Document:

Exhibit 10.7

 

AGREEMENT

BETWEEN

ANAMAX ENERGY SERVICES, INC.

AND

BIOSOURCE AMERICA, INC.

 

 

This Agreement has been
prepared for use with the Standard General Conditions of the Contract Between
Owner and Design/Builder.  Their provisions are interrelated and a
change in one may necessitate a change in the other.

 

 

Confidential and Proprietary Information

 

1

 

AGREEMENT

BETWEEN
OWNER AND DESIGN/BUILDER

 

THIS AGREEMENT is by and between ANAMAX ENERGY SERVICES, INC. (Owner)
of 2099 Shawano Avenue, Green Bay, Wisconsin 54303 and BIOSOURCE AMERICA, INC.
(Design/Builder) of The Riviana Building, 2777 Allen Parkway, Suite 800,
Houston, Texas 77019.  The Effective Date
of this Agreement is December 28, 2005.

 

Owner and Design/Builder, in consideration of the mutual covenants
hereinafter set forth, agree as follows:

 

ARTICLE 1 –
THE WORK

 

1.01        The Owner has determined to construct a
biodiesel processing facility in DeForest, Wisconsin and has elected to
construct the tank farm, yard piping, product handling, process building, site
development and fuel handling infrastructure utilizing their own resources and
to retain the services of the Design/Builder to design, install and commission
the process equipment portion only.  The
Owner has requested that the Design/Builder provide design requirements for the
Owner-furnished components and the Owner will be responsible for the final
design, permitting and construction of the tank farm, yard piping, product
handling, process building, site development and fuel handling infrastructure.

 

1.02        The Owner has required the Design/Builder to
assume responsibility for the entire “turn-key” delivery of the process
equipment only.  As a result of this
requirement, the Design/Builder will be contractually responsible to complete
all Work required to design, fabricate, install, and commission all of the
actual process equipment required to complete the transformation of feedstocks
into methyl esters and glycerin. 
Additionally the Design/Builder will be responsible for the vacuum
system, thermal fluids system, cooling water towers, nitrogen storage and the
plant air compressor systems.

 

1.03        More
specifically, Design/Builder shall complete all Work as specified or indicated
in the Contract Scope of Work attached as Exhibit A to this Agreement and dated
December 28, 2005.  The Work is generally
described as follows:

 

A.           Project
Management – provide programmatic oversight to aid in the execution of the
Project, provide a communication link with the Owner and provide direction and
guidance to subcontractors during the execution of the Project.

 

B.           Professional
Design Services – provide professional engineering process development and
design phase services to develop and assemble fabrication drawings, equipment
specifications and Project requirements as well as provide construction phase
professional support services.

 

2

 

C.           Fabrication
and Installation – provide procurement, purchasing, fabrication and construction
services for the creation, assembly and installation of various process
equipment, piping, wiring, instrumentation and controls, and other various
mechanical, structural, and electrical construction services.

 

D.           Plant
Commissioning and Startup – provide professional services to direct and oversee
the commissioning and startup of the various Plant process units as well as
their integrated process operations and operate the Plant during an initial
startup period until the various process warranties and Owner’s objectives are
met.

 

E.            Training
and Technical Support – provide training to the Owner’s selected operators
during the commissioning and startup phase.

 

ARTICLE 2 –
THE PROJECT

 

2.01
       The Project for which the
Work under the Contract Documents may be the whole or only a part is generally
described as follows:

 

ANAMAX ENERGY SERVICES, INC. has contracted the services of BIOSOURCE
AMERICA, INC. under this Agreement to design, build, deliver, startup and
commission the process equipment and technology package which forms the primary
part of a biodiesel production facility to be located in the Village of
DeForest, Wisconsin (the “Project”). 
This biodiesel production facility (the “Plant”), and the process
equipment and technology package for which Design/Builder will be responsible,
will utilize a variety of feedstocks for conversion to fuel quality methyl
esters and a co-product glycerin.

 

The Plant must be a continuous process capable of producing 20-million
gallons per year of 100% biodiesel (“B100”) and glycerin co-products.   The Plant will be adjacent to an existing
grease collection facility and be operated by Owner or an affiliated company.

 

ARTICLE 3 –
CONTRACT TIMES

 

3.01        Time of the Essence

 

All time limits for Milestones, if any,
Substantial Completion, and completion and readiness for final payment as
stated in the Contract Documents are of the essence.

 

3.02        Days to Achieve Substantial Completion and Final
Payment

 

The Work is targeted for Substantial
Completion as defined in Article 13.05 of the Standard General Conditions
within 300 calendar days of
the Effective Date of this Agreement and is to be completed and ready for final
payment in accordance with paragraph 13.08 of the Standard General Conditions
within 45 calendar days
after the date of Substantial Completion.

 

3

 

3.03        Definition
of Substantial Completion

 

Design/Builder and Owner have agreed to the
following standards as a measure of the Project’s Substantial Completion and
acceptance. Articles 1.01.43 and 13.05 of the General Conditions shall be
amended to include the following elements to define Substantial Completion:

 

3.03.01          Feedstock Specification Requirements

 

The design standard and benchmark for process warranties including
product quality, throughput and yield shall be a variable lipid feedstock with
20% free fatty acid (“FFA”), 70%
triacylglycerol lipid feedstock with a MIU
content not to exceed 2.5%.

 

3.03.02          Product
Specifications

 

To achieve Substantial Completion, the Project must demonstrate that
the final biodiesel product shall be in conformance with ASTM D 6751-03 Grade
S15.

 

To achieve Substantial Completion, the Project must demonstrate that the final Glycerin
will meet 95% purity.

 

3.03.03          Process
Throughput

 

To achieve Substantial Completion, the Project must demonstrate that
the plant must be a continuous process capable of producing 20-million gallons
per year of acceptable biodiesel.  The
plant will be designed to operate as a continuous process based on a 24-hour
day, 350-day per year operation.  The
process warranty will be for 2,400 gallons per hour as measured in the transfer
line to the final biodiesel inventory tankage.

 

3.03.04          Product Yield

 

Yield shall be defined as pounds of feedstock as defined in Article
3.03.01 required to yield one U.S gallon of ASTM D 6751-03 quality biodiesel as
measured during steady state operating conditions.  To achieve Substantial Completion, the
Project must demonstrate that the plant can achieve the minimum yield of no less than one gallon of acceptable biodiesel per 8.51
pounds of feedstock.

 

ARTICLE 4 –
CONTRACT PRICE

 

4.01        Scope

 

The Contract Price is the cost of the Work to
Owner for the Design/Builder to design and construct the Project.  The Contract Price is limited to Design
Professional Services and Construction to be furnished by Design/Builder, and
does not include costs of items not provided by Design/Builder including but
not limited to cost of land and rights of way, compensation for damages to
properties, interest and financing charges, and charges for services to be
provided to

 

4

 

Owner by others not covered by this
Agreement, as set forth in Exhibit A. 
Owner shall pay Design/Builder for completion of the Work in accordance
with the Contract Documents an amount equal to the Contract Price.

 

4.02        Contract
Price

 

The Contract Price for the Work to be performed and provided by the
Design/Builder for the Project under this Agreement and Contract Documents is Thirteen
million two hundred fifty thousand dollars ($13,250,000).

 

ARTICLE 5 –
CHANGES IN CONTRACT PRICE

 

5.01        The
amount of any increases or decreases in the Contract Price which results from a
Change Order shall be set forth in the applicable Change Order subject to the
following:

 

1.     In the case of net additions
in the Work, the amount of any increase in the Contract Price shall be
determined in accordance with paragraph 11.01 of the Standard General
Conditions.

 

2.     In the case of net deletions
in the Work, the amount of any such decrease shall be determined in accordance
with paragraph 11.01 of the Standard General Conditions, and any Contract Price
shall be reduced by mutual agreement.

 

ARTICLE 6 –
PAYMENT PROCEDURES

 

6.01        Submittal and Processing of Payments

 

A.           Design/Builder
shall submit, and Owner will process, Applications for Payment in accordance
with Article 13 of the Standard General Conditions and the Schedule of Values
of the Standard General Conditions and shown in Exhibit B dated December 28, 2005
to this Agreement.  Applications for
Payment will indicate the amount of the Contract Price then payable.

 

6.02        Progress Payments

 

A.           Owner
shall make progress payments on account of the Contract Price on the basis of
Design/Builder’s Applications for Payment that are to be submitted in
accordance with the Schedule of Values – Exhibit B dated December 28, 2005 to
this Agreement.

 

6.03        Final
Payment

 

Upon final
completion and acceptance of the Work in accordance with paragraph 13.08 of the

Standard General
Conditions, Owner shall pay the remainder of the Contract Price.

 

5

 

6.04        Lien Waivers

 

In lieu of providing the
required Performance and Payment bonds provided under this Agreement and as
defined in Article 2.01 of the Standard General Conditions of the Contract
Between Owner and Design/Builder, the Design Builder shall be responsible for
the following:

 

A.           Design/Builder shall secure and provide lien
releases from each of the respective vendors utilized in the completion of the
Work and provide both the individual lien releases as well as a Final Affidavit
of Lien Release to the Owner prior to making application for Final Payment in
accordance with Articles 13.08.1, 2 and 3 of the Standard General Conditions.

 

B.           Beginning with the second Application for Payment, each Application
shall include an affidavit of Design/Builder stating that all previous progress
payments received on account of the Work have been applied on account to
discharge Design/Builder’s legitimate obligations associated with prior
Applications for Payment.

 

ARTICLE 7 –
INTEREST

 

7.01        All
moneys not paid when due as provided in Article 13 of the Standard General
Conditions shall bear interest at the rate of 1-1/2% percent per month.

 

ARTICLE 8 -
REPRESENTATIONS

 

8.01        Design/Builder’s
Representations.

 

To induce Owner to enter into this Agreement, Design/Builder makes the
following representations:

 

A.           Design/Builder
has examined and carefully studied the Contract Documents listed in paragraphs
13.01.A - D of this Agreement.

 

B.           Design/Builder
has visited the Site and become familiar with and is satisfied as to the
general, local, and Site conditions that may affect cost, progress, and
performance of the Work.

 

C.           Design/Builder
is familiar with and is satisfied as to all federal, state, and local Laws and
Regulations that may affect cost, progress, and performance of the Work.

 

D.           Design/Builder
is aware of the general nature of work to be performed by Owner and others at
the Site that relates to the Work.

 

6

 

E.            Design/Builder
has correlated the information known to Design/Builder, information and
observations obtained from visits to the Site, reports and drawings identified
in the Contract Documents, and all additional examinations, investigations,
explorations, tests, studies and data with the Contract Documents.

 

F.            Design/Builder
has given Owner written notice of all conflicts, errors, ambiguities, or
discrepancies that Design/Builder has discovered in the Contract Documents and
the written resolution thereof by Owner is acceptable to Design/Builder.

 

G.           The
Contract Documents are generally sufficient to indicate and convey
understanding of all terms and conditions for performance and furnishing of the
Work.

 

8.02        Owner’s
Representations.

 

Owner
makes the following representations:

 

A.           Owner will secure a Site zoned for industrial use with minimum
dimensions of 300 feet by 400 feet with road access, water, sewage, electric,
and natural gas utilities.

 

B.           Owner will secure or prepare a Site with soil capable of supporting a
minimum of 850 pounds per square foot or Owner will pay additional costs for
foundations.

 

C.           The Site will be free of hazardous waste or Owner will pay the costs of
any required environmental remediation.

 

D.           Owner
will provide Design/Builder with all criteria and full information as to Owner’s
requirements for the Project, including design objectives and constraints,
space, capacity and performance requirements, flexibility and expandability,
and any budgetary limitations.

 

E.            Owner
will furnish copies of all design and construction standards which Owner will
require to be included in the Contract Documents.

 

F.            Owner
will furnish to Design/Builder any other available information pertinent to the
Project including reports and data relative to previous designs, or
investigation at or adjacent to the Site.

 

G.           Following
Design/Builder’s assessment of initially available Project information and
data, upon Design/Builder’s request, furnish or otherwise make available such
additional Project-related information and data as is reasonably required to
enable Design/Builder to complete its Services. 
Such additional information or data would generally include the
following:

 

1.              Property
descriptions;

 

2.              Zoning,
deed, and other land use restrictions;

 

7

 

3.              Property,
boundary, easement, right-of-way, and other special engineering surveys or
data, including establishing relevant reference points for design and
construction which in Owner’s judgment are necessary to enable Design/Builder
to proceed with the Work;

 

4.              Data
prepared by or services of others, including without limitation explorations
and tests of subsurface conditions at or contiguous to the Site, drawings of
physical conditions in or relating to existing surface or subsurface structures
at or contiguous to the Site, or hydrographic surveys, with appropriate
professional interpretation thereof;

 

5.              Environmental
assessments, audits, investigations, and impact statements, and other relevant
environmental or cultural studies as to the Project, the Site, and adjacent
areas; and

 

6.              Data
or consultations as required for the Project but not otherwise identified in
the Agreement or the Exhibits thereto.

 

H.           Owner
will give prompt written notice to Design/Builder whenever Owner observes or
otherwise becomes aware of any development that affects the scope or time of
performance or furnishing of Design/Builder’s services, or any defect or nonconformance
in Design/Builder’s services.

 

I.             Owner
will arrange for safe access to and make all provisions for Design/Builder and
Design/Builder’s subcontractors to enter upon public and private property as
may reasonably be required for Design/Builder to perform services under the
Agreement.

 

J.            Owner
will examine all alternate solutions, studies, reports, sketches, drawings,
specifications, proposals, and other documents presented by Design/Builder
(including obtaining advice of an attorney, insurance counselor, and other
consultants as Owner deems appropriate with respect to such examination) and
render decisions pertaining thereto within a reasonable time after receipt of
documents.

 

K.           Owner will obtain
reviews, approvals, and permits as well as being responsible for payment for
such permits from all governmental authorities having jurisdiction over the
Project or from such others as may be necessary for completion of each Phase of
the services in this Agreement.

 

L.            Owner
will provide accounting, bond, financial advisory, legal and insurance
counseling services for the Project as needed by Owner, or as Design/Builder
reasonably requests.

 

8

 

ARTICLE 9 -
PROCESS WARRANTIES

 

9.01        Design
Standard and Benchmark

 

The
feedstock for the biodiesel synthesis process will be variable lipid feedstocks
with a Free Fatty Acid content of up to 20% with an Moisture Impurities
Unsaponifiables (“MIU”) concentration not to exceed 2.5% by mass.   The design standard and benchmark of
feedstock on which the below process warranties are based shall be a 20% FFA,
70% triacylglycerol lipid with the MIU content to not exceed 2.5% by mass.

 

9.02        Product
Yield Warranty

 

Biodiesel
yield shall be defined as pounds of feedstock as defined in Article 9.01
required to produce one U.S. gallon of ASTM D 6751-03 Grade S15 quality
biodiesel as measured during steady state operating conditions.  The Plant will yield no less than one gallon
of acceptable biodiesel per 8.51 pounds of feedstock (the “Product Yield
Warranty”).

 

During
Plant commissioning and before Substantial Completion, if the measured yield
fails to meet the Product Yield Warranty, the Design/Builder will invest in and
install additional capital equipment into the Plant and/or take other steps as
necessary to achieve the Product Yield Warranty at no charge to Owner.

 

9.03        Product
Specification Warranties

 

The
B100 Biodiesel shall conform to the standards in the following Table 1 (the “Biodiesel
Product Warranty”).   The glycerin co-product
will meet 95% purity (the “Glycerin Product Warranty”).

 

TABLE
1:  ASTM-D-6751-03 (Grade S15) Biodiesel
Standards

 

	
   

  	
   

  	
   

  	
   

  	
  Current

  	
   

  	
   

  
	
  Property

  	
   

  	
  Test Method

  	
   

  	
  Limits

  	
   

  	
  Units

  
	
  Flash Point (closed cup)

  	
   

  	
  ASTM D 93

  	
   

  	
  130.0 min

  	
   

  	
  oC

  
	
  Water and Sediment

  	
   

  	
  ASTM D 2709

  	
   

  	
  0.050 max

  	
   

  	
  % volume

  
	
  Kinematic Viscosity, 40 oC

  	
   

  	
  ASTM D 445

  	
   

  	
  1.9 - 6.0

  	
   

  	
  mm 2/s

  
	
  Sulfated Ash

  	
   

  	
  ASTM D 874

  	
   

  	
  0.020 max

  	
   

  	
  % mass

  
	
  Sulfur

  	
   

  	
  ASTM D 5453

  	
   

  	
  0.0015 max

  	
   

  	
  % mass

  
	
  Copper Strip Corrosion

  	
   

  	
  ASTM D 130

  	
   

  	
  No. 3 max

  	
   

  	
   

  
	
  Cetane Number

  	
   

  	
  ASTM D 613

  	
   

  	
  47 min

  	
   

  	
   

  
	
  Cloud Point

  	
   

  	
  ASTM D 2500

  	
   

  	
  Report

  	
   

  	
  oC

  
	
  Carbon Residue

  	
   

  	
  ASTM D 4530

  	
   

  	
  0.050 max

  	
   

  	
  % mass

  
	
  Acid Number

  	
   

  	
  ASTM D 664

  	
   

  	
  0.80 max

  	
   

  	
  mg KOH/g

  
	
  Free Glycerin

  	
   

  	
  ASTM D 6584

  	
   

  	
  0.02 max

  	
   

  	
  % mass

  
	
  Total Glycerin

  	
   

  	
  ASTM D 6584

  	
   

  	
  0.24 max

  	
   

  	
  % mass

  
	
  Phosphorous Content

  	
   

  	
  ASTM D 4951

  	
   

  	
  0.001 max

  	
   

  	
  % mass

  
	
  Distillation Temperature, AET, 90%

  	
   

  	
  ASTM D 1160

  	
   

  	
  360 max

  	
   

  	
  oC

  

 

9

 

During
Plant commissioning and before Substantial Completion, finished samples of
biodiesel will be sent to an independent laboratory for testing in accordance
with Table 1.  If three consecutive
samples, taken over a period of not less than two consecutive weeks, fails to
meet the Biodiesel Product Warranty, the Design/Builder will invest in and
install additional capital equipment into the Plant and/or take other steps as
necessary to achieve the Biodiesel Product Warranty at no charge to Owner.

 

During
Plant commissioning and before Substantial Completion, finished samples of
glycerin will be sent to an independent laboratory for testing for a minimum
purity of 95%.  If three consecutive
samples, taken over a period of not less than two consecutive weeks, fails to
meet the Glycerin Product Warranty, the Design/Builder will invest in and
install additional capital equipment into the Plant and/or take other steps as
necessary to achieve the Glycerin Product Warranty at no charge to Owner.

 

9.04        Process
Throughput Warranty

 

The
Plant must be a continuous process capable of producing 20 million gallons per
year of acceptable biodiesel.  The Plant
will be designed to operate as a continuous process based on a 24-hour day,
350-day per year operation.  The process
throughput requirement will be 2,400 gallons per hour as measured in the
transfer line to the final B100 inventory tankage (the “Process Throughput
Warranty”).

 

During
Plant commissioning and before Substantial Completion, if the flow rate is less
than 2,400 gallons of acceptable biodiesel per hour, Design/Builder will invest
in and install additional capital equipment and/or take other steps as
necessary to achieve the Process Throughput Warranty at no charge to Owner.

 

ARTICLE 10 –
WARRANTY PERIODS

 

All warranties provided for in Articles 9.02, 9.03 and 9.04 and
associated damages as defined in Articles 11.01, 11.02 and 11.03 shall be
required to be satisfied prior to the issuance of a certificate of Substantial
Completion and shall extend for a period of 90 days after the date of
Substantial Completion.

 

ARTICLE 11 –
DAMAGES FOR FAILURE TO MEET PROCESS WARRANTIES

 

11.01 Damages for Failure to Meet Product
Yield Warranty

 

If,
after the date of Substantial Completion, the product yield of the Plant fails
to meet the Product Yield Warranty, Design/Builder shall reimburse the Owner
for the cost of the amount of the additional feedstock (i.e., above 8.51 pounds
per gallon) which was required to produce one gallon of biodiesel until such
time as the Product Yield Warranty is satisfied.

 

10

 

11.02      Damages
for Failure to Meet Product Warranties

 

If,
after the date of Substantial Completion,, the biodiesel produced fails to meet
the Biodiesel Product Warranty, the Design/Builder shall pay Owner, until such
time as the Biodiesel Product Warranty is satisfied, damages in the amount of
the lost revenue, defined as the difference between the amount of money that
Owner could have reasonably sold biodiesel that met the Biodiesel Product
Warranty compared to the amount of money Owner was able to sell the biodiesel
that failed to meet the Biodiesel Product Warranty.

 

If,
after date of Substantial Completion, the glycerin produced fails to meet the
Glycerin Product Warranty, the Design/Builder shall pay Owner, until such time
as the Glycerin Product Warranty is satisfied, damages in the amount of the
lost revenue, defined as the difference between the amount that Owner could
have reasonably sold glycerin that met the Glycerin Product Warranty compared
to the amount Owner was able to sell the glycerin that failed to meet the
Glycerin Product Warranty.

 

11.03      Damages
for Failure to Meet Process Throughput Warranty

 

If,
after the date of Substantial Completion, the Plant throughput fails to meet
the Process Throughput Warranty, but where the Plant remains operating (i.e.,
throughput is greater than zero gallons per hour), the Design/Builder will pay
Owner, until such time as the Throughput Warranty is satisfied, 20% of the
average price that Owner can reasonably sell biodiesel at, multiplied by the
difference between the Process Throughput Warranty amount (2,400 gallons per
hour) and the actual process throughput, and the number of hours of operation
below the Process Throughput Warranty.

 

If,
after the date of Substantial Completion, the Plant fails to be operational
(i.e., throughput is zero gallons per hour), the Design/Builder will pay Owner,
until such time as the Throughput Warranty is satisfied, 20% of the average
price that Owner can reasonably sell biodiesel at, multiplied by 2,400 gallons
per hour, and by 24 hours per day.   
Damages for failure to meet the Biodiesel Product Warranty, Glycerin
Product Warranty, and Product Yield Warranty will not be assessed if, after the
date of Substantial Completion, the Plant fails to be operational (i.e.,
throughput is zero gallons per hour).  Damages for failure to meet the
Biodiesel Product Warranty (11.02), Glycerin Product Warranty (11.02), and
Product Yield Warranty (11.01) will be assessed if, after the date of
Substantial Completion, throughput is greater than zero gallons per hour.

 

11.04      Cap
on Damages

 

Total
cumulative damages for failing to meet the warranties discussed above shall not
exceed $2,500,000.

 

11

 

ARTICLE 12 –
TECHNICAL SUPPORT

 

12.01      Technical
Support

 

Design/Builder will provide technical support services at the option of
the Owner.  If Owner desires to have
technical support via 24 hour telephone access and periodic updates to control
system architecture, programmable ladder logic, process condition set points,
operating values and service updates for the Biodiesel Plant, Owner shall make
an annual payment of $25,000 per year payable within 30 days at the beginning
of each year unless the parties agree on some other mutually acceptable
technical support arrangement.

 

12.02      On-Site
Support

 

Design/Builder can provide on-site technical support, plant visits,
and/or process audits at Owner’s requests. 
These services will be billed by Design/Builder to Owner for a rate of
$1000 per day including travel time plus expenses for travel, lodging and per
diem unless the parties agree on some other mutually acceptable technical
support arrangement.

 

ARTICLE 13 –
CONTRACT DOCUMENTS

 

13.01      The Contract Documents
consist of the following:

 

A.           This
Agreement;

B.           Standard
General Conditions of the Contract Between Owner and Design/Builder;

C.           Exhibits
A through B to this Agreement;

D.           The
following, which may be delivered, prepared, or issued after the Effective Date
of this Agreement and are not attached hereto:

 

1.              Notice to
Proceed;

2.              All Work Change
Directives and Change Orders amending, modifying or supplementing the Contract
Documents pursuant to paragraph 3.04.A of the Standard General Conditions;

3.              Specifications
as defined in Paragraph 1.01.A.40 of the Standard General Conditions; and

4.              Drawings as
defined in Paragraph 1.01.A.18 of the Standard General Conditions.

 

13.02      The
documents listed in paragraph 13.01 above are attached to this Agreement
(except as expressly noted otherwise above). 
There are no Contract Documents other than those listed above in Article
13.01.  The Contract Documents may only
be amended, modified, or supplemented as provided in paragraph 3.03.A of the
Standard General Conditions.

 

12

 

ARTICLE 14 –
MISCELLANEOUS

 

14.01      The
Standard General Conditions of the Contract Between Owner and Design/Builder
are referred to herein as the General Conditions.  Terms not otherwise defined in this Agreement
will have the meanings indicated in the Standard General Conditions.

 

14.02      No
assignment by a party hereto of any rights under or interests in the Contract
Documents will be binding on another party hereto without the written consent
of the party sought to be bound; and, specifically but without limitation,
moneys that may become due and moneys that are due may not be assigned without
such consent (except to the extent that the effect of this restriction may be
limited by law), and unless specifically stated to the contrary in any written
consent to an assignment no assignment will release or discharge the assignor
from any duty or responsibility under the Contract Documents.  The Owner may assign this Agreement and the
Contract Documents to its affiliate without Design/Builder’s consent.

 

14.03      Owner
and Design/Builder each binds itself, its partners, successors, assigns and
legal representatives to the other party hereto, its partners, successors,
assigns, and legal representatives in respect to all covenants, agreements, and
obligations contained in the Contract Documents.

 

[Remainder of page intentionally left blank]

 

13

 

14.04      Any
provision or part of the Contract Documents held to be void or unenforceable
under any Law or Regulation shall be deemed stricken, and all remaining
provisions shall continue to be valid and binding upon Owner and
Design/Builder, who agree that the Contract Documents shall be reformed to
replace such stricken provision or part thereof with a valid and enforceable
provision that comes as close as possible to expressing the intention of the
stricken provision.

 

 

IN WITNESS WHEREOF, Owner and Design/Builder have signed this Agreement
in duplicate.  One counterpart each has
been delivered to Owner and Design/Builder. 
All portions of the Contract Documents have been signed, initialed, or
identified by Owner and Design/Builder.

 

This Agreement will be effective on December 28, 2005 (which is the
Effective Date of the Agreement).

 

	
  OWNER:

  	
  DESIGN/BUILDER:

  
	
   

  	
   

  
	
  ANAMAX ENERGY SERVICES, INC.

  	
  BIOSOURCE AMERICA, INC.

  
	
   

  	
   

  
	
  BY:

  	
  /s/ J.M.

  	
   

  	
  BY:

  	
  J.D. McGraw

  
	
   

  	
   

  
	
  ITS:

  	
  Director of Corporate Development

  	
   

  	
  ITS:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address for giving notices:

  	
  Address for giving notices:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

14Exhibit 10.14.1

 

ASSET PURCHASE AGREEMENT

 

 

Between

 

FORMING TECHNOLOGIES, INC.

 

METALDYNE COMPANY LLC

 

METALDYNE PRECISION FORMING — FORT WAYNE, INC.

 

and

 

METALDYNE CORPORATION

 

 

Dated as of January 7, 2006

 

 

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I

  
	
   

  
	
  SALE AND PURCHASE OF THE ASSETS

  
	
   

  
	
  1.1. 

  	
  Assets

  	
  1

  
	
  1.2. 

  	
  Excluded Assets

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
   

  
	
  THE CLOSING

  
	
   

  
	
  2.1. 

  	
  Place and Date 

  	
  4

  
	
  2.2. 

  	
  Purchase Price 

  	
  4

  
	
  2.3. 

  	
  Allocation of Purchase
  Price 

  	
  4

  
	
  2.4. 

  	
  Trade Accounts Payable
  Adjustment 

  	
  4

  
	
  2.5. 

  	
  Purchase Price Adjustment

  	
  5

  
	
  2.6. 

  	
  Assumption of
  Liabilities  

  	
  6

  
	
  2.7. 

  	
  Retained Liabilities 

  	
  7

  
	
  2.8. 

  	
  Consents of Third Parties 

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
   

  
	
  REPRESENTATIONS AND WARRANTIES

  
	
   

  
	
  3.1. 

  	
  Representations and
  Warranties of the Sellers

  	
  8

  
	
   

  	
  3.1.1. 

  	
  Organization; Ownership

  	
  8

  
	
   

  	
  3.1.2. 

  	
  Authorization, etc.

  	
  8

  
	
   

  	
  3.1.3. 

  	
  No Conflicts, etc.

  	
  8

  
	
   

  	
  3.1.4. 

  	
  Financial Statements

  	
  9

  
	
   

  	
  3.1.5. 

  	
  Books and Records

  	
  9

  
	
   

  	
  3.1.6. 

  	
  Taxes

  	
  9

  
	
   

  	
  3.1.7. 

  	
  Events Subsequent to the
  Unaudited Balance Sheet Date

  	
  10

  
	
   

  	
  3.1.8. 

  	
  Litigation

  	
  11

  
	
   

  	
  3.1.9. 

  	
  Compliance with Laws;
  Governmental Approvals

  	
  11

  
	
   

  	
  3.1.10. 

  	
  Assets

  	
  12

  
	
   

  	
  3.1.11. 

  	
  Contracts

  	
  12

  
	
   

  	
  3.1.12. 

  	
  Inventories

  	
  13

  
	
   

  	
  3.1.13. 

  	
  Customers

  	
  13

  
	
   

  	
  3.1.14. 

  	
  Suppliers; Raw Materials

  	
  13

  
	
   

  	
  3.1.15. 

  	
  Products; Product and
  Service Warranties; Product Liability; Selling Material and Policies

  	
  13

  
	
   

  	
  3.1.16. 

  	
  Intellectual Property

  	
  13

  
	
   

  	
  3.1.17. 

  	
  Insurance

  	
  14

  
	
   

  	
  3.1.18. 

  	
  Real Property

  	
  15

  
	
   

  	
  3.1.19. 

  	
  Environmental Matters

  	
  16

  
	
   

  	
  3.1.20. 

  	
  Employees, Labor Matters,
  etc.

  	
  16

  
	
   

  	
  3.1.21. 

  	
  Employee Benefit Plans and
  Related Matters

  	
  17

  

 

i

 

	
   

  	
  Page

  
	
   

  	
   

  
	
   

  	
  3.1.22. 

  	
  Brokers, Finders, etc. 

  	
  17

  
	
   

  	
  3.1.23. 

  	
  Sufficiency of Assets

  	
  18

  
	
  3.2. 

  	
  Representations and
  Warranties of the Buyer

  	
  18

  
	
   

  	
  3.2.1. 

  	
  Corporate Status;
  Authorization, etc.

  	
  18

  
	
   

  	
  3.2.2. 

  	
  No Conflicts, etc.

  	
  18

  
	
   

  	
  3.2.3. 

  	
  Litigation

  	
  19

  
	
   

  	
  3.2.4. 

  	
  Brokers, Finders, etc.

  	
  19

  
	
   

  	
  3.2.5. 

  	
  Financing

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  	
   

  
	
  COVENANTS

  
	
   

  	
   

  
	
  4.1. 

  	
  Covenants of the Sellers

  	
  19

  
	
   

  	
  4.1.1. 

  	
  Conduct of Business

  	
  19

  
	
   

  	
  4.1.2. 

  	
  Access and Information

  	
  20

  
	
   

  	
  4.1.3. 

  	
  Public Announcements

  	
  21

  
	
   

  	
  4.1.4. 

  	
  Further Actions

  	
  21

  
	
   

  	
  4.1.5. 

  	
  Further Assurances

  	
  21

  
	
   

  	
  4.1.6. 

  	
  Transfer Taxes

  	
  22

  
	
   

  	
  4.1.7. 

  	
  Bulk Sales Laws

  	
  22

  
	
   

  	
  4.1.8. 

  	
  Exclusivity

  	
  22

  
	
   

  	
  4.1.9. 

  	
  Other Actions

  	
  22

  
	
   

  	
  4.1.10.

  	
  Minerva, Ohio Site

  	
  23

  
	
  4.2. 

  	
  Covenants of the Buyer 

  	
  23

  
	
   

  	
  4.2.1. 

  	
  Public Announcements

  	
  23

  
	
   

  	
  4.2.2. 

  	
  Further Actions

  	
  23

  
	
   

  	
  4.2.3. 

  	
  Further Assurances

  	
  23

  
	
   

  	
  4.2.4. 

  	
  Use of Business Names and
  Marks by the Buyer

  	
  24

  
	
   

  	
  4.2.5. 

  	
  Confidentiality

  	
  24

  
	
   

  	
  4.2.6. 

  	
  Bulk Sales Laws

  	
  24

  
	
   

  	
  4.2.7. 

  	
  Minerva, Ohio Site

  	
  24

  
	
   

  	
  4.2.8. 

  	
  Other Agreements

  	
  24

  
	
  4.3. 

  	
  Baseline Environmental
  Assessment

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
   

  	
   

  
	
  CONDITIONS PRECEDENT

  
	
   

  	
   

  
	
  5.1. 

  	
  Conditions to Obligations
  of Each Party

  	
  25

  
	
   

  	
  5.1.1. 

  	
  HSR Act Notification

  	
  25

  
	
   

  	
  5.1.2. 

  	
  No Injunction, etc.

  	
  25

  
	
  5.2. 

  	
  Conditions to Obligations
  of the Buyer

  	
  25

  
	
   

  	
  5.2.1. 

  	
  Representations;
  Performance

  	
  26

  
	
   

  	
  5.2.2. 

  	
  Consents

  	
  26

  
	
   

  	
  5.2.3. 

  	
  Collateral Agreements

  	
  26

  
	
   

  	
  5.2.4. 

  	
  Transfer Documents

  	
  26

  
	
   

  	
  5.2.5. 

  	
  Indiana Responsible
  Property Transfer Law

  	
  27

  
	
   

  	
  5.2.6. 

  	
  FIRPTA Certificate

  	
  27

  
	
  5.3. 

  	
  Conditions to Obligations
  of the Sellers

  	
  27

  
					

 

ii

 

	
   

  	
  Page

  
	
   

  	
   

  
	
   

  	
  5.3.1. 

  	
  Representations,
  Performance, etc.

  	
  28

  
	
   

  	
  5.3.2. 

  	
  Consents

  	
  28

  
	
   

  	
  5.3.3. 

  	
  Assumption Agreement

  	
  28

  
	
   

  	
  5.3.4. 

  	
  Collateral Agreements

  	
  28

  
	
   

  	
  5.3.5. 

  	
  Bank Consent

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  	
   

  
	
  EMPLOYEES AND EMPLOYEE BENEFIT PLANS

  
	
   

  	
   

  
	
  6.1. 

  	
  Employment of the Sellers’
  Employees

  	
  28

  
	
   

  	
  6.1.1. 

  	
  Non-Solicitation

  	
  28

  
	
   

  	
  6.1.2. 

  	
  Employees Represented by a
  Labor Organization

  	
  28

  
	
   

  	
  6.1.3. 

  	
  Transferred Employees

  	
  29

  
	
   

  	
  6.1.4. 

  	
  Responsibility Under the
  Worker Adjustment and Retraining Notification Act (WARN)

  	
  30

  
	
  6.2. 

  	
  Worker’s Compensation
  Claims

  	
  30

  
	
  6.3. 

  	
  Welfare Benefit Plans

  	
  30

  
	
   

  	
  6.3.1. 

  	
  Transferred Employees

  	
  30

  
	
   

  	
  6.3.2. 

  	
  Cooperation

  	
  31

  
	
  6.4. 

  	
  Information; Cooperation

  	
  31

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  	
   

  
	
  TERMINATION

  
	
   

  	
   

  
	
  7.1. 

  	
  Termination

  	
  31

  
	
  7.2. 

  	
  Effect of Termination

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  
	
   

  	
   

  
	
  GUARANTY

  
	
   

  	
   

  
	
  8.1. 

  	
  Guaranty of Sellers’
  Obligations

  	
  32

  
	
  8.2. 

  	
  Subrogation

  	
  33

  
	
  8.3. 

  	
  Representations and
  Warranties

  	
  33

  
	
  8.4. 

  	
  Liquidation, Winding Up,
  etc.

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  
	
   

  	
   

  
	
  DEFINITIONS; MISCELLANEOUS

  
	
   

  	
   

  
	
  9.1. 

  	
  Definition of Certain
  Terms

  	
  34

  
	
  9.2. 

  	
  Indemnification

  	
  40

  
	
  9.3. 

  	
  Survival of
  Representations and Warranties, etc.

  	
  43

  
	
  9.4. 

  	
  Exclusive Remedy

  	
  44

  
	
  9.5. 

  	
  No Special Damages

  	
  44

  
	
  9.6. 

  	
  Expenses

  	
  44

  
	
  9.7. 

  	
  Severability

  	
  44

  
	
  9.8. 

  	
  Notices

  	
  44

  
	
  9.9. 

  	
  Miscellaneous

  	
  46

  
					

 

iii

 

	
   

  	
  Page

  
	
   

  	
   

  
	
   

  	
  9.9.1. 

  	
  Headings

  	
  46

  
	
   

  	
  9.9.2. 

  	
  Entire Agreement

  	
  46

  
	
   

  	
  9.9.3. 

  	
  Counterparts

  	
  46

  
	
   

  	
  9.9.4. 

  	
  Governing Law, etc.

  	
  46

  
	
   

  	
  9.9.5. 

  	
  Binding Effect

  	
  47

  
	
   

  	
  9.9.6. 

  	
  Assignment

  	
  47

  
	
   

  	
  9.9.7. 

  	
  No Third Party
  Beneficiaries

  	
  47

  
	
   

  	
  9.9.8. 

  	
  Amendment; Waivers, etc.

  	
  47

  
	
   

  	
  9.9.9. 

  	
  Sellers’ Obligations

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  
	
   

  	
   

  
	
  EXHIBIT A 

  	
  Form of Supply
  Agreement

  	
   

  
	
  EXHIBIT B 

  	
  Form of Escrow
  Agreement

  	
   

  
	
  EXHIBIT C 

  	
  Form of Assignment and
  Assumption

  	
   

  
						

 

iv

 

ASSET PURCHASE AGREEMENT

 

ASSET
PURCHASE AGREEMENT, dated as of January 7, 2006, between Forming  Technologies, Inc., a Delaware
corporation (the “Buyer”), Metaldyne Company LLC, a Delaware limited liability
company (“Metaldyne LLC”), Metaldyne Precision Forming — Fort Wayne, Inc.,
an Indiana corporation (“Metaldyne
Precision” and, together with Metaldyne LLC, the “Sellers”), and
Metaldyne Corporation, a
Delaware corporation (the “Guarantor”).

 

W I T N E S S E T H :

 

WHEREAS,
the Sellers are in the business of supplying forged metal components to the
automotive light vehicle market
(the “Business”);

 

WHEREAS,
the Buyer wishes to purchase or acquire from the Sellers, and the Sellers
wish to sell, assign and
transfer to the Buyer, all of the Assets, and the Buyer has agreed to assume
the Assumed Liabilities, all for the purchase price and upon the terms and
subject to the conditions hereinafter set forth;

 

WHEREAS,
in connection with the transactions contemplated hereby, the Sellers and the
Buyer wish to enter into a
Transition Services Agreement and Supply Agreement, as set forth in Section 5.2.3,
each on the terms and subject to the conditions set forth therein; and

 

WHEREAS,
Guarantor, the holder of all of the outstanding capital stock of each of the
Sellers, desires that Buyer
purchase from Sellers all of the Assets and assume the Assumed Liabilities, and
desires to guarantee to Buyer payment and performance of the obligations of
Sellers set forth in this Agreement
and in the Collateral Agreements. 

 

NOW,
THEREFORE, in consideration of the mutual covenants, representations and
warranties  made herein,
and of the mutual benefits to be derived hereby, the parties hereto agree as
follows:

 

ARTICLE I

 

SALE AND PURCHASE OF THE ASSETS

 

1.1.                              Assets. Subject to and upon the terms and conditions set forth in this
Agreement, at the Closing, the
Sellers will, or will cause their Affiliates (including, without limitation,
with respect to clauses 1.1(i) and
1.1(o) below, the Guarantor) to, sell, transfer, convey, assign and deliver to
the Buyer, and the Buyer will
purchase or acquire, all right, title and interest of the Sellers and their
Affiliates in and to all of the
following properties, assets and rights of every nature, kind and description,
tangible and intangible (including
goodwill), wherever located, whether real, personal or mixed, whether accrued,
contingent or otherwise (other
than the Excluded Assets), primarily used in the Business, including the
following assets (collectively, the “Assets”), in each case as the same may exist
on the Closing Date: 

 

(a)                        all machinery, equipment, furniture,
furnishings, automobiles, trucks, vehicles, tools, dies, molds and parts and similar property (including, but not
limited to, any of the foregoing purchased
subject to any conditional sales or title retention agreement) listed or
generally described in Section 1.1(a) of
the Company Disclosure Letter (provided, however, that each such item
that has an acquired value or original asset cost, as shown in Section 1.1(a) of
the Company Disclosure Letter, of less than $10,000 shall be conveyed hereunder
at the Closing Date only if such
item is (i) located on or at the Real Property, (ii) in transit to or
from the Real Property or 

 

 

 

(iii) held
at or by a third party for purposes of repairs, cleaning, maintenance, storage
or the like  and only such
items so located, in transit or held shall be “Assets”);

 

(b)                       all inventories of raw materials, work in
process, finished products and office and other supplies (collectively, the “Inventories”), including
Inventories held at any location controlled by either Seller, held on behalf of either Seller (by outside
processors or other Persons) or deposited
by either Seller with a bailee or in a warehouse and Inventories previously
purchased and in transit to
either Seller, in each case at or to such locations listed or generally
described in Section 1.1(b) of
the Company Disclosure Letter;

 

(c)                        subject to Section 2.8, all rights of
the Sellers (including but not limited to any and all Intellectual Property rights) in and to the products sold in
connection with the Business;

 

(d)                       subject to Section 2.8, all of the rights of the Sellers and
Guarantor under all contracts, arrangements,
licenses, leases and other agreements, including, without limitation, any right
to receive payment for products sold or services rendered, and to receive goods
and services, pursuant to such
agreements and to assert claims and take other rightful actions in respect of breaches,
defaults and other violations of such contracts, arrangements, licenses, leases
and other agreements listed or
generally described in Section 1.1(d) of the Company Disclosure
Letter;

 

(e)                        all credits, prepaid expenses, deferred charges,
advance payments, security deposits and prepaid items reflected in the Closing Statement of Net Assets
Sold;

 

(f)                          subject to Section 2.8, all Intellectual
Property of the Sellers and all rights thereunder or in respect thereof, including all goodwill
associated therewith, all Owned Intellectual Property, all rights to sue for and remedies against past, present and
future infringements thereof, and
rights of priority and protection of interests therein under the laws of any
jurisdiction worldwide and all
tangible embodiments thereof (together with all Intellectual Property rights
and all rights thereunder or in
respect thereof included in the other clauses of this Section 1.1, the “Intellectual Property Assets”) listed or generally described in Section 1.1(f) of
the Company Disclosure Letter;

 

(g)                       all books, records, manuals and other
materials (in any form or medium), including, without limitation, all records and materials
maintained at the headquarters of the Sellers, advertising matter, catalogues, price lists,
correspondence, mailing lists, lists of customers, distribution lists, photographs, production data, sales
and promotional materials and records, purchasing materials and records, personnel records,
manufacturing and quality control records and procedures, blueprints, research and development files,
records, data and laboratory books, media materials and plates, accounting records and sales
order files relating to the Business, subject to Sections 1.2(b) and 4.2.4;

 

(h)                       to the extent their transfer is permitted by
law, all Governmental Approvals (including all applications therefor and pending renewals), including those listed
or described in Section 1.1(h) of
the Company Disclosure Letter;

 

(i)                           the Real Property listed or described in Section 1.1(i) of
the Company Disclosure Letter;

 

(j)                           all insurance benefits, including rights and
proceeds, arising from or relating to the Assets or the Assumed Liabilities subsequent to the date hereof and
prior to the Closing Date, unless
expended in accordance with this Agreement;

 

2

 

 

(k)                        all rights to causes of action, lawsuits,
judgments, claims and demands of any nature available to or being pursued by
the Sellers relating to the Business or the ownership, use, function or value
of any Asset, whether arising by way of counterclaim or otherwise, listed or
described in Section 1.1(k) of the Company Disclosure Letter;

 

(l)                           subject to Section 2.8, all air
emissions credits and allowances Sellers have, are entitled to or applied for,
including any air emissions where Sellers have credit for or have banked,
applied to bank or agreed to sell or trade; 

 

(m)                     all outstanding written offers or
solicitations made by or to the Sellers to enter into any Contracts, provided,
however, that for purposes of the representations and warranties in Article III,
the term “Assets” shall not include such offers or solicitations; 

 

(n)                       all rights of Sellers relating to the accrued
volume discounts from MacSteel (the “MacSteel Accrued Volume Discount”);

 

(o)                       all of the Sellers’ and Guarantor’s rights
under customer Contracts of the Business (including rights under expired and/or
terminated Contracts) described in Section 2.6(a)(vi); and

 

(p)                       subject to Section 2.8, all guarantees,
warranties, indemnities and similar rights in favor of the Sellers with respect
to any Asset listed in Section 1.1(a)-(o) of the Company Disclosure
Letter.

 

Subject
to the terms and conditions hereof, at the Closing, the Sellers’ or their
Affiliates’ interest in the Assets shall be transferred or otherwise conveyed
to the Buyer free and clear of all liabilities, obligations, liens and
encumbrances excepting only Assumed Liabilities, Liens listed in Section 3.1.9
of the Company Disclosure Letter and Permitted Liens.

 

1.2.                    Excluded Assets. The Sellers will retain and not transfer,
and the Buyer will not purchase or acquire, the following assets (collectively,
the “Excluded Assets”):

 

(a)                        the assets listed or described in Section 1.2
of the Company Disclosure Letter;

 

(b)                       the name and mark “Metaldyne” and any
variations thereof in whole or in part;

 

(c)                        all cash and cash equivalents;

 

(d)                       accounts receivable for all products shipped
prior to the Closing Date; and

 

(e)                        any intercompany receivables or intercompany
indebtedness.

 

Within 30 days after the
date hereof, the Sellers and the Buyer agree to develop a transition plan for the
removal of the pinion gear assets and side gear assets set forth in Section 1.2
of the Company Disclosure Letter.

 

3

 

ARTICLE II

 

THE CLOSING

 

2.1.                              Place and Date. The closing of the sale and purchase of the
Assets (the “Closing”) shall take place at 10:00 A.M. local time on the
second Business Day following the satisfaction or waiver of all conditions to
Closing set forth in Article V hereof at the offices of Cahill Gordon &
Reindel LLP, 80 Pine Street, New York, New York 10005,
or such other time and place upon which the parties may agree. The day on
which the Closing actually occurs is herein sometimes referred to as the “Closing
Date.”

 

2.2.                              Purchase Price.

 

(a)                                  On the terms and subject to the conditions
set forth in this Agreement, the Buyer agrees to pay or cause to be paid to the
Sellers an aggregate of $79,200,000, as adjusted pursuant to Section 2.5
(the “Purchase Price”), and to assume the Assumed Liabilities as
provided in Section 2.6. An amount equal to the Purchase Price less the
Deposit and the interest earned thereon shall be payable by Buyer at the
Closing, by wire transfer in immediately available funds to such bank account
or accounts as per written instructions of the Sellers given to the Buyer at
least two (2) Business Days prior to the Closing.

 

(b)                                 No later than the close of business on
Wednesday, January 11, 2006, the Buyer shall pay to an escrow agent
selected by the Sellers (“Escrow Agent”) $1,000,000 (the “Deposit”)
in immediately available funds, pursuant to an Escrow Agreement in the form of
Exhibit B. The Deposit and the interest earned on it shall be paid to the
Sellers and applied to the Purchase Price at Closing. If Closing does not occur
because a condition set forth in Article V of this Agreement is not
satisfied or waived, the Escrow Agent shall return the Deposit to the Buyer. If
Closing does not occur due to the default of the Buyer and all conditions set
forth in Article V have been satisfied or waived, the Escrow Agent shall
pay the Deposit to the Sellers. The Deposit shall be held by the Escrow Agent
in an interest bearing money market account. The interest on the Deposit will
be paid to the party to this Agreement that receives the Deposit. In the event
of a dispute between the Sellers and the Buyer concerning the Deposit, the
Escrow Agent shall hold the Deposit until ordered by a court having
jurisdiction to pay the Deposit to the Sellers, the Buyer or into the court.

 

2.3.                              Allocation of Purchase Price. The Purchase Price, the Assumed Liabilities
and all other capitalized costs shall be allocated among the Assets as set
forth in Section 2.3 of the Company Disclosure Letter. The Sellers and the
Buyer shall, and shall cause each of their Affiliates to, (i) prepare and
file all statements or other information required to be furnished to any Taxing
Authority pursuant to section 1060 of the Code and the Treasury Regulations
or other applicable tax law in a manner consistent with such allocations and (ii) prepare
their respective financial statements and all Tax Returns and reports required
to be filed by them in a manner consistent with such allocations, and shall not
take any position contrary to such allocations with any government agency or
Taxing Authority without the express written consent of the other.

 

2.4.                              Trade Accounts Payable Adjustment.

 

(a)                                  Not later than five Business Days prior to
the Closing Date, the Sellers shall deliver to the Buyer a certificate setting
forth the Trade Accounts Payable as of the close of business on the immediately
preceding Business Day, certified by an officer of the Sellers (the “Trade
Accounts Payable Statement”).

 

4

 

(b)                                 If the Trade Accounts Payable set forth in
the Trade Accounts Payable Statement are greater than $27,200,000, the Sellers
will satisfy or pay those Trade Accounts Payable, beginning with those Trade
Accounts Payable that have the greatest period of delinquency, so that the
aggregate amount of such Trade Accounts Payable will not exceed $27,200,000.
Any payment to be made by the Sellers prior to the Closing Date of a Trade
Account Payable will be excluded from the calculation of Net Working Capital as
shown on the Closing Net Working Capital Statement prepared in accordance with Section 2.5(a).

 

2.5.                              Purchase Price Adjustment.

 

(a)                                  As soon as practicable, but in any event not
more than 60 days following the Closing Date, unless otherwise extended by the
mutual agreement of the Sellers and the Buyer, the Sellers shall deliver to the
Buyer a statement of Net Working Capital as of the Closing Date (the “Closing
Net Working Capital Statement”), together with an Agreed upon Procedures
Letter of the Sellers’ Accountants thereon to the effect that such statement
fairly presents the Net Working Capital of the Business as of said date, and
that such statement has been prepared in accordance with the Net Working
Capital Principles (as defined below). “Net Working Capital” shall mean
the sum of (a) net total Inventory, total prepaids, and unbilled tooling
of the Business, excluding cash and cash equivalents and intercompany
receivables, minus (b) the sum of net Trade Accounts Payable and other
accrued expenses of the Business, all of which are presented on line items
shown in Section 2.5(a) of the Company Disclosure Letter. The Net
Working Capital set forth in the Closing Net Working Capital Statement shall be
prepared applying the accounting principles and policies to be reasonably
agreed by the Buyer and Sellers within 16 days after the date of this Agreement
(collectively, the “Net Working Capital Principles”).

 

(b)                                 The Purchase Price shall be adjusted as
follows: subject to Section 2.5(d), (i) if Net Working Capital on the
Closing Date as reflected on the Closing Net Working Capital Statement is less
than $3,500,000 (the “Target Net Working Capital”), the difference
between Net Working Capital and the Target Net Working Capital shall be paid by
the Sellers to the Buyer or (ii) if Net Working Capital on the Closing
Date as reflected on the Net Working Capital Statement is more than the Target
Net Working Capital, the difference between Net Working Capital and the Target
Net Working Capital shall be paid by the Buyer to the Sellers.

 

(c)                                  Subject to Section 2.5(d), payments
required pursuant to Section 2.5(b) shall be made within 60 days
after the delivery by the Sellers of the Closing Net Working Capital Statement
by wire transfer of immediately available funds to one or more accounts
specified at least two Business Days prior to such date by the party who shall
receive the funds. Any such payment shall be made together with interest
thereon at the rate of 6% per annum, payable for the period commencing on the
Closing Date and ending on the day immediately prior to the date such payment
is made.

 

(d)                                 The Buyer may dispute the accounting
treatment of any amounts reflected on the Closing Net Working Capital
Statement, including as not being in accordance with the Net Working Capital
Principles; provided, however, that the Buyer shall notify the
Sellers in writing (the “Dispute Notice”) of each disputed item, specifying the amount thereof in dispute and
setting forth, in reasonable detail, the basis for such dispute, within 60 days
of the Sellers’ delivery of the Closing Net Working Capital Statement. In the
event of such a dispute, the Sellers and the Buyer shall attempt to reconcile
their differences and any resolution by them as to any disputed amounts shall
be final, binding and conclusive. If the Sellers and the Buyer are unable to
reach a resolution with such effect within 30 days of the receipt by the
Sellers of the Dispute Notice, the Sellers and the Buyer shall submit the
accounting treatment in accordance with the Net Working Capital Principles of
the items remaining in dispute for resolution to the Independent Accounting
Firm, which shall, within 30 days after submission, determine and report to the
parties upon such remaining disputed items, and such report shall be final,
binding and conclusive on the

 

5

 

parties hereto. All costs
and expenses of the Independent Accounting Firm relating to the disputed items
shall be allocated between the Sellers and the Buyer in the same proportion
that the aggregate dollar amount of the items unsuccessfully disputed by each
party bears to the total dollar amount of the items disputed hereunder. The
term “Independent Accounting Firm” shall mean a nationally recognized accounting
firm which is not otherwise retained by the Sellers or Buyer and their
respective Affiliates as the Sellers and the Buyer shall agree.

 

(e)                                  Notwithstanding any dispute pursuant to Section 2.5(d) of
any amounts payable pursuant to this Section 2.5, the applicable party
shall at the time specified in this Section 2.5 pay the net amount payable
by it pursuant to this Section 2.5 that is not subject to any dispute. Any
amount payable following resolution of a matter specified in a Dispute Notice
shall be paid within five Business Days following the resolution thereof.

 

(f)                                    During the periods in which (i) the
Closing Net Working Capital Statement is being prepared or (ii) any
dispute is raised as contemplated by Section 2.5(d), the Sellers and the
Buyer shall provide each other, including their authorized agents and
Representatives, with reasonable access, during normal business hours and
without disruption to their day-to-day business, to their respective books, records
and facilities pertaining to the Business, including any consolidated or
combined returns, schedules, consolidated or combined work papers (including
accountants’ work papers) and other related documents; provided, however,
that with respect to consolidated, combined, unitary or similar Tax Returns of the
Sellers (or any Subsidiary of the Sellers), the Buyer shall only have access to
portions of such Tax Returns relevant to the Business and provided  further,
however, that any access to accountant’s work papers shall be subject to
the policies and requirements of such accounting firm.

 

2.6.                              Assumption of Liabilities.

 

(a)                                  Subject to the terms and conditions set forth
herein, at the Closing the Buyer shall assume and agree to pay, honor and
discharge when due only the following liabilities relating to the Assets and
existing at or arising on or after the Closing Date (collectively, the “Assumed
Liabilities”):

 

(i)                                     any and all liabilities, obligations and
commitments relating to the Business or the Assets that are reflected on the
Closing Net Working Capital Statement as finally determined pursuant to Section 2.5;

 

(ii)                                  any and all liabilities, obligations and
commitments with respect to the IRB Loan Documents (other than any liabilities,
obligations or commitments arising out of or relating to a breach with respect
thereto that occurred prior to the Closing Date);

 

(iii)                               any and all liabilities, obligations and
commitments under the agreements, contracts and commitments set forth in Section 1.1(d) of
the Company Disclosure Letter (or not required to be set forth therein because
of the amount involved) or in Section 1.1(f) (other than, except as
set forth in Section 2.6(a)(v) below, any liabilities, obligations or
commitments arising out of or relating to a breach with respect thereto that
occurred prior to the Closing Date);

 

(iv)                              liabilities in respect of Transferred
Employees to the extent assumed by the Buyer pursuant to Article VI;

 

(v)                                 any warranty or product liability claim first
made after the Closing Date and arising out of products of the Business
manufactured or sold prior to the Closing Date, including, but not limited to,
the design, manufacture, use, service, repair or sale thereof;

 

6

 

(vi)                              all of the Sellers’ and Guarantor’s
obligations to supply service parts under customer Contracts of the Business
(including obligations under expired and/or terminated Contracts); and

 

(vii)                           the Transfer Taxes borne by the Buyer
pursuant to Section 4.1.6.

 

(b)                                 At the Closing, the Buyer shall assume the
Assumed Liabilities by executing and delivering to the Sellers an assumption
agreement in a form reasonably satisfactory to the Sellers (the “Assumption
Agreement”).

 

2.7.                              Retained Liabilities. The Retained Liabilities shall remain the
sole responsibility of and shall be retained, paid, performed and discharged
solely by the Sellers. “Retained Liabilities” shall mean each and every
liability of the Sellers other than the Assumed Liabilities, including, without
limitation, all Environmental Liabilities arising out of (A) the operation
of the Business prior to the Closing Date and (B) the Sellers’ leasing,
ownership and operation of the Real Property used in the Business prior to the
Closing Date.

 

2.8.                              Consents of Third Parties.

 

(a)                                  Notwithstanding anything to the contrary
herein, this Agreement shall not constitute an agreement to assign or transfer
any instrument, contract, lease or other agreement or arrangement or any claim,
right or benefit arising thereunder or resulting therefrom if an assignment or
transfer or an attempt to make such an assignment or transfer without the
consent of a third party would constitute a breach or violation thereof or
adversely affect the rights of the Buyer or the Sellers thereunder; and any
transfer or assignment to the Buyer by the Sellers of any interest under any
such instrument, contract, lease or other agreement or arrangement that
requires the consent or approval of a third party shall be made subject to such
consent or approval being obtained. In the event any such consent or approval
is not obtained (or otherwise is not in full force and effect) on or prior to
the Closing Date, the Sellers shall continue to use commercially reasonable
efforts to obtain any material consent or approval as quickly as reasonably
practicable for 120 days after the Closing Date. Pending the obtaining of any
such consent or approval as set forth above, the parties shall cooperate with
each other in any reasonable, lawful and economically feasible arrangements
designed to provide to the Buyer the benefits of and use of such instrument,
contract, lease or other agreement or arrangement for its term (or any right or
benefit arising hereunder, including the enforcement for the benefit of the
Buyer of any and all rights of the Sellers against a third party thereunder),
including, without limitation, by subleasing any Leased Real Property to the
Buyer, subject to obtaining any required consent from the owner of such Leased
Real Property; provided that the Buyer shall undertake to pay or satisfy
the corresponding liabilities for the enjoyment of such benefit to the extent
the Buyer would have been responsible therefor hereunder if such consent or approval
had been obtained. Once the consent or approval of the assignment of such instrument,
contract, lease or other agreement or arrangement is obtained, the Sellers
shall promptly assign, transfer, convey and deliver such instrument, contract,
lease or other agreement or arrangement, and the Buyer shall assume the
obligations thereunder from and after the date of assignment to the Buyer
pursuant to a special-purpose assignment and assumption agreement substantially
similar in terms to those of the Assumption Agreement (which special-purpose
agreement the parties shall prepare, execute and deliver in good faith at the
time of such transfer, all at no additional cost to the Buyer or the Seller).

 

(b)                                 Except as set forth in the next sentence, in
no event will the Sellers be required to alter the terms of any agreement or
pay any fee in connection with obtaining such consent or approval, unless such
consent or transfer fee is provided for in such instrument, contract, lease or
other agreement or arrangement as in effect on the date hereof, in which case
the Sellers shall be required to pay such fee in connection therewith (to the
extent required by the party entitled thereto). With respect to the leases of 

 

7

 

Real Property used in the
Business listed or described in Section 2.8(b) of the Company Disclosure
Letter, the Sellers shall be required to obtain such consent or approval and
pay all such fees in connection therewith; provided, however,
that the Sellers shall have the right to sublease any such properties in accordance
with Section 2.8(a) to the Buyer, provided that on or prior to
the Closing Date, the Sellers have obtained any required consents to such
sublease. Notwithstanding anything to the contrary contained herein, in no
event will the Buyer be required to pay any fee in connection with obtaining
any consent or approval required for the assignment of any Contract from the
Sellers to the Buyer.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

3.1.                              Representations and Warranties of the Sellers. Except as set forth in the Company
Disclosure Letter (in the section or subsections thereof corresponding to
the section or subsection of this Agreement) delivered by the Sellers
to the Buyer prior to execution of this Agreement (the “Company Disclosure
Letter”), the Sellers, jointly and severally, represent and warrant to the
Buyer as follows:

 

3.1.1.                     Organization; Ownership. Each Seller is a corporation or limited liability
company duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or formation, with full power and authority
to carry on its business (including its portion of the Business) and to own or
lease and to operate its properties. Each Seller is duly qualified to do
business as a foreign corporation 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 it, or the nature of the activities conducted by
it, requires such qualification, except where the lack of such qualification
would not reasonably be expected to result in a Material Adverse Effect. Guarantor
holds, beneficially and of record, all of the issued and outstanding membership
and other equity or ownership interests of each Seller. Complete and accurate
copies of the certificate of incorporation and bylaws of Metaldyne Precision,
and the articles of organization and operating agreement of Metaldyne LLC, as
currently in effect, have been provided to the Buyer.

 

3.1.2.                     Authorization, etc. Each Seller has the corporate power and
authority to execute and deliver this Agreement and each of the Collateral
Agreements to which it will be a party, to perform fully its obligations
hereunder and thereunder, and to consummate the transactions contemplated
hereby and thereby. The execution and delivery by the Sellers of this Agreement
and the Collateral Agreements, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by all requisite
corporate and stockholder action of the Sellers. The Sellers have duly executed
and delivered this Agreement and on the Closing Date each Seller will have duly
executed and delivered each of the Collateral Agreements to which it is a
party. This Agreement is, and on the Closing Date each of the Collateral
Agreements to which either Seller is a party will be, a legal, valid and
binding obligation of the Sellers, enforceable against them in accordance with
its terms.

 

3.1.3.                     No Conflicts, etc.

 

(a)          The execution, delivery and performance by
each Seller of this Agreement and each of the Collateral Agreements to which it
is a party, and the consummation of the transactions contemplated hereby and
thereby, do not and will not (with or without the giving of notice or the lapse
of time or both):

 

(i)                                     conflict with or result in a material violation
of or a material default under any Applicable Law applicable to either Seller
or any of the Assets;

 

8

 

(ii)                                  conflict with or breach any provision of the
certificate of incorporation or bylaws or other organizational documents of
either Seller;

 

(iii)                               contravene, conflict with or result in a
violation or breach of any terms or requirements of, or give any Governmental
Authority the right to revoke, withdraw, suspend, cancel, terminate or modify,
any material Governmental Approval that is held by either Seller or that is
otherwise necessary for conduct of the Business; or

 

(iv)                              result in the imposition or creation of any
Lien upon or with respect to any other Assets.

 

(b)                                 Subject to Section 2.8, neither Seller
is required to give any notice to or obtain any consent from any Person in
connection with the execution and deliver of this Agreement or the Collateral
Agreements or the consummation or performance of the transactions contemplated
thereby.

 

3.1.4.                     Financial Statements.

 

(a)                                  The Sellers have delivered to the Buyer
audited financial statements of the Business for the years ended December 31,
2003 and 2004 (the “Audited Financial Statements”), unaudited reviewed
financial statements for the six months ended July 3, 2005 and June 27,
2004 (the “Unaudited Reviewed Financial Statements”), an unaudited
unreviewed balance sheet of the Business as of September 30, 2005 (the “Unaudited
Balance Sheet”) and related unaudited unreviewed statements of income and cash
flows of the Business for the nine months then ended (the “Unaudited
Unreviewed Financial Statements” and, together with the Unaudited Reviewed
Financial Statements, the “Unaudited Financial Statements” and,
collectively with the Audited Financial Statements, the “Financial
Statements”).

 

(b)                                 The Financial Statements have been prepared
in all material respects in accordance with GAAP applied on a consistent basis,
and fairly present the financial condition and results of operations of the
Business as of the dates and for such periods, provided,  however,
that the Unaudited Financial Statements are subject to normal year end
adjustments and lack footnotes and other presentation items. Except for (i) liabilities
which are not required under GAAP to be disclosed in the Unaudited Financial
Statements or referred to in the footnotes to the Unaudited Financial
Statements and (ii) liabilities incurred in the Ordinary Course of
Business since the Unaudited Balance Sheet Date, neither Seller has any
material liability not disclosed, reserved for or otherwise reflected in the
Unaudited Financial Statements.

 

3.1.5.                     Books and Records. The books of account and other financial
Records of the Sellers related to the Business, all of which have been made
available to the Buyer, are complete and correct in all material respects and
represent actual, bona fide transactions and have been maintained in accordance
with sound business practices.

 

3.1.6.                     Taxes.

 

(a)                                  Each of the Sellers has duly prepared and
timely filed all material Tax Returns that it was required to file. All such
Tax Returns were correct and complete in all material respects and were
prepared in material compliance with all applicable laws and regulations. All
material Taxes owed by the Sellers (whether or not shown on any Tax Return)
have been paid. No claim has ever been made by a Taxing Authority in a
jurisdiction where any of the Sellers do not file Tax Returns that it is or may
be subject to taxation by that jurisdiction.

 

9

 

(b)                                 Each of the Sellers has in all material
respects withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder or other third party and all Forms W-2 and 1099 required
with respect thereto have in all material respects been properly completed and
timely filed.

 

(c)                                  No Tax Return is in the process of or within
the last five years has been examined by any Taxing Authority and the Sellers
have no Knowledge of a Taxing Authority proposing to examine any Tax Return or
assess additional Taxes for any period for which Tax Returns have been filed.

 

(d)                                 Neither Seller has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency.

 

(e)                                  None of the Assumed Liabilities is an
obligation to make a payment that will not be deductible under section 280G
of the Code based on facts and circumstances as of the Closing.

 

(f)                                    The Buyer will not be required to deduct and
withhold any amount pursuant to section 1445(a) of the Code upon the
transfer of the Business to the Buyer.

 

3.1.7.                     Events Subsequent to the Unaudited Balance
Sheet Date.

 

(a)                                  Since the Unaudited Balance Sheet Date, there
has been no Material Adverse Effect.

 

(b)                                 Since the Unaudited Balance Sheet Date, the
Business has not engaged in any material practice, taken any material action or
entered into any material transaction outside the Ordinary Course of Business
(other than the transactions contemplated by this Agreement). Without limiting the
generality of the foregoing, since that date:

 

(i)            there has been no change made or authorized in the certificate of
incorporation, bylaws or other organizational documents of either Seller;

 

(ii)                                  neither Seller has granted any increase in
the compensation or employee benefits payable to or to become payable to any
officer, director or employee of the Sellers, other than increases required by
law or in the Ordinary Course of Business or as disclosed in Section 3.1.7
of the Company Disclosure Schedule;

 

(iii)                               there has been no material damage to or
destruction or loss of any Asset with a value greater than $100,000, whether or
not covered by insurance;

 

(iv)                              neither Seller has entered into, terminated
or received written notice of termination of (i) any license,
distributorship, dealer, sales representative, joint venture, credit or similar
Contract to which either Seller is a party, or (ii) any Contract or
transaction involving a total commitment by either Seller of at least $100,000;

 

(v)                                 there has been no sale (other than sales of
Inventory in the Ordinary Course of Business), lease, license or other
disposition (other than dispositions in the Ordinary Course of Business) of any
Asset or property of either Seller (including the Intellectual Property Assets)
or the creation of any Lien on any Asset;

 

(vi)                              there has been no cancellation or waiver of
any claims or rights with a value to the Business in excess of $100,000;

 

10

 

(vii)                           there has been no material change in the
accounting methods used by the Business;

 

(viii)                        there has been no transfer or removal of any
Asset or property of either Seller with an acquired value or original asset
cost exceeding $10,000 from any of the Owned Real Property or Leased Real
Property (other than the sales of Inventory in the Ordinary Course of
Business);

 

(ix)                                there has been no Contract by either Seller
to do any of the foregoing; or

 

(x)                                   neither Seller has received written notice of
termination or discontinuance of any customer Contract.

 

3.1.8.                     Litigation.

 

(a)                                  There is no Proceeding pending or, to the
Knowledge of the Sellers, threatened against either Seller in connection with
the Assets or the Business or the transactions contemplated by this Agreement
or the Collateral Agreements that (i) would reasonably be expected to have
a Material Adverse Effect or (ii) that challenges, or that may have
the effect of preventing, delaying, making illegal, making unenforceable or
otherwise interfering with the transactions contemplated by this Agreement or
the Collateral Agreements. Section 3.1.8(a) of the Company Disclosure
Letter lists each proceeding pending against either Seller in connection with
the Assets or the Business that seeks injunctive relief or specifies damage
claims in excess of $250,000. The Sellers have made available to the Buyer
copies of all pleadings, correspondence and other documents relating to each
Proceeding listed in Section 3.1.8(a) of the Company Disclosure
Letter;

 

(b)                                 There is no Order to which the Business or
any of the Assets is subject, and, to the Knowledge of the Sellers, no agent or
employee of any Seller is subject to any Order that prohibits such agent or
employee from engaging in or continuing any conduct, activity or practice
relating to the Business;

 

(c)                                  No event has occurred or circumstances exist
that is reasonably likely to constitute or result in (with or without notice or
lapse of time) a violation of or failure to comply with any material term or
requirement of any Order to which either the Seller (with respect to the
Business) or any of the Assets is subject; and

 

(d)                                 Neither Seller has received, at any time
since December 31, 2002, any written notice from any Governmental
Authority regarding any actual, alleged or potential violation of, or failure
to comply with, any term or requirement of any Order to which the Sellers (with
respect to the Business) or any Assets are or have been subject.

 

3.1.9.                     Compliance with Laws; Governmental Approvals.

 

(a)                                  To the Knowledge of the Sellers, the Business
as presently conducted does not violate in any material respect any Applicable
Laws applicable to the Business or the Assets.

 

(b)                                 Notwithstanding the provisions of Section 3.1.9(a) above,
and in addition thereto, the Business as presently conducted does not violate
in any material respect any Applicable Laws relating specifically to workplace
safety and applicable to the Business or the Assets.

 

11

 

(c)                                  Section 1.1(h) of the Company
Disclosure Letter sets forth (i) all Governmental Approvals (other than
Environmental Permits) necessary for the conduct of the Business, (ii) the
expiration dates of all such Governmental Approvals, and (iii) all pending
applications therefor and renewals thereof. All such Governmental Approvals
(other than Environmental Permits) listed on Section 1.1(h) of the
Company Disclosure Letter have been duly obtained and are in full force and
effect, except as would not, individually or in the aggregate, have a Material
Adverse Effect.

 

3.1.10.               Assets. The Sellers or their affiliates have a valid leasehold interest in all
of their leases of personalty, have good title to all the Assets owned by the
Sellers or their affiliates, and have a valid legal right under contract to use
all other personalty used by the Sellers in the Business, including all
personalty reflected on the Unaudited Balance Sheet and all personalty acquired
since the Unaudited Balance Sheet Date, other than personalty disposed of since
such date in the Ordinary Course of Business and in accordance with the terms
of this Agreement, free and clear of any and all Liens other than Permitted
Liens. The Assets which are significant to the Business are in all material
respects adequate for the purposes for which such assets are currently used and
are in reasonably good repair and operating condition (subject to normal wear
and tear).

 

3.1.11.               Contracts.

 

(a)                                  Section 1.1(d) of the Company
Disclosure Letter lists or generally describes all Contracts included in the
Assets except for (i) this Agreement and the Collateral Agreements, (ii) purchase
orders for the purchase of products, merchandise, raw materials or other goods
or services by the Sellers issued in the Ordinary Course of Business and
purchase orders for the sale of goods or services by the Sellers to customers
issued in the Ordinary Course of Business and (iii) Contracts involving payments
to or by the Sellers of less than $100,000.

 

(b)                                 All Contracts set forth in Section 1.1(d) of
the Company Disclosure Letter are in full force and effect and enforceable
against the Seller which is a party thereto in accordance with their terms.

 

(c)                                  Each Seller is in material compliance with
all applicable terms and requirements of the IRB Loan Documents and each
Contract set forth in Section 1.1(d) of the Company Disclosure Letter,
and, to the Knowledge of the Sellers, each other Person that has or had any
obligation or liability under any Contract set forth in Section 1.1(d) of
the Company Disclosure Letter is in compliance in all material respects with
all applicable terms and requirements of such Contract.

 

(d)                                 To the Knowledge of the Sellers, no event has
occurred or circumstance exists that (with or without notice or lapse of time)
would reasonably be expected in any material respect to contravene, conflict
with or result in a breach of, or give either Seller or other Person the right
to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or payment under, or to cancel, terminate or
modify, the IRB Loan Documents or any Contract set forth in Section 1.1(d) of
the Company Disclosure Letter.

 

(e)                                  No event has occurred or circumstance exists
under or by virtue of any Contract set forth in Section 1.1(d) of the
Company Disclosure Letter that (with or without notice or lapse of time) would
cause the creation of any Lien (other than Permitted Liens) affecting any of
the Assets.

 

(f)                                    To the Knowledge of Sellers, the Sellers are
not party to any Contract that contains any covenant that prohibits Sellers
from engaging in any line of business or competing with any Person, or that
materially restricts Sellers’ ability to solicit, either directly or
indirectly, through agents or consultants, or hire, potential officers,
employees or consultants.

 

12

 

3.1.12.               Inventories. The aggregate Inventories (net of the aggregate reserves reflected in
the Closing Net Working Capital Statement) are usable and salable in the usual
and Ordinary Course of Business and are not obsolete or discontinued. All
Inventories are recorded on the books of the Business at the lower of cost or
market value determined in accordance with the Working Capital Principles.

 

3.1.13.               Customers. Section 3.1.13 of the Company Disclosure Letter lists the names
and addresses of all customers of each Seller that ordered goods and services
from such Seller with an aggregate value for each such customer of $1,000,000
or more during the twelve-month period ended July 31, 2005.

 

3.1.14.               Suppliers; Raw Materials. Section 3.1.14 of the Company Disclosure
Letter lists the names of all suppliers from which the Business ordered raw
materials, supplies, merchandise and other goods and services with an aggregate
purchase price for each such supplier of $1,000,000 or more during the twelve-month period ended July 31,
2005.

 

3.1.15.               Products; Product and Service Warranties;
Product Liability; Selling Material and Policies. Except for normal customer returns and
allowances made in the Ordinary Course of Business and except for those
instances which would not, individually or in the aggregate, have a Material
Adverse Effect, (a) the products manufactured and sold and the services
provided by the Sellers in connection with the Business conform with
applicable contractual commitments in all material respects, and (b) no
product manufactured and sold and no service provided by the Sellers in
connection with the Business is subject to any guaranty, warranty or indemnity
beyond the applicable customer terms and conditions of purchase. Since January 1,
2002, the Sellers have received no written claims alleging liability on the part of
either Seller in connection with the Business (and, to the Knowledge of the
Sellers, there is no basis for any present or future Proceeding against them
that would give rise to any such liability in connection with the Business)
arising out of any injury to any individual or property as a result of the use
of any product manufactured and sold or any service provided by the Sellers in
connection with the Business in the manner intended, on account of a defect in
the manufacture of any such product that is currently offered for sale by
either Seller. Section 3.1.15 of the Company Disclosure Letter sets forth
a summary of all claims from customers since January 1, 2002 that the
products purchased by them from Sellers were not manufactured in accordance
with applicable specifications or were otherwise defective for which the
aggregate sales price of products covered by such claims (together with all
claims from other customers alleging similar matters with respect to such
products) exceeds $250,000.

 

3.1.16.               Intellectual Property.

 

(a)                                  Title. Section 1.1(f) of the Company Disclosure Letter lists or
generally describes all Intellectual Property that is owned by either Seller
and exclusively used in, held for use in or necessary for the conduct of the
Business (the “Owned Intellectual Property”) other than (i) inventions,
trade secrets, processes, formulas, compositions, designs and confidential
business and technical information and (ii) Intellectual Property that is
not registered and not material to the Business. The Sellers own or have the
right to use pursuant to license, sublicense, agreement or permission all
Intellectual Property Assets, free from any Liens (other than Permitted Liens).
The Intellectual Property Assets comprise all of the Intellectual Property
necessary for the Buyer to conduct and operate the Business as now being conducted
by the Sellers. No Owned Intellectual Property is assigned or registered
jointly with a person other than a Seller.

 

(b)                                 Transfer. Immediately after the Closing, the Buyer will own all of the Owned Intellectual
Property and, upon receipt of any necessary consents to assignment set forth on
Section 1.1(f) of

 

13

 

the Company Disclosure
Letter, will have a right to use all other Intellectual Property Assets
permitted by law, free from any Liens (other than Permitted Liens).

 

(c)                                  No Infringement. To the Knowledge of the Sellers, the
conduct of the Business or any product or service of Sellers does not infringe,
misappropriate or otherwise violate any rights of any Person in respect of any
Intellectual Property.

 

(d)                                 Licensing Arrangements. Section 1.1(f) of the Company
Disclosure Letter lists or generally describes all agreements other than
customer and supplier purchase orders (i) pursuant to which either Seller
has licensed any material Intellectual Property Assets to, or the use of any material
Intellectual Property Assets is otherwise permitted (through non-assertion,
settlement or similar agreements or otherwise) by, any other Person and (ii) pursuant
to which either Seller has had any material Intellectual Property licensed to
it, or has otherwise been permitted to use Intellectual Property (through
non-assertion, settlement or similar agreements or otherwise). All of the
agreements set forth in Section 1.1(f) of the Company Disclosure Letter
(x) are in full force and effect in accordance with their terms and no default
exists thereunder by either Seller or by any other party thereto and (y) are
free and clear of all Liens other than Permitted Liens.

 

(e)                                  No Intellectual Property Litigation. No written claim or demand of any Person
has been made nor is there any Proceeding that is pending or, to the Knowledge
of the Sellers, threatened that (i) challenges the rights of the Sellers
or the validity or enforceability in respect of any Intellectual Property
Assets material to the Business, (ii) asserts that any Seller is
infringing, misappropriating or otherwise in conflict with, or is required to
pay any additional royalty, license fee, charge or other amount with regard to,
any Intellectual Property, other than maintenance and registration fees in the ordinary
course of business, or (iii) claims that any material default exists under
any agreement or arrangement set forth in Section 1.1(f) of the
Company Disclosure Letter. None of the Owned Intellectual Property is subject
to any outstanding order, ruling, decree, judgment or stipulation by or with
any court, arbitrator or administrative agency, or has been the subject of any
litigation within the last five years, whether or not resolved in favor of the
Sellers.

 

(f)                                    No Conflicts. To the Knowledge of the Sellers, the
Intellectual Property Assets are valid and enforceable and all due maintenance
and annuity fees have been paid and, to the Knowledge of the Sellers, are not
being infringed, misappropriated or otherwise violated by any Person. No Owned
Intellectual Property which are material to the Business are being used or enforced
in a manner that would reasonably be expected to result in the abandonment,
cancellation or unenforceability of any Intellectual Property Asset.

 

(g)                                 Intellectual Property Opinions. Neither Seller nor the Guarantor has obtained
any opinion of counsel regarding any third party Intellectual Property or any
Intellectual Property Asset related to the Business.

 

(h)                                 Owned Shared Intellectual Property. Section 1.1(f) of the Company Disclosure
Letter lists or generally describes all Intellectual Property that is owned by
either Seller and exclusively used in, held for use in or necessary for the
conduct of the Business, as well as other businesses of Sellers, as currently
conducted (“Owned Shared Intellectual Property”) other than (i) inventions,
trade secrets, processes, formulas, compositions, designs and confidential
business and technical information and (ii) Intellectual Property that is
not registered and not material to the Business.

 

3.1.17.               Insurance. Section 3.1.17 of the Company Disclosure Letter lists all insurance
policies maintained by either Seller for the benefit of or in connection with
the Assets or the Business. Section 3.1.17 of the Company Disclosure
Letter lists all material claims made by the Sellers

 

14

 

under any policy of
insurance during the past two years with respect to the Business. All premiums
due and payable for the insurance listed in Section 3.1.17 of the Company
Disclosure Letter have been duly paid, and such policies or extensions or
renewals thereof in such amounts will be outstanding and duly in full force
without interruption until the Closing Date.

 

3.1.18.               Real Property.

 

(a)                                  Owned Real Property. Section 3.1.18(a) of the Company
Disclosure Letter lists all Owned Real Property, setting forth the address and
owner of each parcel of Owned Real Property including, without limitation, the
properties reflected as being so owned on the Financial Statements. Each Seller
has, or on the Closing Date will have, good, valid and marketable fee simple
title to the Owned Real Property indicated in Section 3.1.18(a) of
the Company Disclosure Letter as being owned by it, free and clear of all Liens
other than Permitted Liens. There are no outstanding options or rights of first
refusal to purchase the Owned Real Property, or any portion thereof or interest
therein.

 

(b)                                 Leases. Section 3.1.18(b) of the Company Disclosure Letter lists
all Leases, setting forth the address, landlord and tenant for each Lease. The
Sellers have delivered to the Buyer correct and complete copies of the Leases.
Each Lease is legal, valid, binding, enforceable and in full force and effect, except
as may be limited by bankruptcy, insolvency, reorganization and similar
Applicable Laws affecting creditors generally and by the availability of
equitable remedies. Neither the Sellers nor, to the Knowledge of the Sellers,
any other party is in default, violation or breach in any material respect under
any Lease, and no event has occurred and is continuing that constitutes or,
with notice or the passage of time or both, would constitute a default,
violation or breach in any material respect under any Lease. Each Lease grants
the tenant under the Lease the exclusive right to use and occupy the demised
premises thereunder. The Sellers have a good and valid title to the leasehold
estate under each Lease free and clear of all Liens other than Permitted Liens.
Each Seller enjoys peaceful and undisturbed possession under its respective
Leases for the Leased Real Property.

 

(c)                                  No Proceedings. There are no eminent domain or other
similar Proceedings pending or, to the Knowledge of the Sellers, threatened
affecting any portion of the Real Property. There is no writ, injunction,
decree, order or judgment outstanding, nor any action, claim, suit or Proceeding
pending or, to the Knowledge of the Sellers, threatened, relating to the
ownership, lease, use, occupancy or operation by any Person of any Real
Property, except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

(d)                                 Current Use. The use and operation of the Owned Real Property in the conduct of
the Business does not violate in any material respect any instrument of record
or agreement affecting the Owned Real Property. There is no violation of any
covenant, condition, restriction, easement or order of any Governmental
Authority having jurisdiction over such property or of any other Person
entitled to enforce the same affecting the Owned Real Property or the use or
occupancy thereof that would have a Material Adverse Effect. No material damage
or destruction, other than normal wear and tear, has occurred with respect to
any of the Owned Real Property since January 1, 2002.

 

(e)                                  Compliance with Real Property Laws. The Owned Real Property is in material
compliance with all applicable building, zoning, subdivision and other land use
and similar Applicable Laws affecting the Owned Real Property (collectively,
the “Real Property Laws”), and no Seller has received any notice of
violation or claimed violation of any Real Property Law. No current use by any
Seller of the Owned Real Property is dependent on a nonconforming use or other
Governmental Approval the absence of which would materially limit the use of
any properties or assets used in connection with or otherwise material to the
Business.

 

15

 

3.1.19.               Environmental Matters.

 

(a)                                  Permits. All active material Environmental Permits are identified in Section 3.1.19(a) of
the Company Disclosure Letter, the Sellers currently hold all such
Environmental Permits material to the Business and renewal of Environmental
Permits if currently required have been timely applied for. No Seller has
received written notice from any relevant Governmental Authority that any Environmental
Permit will be modified, suspended, canceled or revoked, or cannot be renewed
in the Ordinary Course of Business.

 

(b)                                 No Violations. Each of the Sellers and their respective
Affiliates is in material compliance with all Environmental Permits and all
applicable Environmental Laws pertaining to the Real Property and the Business.
The Sellers have not received any written notice of any violation by either
Seller of any Environmental Permit or any applicable Environmental Law relating
to the conduct of the Business or the Real Property. Sellers have made
available to Buyer copies of any material, investigations, studies, audits and
inspections concerning Environmental Liabilities or the part of Sellers in
connection with the Business or Real Property, including the Phase I and Phase
II environmental reports listed on Section 3.1.19(b) of the Company
Disclosure Schedule in the Sellers’ possession. The Sellers have made
available to the Buyer copies of all Occupational Health and Safety (“OSHA”)
correspondence and documents regarding worker accidents or injuries, including
OSHA 300 logs, investigations, and written notices of violations (and the
dispositions thereof) issued by OSHA or analogous state or local agencies to
the Sellers since January 1, 2003 related to the Business or the Real
Property.

 

(c)                                  No Actions. To the Knowledge of the Sellers, neither of the Sellers or any of
their respective Affiliates has taken any action in the conduct of the Business
or affecting the Real Property that would reasonably be expected to result in
material liability of any of them under any Environmental Law, including the treatment,
generation, storage or Release of any Hazardous Substances.

 

(d)                                 Investigations and Remediations. Neither Seller is financing or conducting
any investigation or remediation involving any Hazardous Substances related to
the conduct of the Business at any location under any Environmental Law.

 

(e)                                  Orders, etc. Neither Seller is a party to any outstanding order, judgment,
injunction, decree or agreement with any Governmental Authority which requires
any action under any Environmental Law by either Seller.

 

(f)                                    Disposal of Hazardous Substances. The Sellers have not, and, to the Knowledge
of the Sellers, no other Person has, stored, discharged, buried, or disposed of
Hazardous Substances resulting from, any business, commercial or industrial
activities, operations or processes, on or beneath the Real Property, other
than in material compliance with applicable Environmental Laws and, to the Knowledge
of the Sellers, the Sellers have not disposed of or arranged for the disposal
or treatment of Hazardous Substances generated by them in the conduct of the
Business at any other location in a manner which would be expected to result in
any material Environmental Liability being asserted against the Sellers.

 

3.1.20.               Employees, Labor Matters, etc.

 

(a)                                  Section 3.1.20(a) of the Company
Disclosure Letter lists all collective bargaining agreements of the Sellers
specifically relating to each company facility that is represented by a labor organization
and all known or threatened current labor organizing activities that relate to
the Business. The Sellers are in material compliance with all collective
bargaining agreements of the Sellers regarding each company facility associated
with the Business that is represented by a labor organization, including any
provision requiring notice of the transactions contemplated by this Agreement. Since
January 1, 2000

 

16

 

there has not occurred or,
to the Knowledge of the Sellers, been threatened any strike, slowdown, picketing,
work stoppage, concerted refusal to work overtime or other similar labor
activity with respect to any employees employed in the operation of the
Business. There are no labor disputes currently subject to any arbitration or
litigation and there is no representation petition pending or, to the Knowledge
of the Sellers, threatened with respect to any employee employed in the
operation of the Business. Each Seller has complied in all material respects
with Applicable Law in effect as of the date of this Agreement pertaining to
the employment of employees, including, without limitation, all such laws
relating to labor relations, wages, hours, working conditions, occupational
safety and health, workers’ compensation, plant closings and mass layoffs,
immigration, equal employment, fair employment practices, entitlements, prohibited
discrimination or other similar employment acts (collectively, “Labor Laws”).
The Sellers have not received notice of the intent of any Governmental
Authority responsible for the enforcement of any Labor Law to conduct an
investigation with respect to any employees employed in the operation of the
Business and, to the Knowledge of the Sellers, no such investigation is
threatened. There exists no pending or, to the Knowledge of Sellers, threatened
lawsuit, administrative proceeding or investigation involving the Business and
any current or former director, officer or employee of the Business, including under
any Labor Law or any claim for wrongful termination or breach of an express or
implied contract of employment, other than routine employee grievances.

 

(b)                                 Section 3.1.20(b) of the Company
Disclosure Letter lists all written (and, to the Knowledge of the Sellers,
oral) agreements (other than “at-will” employment or consulting agreements) (i) for
the employment of any individual employed in the operation of the Business on a
full-time, part-time, consulting or other basis and (ii) to provide to any
individual employed in the operation of the Business any severance benefits
upon the termination of such individual’s employment with the Sellers.

 

3.1.21.               Employee Benefit Plans and Related Matters.

 

(a)                                  Employee Benefit Plans. Section 3.1.21(a) of the Company
Disclosure Letter lists each “employee benefit plan,” as such term is defined
in section 3(3) of ERISA, whether or not subject to ERISA, and each
bonus, incentive or deferred compensation, severance, termination, retention,
change of control, stock option or other equity-based plan that (i) provides
benefits or compensation in respect of any employee employed in the operation
of the Business (the “Employees”) or the beneficiaries or dependents of
any such Employee and (ii) is maintained or contributed to by the Sellers
(collectively, the “Plans”). The Sellers have provided the Buyer
complete and correct copies of all written Plans.

 

(b)                                 Qualification. Each Plan intended to be qualified under section 401(a) of
the Code has received a favorable determination letter from the IRS as to its
qualification under the Code and, to the Knowledge of the Sellers, nothing has
occurred since the date of such determination letter that could reasonably be
expected to adversely affect such qualification or tax-exempt status.

 

(c)                                  Compliance; Liability.

 

(i)                                     Each of the Plans has been operated and
administered in compliance with all Applicable Laws, except for any failure so
to comply that, individually or in the aggregate, would not result in a
Material Adverse Effect.

 

(ii)                                  No Plan is a “multiemployer plan” within the
meaning of section 4001(a)(3) of ERISA or is a “multiple employer
plan” within the meaning of section 4063 or 4064 of ERISA.

 

3.1.22.               Brokers, Finders, etc. All negotiations relating to this
Agreement, the Collateral Agreements, and the transactions contemplated hereby
and thereby, have been carried on with-

 

17

 

out the participation of any
Person acting on behalf of either Seller or its Affiliates and in such manner
as not to give
rise to any valid claim against the Buyer or any of its Subsidiaries for any
brokerage or finder’s commission, fee or similar compensation.

 

3.1.23.               Sufficiency of Assets.

 

(a)                                  Section 3.1.23(a) of the Company
Disclosure Letter lists all Assets consisting of machinery, equipment,
vehicles, furniture or other tangible personal property owned by the Sellers having
any original individual cost in excess of $10,000 and the location thereof.

 

(b)                                 Section 3.1.23(b) of the Company
Disclosure Letter lists all Assets consisting of property and assets (other
than the Real Property) used in the Business that are leased by the Sellers and
that involve payments by such Seller in excess of $30,000 per year. For all
such leased assets, Sellers have made available to the Buyer true and complete
copies of all leased and other agreements affecting such assets.

 

(c)                                  The Assets, together with the services to be
provided under the Collateral Agreements, (a) constitute all of the
assets, tangible and intangible, of any nature whatsoever, necessary to operate
the Sellers’ business in the manner presently operated by the Sellers and (b) include
all of the operating assets of the Sellers.

 

(d)                                 As of the date of this Agreement, the
aggregate amount owing under the IRB Loan Agreement is a principal amount of
$7,500,000 plus accrued and unpaid interest since December 31, 2005.

 

3.2.                              Representations and Warranties of the Buyer. Except as set forth in the Buyer Disclosure
Letter (in the section or subsections thereof corresponding to the section or
subsection of this Agreement) delivered by the Buyer to the Sellers prior
to execution of this Agreement (the “Buyer Disclosure Letter”), the
Buyer represents and warrants to the Sellers as follows:

 

3.2.1.                     Corporate Status; Authorization, etc. The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation with full corporate power and authority to execute and deliver
this Agreement and the Collateral Agreements, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by the Buyer of this Agreement, and the
consummation of the transactions contemplated hereby, have been, and on the
Closing Date the execution and delivery by the Buyer of the Collateral
Agreements will have been, duly authorized by all requisite corporate action of
the Buyer. The Buyer has duly executed and delivered this Agreement and on the Closing
Date the Buyer will have duly executed and delivered the Collateral Agreements.
This Agreement is, and on the Closing Date each of the Collateral Agreements
will be, a valid and legally binding obligation of the Buyer, enforceable
against the Buyer in accordance with its terms.

 

3.2.2.                     No Conflicts, etc. The execution, delivery and performance by
the Buyer of this Agreement and each of the Collateral Agreements, and the
consummation of the transactions contemplated hereby and thereby, do not and
will not conflict with or result in a violation of or under (with or without
the giving of notice or the lapse of time, or both) (i) the certificate of
incorporation or bylaws or other organizational documents of the Buyer, (ii) any
Applicable Law applicable to the Buyer or any of its Affiliates or any of its
or their properties or assets or (iii) any contract, agreement or other
instrument applicable to the Buyer or any of its Affiliates or any of its or
their properties or assets, except, in the case of clause (iii), for violations
and defaults that, individually and in the aggregate, have not and will not materially
impair the ability of the Buyer to perform its obligations under this
Agreement or under any of the

 

18

 

Collateral Agreements. No
Governmental Approval is required to be obtained by the Buyer in connection
with the execution and delivery of this Agreement or the Collateral Agreements
or the consummation of the transactions contemplated hereby or thereby.

 

3.2.3.                     Litigation. There is no action, claim, suit or proceeding pending, or to the
Buyer’s knowledge threatened, by or against or affecting the Buyer in
connection with or relating to the transactions contemplated by this Agreement
or any action taken or to be taken in connection herewith or the consummation
of the transactions contemplated hereby.

 

3.2.4.
Brokers, Finders, etc. All negotiations relating to this Agreement, the
Collateral Agreements and the transactions contemplated hereby and thereby have
been carried on without the participation of any Person acting on behalf of the
Buyer or its Affiliates and in such manner as to not give rise to any valid
claim against the Sellers or their Affiliates for any brokerage or finder’s commission,
fee or similar compensation.

 

3.2.5.
Financing. The Buyer has, and will at the Closing Date have, funds
available in amounts sufficient to pay the Purchase Price and related expenses
of the transactions contemplated hereby to be paid by it hereunder.

 

ARTICLE IV

 

COVENANTS

 

4.1.                              Covenants of the Sellers.

 

4.1.1.                     Conduct of Business. From the date hereof to the Closing Date, except
as expressly permitted or required by this Agreement or as otherwise consented
to by the Buyer in writing, the Sellers will:

 

(a)                                  carry on the Business in the ordinary course,
in substantially the same manner as heretofore conducted, and use commercially
reasonable efforts to preserve intact its present business organization and its
relationship with customers, suppliers and others having business dealings with
it;

 

(b)                                 perform in all material respects all of
their obligations under all Contracts of the Business or the Assets, and comply
in all material respects with all Applicable Laws applicable to the Assets or
the Business;

 

(c)                                  subject to Section 2.4, pay Trade
Accounts Payable and other obligations of the Business when they become due and
payable in the Ordinary Course of Business, including without limitation the
weekly payment of Trade Accounts Payable in the Ordinary Course of Business;

 

(d)                                 not grant (or commit to grant) any increase
in the compensation (including incentive or bonus compensation) of any employee
employed in the operation of the Business or institute, adopt or amend (or
commit to institute, adopt or amend) any compensation or benefit plan, policy,
program or arrangement or collective bargaining agreement applicable to any such
employee, except in each case in the Ordinary Course of Business;

 

(e)                                  not hire or fire employees of the Business
outside of the Ordinary Course of Business;

 

19

 

(f)                                    maintain in the Ordinary Course of Business
the tangible Assets currently used in the operation of the Business in good
repair, working order and operating condition subject only to ordinary wear and
tear;

 

(g)                                 maintain the books of account and records of
the Business in the usual, regular and ordinary manner consistent with past
policies and practice;

 

(h)                                 comply in all material respects with all
Applicable Laws applicable to the Business or any of the properties or Assets
of the Business;

 

(i)                                     use commercially reasonable efforts to maintain
the good standing of the Sellers in their respective jurisdictions of
incorporation and in the jurisdictions in which any Seller is qualified to do
business, as a foreign corporation or otherwise, and to maintain all Governmental
Approvals and other consents material to the Business;

 

(j)                                     not sell any Assets other than in the
Ordinary Course of Business;

 

(k)                                  not make sales of inventory except in the
Ordinary Course of Business;

 

(l)                                     not purchase, order or otherwise acquire
inventory for the Business from any unit of the Sellers outside the Ordinary
Course of Business;

 

(m)                               acquire the equipment subject to the
equipment leases specified in Section 4.1.1(m) of the Company Disclosure
Letter and terminate all ownership and other rights of the owners/lessors of
such equipment (such equipment to be “Assets” hereunder);

 

(n)                                 with respect to any item that would be an “Asset”
pursuant to the second parenthetical in Section 1.1(a) if the date of
this Agreement were the Closing Date, take any action to cause such item not to
be (i) located on or at the Real Property, (ii) in transit to or from
the Real Property or (iii) held at or by a third party for purposes of
repairs, cleaning, maintenance, storage or the like, other than, in each case,
in the Ordinary Course of Business; and

 

(o)           not agree or
otherwise commit to take any of the actions described in the foregoing
paragraphs (a) through (n) of this Section 4.1.1.

 

4.1.2.                     Access and Information.

 

(a)                                  So long as this Agreement remains in effect,
each Seller will give the Buyer and its Representatives full access during
normal business hours to, and furnish them with, all of such Seller’s
non-privileged documents, Tax Returns, records, work papers and information
with respect to the Assets, reports and records relating to the Business as the
Buyer shall from time to time reasonably request. In addition, the Sellers will
permit the Buyer and its Representatives reasonable access to such personnel of
the Sellers during normal business hours as may be necessary or useful to
the Buyer in its review of the properties, assets and business affairs of the
Business and the above-mentioned documents, records and information.

 

(b)                                 The Sellers will retain all books and records
relating to the Business in accordance with the Sellers’ record retention
policies as presently in effect. During the three-year period beginning on the
Closing Date, the Sellers shall not dispose of or permit the disposal of any
such books and records not required to be retained under such policies without first
giving 60 days’ prior written notice to the Buyer offering to surrender the
same to the Buyer at the Buyer’s expense.

 

 

20

 

(c)                                  So long as this Agreement remains in effect,
each Seller will give the Buyer and its Representatives full access during
normal business hours and furnish them with all of such Seller’s non-privileged
documents, records and information with regard to the Assets and the Business,
as the Buyer or its Representatives may require for the purpose of
developing the post-Closing Environmental Site Assessments, compliance reviews
and asbestos assessments as more fully described in Sections 4.3(a) and
4.3(b).

 

4.1.3.                     Public Announcements. Prior to the Closing, except as required by
Applicable Law and in connection with obtaining the consents set forth in Section 5.3.2,
the Sellers shall not, and they shall not permit any Affiliate to, make any
public announcement in respect of this Agreement or the Collateral Agreements
or the transactions contemplated hereby or thereby without the prior written
consent of the Buyer, which consent is not to be unreasonably withheld; provided,
however, that with respect to any public announcement required by
Applicable Law, Sellers shall give to Buyer the right to review any such public
disclosure as promptly as practicable prior to its publication to the extent
practicable.

 

4.1.4.                     Further Actions.

 

(a)                                  The Sellers agree to use commercially
reasonable efforts to take all actions and to do or cause to be done all other
things necessary, proper or advisable to consummate and make effective the
transactions contemplated hereby (including using commercially reasonable
efforts to obtain, or cause to be obtained, all consents material to the
operation of the Business and the execution and delivery of this Agreement and
the Collateral Agreements or the consummation of the sale and transfer of the
Assets or the other transactions contemplated hereby or thereby) by February 28,
2006.

 

(b)                                 The Sellers will, as promptly as practicable,
file or supply, or cause to be filed or supplied, all applications,
notifications and information required to be filed or supplied by either of them
pursuant to Applicable Law in connection with this Agreement, the Collateral
Agreements, the sale and transfer of the Assets pursuant to this Agreement and
the consummation of the other transactions contemplated thereby, including but
not limited to filings pursuant to the HSR Act.

 

(c)                                  The Sellers will, and will cause each of
their Affiliates to, coordinate and cooperate with the Buyer in exchanging such
information and supplying such assistance as may be reasonably requested
by the Buyer in connection with the filings and other actions contemplated by Section 4.2.2.

 

(d)                                 The Sellers will not, and will cause each of
their Affiliates not to, register or transfer to a third party the Owned Shared
Intellectual Property set forth in Section 1.1(f) of the Company
Disclosure Letter without the consent of the Buyer. The Sellers will, and will
cause each of their Affiliates to, take commercially reasonable measures to
protect the trade secrets constituting Owned Shared Intellectual Property set
forth in Section 1.1(f) of the Company Disclosure Letter.

 

4.1.5.                     Further Assurances. Following the Closing, the Sellers shall,
from time to time, (a) execute and deliver such additional instruments,
documents, conveyances or assurances as shall be reasonably necessary, or
otherwise reasonably requested by the Buyer, to confirm and assure the rights
and obligations provided for in this Agreement and the Collateral Agreements
and render effective the consummation of the transactions contemplated hereby
and thereby, (b) provide the Buyer with access to all books, records,
manuals and other materials of the Sellers relating to the Business or the
Assets that are retained by the Sellers, except that the Sellers and their
respective Affiliates shall not be required to provide access to any
information that such party is required pursuant to Applicable Law or enforceable
contract, agreement or other instrument to keep confidential, (c) make
available to Buyer, at Buyer’s cost and on reasonable notice, the Sellers’
employees when reasonably requested by the Buyer and (d) execute

 

21

 

such documents as the Buyer may reasonably
request to enable the Buyer to file any required reports or Tax Returns
relating to the Buyer.

 

4.1.6.                     Transfer Taxes. The Buyer and Sellers shall each be
responsible for the timely payment of all sales, use, value added, documentary,
stamp, gross receipts, registration, transfer, conveyance, real property gains
or transfer, excise, recording, license and other similar Taxes and fees (“Transfer
Taxes”) arising out of or in connection with or attributable to the
transactions effected pursuant to this Agreement and the Collateral Agreements.
The Buyer and the Sellers will cooperate with each other in attempting to
minimize Transfer Taxes. Transfer Taxes shall be borne equally by the Buyer and
the Sellers.

 

(b)                                 As between the Sellers, on the one hand, and
the Buyer, on the other hand, the party that has the primary responsibility
under Applicable Law for filing any Tax Return required to be filed in respect
of Transfer Taxes shall prepare and timely file such Tax Return, provided
that such party’s preparation of such Tax Return shall be subject to the other
party’s approval, which approval shall not be withheld unreasonably.

 

(c)                                  To the extent applicable to the Assets and
the transactions contemplated hereby at Closing, the Buyer will provide to
Sellers any and all certificates, in a form reasonably acceptable to the
appropriate tax authorities, stating that Buyer’s purchase of such Assets is
exempt from any sales and use taxes and that the Buyer intends to use the Assets
in a manner to exempt the transaction from sales and use taxes. With respect to
such Assets, Sellers shall not collect any sales or use taxes in reliance upon
these certificates and Buyer shall reimburse Sellers for any sales or use taxes
that may be paid by Sellers if Buyer’s subsequent use of the Assets does
not comply with the exemptions to sales and use tax laws.

 

4.1.7.                     Bulk Sales Laws. The Sellers hereby waive compliance with
the bulk-transfer provisions of the Uniform Commercial Code (or any similar
law) (“Bulk Sales Laws”) in connection with the transactions
contemplated by this Agreement and the Collateral Agreements.

 

4.1.8.
Exclusivity.

 

(a)                                  Until the earlier of (i) the Closing or (ii) the
termination of this Agreement, none of the Guarantor, the Sellers or any of
their respective Affiliates will (y) directly or indirectly, solicit, initiate
or encourage the submission of any proposal or offer from, discuss or negotiate
with (whether such negotiations are initiated by the Guarantor, the Sellers or
any of their respective Affiliates, any agent or representative of any of the
foregoing Persons, or otherwise), provide any information or documentation to,
any Person other than the Buyer, its Affiliates, co-investors, potential
financing sources, successors and assigns, or (z) enter into an agreement with
any Person, other than the Buyer, its Affiliates, co-investors, potential
financing sources, successors and assigns, in each case, relating to the
acquisition of all or substantially all of the capital stock or assets of the
Sellers (including any acquisition structured as a merger, consolidation or
share exchange).

 

(b)                                 The parties recognize and acknowledge that a
breach by the Guarantor, the Sellers or their respective Affiliates of this Section 4.1.8
will cause irreparable and material loss and damage to the Buyer as to which it
will not have an adequate remedy at law or in damages. Accordingly, each party
acknowledges and agrees that the issuance of an injunction or other equitable
remedy is an appropriate remedy for any such breach.

 

4.1.9.                     Other Actions. The Sellers shall comply with the
agreements set forth in Section 4.1.9. of the Company Disclosure Letter.

 

22

 

4.1.10.               Minerva, Ohio Site. The Sellers agree that they will, as soon
as reasonably practical following Closing, and at Seller’s sole cost and
expense, cause to be conducted at the Minerva, OH facility the additional Phase
II property assessment activities identified in the February 2003 Ohio
Voluntary Action Program (“VAP”) Phase II Environmental Site Assessment
for the site, as well as such further investigation and, if necessary,
remediation, as may be required following completion of those activities,
in order for the Sellers’ consultant to issue a No Further Action Letter for
the purpose of having Ohio EPA grant to Seller and Buyer a “covenant not to sue”
under the VAP.

 

4.2.                              Covenants of the Buyer.

 

4.2.1.                     Public Announcements. Prior to the Closing, except as required by
Applicable Law and in connection with obtaining the consents set forth in Section 5.2.2,
the Buyer shall not, and shall not permit its Affiliates to, make any public
announcement in respect of this Agreement or the transactions contemplated
hereby without the prior written consent of the Sellers, which consent is not to
be unreasonably withheld, provided, however, that with respect to
any public announcement required by Applicable Law, the Buyer shall give to the
Sellers the right to review any such public disclosure as promptly as
practicable prior to its publication to the extent practicable.

 

4.2.2.                     Further Actions.

 

(a)                                  The Buyer agrees to use all commercially
reasonable efforts to take all actions and to do or cause to be done all other
things necessary, proper or advisable to consummate and make effective the
transactions contemplated hereby by February 28, 2006.

 

(b)                                 The Buyer will, as promptly as practicable,
file or supply, or cause to be filed or supplied, all applications,
notifications and information required to be filed or supplied by the Buyer or
its Affiliates pursuant to Applicable Law in connection with this Agreement,
the Collateral Agreements, the Buyer’s acquisition of the Assets pursuant to
this Agreement and the consummation of the other transactions contemplated
thereby, including but not limited to filings pursuant to the HSR Act.

 

(c)                                  The Buyer will coordinate and cooperate with
the Sellers in exchanging such information and supplying such reasonable
assistance as may be reasonably requested by the Sellers in connection
with the filings and other actions contemplated by Section 4.1.5.

 

(d)                                 The Buyer will cooperate with the Sellers in
filing and recording within 60 days after the Closing Date a disclosure
document required to be provided by the Sellers pursuant to the Indiana
Responsible Property Transfer Law.

 

(e)                                  After the Closing, the Buyer will not, and
will cause each of its Affiliates not to, register or transfer to a third party
the co-owned Intellectual Property set forth in Section 1.1(f) of the
Company Disclosure Letter without the consent of the Sellers. The Buyer will,
and will cause each of its Affiliates to, take commercially reasonable measures
to protect the trade secrets constituting Owned Shared Intellectual Property
set forth in Section 1.1(f) of the Company Disclosure Letter.

 

4.2.3.                     Further Assurances. Following the Closing, the Buyer shall, and
shall cause its Affiliates to, from time to time, execute and deliver such
additional instruments, documents, conveyances or assurances as shall be
necessary, or otherwise reasonably requested by the Sellers, to confirm and
assure the rights and obligations provided for in this Agreement and in the
Collateral Agreements and render effective the consummation of the transactions
contemplated hereby and thereby.

 

23

 

4.2.4.                     Use of Business Names and Marks by the Buyer. To the extent the trademarks, service
marks, brand names or trade, corporate or business names of the Sellers or of
any of the Sellers’ Affiliates or divisions (other than the Business) are used
by the Business on signage, invoices, receipts, packaging, product literature
and materials, computer programs or like materials (“Marked Materials”) or
appear on Inventory at the Closing, the Buyer may use such Marked
Materials or sell such Inventory after the Closing for a period of 180 days
without altering or modifying such Marked Materials or Inventory, or removing
such trademarks, service marks, brand names, or trade, corporate or business names,
but the Buyer shall not thereafter use such trademarks, service marks, brand
names or trade, corporate or business names in any other manner without the
prior written consent of the Sellers; provided that, notwithstanding the
foregoing or any other provision of this Agreement, in no event shall the Buyer
use letterhead of the Sellers or of any of the Sellers’ Affiliates or
divisions.

 

4.2.5.                     Confidentiality. The Confidentiality Agreement shall
terminate as of the Closing. Except as otherwise provided in this Agreement, (a) the
Sellers will, and will cause their Subsidiaries (and their respective
accountants, counsel, consultants, employees and agents to whom they disclose
such information) to, keep confidential all information in the possession of
the Sellers, or to which the Sellers are given access pursuant to Section 2.5(d),
4.2.3 or 8.2(d), after the Closing that relates to the Business or the Assets
and (b) the Buyer will, and will cause its Subsidiaries (and their
respective accountants, counsel, consultants, employees and agents to whom they
disclose such information) to, keep confidential all information in the
possession of the Buyer, or to which the Buyer is given access pursuant to Section 2.5(d),
4.1.5 or 8.2(d), after the Closing that relates to the Sellers and is not
information solely related to the Business and the Assets. The provisions of
this Section 4.2 shall not apply to the disclosure by any party hereto or
its Subsidiaries of any information, documents or materials which are (i) or
become publicly available, other than by reason of a breach of this Section 4.2
by the disclosing party or any Affiliate of the disclosing party, (ii) received
from a third party not bound by any confidentiality agreement with the other
party hereto, (iii) required by Applicable Law to be disclosed by such
party, or (iv) necessary to establish such party’s rights under this
Agreement or any Collateral Agreement, provided that, in the case of
clauses (iii) and (iv), the Person intending to make disclosure of
confidential information will promptly notify the party to whom it is obliged
to keep such information confidential and, to the extent practicable, provide
such party a reasonable opportunity to prevent public disclosure of such
information.

 

4.2.6.                     Bulk Sales Laws. The Buyer hereby waives compliance with the
Bulk Sales Laws in connection with the transactions contemplated by this
Agreement and the Collateral Agreements.

 

4.2.7.                     Minerva, Ohio Site. Following the Closing, the Buyer shall
provide Sellers or their Representatives access to the Minerva, OH, facility
for the purpose of conducting the continued investigation of the site, and any
other required work thereon, in furtherance of the preparation of a No Further
Action Letter to enable the Sellers to obtain a “covenant not to sue” from the
Ohio Environmental Protection Agency (“Ohio EPA”), as required in Section 4.1.10.

 

4.2.8.                     Other Agreements. Buyer will enter into an agreement
reasonably satisfactory to Buyer and Sellers providing that Buyer will license
to Sellers and Metaldyne Zell any software updates to the Co-Owned Differential
Gear Software which Buyer may obtain from time to time; provided that
Buyer shall have no obligation to obtain any such updates, Buyer may cease
use of such software at any time, any such updates shall be provided without
representation or warranty and Sellers and their Affiliates shall comply with
any restrictions applicable to Buyer and the provisions of Section 4.1.4(d) with
respect to such updates. Seller licensees shall have no right to sublicense any
such update. Such license agreement shall contain mutually acceptable
provisions with respect to reimbursement of Buyer for any out of pocket costs
incurred in connection with obtaining and maintaining any such updates.

 

24

 

 

4.3.          Baseline
Environmental Assessment.

 

(a)           Michigan Sites. The Sellers and the Buyer agree that: (i) prior
to Closing, Buyer and its
consultant, in consultation with the Sellers and their consultant, shall
develop a work plan, to commence
promptly after the Closing, for Baseline Environmental Site Assessments under Part 201
of the State of Michigan’s
Natural Resources and Protection Act, 1994 PA 451 (hereafter “Baseline
Environmental Assessment
Program”) of the Real
Property located in the State of Michigan and listed or described in Section 1.1(i) of the Company
Disclosure Letter; (ii) the scope of the Environmental Site Assessments conducted
by the Buyer after the Closing shall be limited to those activities sufficient
to enable the Buyer to obtain
liability protection under the Baseline Environmental Assessment Program, and, may include,
as well an environmental compliance review and visual assessment of asbestos
containing materials; (iii) Sellers
have the right to have representatives present at all times during
Environmental Site Assessment activities
on the Real Property and shall have the right to request and receive splits of
any samples taken during such
activities; (iv) any Environmental Site Assessment Reports prepared
pursuant to this Section shall
be submitted to Sellers in draft form for review and comment prior to
submittal to the Michigan
Department of Environmental Quality under the regulations for the Baseline
Environmental Assessment
Program.; (v) any reports prepared pursuant to this Section relative
to any environmental compliance
review or environmental assessment of asbestos shall be submitted to Sellers in
draft form for review and
comment; (vi) copies of all final reports relating to activities
authorized under this Section shall be provided to Sellers within five
business days of their completion.

 

(b)           Indiana and Canal Fulton, Ohio Sites. As a result of its investigations to date,
Buyer will not conduct a Phase II Environmental Site Assessment or further
assessment of asbestos at the Real Property located in Indiana and Canal
Fulton, Ohio. Buyer (and its consultants) shall complete the environmental
compliance reviews of these sites upon receipt of certain documents that have
been, or will be prior to Closing, requested of Sellers. If any reports are
prepared pursuant to this Section relating to environmental compliance
reviews or visual assessment of asbestos containing materials, such reports
shall be submitted to Sellers in draft form for review and comment prior
to finalization of said reports. Copies of all final reports, if any, relating
to activities authorized under this Section shall be provided to Sellers
within five business days of their completion.

 

ARTICLE V

 

CONDITIONS PRECEDENT

 

5.1.          Conditions to Obligations of Each Party. The obligations of each of the parties to
consummate the transactions contemplated hereby shall be subject to the
fulfillment on or prior to the Closing Date of the following conditions:

 

5.1.1.       HSR Act Notification.
In respect of the notifications of the Buyer and the Sellers pursuant to the
HSR Act, the applicable waiting period and any extensions thereof shall have
expired or been terminated.

 

5.1.2.       No Injunction, etc.
Consummation of the transactions contemplated hereby shall not have been
restrained, enjoined or otherwise prohibited by any Applicable Law, including
any order, injunction, decree or judgment of any court or other Governmental
Authority. No court or other Governmental Authority shall have determined any
Applicable Law to make illegal the consummation of the transactions
contemplated hereby or by the Collateral Agreements.

 

5.2.          Conditions to Obligations of the Buyer. The obligations of the Buyer to consummate
the transactions contemplated hereby shall be subject to the fulfillment (or
waiver by the Buyer)

 

25

 

on or prior to the Closing
Date of the following additional conditions, which the Sellers agree to use
reasonable good faith efforts to cause to be fulfilled:

 

5.2.1.       Representations; Performance.

 

(a)           The representations and warranties of the Sellers and the Guarantor
contained in this Agreement and in the Collateral Agreements (i) shall be
true and correct in all respects (in the case of any representation or warranty
containing any materiality qualification) or in all material respects (in the
case of any representation or warranty without any materiality qualification)
at and as of the date hereof and (ii) shall be repeated and shall be true
and correct in all respects (in the case of any representation or warranty
containing any materiality qualification) or in all material respects (in the
case of any representation or warranty without any materiality qualification)
at and as of the Closing Date.

 

(b)           Each Seller and the Guarantor shall have duly performed and complied in
all material respects with all agreements and conditions required by this
Agreement and each of the Collateral Agreements to be performed or complied
with by it prior to or on the Closing Date.

 

(c)           The Sellers shall have delivered the Trade Accounts Payable Statement
to the Buyer five (5) Business Days prior to the Closing Date.

 

(d)           Each Seller and the Guarantor shall have delivered to the Buyer a
certificate, dated the Closing Date and signed by its duly authorized officer,
certifying as to the matters set forth in Sections 5.2.1(a) and (b).

 

5.2.2.       Consents.

 

(a)           All consents, amendments, legal opinions, letters and other actions
required in order to assign the IRB Loan Documents and to institute an Alternate
Credit Facility (as such term is defined in the IRB Loan Agreement) under the
IRB Loan Agreement shall have been executed or obtained, as the case may be,
on terms reasonably satisfactory to the Buyer.

 

(b)           The Sellers shall have obtained and shall have delivered to the Buyer
copies of all consents and extensions, or other actions reasonably satisfactory
to the Buyer, set forth in Section 5.2.2 of the Company Disclosure Letter.

 

5.2.3.       Collateral Agreements.
The Guarantor and the Sellers or one of their Affiliates, as the case may be,
shall have entered into each of the following agreements with the Buyer:

 

(a)           a transitional services agreement, in the form and
substance reasonably satisfactory to the Buyer and Sellers, pursuant to which
the Sellers will provide to the Buyer for a period of up to twelve months
following the Closing Date certain of those goods, rights and services
specified therein that are currently provided or made available to the Business
by the Sellers or their Affiliates; and

 

(b)           a supply agreement, in the form of Exhibit A,
pursuant to which the Sellers will purchase from the Buyer those goods, rights
and services specified therein that are currently provided or made available to
the Business by the Sellers or their Affiliates.

 

5.2.4.       Transfer Documents.
The Sellers shall have executed and delivered to the Buyer at the Closing all
documents, certificates and agreements reasonably necessary to transfer to the

 

26

 

Buyer good and marketable
title to the Assets, free and clear of any and all Liens thereon, other than
Permitted Liens, including without limitation:

 

(a)           a bill of sale, assignment and general
conveyance, in form and substance reasonably satisfactory to the Buyer and
Sellers, dated the Closing Date, with respect to the Assets (other than any
Asset to be transferred pursuant to any of the instruments referred to in any
other clause of this Section 5.2.4);

 

(b)           a general warranty deed, dated as of the
Closing Date, with respect to the Owned Real Property included in the Assets,
in form and substance reasonably satisfactory to the Buyers and the
Sellers, together with any necessary transfer declarations or other filings;

 

(c)           an assignment of lease, in form and
substance reasonably satisfactory to the Buyers and the Sellers, dated as of
the Closing Date, with respect to each real property Lease listed on Schedule 5.2.2,
together with any necessary transfer declarations or other filings, together
with a consent to assignment of the Lease from the landlord thereunder (to the
extent required by the Lease) and an estoppel certificate from the landlord
identifying in the Lease to the assigned, setting forth the rent payable
thereunder and term of the Lease and stating that there are no defaults by the
tenant thereunder;

 

(d)           certificates of title to all owned motor
vehicles included in the Assets to be transferred to the Buyer hereunder, duly
endorsed for transfer to the Buyer as of the Closing Date; and

 

(e)           as to the Owned Real Property:

 

(i)            such affidavits or assurances to the Buyer’s
title insurance company as will permit the Buyer to obtain (upon the Buyer’s
payment of applicable premiums) an owner’s policy of title insurance insuring
title to the Owned Real Property to be in the Buyer, free and clear of all
liens and encumbrances other than Permitted Liens,

 

(ii)           such surveys, plans/specifications,
warranties and property records which are in the Seller’s possession, and

 

(iii)          keys to locks located on the Owned Real
Property.

 

5.2.5.       Indiana Responsible Property Transfer Law. Any disclosure document required to be
provided by the Sellers pursuant to the Indiana Responsible Property Transfer
Law shall have been provided to the Buyer on or prior to the Closing Date.

 

5.2.6.       FIRPTA Certificate.
Each Seller shall deliver to the Buyer a certification dated as of the Closing
Date, in the form required by Treasury Regulations § 1.1445-2(b)(2) and
signed under penalties of perjury, stating that such Seller is not a foreign
person (within the meaning of section 1445 of the Code).

 

5.3.          Conditions to Obligations of the Sellers. The obligations of the Sellers to
consummate the transactions contemplated hereby shall be subject to the
fulfillment (or waiver by the Sellers), on or prior to the Closing Date, of the
following additional conditions, which the Buyer agrees to use reasonable good
faith efforts to cause to be fulfilled.

 

27

 

5.3.1.       Representations, Performance, etc.

 

(a)           The representations and warranties of the Buyer contained in this
Agreement and the Collateral Agreements (i) shall be true and correct in
all respects (in the case of any representation or warranty containing any
materiality qualification) or in all material respects (in the case of any
representation or warranty without any materiality qualification) at and as of
the date hereof and (ii) shall be repeated and shall be true and correct
in all respects (in the case of any representation or warranty containing any
materiality qualification) or in all material respects (in the case of any
representation or warranty without any materiality qualification) at and as of
the Closing Date.

 

(b)           The Buyer shall have duly performed and complied in all material
respects with all agreements and conditions required by this Agreement and the
Collateral Agreements to be performed or complied with by it prior to or on the
Closing Date.

 

(c)           Each
Buyer shall have delivered to the Sellers a certificate, dated the Closing Date
and signed by its duly authorized officer, certifying as to the matters set
forth in Section 5.3.1(a) and (b).

 

5.3.2.       Consents.
The Sellers shall have obtained copies of all consents set forth in Section 5.3.2
of the Company Disclosure Letter.

 

5.3.3.       Assumption Agreement. The Sellers shall have received from the
Buyer the Assumption Agreement.

 

5.3.4.       Collateral Agreements. The Buyer shall have entered into each of
the Collateral Agreements.

 

5.3.5.       Bank Consent. Sellers shall have received a consent under
their bank credit facility to the sale of the Business.

 

ARTICLE VI

 

EMPLOYEES AND EMPLOYEE BENEFIT PLANS

 

6.1.          Employment of the Sellers’ Employees.

 

6.1.1.       Non-Solicitation. Beginning on the date of this Agreement and
continuing for a period of two years from the Closing Date, the Sellers and the
Guarantor will not, and will not permit any of their Affiliates, either
directly or indirectly, through agents or consultants, to, employ any employee
of the Buyer who was a Management Employee of the Business as of the date of
this Agreement (other than the employment of such persons in the Business from
the date hereof through the Closing Date) without obtaining the prior written
consent of the Buyer to such action; provided that the Sellers may employ
any such person who has been terminated by the Buyer prior to commencement of
employment discussions between the Sellers and such persons.

 

6.1.2. Employees Represented by a Labor
Organization. Effective as of the Closing Date, the Buyer will hire all
employees at any Acquired Facility organized by a labor organization and assume
the collective bargaining agreements listed in Section 6.1.2 of the
Company Disclosure Letter (“Assumed Collective Bargaining Agreements”), as well
as any duty to bargain at any such facility and the Buyer shall notify labor
organizations at any Acquired Facility of its obligations in this regard prior
to Closing. Such assumption will include, but not be limited to, offering
employment to all 

 

28

 

represented employees at
Acquired Facilities organized by labor organizations on terms and conditions
they enjoy under the collective bargaining agreement with the Buyer.

 

6.1.3. Transferred Employees. Effective as of
the Closing Date, the Buyer  shall
offer to employ, with a wage and benefits package as of the Closing Date that
is comparable in the aggregate
to or better than the wage and benefits package such Employees were entitled to
receive from the Sellers, all of
the Employees who are actively employed in the Business on the Closing Date
immediately after giving effect
to the transactions contemplated hereby (each such Employee who accepts such offer,
together with Employees represented by a labor organization as provided at Section 6.1.2
above, being hereafter referred
to as a “Transferred Employee”), it being agreed that persons who are on
layoff or leave and who have a
right to return to work at an Acquired Facility or who are on short-term
(not more than six months)
medical disability leave (including pregnancy leave) as of the Closing Date or
who are on any other authorized
leave (such as military, family or other leaves where return to work is subjectto statutory or contractual
requirements) are to be considered Employees who are actively employed, andit is also agreed that persons on
long-term medical disability or worker’s compensation as of the Closing Date and persons whose employment has
terminated or will terminate prior to the Closing Date without any right to return to work are not to be
considered Employees who are actively employed. Notwithstanding the foregoing, (i) the provisions of
Sections 6.1.1 and 6.1.2 shall not be construed to limit the ability of the Buyer to terminate any such
Employee at any time for any reason after the Closing Date except as otherwise prohibited by law, or subject to
the terms and conditions of any Assumed Collective Bargaining Agreement, and (ii) the Buyer
shall not be obligated to provide any benefits that are comparable to any stock based benefits or any defined
benefit pension plan benefits, except in connection with Assumed Collective Bargaining Agreements.
From and after the Closing Date, the Buyer shall also assume responsibility to provide Transferred
Employees with disability benefits in the same manner and to the same extent as such Transferred Employees
would have been entitled to receive under the Sellers’ disability plans and the Buyer shall assume
the responsibility to provide Transferred Employees with continuing benefits and coverage required, if any, under
section 4980B of the Code and part 6 of Subtitle B of Title I of ERISA. Notwithstanding any
other provision of this Article VI, subject to Section 6.1.4, after the
Closing Date the Buyer shall not be prohibited from amending or terminating any
benefit or compensation plan,
program, practice, policy, agreement or arrangement covering any Transferred
Employee (subject to any
applicable terms and conditions of any Assumed Collective Bargaining
Agreement). From and after the
Closing, the Buyer shall be solely responsible for any and all liabilities,
obligations and responsiblities
in respect of the Transferred Employees, and their beneficiaries and
dependents, relating to or
arising in connection with or as a result of (i) the employment or the
actual or constructive termination of
employment of any such Transferred Employee by the Sellers (including, without
limitation, in connection with
the consummation of the transactions contemplated by this Agreement), (ii) the
participation in or accrual of
benefits or compensation under, or the failure to participate in or to accruecompensation or benefits under, any
Plan (other than any stock based Plan or any Plan that is a defined benefit pension plan) or other employee or
retiree benefit or compensation plan, program, practice, policy, agreement or arrangement of the Sellers or (iii) accrued
but unpaid salaries, wages, bonuses, incentive compensation, vacation or sick pay or other compensation or payroll
items (including, without limitation, deferred compensation), except, in any such case, to the extent any
such liability, obligation or responsibility (x) is specifically retained by the Sellers pursuant to this Article VI
or (y) relates to services rendered and arose prior to the Closing Date and is not reflected on the Closing
Net Working Capital Statement in
a manner consistent with the prior practice of the Sellers. Notwithstanding any
other provision of this
Agreement, the Sellers shall retain all liability for defined benefit pension
benefits accrued by Transferred Employees
as of the Closing Date, and shall retain all responsibility and liability
arising out of or relating to
the Metaldyne Corporation Pension Plan (MascoTech) (the “Seller Pension Plan”).
On or as soon as practicable
following the Closing Date, the Buyer shall establish a defined benefit pension
plan (the “Buyer Pension Plan”)
to provide for such defined benefit pension benefits as are required to be
provided to Transferred
Employees from and after the Closing Date pursuant to any Assumed Collective

 

29

 

Bargaining Agreement; provided,
however, that the Buyer Pension Plan shall provide credit with respect
to Transferred Employees for
service credited under the Seller Pension Plan for purposes of eligibility, vesting
and benefit accrual, and shall also provide that the benefit accrued with
respect to any Transferred Employee
under the Buyer Pension Plan shall be reduced by the benefit accrued with
respect to such Transferred
Employee under the Seller Pension Plan.

 

6.1.4.       Responsibility Under the Worker Adjustment
and Retraining Notification  Act
(WARN). The Buyer shall not,
during the sixty (60) day period after the Closing Date, change the terms and conditions of the employment of
the Transferred Employees such that such changes would result in the employees becoming eligible for
notice or notice pay under the federal law known as the Worker Adjustment and Retraining Notification
Act (“WARN”). Except as to this condition, the parties agree that the Sellers shall be responsible
for any required WARN notices under WARN up until the date and time of Closing and the Buyer for WARN
notices after the date and time of Closing. If and when such notice is required for Transferred
Employees at any time (if ever) due to actions or inactions of the Buyer but is not given, the Buyer shall be
responsible to indemnify the Sellers for the Sellers’ portion of any pay
in lieu of notice required under WARN to be paid by the Sellers.

 

6.2.          Worker’s Compensation
Claims.

 

(a)           The Sellers shall retain liability for all suits, claims, proceedings
and actions pending as of or
commenced after the Closing Date resulting from actual or alleged harm or
injury to Transferred Employees
where the incident or accident giving rise to such liability occurred prior to
the Closing Date. The Buyer
shall assume liability for all suits, claims, proceedings and actions commencedby or on behalf of a Transferred
Employee on or after the Closing Date where the incident or accident giving rise to such liability occurs on or
after the Closing Date. The Buyer shall make all necessary arrangements to provide worker’s compensation insurance
and cover claims for Transferred Employees arising on or after the Closing Date and to ensure the management of
such claims. 

 

(b)           Buyer will offer to hire any Employee at a wage and benefits package
that would meet the requirements
of Section 6.1.3 who is on worker’s compensation leave as of the Closing
Date and who is not otherwise a
Transferred Employee as of the Closing Date, upon the date that both the
following conditions are met (i) the
employee is able to return to work, and (ii) there is a position with the
Buyer that the Employee can fill
for which the Employee is reasonably qualified and for which the Employeecan perform the essential
functions, with or without reasonable accommodation. In the case of Employeeswho are on worker’s compensation leave
at an Acquired Facility but whom are covered by a Assumed Collective Bargaining Agreement, the Buyer
will hire such Employees as of the Closing Date and provide such leave manner and reinstatement in the
manner provided by the Assumed Collective Bargaining Agreement. In either
case, effective upon being hired, such Employees shall be deemed to be a
Transferred Employee for
purposes of this Agreement. Notwithstanding the foregoing, the provisions of
this Section 6.2(b) shall
not be construed to limit the ability of the Buyer to terminate any such
Employee at any time for any reason after the Closing Date except as otherwise prohibited
by law, or subject to the terms
and conditions of any Assumed Collective Bargaining Agreement.

 

6.3.          Welfare Benefit Plans.

 

6.3.1.       Transferred Employees. Payment of claims for all Transferred
Employees and their dependents
and beneficiaries (the “Covered Employees”) and their respective
eligible dependents under the
welfare benefit plans (as defined in section 3(1) of ERISA)
maintained by the Sellers or
their Affiliates for the benefit of Employees prior to the Closing Date (the “Seller
Welfare Plans”) shall be cut
off and terminated as of the Closing Date, provided that the Sellers
shall remain liable for all claims
incurred and made by Covered Employees prior to the Closing Date that remain
unpaid as of the 

 

30

 

Closing Date. Subject to the
satisfaction of any conditions, limitations or waiting periods referred to in
the last sentence of this Section, the welfare benefit plans (as defined in section 3(1) of
ERISA) maintained by the Buyer or its Affiliates (the “Buyer Welfare Plans”)
shall provide coverage and benefits to such Covered Employees (and the eligible
dependents of such Covered Employees) in substantially the same manner as
provided by the Sellers prior to the Closing Date. The Buyer Welfare Plans
shall be liable for claims incurred or made by Covered Employees on or after
the Closing Date. The Covered Employees shall be entitled to apply deductibles
and out of pocket payments expended for covered medical and dental expenses
under the Seller Welfare Plans in the plan fiscal year ending December 31,
2005 to the deductibles and out of pocket maximums under the Buyer Welfare
Plans, if any, for the plan fiscal year which ends on December 31, 2005.
If requested by the Buyer, the Sellers shall furnish the Buyer with a schedule within
a reasonable period of time following the Closing Date setting forth the
deductibles and out of pocket maximums incurred under the Seller Welfare Plans
for each Covered Employee. The Seller Welfare Plans shall be liable only for
claims incurred and actually made prior to the Closing Date. The Seller Welfare
Plans shall continue to operate in their usual and customary manner for all
periods between the date that this Agreement is executed and the Closing Date.
No pre-existing condition limitations, exclusions or waiting periods applicable
with respect to life and accident, death and dismemberment insurance,
disability, sickness and accident and medical benefits under the Buyer Welfare
Plans shall apply to the Covered Employees to the extent that such limitations,
exclusions or waiting periods exceed those in effect under the Seller Welfare
Plans as of the Closing Date.

 

6.3.2.       Cooperation. To the extent that the Buyer or the Sellers are unable to, with
reasonably diligent effort and at reasonable expense, perform their
obligations in the manner contemplated by this Article VI, the Buyer and
the Sellers shall cooperate in order to achieve the most economic transfer
reasonably practicable and the Buyer on the one hand and the Sellers on the
other agree to indemnify each other for any incremental expenses incurred by
the other as a result of any accommodation by either such party from the
respective responsibilities assigned to the parties by this Section 6.3.2.

 

6.4.          Information; Cooperation. If after the Closing, in order properly to
prepare documents or reports required to be filed with Governmental Authorities
or financial statements, it is necessary that the Buyer or the Sellers be
furnished with additional information relating to the Business and such
information is in possession of any party hereto, such party will use its
reasonable efforts to furnish, or cause to be furnished, such information
to the party requesting information. Notwithstanding the above, to the extent
that the Buyer or the Sellers are unable to, with reasonably diligent effort
and at reasonable expense, perform their obligations in the manner
contemplated by this Article VI, the Buyer and the Sellers shall cooperate
in order to achieve the most economic transfer reasonably practicable and the
Buyer on the one hand and the Sellers on the other agree to indemnify each
other for any incremental expenses incurred by the other as a result of any
accommodation by either such party from the respective responsibilities
assigned to the parties by this Article VI.

 

ARTICLE VII

 

TERMINATION

 

7.1.          Termination. This Agreement may be terminated:

 

(a)           at any time prior to the Closing Date by the
written agreement of the Buyer and the Sellers;

 

(b)           at any time prior to the Closing Date by
either the Sellers or the Buyer by written notice to the other party if any
court of competent jurisdiction in the United States or federal, state or local
government or regulatory body in the United States shall have issued an order,
decree or

 

31

 

ruling
or taken such action that permanently restrains, enjoins or otherwise prohibits
the transactions contemplated hereby and such order, decree, ruling or other
action shall have become final and non-appealable;

 

(c)           at any time prior to the Closing Date by
either the Sellers or the Buyer by written notice to the other party if the
transactions contemplated hereby shall not have been consummated pursuant
hereto by 5:00 p.m. New York City time on February 28, 2006, unless
such date shall be extended by the mutual written consent of the Sellers and
the Buyer;

 

(d)           at any time prior to the Closing Date by the
Buyer by written notice to the Sellers if the representations and warranties of
the Sellers shall not have been true and correct in all material respects as of
the date when made, unless such failure shall be due to the failure of the
Buyer to perform or comply with any of the covenants, agreements or
conditions hereof to be performed or complied with by it prior to the Closing;

 

(e)           at any time prior to the Closing Date by the
Sellers by written notice to the Buyer if the representations and warranties of
the Buyer shall not have been true and correct in all material respects as of
the date when made, unless such failure shall be due to the failure of the
Sellers to perform or comply with any of the covenants, agreements or
conditions hereof to be performed or complied with by them prior to the
Closing.

 

7.2.          Effect of Termination. In the event of the termination of this
Agreement pursuant to the provisions of Section 7.1, this Agreement shall
become void and have no effect, without any liability to any Person in respect
hereof or of the transactions contemplated hereby on the part of any party
hereto, or any of its directors, officers, employees, agents, consultants,
representatives, advisers, stockholders or Affiliates, except as specified in Section 9.4
and except for any liability resulting from such party’s breach of this
Agreement.

 

ARTICLE VIII

 

GUARANTY

 

8.1.          Guaranty of Sellers’ Obligations.

 

(a)           The Guarantor hereby unconditionally
guarantees to the Buyer the due and prompt payment and performance of all
obligations of the Sellers under this Agreement and the Collateral Agreements
(collectively, the “Guaranteed Obligations”). In case of the failure of
the Sellers to timely pay or perform any Guaranteed Obligation, the
Guarantor hereby agrees to cause any such payment to be made punctually when
and as the same shall become due and payable, and to cause the timely
performance of any such Guaranteed Obligations, all in accordance with the
terms of this Agreement and the Collateral Agreements.

 

(b)           The Guarantor hereby agrees that its
Guaranteed Obligations hereunder shall be continuing, absolute and
unconditional, and shall remain in full force and effect until all of the
Guaranteed Obligations under this Agreement have been completely discharged,
irrespective of (1) the extension by the Buyer of the time for payment or
performance by the Sellers or the Guarantor of any of their obligations arising
under this Agreement or the Collateral Agreements; (2) the modification or
amendment of any duty, covenant, agreement or obligation of the Sellers or the
Guarantor contained in this Agreement or the Collateral Agreements; (3) any
failure, omission, delay or lack on the part of the Buyer to enforce,
assert or exercise any right, power or remedy conferred on the Buyer under this
Article VIII; (4) lack of presentment, notice of default or protest; (5) lack
of corporate power or due authorization, execution or

 

32

 

delivery by the Sellers; and
(6) any other circumstances which might otherwise constitute a legal or
equitable discharge or defense of a guarantor; provided that in no event
shall this paragraph extend the scope of the Guaranteed Obligations set forth
in Section 8.1(a) above. The Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of merger or
bankruptcy of the Sellers, any right to require a legal proceeding first
against the Sellers, and all demands whatsoever, and covenants that the
Guaranteed Obligations contained in this Article VIII will not be
discharged except by complete performance of the obligations of the Sellers
contained in this Agreement or the Guaranteed Obligations contained in this Article VIII.

 

(c)           The Guarantor further agrees that if at any
time all or any part of any payment theretofore applied by the Buyer to
any Guaranteed Obligation is or must be rescinded or returned to Sellers for
any reason whatsoever, including, without limitation, the insolvency,
bankruptcy or reorganization of the Sellers, such Guaranteed Obligation shall
for the purposes of this Article VIII, to the extent that such payment is
or must be rescinded or returned, be deemed to have continued in existence
notwithstanding such application, and this Article VIII shall continue to
be effective or to be reinstated, as the case may be, as to such Guaranteed
Obligation as thought such application had not been made.

 

(d)           Notwithstanding any other provisions hereof,
the Guarantor shall be entitled to the benefit of and may assert as a
defense against any claim under this guarantee, any defense, set-off or counterclaim
which the Sellers could have asserted other than defenses based upon or
relating to Sellers’ insolvency, bankruptcy or similar laws or lack or
corporate power or due authorization or delivery by the Sellers.

 

8.2.          Subrogation. The Guarantor shall be subrogated to all rights of the Buyer against
the Sellers in respect of any amount paid by the Guarantor pursuant to the
provisions of this Article VIII; provided that any such rights of
the Guarantor shall be subordinate to any rights of the Buyer against the
Sellers.

 

8.3.          Representations and Warranties. The Guarantor represents and warrants to the
Buyer as follows:

 

(a)           The Guarantor holds, beneficially and of
record, all of the issued and outstanding membership and other equity or
ownership interests of each of the Sellers.

 

(b)           The Guarantor is duly authorized, under all
applicable provisions of law, to execute and deliver this Agreement and to perform its
obligations hereunder, all corporate and stockholder action necessary therefor
has been duly and effectively taken that the execution and delivery of this
Agreement and performance in accordance with its terms will not result in a
breach of any of the terms or provisions of, or constitute a default under, any
indenture, deed of trust, note, note agreement, consent or other agreement or
instrument to which the Guarantor is a party, or its certificate of limited
partnership or its limited partnership agreement, and this Agreement is a valid
and legally binding instrument for the purposes herein expressed, enforceable
in accordance with its terms (except as enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting creditors’
rights generally).

 

(c)           All consents, licenses, approvals, orders and
authorizations of, and declarations filings and registrations with, any
governmental or regulatory authority, bureau or agency required to be obtained
by the Guarantor in connection with the execution, delivery, performance,
validity or enforceability of this Agreement have been duly obtained or made
and are in full force and effect.

 

33

 

8.4.          Liquidation, Winding Up, etc. If the Guarantor shall liquidate, wind up
or dissolve itself or if the Guarantor sells all or substantially all of its
assets, the Guarantor hereby covenants and agrees that upon any such
liquidation, winding up, dissolution or sale, the guarantee given in this
Agreement and the due and punctual performance and observance of the Guaranteed
Obligations shall be expressly assumed by supplemental agreements including
provisions in substantially the form attached hereto as Exhibit C, by
the corporation, corporations or other entity which shall have acquired all or
substantially all of the assets of the Guarantor.

 

ARTICLE IX

 

DEFINITIONS; MISCELLANEOUS

 

9.1.          Definition of Certain Terms. The terms defined in this Section 9.1,
whenever used in this Agreement (including in the Company Disclosure Letter and
Buyer Disclosure Letter), shall have the respective meanings indicated below
for all purposes of this Agreement. All references herein to a Section,
Article, Exhibit or section of the Company Disclosure Letter or Buyer
Disclosure Letter are to a Section, Article or Exhibit or section of
the Company Disclosure Letter or Buyer Disclosure Letter or to this Agreement,
unless otherwise indicated.

 

Acquired
Facility: any
facility whose ownership and/or operation is transferred to the Buyer by this
Agreement.

 

Affiliate: of a Person, another Person that directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, the first Person. “Control” (including
the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a Person, whether through the ownership
of voting securities, by contract or credit arrangement, as trustee or
executor, or otherwise.

 

Agreement: this Asset Purchase Agreement, including
the Company Disclosure Letter and Buyer Disclosure Letter.

 

Applicable
Law: all applicable
provisions of all (i) constitutions, treaties, statutes, laws (including
the common law), rules, regulations, ordinances, codes or orders of any
Governmental Authority, (ii) Governmental Approvals and (iii) orders,
decisions, injunctions, judgments, awards and decrees of or agreements with any
Governmental Authority.

 

Assets: as defined in Section 1.1.

 

Assumed
Collective Bargaining Agreements: as defined in Section 6.1.2.

 

Assumed
Liabilities: as
defined in Section 2.6(a).

 

Assumption
Agreement: as defined
in Section 2.6(b).

 

Audited
Financial Statements:
as defined in Section 3.1.4(a).

 

Baseline
Environmental Assessment Program: as defined in Section 4.3.

 

34

 

Benefit
Liabilities:
liabilities, obligations, commitments, costs and expenses, including reasonable
fees and disbursements of attorneys and other advisors, including any such
expenses incurred in connection with the enforcement of any applicable
provision of this Agreement.

 

Bulk
Sales Laws: as
defined in Section 4.1.7.

 

Business: as defined in the first WHEREAS clause of
this Agreement.

 

Business
Day: a day other than
a Saturday, Sunday or other day on which commercial banks in New York City are
authorized or required to close.

 

Buyer: as defined in the first paragraph of this
Agreement.

 

Buyer
Disclosure Letter: as
defined in Section 3.2.

 

Buyer
Indemnitees: as
defined in Section 9.2(a).

 

Buyer
Pension Plan: as
defined in Section 6.1.3.

 

Buyer
Welfare Plans: as
defined in Section 6.3.1.

 

Closing: as defined in Section 2.1.

 

Closing
Date: as defined in Section 2.1.

 

Closing
Net Working Capital Statement: as defined in Section 2.5(a).

 

Code: the Internal Revenue Code of 1986, as
amended.

 

Collateral
Agreements: the
agreements and other documents and instruments describe in Section 5.2.3.

 

Company
Disclosure Letter: as
defined in Section 3.1.

 

Confidentiality
Agreement: the
Confidentiality Agreement dated as of July 25, 2005.

 

Contracts: all contracts, agreements, instruments,
leases, subleases, deeds of trust, conditional sales contracts, franchises,
licenses, commitments or other binding arrangements, together with all
modifications and amendments thereto, including any that are executory and
unexpired as of the Closing Date.

 

Covered
Employees: as defined
in Section 6.3.1.

 

CPR: as defined in Section 9.9.4.

 

Deposit: as defined in Section 2.2(b)

 

Dispute: as defined in Section 9.9.4.

 

Dispute
Notice: as defined in
Section 2.5(d).

 

$: lawful money of the United States.

 

35

 

Employees: as defined in Section 3.1.21(a).

 

Environmental
Laws: all Applicable
Laws relating to the protection of the environment and human health (to the
extent related to exposure to Hazardous Substances), including those relating to
generation, pollution, storage, transport, treatment, disposal, use and Release
of any Hazardous Substances.

 

Environmental
Liabilities: any
liability or obligation, including, without limitation, liability for
investigatory costs, oversight costs, remediation and cleanup costs,
governmental or private response costs and cost recovery actions, natural
resource damages, property damages, personal injuries, consequential economic
damages, administrative, civil or criminal penalties or forfeitures, and
recoverable attorneys’ fees or other costs of defending an action, suit,
proceeding or investigation asserting liability under any Environmental Law.

 

Environmental
Permits: any federal,
state and local permit, license, registration, approval or other authorization
necessary under Environmental Laws for the conduct of the Business as currently
conducted.

 

ERISA: the Employee Retirement Income Security Act
of 1974, as amended.

 

Escrow
Agent: as defined in Section 2.2(b).

 

Excluded
Assets: as defined in
Section 1.2.

 

Financial
Statements: as
defined in Section 3.1.4(a).

 

GAAP: generally accepted accounting principles
consistently applied as in effect in the United States.

 

Governmental
Approval: any
consent, license, registration or permit issued, granted, given or otherwise
made available by or under the authority of any Governmental Authority or
pursuant to any Legal Requirement, which consent, license, registration or
permit is related primarily to or required for the operation of the Business.

 

Governmental
Authority: any nation
or government, any state or other political subdivision thereof or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including, without limitation, any
government authority, agency, department, board, commission or instrumentality
of the United States, any State of the United States or any political
subdivision thereof.

 

Guaranteed
Obligations: as
defined in Section 8.1(a).

 

Guarantor: as defined in the first paragraph of this
Agreement.

 

Hazardous
Substance: any
substance, waste, pollutant, contaminant, material or chemical, including
asbestos, polychlorinated biphenyls, crude oil, petroleum or petroleum
products, regulated under any Environmental Law.

 

HSR
Act: the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

 

Indemnified
Party: as defined in Section 9.2(e).

 

36

 

Indemnifying
Party: as defined in Section 9.2(e).

 

Independent
Accounting Firm: as
defined in Section 2.5(d).

 

Intellectual
Property: any and all
United States and foreign (a) patents and patent applications (including,
reissues, divisions, continuations, continuations-in-part and extensions
and any application thereto), inventions and improvements thereto; (b) trademarks,
service marks, certification marks, trade names, trade dress, logos, business
and product names, slogans and registrations and applications for registration
thereof; (c) copyrights (including software) and registrations thereof,
(x) but excluding, in the case of clauses (a), (b) and (c), the name “Metaldyne”
and (y) including, without limitation, in the case of clauses (a), (b) and
(c), the names “FormTech”, “Braun” and “Burns”; and (d) inventions,
processes, designs, formulae, Software, trade secrets, know-how, industrial
models, confidential and technical information, manufacturing, engineering and
technical drawings, product specifications and confidential business
information.

 

Intellectual
Property Assets: as
defined in Section 1.1(f).

 

Inventories:
as defined in Section 1.1(b).

 

IRB
Loan Agreement: the
Loan Agreement, by and between the City of Fort Wayne, Indiana and ND-Tech
Corporation, an Indiana corporation, dated as of July 1, 1989, as amended
by the First Amendment to the Loan Agreement, dated as of July 1, 1994.

 

IRB
Loan Documents:
collectively, (i) the IRB Loan Agreement, (ii) Placement and
Remarketing Agreement among the City of Fort Wayne, Indiana, ND-Tech
Corporation, First Chicago Capital Markets, Inc., as Placement Agent and
First Chicago Capital Markets, Inc., as Remarketing Agent, dated 7/1/89, (iii) the
Arbitrage Compliance Agreement among the City of Fort Wayne, Indiana, ND-Tech
Corporation and Fort Wayne National Bank, dated 7/1/89 and (iv) the Tax
Compliance Agreement among the City of Fort Wayne, Indiana, ND-Tech Corporation
and Fort Wayne National Bank, dated 7/1/89.

 

IRS: the Internal Revenue Service.

 

Knowledge
of the Sellers:
knowledge of Thomas Amato, John Campbell, Steven Dickerson, Dean Teeples, David
Gann, Dr. Markus Knoerr and Jeffrey Heath, after reasonable inquiry or
investigation.

 

Labor
Laws: as defined in Section 3.1.20(a).

 

Leased
Real Property: all
interests leased pursuant to the Leases.

 

Leases: the real property leases pursuant to which
any Seller is the lessee or sublessee, other than real property leases or
subleases included in Excluded Assets.

 

Legal
Requirement: any
federal, state or municipal law, ordinance, regulation, statute or treaty.

 

Lien: any mortgage, pledge, hypothecation,
security interest, encumbrance, lien, charge or right of others of similar
nature.

 

Losses: as defined in Section 9.2(a).

 

37

 

Management
Employee: any
employee who serves as a manager, director, officer or professional or
engineering employee of the Business.

 

Marked
Materials: as defined
in Section 4.2.4.

 

Material
Adverse Effect: any
event, occurrence, fact, condition, circumstance, change or effect which has
had or would be reasonably likely to have a material adverse effect upon, or
change in the business, results of operations, financial condition, assets
(including intangible assets) or liabilities of the Business, taken as a whole;
provided,  however, that none of the following shall be deemed in
themselves, either alone or in combination, to constitute, and none of the
following shall be taken into account in determining whether there has been, a
Material Adverse Effect: (i) any adverse change, effect, event,
occurrence, state of facts or development solely to the extent attributable to
the announcement of pendency of the transactions contemplated hereby and by the
Collateral Agreements (including any cancellations of or delays in customer
orders, any reduction in sales, any disruption in supplier, distributor, partner
or similar relationships or any loss of employees), (ii) any adverse
change, effect, event, occurrence, state of facts or development attributable
to conditions affecting the industries in which the Business participates which
does not affect the Business disproportionately relative to other entities
operating in such industries, or (iii) any material adverse change,
effect, event, occurrence, state of facts or development resulting from or
relating to compliance with the terms of, or the taking of any action required
by, this Agreement.

 

Metaldyne
LLC: as defined in
the first paragraph of this Agreement.

 

Metaldyne
Precision: as defined
in the first paragraph of this Agreement.

 

Net
Working Capital: as
defined in Section 2.5(a).

 

Net
Working Capital Principles: as defined in Section 2.5(a).

 

Order: any binding award, decision, order,
injunction, judgment, decree, ruling or verdict entered, issued, made or rendered
by, or assessment or arbitration award of, any Governmental Authority or
arbitrator.

 

Ordinary
Course of Business:
the ordinary course of business of the Sellers consistent with past custom and
practice.

 

Owned
Intellectual Property:
as defined in Section 3.1.16(a).

 

Owned
Real Property: the
real property owned by the Sellers relating to the Business, together with all
other structures, facilities, improvements, fixtures, systems, equipment and
items of property presently or hereafter located thereon attached or
appurtenant thereto or owned by the Sellers relating to the Business and all
easements, licenses, rights and appurtenances relating to the foregoing other
than owned real property included in Excluded Assets.

 

Permitted
Liens: (i) Liens
reserved against in the Unaudited Balance Sheet, to the extent so reserved, (ii) Liens
for Taxes not yet due and payable or which are being contested in good faith and
by appropriate proceedings if adequate reserves with respect thereto are
maintained on the Sellers’ books in accordance with GAAP, or (iii) other
Liens arising in the Ordinary Course of Business which are immaterial and which
do not, individually or in the aggregate, materially detract from the value of
the property or assets to which it relates or materially impair the ability of
the Buyer to use the property or assets

 

38

 

which it relates in
substantially the same manner as it was used prior to the Closing Date,
specifically excluding, however, mortgages on the Leases or Owned Real
Property.

 

Person: any natural person, firm, partnership,
association, corporation, company, trust, business trust, Governmental
Authority or other entity.

 

Plan: as defined in Section 3.1.21(a).

 

Proceeding: any action, arbitration, audit, hearing,
investigation, litigation or suit (whether civil, criminal, administrative,
judicial or investigative, whether public or private) commenced, brought,
conducted or heard by or before, or otherwise involving, any Governmental
Authority or arbitrator.

 

Purchase
Price: as defined in Section 2.2(a).

 

Real
Property: the Owned
Real Property and the Leased Real Property.

 

Real
Property Laws: as
defined in Section 3.1.18(e).

 

Record: information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and is retrievable in
perceivable form.

 

Release: any disposing, discharging, injecting,
spilling, leaking, leaching, pumping, dumping, emitting, escaping, emptying,
seeping or dispersal into the environment.

 

Representatives: as to any Person, its accountants, counsel,
consultants (including actuarial, environmental and industry consultants) and
lenders and their counsel and consultants, employees, agents and other
representatives and advisers.

 

Retained
Liabilities: as
defined in Section 2.7.

 

Rules: as defined in Section 9.9.4.

 

Seller
Indemnitees: as
defined in Section 9.2(b).

 

Seller
Pension Plan: as
defined in Section 6.1.3.

 

Seller
Welfare Plans: as
defined in Section 6.3.1.

 

Sellers: as defined in the first paragraph of this
Agreement.

 

Software: all computer software and subsequent
versions thereof, including source code, object, executable or binary code,
objects, comments, screens, user interfaces, report formats, templates, menus,
buttons and icons and all files, data, materials, manuals, design notes and
other items and documentation related thereto or associated therewith.

 

Subsidiary: each corporation or other Person in which a
Person owns or controls, directly or indirectly, capital stock or other equity
interests representing at least 50% of the outstanding voting stock or other
equity interests.

 

Target
Net Working Capital:
as defined in Section 2.5(b).

 

39

 

Tax: any federal, state, provincial, local, foreign
or other income, alternative, minimum, accumulated earnings, personal holding
company, franchise, capital stock, net worth, capital, profits, windfall
profits, gross receipts, value added, sales (including, without limitation,
bulk sales), use, goods and services, excise, customs duties, transfer,
conveyance, mortgage, registration, stamp, documentary, recording, premium,
severance, environmental (including, without limitation, taxes under section 59A
of the Code), real property, personal property, ad valorem, intangibles, rent,
occupancy, license, occupational, employment, unemployment insurance, social
security, disability, workers’ compensation, payroll, health care, withholding,
estimated or other similar tax, duty or other governmental charge or assessment
or deficiencies thereof (including all interest and penalties thereon and
additions thereto whether disputed or not).

 

Tax
Return: any return,
report, declaration, form, claim for refund or information return or statement
relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.

 

Taxing
Authority: the IRS or
any other federal, provincial, state, local or other taxing authority.

 

Trade
Accounts Payable:
short term obligations arising from the acquisition of goods and services from
the Sellers’ suppliers as evidenced by invoices, purchase orders/requisitions,
contracts, credit or debit memoranda or similar documentation (excluding any
payables to Subsidiaries of the Guarantor).

 

Trade
Accounts Payable Statement: as defined in Section 2.4(a).

 

Transfer
Taxes: as defined in Section 4.1.6(a).

 

Transferred
Employees: as defined
in Section 6.1.3.

 

Treasury
Regulations: the
regulations prescribed pursuant to the Code.

 

Unaudited
Balance Sheet Date: September 30,
2005.

 

Unaudited
Financial Statements:
as defined in Section 3.1.4(a).

 

Unaudited
Reviewed Financial Statements: as defined in Section 3.1.4(a).

 

Unaudited
Unreviewed Financial Statements: as defined in Section 3.1.4(a).

 

Working
Capital: as defined
in Section 2.5(a).

 

WARN: as defined in Section 6.1.4.

 

9.2.          Indemnification.

 

(a)           By the Sellers. The Sellers covenant and agree to defend,
indemnify and hold harmless the Buyer, its Affiliates and the officers,
directors, employees, agents, advisers and representatives of each such Person
(collectively, the “Buyer Indemnitees”) from and against, and pay or
reimburse the Buyer  Indemnitees for any and all claims,
liabilities, obligations, Taxes, losses, fines, royalties, proceedings,
deficiencies or damages (whether absolute, accrued, conditional or otherwise
and whether or not resulting from third party claims), including out-of-pocket
expenses and reasonable attorneys’ and

 

40

 

accountants’ fees incurred
in the investigation or defense of any of the same or in asserting any of their
respective rights hereunder (collectively, “Losses”), resulting from or
arising out of:

 

(i)            any inaccuracy of any representation or
warranty made by any Seller in (A) this Agreement, (B) the Company
Disclosure Letter, (C) any transfer instrument, (D) the certificate
delivered pursuant to Section 5.2.1(d), (E) all instruments and other
documents effecting the transfer of Assets or the assumption of Assumed
Liabilities pursuant to this Agreement or (F) the Trade Accounts Payable
Statement;

 

(ii)           any failure of either Seller to perform any covenant or agreement
set forth herein;

 

(iii)          any Excluded Assets;

 

(iv)          any Retained Liabilities (including, without limitation, the failure to
pay any Retained Liabilities), except to the extent that such liability is an
Assumed Liability;

 

(v)           any and all Benefit Liabilities in respect of Employees except, with
respect to Employees and Transferred Employees, to the extent assumed by the
Buyer pursuant to Article VI; and

 

(vi)          any claim set forth in Section 9.2(a) of the Company
Disclosure Letter.

 

Sellers
shall have no obligation to defend, indemnify or hold harmless the Buyer with
respect to any Environmental Liability if any such liability relates to, arises
out of or is triggered by any condition that is discovered or identified as a
result of any investigation, testing or sampling conducted by or on behalf of
the Buyer after the Closing, except for any such action as is required by law, provided,
however, that this limitation shall not apply to (x) any investigation,
testing or sampling conducted pursuant to Section 4.3 hereof; (y) any
investigation, testing or sampling required in connection with the financing of
the transactions contemplated hereby (including without limitation the proposed
sale-leaseback of the Owned Real Property located in Troy and Royal Oak,
Michigan); or (z) any condition that is discovered or identified incidentally
in connection with capital improvements initiated by the Buyer in the ordinary
course of business. Any Environmental Liability or condition requiring
indemnification or remediation by Sellers under the terms of this Agreement
shall be indemnified or remediated only to the extent required by Environmental
Laws for industrial use of the Real Property to be remediated (including the
use of reasonable engineering and/or institutional controls, use restrictions
and covenants). The Seller shall control all remediation required of Seller
under the terms of this Agreement and all negotiations with any Governmental
Authority with respect to such remediation, provided that the Buyer shall be
given reasonable notice of and have the right to attend all meetings between
any Governmental Authority and Sellers and/or their consultant and, and further
provided that neither Sellers’ remediation activities, nor any actions or
restrictions agreed to with any Governmental Authority shall unreasonably
interfere with Buyer’s current or future use of the applicable site for
industrial purposes.

 

Except for indemnification claims arising from
inaccuracies in the representations and warranties contained in Section 3.1.1,
3.1.2, 3.1.3, 3.1.6, 3.1.10 (insofar as it relates to title to Assets with an
acquired value or original asset cost, as shown in Section 1.1(a) of
the Company Disclosure Letter, in excess of $10,000) or 3.1.22, the Sellers
shall not be required to indemnify the Buyer Indemnitees with respect to any
claim for indemnification pursuant to Section 9.2(a)(i) (other than
with respect to any claim for indemnification pursuant to Section 9.2(a)(i)(F))
unless and until the aggregate amount of all claims against the Sellers under
such Section 9.2(a)(i) (other than with respect to any claim for
indemnification pursuant to Section 9.2(a)(i)(F)) exceeds $1,000,000 and
then only to the extent such aggregate amount

 

41

 

exceeds $1,000,000.
Notwithstanding the foregoing, in no event shall the Sellers’ aggregate
liability for claims under such 

Section 9.2(a)(i) (other than with respect to any claim for
indemnification pursuant to Section 9.2(a)(i)(F)) exceed 20% of the
Purchase Price paid on the Closing Date; provided, however, that
with respect to inaccuracies in the representation and warranties contained in Section 3.1.1,
3.1.2, 3.1.3, 3.1.6, 3.1.10 (insofar as it relates to title to Assets with an
acquired value or original asset cost, as shown in Section 1.1(a) of
the Company Disclosure Letter, in excess of $10,000) or 3.1.22, the Sellers
aggregate liability for claims shall not exceed the Purchase Price paid on the
Closing Date.

 

(b)           By the Buyer. The Buyer covenants and agrees to defend,
indemnify and hold harmless the Sellers, their respective Affiliates and the
officers, directors, employees, agents, advisers and representatives of each
such Person (collectively, the “Seller Indemnitees”) from and against
any and all Losses resulting from or arising out of:

 

(i)            any inaccuracy of any representation or
warranty made by any Buyer in (A) this Agreement, (B) the Buyer
Disclosure Letter, (C) any transfer instrument or (D) the certificate
delivered pursuant to Section 5.3.1(c);

 

(ii)           any failure of the Buyer to perform any covenant or agreement set
forth herein;

 

(iii)          the Assumed Liabilities;

 

(iv)          the use by the Buyer of any of the Sellers’ trade names or trademarks
after the Closing Date as contemplated by Section 4.2.4; and

 

(v)           the operation of the Business or the ownership, operation or use of the
Assets following the Closing Date.

 

(c)           Adjustments to Indemnification Payments. Any payment made by the Sellers to the
Buyer Indemnitees, on the one hand, or by the Buyer to the Seller Indemnitees,
on the other hand, pursuant to this Section 9.2 in respect of any claim
shall be net of any insurance proceeds realized by and paid to the Indemnified
Party in respect of such claim. The Indemnified Party shall use its commercially
reasonable efforts to make insurance claims relating to any claim for which it
is seeking indemnification pursuant to this Section 9.2. The amount of any
Loss under Section 9.2(a) or 9.2(b) shall be reduced by the
actual federal, state and other income or similar tax savings realized by the
Buyer Indemnitees or Seller Indemnitees, as the case may be, with respect
thereto.

 

(d)           Adjustment to Purchase Price. All indemnification payments made under this
Section 9.2 shall be deemed adjustments to the Purchase Price.

 

(e)           Indemnification Procedures. In the case of any claim asserted by a
third party against a party entitled to indemnification under this
Agreement (the “Indemnified Party”), notice shall be given by the Indemnified
Party to the party required to provide indemnification (the “Indemnifying
Party”) promptly after such Indemnified Party has actual knowledge of any
claim as to which indemnity may be sought, and the Indemnified Party shall
permit the Indemnifying Party (at the expense of such Indemnifying Party) to
assume the defense of any claim or any litigation resulting therefrom, provided
that (i) the counsel for the Indemnifying Party who shall conduct the
defense of such claim or litigation shall be reasonably satisfactory to the
Indemnified Party, (ii) the Indemnified Party may participate in such
defense at such Indemnified Party’s expense, and (iii) the omission by any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its indemnification obligation under this Agreement
except to the extent that such omission results in a failure of actual notice
to the Indemnifying 

 

42

 

Party and such Indemnifying
Party is damaged as a result of such failure to give notice. Except with the
prior written consent of the Indemnified Party, such consent not to be
unreasonably withheld or delayed, no Indemnifying Party, in the defense of any
such claim or litigation, shall consent to entry of any judgment or order,
interim or otherwise, or enter into any settlement that provides for injunctive
or other nonmonetary relief affecting the Indemnified Party or that does not
include as an unconditional term thereof the giving by each claimant or
plaintiff to such Indemnified Party of a release from all liability with
respect to such claim or litigation. In the event that the Indemnified Party
shall in good faith determine that the conduct of the defense of any claim
subject to indemnification hereunder or any proposed settlement of any such
claim by the Indemnifying Party might be expected to affect adversely the
Indemnified Party’s liability for Taxes or the ability of the Indemnified Party
to conduct its business, or that the Indemnified Party may have available
to it one or more defenses or counterclaims that are inconsistent with one or
more of those that may be available to the Indemnifying Party in respect
of such claim or any litigation relating thereto, the Indemnified Party shall
have the right at all times to take over and assume control over the defense,
settlement, negotiations or litigation relating to any such claim at the sole
cost of the Indemnifying Party, provided that if the Indemnified Party
does so take over and assume control, the Indemnified Party shall not settle
such claim or litigation without the written consent of the Indemnifying Party,
such consent not to be unreasonably withheld or delayed. In the event that the
Indemnifying Party does not accept the defense of any matter as above
provided, the Indemnified Party shall have the full right to defend against any
such claim or demand and shall be entitled to settle or agree to pay in full such
claim or demand. In any event, the Indemnifying Party and the Indemnified Party
shall cooperate in the defense of any claim or litigation subject to this Section 9.2
and the records of each shall be available to the other with respect to such
defense.

 

(f)            Limitations. The obligation of the Sellers to indemnify the Buyer Indemnitees
pursuant to 

Section 9.2(a)(i) shall terminate when the applicable representation
or warranty terminates pursuant to Section 9.3; provided, however,
that any indemnification obligation of the Sellers that would otherwise
terminate in accordance with this provision shall not terminate if a claim by a
Buyer Indemnitee shall have been timely made or given on or prior to the
applicable terminate date, and shall continue in full force and effect (solely
with respect to any such claim) until such claim has been satisfied or otherwise
resolved under this Article IX. To the extent any provision of this
Agreement specifically limits or excludes the Sellers’ indemnification
obligation for certain matters, the Sellers shall have no indemnification
obligation for such matters under any other provisions of this Agreement.

 

9.3.          Survival of Representations and Warranties,
etc. The representations and
warranties contained in this Agreement shall survive the execution and delivery
of this Agreement, any examination by or on behalf of the parties hereto and
the completion of the transactions contemplated herein, but only to the extent
specified below:

 

(a)           except as set forth in clauses (b), (c) and (d) below, the
representations and warranties contained in Section 3.1 and Section 3.2
shall survive until (60) days after the date of receipt by the Buyer of audited
financial statements for the fiscal year ended December 2006 (but in any
event, not later than June 30, 2007);

 

(b)           the representations and warranties contained in Sections 3.1.1, 3.1.2,
3.1.3, 3.1.10 (insofar as it relates to title to Assets with an acquired value
or original asset cost, as shown in Section 1.1(a) of the Company
Disclosure Letter, in excess of $10,000), 3.1.22, 3.2.1, 3.2.2 and 3.2.4 shall
survive without limitation;

 

(c)           the representations and warranties of the Sellers contained in Section 3.1.6
shall survive for a period of 60 days following the expiration of any applicable
statute of limitations (as

 

43

 

extended
for any reason, including without limitation by reason of waiver of such
statute of limitations);

 

(d)           the representations and warranties of the Sellers contained in Section 3.1.16
shall survive until sixty (60) days after the receipt by the Buyer of audited
financial statements for the fiscal year ended December 2006 (but in any
event no later than June 30, 2007), provided that if any claim is
brought by the Guarantor, the Sellers or any of their respective Affiliates
under indemnifications obligations of the Buyer under Section 3.1(c) of
the supply agreement (entered into pursuant to Section 5.2.3(b) or
any transferee of their respective rights under such agreement), and such claim
is based in whole or in part on facts or circumstances which would
otherwise constitute a breach of the representations and warranties of the
Sellers contained in Section 3.1.16, such representations and warranties of the
Sellers in Section 3.1.16 shall be deemed to survive until final
determination of any such claims under the Supply Agreement; and

 

(e)           the representations and warranties of the Sellers contained in Section 3.1.19
shall survive for a period of 36 months following the Closing Date.

 

9.4.          Exclusive Remedy. The indemnification provisions in this
Agreement shall be the exclusive remedy available to the Buyer Indemnitees or
the Seller Indemnitees, as the case may be, for any breach of the
representations, warranties, covenants or other provisions or this Agreement,
other than (i) equitable remedies (included, but not limited to,
injunctive relief and specific performance) and (ii) remedies for fraud.
No party shall be entitled to the indemnification provided for hereunder if it had
knowledge at any time of the matter that is later the subject of a claim for
indemnity.

 

9.5.          No Special Damages. In no event shall any party be liable under
this Section IX or otherwise in respect of this Agreement for exemplary,
special, punitive, indirect, remote or speculative damages except to the extent
any such party suffers such damages to an unaffiliated third party in connection
with a third party claim, in which event such damages shall be recoverable.

 

9.6.          Expenses. The Sellers, on the one hand, and the Buyer, on the other hand, shall
bear their respective expenses, costs and fees (including attorneys’, auditors’
and financing commitment fees) in connection with the transactions contemplated
hereby, including the preparation, execution and delivery of this Agreement and
compliance herewith (the “Transaction Expenses”), whether or not the
transactions contemplated hereby shall be consummated.

 

9.7.          Severability. If any provision of this Agreement,
including any phrase, sentence, clause, section or subsection, is
inoperative or unenforceable for any reason, such circumstances shall not have
the effect of rendering the provision in question inoperative or unenforceable
in any other case or circumstance, or of rendering any other provision or provisions
herein contained invalid, inoperative or unenforceable to any extent
whatsoever.

 

9.8.          Notices. All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if (a) delivered personally, (b) mailed
by first-class, registered or certified mail, return receipt requested, postage
prepaid, (c) sent by next-day or overnight mail or delivery or (d) sent
by telecopy or telegram.

 

44

 

(i)            if to the Buyer, to

 

Forming Technologies, Inc.

c/o
Jacobson Partners

595
Madison Avenue

New
York, New York 10022

Attention:
Benjamin R. Jacobson

Facsimile:
(212) 758-4567

 

with
copies to:

 

Stroock &
Stroock & Lavan LLP

180
Maiden Lane

New
York, New York 10038

Attention:
Bradley G. Kulman, Esq.

Facsimile:
(212) 806-5400

 

(ii)           if to the Guarantor, to

 

Metaldyne Corporation

47659 Halyard Drive

Plymouth, Michigan 48170

Attention:
Thomas Amato

Attention:
General Counsel

Facsimile:
(734) 451-4124

 

with
a copy to:

 

Cahill
Gordon & Reindel LLP

80
Pine Street

New
York, New York 10005

Attention:
Jonathan Schaffzin, Esq.

Facsimile:
(212) 269-5420

 

(iii)          if to the Sellers, to

Metaldyne
Company LLC

Metaldyne
Precision Forming — Fort Wayne, Inc.

47659
Halyard Drive

Plymouth,
Michigan 48170

Attention:
Thomas Amato 

Attention:
General Counsel

Facsimile:
(734) 451-4124

 

with
a copy to:

 

Cahill
Gordon & Reindel LLP

80
Pine Street

New
York, New York 10005

Attention:
Jonathan Schaffzin, Esq.

Facsimile:
(212) 269-5420

 

45

 

or, in each case, at such
other address as may be specified in writing to the other parties hereto.

 

All
such notices, requests, demands, waivers and other communications shall be
deemed to have been received (w) if by personal delivery on the day after such
delivery, (x) if by certified or registered mail, on the seventh Business Day
after the mailing thereof, (y) if by next-day or overnight mail or delivery, on
the day delivered and (z) if by telecopy or telegram, on the next day following
the day on which such telecopy or telegram was sent, provided that a
copy is also sent by certified or registered mail.

 

9.9.          Miscellaneous.

 

9.9.1.       Headings. The headings contained in this Agreement are for purposes of
convenience only and shall not affect the meaning or interpretation of this
Agreement.

 

9.9.2.       Entire Agreement. This Agreement (including the Company
Disclosure Letter and Buyer Disclosure Letter) and the Collateral Agreements
(when executed and delivered) constitute the entire agreement and supersede all
prior agreements and understandings, both written and oral, between the parties
with respect to the subject matter hereof.

 

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

 

9.9.4.       Governing Law, etc. This Agreement shall be governed in all
respects, including as to validity, interpretation and effect, by the internal
laws of the State of New York, without giving effect to the conflict of laws rules thereof.
Except as provided by Section 2.5(d) of this Agreement, any dispute
or disputes arising out of or relating to this Agreement, including but not
limited to indemnification under, or the breach, termination or validity
thereof (“Dispute”), shall be finally resolved by arbitration in
accordance with the International Institute for Conflict Prevention and
Resolution (“CPR”) Rules for Non-Administered Arbitration then in
effect (the “Rules”), as set forth in this paragraph. If a Dispute
arises, and if the Dispute cannot be settled through direct discussions between
representatives of the Sellers and Guarantor and representatives of the Buyer
within thirty calendar days following receipt of notice of a Dispute, the
parties agree first to endeavor to settle the Dispute in an amicable manner by
mediation under the Mediation Procedure established by the CPR, then in effect,
before resorting to arbitration. If a Dispute cannot be resolved through such
mediation process within thirty calendar days following the appointment of the
mediator, the Dispute will be settled finally by arbitration under the Rules,
by a sole arbitrator, chosen by agreement of the parties within twenty calendar
days of the receipt by a party of a copy of the notice of arbitration from the
other party. In the event the parties cannot reach such agreement within such
twenty calendar day period, the arbitrator shall be appointed by the CPR in
accordance with the Rules. Any arbitrator appointed by CPR shall be a retired
judge or a practicing attorney with no less than fifteen years of experience
with large commercial cases and an experienced arbitrator. The arbitration will
be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et  seq.
The parties shall be entitled to conduct limited discovery, consisting only of (i) production
by the parties of documents relevant to the claims and defenses of any party
and (ii) five single days deposition conducted by the Buyer and two single
days deposition conducted by the Sellers and Guarantor. The arbitration hearing
on the merits shall be held no later than four months after the appointment of
the arbitrator unless the parties otherwise agree or the arbitrator extends
such time period for good cause shown. The arbitrator shall not be empowered to
award damages in excess of compensatory damages and each party expressly
waives and forgoes any claim or right to punitive, exemplary or similar damages
unless a statute requires that compensatory damages be increased in a specified
manner. The award shall be in writing and shall state the findings of fact and
conclusions of law on which it is based. The award of the arbitrator shall be
final and binding on the parties and judgment upon the award may be
entered and enforced

 

46

 

in any court having
jurisdiction thereof. The Buyer, the Sellers and the Guarantor hereby
irrevocably submit to the jurisdiction of the courts of the State of New York
and the Federal courts of the United States of America located in the State,
City and County of New York, and hereby waive, and agree not to assert, as a
defense in any action, suit or proceeding for the enforcement of such judgment
or award, that it is not subject thereto or that such action, suit or
proceeding may not be brought or is not maintainable in said courts or
that the venue thereof may not be appropriate or that this Agreement or
any of such document may not be enforced in or by said courts. The Buyer,
the Sellers and the Guarantor hereby consent to and grant any such court
jurisdiction over the person of such parties and agree that mailing of process
or other papers in connection with any such action or proceeding in the manner
provided in Section 9.7, or in such other manner as may be permitted
by law, shall be valid and sufficient service thereof. Unless the parties
otherwise agree in writing, the mediation and arbitration will be held in New York,
New York. Each party shall bear its own costs and expenses (including fees and
disbursements of counsel) and the Buyer, on the one hand, and the Sellers and
the Guarantor, on the other hand, shall each bear one-half of the costs and
expenses payable to the mediator and arbitrator.

 

9.9.5.       Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns.

 

9.9.6.       Assignment. This Agreement shall not be assignable or otherwise transferable by
any party hereto without the prior written consent of the other party hereto, provided
that the Buyer may assign this Agreement (a) to any Affiliate of the
Buyer, (b) as security for any obligation arising in connection with the
financing of the transactions contemplated hereby or (c) subsequent to the
Closing, to any transferee of all or substantially all of the assets of the
Business that executes a written assumption of the obligations of the Buyer
under this Agreement and the Collateral Agreements. At the request of the
Buyer, the Sellers shall execute customary consents to collateral assignment
documents with the Buyer’s lenders in connection with any assignments permitted
by Section 9.9.6(b).

 

9.9.7.       No Third Party Beneficiaries. Except as provided in Section 9.2 with
respect to indemnification of Indemnified Parties hereunder, nothing in this
Agreement shall confer any rights upon any Person or entity other than the
parties hereto and their respective heirs, successors and permitted assigns.

 

9.9.8.       Amendment; Waivers, etc. No amendment, modification or discharge of
this Agreement, and no waiver hereunder, shall be valid or binding unless set
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by any of the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights
or privileges hereunder. The rights and remedies herein provided are cumulative
and are not exclusive of any rights or remedies that any party may otherwise
have at law or in equity. The rights and remedies of any party based upon,
arising out of or otherwise in respect of any inaccuracy or breach of any
representation, warranty, covenant or agreement or failure to fulfill any
condition shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such inaccuracy
or breach is based may also be the subject matter of any other
representation, warranty, covenant or agreement as to which there is no
inaccuracy or breach. The representations and warranties of the Sellers and the
Guarantor shall not be affected or deemed waived by reason of any investigation
made by or on behalf of the Buyer (including but not limited to by any of its
advisors, consultants or representatives) 

 

47

 

or by reason of the fact
that the Buyer or any of such advisors, consultants or representatives knew or
should have known that any such representation or warranty is or might be
inaccurate.

 

9.9.9.       Sellers’ Obligations. The liability of the Sellers hereunder
shall be joint and several. Where in this Agreement provision is made for any
action to be taken or not taken by either Seller, Sellers jointly and severally
undertake to cause such Seller to take or not take such action, as the case may be.

 

[Signature Pages Follow]

 

48

 

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

 

	
   

  	
  FORMING
  TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard W. Moore

  
	
   

  	
   

  	
  Name:
  Richard W. Moore

  
	
   

  	
   

  	
  Title:
  Assistant Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  METALDYNE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jeffrey M. Stafeil

  
	
   

  	
   

  	
  Name:
  Jeffrey M. Stafeil

  
	
   

  	
   

  	
  Title:
  Executive Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  METALDYNE COMPANY LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jeffrey M. Stafeil

  
	
   

  	
   

  	
  Name:
  Jeffrey M. Stafeil

  
	
   

  	
   

  	
  Title:
  Executive Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  METALDYNE
  PRECISION FORMING — FORT

  WAYNE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jeffrey M. Stafeil

  
	
   

  	
   

  	
  Name:
  Jeffrey M. Stafeil

  
	
   

  	
   

  	
  Title:
  Executive Vice President and Chief Financial Officer

  

 

49

 

Exhibit C

 

(a)           Metaldyne Corporation (the “Company”)
hereby assigns, transfers and sets over (collectively the “Assignment”)
to Assignee, from and after the Closing Date, all of the Company’s right,
title, benefit, privileges and interest in and to, and all of the Company’s
burdens, obligations and liabilities arising from and after the Closing Date,
under and pursuant to the Asset Purchase Agreement, by and between Forming
Technologies, Inc., a Delaware corporation (“Forming Technologies”),
Metaldyne Company LLC, Metaldyne Precision Forming — Fort Wayne, Inc., and
the Company, dated as of January 7, 2006, as may be amended from time to
time (the “Asset Purchase Agreement”), including without limitation, the
Guaranteed Obligations (as such term is defined in the Asset Purchase
Agreement) of the Company thereunder.

 

(b)           The Assignee, from and after the Closing
Date, hereby accepts the assignment and assumes and agrees to observe and perform all
of the duties, obligations, terms, provisions and covenants, and to pay and discharge
all of the liabilities of the Company to be observed, performed, paid or
discharged, arising from and after the Closing Date, pursuant to the Asset
Purchase Agreement including, without limitation, the Guaranteed Obligations
(as such term is defined in the Asset Purchase Agreement)

of the Company thereunder.

 

(c)           This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and assigns.

 

(d)           The Company and the Assignee acknowledge and
agree that Forming Technologies is an intended third party beneficiary to the
Agreement and that Forming Technologies shall be entitled to enforce its rights
as a third party beneficiary under this Agreement accordingly. The Company and
Assignee each hereby covenant to provide an executed copy of this Agreement to
Forming Technologies promptly upon the execution hereof.

 

These
provisions may not be amended or modified without the written consent of
Forming Technologies.

 

C-1

 

Amendment

 

March 10, 2006

 

Reference is
made to that certain Asset Purchase Agreement, dated as of January 7, 2006,
as amended (the “Asset Purchase Agreement”), among Metaldyne Company
LLC, a Delaware limited liability company, Metaldyne Precision Forming — Fort
Wayne, Inc., an Indiana corporation and Metaldyne Corporation, a Delaware
corporation (each a “Seller” and collectively, the “Sellers”),
and FormTech Industries LLC, a Delaware limited liability company (successor by
conversion to Forming Technologies, Inc.) (“Purchaser”). Capitalized
terms used but not otherwise defined in this Amendment shall have the meanings
ascribed to them in the Asset Purchase Agreement.

 

The Purchaser
and the Sellers hereby agree that:

 

(i)            The
“owned vehicles” schedule attached to Section 1.1(a) of the
Company Disclosure Letter is hereby deleted and replaced by the “owned vehicles”
schedule attached to this Amendment.

 

(ii)           Section 1.1(b) of
the Company Disclosure Letter is amended to include the following:

 

MK Chambers Company

2251 Johnson Mills Rd

North Branch, MI 48461

 

Springco

12500 Elmwood Ave.

Cleveland, OH 44111

 

Atco Industries

7200 Fifteen Mile Road

Sterling Heights, MI 48312

 

Great Lakes Production Support

24600 Wood Ct.

Macomb, MI 48042

 

(iii)          Section 4.2.8
of the Asset Purchase Agreement is hereby amended and restated in its entirety
as follows:

 

Section 4.2.8    Other Agreements. Buyer
and Sellers (or an affiliate of Sellers) shall enter into the agreement
attached hereto as Exhibit D.

 

(iv)          If the transaction
contemplated by the Asset Purchase Agreement is consummated and the Purchase
Price is received by the Sellers by or before 11:59 p.m. on March 10,
2006, then the reference to “$3,500,000” in Section 2.5(b) of the
Asset Purchase Agreement shall

 

 

be replaced with “$5,700,000.” 
For the avoidance of doubt, if the Closing occurs after 12:01 a.m.
on March 11, 2006, then such reference to “$3,500,000” shall remain
unchanged.

 

(v)           Schedule A to the
Supply Agreement is hereby amended by adding the following “Note”:

 

(3)           In addition to the unit
prices set forth in the table above, as soon after the Closing Date as Buyer
and Sellers agree to the logistics for FOB delivery at Royal Oak, but in no
event later than 60 days after the Closing, the unit prices set forth above
shall no longer apply and shall be replaced in their entirety with the pricing schedule set
forth on Schedule 1 hereto. Additionally, footnote (2) of Schedule A
to the Supply Agreement shall be eliminated once the prices on Schedule 1
go into effect.

 

(vi)          The conditions set forth in Section 5.2.2(b) of
the Asset Purchase Agreement have been satisfied.

 

(vii)         Notwithstanding
anything to the contrary in this Agreement or Section 1.2 of Company
Disclosure Letter, the Buyer and Sellers hereby agree as follows:

 

(A)  Fuji ANW30 Serial #14764, installed
in January 2005, and all associated machine tooling with respect thereto
(i.e., all durable and perishable tools) constitutes an Excluded Asset
hereunder (the “Fuji 14764”). The Sellers have taken possession of Fuji
14764 as of the Closing Date. The Sellers have also taken possession of one (1) Fuji
ANW30 that had been held in a Fuji warehouse in January 2006 (such Fuji
ANW30, the “Warehoused Fuji”). The Warehoused Fuji constitutes an
Excluded Asset hereunder. The Fuji ANW30 #14765, installed in January 2005,
constitutes an Asset to be purchased by the Buyer hereunder;

 

(B) any other Fuji located on Owned Real
Property or Leased Real Property as of the Closing Date shall be included in
the “Assets” purchased by the Buyer hereunder; and

 

(C) any other Fuji not located on Owned
Real Property or Leased Real Property as of the Closing Date shall be “Excluded
Assets.”

 

Except as expressly provided herein, this Amendment
shall not constitute a consent to or modification of any other provision, term
or condition of the Asset Purchase Agreement. All terms, provisions, covenants,
representations, warranties, agreements and conditions contained in the Asset
Purchase Agreement, as amended hereby, are ratified and confirmed in all
respects and shall remain in full force and effect.

 

This Amendment
shall be governed in all respects, including as to validity, interpretation and
effect, by the internal laws of the State of 
New York, without giving effect to the conflict of laws rules thereof.
Section 9.9.4 of the Asset Purchase Agreement shall be deemed applicable
to this Amendment.

 

2

 

This Amendment
may be executed in several counterparts, each of which shall be deemed an
original and all of which shall together constitute one and the same instrument.

 

[Signature Page Follows]

 

3

 

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

 

	
   

  	
  FORMTECH
  INDUSTRIES LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  FormTech
  Industries Holdings LLC, its

  
	
   

  	
  Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard McDermott

  
	
   

  	
   

  	
  Name:
  Richard McDermott

  
	
   

  	
   

  	
  Title:
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  METALDYNE
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jeffrey M. Stafeil

  
	
   

  	
   

  	
  Name:
  Jeffrey M. Stafeil

  
	
   

  	
   

  	
  Title:
  Executive Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  METALDYNE
  COMPANY LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jeffrey M. Stafeil

  
	
   

  	
   

  	
  Name:
  Jeffrey M. Stafeil

  
	
   

  	
   

  	
  Title:
  Executive Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  METALDYNE
  PRECISION FORMING — FORT

  WAYNE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jeffrey M. Stafeil

  
	
   

  	
   

  	
  Name:
  Jeffrey M. Stafeil

  
	
   

  	
   

  	
  Title:
  Executive Vice President and Chief Financial Officer

  

 

4

 

Schedule 1

 

	
  Part Number

  	
   

  	
  Adjusted Price

  	
   

  
	
     4984
  B, E

  	
   

  	
  $

  	
  5.4797

  	
   

  
	
  F 6860 B, F

  	
   

  	
  3.9425

  	
   

  
	
  F 4638 G

  	
   

  	
  8.4625

  	
   

  
	
  F 5594 D

  	
   

  	
  6.6885

  	
   

  
	
  F 6352 A

  	
   

  	
  7.9681

  	
   

  
	
  F 8169 B

  	
   

  	
  4.6154

  	
   

  
	
  F 7724 D

  	
   

  	
  4.9007

  	
   

  
	
  F 8124 B

  	
   

  	
  3.8829

  	
   

  
	
  F 8179 B

  	
   

  	
  4.6484

  	
   

  
	
  F 8285

  	
   

  	
  1.8050

  	
   

  
	
  F 8472

  	
   

  	
  8.7451

  	
   

  
	
  F 8476 A

  	
   

  	
  9.1972

  	
   

  
	
     7259
  A, B

  	
   

  	
  4.7165

  	
   

  
					

 

The above is based upon Farmington Hills
continuing to provide their Requirement Schedule daily to Royal Oak by
11:00 a.m. the previous workday. Farmington Hills would be responsible to
pick up all their parts at the Royal Oak location. Royal Oak will accommodate a
scheduled one-hour pick-up window by Farmington Hills with pick list. Items
that do not make the truck must be delivered by Royal Oak at their expense if
line shutdown at Farmington Hills is at risk. Return of empty racks would be
Farmington Hills’ responsibility.

 

5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}]]