be reasonably satisfactory in form and substance to
the Seller’s Representative; and

 

i.              Buyer shall have delivered to the Representatives officer’s
certificates (“Buyer’s Resolutions
Certificates”) of Buyer and Parent, dated as of the Closing Date, in
form and substance reasonably satisfactory to the Representatives, as to: the
resolutions of the member of Buyer and the Board of Directors of the Parent
approving this Agreement and authorizing the execution of this Agreement by a
duly authorized officer of Buyer and Parent.

 

The Representatives may waive
any condition specified in this Section 8.2 if each of them executes a
writing so stating at or prior to the Closing.

 

ARTICLE IX – CLOSING

 

9.1          Closing.  The closing of the transactions contemplated
by this Agreement (“Closing”)
shall take place at the offices of Barrett & McNagny, LLP, 215 E.
Berry St., Fort Wayne, IN 46802, at 10 a.m., local time, on the second
business day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
(other than conditions with respect to actions the respective Parties will take
at the Closing itself) or at such other time and place as the Parties may
mutually determine (“Closing Date”).  Unless the Parties otherwise agree in
writing, the Closing shall be effective as of the close of business on the
Closing Date.

 

9.2          Deliveries at Closing by Buyer.  At the Closing, Buyer shall take the following
action and deliver or cause to be delivered the following:

 

a.             The Cash Amount, by wire transfer of immediately available
funds to the Sellers in the proportions set forth opposite their names as
provided in Schedule 2.2;

 

b.             769,231 shares of the Parent Common Stock (“Escrow Shares”) to the Escrow Agent,
pursuant to the provisions of the Escrow Agreement and as provided in Schedule
2.2;

 

c.             To the Individual Owners in relative proportions set forth
in Schedule 2.2, that number of shares of Parent Common Stock equal to
the number of Closing Shares less the Escrow Shares;

 

d.             The Buyer’s Article VIII Certificate, provided that,
solely for purposes of this Section 9.2, such certificate may give full
effect to any disclosures made pursuant to Section 6.5 for purposes of
reaffirming the representations and warranties of Buyer and Parent as of the
Closing Date;

 

57

 

e.             cash, by wire transfer of immediately available funds, of an
amount sufficient to repay all amounts outstanding under the Credit Agreement;

 

f.              Executed copies of the Buyers’ Resolutions Certificates; and

 

g.             Such other instruments or documents to be executed by Parent
or Buyer as may be necessary or reasonably requested by the Sellers to carry
out the transactions contemplated hereby.

 

9.3          Deliveries at Closing by the
Sellers.  At the
Closing, the Sellers shall take the following action and deliver or cause to be
delivered the following:

 

a.             an assignment, in form and substance reasonably acceptable
to Buyer assigning all the Membership Interest to Buyer;

 

b.             each Representative, on behalf of all the respective parties
they represent, shall deliver to Buyer a Sellers’ and Equity Owners’ Article VIII
Certificate, provided that, solely for purposes of this Section 9.3, such
certificates may give full effect to any disclosures made pursuant to Section 6.5
for purposes of reaffirming the representations and warranties of the Sellers
and the Equity Owners as of the Closing Date;

 

c.             Executed copies of the following: Resignations and Sellers’
Resolutions Certificates; and

 

d.             Such other instruments or documents to be executed by the
Sellers or the Equity Owners as may be necessary or reasonably requested by
Buyer to carry out the transactions contemplated by this Agreement.

 

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

 

ARTICLE X – REMEDIES FOR
BREACHES OF THIS AGREEMENT

 

10.1        Agreement to Indemnify.

 

a.             The Sellers and the Equity Owners jointly and severally
agree to indemnify and hold Buyer and Parent (and after the Closing, the
Acquired Companies) and their respective shareholders, members, directors,
officers, and employees (“Buyer Indemnified
Parties”) harmless from and against the aggregate of all expenses
(including reasonable attorney and other professional fees and expenses and
court costs), losses, costs, judgments, deficiencies, diminution in value,
liabilities and damages (collectively, “Losses”)
arising out of or resulting from (x) any breach of a representation or
warranty made by the Sellers or the Equity Owners in or pursuant to this
Agreement, (y) any breach of the covenants or agreements made 

 

58

 

by the Sellers or the Equity Owners in
or pursuant to this Agreement, and (z) any inaccuracy in any certificate
delivered by the Representatives pursuant to this Agreement.

 

Notwithstanding
the foregoing provisions of Section 10.1(a), the following limitations
shall apply:

 

i.                                         If a Buyer Indemnified Party suffers a Loss as a result of
any breach of a representation or warranty in or pursuant to Article IVA
of this Agreement (including any certificate related thereto) made by ASAP
Investors and/or by an Equity Owner of ASAP Investors, such Buyer Indemnified
Party shall be indemnified jointly and severally by all of ASAP Investors and
each Equity Owner of ASAP Investors, but such Buyer Indemnified Party shall
have no right to indemnification from CRG Investors or any Equity Owner of CRG
Investors.

 

ii.                                     If a Buyer Indemnified Party suffers a Loss as a result of
any breach of a representation or warranty in or pursuant to Article IVB
of this Agreement (including any certificate related thereto) made by CRG
Investors and/or an Equity Owner of CRG Investors, such Buyer Indemnified Party
shall be indemnified jointly and severally by all of CRG Investors and each
Equity Owner of CRG Investors, but such Buyer Indemnified Party shall have no
right to indemnification from ASAP Investors or any Equity Owner of ASAP
Investors.

 

iii.                                 If a Buyer Indemnified Party suffers a Loss as a result of (i) any
breach of a representation or warranty made by the Equity Owners in or pursuant
to Article IVC of this Agreement (including any certificate related thereto),
or (ii) any breach of the covenants or agreements made by the Equity
Owners in or pursuant to this Agreement, such Buyer Indemnified Party shall be
indemnified (A) in the case of a breach by a Seller Member, jointly and
severally by the breaching Seller Member and each Individual Owner of such
Seller Member, but such Buyer Indemnified Party shall have no right to
indemnification from the Sellers, the other Seller Members or their respective
Individual Owners, and (B) in the case of a breach by an Individual Owner,
solely by the breaching Individual Owner, but such Buyer Indemnified Party
shall have no right to indemnification from the Sellers, any Seller Members or
any other Individual Owner.

 

iv.                                    In the event that at or prior to the Closing, any of Danny
Rifkin, Grant Schultz, Gary Rohrs or John Marynowski has actual knowledge that
the Sellers or the Equity Owners breached any representation or warranty made
by them in Article III of this Agreement, then Parent and Buyer (on behalf
of any and all Buyer Indemnified Parties) waive their rights to seek
indemnification for any Losses arising out of such breach and Parent and Buyer
acknowledge that, to the extent of such actual knowledge, they did 

 

59

 

not rely upon such
representation or warranty made by the Sellers and the Equity Owners.

 

b.             The
Sellers and the Equity Owners jointly and severally agree to indemnify and hold
Buyer Indemnified Parties harmless from and against all Losses arising out of
or resulting from (i) all Transaction Expenses and (ii) all Environmental,
Health, and Safety Liabilities incurred by any Buyer Indemnified Party as a
result of a Third Party Claim that Hazardous Materials are present at or have
been Released to or from that portion of the Company Owned Real Property
located in Winston-Salem, North Carolina (A) being considered by the North
Carolina Department of Transportation for acquisition of additional right of
way for U.S. Highway 52 or for construction of roadway improvements following
therefrom or (B) being formerly owned by Virginia-Carolina Chemical Company or
(C) being formerly owned by Carolina Ore Company or (D) being the Bowen Branch,
regardless of the source of such Hazardous Materials.  Notwithstanding the foregoing, with regard to
the Company Owned Real Property described in subparagraph (D), the
indemnification provided by this Section 10.1(b)(ii) shall not apply to Third
Party Claims for Hazardous Materials present or Released as a result of the
operation of normal scrap operations at such Company Owned Real Property.  After the third (3rd) anniversary of the Closing Date,
Parent and Buyer shall, and shall cause any other Buyer Indemnified Parties to,
seek indemnification pursuant to Section 10.1(b)(ii) first from ASAP Investors
and its direct and indirect Equity Owners prior to seeking indemnification from
CRG Investors and its direct and indirect Equity Owners.

 

c.             Parent and Buyer jointly and severally agree to indemnify
and hold the Sellers and the Equity Owners and their respective shareholders,
members, directors, officers, and employees (“Seller
Indemnified Parties”) harmless from and against all Losses arising
out of or resulting from (i) any breach of a representation or warranty
made by Parent or Buyer in or pursuant to this Agreement, (ii) any
inaccuracy in any certificate delivered by Parent or Buyer pursuant to this
Agreement, and (iii) any breach of the covenants or agreements made by
Parent or Buyer in or pursuant to this Agreement.

 

d.             For purposes of determining whether a representation or
warranty contained in Article III has been breached, any references
therein to “materiality” or a “Material Adverse Effect” shall be considered in
such determination.  In the event any
such representation or warranty qualified by “materiality” or a “Material
Adverse Effect” has been breached, the parties’ indemnification obligations and
the calculation of Losses shall be determined as if all references to “materiality”
or a “Material Adverse Effect” were removed from such representation and
warranty, other than the representations and warranties in Section 3.27,
and the provisions of Section 10.1(e) shall apply.

 

e.             Notwithstanding the foregoing provisions in this Article X,
except in the case of fraud or intentional misrepresentation, no claim for
Losses arising under Sections 10.1(a) and 10.1(c), other than those Losses
arising from any breach of 

 

60

 

representation or warranty in Sections
3.1, 3.2, 3.6(a), 3.6(c), 3.12, 4A.1, 4A.2, 4A.3, 4A.4, 4B.1, 4B.2, 4B.3, 4B.4,
4C.1, 4C.2, 4C.3, 5.1, 5.2, 5.3 and 5.4 (“Excluded
Representations”), shall be asserted by a Buyer Indemnified Party or
by a Seller Indemnified Party, respectively, until the aggregate of all such
Losses suffered by the Buyer Indemnified Parties on the one hand, and the
Seller Indemnified Parties on the other hand, exceeds the sum of $5,000,000
(the “Deductible Amount”) in which
case the parties entitled to indemnification shall be entitled to only the
amount of their aggregate Losses in excess of the Deductible Amount. Pursuant
to this Section 10.1, except in the case of fraud or intentional
misrepresentation, the maximum aggregate amount recoverable by Buyer
Indemnified Parties or the Seller Indemnified Parties, as the case may be, with
respect to Losses arising from a claim under Sections 10.1(a), 10.1(b)(ii) and
10.1(c) (other than the Excluded Representations) shall be $25,000,000
with respect to the Buyer Indemnified Parties, on the one hand, and the Seller
Indemnified Parties, on the other hand.

 

10.2        Survival.  Each of the representations and warranties
made by Parties in this Agreement or pursuant hereto shall survive for two
years after the Closing Date, except (i) the representations and
warranties of Sellers and the Equity Owners contained in Sections 3.1, 3.2,
4A.1, 4A.2, 4A.3, 4A.4, 4B.1, 4B.2, 4B.3, 4B.4, 4C.1, 4C.2, 4C.3, 5.1, 5.2, 5.3
and 5.4. shall survive indefinitely, (ii) the representations and
warranties in Sections 3.6(a), 3.6(c) and 3.20 shall survive for three (3) years
after the Closing Date, (iii) the indemnification obligations arising
under Section 10.1(b)(ii) shall survive for five (5) years after
the Closing Date, and (iv) the representations and warranties in Sections
3.12 and 3.14 shall survive indefinitely unless a statute of limitations
applies to claims of third parties in which case, with respect to such claims,
such representations and warranties shall expire sixty days following the
expiration of the applicable statute of limitations (including extensions
thereof).  No claim for the recovery of
Losses from any breach of representation or warranty may be asserted after such
representations and warranties expire; provided, however, that claims first
asserted in writing within the applicable period shall survive until finally
resolved without possibility of appeal. Each representation, warranty, covenant
and agreement of the parties contained in this Agreement is independent of each
other representation, warranty, covenant and agreement. All covenants and
agreements in this Agreement shall survive Closing until fully performed.

 

10.3        Defense of Third Party Claims.  With respect to each third party claim,
including claims of a Governmental Body, with respect to any matter that may give
rise to a claim for indemnification against any other Party pursuant to this Article X
(“Third Party Claim”), the party seeking
indemnification (“Indemnified Party”) shall give
prompt written notice to the indemnifying party (“Indemnifying
Party”) of the Third Party Claim, provided that failure to give such
notice promptly shall not relieve or limit the obligations of the Indemnifying
Party except to the extent the Indemnifying Party is materially prejudiced
thereby. Except for Third Party Claims arising in whole or in part from
Environmental Laws, if the remedy sought in the Third Party Claim is solely
money damages and the Indemnifying Party agrees in writing to pay the claim
without regard to any indemnity limitations herein and reasonably demonstrates
that it has the financial capacity to pay for such Third Party Claim or if the
Indemnified Party otherwise permits, then the Indemnifying Party, at its sole
cost and expense, may, upon notice to the Indemnified Party, within thirty (30)
days after the 

 

61

 

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

 

10.4        Payment of Indemnification Claims
against Sellers and Equity Owners.  Prior to termination of the Escrow Agreement,
Buyer Indemnified Parties’ claims for indemnification shall first be settled by
making a claim with the Escrow Agent pursuant to the Escrow Agreement.  To the extent that the remaining value of the
ASAP Escrow Fund and the CRG Escrow Fund (as such terms are defined in the
Escrow Agreement) is less than the amount of any such claim, Buyer Indemnified
Parties’ may seek indemnification from the applicable indemnifying parties for
the difference.  The provisions of the
Escrow Agreement shall govern the determination of the number of shares of
Parent Common Stock to be released from the Escrow Amount in connection with
any claims by a Buyer Indemnified Party.

 

10.5        Third Party Indemnification; Subrogation.   Following the
Closing, Parent and Buyer shall cause the Acquired Companies first to use their
reasonable efforts to pursue applicable remedies against insurance companies
(including real estate title companies) who 

 

62

 

provided insurance (including real
estate title insurance), prior to pursuing indemnification under this Article X;
provided however, Parent and Buyer may pursue indemnification under this Article X
to recover and be reimbursed for their reasonable legal fees and other
reasonable expenses incurred in pursuing their remedies against the insurance
companies; provided, further, Parent and Buyer shall provide the
Representatives with reasonable periodic updates of such costs incurred.  Proceeds received in connection with any such
insurance policies shall reduce the amount of Losses otherwise subject to indemnification
under this Agreement.  To the extent the
Sellers or Equity Owners have paid an indemnification claim under this
Agreement, they shall be subrogated to the rights of the applicable Buyer
Indemnified Parties against any person or entity with respect to the subject
matter of such indemnification claim, provided no such subrogation claim may be
made against an Acquired Company, the Buyer, or the Parent.  The foregoing provisions of this Section shall
not prohibit Buyer from providing a notice of a claim against the Sellers or
the Equity Owners pursuant to the Escrow Agreement prior to resolution of such
claim.

 

10.6        Indemnification Accounted for in
Distributions. The Buyer
Indemnified Parties shall not have a claim against any of the Sellers or Equity
Owners pursuant to this Agreement in respect of

 

a.             a
breach of any covenant, representation or warranty, or

 

b.             any
indemnification obligation, of the Sellers or Equity Owners contained in this
Agreement,

 

if, and only to the extent that, the subject matter
of any such breach or indemnification obligation has been identified (by
description and dollar amount) and has been expressly taken into account (as
evidenced by spreadsheets, work papers and other similar documentation used and
agreed to by Buyer and the Sellers to determine the Stub Period Free Cash Flow
described in Section 7.3, and only to the extent such spreadsheets, work
papers, or other similar documentation expressly refer to this Section 10.6
in identifying and quantifying such amount) in the determination of the Stub
Period Free Cash Flow described in Section 7.3.  By way of illustration, any expense actually
incurred or accrued with respect to an expense expected to be incurred, with
respect to any such breach or indemnification obligation that reduces the
amount of the Stub Period Free Cash Flow, and is identified in Schedule 10.6,
shall be considered expressly taken into account.

 

10.7        Exclusive Remedy.  Parent and Buyer acknowledge and agree that,
from and after the Closing, the sole and exclusive remedy for monetary damages
of Parent, Buyer, the Acquired Companies or any other Buyer Indemnified Party
with respect to any and all claims relating to the subject matter of this
Agreement and the agreements contemplated by this Agreement (other than the
Shareholders Agreement and the Escrow Agreement and, and the transactions
contemplated hereby and thereby shall be pursuant to the provisions of Article X
of this Agreement; provided, however, this limitation shall not apply in the
case of fraud or intentional misrepresentation by the Sellers or the Equity
Owners.

 

63

 

ARTICLE XI – TAX MATTERS

 

11.1        Tax Indemnification.  The Sellers and Equity Owners shall jointly
and severally indemnify each of Buyer Indemnified Parties and hold them harmless
from and against any loss, claim, liability, expense, or other damage
attributable to (i) all Taxes (or the non-payment thereof) of each
Acquired Company for all taxable periods ending on or before the Closing Date
and the portion through the end of the Closing Date for any taxable period that
includes (but does not end on) the Closing Date (“Pre-Closing
Tax Period”), and (ii) any Taxes arising as a result of the
payment of any “excess parachute payments” as defined in Section 280G of
the Code made in connection with the transactions contemplated by the
Agreement.

 

11.2        Tax Periods Ending on or before
Closing Date.  The Sellers
and Buyer shall jointly prepare or cause to be prepared and file or cause to be
filed all Tax Returns (and any related Schedule K-1s) for each Acquired Company
for all periods ending on or prior to the Closing Date that are filed after the
Closing Date. The Sellers and Buyer shall include any income, gain, loss,
deduction or other tax items for such periods on their Tax Returns in a manner
consistent with the Schedule K-1s furnished by the Company to them for such
periods.

 

11.3        Cooperation on Tax Matters.

 

a.             The Parties shall cooperate fully, as and to the extent
reasonably requested by the other party, in connection with the preparation and
filing of Tax Returns and any audit, litigation or other proceeding with
respect to Taxes. Such cooperation shall include the retention and (upon the
other party’s request) the provision of records and information reasonably
relevant to any such audit, litigation, or other proceeding and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Each Party
agrees (A) to retain all books and records with respect to Tax matters
pertinent to each of the Acquired Companies relating to any taxable period
beginning before the Closing Date until expiration of the statute of
limitations (and, to the extent notified by the Company or the Representatives,
any extensions thereof) of the respective taxable periods, and to abide by all
record retention agreements entered into with any taxing authority, and (B) to
give the other party reasonable written notice prior to transferring,
destroying or discarding any such books and records and, if the other party so
requests, to allow the other Party to take possession of such books and
records.

 

b.             The Parties further agree, upon request, to use their best
efforts to obtain any certificate or other document from any governmental authority
or any other Person as may be necessary to mitigate, reduce or eliminate any
Tax that could be imposed for any Pre-Closing Tax Period (including with
respect to the transactions contemplated hereby).

 

11.4        Tax-Sharing Agreements.  All tax-sharing agreements or similar
agreements with respect to or involving any Acquired Company shall be
terminated as of the Closing Date and, after the Closing Date, no Acquired
Company shall be bound thereby or have any liability thereunder.

 

64

 

11.5        Certain Taxes.  All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement shall be paid by the
Sellers when due, and the Sellers shall, at their own expense, file all
necessary Tax Returns and other documentation with respect to all such
transfer, documentary, sales, use, stamp, registration and other Taxes and
fees, and, if required by applicable Law, Buyer shall, and shall cause its
Affiliates to, join in the execution of any such Tax Returns and other
documentation.

 

11.6        Purchase Price Allocation.  Concurrently with the
determination of Stub Period Free Cash Flow as provided in Section 7.3, if
required by applicable tax law, the Parties shall, in compliance with
applicable tax law, jointly prepare an allocation of the Purchase Price and the
liabilities of each Acquired Company for tax purposes.  If the Parties are unable to agree regarding
any such allocations, the dispute shall be submitted to one of the “Big 4”
independent accounting firms, the decision of which shall be final and binding
on the Parties.  In the event of such
dispute, Buyer and Parent on the one hand, and ASAP Investors and CRG
Investors, on the other hand, shall each pay one-half of the fees and expenses
of such accountant.  The Parties shall
file all Tax Returns (including amended returns and claims for refund) and
information tax reports in a manner consistent with such allocation.

 

11.7        Amended Returns, etc.   Without the prior written consent of the
Representatives (which consent may not be unreasonably delayed or withheld), or
unless otherwise required by any Legal Requirement, none of Parent, Buyer or
the Company shall file any amended Tax Return or propose or agree to any
adjustment of any item with any Governmental Body with respect to an Acquired
Company and involving any taxable period ending on or before the Closing Date
that would (in any such case) have the effect of increasing the Sellers’ or
Equity Owners’ liability for any Taxes, increasing the indemnification
obligations of the Sellers and Equity Owners with respect to Taxes or
increasing the amount recoverable by Buyer from the Sellers and Equity Owners
with respect to Taxes.

 

ARTICLE XII – TERMINATION

 

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

 

a.             by mutual written consent of Buyer and the Representatives
at any time prior to the Closing;

 

b.             by Buyer in the event of a material breach by any of the
Sellers or the Equity Owners of any provision of this Agreement, which breach
is not cured within 20 days after written notice thereof, or, if the nature of
such breach is such that it can not reasonably be cured within 20 days despite the
best efforts of the Sellers and the Equity Owners, then within a reasonable
period thereafter not to exceed 75 days provided that the Sellers or the Equity
Owners, as the case may be, have taken reasonable steps to begin to cure such
breach within the initial 20 day period. 
Notwithstanding the foregoing, Buyer may not terminate this Agreement 

 

65

 

for any breach of the Agreement that
can be satisfied by the payment of monies if the Sellers and the Equity Owners
agree to allow a portion of the consideration otherwise payable to the Sellers
at the Closing equal to the amount reasonably necessary to cure such breach to
be placed in escrow (in addition to the Escrow Shares), to be held by the
Escrow Agent until such breach is cured by the Sellers and the Equity Owners to
the reasonable satisfaction of Buyer or the Representatives and the Buyer agree
in writing to direct payment of all or any portion of such escrowed amount to
Buyer in consideration of the waiver of such breach of the Agreement;

 

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

 

d.             by either Buyer on the one hand, provided Parent and Buyer
are not in breach, or the Representatives on the other hand, provided none of
the Sellers or the Equity Owners are in breach, if the Closing shall not have
occurred by June 30, 2008; provided, however, if the failure to consummate
the Closing is due to the failure of the conditions described in Sections 8.1(f) or
8.2(e) to be satisfied, Buyer or the Representatives may at their option
extend such date until September 30, 2008; provided, further, that if
Buyer has elected to extend the Closing, then (i) all conditions described
in Section 8.1, except for those described in Sections 8.1(b) and
8.1(f), shall be deemed satisfied in all respects, regardless of whether such
conditions actually have been satisfied.

 

12.2        Effect of Termination.  Except for this Section 12.2,
the provisions of Articles I and X and Sections 6.10 and 6.11 hereof, in the
event of termination of this Agreement pursuant to Section 12.1, this
Agreement shall forthwith become void; provided, however, that nothing herein
shall relieve any party from liability for the breach of any of its
representations, warranties, covenants or agreements set forth in this
Agreement prior to termination.

 

66

 

ARTICLE XIII –
MISCELLANEOUS

 

13.1        No Third-Party Beneficiaries.  This Agreement shall not confer any rights or
remedies upon any Person other than the Parties and their respective successors
and permitted assigns.

 

13.2        Entire Agreement.  This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes
any prior understandings, agreements, or representations by or among the
Parties, written or oral, to the extent they relate in any way to the subject
matter hereof.

 

13.3        Succession and Assignment.  This Agreement shall be binding upon and inure
to the benefit of the Parties named herein and their respective successors and
permitted assigns. No Party may assign either this Agreement or any of his, her
or its rights, interests, or obligations hereunder without the prior written
approval of Buyer and the Representatives.

 

13.4        Counterparts.  This Agreement may be executed in one or more
counterparts (including by means of facsimile), each of which shall be deemed
an original but all of which together shall constitute one and the same
instrument.

 

13.5        Headings.  The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.

 

13.6        Notices.  All notices, requests, demands, claims, and
other communications hereunder shall be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly given (i) when
delivered personally to the recipient, (ii) 1 business day after being
sent to the recipient by reputable overnight courier service (charges prepaid),
or (iii) 4 business days after being mailed to the recipient by certified
or registered mail, return receipt requested and postage prepaid, and addressed
to the intended recipient as set forth below:

 

	
  If
  to Sellers, Equity 

  Owners, or 

  Representatives:

  	
   

  	
  Stephen
  W. Earp, ASAP Representative 

  300
  N. Greene Street, Suite 1400 

  Greensboro,
  NC 27401 

   

  and
  

   

  Marvin
  Siegel, CRG Representative 

  2061
  Nazareth Church Road 

  Spartanburg,
  SC 29301

   

  
	
  Required
  copy to:

  	
   

  	
  Wyche
  Burgess Freeman & Parham, P.A. 

  44
  East Camperdown Way 

  Greenville,
  SC 29601 

  ATTN:
  Kevin Hendricks, Esq.

   

  

 

67

 

	
  If to Buyer or Parent:

  	
   

  	
  OmniSource Corporation 

  7575 West Jefferson
  Boulevard 

  Fort Wayne, IN 46804 

  ATTN: Daniel M. Rifkin 

   

  and

   

  
	
   

  	
   

  	
  Steel Dynamics, Inc. 

  6714 Pointe Inverness Way –
  Suite 200 

  Fort Wayne, IN 46804 

  ATTN: Gary Heasley

   

  
	
  Required copy to:

  	
   

  	
  Barrett &
  McNagny, LLP 

  215 East Berry Street 

  Fort Wayne, IN 46802 

  ATTN: John P.
  Martin, Esq.

  

 

Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Parties notice in the manner herein set forth.

 

13.7        Governing Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Indiana
without giving effect to any choice or conflict of law provision or rule (whether
of the State of Indiana or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Indiana.

 

13.8        Amendments and Waivers.  No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by Buyer
and the Representatives. No waiver by any Party of any provision of this
Agreement or any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be valid unless the same shall be
in writing and signed by the Party making such waiver nor shall such waiver be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such default, misrepresentation,
or breach of warranty or covenant.

 

13.9        Severability.  Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.

 

13.10      Expenses.  The Parties shall bear his, her or its own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby. For avoidance of
doubt, the Sellers shall pay all Transaction Expenses.  Parent shall pay any filing fees associated
with the filings to be made by the Parties under the Hart-Scott-Rodino Act,
environmental reports ordered by Buyer and surveys related to Company
Facilities.

 

68

 

13.11      Construction.  Any reference to any federal, state, local,
or foreign statute or Law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word “including” shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) that the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.

 

13.12      Incorporation of Exhibits and
Schedules.  The Exhibits
and Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.

 

13.13      Specific Performance.  Each Party acknowledges and agrees that the
other Parties would be damaged irreparably in the event any provision of this
Agreement is not performed in accordance with its specific terms or otherwise
is breached, so that a Party shall be entitled to injunctive relief to prevent
breaches of this Agreement and to enforce specifically this Agreement and the terms
and provisions hereof in addition to any other remedy to which such Party may
be entitled, at law or in equity. In particular, the Parties acknowledge that
the Business is unique and recognize and affirm that in the event Buyer or any
Seller breaches this Agreement, money damages would be inadequate and the
Sellers or Buyer, as the case may be, would have no adequate remedy at law, so
that the Sellers and Buyer, as the case may be, shall have the right, in
addition to any other rights and remedies existing in its favor, to enforce its
rights and the other Parties’ obligations hereunder not only in an action for
damages but also in an action for specific performance, injunctive, and/or
other equitable relief.

 

13.14      Submission to Jurisdiction. To the maximum
extent permitted by applicable law, the Parties hereby irrevocably agree that
any legal action or proceeding arising out of or relating to this Agreement or
any agreements or transactions contemplated hereby, including tort claims, may
be brought only in the North Carolina Business Court in Charlotte, North
Carolina, or if there is no North Carolina Business Court in Charlotte at the
time, in the North Carolina Business Court that is located closest to
Charlotte, North Carolina. If there is not a North Carolina Business Court at
the time, then such proceedings are to be brought in the appropriate courts of
the State of North Carolina in Charlotte, North Carolina or of the United
States of America for the Western District of North Carolina. Each of the Parties
hereby expressly submits to the personal jurisdiction and the venue of the
aforementioned courts for the purposes thereof and expressly waives any claim
of improper venue and any claim that those courts are an inconvenient forum.

 

13.15      Arm’s Length Negotiations;
Drafting.  Each Party
herein expressly represents and warrants to all other Parties hereto that
before executing this Agreement, said Party (i) has been fully informed of
the terms, contents, conditions and effects of this Agreement, (ii) has
relied solely and completely upon his, her, or its own judgment in executing
this Agreement, (iii) has had the opportunity to seek and has obtained the
advice of counsel before executing this Agreement (iv) has acted
voluntarily and of his, her, or its own free will in executing this Agreement,
and (v) is not acting under duress, whether economic or physical, in
executing this Agreement. This Agreement is the result of arm’s length
negotiations conducted by and among 

 

69

 

the Parties and their respective
counsel.  This Agreement shall be deemed
drafted jointly by the Parties and nothing shall be construed against one Party
or another as the drafting Party.

 

{Signatures on Following Pages}

 

70

 

IN WITNESS
WHEREOF, the Parties hereto have executed this
Agreement on the date first above written.

 

 

	
  Carolina Investment Company, LLC

  	
   

  	
  Steel Dynamics, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
    OmniSource Corporation,

  	
   

  	
  By:

  	
         /s/ Theresa E. Wagler

  
	
   

  	
    Its sole member

  	
   

  	
   

  	
         Theresa E. Wagler, Vice
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
         /s/ Grant Schultz

  	
   

  	
   

  	
   

  
	
   

  	
    Grant Schultz, Vice President

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Recycle South, LLC

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
         /s/ Marvin Siegel

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
         Chairman/CEO

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SELLERS:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ASAP Investors, LLC

  	
   

  	
  CRG Investors, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
         /s/ Frank Brenner

  	
   

  	
  By:

  	
         /s/ Marvin Siegel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
         Chairman

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PERSONS LISTED ON EXHIBIT A:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  M&F Recycling, Inc.

  	
   

  	
  St. Andrews Enterprises, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
         /s/ Frank Brenner

  	
   

  	
  By:

  	
         /s/ Louis Gordon

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
         President

  	
   

  	
  Its:

  	
         Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hilltop Holdings, Inc.

  	
   

  	
  Scrapman, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
         /s/ Daniel H.
  Griffin, Jr.

  	
   

  	
  By:

  	
         /s/ William Perry

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
         Managing Member

  	
   

  	
  Its:

  	
         President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MSUM, Inc.

  	
   

  	
  Del Boca Vista Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
         /s/ Roger Ruminski

  	
   

  	
  By:

  	
         /s/ Keith Rosen

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
         President

  	
   

  	
  Its:

  	
         President

  

 

71

 

	
  DD&F, Inc.

  	
   

  	
  SDM, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
         Edward W. Bradley, Jr.

  	
   

  	
  By:

  	
         Scott D. McDaniel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
         President

  	
   

  	
  Its:

  	
         President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deschenes Group, Inc.

  	
   

  	
  SNA Enterprises, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
         /s/ John J. Deschenes

  	
   

  	
  By:

  	
         /s/ Tim S. Bryan

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
         President

  	
   

  	
  Its:

  	
         President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Millman, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
         /s/ Nick Urban

  	
   

  	
  /s/ Stephen W. Earp

  
	
   

  	
   

  	
   

  	
  Stephen W. Earp

  
	
  Its:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Spartan Iron and Metal Corporation of

  	
   

  	
  K&W Recycling, Inc.

  
	
  Wellford, S.C.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
         /s/ Marvin Siegel

  	
   

  	
  By:

  	
         /s/ Harold D. Kennedy

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
         President

  	
   

  	
  Its:

  	
         President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Carolina Scrap Processors, Inc.

  	
   

  	
  Spartan Iron and Metal Corporation of

  
	
   

  	
   

  	
   

  	
  Spartanburg, S.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
         /s/ Kym J. Cleveland

  	
   

  	
  By:

  	
         /s/ Marvin Siegel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
         President

  	
   

  	
  Its:

  	
         President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INDIVIDUAL OWNERS (LISTED ON EXHIBIT B):

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Mike Brenner

  	
   

  	
  /s/ Frank Brenner

  
	
  Mike Brenner

  	
   

  	
  Frank Brenner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Estate of Melvin Gordon

  	
   

  	
  Alfred A. Gordon Family Trust

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kalman Gordon /s/ Saul Gordon

  	
   

  	
  By:

  	
         /s/ Richard Gordon

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
         Executors

  	
   

  	
  Its:

  	
         Trustee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   /s/ Saul Gordon

  	
   

  	
   /s/ Barry Gordon

  
	
  Saul Gordon

  	
   

  	
  Barry Gordon

  

 

72

 

	
   /s/ Charlotte Margolis

  	
   

  	
   /s/ Mark Gordon

  
	
  Charlotte Margolis

  	
   

  	
  Mark Gordon

  
	
   

  	
   

  	
   

  	
   

  
	
   /s/ Craig Gordon

  	
   

  	
    /s/ Richard Gordon

  
	
  Craig Gordon

  	
   

  	
  Richard Gordon

  
	
   

  	
   

  	
   

  	
   

  
	
    /s/ Susan Sandler

  	
   

  	
    /s/ Wendy Pake

  
	
  Susan Sandler

  	
   

  	
  Wendy Pake

  
	
   

  	
   

  	
   

  	
   

  
	
    /s/ Louis Gordon

  	
   

  	
   /s/ Robert Gordon

  
	
  Louis Gordon

  	
   

  	
  Robert Gordon

  
	
   

  	
   

  	
   

  	
   

  
	
    /s/ D.H. Griffin

  	
   

  	
   /s/ David H. Griffin, Jr.

  
	
  D.H. Griffin

  	
   

  	
  David H. Griffin, Jr.

  
	
   

  	
   

  	
   

  	
   

  
	
    /s/ Bonita Mitchell

  	
   

  	
    /s/ Melody London

  
	
  Bonita Mitchell

  	
   

  	
  Melody London

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
    /s/ William Perry

  	
   

  	
    /s/ Roger Ruminski

  
	
  William Perry

  	
   

  	
  Roger Ruminski

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
    /s/ Keith Rosen

  	
   

  	
    /s/ Ed Bradley

  
	
  Keith Rosen

  	
   

  	
  Ed Bradley

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
    /s/ Scott D. McDaniel

  	
   

  	
   /s/ Tim S. Bryan

  
	
  Scott D. McDaniel

  	
   

  	
  Tim S. Bryan

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
    /s/ Nick Urban

  	
   

  	
    /s/ Kalman Gordon

  
	
  Nick Urban

  	
   

  	
  Kalman Gordon

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
    /s/ John J. Deschens

  	
   

  	
    /s/ Marvin Siegel

  
	
  John J. Deschenes

  	
   

  	
  Marvin Siegel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
    /s/ Ken Siegel

  	
   

  	
    /s/ Paul Siegel

  
	
  Ken Siegel

  	
   

  	
  Paul Siegel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
    /s/ Steve Siegel

  	
   

  	
    /s/ Harold Kennedy

  
	
  Steve Siegel

  	
   

  	
  Harold Kennedy

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
    /s/ Jeff Kennedy

  	
   

  	
    /s/ Brian Kennedy

  
	
  Jeff Kennedy

  	
   

  	
  Brian Kennedy

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
    /s/ Maria Kennedy

  	
   

  	
    /s/ Kym Cleveland

  
	
  Maria Kennedy

  	
   

  	
  Kym Cleveland

  

 

73

 

	
       /s/ Kelly Cleveland

  	
   

  	
    /s/ Charles Cleveland

  
	
  Kelly Cleveland

  	
   

  	
  Charles Cleveland

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
    /s/Dorothy Cleveland

  	
   

  	
   

  	
   

  
	
  Dorothy Cleveland

  	
   

  	
   

  	
   

  
					

 

74

 

Exhibit A

 

Persons that are Members of the Sellers

 

Seller Members of ASAP Investors:

 

M&F Recycling, Inc.

St. Andrews Enterprises, Inc.

Hilltop Holdings, Inc.

Scrapman, Inc.

MSUM, Inc.

Del Boca Vista, Inc.

DD&F, Inc.

Stephen W. Earp

SDM, Inc.

Deschenes Group, Inc.

SNA Enterprises, Inc.

Millman, Inc.

 

Seller Members of CRG Investors:

 

Spartan Iron and Metal Corporation of Wellford, S.C.

K&W Recycling, Inc.

Carolina Scrap Processors, Inc.

Spartan Iron and Metal Corporation of Spartanburg, S.C.

 

75

 

Exhibit B

 

Individual Owners

 

Individual Owners of Seller Members of ASAP Investors:

 

	
  M&F Recycling, Inc.

  	
   

  
	
   

  	
  Mike Brenner

  	
   

  
	
   

  	
  Frank Brenner

  	
   

  
	
   

  	
   

  	
   

  
	
  St. Andrews Enterprises, Inc.

  	
   

  
	
   

  	
  Estate of Melvin Gordon

  	
   

  
	
   

  	
  Saul Gordon

  	
   

  
	
   

  	
  Kalman Gordon

  	
   

  
	
   

  	
  Alfred A. Gordon Family Trust

  	
   

  
	
   

  	
  Barry Gordon

  	
   

  
	
   

  	
  Charlotte Margolis

  	
   

  
	
   

  	
  Mark Gordon

  	
   

  
	
   

  	
  Craig Gordon

  	
   

  
	
   

  	
  Richard Gordon

  	
   

  
	
   

  	
  Susan Sandler

  	
   

  
	
   

  	
  Wendy Pake

  	
   

  
	
   

  	
  Louis Gordon

  	
   

  
	
   

  	
  Robert Gordon

  	
   

  
	
   

  	
   

  	
   

  
	
  Hilltop Holdings, Inc.

  	
   

  
	
   

  	
  D.H. Griffin

  	
   

  
	
   

  	
  David H. Griffin, Jr.

  	
   

  
	
   

  	
  Bonita Mitchell

  	
   

  
	
   

  	
  Melody London

  	
   

  
	
   

  	
   

  	
   

  
	
  Scrapman, Inc.

  	
   

  
	
   

  	
  William Perry

  
	
   

  	
   

  
	
  MSUM, Inc.

  	
   

  
	
   

  	
  Roger Ruminski

  
	
   

  	
   

  
	
  Del Boca Vista, Inc.

  	
   

  
	
   

  	
  Keith Rosen

  
	
   

  	
   

  
	
  DD&F, Inc.

  	
   

  
	
   

  	
  Ed Bradley

  
	
   

  	
   

  
	
  SDM, Inc.

  	
   

  
	
   

  	
  Scott D. McDaniel

  
	
   

  	
   

  
	
  Deschenes Group, Inc.

  	
   

  
	
   

  	
  John J. Deschenes

  
	
   

  	
   

  
	
  SNA Enterprises, Inc.

  	
   

  
	
   

  	
  Tim S. Bryan

  
	
   

  	
   

  
	
  Millman, Inc.

  	
   

  
	
   

  	
  Nick Urban

  

 

76

 

Individual Owners of Seller Members of CRG Investors:

 

	
  Spartan Iron and Metal Corporation of Wellford, S.C.

  	
   

  
	
   

  	
  Marvin Siegel

  	
   

  
	
   

  	
  Ken Siegel

  	
   

  
	
   

  	
  Paul Siegel

  	
   

  
	
   

  	
  Steve Siegel

  	
   

  
	
   

  	
   

  	
   

  
	
  K&W Recycling, Inc.

  	
   

  
	
   

  	
  Harold Kennedy

  	
   

  
	
   

  	
  Jeff Kennedy

  	
   

  
	
   

  	
  Brian Kennedy

  	
   

  
	
   

  	
  Maria Kennedy

  	
   

  
	
   

  	
   

  	
   

  
	
  Carolina Scrap Processors, Inc.

  	
   

  
	
   

  	
  Kym Cleveland

  	
   

  
	
   

  	
  Kelly Cleveland

  	
   

  
	
   

  	
  Charles Cleveland

  	
   

  
	
   

  	
  Dorothy Cleveland

  	
   

  
	
   

  	
   

  	
   

  
	
  Spartan Iron and Metal Corporation of Spartanburg, S.C.

  	
   

  
	
   

  	
  Marvin Siegel

  

 

	
  Griffin Individual Owners:

  	
   

  

 

	
  D.H. Griffin

  	
   

  
	
  David H. Griffin, Jr.

  	
   

  
	
  Bonita Mitchell

  	
   

  
	
  Melody London

  	
   

  

 

	
  Gordon Individual Owners:

  	
   

  

 

	
  Estate of Melvin Gordon

  	
   

  
	
  Saul Gordon

  	
   

  
	
  Kalman Gordon

  	
   

  
	
  Alfred A. Gordon Family Trust

  	
   

  
	
  Barry Gordon

  	
   

  
	
  Charlotte Margolis

  	
   

  
	
  Mark Gordon

  	
   

  
	
  Craig Gordon

  	
   

  
	
  Richard Gordon

  	
   

  
	
  Susan Sandler

  	
   

  
	
  Wendy Pake

  	
   

  
	
  Louis Gordon

  	
   

  
	
  Robert Gordon

  	
   

  

 

77

 

Exhibit C

 

Exceptions to Noncompetition and
Nonsolicitation

 

A.            Exceptions
to Noncompetition and Nonsolicitation

 

1.             MRR
Southern, LLC

 

D.H. Griffin, Sr.,
D.H. Griffin, Jr. and Juan K. Carroll are members of D.H. Griffin
Investments, LLC, which is one of two fifty percent members of MRR Southern,
LLC (“MRR”). 
MRR is engaged in the landfill business, which may have operations in
the Territory.  Part of MRR’s
landfill operations includes having transfer stations and reclamation
facilities.  At the reclamation
facilities substantial amounts of materials, including scrap metal, that would
otherwise be disposed in landfills are extracted and sold.  MRR does not have an auto and white goods
scrap metal shredder, and this exception to the noncompetition covenants of Section 7.4(c) and
Section 7.4(d) does not permit MRR to install or otherwise own or
lease such a shredder in its business. 
Moreover, for as long as any Equity Owner or Affiliate of an Equity
Owner owns a direct or indirect equity or beneficial ownership interest in MRR,
they will cause MRR to not purchase any material amounts of ferrous or
non-ferrous scrap metal for purposes of resale.

 

2.             Gordon Recyclers, Inc.
and Gordon Industries, Inc.

 

Members of the
Gordon family are owners of Gordon Recyclers, Inc. and Gordon Industries, Inc.
(individually a “Gordon Scrap Entity” and
collectively the “Gordon Scrap Entities”), which
are involved in the Protected Business at 1300 Salisbury Road, Statesville,
North Carolina.  The Gordon Scrap
Entities may continue to engage in the Protected Business at their current
facility located at 1300 Salisbury Road, Statesville, North Carolina, and may
increase the size and scope of the business and operations conducted at that
facility, including purchasing or otherwise acquiring land that is contiguous
to those facilities (or, to the extent used solely for vehicle parking or
equipment storage purposes, land that is within a one mile radius of those
facilities), and those operations will not be deemed to violate the noncompetition
covenants of Section 7.4(c) and Section 7.4(d); except, the
Gordon Scrap Entities and their Affiliates may not employ or otherwise use more
than one shredder at that facility.

 

3.             D. H. Griffin
Wrecking Company, Inc.

 

a.             D. H. Griffin Wrecking Company, Inc.
(“D.H. Griffin Wrecking”) is
engaged in the Protected Business, with operations at 4700 Hilltop Road,
Greensboro, North Carolina; 2365 Malabros Industrial Parkway, Ellenwood,
Georgia; 4294 Highway 42, Ellenwood, Georgia; 2630 Pickle Road, Knoxville,
Tennessee; and 305 W. Quincy Avenue, Knoxville, Tennessee (the Tennessee
facilities may be referred to as the “Tennessee
Facilities,” and all the described facilities (including the
Tennessee Facilities) may be referred to as the “D.H. Griffin Wrecking Facilities”).

 

b.             Subject to the provisions of
this Paragraph 3, and with respect to D.H. Griffin Wrecking’s Tennessee
Facilities, D. H. Griffin Wrecking may continue to engage 

 

78

 

in the Protected Business within the
Territory from the Tennessee Facilities and there are no limitations on the
ability of D.H. Griffin to add shredders to its Tennessee Facilities.

 

c.             With respect to D.H. Griffin
Wrecking Facilities and their operations, D. H. Griffin Wrecking (and its
Affiliates) may not engage in or conduct a Protected Business within the
Territory from any facility other than the D.H. Griffin Wrecking Facilities.

 

d.             In addition to the restrictions
in this Agreement, as provided or limited by this Exhibit C, D. H.
Griffin Wrecking may not acquire, expand or otherwise locate a Protected
Business facility within the Territory, except that with respect to D. H.
Griffin Wrecking’s Protected Business facilities located in North Carolina and
Georgia, D. H. Griffin Wrecking (and its Affiliates) may continue to engage in
the Protected Business at its current facilities located at 4700 Hilltop Road,
Greensboro, North Carolina, 2365 Malabros Industrial Parkway, Ellenwood,
Georgia, and 4294 Highway 42, Ellenwood, Georgia, and may increase the size and
scope of the business and operations conducted at those facilities, including
purchasing or otherwise acquiring land that is contiguous to those facilities
(or, to the extent used solely for vehicle parking or equipment storage
purposes, land that is within a one mile radius of those facilities), and those
operations will not be deemed to violate the noncompete covenants of Section 7.4(c) and
Section 7.4(d); except D. H. Griffin Wrecking and its Affiliates may not
employ or otherwise use a shredder at any of those facilities.

 

e.             Notwithstanding anything in this
Agreement to the contrary, it is understood that (i) D. H. Griffin
Wrecking is engaged in the demolition business throughout the United States and
that D. H. Griffin Wrecking may continue to conduct that business, and as part
of that business, D.H. Griffin Wrecking may sell any scrap materials directly
generated from the demolition of the buildings or other structures, and those
operations will not be claimed to violate the noncompete covenants of Section 7.4(c) and
Section 7.4(d), and (ii) D.H. Griffin Wrecking (and its Affiliates)
may not, in connection with its demolition business or otherwise, open up or
acquire any new facility in the Territory for purposes of operating the
Protected Business, and if any such new facility is opened up or acquired, a
violation of the noncompete covenants of Section 7.4(c) and 7.4(d) will
occur.

 

4.             Griffin Gordon
Recycling, LLC

 

Members of the
Gordon family are owners of St. Andrews Enterprises, Inc.  Members of the Griffin family are owners of
Mountain Recycling, Inc.  St.
Andrews Enterprises, Inc. and Mountain Recycling, Inc. each owns 50%
of Griffin Gordon Recycling, LLC (“Griffin Gordon Recycling”),
which is involved in the Protected Business at 1065 3rd Avenue Northwest,
Hickory, North Carolina (“Hickory Facility”)
and 1581 Highway U.S. 70, Connelly Springs, North Carolina (“Connelly Springs Facility” and together with the Hickory
Facility, the “NC Facilities”).  Subject to the provisions of this paragraph, Section 7.4(c) and
Section 7.4(d) will 

 

79

 

not apply to Griffin Gordon Recyclers’ (or its Affiliates) NC
Facilities and, therefore, Griffin Gordon Recyclers’ Hickory Facility may
continue to engage in the Protected Business within the Territory; provided,
however, Griffin Gordon Recyclers (and its Affiliates) may not engage in or
conduct a Protected Business within the Territory from any facility other than
the NC Facilities. Griffin Gordon Recyclers may continue to engage in the
Protected Business at the NC Facilities and may increase the size and scope of
the business and operations conducted at the NC Facilities, including
purchasing or otherwise acquiring land that is contiguous to that Hickory
Facility or that Connelly Springs Facility (or, to the extent used solely for
vehicle parking or equipment storage purposes, land that is within a one mile
radius of either of those facilities), and those operations will not be deemed
to violate the non compete covenants of Section 7.4(c) and Section 7.4(d);
except Griffin Gordon Recyclers and its Affiliates may not employ or otherwise
use a shredder at the Hickory Facility or the Connelly Springs Facility.

 

5.             Synergy Recycling,
LLC

 

Roger
Ruminski, William Perry and Stephen Earp hold ownership interests in Synergy
Recycling, LLC, 104 East Roosevelt Street, Mayodan, North Carolina.  Synergy Recycling, LLC is engaged in the
business of buying, selling, storing, processing, rebuilding and otherwise
recycling used computers and other electronic equipment and materials, some of
which contain scrap metal.  Synergy
Recycling, LLC may continue to engage in the Protected Business within the size
and scope that they were operating at the beginning of 2007, as described in
the preceding sentence (including having the right to repair and replace its
existing equipment), and those continued operations will not be deemed to
violate the noncompetition covenants of Section 7.4(c) and Section 7.4(d).

 

6.             Stephen W. Earp

 

Stephen W.
Earp is a duly licensed attorney. 
Nothing in Section 7.4(c) and Section 7.4(d) shall
be construed to prevent or limit Mr. Earp from being a consultant or
providing other services to Protected Businesses as part of Mr. Earp’s
legal practice.

 

B.            Sale
of Exhibit C Businesses to Independent Third Party (defined below) and
Post-Sale Employment by a Griffin or Gordon Individual Owner.

 

1.             If MRR is (or all or
substantially all of its assets are) sold to an Independent Third Party in an
arm’s length sale and except as otherwise provided in this Agreement, no
Griffin and Gordon Individual Owner retains any ownership in the business
operated by MRR prior to the sale, then a Griffin Individual Owner may,
subsequent to such sale, be employed by MRR or such Independent Third Party;
provided however, except as expressly permitted with respect to such post-sale
employment, each Griffin Individual Owner is otherwise subject to all the
provisions, terms, and conditions of Section 7.4. Notwithstanding the
forgoing, after a sale of MRR (or all or substantially all of its assets) to an
Independent Third Party, Section 7.4 shall not thereafter be applicable to
MRR or such Independent Third Party (however, as provided in the immediately
preceding sentence, Section 7.4 shall continue to be applicable to each
Griffin and Gordon Individual Owner in accordance with the immediately
preceding sentence).

 

80

 

2.             If both of the Gordon
Scrap Entities are (or all or substantially all of their assets are) sold to an
Independent Third Party in an arm’s length sale and except as otherwise
provided in this Agreement, no Griffin and Gordon Individual Owner retains any
ownership in the business operated by Gordon Scrap Entities prior to the sale,
then a Gordon Individual Owner may, subsequent to such sale, be employed by the
Gordon Scrap Entities or such Independent Third Party; provided however, except
as expressly permitted with respect to such post-sale employment, each Gordon
Individual Owner is otherwise subject to all the provisions, terms, and
conditions of Section 7.4. Notwithstanding the forgoing, after a sale of a
Gordon Scrap Entity (or all or substantially all of its assets) to an
Independent Third Party, Section 7.4 shall not thereafter be applicable to
that Gordon Scrap Entity or such Independent Third Party (however, as provided
in the immediately preceding sentence, Section 7.4 shall continue to be
applicable to each Griffin and Gordon Individual Owner in accordance with the
immediately preceding sentence).

 

3.             If D.H. Griffin
Wrecking is (or all or substantially all of its assets are) sold to an
Independent Third Party in an arm’s length sale and except as otherwise
provided in this Agreement, no Griffin and Gordon Individual Owner retains any
ownership in the business operated by D.H. Griffin Wrecking prior to the sale,
then a Griffin Individual Owner may, subsequent to such sale, be employed by
D.H. Griffin Wrecking or such Independent Third Party; provided however, except
as expressly permitted with respect to such post-sale employment, each Griffin
Individual Owner is otherwise subject to all the provisions, terms, and
conditions of Section 7.4. Notwithstanding the forgoing, after a sale of
D. H. Griffin Wrecking (or all or substantially all of its assets) to an
Independent Third Party, Section 7.4 shall not thereafter be applicable to
D. H. Griffin Wrecking or such Independent Third Party (however, as provided in
the immediately preceding sentence, Section 7.4 shall continue to be
applicable to each Griffin and Gordon Individual Owner in accordance with the
immediately preceding sentence).

 

4.             If Griffin Gordon
Recycling is (or all or substantially all of its assts are) sold to an
Independent Third Party in an arm’s length sale and except as otherwise
provided in this Agreement, no Griffin and Gordon Individual Owner retains any
ownership in the business operated by Griffin Gordon Recycling prior to the
sale, then a Griffin and Gordon Individual Owner may, subsequent to such sale,
be employed by Griffin Gordon Recyclers or such Independent Third Party;
provided however, except as expressly limited to such post-sale employment,
each Griffin and Gordon Individual Owner is otherwise subject to all the
provisions, terms, and conditions of Section 7.4. Notwithstanding the
forgoing, after a sale of Griffin Gordon Recycling (or all or substantially all
of its assets) to an Independent Third Party, Section 7.4 shall not
thereafter be applicable to Griffin Gordon Recycling or such Independent Third
Party (however, as provided in the immediately preceding sentence, Section 7.4
shall continue to be applicable to each Griffin and Gordon Individual Owner in
accordance with the immediately preceding sentence).

 

5.             As used herein, the
term “Designated Entities” shall mean each of D. H. Griffin Investments, LLC,
MRR, Gordon Recyclers, Inc., Gordon Industries, Inc., D. H. Griffin
Wrecking, Mountain Recycling, Inc., St. Andrews Enterprises, Inc.,
and Griffin Gordon Recycling, and the term “Designated Entity” shall mean any
one of the Designated Entities.

 

81

 

6.             For purposes of this Exhibit C,
an Independent Third Party is a Person that is not an Affiliate of any Griffin
and Gordon Individual Owner and is not otherwise, directly or indirectly, owned
by any Griffin and Gordon Individual Owner or any family member of a Griffin
and Gordon Individual Owner. Notwithstanding the foregoing, in connection with
the sale of a Designated Entity (or all or substantially all of its assets) to
an Independent Third Party in an arm’s length sale where the Independent Third
Party is a Publicly Traded Corporation, the Griffin or Gordon Individual Owners
may acquire or hold up to an aggregate of 5% of the publicly traded securities
of such Publicly Traded Corporation. A “Publicly Traded
Corporation” is a corporation or other legal entity whose securities
are traded on the NASDAQ Global Market, NASDAQ Global Select Market, the New
York Stock Exchange or the American Stock Exchange.

 

7.             For the avoidance of
doubt, neither Section 7.4 nor this Exhibit C shall prevent one or
more of any of the Griffin and Gordon Individual Owners (or Affiliates) from
merging, consolidating, combining or selling the equity interests or assets of
any or all of the Designated Entities (such merger, consolidation, combination,
or sale may be referred to individually as a “Sale
Transaction” or collectively as “Sale Transactions”),
whether under the on-going ownership of Griffin or Gordon Individual Owners (or
Affiliates) or an Independent Third Party; provided however such Sale
Transaction or Sale Transactions shall not release the Griffin and Gordon
Individual Owners of their obligations under Section 7.4 and this Exhibit C.
..

 

82

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