Document:

Asset Purchase Agreement

 Exhibit 10.26 
  
 ASSET PURCHASE AGREEMENT 
  
 This ASSET PURCHASE AGREEMENT (this “Agreement”) is entered into effective as of the 1st day of January,
2005, by and among Huttig Texas Limited Partnership, a Texas limited partnership (“Buyer”) wholly owned by Huttig Building Materials, Inc., a Delaware corporation, and Huttig Texas Holdings, Inc., a Delaware corporation, Texas
Wholesale Building Materials, Ltd., a Texas limited partnership (the “Partnership”) and successor in interest to Texas Wholesale Building Materials, Inc., a Texas corporation converted into a limited partnership effective as of
December 1, 2004 (the “Corporation” and, together with the Partnership, “Seller”), and Joe Cornett (“Cornett”), a partner owning a majority of the partnership interests of the Partnership. Buyer,
Seller and Cornett are each referred to herein as a “Party” and together as the “Parties”. Capitalized terms are defined in Article 1. 
  
 RECITALS 
  
 A. Buyer desires to purchase from Seller, on the following terms and conditions, the Purchased Assets and to assume from Seller the Assumed Liabilities,
on the following terms and conditions; and 
  
 B. Seller and
Cornett desire to sell to Buyer the Purchased Assets and to assign to Buyer the Assumed Liabilities, on the following terms and conditions. 
  
 NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants, representations, warranties, conditions, and agreements contained
herein and in the Related Agreements, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties agree as follows: 
  
 ARTICLE 1 
 DEFINITIONS 
  
 The following terms shall have the meanings set forth below in this Article 1. 
  
 1.1 “Accounts Receivable” has the meaning set forth in Section 3.8. 
  
 1.2 “Action” has the meaning set forth in Section 3.11. 
  
 1.3 “Affiliate” means with respect to any Person, any other Person which is controlling, controlled by, or
under common control with, directly or indirectly through any Person, the Person referred to, and, if the Person referred to is a natural person, any member of such Person’s immediate family. The term “control” (including, with
correlative meaning, the terms “controlled by” and “under common control with”) as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by contract or otherwise. 
  

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 1.4 “Agreement” means this Asset Purchase Agreement as executed on the date hereof and
as amended or supplemented in accordance with the terms hereof, including the Disclosure Letter and all Schedules and Exhibits hereto. 
  
 1.5 “Assigned Leases” means the Leases for the Facilities located in Farmer’s Branch, Texas, and Tulsa, Oklahoma. 
  
 1.6 “Assumed Contracts” means only those Contracts of Seller
listed on Schedule 1.6. 
  
 1.7 “Assumed
Liabilities” means (i) all Liabilities of Seller set forth on the Closing Balance Sheet, (ii) Liabilities of Seller set forth in the Disclosure Letter under an express statement (that Buyer has initialed) to the effect that the definition
of Assumed Liabilities will include the Liabilities so disclosed; provided, however, that, notwithstanding the above, the Assumed Liabilities shall not include (a) the Excluded Liabilities or (b) Liabilities resulting from, arising out of,
relating to, in the nature of, or caused by any breach of contract, breach of warranty, tort, infringement, violation of Law or environmental matter, including without limitation those arising under Environmental Laws. 
  
 1.8 “Business” means the business of the wholesale
distribution of building materials to independent retail lumberyards and framing yards, one-step door shops, national accounts and roofing contractors, as such business is conducted or planned by Seller on the date hereof. 
  
 1.9 “Business Day” means any day which is not a Saturday,
Sunday or legal holiday in the State of Texas, United States of America. 
  
 1.10 “Buyer” has the meaning set forth in the first paragraph hereof. 
  
 1.11 “Buyer Indemnified Persons” has the meaning set forth in Section 8.2. 
  
 1.12 “Closing” means the consummation of the transactions
contemplated by this Agreement, as provided for in Section 2.3. 
  
 1.13 “Closing Balance Sheet” has the meaning set forth in Section 2.4(a). 
  
 1.14 “Closing Date” means January 10, 2005, or such other date as the Parties may mutually agree upon in writing. 
  
 1.15 “Code” means the Internal Revenue Code of 1986 and
regulations promulgated thereunder, as amended from time to time. 
  

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 1.16 “Contract” means any contract, agreement, understanding, lease, indenture,
mortgage, deed of trust, evidence of indebtedness, binding commitment or instrument, open purchase order, or offer, written or oral, express or implied, to which Seller is a party or by which it or any of its assets is bound. 
  
 1.17 “Cornett” has the meaning set forth in the first
paragraph hereof. 
  
 1.18 “Disclosure Letter”
means the letter from Seller to Buyer, dated the date hereof and as may be amended or supplemented from time to time on or prior to Closing, of exceptions to the representation and warranties made, and the listings of information provided, by
Seller. 
  
 1.19 “Effective Time” means the
effective time of the Closing, which shall be deemed to be as of 12:01 a.m. Central Standard time on January 1, 2005. 
  
 1.20 “Employees” means the individuals listed on Exhibit A, an updated version of which shall be provided by Seller to Buyer at
least three (3) Business Days prior to the Closing, who as of the date of this Agreement are and, as updated as of the Effective Time, will be all the employees of Seller who are primarily employed in the Business. 
  
 1.21 “Employment Agreements” means the employment agreements
between Buyer and each of Cornett and Craig Lott in the forms of Exhibit B-1 and Exhibit B-2, respectively, attached hereto. 
  
 1.22 “Environmental Law” means all applicable laws, statutes, enactments, orders, regulations, rules and ordinances of any Government
relating to pollution or protection of human health, safety, the environment, natural resources or laws relating to releases or threatened releases of Hazardous Materials into the indoor or outdoor environment (including, without limitation, ambient
air, surface water, groundwater, land, surface and subsurface strata) or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, release, transport or handling of Hazardous Materials, including, without limitation
(as applicable), the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. §9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. App. §1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. §6901 et seq.), the Clean Water Act (33 U.S.C. §1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. §2601 et seq.) and the Occupational Safety and Health Act, 29U.S.C. §653 et seq.), and the regulations promulgated pursuant thereto, as amended from time to time. 
  
 1.23 “Environmental Permits” means all permits,
registrations, approvals, licenses and filings to any Government or other authority required by or made by or on behalf of the Business under or pursuant to any Environmental Law. 
  

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 1.24 “Environmental Property” means any assets, personal property or real property
currently or previously owned, leased, operated or used by Seller. 
  
 1.25 “EPA” means the United States Environmental Protection Agency. 
  
 1.26 “ERISA” means the Employee Retirement Income Security Act of 1974 and regulations promulgated thereunder, as amended from time to time. 
  
 1.27 “Excluded Assets” means: 
  
 (a) the charter, certificate of limited partnership, qualifications to
conduct business as a foreign corporation or limited partnership, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, seals, minute books, stock transfer books, blank stock certificates,
and other documents relating to the organization, maintenance, and existence of Seller formerly as a corporation and currently as a limited partnership; 
  
 (b) tax losses and tax loss carry forwards and rights to receive refunds, credits and credit carry forwards with respect to any and all federal Income
Taxes, to the extent attributable to a taxable period (or portion thereof) ending on or prior to the Effective Time, including interest thereon, whether or not the foregoing is derived from the Business, and copies of all federal Income Tax Returns
and records of Seller; 
  
 (c) rights of Seller and Cornett under
this Agreement and the Related Agreements; 
  
 (d) all current and
prior insurance policies and all rights of any nature with respect thereto, including all insurance recoveries, set forth in Schedule 1.27(d); 
  
 (e) except as expressly set forth herein, all assets of any Plan; 
  

(f) all legal and beneficial interest in the share capital, equity interest or assets not related primarily to the Business; and 
  
 (g) any legal or beneficial interest in the assets listed on Schedule
1.27(g), notwithstanding the fact that such assets are related primarily to the Business. 
  
 1.28 “Excluded Liabilities” means all Liabilities of Seller other than the Assumed Liabilities and Liabilities for which Buyer expressly has responsibility pursuant to the terms of this Agreement,
such Excluded Liabilities to include without limitation: 
  
 (a)
Liabilities resulting from any claims, Actions, suits, proceedings, arbitrations, product claims or litigation relating to or resulting from, actions or omissions of Seller prior to Closing; 
  

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 (b) Liabilities under Seller’s line of credit with Bank One, N.A. (or any other obligation or debt
to any financial institution, including any overdraft thereon); 
  
 (c) Liabilities related to the Plans (other than as specified in Section 2.5(c)) and other employee matters to be retained by Seller as provided in Article 5 of this Agreement; 
  
 (d) Liabilities of Seller arising prior to or after the Effective Time to the
extent such Liabilities are not related to, or do not arise out of, the operation of the Business or the ownership or use of the Purchased Assets; and 
  
 (e) Liabilities of Seller related to federal Income Tax for the Seller or the equity owners of Seller for the tax year ending December 31, 2004 and all
prior tax years. 
  
 1.29 “Facilities” means the
facilities of the Business at the addresses listed on Exhibit C. 
  
 1.30 “Financial Statements” means the (a) audited balance sheets of Seller as of December 31, 2001, 2002 and 2003; (b) the unaudited balance sheet of Seller as of September 30, 2004; (c) the related audited and unaudited
statements of income, changes in stockholders equity and cash flows for the periods then ended; (d) the Closing Balance Sheet and the income statement delivered pursuant to Section 2.4(a); and (e) together, as to all the foregoing, with any
notes or schedules thereto. 
  
 1.31 “GAAP” means
the accounting principles generally accepted in the United States, including as set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, which are applied consistently throughout the periods involved. 
  
 1.32 “Government” means the United States of America, any other nation or state, any U.S. State, any federal, bilateral or multilateral
governmental authority, any possession, territory, local, county, district, city or other governmental unit or subdivision, and any branch, entity, agency, or judicial body of any of the foregoing. 
  
 1.33 “Hazardous Materials” means any chemicals, materials or
substances which are defined or regulated as dangerous, toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous or as a pollutant or contaminant under any Environmental Law, including but not
limited to radon, urea-formaldehyde, polychlorinated biphenyls, asbestos or asbestos-containing materials, petroleum and petroleum products. 
  
 1.34 “Income Taxes” means any Tax imposed upon or measured by net income or gross income (excluding any Tax based solely on gross
receipts) including any interest, penalty, or additions thereto, whether disputed or not. 
  

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 1.35 “IRCA” means the Immigration Reform and Control Act of 1986 and the rules and
regulations thereunder, as amended from time to time. 
  
 1.36
“IRS” means the United States Internal Revenue Service. 
  
 1.37 “Indemnified Losses” has the meaning set forth in Section 8.2. 
  
 1.38 “Indemnified Party” has the meaning set forth in Section 8.4. 
  
 1.39 “Indemnifying Party” has the meaning set forth in Section 8.4. 
  
 1.40 “Intellectual Property” means all intellectual
property, including but not limited to: patents, trademarks, service marks, trade names, domain names, corporate names, copyrights, and proprietary rights in copyrighted works; registrations thereof and applications therefor; derivatives,
continuations, continuations-in-part, extensions, reissues and renewals thereof; inventions (whether or not patentable), trade secrets and know-how; and any other proprietary rights in software (in any form, including source code and object code),
data, discoveries, processes, flow charts, documentation, prospect lists, customer lists, projections, analyses, and market studies. 
  
 This definition does not include non-proprietary information, know-how or processes otherwise available to the industry or public or rights obtained
pursuant to licenses associated with software and other intellectual property generally made available for purchase or use by the industry or the public. 
  
 1.41 “Knowledge” or “knowledge” means (i) the actual awareness of a particular fact or (ii) imputed awareness of a
particular fact that reasonably should have been known by an officer or partner of Seller. The words “know,” “knowing” and “known” shall be construed accordingly. 
  
 1.42 “Law” means any statute, law, ordinance, decree, rule,
directive, or regulation of any Government or quasi-governmental authority, and includes rules and regulations of any regulatory or self-regulatory authority compliance with which is required by Law. 
  
 1.43 “Leased Real Property” has the meaning set forth in
Section 3.12(b). 
  
 1.44 “Liability” or
“Liabilities” means all debts, adverse claims, liabilities and/or obligations, direct, indirect, absolute or contingent, whether accrued, vested or otherwise and whether or not reflected or required to be reflected on the financial
statements of a Person. 
  
 1.45 “Lien” means any
lien, security interest, mortgage, indenture, deed of trust, pledge, easement, restriction or other encumbrance. 
  
 1.46 “Losses” has the meaning set forth in Section 8.2. 
  

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 1.47 “Material Adverse Effect” means a material adverse effect on the assets, business,
prospects, financial condition or results of operations of the Business taken as a whole, but shall not be deemed to include (i) any changes resulting from general economic, regulatory or political conditions, (ii) circumstances that affect the
industries in which Seller operates generally, or (iii) any changes resulting from the announcement or pendency of the transactions provided for in this Agreement. 
  
 1.48 “Material Contracts” has the meaning set forth in Section 3.19(a). 
  
 1.49 [Intentionally Omitted] 
  
 1.50 “Non-Compete Agreements” has the meaning set forth in
Section 6.5(d). 
  
 1.51 “Non-Income
Taxes” means any Taxes other than Income Taxes. 
  
 1.52
“Order” means an order, writ, injunction, or decree of any court or Government. 
  
 1.53 “Ordinary Course” means, with respect to the Business of Seller, only the ordinary course of commercial operations customarily
engaged in by Seller consistent with industry norms or Seller’s prior practices, and specifically does not include (a) any activity (i) involving the purchase or sale of Seller, all or substantially all of its assets or of any product line or
business unit of Seller, (ii) involving modification or adoption of any Plan or (iii) which requires approval by the partners of Seller, or (b) the incurrence of any Liability for any tort or any breach or violation of or default under any Contract
or Law. 
  
 1.54 “Party” has the meaning set
forth in the first paragraph hereof. 
  
 1.55
“PBGC” means the Pension Benefit Guaranty Corporation. 
  
 1.56 “Pension Plan” means an employee pension benefit plan (within the meaning of ERISA Section 3(2)). 
  
 1.57 “Permitted Liens” means, collectively, (a) Liens that are disclosed in the Disclosure Letter, (b) liens for Taxes, fees, levies,
duties or other governmental charges of any kind which are not yet delinquent or are being contested in good faith by appropriate proceedings, (c) liens for mechanics, materialmen, laborers, employees, suppliers or similar liens arising by operation
of law for amounts which are owed, but not yet delinquent, and (d) in the case of real property, any matters, restrictions, covenants, conditions, limitations, rights, rights of way, encumbrances, encroachments, reservations, easements, agreements
and other matters of record, which an accurate survey of the property would reveal. 
  
 1.58 “Person” means and shall include a natural person, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity (or any department, agency or political subdivision thereof) and shall be construed broadly. 
  

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 1.59 “Plan” means any agreement, arrangement, plan, or policy, qualified or
non-qualified, whether or not considered legally binding and whether or not written, that involves any (a) pension, retirement, profit sharing, savings, deferred compensation, bonus, stock option, stock purchase, phantom stock, or incentive plan;
(b) welfare or “fringe” benefits, including without limitation vacation, holiday, severance, disability, medical, hospitalization, dental, life and other insurance, tuition, company car, club dues, sick leave, maternity, paternity
or family leave, health care reimbursement, dependent care assistance, cafeteria plan, regular in-kind gifts or other benefits; or (c) any employment, consulting, engagement, retainer or golden parachute agreement or arrangement, including without
limitation any “employee benefit plan” as defined in ERISA Section 3(3), (together “Plans” and each item thereunder a “Plan”). 
  
 1.60 “Pre-Closing Periods” has the meaning set forth in Section 2.5(c). 
  
 1.61 “Prepaid Expenses” means all payments made and deposits
with suppliers for inventory, goods and services used in the conduct of the Business which have not been delivered to the Business. 
  
 1.62 “Purchased Assets” means all the assets, properties and rights, real, personal or mixed, tangible or intangible, wherever located,
which are owned or held by Seller as of the Closing Date, including all assets, properties and rights reflected on the Financial Statements (except to the extent disposed of or decreased in the Ordinary Course since the date thereof) and, except as
expressly provided otherwise herein, and shall include all assets, properties and rights owned or held by Seller and described in the following clauses (a) through (v): 
  
 (a) cash and cash equivalents, including without limitation any and all cash held in respect of or designated in accordance
with Seller’s past practice for use in applying rebates from customers and suppliers; 
  
 (b) accounts and notes receivable and other rights to payment from customers and suppliers of Seller and the full benefit of all security for such accounts or rights to payment, and any claim, remedy or right related
to the foregoing; 
  
 (c) inventory, including raw materials,
packaging supplies, spare parts, work-in-process or finished goods, whether stored at a Seller location or stored at a third-party location or in transit to Seller; 
  
 (d) tangible personal property, including equipment, machinery, vehicles, furniture, fixtures, computers and related
hardware, supplies, spare parts, tools and other tangible personal property, together with any express or implied warranty by the manufacturers, sellers or lessors of any item or component part thereof and all maintenance records and other documents
relating thereto; 
  

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 (e) the Assigned Leases and leasehold interests in personal property, including any prepaid rent,
security deposits and options to renew or purchase in connection therewith; 
  
 (f) Seller’s rights pursuant to the Assumed Contracts, including; purchase commitments, rights under purchase orders, contract commitments or sales contracts; 
  
 (g) tax losses and tax loss carry forwards and rights to receive refunds,
credits and credit carry forwards with respect to any and all Taxes (other than federal Income Taxes), to the extent attributable to any Pre-Closing Period or Straddle Period, including interest thereon, whether or not the foregoing is derived from
the Business, and copies of all Tax Returns and records of Seller (other than federal Income Tax Returns and records); 
  
 (h) Intellectual Property; 
  
 (i) product registrations (and applications therefor) granted to Seller by or pending with any governmental authority in any particular country to market
any product of Seller, to the extent transferable; 
  
 (j)
governmental authorizations, including permits, licenses, certificates, consents, variances, approvals, environmental permits or authorizations of any supranational, national, federal, state or local judicial, legislative, executive, administrative
or regulatory authority relating primarily to and required in the operation of the Business as it is currently conducted, to the extent transferable; 
  
 (k) the databases and software programs (including, source code, object code, machine code, firmware, and the like), and user manuals, documentation,
instruction manuals, and the like, owned by Seller, or used, leased by or licensed to Seller and used, or being developed for use, primarily in the Business to the extent transferable; 
  
 (l) records and data, whether in hard copy, electronic or magnetic format or otherwise, including copies of all accounting
and operating ledgers, asset ledgers, inventory records, budgets, customer lists, customer credit information, supplier lists, technical data, employee files, sales literature, research and development reports, referral sources, service and warranty
records, correspondence, computer printouts, books, notes, files, and all other accounting and operating records and other graphic or electronically stored operating and financial information; 
  
 (m) the goodwill of the Business; 
  
 (n) all advertising, marketing, sales, creative and promotional materials;

  
 (o) interests in any joint venture or partnership; 

 

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 (p) causes of action, judgments, claims and demands against third parties, whether known or unknown;

  
 (q) rights associated with any liability to be assumed by
Buyer under this Agreement; 
  
 (r) restrictive covenants and
other obligations of present and former employees of Seller; 
  
 (s) deposits, Prepaid Expenses and rights to refunds; 
  
 (t) all warranties and all claims in respect of deposits, prepayments and refunds and rights of set off against third parties that relate primarily to the Purchased Assets; 
  
 (u) insurance benefits, including rights and proceeds, and insurance policies, if any, with third parties held in the name
of Seller, to the extent assignable to Buyer except for such benefits and policies set forth in Schedule 1.27(d); and 
  
 (v) all other assets set forth on Schedule 1.62(v) . 
  
 1.63 “Purchase Price” has the meaning set forth in Section 2.2. 
  
 1.64 “Real Property” means the Leased Real Property. 
  
 1.65 “Related Agreements” means the Employment Agreement and
the Non-Compete Agreements. 
  
 1.66 “Seller Indemnified
Persons” has the meaning set forth in Section 8.3. 
  
 1.67 “Seller” has the meaning set forth in the first paragraph hereof. 
  
 1.68 “Straddle Period” has the meaning set forth in Section 2.5(c). 
  
 1.69 “Tax” or “Taxes” means all taxes, charges, fees, levies, or other like assessments,
including without limitation, all federal, possession, state, city, county and foreign (or governmental unit, agency, or political subdivision of any of the foregoing) income, profits, employment (including Social Security, unemployment insurance
and employee income tax withholding), franchise, gross receipts, sales, use, transfer, stamp, occupation, property, capital, severance, premium, windfall profits, customs, duties, ad valorem, value added and excise taxes; PBGC premiums and any other
Government charges of the same or similar nature, including any interest, penalty or addition thereto, whether disputed or not and including any obligations to indemnify or otherwise assume or succeed to the Tax liability of any other Person. Any
one of the foregoing Taxes shall be referred to sometimes as a “Tax.” 
  

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 1.70 “Tax Returns” means all reports, estimates, declarations, claims for refund,
information statements and returns relating to or required by Law to be filed by Seller in connection with any Taxes, and all information returns (e.g., Form W-2, Form 1099) and reports relating to Taxes and Taxes payable by, pursuant to or in
connection with any Plans, including any amendment or supplement thereof. Any one of the foregoing Tax Returns shall be referred to sometimes as a “Tax Return.” 
  
 1.71 “Third Person” has the meaning set forth in Section 8.5. 
  
 1.72 “Third-Person Claim” has the meaning set forth in
Section 8.5. 
  
 1.73 “Transferred
Employee” has the meaning set forth in Section 5.3(a). 
  
 1.74 “Treasury Regulations” means the rules and regulations under the Code issued by the U.S. Department of Treasury. 
  
 ARTICLE 2 
 PURCHASE AND SALE OF THE
BUSINESS 
  
 2.1 Transfer of Assets and Liabilities.

  
 (a) Upon the terms and subject to the conditions of this
Agreement, at the Closing and effective as of the Effective Time, Seller shall sell, assign, transfer and convey to Buyer, and Buyer shall purchase, acquire and accept from Seller, all of Seller’s right, title and interest in and to the
Purchased Assets. Notwithstanding any provision in this Agreement to the contrary, the Excluded Assets are excluded from the Purchased Assets and shall remain the property of Seller after the Closing. 
  
 (b) Upon the terms and subject to the conditions of this Agreement, at the
Closing and effective as of the Effective Time, Buyer shall assume and discharge when and as due only the Assumed Liabilities. Notwithstanding any provision in this Agreement to the contrary, the Excluded Liabilities are excluded from the Assumed
Liabilities and shall remain the responsibility and obligation of Seller after the Closing 
  
 2.2 Consideration. The consideration that Buyer shall pay to Seller for the Purchased Assets, the obligations of Seller under Article 5, and other rights of Buyer hereunder shall be $15,000,000.00 (the
“Purchase Price”). 
  
 2.3 Closing. The
Closing shall take place at 9:00 a.m. on the Closing Date, effective as of the Effective Time, at the offices of the Pearce Law Firm or at such other place as the Parties may agree in writing. At Closing, Seller shall deliver or cause to be
delivered to Buyer the documents identified in Article 6, and Buyer shall deliver to Seller, by wire transfer of immediately available funds, in accordance with the wire transfer instructions set forth on Schedule 2.3, the Purchase
Price, and the documents identified in Article 7. 
  

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 2.4 Closing Balance Sheet and Income Statement. 
  
 (a) Closing Financial Statements. On or prior to the Closing Date,
Seller shall prepare, or cause to be prepared, and deliver to Buyer an unaudited balance sheet of Seller as of December 31, 2004 (the “Closing Balance Sheet”) and an unaudited statement of income for the year ended December 31,
2004.  
  
 (b) Review of Closing Financial
Statements. Seller shall permit Buyer to review promptly upon request all accounting records, work papers and computations used by Seller in the preparation of Financial Statements to be delivered pursuant to Section 2.4(a). 

 
 2.5 Taxes; Allocation of Purchase Price. 
  
 (a) All transfer, documentary, sales, use, stamp, registration and other
such Taxes and all conveyance fees, recording charges and other fees and charges (including any penalties and interest) incurred in connection with consummation of the transactions contemplated by this Agreement shall be paid by Seller when due, and
Seller will, at its own expense, file all necessary Tax Returns and other documentation with respect to all such Taxes, fees and charges, and if required by applicable Law, Buyer will, and will cause its Affiliates to, join in the execution of any
such Tax Returns and other documentation. 
  
 (b) Seller, upon
request, shall use its reasonable efforts to provide or obtain from any taxing authority any certificate or other document necessary to mitigate, reduce or eliminate any Taxes (including additions thereto or interest and penalties thereon) that
otherwise would be imposed with respect to the transactions contemplated in this Agreement. 
  
 (c) Seller shall be responsible for preparing and filing all Tax Returns of Seller for any taxable year or period ending on or before the Effective Time that are required to be filed after the Effective Time
(“Pre-Closing Periods”). Such Tax Returns will be prepared in a manner consistent with prior Tax Returns of Seller to the extent permitted by applicable Law. Buyer shall have the right to review and approve all Tax Returns (other
than Income Tax Returns) with respect to any Pre-Closing Period. Except as may be otherwise permitted by applicable Law, for any Tax Return for a taxable period commencing prior to the Effective Time and ending after the Effective Time (a
“Straddle Period”), Buyer shall be responsible for preparing and filing such Straddle Period Tax Returns, subject to Seller’s reasonable review and approval. All Taxes (other than Income Taxes) for Pre-Closing Periods and for any
Straddle Period shall be payable by Buyer or remitted to Seller for payment with any Tax Returns required to be filed by Seller. 
  
 (d) Buyer and Seller agree to furnish or cause to be furnished to each other, upon request, as promptly as practical, such information (including
reasonable 
  

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 access to books and records, Tax Returns and Tax filings) and assistance as is reasonably necessary for the filing of any
Tax Return, the conduct of any Tax audit, and for the prosecution or defense of any claim, suit or proceeding relating to any Tax matter. Buyer and Seller shall cooperate with each other in the conduct of any Tax audit or other Tax proceedings and
each shall execute and deliver such powers of attorney and other documents as are necessary to carry out the intent of this Section 2.5. Any Tax audit or other Tax proceeding that gives rise to a Loss subject to indemnification pursuant to
Article 8 shall be deemed to be a Third Person Claim subject to the procedures set forth in Article 8 of this Agreement. 
  
 (e) The Purchase Price of the Business shall be allocated as set forth on Schedule 2.5. The Buyer and Seller hereby agree and acknowledge
that such allocation shall be made in accordance with Section 1060 of the Code and the regulations thereunder, and agree to report such allocation for all Tax purposes in a consistent manner and take no position contrary thereto. 
  
 2.6 Completion of Transfers. 
  
 (a) The entire beneficial interest in and to, and the risk of loss with
respect to, the Purchased Assets and the Assumed Liabilities, shall, regardless of when legal title thereto shall be transferred to Buyer, pass to Buyer at Closing as of the Effective Time. All operations of the Business shall be for the account of
Seller up to the Effective Time and shall be for the account of Buyer thereafter. In the event legal title to any of the Purchased Assets or the Assumed Liabilities is not transferred at Closing, Seller shall hold such Purchased Assets or Assumed
Liabilities as nominee for Buyer until completion of such transfers.  
  
 (b) In the event that the legal interest in any of the Purchased Assets or the Assumed Liabilities to be sold, assigned, transferred or conveyed pursuant to this Agreement, or any claim, right or benefit arising
thereunder or resulting therefrom cannot be sold, assigned, transferred or conveyed hereunder as of the Closing Date because any waiting or notice period has not expired or any consents or approvals required for such sale, assignment, transfer or
conveyance have not been obtained or waived, then the legal interest in such Purchased Assets or Assumed Liabilities shall not be sold, assigned, transferred or conveyed unless and until such waiting or notice period shall have expired or until
approval, consent or waiver thereof is obtained. In such event, Seller shall at its expense, and Buyer shall at its expense, use reasonable efforts to cooperate in obtaining such consents, approvals or waivers as may be necessary to complete such
transfers as soon as practicable. Notwithstanding the forgoing, to the extent a landlord or lessor, under a Material Contract, requires any reasonable administrative, processing, expediting or legal fees to be paid in connection with obtaining the
consents or approvals for assignment required under this Agreement, Seller shall pay any such fee. Except as set forth in Schedule 6.2, the failure of Seller to obtain any required consents or approvals prior to Closing shall not affect
Buyer’s obligations to close under this Agreement or to pay, or cause to be paid, the Purchase Price. Nothing in this Agreement shall be construed as an attempt to assign to Buyer any legal interest in any of the Purchased 
  

 13 

 Assets or the Assumed Liabilities which, as a matter of law or by the terms of any legally binding contract, engagement
or commitment to which Seller is subject, is not assignable without the consent of any other party, unless such consent shall have been given. 
  
 (c) Pending the assignments, conveyances and transfers referred to in paragraph (b), Seller shall hold any such non-assigned, non-conveyed and
non-transferred Purchased Assets or Assumed Liabilities for the benefit and at the risk of Buyer and shall cooperate with Buyer in any lawful and reasonable arrangements designed to provide the benefits of ownership thereof to Buyer. 
  
 (d) Buyer shall bear all costs and expenses associated with the assignment to
Buyer, and the recordation by Buyer, of the Intellectual Property Rights. 
  
 2.7 Further Assurances. From and after the Closing, the Parties shall do such acts and execute such documents and instruments as may be reasonably required to make effective the transactions contemplated
hereby. 
  
 ARTICLE 3 
 REPRESENTATIONS AND WARRANTIES OF SELLER AND CORNETT 
  
 Seller and Cornett hereby make the following representations and warranties, each of which is true and correct on the date hereof and shall survive the
Closing and the transactions contemplated hereby to the extent set forth herein. 
  
 3.1 Existence and Power. 
  
 (a) Seller is a limited partnership duly organized and validly existing under the laws of the State of Texas, and Seller has delivered to Buyer true, complete and correct copies of its certificate of limited partnership and limited
partnership agreement, as currently in effect. Texas Wholesale Building Materials, Inc., the predecessor in interest to Seller, was validly and effectively converted into a limited partnership, the Seller, upon the filing of the Articles of
Conversion with the Texas Secretary of State effective as of December 1, 2004. TWBM Partners, GP, the limited partner of Seller, is a general partnership duly organized and validly existing under the laws of the State of Texas. TWBM Management
Company, LLC, the general partner of Seller, is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Texas. 
  
 (b) Seller has all requisite power and authority to own, lease and use its assets and to transact the Business, and holds
all authorizations, franchises, licenses and permits required therefor and all such authorizations, franchises, licenses and permits are valid and subsisting. Seller is duly licensed or qualified to do business as a foreign limited partnership and
is in good standing in each jurisdiction where such license or qualification is required, except for jurisdictions where the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect. 
  

 14 

 (c) Seller has the full power, authority and capacity to execute and deliver this Agreement, to perform
its obligations hereunder, and to consummate the transactions contemplated hereby. 
  
 3.2 Valid and Enforceable Agreement; Authorization; Non-contravention. 
  
 (a) This Agreement has been duly executed and delivered by Seller and constitutes a legal, valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms, except that such enforcement may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally, and (ii)
general principles of equity. 
  
 (b) The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized, approved and ratified by all necessary action on the part of Seller. 
  
 (c) Except as set forth in Section 3.2(c) of the Disclosure Letter, Seller is not a party to, subject to or bound by
any Contract, Law or Order which does or would (i) conflict with or be breached or violated or the obligations thereunder accelerated or increased (whether or not with notice or lapse of time, or both) by the execution, delivery or performance by
Seller of this Agreement, or (ii) prevent the carrying out of the transactions contemplated hereby. Except as set forth on Section 3.2(c) of the Disclosure Letter, no permit, consent, waiver, approval or authorization of, or
declaration to or filing or registration with, any Government or third party is required in connection with the execution, delivery or performance of this Agreement by Seller or any of the Related Agreements to which Seller is a party or the
consummation by Seller of the transactions contemplated hereby and thereby, except for any such permits, consents, waivers, approvals, authorizations, declarations, filings or registrations the failure of which to obtain would not have a Material
Adverse Effect. The transactions contemplated hereby will not result in the creation of any Lien against Seller or any of its properties or assets. 
  
 3.3 Capitalization, Ownership and Subsidiaries. 
  
 (a) The partnership interests of Seller and the names, addresses and holdings of the record holders thereof are set forth in Section 3.3(a) of the
Disclosure Letter. Such partnership interests constitute the only issued and outstanding partnership interests of Seller. Except for Buyer’s rights pursuant to this Agreement and except as set forth in Section 3.3 of the Disclosure
Letter, (i) there are no issued and outstanding (A) securities of Seller, or (B) warrants, preemptive rights, other rights, or options with respect to any securities of Seller, and (ii) Seller is not subject to any obligation to issue, sell,
deliver, redeem, or otherwise transfer, acquire or retire any of its securities. 
  
 (b) Except as set forth in Section 3.3 of the Disclosure Letter, Seller does not have any subsidiaries and Seller does not directly or indirectly own or have any capital stock or other equity interest in
any Person. 
  

 15 

 3.4 Financial Statements. Attached as Section 3.4 of the Disclosure Letter are the
Financial Statements. The Financial Statements were derived from the books and records of Seller and (i) present fairly the financial position and results of operations of Seller at the dates and for the periods indicated, and (ii) have been
prepared in accordance with GAAP; provided, however, that the Financial Statements as of and for the periods ended September 30, 2004 and December 31, 2004 are subject to normal year-end adjustments (which will not be material individually or
in the aggregate) and lack footnotes and other presentation items. 
  
 3.5 Events Subsequent to December 31, 2003. Since December 31, 2003, except as set forth in Section 3.5 of the Disclosure Letter, there has been no: 
  
 (a) change in the business or condition (financial or otherwise), operations, results of operations or prospects of Seller
other than changes in the Ordinary Course (which changes have not, individually or in the aggregate, had a Material Adverse Effect); 
  
 (b) damage, destruction or loss, whether covered by insurance or not, materially affecting the tangible assets of Seller; 
  
 (c) loss or threatened loss of customer accounts of Seller, provided that,
for purposes of this Section 3.5(c), “threatened loss” shall not include negotiation of terms of sale in the Ordinary Course; 
  
 (d) material adverse change in Seller’s relationship with any of the suppliers, customers, distributors, lessors, licensors, licensees or other third
parties which are material to Seller; 
  
 (e) declaration, setting
aside, or payment of any dividend or any distribution (in cash or in kind) with respect to any securities of Seller; 
  
 (f) sale or direct or indirect redemption, purchase or other acquisition of securities of Seller; 
  
 (g) increase in or commitment to increase compensation, benefits, or other
remuneration to or for the benefit of any employee, shareholder, partner, director, officer, or agent of Seller, or any benefits granted under any Plan with or for the benefit of any such employee, shareholder, director, officer, or agent, except
for increases in salary, wages or benefits in the Ordinary Course with respect to employees other than those who are shareholders, partners, officers or directors; 
  
 (h) transaction entered into or carried out by Seller in connection with the Business, other than in the Ordinary Course or
as contemplated by this Agreement; 
  
 (i) borrowing or incurrence
of any indebtedness (including letters of credit and foreign exchange contracts), contingent or otherwise, by or on behalf of Seller, 

  

 16 

 any endorsement, assumption, or guarantee of payment or performance of any such indebtedness or any Liabilities of any
other Person by or on behalf of Seller other than in the Ordinary Course; 
  
 (j) change made with respect to Seller in its Tax or financial accounting or any Tax election; 
  
 (k) grant of any Lien with respect to the Purchased Assets; 
  
 (l) transfer of any assets of Seller, other than (i) arm’s-length sales, leases, or dispositions in the Ordinary Course and (ii) sales of products to
Seller’s employees consistent with past practice and in an aggregate amount not to exceed $15,000; 
  
 (m) modification or termination of any material Contract or any material term thereof except in the Ordinary Course; 
  
 (n) lease or acquisition of any capital assets by Seller except in the
Ordinary Course; 
  
 (o) loan or advance by Seller to any
director, officer, employee or third party; or 
  
 (p) commitment
or agreement by Seller to do any of the foregoing items (e) through (o). 
  
 3.6 Undisclosed Liabilities. To Seller’s Knowledge, Seller does not have any Liabilities whatsoever, asserted or unasserted, liquidated or unliquidated, accrued, absolute, contingent, or otherwise, and
there is no basis for any claim against Seller for any such Liability, except: 
  
 (a) as set forth as a liability on the Financial Statements or in Section 3.5 or 3.6 of the Disclosure Letter; 
  
 (b) as incurred in the Ordinary Course since the date of the most recent Financial Statements, none of which has had or may reasonably be expected to have
a Material Adverse Effect; or 
  
 (c) for, to the extent such
Liability arose in the Ordinary Course and is not otherwise required to be set forth in a schedule hereto, performance and payment obligations (but not liabilities for breach or violation) lawfully incurred under arm’s-length Contracts for
goods or services, none of which reasonably would be expected to have a Material Adverse Effect. 

  

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 3.7 Taxes. Except as set forth in Section 3.7 of the Disclosure Letter: 
  
 (a) Seller has filed, or caused to be filed, on a timely basis all Tax
Returns, and such Tax Returns are true, correct and complete in all respects. Without limiting the foregoing, none of the Tax Returns contains any position that is, or would be, subject to penalties under section 6662 of the Code (or any
corresponding provisions of state, local or foreign Tax law). Seller has not entered into any “listed transactions” as defined in Section 1.6011-4(b)(2) of the Treasury Regulations, and Seller has properly disclosed all reportable
transactions as required by Section 1.6011-4 of the Treasury Regulations. 
  
 (b) Section 3.7 of the Disclosure Letter lists all Tax Returns for periods up to the Closing Date (whether or not the period ends on such date) that have not been filed on or before the Closing Date.
Seller currently is not the beneficiary of any extension of time within which to file any Tax Return. 
  
 (c) All Taxes due and owing by Seller (whether or not reflected on any Tax Return) have been timely and fully paid and there are no grounds for the
assertion or assessment of additional Taxes against Seller or its assets. 
  
 (d) Seller has timely and properly withheld and paid all Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, shareholder or
other third party, including, but not limited to, amounts required to be withheld under Sections 1441 and 1442 of the Code, or any similar provision under foreign Law. 
  
 (e) Seller has filed or caused to be filed with the appropriate governmental entity all unclaimed property reports required
to be filed and has remitted to the appropriate governmental entity all unclaimed property required to be remitted. 
  
 (f) There are no Liens for Taxes (other than for current Taxes not yet due and payable) upon any assets of Seller. 
  
 (g) Seller is not a party to or bound by any Tax indemnity, Tax sharing or
Tax allocation agreement or arrangement. 
  
 (h) Seller (i) is not
and never has been a member of an “affiliated group” within the meaning of Section 1504 of the Code and (ii) does not have any liability for the Taxes of any Person under Treasury Regulation Section 1.1502-6 (or similar provision of state,
local or foreign Law) as a transferee or successor, by contract or otherwise. 
  
 (i) Seller is not a party to or a partner in any joint venture, partnership or other arrangement or Contract that could be treated as a partnership for federal income tax purposes. 
  
 (j) Seller has not conducted business outside the States of Texas, Oklahoma
and Louisiana in a manner that would subject it to the income tax of a state 

  

 18 

 other than Texas, Oklahoma or Louisiana. Seller does not have and has not had a permanent establishment in any foreign
country, as defined in any applicable Tax treaty or convention between the United States and such foreign country, or a presence in a foreign country that could subject Seller to income tax in such foreign country. 
  
 (k) No federal, state, local or foreign Tax audits or administrative or
judicial Tax proceedings are pending or being conducted with respect to Seller. 
  
 (l) Seller has not received from any federal, state, local or foreign Tax authority (including jurisdictions where Seller has not filed a Tax Return) any (i) notice indicating an intent to open an audit or other
review; (ii) request for information related to Tax matters; or (iii) notice of deficiency or proposed adjustment for any amount of Tax proposed, asserted, or assessed by any Tax authority against Seller. 
  
 (m) Seller has not waived any statutes of limitation in respect of Taxes or
agreed to any extension of time with respect to a Tax assessment or deficiency. 
  
 (n) True, correct and complete copies of all income Tax Returns, Tax examination reports and statements of deficiencies assessed against, or agreed to with respect to Seller for any of the last three years with the
IRS (or any taxing authority) have been delivered to Buyer. 
  
 (o) Seller is not a party to any agreement, Contract, arrangement or plan that has resulted or would result in a payment that would not be fully deductible as a result of Section 162(m) or Section 280G of the Code or any similar provision
of foreign, state, or local Law. 
  
 (p) None of the assets of
Seller is property that Seller is required to treat as being a “safe harbor lease” within the meaning of Section 168(f)(8) of the Code, as in effect prior to amendment by the Tax Equity and Fiscal Responsibility Act of 1982. 
  
 (q) None of the assets of Seller has been financed with or directly or
indirectly secures any debt the interest on which is Tax-exempt under Section 103(a) of the Code. Seller is not a borrower or guarantor of any outstanding industrial revenue bonds, and is not a tenant, principal user or related person to any
principal user (within the meaning of Section 144(a) of the Code) of any property that has been financed or improved with the proceeds of any industrial revenue bonds. 
  
 (r) None of the assets of Seller is “tax-exempt use property” within the meaning of Section 168(h) of the Code.

  
 (s) Seller is not, and never has been, a United States real
property holding company within the meaning of Section 897(c)(1)(A)(ii) of the Code. 
  
 (t) Seller will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion 

  

 19 

 thereof) ending after the Closing Date as a result of any (i) change in method of accounting for a taxable period ending
on or prior to the Closing Date; (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax Law) executed on or prior to the Closing Date; (iii)
installment sale or open transaction disposition made on or prior to the Closing Date; or (iv) prepaid amount received on or prior to the Closing Date. 
  
 3.8 Accounts Receivable. Set forth in Section 3.8 of the Disclosure Letter is a list of all the accounts receivable of Seller and an
aging schedule related thereto, as of December 31, 2004. Such accounts receivable, together with any accounts receivable arising between such date and the Closing Date (collectively, the “Accounts Receivable”), are (to the extent
not yet paid in full) valid, genuine and existing and arose or will have arisen from bona fide sales of products or services actually made in the Ordinary Course. Seller has no knowledge of, and Seller has received no notice of, any counterclaim,
set-off, defense or Lien with respect to the Accounts Receivable. Seller has no knowledge of any reason the Accounts Receivable will not be fully collectible. No agreement for deduction, free goods, discount or deferred price or quantity adjustment
has been made with respect to any Accounts Receivable. 
  
 3.9
Inventories; Consignment. Except as set forth in Section 3.9 of the Disclosure Letter, the inventory held by Seller at any location consists of a quantity and quality usable and salable in the Ordinary Course, is not physically
damaged, previously used, obsolete, discontinued, “old” or “excess” (as defined below), is merchantable and fit for its intended use, is in compliance with all applicable Law, whether domestic or foreign, and is in conformity
with all applicable product registrations and specifications, subject only to the reserve, if any, for inventory write-down set forth on the Financial Statements. Except as set forth in Section 3.9 of the Disclosure Letter, Seller does
not hold any inventory or materials on consignment or have title to any inventory or materials in the possession of others. As used in this Agreement, “excess” inventory shall mean (A) with respect to products in existence more than 24
months, the amount of inventory in excess of a 24-month supply based on actual sales of such products over the preceding 12 months, (B) with respect to products introduced within the last 24 months, the amount of such inventory in excess of a
24-month supply based upon the forecasted sales for such products during the six months following the Closing, which forecast has been prepared by Seller in a commercially reasonable manner, and (C) with respect to special order items, the amount of
such items that either have not been sold within 60 days of their receipt or have been returned by customers of Seller. As used in this Agreement, “old” inventory shall mean any SKU of inventory which has had no movement for more than
twelve (12) months. 
  
 3.10 No Breach of Law or Governing
Document. Except as set forth in Section 3.10 of the Disclosure Letter, Seller is not in default under or in breach or violation of any Law or the provisions of any material Government permit, franchise or license, or any provision of its
certificate of limited partnership or its limited partnership agreement. Except as set forth in Section 3.10 of the Disclosure Letter, Seller has not received any notice alleging such default, breach or violation. Neither the execution
of this Agreement nor the Closing does or will constitute or result in any such default, breach or violation. 
  

 20 

 3.11 Litigation. Except as set forth in Section 3.11 of the Disclosure Letter, (a)
there is no, and for the previous five years there has not been any material suit, claim, litigation, proceeding (administrative, judicial, or in arbitration, mediation or alternative dispute resolution), Government or grand jury investigation, or
other action (any of the foregoing, an “Action”) pending or, to Seller’s knowledge, threatened, anticipated or contemplated against Seller or involving the Business, any of its property, or any of its shareholders, partners,
directors, officers, agents, or other personnel in their capacity as such which would have a Material Adverse Effect, including without limitation any Action challenging, enjoining, or preventing this Agreement, or the consummation of the
transactions contemplated hereby; (b) Seller is not and has not been subject to any Order other than Orders of general applicability which would not have a Material Adverse Effect; and (c) Seller has not been subject to or, to Seller’s
knowledge, threatened to be subject to, and Seller does not have Knowledge of any grounds for, any Action or Order relating to personal injury, death, or property or economic damage arising from products sold, licensed or leased and services
performed by Seller. 
  
 3.12 Owned and Leased Real
Property. 
  
 (a) Seller does not own any real property.

  
 (b) Set forth in Section 3.12(b) of the Disclosure
Letter is a description of each lease (including without limitation the monthly lease payments and lease term) under which Seller is the lessee of any real property (the “Leased Real Property”). Seller has made available to
Buyer a true, correct and complete copy of each lease identified in Section 3.12(b) of the Disclosure Letter. The premises or property described in such leases are presently occupied or used by Seller as lessee under the terms of such
leases. Except as set forth in Section 3.12(b) of the Disclosure Letter, all rentals due under such leases have been paid and there exists no default by Seller or, to Seller’s knowledge, by any other party to such leases under the
terms of such leases and no event has occurred which, upon passage of time or the giving of notice, or both, would result in any event of default by Seller or, to Seller’s knowledge, by any other party to such leases, or prevent Seller from
exercising and obtaining the benefits of any rights or options contained therein. Except as set forth in Section 3.12(b) of the Disclosure Letter, Seller has all right, title and interest of the lessee under the terms of said leases, free of
all Liens other than Permitted Liens and all such leases are valid and in full force and effect. 
  
 (c) All improvements located on, and the use presently being made of, the Real Property comply with all applicable zoning and building codes, ordinances
and regulations and all applicable fire, environmental, occupational safety and health standards and similar standards established by Law and the same use thereof by Buyer following Closing will not result in any violation of any such code,
ordinance, regulation 
  

 21 

 or standard. The present use and operation of the Real Property does not constitute a non-conforming use and is not
subject to a variance, although Seller does have a permit for outdoor storage. To Seller’s Knowledge, there is no proposed, pending or threatened change in any such code, ordinance, regulation or standard which would adversely affect the
Business of Seller. 
  
 (d) At and after the Closing, Buyer shall
have the right to maintain or use such Real Property, including the space, facilities or appurtenances outside the building lines, whether on, over or under the ground, and to conduct such activities thereon as maintained, used or conducted by
Seller on the date hereof and such right is not subject to revocation, unless Buyer fails to comply with the terms of the respective leases on the Leased Real Property. At and after the Closing, Buyer shall have all rights, easements and agreements
necessary for the use and maintenance of water, gas, electric, telephone, sewer or other utility pipelines, poles, wires, conduits or other like facilities, and appurtenances thereto, over, across and under the Real Property. No proceeding is
pending or, to Seller’s knowledge, threatened which could adversely affect the zoning classification of the Real Property. 
  
 (e) There is no unpaid property Tax (except Taxes not yet due and payable), nor is there any levy or assessment against the Real Property (except for
Liens relating to Taxes not yet due and payable), nor is there pending or, to Seller’s knowledge, threatened any condemnation proceeding against the Real Property or any portion thereof. No part of any improvements on the Real Property
encroaches upon any property adjacent thereto or upon any easement, nor is there any encroachment or overlap upon the Real Property. 
  
 (f) Except as set forth in Section 3.12 of the Disclosure Letter, to Seller’s knowledge, there is no condition affecting the Real Property or
the improvements located thereon which requires repair or correction to restore the same to reasonable operating condition. 
  
 3.13 Title to Assets. Except as set forth in Section 3.13 of the Disclosure Letter and with respect to leases set forth in Section 3.12
and Section 3.14 of the Disclosure Letter, Seller has good and marketable title to and is the sole and exclusive owner of all right title and interest in and to all of the property used by it or necessary to conduct its Business,
including in each case all personal property reflected on the Financial Statements or acquired after the date thereof (except any personal property subsequently sold in the Ordinary Course), free and clear of all Liens, leases, options, covenants,
conditions, agreements, claims, restrictions and other encumbrances of every kind, and there exists no restriction on the use or transfer of such property except for Permitted Liens. 
  
 3.14 Personal Property Leases. Seller is not the lessor of any personal property. Set forth in Section 3.14
of the Disclosure Letter is a description of each lease (including without limitation the monthly lease payments, lease term and description of 
  

 22 

 the personal property) under which Seller is the lessee of any personal property included in the Purchased Assets and the
location of such property. Seller has made available to Buyer a true, correct and complete copy of each lease identified in Section 3.14 of the Disclosure Letter. The property described in such leases is presently used by Seller as lessee
under the terms of such leases. Except as set forth in Section 3.14 of the Disclosure Letter, all rentals due under such leases have been paid and there exists no default by Seller or, to Seller’s knowledge, by any other party to such
leases under the terms thereof and no event has occurred which, upon passage of time or the giving of notice, or both, would result in any event of default by Seller or, to Seller’s knowledge by any other party to such leases, or prevent Seller
from exercising and obtaining the benefits of any rights or options contained therein. Except as set forth in Section 3.14 of the Disclosure Letter, Seller has all right, title and interest of the lessee under the terms of said leases,
free of all Liens other than Permitted Liens and all such leases are valid and in full force and effect. 
  
 3.15 Necessary Property. The assets owned or leased by Seller constitute all of the property and property rights used or necessary for the conduct
of the Business in the manner and to the extent presently conducted by Seller. There exists no condition, restriction or reservation affecting the title to or utility of such assets of Seller which would prevent Seller or Buyer from utilizing such
assets, or any part thereof, after the Closing to the same full extent that Seller might continue to do so if the transactions contemplated hereby did not take place. 
  
 3.16 Use and Condition of Property; Location. Except as set forth in Section 3.16 of the Disclosure
Letter, all the assets of Seller are in good operating condition and repair, subject to ordinary and normal wear and tear, as reasonably required for their use as presently conducted or planned by Seller, and conform to all applicable Laws, and
no notice of any violation of any Law relating to any of such property or assets has been received by Seller except such as have been fully complied with. Except as set forth in Section 3.16 of the Disclosure Letter, no property or
assets of Seller, other than inventory, are in the possession of others and Seller does not hold more than $25,000 of property on consignment. All of the tangible property of Seller has been maintained in accordance with normal industry practice and
is suitable for the purposes for which it is presently used. 
  
 3.17 Licenses and Permits. Except as set forth in Section 3.17 of the Disclosure Letter, Seller possesses all licenses, permits and other authorizations and approvals required for the conduct of the Business, and each such
license or permit is valid and in full force and effect and upon Closing Buyer will have all right and authority to conduct its activities pursuant to such licenses and permits. Seller is in compliance in all material respects with such licenses and
permits. No such license or permit has been, or to Seller’s Knowledge is threatened to be, revoked, canceled, suspended or materially adversely modified. Neither the execution of this Agreement nor the Closing do or will constitute or result in
a default under or violation of any such license or permit. 
  

 23 

 3.18 Environmental Matters. 
  
 (a) Except as set forth in Section 3.18 of the Disclosure Letter, all Environmental Property, all current or, to the
Knowledge of Seller, previous conditions on and uses of the Environmental Property, and all current or previous ownership or operation by Seller and, to Seller’s Knowledge, by prior owners (other than Affiliates of Seller) of the Environmental
Property (including without limitation transportation and disposal of Hazardous Materials by or for Seller) comply and have at all times complied with, and do not cause, have not caused, and will not cause liability to be incurred by Seller under
any Environmental Law. Seller is not in violation of and has not violated any Environmental Law. 
  
 (b) Except as set forth in Section 3.18 of the Disclosure Letter, Seller has obtained and is in compliance with all necessary Environmental
Permits, and no deficiencies have been asserted by any Government or authority with respect to such items. 
  
 (c) Except as set forth in Section 3.18 of the Disclosure Letter, there has been no spill, discharge, leak, leaching, emission, migration,
injection, disposal, escape, dumping, or release of any kind on, beneath, above, or into the Environmental Property or into the environment surrounding the Environmental Property of any Hazardous Materials, which has resulted in contamination in
excess of applicable federal, state or local limits or could require remediation under any Environmental Law. 
  
 (d) Seller is not a treatment storage disposal facility as defined under the Resource Conservation and Recovery Act. Except as set forth in Section
3.18 of the Disclosure Letter, there are and have been no (i) Hazardous Materials stored, disposed of, generated, manufactured, refined, transported, produced or treated at, upon or from the Environmental Property, or (ii) asbestos fibers
or materials or polychlorinated biphenyls or underground storage tanks on or beneath the Environmental Property. 
  
 (e) Except in the Ordinary Course, no expenditure will be required in order for Buyer to comply with any Environmental Laws in effect at the time of the
Closing in connection with the operation or continued operation of the Business on the Environmental Property in a manner consistent with the current operation thereof by Seller. 
  
 (f) Except as set forth in Section 3.18 of the Disclosure Letter, there never has been pending or, to Seller’s
knowledge, threatened against Seller or to Seller’s knowledge, any other Person to the extent that such other Person from time to time has owned, leased, occupied or conducted operations on the Environmental Property, any civil, criminal or
administrative action, suit, summons, citation, complaint, claim, notice, demand, request, judgment, order, lien, proceeding, hearing, study, inquiry or investigation based on or related to an Environmental Permit or an Environmental Law.

  

 24 

 (g) Except as set forth in Section 3.18 of the Disclosure Letter, Seller has not transported or
arranged for the transportation of any Hazardous Materials to any location which is: (i) listed on, or proposed for listing on, the EPA’s National Priorities List published at 40 CFR Part 300 or on any similar state list; or (ii) the subject of
any regulatory action which may lead to claims against Seller for damages to natural resources, personal injury, clean-up costs or clean-up work. 
  
 (h) Except as set forth in Section 3.18 of the Disclosure Letter, neither Seller, nor to the Seller’s Knowledge any other Person to the extent
that such other Person from time to time has owned, leased, occupied or conducted operations on the Environmental Property, has ever received from any Person any notice of, or has any knowledge of, any past, present or anticipated future events,
conditions, circumstances, activities, practices, incidents, actions, agreements or plans that could: (i) interfere with, prevent, or increase the costs of compliance or continued compliance with any Environmental Permits or any renewal or transfer
thereof or any Environmental Law; (ii) make more stringent any restriction, limitation, requirement or condition under any Environmental Law or any Environmental Permit in connection with the operations on the Environmental Property; or (iii) give
rise to any Liability, loss or expense, or form the basis of any civil, criminal or administrative action, suit, summons, citation, complaint, claim, notice, demand, request, judgment, order, lien, proceeding, hearing, study, inquiry or
investigation involving the Environmental Property or Seller, based on or related to an Environmental Permit or an Environmental Law or to the presence, manufacture, generation, refining, processing, distribution, use, sale, treatment, recycling,
receipt, storage, disposal, transport, handling, emission, discharge, release or threatened release of any Hazardous Materials. 
  
 3.19 Contracts and Commitments. 
  
 (a) Except as set forth in Section 3.19(a) of the Disclosure Letter, Seller is not a party to or otherwise obligated under any of the following
Contracts (“Material Contracts”), whether written or oral: 
  
 (i) any Contract providing for the sale of products or the provision of services, with a term in excess of one (1) year, by Seller to any other Person, other than such Contracts that provide for payments, in the
aggregate of less than $10,000; 
  
 (ii) any
Contract (or group of related Contracts) for the purchase of raw materials, commodities, supplies, products, or other personal property, or for the receipt of services, the performance of which will extend over a period of more than 1 year, or
involve consideration in excess of $50,000; 
  
 (iii) any Contract providing for an expenditure by Seller for the purchase or sale of real property; 
  

 25 

 (iv) any Contract, bid or offer to sell products or to provide services to third parties
which (A) Seller knows is at a price which would result in a net loss on the sale of such products or provision of such services or (B) contains terms or conditions which Seller cannot reasonably expect to satisfy or fulfill in all material
respects; 
  
 (v) any purchase commitment for
materials, supplies, component parts or other items or services in excess of the normal, ordinary, usual and current requirements of Seller or at a price in excess of the current reasonable market price at the time of such commitment; 
  
 (vi) any Contract pursuant to which Seller is the lessor or
sublessor of, or permits any third party to operate, any real or personal property; 
  
 (vii) any revocable or irrevocable power of attorney granted to any Person, for any purpose whatsoever; 
  
 (viii) any loan or financing agreement, capitalized lease
arrangement (other than as set forth in Section 3.14 of the Disclosure Letter), indenture, promissory note, conditional sales agreement, mortgage, security agreement, pledge, letter of credit arrangement, guarantee, endorsement, assumption,
indemnity, surety, foreign exchange contract, accommodation or other similar type of agreement; 
  
 (ix) any arrangement or other agreement which involves (i) a sharing of profits or (ii) any joint venture, partnership or similar
agreement or arrangement; 
  
 (x) any sales
agency, sales representation, consultant, distributorship or franchise agreement that is not terminable without penalty within 60 days; 
  
 (xi) any profit sharing, stock option, stock purchase, stock appreciation, deferred compensation, severance, or other plan or arrangement
for the benefit of its current or former directors, officers, and employees; 
  
 (xii) any collective bargaining agreement; 
  
 (xiii) any Contract for the employment of any individual on a full-time, part-time, consulting, or other basis or providing severance benefits; 
  
 (xiv) any Contract providing for the payment of any cash or other benefits upon the sale or change of
control of Seller or a substantial portion of its assets; 
  

 26 

 (xv) any Contract prohibiting competition, prohibiting Seller from freely engaging in any
business anywhere in the world, or prohibiting the disclosure of trade secrets or other confidential or proprietary information; 
  
 (xvi) any Contract or commitment not made in the Ordinary Course, including without limitation any Contract pursuant to which Seller has
acquired or disposed of, or has agreed to acquire or dispose of, any securities, business unit, product line or the like; or 
  
 (xvii) any other Contract under which the consequences of a default or termination could have a Material Adverse Effect. 
  
 (b) Seller has not received any notice of any intention to terminate,
repudiate or disclaim any Material Contract. 
  
 3.20 Validity
of Contracts. Each of the Material Contracts is a valid, binding and enforceable obligation of Seller and, to Seller’s knowledge, the other parties thereto, in accordance with its terms and conditions, except that such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally and general equitable principles. Except as indicated in Section 3.20 of the
Disclosure Letter, (x) Seller is not, (y) to the extent it would create a current or future liability of Buyer and/or Seller, Seller has not been, and (z) to Seller’s knowledge, no other party to a Material Contract is, in material breach
or violation of or default under any Material Contract, and no event has occurred that, with the passage of time or the giving of notice, or both, would constitute, and neither the execution of this Agreement nor the Closing hereunder do or will
constitute or result in, such a breach, violation or default on the part of any party thereto, cause the acceleration of any obligation of Seller or any other party thereto, or the creation of a Lien upon any assets of Seller, or require any consent
thereunder. Seller has made available to Buyer a true, complete and accurate copy of each Material Contract. 
  
 3.21 Intellectual Property. Section 3.21 of the Disclosure Letter sets forth the registered Intellectual Property of Seller and accurately
identifies, where applicable, one or more of the following for each item of registered Intellectual Property: filing date, issue date, classification of invention or goods or services covered, country of origin, licensor, license date and licensed
subject matter. Except as set forth in Section 3.21 of the Disclosure Letter: 
  
 (a) Seller is the sole and exclusive owner of, and has the unrestricted right to use, the Intellectual Property, free and clear of all Liens, and all such items are valid and subsisting; 
  
 (b) The Intellectual Property is valid and enforceable and encompasses all
proprietary rights necessary or desirable for the operation of Seller as presently conducted and as proposed to be conducted; 
  

 27 

 (c) There has been no claim made or, to Seller’s knowledge, threatened, against Seller asserting the
invalidity, misuse or unenforceability of any of the Intellectual Property or challenging Seller’s right to use or ownership of any of the Intellectual Property, and there are no valid grounds for any such claim or challenge; 
  
 (d) No loss of any of the Intellectual Property is pending, reasonably
foreseeable or, to Seller’s knowledge, threatened; 
  
 (e)
The consummation of the transactions contemplated by this Agreement will not alter, impair or extinguish Seller’s rights in and to any of the Intellectual Property; 
  
 (f) Seller has not given indemnification to any third party in connection with any item of Intellectual Property;

  
 (g) Except as set forth in Section 3.21 of the
Disclosure Letter, there exists no restriction on Seller’s use of the Intellectual Property, or on the transfer of any rights of Seller in and to any of the Intellectual Property; 
  
 (h) Seller has the right to use each item of Intellectual Property without
obligations to third parties except as disclosed in Section 3.21 of the Disclosure Letter; 
  
 (i) The conduct of the Business and operations of Seller and the ownership, assembly, purchase, sale, marketing, licensing and use of Seller’s
products do not contravene, conflict with, violate or infringe upon any patent, trademark, service mark, copyright or other intellectual property right of a third party or the terms of any license with respect thereto, and no proprietary information
or trade secret has been misappropriated by Seller from any third party; and 
  
 (j) The Intellectual Property and Seller’s products are not subject to a current claim of infringement, interference or unfair competition or other claim and, to Seller’s knowledge, the Intellectual Property
is not being infringed upon or violated by any third party. 
  
 3.22 Insurance. Seller has at all times since January 1, 2004 maintained insurance as required by Law or under any Contract to which Seller is or has been a party, including without limitation general comprehensive liability,
unemployment and workers’ compensation coverage. Section 3.22 of the Disclosure Letter sets forth the insurance maintained by Seller, together with the amount of coverage for each policy, the premium due dates and the dates of last
payment and clearly indicates which of such insurance policies are claims-made policies and which of such policies are occurrence-based policies. To Seller’s Knowledge, the policies described evidence insurance in such amounts and against such
risks and losses as are generally maintained with respect to comparable companies and properties. All of such insurance policies are in full force and effect (with respect to the applicable coverage periods), and Seller is not in default with
respect to any of its obligations under any of such insurance policies. 
  

 28 

 3.23 Employees, Officers, Partners, Directors and Consultants. 
  
 (a) Section 3.23(a) of the Disclosure Letter contains a complete and
accurate list of the following information for each employee of Seller, including each employee on leave of absence or layoff status: name, job title, current compensation paid or payable, any change in compensation since January 1, 2004, and
vacation accrued. 
  
 (b) Set forth in Section 3.23(b) of the
Disclosure Letter is a list of: (i) all current partners of Seller, (ii) all current officers (with office held) of Seller, (iii) all current paid consultants to Seller, and (iv) all retirees and terminated employees of Seller for whom Seller
has any benefits responsibility or other continuing or contingent obligation, together with the current rate of compensation and benefits (if any) payable, and paid vacation time owing, to such person and any incentive or bonus payments. 

 
 (c) Except as set forth in Section 3.23(c) of the Disclosure
Letter, Seller is not indebted to any partner, shareholder, director, officer, employee or agent of Seller, except for amounts due as normal salaries, wages, employee benefits and bonuses, and in reimbursement of ordinary expenses on a current
basis, as set forth in Sections 3.23(a) and (b) of the Disclosure Letter. 
  
 (d) Except as set forth in Section 3.23(d) of the Disclosure Letter, no partner, officer, director, employee or consultant of Seller is indebted to Seller except for advances for ordinary business
expenses on a basis consistent with past practices. 
  
 (e) All
payments to agents, consultants and others made by Seller have been in payment of bona fide fees and commissions and not as bribes, kickbacks or as otherwise illegal payments. All such payments have been made directly to or for the account of the
parties providing the goods or services for which such payments were made, and no such payment has been paid in a manner intended to avoid currency controls or any party’s Tax reporting or payment obligations. Seller has properly and accurately
reflected on its books and records: (i) all compensation paid to and perquisites provided to or on behalf of its agents and employees; and (ii) all compensation and perquisites that are due and payable to such persons, but which have not been paid
or provided as of the Closing Date. Such compensation and perquisites have been properly and accurately reflected in the Financial Statements, records or Government filings of Seller, to the extent required by Law. 
  
 (f) Except as set forth in Section 3.23(f) of the Disclosure
Letter, no former or current employee or current or former officer, director or partner of Seller is a party to, or is otherwise bound by, any agreement or arrangement, including any confidentiality, non-competition or proprietary rights
agreement, between such employee, officer, director or partner and any other Person that in any way adversely affected, 

  

 29 

 affects or may affect (i) the performance of his or her duties as an employee, officer, director or partner of Seller, or
(ii) the ability of Seller or Buyer to conduct the Business. To Seller’s knowledge, no director, officer, partner or other current and active employee of Seller intends to terminate his or her employment with Seller. 
  
 3.24 Bank Accounts of Seller. Set forth in Section 3.24 of
the Disclosure Letter is a list of the locations and numbers of all bank accounts, investment accounts and safe deposit boxes maintained by Seller, together with the names of all persons who are authorized signatories or have access thereto or
control thereunder. 
  
 3.25 Transactions with Related Persons;
Affiliates. Except as set forth in Section 3.25 of the Disclosure Letter, Seller has no Affiliates. Except as set forth in Section 3.25 of the Disclosure Letter, Seller has no Liabilities, contractual or otherwise, owed to
or owing from, directly or indirectly, Seller or any Affiliate of Seller. Except as set forth in Section 3.25 of the Disclosure Letter, neither Seller nor any director, officer, or Affiliate of Seller has any financial interest, direct or
indirect, in any supplier or customer of, or other business which has any transactions or other business relationship with, Seller. 
  
 3.26 Labor Matters. Except as set forth in Section 3.26 of the Disclosure Letter: 
  
 (a) Seller is not a party to or bound by any collective bargaining, works
council, union representation or similar agreement or arrangement; 
  
 (b) There is no controversy existing, pending or, to Seller’s Knowledge, threatened with any association or union or collective bargaining representative of the employees of Seller; 
  
 (c) There is no charge or complaint relating to unfair labor practices
pending against Seller, nor is there any labor strike, work stoppage, material grievance or other labor dispute pending or, to Seller’s Knowledge, threatened against Seller; 
  
 (d) Seller is not engaging and has not engaged in any unfair labor practice; 
  
 (e) To Seller’s Knowledge, no right of representation exists respecting
the employees of Seller; 
  
 (f) No collective bargaining
agreement is currently being negotiated and no organizing effort is currently being made with respect to the employees of Seller; 
  
 (g) No current or former employee of Seller has any claim against Seller on account of or for (i) overtime pay, other than overtime pay for the current
payroll period, (ii) wages or salary (excluding current bonus accruals and amounts accruing under pension and profit sharing plans) for any period other than the current 
  

 30 

 payroll period, (iii) vacation, time off or pay in lieu of vacation or time off, other than that earned in respect of the
current fiscal year or of the employee’s period of service with Seller, or (iv) any violation of any Law relating to minimum wages or maximum hours of work; 
  
 (h) No claim has been made that remains outstanding for breach of any contract of employment or for services or for
severance or redundancy payments or protective awards or for compensation for unfair dismissal or for failure to comply with any Law concerning employment rights or in relation to any alleged discrimination actionable under any Law or for any other
Liability accruing from the termination or variation of any contract of employment or for services, nor is Seller aware that any such claim has been threatened or is pending; 
  
 (i) There is no contract of service in force between Seller and any of its partners, directors, officers or employees which
is not terminable by Seller without compensation on less than three months’ notice given at any time or which provides for compensation specifically in connection with the transactions contemplated by this Agreement. There are no consultancy or
management services agreements in existence between Seller and any other Person; 
  
 (j) With respect to each person employed by Seller, (i) Seller hired such person in compliance with the IRCA; and (ii) Seller has complied with all recordkeeping and other regulatory requirements under IRCA; and

  
 (k) Seller has complied with any and all obligations arising
under the Worker Adjustment and Retraining Notification Act. 
  
 3.27 Employee Benefit Matters.  
  
 (a)
Disclosure. Set forth in Section 3.27(a) of the Disclosure Letter is a complete list of all of the Plans of Seller. 
  
 (b) Valid Obligations. Each Plan and related trust agreement, annuity contract or other funding instrument is legal, valid and binding and in full
force and effect, and there are no defaults thereunder. 
  
 (c)
Compliance with Applicable Law. Except as set forth in Section 3.27(c) of the Disclosure Letter, to Seller’s Knowledge, each Plan and related trust agreement, annuity contract or other funding instrument complies with and
has been administered, operated and maintained in compliance with its terms, and Seller has no direct or indirect Liability under the requirements provided by any and all statutes, orders or Governmental rules or regulations, including but not
limited to ERISA, COBRA, HIPAA and the Code, and applicable to a Plan. With respect to each Plan, no prohibited transactions (as defined in ERISA Section 406 or Code Section 4975) and no violations of ERISA Section 407 for which an applicable
statutory or administrative exemption does not exist have occurred. Any employee training and participant or other notices required 
  

 31 

 by ERISA, HIPAA, COBRA, the Code or any other state or federal Law or any ruling or regulation of any state or federal
administrative agency with respect to each Plan have been appropriately and timely given. 
  
 (d) Claims/Liability. Except as set forth in Section 3.27(d) of the Disclosure Letter, there is no pending or threatened legal action, proceeding or investigation, suit, grievance, arbitration or
other manner of litigation, or claim against or involving any Plan and no facts exist that would give rise to any legal action, proceeding or investigation, suit, grievance, arbitration or other manner of litigation, or claim, other than routine
claims for benefits. Neither Seller nor any of its partners, directors, officers, employees or any plan fiduciary has any Liability for failure to comply with ERISA, HIPAA, COBRA or the Code for any action or failure to act in connection with the
administration or investment of any Plan. Seller has no Liability by virtue of its being a member of a controlled group with a Person who has Liability under the Code or ERISA. 
  
 (e) Contributions/Premiums. All contributions with respect to the Plans for all periods ending prior to the Closing
Date (including periods from the first day of the current plan year to the Closing Date), that were due and payable prior to the Closing Date, will be made prior to the Closing Date by Seller and all members of the controlled group in accordance
with past practice and the recommended contribution in the applicable actuarial report. Seller has no Knowledge that any contributions to the Plans have not been made on a timely basis in accordance with ERISA and the Code. All insurance premiums
(including premiums to the PBGC) have been paid in full, subject only to normal retrospective adjustments in the ordinary course, with regard to the Plans for policy years or other applicable policy periods ending on or before the Closing Date.

  
 (f) Terminated Plans. Except as set forth in Section
3.27(f) of the Disclosure Letter, Seller has not terminated or taken action within the last six taxable years to terminate (in part or in whole) any employee benefit plans as defined in ERISA Section 3(3). All employee benefit plan
terminations have been carried out in accordance with all provisions of Law and any rulings or regulations of any administrative agency, including, without limitation, all applicable reporting and other provisions of the Code and ERISA and with
respect to the PBGC. Seller has no Liability to, and has not received notice alleging Liability from, any Person, including without limitation the PBGC, any other Government agency or any participant in or beneficiary of any employee benefit plan,
nor is Seller liable for any excise, income or other tax or penalty as a result of or in connection with such termination. Seller has obtained a favorable determination letter from the IRS, true, complete and correct copies of which have been
delivered to Buyer, and with respect to each Pension Plan subject to the jurisdiction of the PBGC, has not received a notice of non-compliance from the PBGC with respect to the termination of each of such pension plans as defined in ERISA Section
3(2). The favorable determination letters and PBGC approval were received after full and accurate disclosure by Seller of all material facts to the appropriate Government agencies. 
  

 32 

 (g) MultiEmployer Plans. Seller has never made any contributions to any multiemployer-employer
plan (as defined in ERISA Section 3(37) or 4001(a)(3)), Seller has never been a member of a controlled group which contributed to any such plan, and Seller has never been under common control with an employer which contributed to any such plan.

  
 3.28 Discrimination and Occupational Safety and Health.
Except as set forth in Section 3.28 of the Disclosure Letter, no person has any claim or, to Seller’s knowledge, any basis for any Action against, and no claim is pending or, to Seller’s knowledge, threatened against, Seller
arising out of any Law relating to discrimination in employment or employment practices or occupational safety and health standards. 
  
 3.29 Product and Service Warranties. Set forth in Section 3.29 of the Disclosure Letter are the standard forms of product and service
warranties and guarantees used by Seller and copies of all other outstanding product and service warranties and guarantees, other than those provided directly by the original manufacturers or service providers. No oral product or service warranties
or guaranties have been authorized or made containing terms less favorable to Seller than the terms of the forms of product and service warranties and guarantees set forth in Section 3.29 of the Disclosure Letter. Except as set forth
in Section 3.29 of the Disclosure Letter, since January 1, 2001, no product or service warranty or similar claims have been made against Seller except routine claims as to which, in the aggregate, losses and expenses in respect of
service costs and repair or replacement of merchandise have not had and will not have a Material Adverse Effect. 
  
 3.30 Product Liability Claims. Except as set forth in Section 3.30 of the Disclosure Letter, since January 1, 2001, Seller has not received
notice or information as to any claim or allegation of personal injury, death, or property or economic damages, any claim for punitive or exemplary damages, any claim for contribution or indemnification, or any claim for injunctive relief in
connection with any services provided or products manufactured, sold, distributed or otherwise put in commerce by or in connection with any service provided by Seller or its employees. Section 3.30 of the Disclosure Letter accurately
and completely describes all such claims, together in each case with the date such claim was made, the amount claimed, the disposition or status of such claim (including settlement or judgment amount), and the amount of attorney’s fees incurred
in connection with such claim. Seller has no Liability (and there is no basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand against any of them giving rise to any Liability) arising
out of any injury to individuals or property as a result of the ownership, possession, or use of any product manufactured, sold, distributed or otherwise put in commerce by Seller. Seller has not ever maintained “occurrence based” product
liability insurance. 
  
 3.31 Customers and Suppliers.
Section 3.31 of the Disclosure Letter sets forth a true, complete and correct list of customers of Seller representing at least 80% of Seller’s net sales, and suppliers of Seller representing at least 80% of Seller’s
purchases, 

  

 33 

 by dollar volume of sales and purchases, respectively, for the year ended December 31, 2003 and the year ended December
31, 2004. To Seller’s knowledge, no supplier of Seller (including those listed in Section 3.31 of the Disclosure Letter) intends to stop, or decrease the rate of, or materially increase the price of, supplying materials, products
or services to Seller. To Seller’s knowledge, no customer of Seller (including those listed in Section 3.31 of the Disclosure Letter) intends to stop, or decrease the rate of, buying materials, products or services from Seller.

  
 3.32 Books and Records; Financial and Operational
Controls. 
  
 (a) True, correct and complete copies of the
books of account, stock record books, minute books, bank accounts, and other corporate and partnership records of Seller have been made available to Buyer and such books and records have been maintained in accordance with good business practices.
The minute book of Seller contains accurate and complete records of all meetings of, and corporate and partnership action taken by, the shareholders, the partners, the Board of Directors, and committees of the Board of Directors of Seller, and no
meeting of any such shareholders, partners, Board of Directors, or committee has been held for which minutes or written consents have not been prepared and are not contained in such minute books. At the Closing, all of those books and records will
be in the possession of Seller or its attorney. 
  
 (b) Seller
uses commercially reasonable efforts to establish proper and adequate internal accounting and operational controls which provide reasonable assurance that (i) transactions are executed with management’s authorization; (ii) transactions are
recorded as necessary to permit preparation of the financial statements of Seller and to maintain accountability for Seller’s assets; (iii) access to Seller’s assets is permitted only in accordance with management’s authorization;
(iv) the reporting of Seller’s assets is compared with existing assets at regular intervals; and (v) accounts, notes and other receivables and inventory are recorded accurately, and proper and adequate procedures are implemented to effect the
collection thereof on a current and timely basis. 
  
 3.33
Guarantees. Except as set forth in Section 3.33 of the Disclosure Letter, Seller is not a guarantor, indemnitor, surety or accommodation party or otherwise liable for any indebtedness of any other Person, except as endorser of
checks received and deposited in the Ordinary Course. 
  
 3.34
Brokers, Finders. Except as set forth in Section 3.34 of the Disclosure Letter, no finder, broker, agent or other intermediary, acting on behalf of Seller or Cornett, is entitled to a commission, fee or other compensation in connection
with the negotiation or consummation of this Agreement or any of the transactions contemplated hereby. 
  
 3.35 Disclosure. No representation or warranty by Seller in this Agreement, the Disclosure Letter, or any Exhibit or Schedule referred to herein or
in any agreement to be 

  

 34 

 delivered hereunder, and no statement, certificate or other information furnished to Buyer by or on behalf of Seller
pursuant hereto or thereto, contains any untrue statement of a material fact or any omission of a material fact necessary to make the respective statements contained herein and therein, in the light of the circumstances under which the statements
were made, not misleading. 
  
 ARTICLE 4 
 REPRESENTATIONS AND WARRANTIES OF BUYER 
  
 Buyer hereby makes the following representations and warranties, each of which is true and correct on the date hereof and shall survive the Closing Date
and the transactions contemplated hereby to the extent set forth herein. 
  
 4.1 Existence and Power. 
  
 (a) Buyer is a limited partnership, duly organized and validly existing under the laws of the State of Texas. 
  
 (b) Buyer has all requisite limited partnership power and authority to own, lease and use its assets and to transact the business in which it is engaged,
and holds all authorizations, franchises, licenses and permits required therefor. Buyer is duly licensed or qualified to do business as a foreign limited partnership and, where such status is recognized, is in good standing in each jurisdiction
where such license or qualification is required except for jurisdictions where the failure to be so qualified would not have a material adverse effect on Buyer. 
  

(c) Buyer has the limited partnership power to enter into this Agreement, to perform its obligations hereunder, and to consummate the transactions
contemplated hereby. 
  
 (d) Buyer is not a party to, subject to
or bound by any Contract, Law or Order which would (i) be breached or violated or its obligations thereunder accelerated or increased (whether or not with notice or lapse of time, or both) by the execution or delivery by Buyer of this Agreement or
the performance by Buyer of the transactions contemplated by this Agreement, or (ii) prevent the carrying out of the transactions contemplated hereby. Except for consents of Buyer’s lenders as required under Buyer’s bank credit facility
and as otherwise provided for herein, no waiver or consent of any third person or governmental authority is required for the execution of this Agreement by Buyer or the consummation by Buyer of the transactions contemplated hereby. 
  
 4.2 Valid and Enforceable Agreement; Authorization; Non-Contravention.
This Agreement constitutes a legal, valid and binding obligation of Buyer, enforceable against it in accordance with its terms, except that such enforcement may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting or relating to enforcement of creditors’ rights generally, and (ii) general principles of equity. The execution and delivery of this Agreement and the consummation of the transactions 
  

 35 

 contemplated hereby have been duly authorized, approved and ratified by all necessary action on the part of Buyer. Buyer
has full authority to enter into and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby. 
  
 4.3 Brokers, Finders. No finder, broker, agent or other intermediary, acting on behalf of Buyer, is entitled to a commission, fee or other
compensation in connection with the negotiation or consummation of this Agreement or any of the transactions contemplated hereby. 
  
 ARTICLE 5 
 ADDITIONAL COVENANTS OF
THE PARTIES 
  
 5.1 Confidentiality. Buyer acknowledges
that, in the course of its investigation of Seller, Buyer and its representatives have and will become aware of confidential information and documents of Seller, and that its use of such confidential information and documents, or communication of
such information to third parties, could be detrimental to Seller. Buyer covenants that prior to Closing all information and documents concerning Seller reviewed by Buyer or its representatives in connection with this Agreement or the transactions
contemplated hereby shall be maintained in confidence and shall not be disclosed or used by Buyer or its representatives without Seller’s prior written consent, unless Buyer can demonstrate that such information is (i) otherwise publicly
available, (ii) required to be disclosed pursuant to judicial order, regulation or Law, or (iii) required to be disclosed by the rules of a securities exchange on which Buyer may from time to time be listed. In the event that Buyer or any of its
representatives becomes legally compelled to disclose any such information or documents referred to in this paragraph, Buyer shall, to the extent reasonably practicable, provide Seller with prompt written notice before such disclosure, sufficient to
enable Seller either to seek a protective order, at its expense, or another appropriate remedy preventing or prohibiting such disclosure or to waive compliance with the provisions of this Section5.1, or both. With respect to
information and documents related to Seller, at Seller’s request, in the event that the Closing shall not occur, or as soon as practicable following termination of this Agreement, (i) Buyer shall, and shall cause its representatives to,
promptly destroy all information and documents concerning Seller (including any copies thereof or extracts therefrom); (ii) an officer of Buyer shall certify to Seller that such destruction has occurred; and (iii) Buyer shall and shall cause its
representatives to keep confidential and not use any such information or documents unless required to disclose such information or documents pursuant to judicial order, regulation or Law. 
  
 5.2 Conduct of Business Until Closing. Except as otherwise provided in this Agreement, or as Buyer may otherwise
consent to in writing (which consent shall not be unreasonably withheld), on and after the date hereof and prior to the Closing Date, Cornett shall cause Seller to and Seller shall: 
  
 (a) not enter into discussions or effect any transactions relating to the disposition of any material part of the assets of
Seller, other than in the Ordinary Course; 
  

 36 

 (b) (i) conduct the business, operations, activities and practices of Seller in the Ordinary Course, (ii)
use reasonable efforts to preserve Seller’s current business organization and existing business relationships, and (iii) maintain Seller’s property, including the Real Property, in substantially the condition currently existing, normal
wear and tear excepted; 
  
 (c) not increase the compensation
payable or to become payable to, any management employee, except increases in compensation as may be required by existing executive and employee compensation plans, mandated by Law or consistent with past practices in the Ordinary Course (which
includes distributions to those persons who are employees as well as equity holders of the Seller, as a result of the former S-corporation status of Seller); 
  
 (d) neither (i) merge with or into, consolidate with or acquire all or substantially all of the stock or assets of any other Person; (ii) change the
overall character of the business, operations, activities and practices of Seller in any material way; (iii) enter into, terminate or amend in any material respect any Material Contract (except to the extent necessary to obtain any consents for
transfer contemplated by this Agreement); nor (iv) except in the Ordinary Course, sell, lease or grant any option to sell or lease, give a security interest in or otherwise create any Lien (other than a Permitted Lien) on any of the assets of
Seller; 
  
 (e) not make any individual commitment or agreement
for capital expenditures; 
  
 (f) not sell, license or transfer
any Intellectual Property other than in the Ordinary Course; 
  
 (g) not pay, discharge, settle or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of liabilities or obligations
approved (either in writing or verbally) in advance by Buyer’s Chief Financial Officer, or waive any material benefits of, or agree to modify any material confidentiality, standstill, non- solicitation or similar agreement to which Seller is a
party; 
  
 (h) not create or issue or grant any option or other
right to subscribe, purchase or redeem any of its securities; 
  
 (i) not enter into any binding agreement or arrangement with the IRS (or any similar Tax authority), with respect to Seller, which relates to any period or periods after the Effective Time; 
  

 37 

 (j) use its reasonable efforts to comply with all applicable Laws affecting or relating to Seller; and

  
 (k) not enter into any agreement (conditional or otherwise) to
do any of the foregoing. 
  
 5.3 Employees of Seller.

  
 (a) Offer of Employment. Buyer will offer or will
cause one of its Affiliates to offer employment, effective at the Effective Time, to each of the Employees, provided that during continued employment with the Buyer each such Employee has successfully passed a drug screening test to the reasonable
satisfaction of the Buyer (the “Transferred Employees”). Notwithstanding anything in this Agreement or otherwise to the contrary, the Buyer shall have no obligation to employ any Transferred Employee other than on an “at
will” basis. Prior to the Closing Date, Seller shall provide reasonable access to the Transferred Employees, and, to the extent permitted by applicable law, such information regarding the Transferred Employees as is contained in personnel
records. 
  
 (b) Indemnity Relating to Employment Matters.
Seller hereby agrees to indemnify Buyer and each of Buyer’s Affiliates and to defend and hold Buyer and each of Buyer’s Affiliates harmless from and against any and all losses (including but not limited to reasonable attorneys’ fees
and other costs of defense incurred in any action) arising out of or with respect to any Seller employees with respect to events arising before the Closing Date. 
  
 (c) Retire Welfare Benefits. Seller shall provide retiree life insurance and medical and dental benefits to Seller
employees who retired or who otherwise became entitled to such benefits prior to the Closing Date and who were covered under retiree welfare programs of Seller as of the Closing Date, and to their covered dependents. 
  
 (d) No Third-Party Beneficiary. No provision of this Agreement,
including without limitation this Section 5.3, shall create any third-party beneficiary rights in any Person, including without limitation employees or former employees (including any beneficiary or dependent thereof) of Seller, unions or
other representatives of such employees or former employees, or trustees, administrators, participants, or beneficiaries of any Plan, and no provision of this Agreement, including this Section 5.3, shall create such third-party beneficiary
rights in any such Person in respect of any benefits that may be provided, directly or indirectly, under any Plan, including the currently existing Plan. 
  
 5.4 Books and Records. From and after the Closing, Buyer shall provide Seller and its representatives with reasonable access, for any reasonable
purpose, including but not limited to (a) preparing Tax Returns or (b) defending any claim in respect of which a notice of claim has been served on Seller, during normal business hours, to all books and records of the Business, including, but not
limited to, accounting 
  

 38 

 and Tax records, sales and purchase documents, notes, memoranda, and any other electronic or written data
(“Records”) pertaining or relating to the period prior to the Effective Time. To the extent deemed necessary by Seller with respect to its other business operations, if any, Seller and its Affiliates may retain copies of such
Records prior to providing the originals to Buyer, or, as soon as practicable after Closing, Buyer shall provide to Seller and its Affiliates copies of all or any portion of such Records as requested by Seller and its Affiliates. Unless otherwise
consented to in writing by Seller, Buyer shall not, for a period of 10 years following the date hereof or such longer period as retention thereof is required by applicable Law, destroy, alter or otherwise dispose of (or allow the destruction,
alteration or disposal of) any of the Records without first offering to surrender such Records to Seller. 
  
 5.5 Public Announcements. Except with the prior written consent of the other Party, or as otherwise expressly permitted by this Agreement, or as
may otherwise be reasonably determined by any Party as being required under Law or by stock exchange regulation, no Party nor any of its representatives will disclose to any Person any information about the terms of this Agreement or the
transactions contemplated hereunder. In connection with the foregoing, the Parties agree to work together in good faith to reach a mutual agreement as to the content and form of any public announcement, press release or similar publicity.

  
 5.6 Exclusivity. Seller will not, and will not permit
its partners, officers, directors, employees or other agents or representatives to, at any time prior to the termination of this Agreement under Section9.2, directly or indirectly, (i) take any action to solicit, initiate or encourage
the making of any Acquisition Proposal, or (ii) discuss or engage in negotiations concerning any Acquisition Proposal with, or further disclose any non-public information relating to the Business to, any Person in connection with an Acquisition
Proposal, in each case, other than Buyer and its representatives. The term “Acquisition Proposal” as used herein means any offer or proposal for the acquisition of Seller or the Business or any portion thereof (other than in the
Ordinary Course or with respect to obsolete equipment), whether by way of merger, consolidation or statutory share exchange or the acquisition of shares of capital stock, the acquisition of assets or similar transaction. 
  
 5.7 Further Assurances; Cooperation. From and after the Closing, the
Parties shall do such acts and execute such documents and instruments as may be reasonably required to make effective the transactions contemplated hereby. On or after the Closing Date, the Parties shall, on request, cooperate with one another by
furnishing any additional information, executing and delivering any additional documents and instruments, including contract assignments, and doing any and all such other things as may be reasonably required by the Parties or their counsel to
consummate or otherwise implement the transactions contemplated by this Agreement. 
  

 39 

 ARTICLE 6 
 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER 
  
 The obligation of Buyer to proceed with the Closing shall be subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions precedent, any of which may be waived in whole or in part
by Buyer: 
  
 6.1 Accuracy of Representations and Warranties
and Performance of Obligations. All representations and warranties made by Seller and Cornett in or pursuant to this Agreement shall be true and correct in all material respects, except for those representations and warranties that are qualified
as to materiality which shall be true and correct in all respects, on and as of the Closing Date with the same effect as if such representations and warranties had been made on and as of the Closing Date, except to the extent that any such
representation or warranty by its terms relates to an earlier date, and except to the extent of any change expressly permitted by the terms of this Agreement or expressly consented to in writing by Buyer, and Seller and Cornett shall have performed
or complied in all material respects with all covenants, agreements and conditions contained in this Agreement required to be performed or complied with at or prior to the Closing. Seller and Cornett shall deliver to Buyer at the Closing a
certificate of Seller and Cornett certifying that the conditions stated in this Section 6.1 have been fulfilled. 
  
 6.2 Consents and Approvals. All filings with Government authorities or any other third parties listed on Schedule 6.2 shall have been made
and any necessary authorizations, consents or approvals required from such authorities or third parties shall have been obtained and shall be in full force and effect. 
  
 6.3 No Litigation or Contrary Judgment. On the Closing Date there shall exist no valid Order, statute, rule,
regulation, executive order, stay, decree, judgment or injunction which prohibits or prevents the consummation of the transactions contemplated by this Agreement. 
  
 6.4 No Material Adverse Change; Inventory. There shall not have occurred after the date hereof any event that has had
or reasonably would be expected to have a Material Adverse Effect on the Business. Except for changes in the Ordinary Course, the quantity of inventory of the Business will not be materially different from the quantity of inventory as set forth in
the unaudited balance sheet of Seller as of September 30, 2004. 
  
 6.5 Deliveries of Seller and Cornett at Closing. At Closing, Seller and Cornett shall deliver or cause to be delivered to Buyer: 
  
 (a) a Bill of Sale for the Purchased Assets, in form and substance reasonably acceptable to Buyer, duly executed by Seller; 
  

 40 

 (b) an Assignment and Assumption Agreement for the Assumed Liabilities, in form and substance reasonably
acceptable to Buyer, duly executed by Seller; 
  
 (c) the
Employment Agreement duly executed by Cornett; 
  
 (d) Non-Compete
Agreements duly executed by certain employees of Seller identified on Schedule 6.5(d), in substantially the form attached hereto as Exhibit D (the “Non-Compete Agreements”); 
  
 (e) from John R. Pearce III, counsel to Seller, an opinion of such counsel,
dated the Closing Date, in substantially the form attached hereto as Exhibit E; 
  
 (f) all consents and approvals from Governments and third parties under Contracts necessary to ensure that Buyer will continue to have the same full rights with respect to the Purchased Assets as Seller had
immediately prior to the consummation of the transaction contemplated hereunder; 
  
 (g) the written release of all Liens (other than Permitted Liens) relating to the Purchased Assets executed by the holder of or parties to each such Lien. The releases shall be satisfactory in substance and form to
Buyer and its counsel; 
  
 (h) a certificate of existence of
Seller, dated within five Business Days of the Closing Date, from the Texas Secretary of State; 
  
 (i) a copy, certified by the Secretary of Seller to be true, complete and correct as of the Closing Date, of the Articles of Conversion, the certificate
of limited partnership, limited partnership agreement and resolutions of the partners of Seller, authorizing and approving the transactions contemplated hereby; 
  

(j) the certificate required of Seller and Cornett pursuant to Section 6.1; 
  
 (k) the Disclosure Letter, dated within two (2) Business Days prior to the Closing Date; 
  
 (l) evidence of payment of Liabilities to Seller, bank debt and other similar
long term indebtedness to third parties, including all overdrafts thereon outstanding as of the Closing Date, as set forth on Schedule 6.5(l) (which may be accomplished concurrently with the Closing by having a portion of the funds otherwise
payable to Seller to be sent directly to Bank One, N.A. and other parties in payment of the applicable debt or Liabilities); 
  
 (m) evidence of the termination of any and all Plans of Seller; 
  

 41 

 (n) fully executed and approved documentation satisfactory to Buyer evidencing the complete termination
of Seller’s 401(k) Plan as of a date prior to the Effective Time. Such documentation shall be in compliance with the terms of Seller’s 401(k) Plan as well as any other applicable Law, including ERISA and the Code; and 
  
 (o) such other customary documents, instruments or certificates as shall be
reasonably requested by Buyer and as shall be consistent with the terms of this Agreement. 
  
 6.6 Due Diligence. Buyer shall be satisfied in all respects with the results of its due diligence review of the Business of Seller and its prospects, including without limitation customer, supplier, and other
third-person relationships and environmental, tort, securities, corporate, product liability, employee benefits, taxation and insurance matters. 
  
 ARTICLE 7 
 CONDITIONS PRECEDENT TO
OBLIGATIONS OF SELLER 
  
 The obligation of Seller to proceed
with the Closing shall be subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions precedent, any of which may be waived in whole or in part by Seller: 
  
 7.1 Accuracy of Representations and Warranties and Performance of
Obligations. All representations and warranties made by Buyer in this Agreement shall be true and correct in all material respects, except for those representations and warranties that are qualified as to materiality which shall be true and
correct in all respects, on and as of the Closing Date with the same effect as if such representations and warranties had been made on and as of the Closing Date, except to the extent that any such representation or warranty by its terms relates to
an earlier date, and except to the extent of any change permitted by the terms of this Agreement or consented to by Seller, and Buyer shall have performed or complied in all material respects with all covenants, agreements and conditions contained
in this Agreement on its part required to be performed or complied with at or prior to the Closing. Buyer shall deliver to Seller at the Closing a certificate of an officer of Buyer certifying that the conditions stated in this Section 7.1
have been fulfilled. 
  
 7.2 Consents and Approvals. All
filings with Government authorities or any other third parties listed on Schedule 7.2 shall have been made and any necessary authorizations, consents or approvals required from such authorities or third parties shall have been obtained and
shall be in full force and effect. 
  
 7.3 No Litigation or
Contrary Judgment. On the Closing Date there shall exist no valid Order, statute, rule regulation, executive order, stay decree, judgment or injunction which prohibits or prevents the consummation of the transactions contemplated by this
Agreement. 
  

 42 

 7.4 Deliveries of Buyer at Closing. At Closing Buyer shall deliver to Seller (and, with respect to
a portion of the Purchase Price, directly to Bank One, N.A.): 
  
 (a) by cash or wire transfer, the Purchase Price, in accordance with the wire transfer instructions set forth on Schedule 2.3; 
  
 (b) an Assignment and Assumption Agreement for the Assumed Liabilities, in form and substance reasonably acceptable to Seller, duly executed by Buyer;

  
 (c) the Employment Agreements duly executed by Buyer;

  
 (d) the Non-Compete Agreements, duly executed by Buyer;

  
 (e) a certificate of existence of Buyer, dated within five
Business Days of the Closing Date, from the Texas Secretary of State; and 
  
 (f) such other customary documents, instruments or certificates as shall be reasonably requested by Seller and as shall be consistent with the terms of this Agreement. 
  
 ARTICLE 8 
 INDEMNIFICATION 
  
 8.1 Survival of Representations and Warranties. All of the representations and warranties made by any Party in this Agreement, the Disclosure Letter or any certificates or documents delivered hereunder shall
survive the Closing Date and consummation of the transaction contemplated hereby and will continue for a period of two (2) years following the Closing Date at which time they shall expire; provided, however, that such expiration shall have no effect
on any notice of claim made prior to such expiration with respect to any breach of such representation or warranty occurring prior to such expiration and set out in such notice of claim; and provided further, that the representations and warranties
contained in (i) Section 3.1 (Existence and Power), Section 3.2 (Valid and Enforceable Agreement; Authorization; Non-Contravention), Section 3.13 (Title to Assets), Section 3.18 (Environmental Matters), Section 4.1
(Existence and Power), and Section 4.2 (Valid and Enforceable Agreement; Authorization; Non-Contravention) shall survive the Closing Date indefinitely, and (ii) Section 3.7 (Taxes) and Section 3.27 (Employee Benefit Matters)
shall survive the Closing Date until the expiration of the applicable statutes of limitation. No Indemnified Party shall be entitled to indemnification for breach of any representation and warranty unless a notice of claim of such breach has been
given to the Indemnifying Party within the period of survival of such representation and warranty as set forth herein. 
  
 8.2 Indemnification by Seller. Subject to the terms and conditions of this Article 8, including the limitations set forth in
Section 8.6 below, from and after Closing, Seller and Cornett shall jointly and severally indemnify and hold harmless Buyer and its 
  

 43 

 Affiliates and the shareholders, directors, officers, partners, employees, successors, assigns, representatives and
agents of each of them in their capacities as such (collectively, the “Buyer Indemnified Persons”), from and against any and all claims, losses, monetary damages, liabilities, fines, fees, penalties, expenses or costs
(“Losses”), plus reasonable attorneys’ fees and expenses, including court costs and expert witness fees and costs, incurred in connection with Losses and/or enforcement of this Agreement (in all, “Indemnified
Losses”) incurred or to be incurred by any of them resulting from or arising out of: 
  
 (a) the breach of any agreement, covenant, representation, warranty, or other obligation of Seller or Cornett made or incurred under or pursuant to this Agreement or any document delivered pursuant hereto or in
connection with the Closing; 
  
 (b) the conduct of the Business
of Seller prior to the Closing Date (except with respect to any claims, liabilities or obligations paid, discharged, settled or satisfied in accordance with Section 5.2(g)); 
  
 (c) the assertion of any claim for injury, death, property or economic damage, or other product or strict liability claim
arising from the design, manufacture, sale or distribution of or exposure to any product or component thereof or the provision of any service by Seller or its Affiliates prior to the Closing Date; 
  
 (d) Liability of Seller or its Affiliates for its own Taxes or its Liability,
if any (for example, by reason of transferee Liability or application of Treasury Regulation Section 1.1502 6), for Taxes of others, including, but not limited to, Seller or any Affiliate of Seller, or damage or Indemnified Losses payable with
respect to Taxes claimed or assessed against Seller or its Affiliates (i) for any taxable period ending on or before the Effective Time or as a result of this transaction or (ii) for any taxable period resulting from a breach of any of the
representations or warranties contained in Section 3.7 hereof. Seller also agrees to indemnify, defend and hold harmless Buyer Indemnified Persons from and against any and all Indemnified Losses sustained in a tax period of Seller or
its Affiliates ending after the Effective Time arising out of the settlement or other resolution (without the written consent of Buyer) of a proposed tax adjustment which relates to a taxable period ending on or before the Effective Time. For
example, if Seller agrees in an income tax audit to reduce the depreciable basis of property acquired by Seller before the Closing Date, Seller shall be liable for any additional Taxes due from Seller by reason of reduced depreciation deductions;

  
 (e) any obligation, claim or Liability which relates to a Plan
or Plan assets, regardless of when the claim occurs or the obligation or Liability is paid, including, but not limited to, obligations, claims and liabilities relating to Plan administration, funding and benefits; and 
  
 (f) transaction costs and expenses incurred by or on behalf of Seller or
Cornett in connection with this Agreement and the transactions contemplated hereby, including without limitation, fees and expenses relating to any investment banker, broker, lawyer or accountant. 
  

 44 

 8.3 Indemnification by Buyer. Subject to the terms and conditions of this Article 8,
including the limitations set forth in Section 8.6 below, Buyer shall indemnify and hold harmless each of Seller and its Affiliates and the shareholders, directors, officers, partners, employees, successors, assigns, representatives
and agents of each of them in their capacities as such (the “Seller Indemnified Persons”) from and against any and all Indemnified Losses incurred or to be incurred by any of them, resulting from or arising out of: 
  
 (a) the breach of any agreement, covenant, representation, warranty, or
other obligation of Buyer made or incurred under this Agreement or any document delivered pursuant hereto or in connection with the Closing; 
  
 (b) the conduct of the Business from and after the Closing; and 
  

(c) transaction costs and expenses incurred by or on behalf of Buyer in connection with this Agreement and the transactions contemplated hereby,
including without limitation, fees and expenses relating to any investment banker, broker, lawyer or accountant. 
  
 8.4 Notice of Claim. In the event that Buyer seeks indemnification on behalf of a Buyer Indemnified Person, or Seller seeks indemnification on
behalf of a Seller Indemnified Person, such Party seeking indemnification (the “Indemnified Party”) shall give reasonably prompt written notice to the indemnifying Party (the “Indemnifying Party”) specifying the
facts constituting the basis for such claim and the amount, to the extent known, of the claim asserted; provided, however, that the right of a Person to be indemnified hereunder shall not be adversely affected by a failure to give such notice
unless, and then only to the extent that, an Indemnifying Party is actually irrevocably and materially prejudiced thereby. Subject to the terms hereof, the Indemnifying Party shall pay the amount of any valid and uncontested claim not more than 10
days after the Indemnified Party provides notice to the Indemnifying Party of such amount. 
  
 8.5 Right to Contest Claims of Third Persons. If an Indemnified Party is entitled to indemnification hereunder because of a claim asserted by any claimant (other than an indemnified person hereunder)
(“Third Person”), the Indemnified Party shall give the Indemnifying Party reasonably prompt notice thereof after such assertion is actually known to the Indemnified Party; provided, however, that the right of a Person to be
indemnified hereunder in respect of claims made by a Third Person shall not be adversely affected by a failure to give such notice unless, and then only to the extent that, an Indemnifying Party is actually irrevocably and materially prejudiced
thereby. The Indemnifying Party shall have the right, upon written notice to the Indemnified Party, and using counsel reasonably satisfactory to the Indemnified Party, to investigate, contest or settle the claim alleged by such Third Person (a
“Third Person Claim”), provided that the 
  

 45 

 Indemnifying Party has unconditionally acknowledged to the Indemnified Party in writing its obligation to indemnify the
Persons to be indemnified hereunder with respect to such Third Person Claim and to discharge (and does in fact so discharge) any cost or expense arising out of such investigation, contest or settlement and such Indemnifying Party has presented
evidence satisfactory to the Indemnified Party of its ability to discharge the obligations, including without limitation by establishment of an escrow account. The Indemnified Party may thereafter participate in (but not control) the defense of any
such Third Person Claim with its own counsel at its own expense, unless separate representation is necessary to avoid a conflict of interest, in which case such representation shall be at the expense of the Indemnifying Party. Unless and until the
Indemnifying Party so acknowledges its obligation to indemnify, the Indemnified Party shall have the right, at its option, to assume and control defense of the matter and to look to the Indemnifying Party for the full amount of the reasonable costs
of defense. The failure of the Indemnifying Party to respond in writing to the aforesaid notice of the Indemnified Party with respect to such Third Person Claim within 20 days after receipt thereof shall be deemed an irrevocable election not to
defend the same. If the Indemnifying Party does not so acknowledge its obligation to indemnify and assume the defense of any such Third Person Claim, (a) the Indemnified Party may defend against such claim using counsel of its choice, in such manner
as it may reasonably deem appropriate, including, but not limited to, settling such claim, after giving notice of the same to the Indemnifying Party, on such terms as the Indemnified Party may reasonably deem appropriate, and (b) the Indemnifying
Party may participate in (but not control) the defense of such action, with its own counsel at its own expense. If the Indemnifying Party thereafter seeks to question the manner in which the Indemnified Party defended such Third Person Claim or the
amount or nature of any such settlement, the Indemnifying Party shall have the burden to prove by clear and convincing evidence that conduct of the Indemnified Party in the defense and/or settlement of such Third Person Claim constituted gross
negligence or willful misconduct. The Parties shall make available to each other all relevant information in their possession relating to any such Third Person Claim and shall cooperate in the defense thereof. 
  
 8.6 Limitations on Indemnity. Seller shall have no obligation to
indemnify Buyer Indemnified Persons in respect of Indemnified Losses resulting from or arising out of breaches of the representations and warranties contained in Article 3 of this Agreement until all Indemnified Losses exceed $165,000.00 in
the aggregate and then only for those Indemnified Losses in excess of $165,000.00 (except for Indemnified Losses resulting from or arising under Section 3.1 (Existence and Power), Section 3.2 (Valid and Enforceable Agreement,
Authorization; Non-contravention), Section 3.7 (Taxes), Section 3.13 (Title to Assets), Section 3.18 (Environmental Matters), Section 3.27 (Employee Benefit Matters) and Section 3.39 (Brokers, Finders), as to which
the foregoing $165,000.00 limitation shall not apply). 
  
 8.7
Characterization of Indemnity Payments. Any indemnification payments made pursuant to this Agreement shall be considered, to the extent permissible under Law, as adjustments to the Purchase Price for all Tax purposes. 
  

 46 

 ARTICLE 9 
 MISCELLANEOUS PROVISIONS 
  
 9.1 Notice. All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given (a) when delivered in person, (b) by facsimile, receipt
confirmed, (c) on the next Business Day when sent by overnight courier, or (d) on the second succeeding Business Day when sent by registered or certified mail (postage prepaid, return receipt requested), to the respective Parties at the following
addresses (or at such other address for a Party as shall be specified by like notice): 
  
 If to Buyer: 
  
 Huttig Texas
Limited Partnership 
 555 Maryville University Dr., Suite 240 
 St. Louis, MO 63141 
 Telephone: (314) 216-2600 
 Telecopier: (314) 216-8793 
 Attn: Nick H.
Varsam, Vice President – General Counsel 
  
 With copies to:

  
 Bryan Cave LLP 
 One Metropolitan Square 
 211 North Broadway,
Suite 3600 
 St. Louis, MO 63102 
 Telephone: (314) 259-2000 
 Telecopier: (314) 259-2020 
 Attn: John M. Welge, Esq. 
  
 If
to Seller: 
  
 Texas Wholesale Building Materials, Ltd.

 2115 Valley View Lane 
 Farmers
Branch, TX 75234 
 Telephone: (972) 620-2200 
 Telecopier: (972) 620-9330 
 Attn: Joe Cornett 
  
 With a copy to: 
  
 John R. Pearce III 
 Pearce Law Firm

 17110 North Dallas Tollway 
 Suite 210 
 Dallas, TX 75248 
 Telephone: (972) 381-9111 
 Telecopier: (972) 248-7378 
  

 47 

 9.2 Termination. This Agreement may be terminated at any time prior to the Closing only by (i)
mutual written consent of Seller and Buyer; (ii) by Seller or Buyer if the other Party shall have breached any provisions of this Agreement and shall not have cured such breach within 10 days of receiving notice of such breach by the non-breaching
party; or (iii) by Seller or Buyer, if the Closing shall not have occurred on or before January 14, 2005, other than as a result of the breach of this Agreement by the Party seeking to so terminate this Agreement; provided, however, that the right
to terminate this Agreement under this Section 9.2 shall not be available to any Party whose willful failure to fulfill any obligation hereunder or other breach of this Agreement has been the cause of, or resulted in, the failure of the
Closing to occur on or before such date. In the event of any termination of this Agreement as provided in this Section 9.2, this Agreement shall forthwith become wholly void and of no further force and effect and there shall be no Liability
on the part of Buyer or Seller, except that the provisions of Section 5.1 shall survive any such termination of this Agreement. 
  
 9.3 Entire Agreement. This Agreement and the Schedules and Exhibits hereto embody the entire agreement and understanding of the Parties hereto with
respect to the subject matter hereof, and supersede all prior and contemporaneous agreements and understandings relative to such subject matter. 
  
 9.4 Amendment and Modification. To the extent permitted by applicable Law, this Agreement shall be amended, modified or supplemented only by a
written agreement between Buyer and Seller. 
  
 9.5 Assignment;
Binding Agreement. This Agreement and various rights and obligations arising hereunder shall inure to the benefit of and be binding upon the Parties hereto and their successors, and permitted assigns. Neither this Agreement nor any of the
rights, interests, or obligations hereunder shall be transferred, delegated, or assigned (by operation of law or otherwise, except by death of a Seller), by the Parties hereto without the prior written consent of the other Parties, except that (i)
Buyer shall have the right to transfer and assign any or all of its rights and obligations hereunder to any entity which at the time of such transfer and assignment is controlled by Buyer or by the Affiliates of Buyer provided that Buyer shall not
be relieved of its obligations hereunder and (ii) Seller shall have the right to assign its rights to receive payments, but not its obligations, hereunder. 
  
 9.6 Waiver of Compliance; Consents. Any failure of either Seller, on the one hand, or Buyer, on the other hand, to comply with any obligation,
covenant, agreement or condition herein may be waived by Buyer, on the one hand, or Seller, on the other hand, only by a written instrument signed by the Party granting such waiver, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or 
  

 48 

 condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any Party hereto, such consent shall be given in writing in a manner consistent with the requirements for a waiver of compliance as set forth in this Section 9.6. 
  
 9.7 Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the Party incurring such costs or expenses. 
  
 9.8 Counterparts. This Agreement may be executed in multiple counterparts, and on separate counterparts, each of which shall be deemed an original,
but all of which taken together shall constitute one and the same instrument, but in making proof of the Agreement, one fully executed document will be sufficient (whether or not some signatures are on separate counterparts) and it will not be
necessary to account for all counterparts. 
  
 9.9
Severability. If any provision of this Agreement shall be determined to be contrary to Law and unenforceable by any court of law, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long
as the economic or legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced,
the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent
possible. 
  
 9.10 Remedies Cumulative. Except as otherwise
provided herein, all rights and remedies of the Parties under this Agreement are cumulative and without prejudice to any other rights or remedies under Law. Nothing contained herein shall be construed as limiting the Parties’ rights to redress
for fraud. 
  
 9.11 Governing Law. This Agreement shall in
all respects be construed in accordance with and governed by the substantive laws of the State of Texas, without reference to its choice of law rules. 
  
 9.12 No Third Party Beneficiaries or Other Rights. Nothing herein shall grant to or create in any Person not a Party hereto, or any such
Person’s dependents, heirs, successors or assigns, any right to any benefits hereunder, and no such party shall be entitled to sue any Party to this Agreement with respect thereto. The representations and warranties contained in this Agreement
are made for purposes of this Agreement only and shall not be construed to confer any additional rights on the Parties under applicable state and federal securities Laws. 
  
 9.13 Disclosure Letter. The sections of the Disclosure Letter shall be arranged in separate parts corresponding to
the numbered and lettered sections, and the disclosure in any numbered or lettered part shall be deemed to relate to and to qualify only the 
  

 49 

 particular representation or warranty set forth in the corresponding numbered or lettered section, and not any other
representation or warranty (unless an express and specific reference to any other Schedule which clearly identifies the particular item being referred is set forth therein). 
  
 9.14 Headings; Interpretation. The article and section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation of this Agreement. Each reference in this Agreement to an Article, Section, Schedule or Exhibit, unless otherwise indicated, shall mean an Article or a Section of this
Agreement or a Schedule or Exhibit attached to this Agreement, respectively. Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the
plural or singular number, respectively; (iii) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement; (iv) the terms “include,”
“includes,” “including,” and derivative or similar words shall be construed to be followed by the phrase “without limitation”; and (v) references herein to “days” are to consecutive
calendar days unless Business Days are specified. All accounting terms used herein and not expressly defined herein shall have the meanings given to them under generally accepted accounting principles. Both Parties have participated substantially in
the negotiation and drafting of this Agreement and agree that no ambiguity herein should be construed against the draftsman. 
  
 9.15 Acknowledgment; Guarantee. In consideration of Buyer’s execution of the Employment Agreement and the transactions contemplated under this
Agreement, Cornett, acknowledges that the terms and conditions of this Agreement are fair, equitable and in his best interests, and agrees to be bound by those provisions of this Agreement that are applicable to him. Cornett hereby guarantees to the
Buyer the full and prompt performance of any and all of Seller’s obligations under this Agreement, including indemnification obligations under Article 8 of this Agreement. 
  

 50 

 IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be executed as of the dates
set forth below. 
  

							
	 	 	 “BUYER”
 HUTTIG TEXAS LIMITED
PARTNERSHIP

			
	 	 	By:	 	Huttig Building Materials, Inc.,
	 	 	 	 	a Delaware corporation, General Partner
	 	 	 	 	 	 	 
	Date: January     , 2005	 	 	 	By:	 	

	 	 	 	 	Name:	 	Michael A. Lupo
	 	 	 	 	Title:	 	President
		
	 	 	 “SELLER”
 TEXAS
WHOLESALE
 BUILDING MATERIALS, LTD.

	 	 	By:	 	 TWBM Management Company, LLC,
 a Texas
limited liability company,
 sole General Partner

	 	 	 	 	 	 	 
	Date: January     , 2005	 	 	 	By:	 	

	 	 	 	 	Name:	 	Joe L. Cornett
	 	 	 	 	Title:	 	President
		
	 	 	“CORNETT”
	 	 	  

	 	 	Joe L. Cornett

  

 51 

 TABLE OF EXHIBITS AND SCHEDULES 
  
 Exhibit A – Employees 
  
 Exhibit B-1 – Form of Employment Agreement with Joe Cornett 

 
 Exhibit B-2 – Form of Employment Agreement with Craig Lott

  
 Exhibit C – Addresses of Facilities 
  
 Exhibit D – Form of Non-Compete Agreement 
  
 Exhibit E – Form of Opinion of Counsel to Seller 
  
  
 Schedule 1.6 – Assumed Contracts 
  
 Schedule
1.27(d) – Excluded Insurance Policies and Recoveries 
  
 Schedule 1.27(g) – Other Excluded Assets 
  
 Schedule 1.62(v) – Other Purchased Assets 
  
 Schedule 2.3 – Seller’s Wire Transfer Instructions 
  
 Schedule 2.5 – Purchase Price Allocation 
  
 Schedule 6.2 – Seller Consents 
  
 Schedule 6.5(d)
– Key Employees of Seller 
  
 Schedule 6.5(l) –
Outstanding Overdrafts 
  
 Schedule 7.2 – Buyer Consents

  
  
 Disclosure Letter 
  

 52Sales Agreement dated Nov. 5,2004 - Builder Resource Supply Corp.

 Exhibit 10.27 
 ASSET PURCHASE AND SALE AGREEMENT 
  
 THIS ASSET PURCHASE AND SALE AGREEMENT is entered into as of this 11th day of January 2005, by and between Huttig Building Products, Inc., a Delaware corporation (“Huttig”), and Hendricks Companies,
Inc., an Alabama corporation (the “Buyer”). Capitalized terms are defined in Article 1. 
  
 RECITALS 
  
 A. The Buyer desires to purchase the Purchased Assets and assume the Assumed Liabilities from Huttig, on the following terms and conditions; and 
  
 B. Huttig desires to sell the Purchased Assets, and to assign the Assumed Liabilities to the Buyer, on the following terms
and conditions. 
  
 NOW, THEREFORE, in consideration of the
foregoing recitals and the mutual covenants, representations, warranties, conditions, and agreements hereinafter expressed, the Parties agree as follows: 
  
 ARTICLE 1 
 DEFINITIONS

  
 Without limiting the effect of any other terms defined
in the text of this Agreement, the following words shall have the meaning given them in this Article 1: 
  
 1.1 “Affiliate” means, with respect to any Person, any other Person which is controlling, controlled by, or under common control with,
directly or indirectly through any Person, the Person referred to, and, if the Person referred to is a natural person, any member of such Person’s immediate family. The term “control” (including, with correlative meaning, the terms
“controlled by” and “under common control with”) as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise. 
  
 1.2 “Agreement” means this Agreement as executed on the date hereof and as amended or supplemented in accordance with the terms hereof, including the Disclosure Schedule and all Exhibits hereto.

  
 1.3 “Assigned Leases” means the Leases for
the Facilities located in Memphis, Tennessee, and Mobile, Alabama. 
  
 1.4 “Assumed Liabilities” has the meaning set forth in Section 2.3. 
  
 1.5 “Benefit Plans” means all written material employee benefit plans and programs of Huttig (in respect of the Business) or otherwise
applicable to Employees as of the date hereof, including plans and programs providing for pension, retirement, profit sharing, savings, bonus, deferred or incentive compensation, hospitalization, medical, life or disability insurance, vacation and
paid holiday, termination or severance pay, restricted stock, stock option or stock appreciation rights benefit plans. 
  

 1 

 1.6 “Business” means the business of the Builder Resource Division of Huttig conducted
at the Facilities, as such business has been conducted by Huttig on the date hereof. 
  
 1.7 “Business Day” means any day which is not a Saturday, Sunday or a legal holiday in the State of Missouri, United States of America. 
  
 1.8 “Buyer” has the meaning set forth in the preamble. 
  
 1.9 “Closing” means the consummation of the transactions
contemplated by this Agreement, as provided for in Section 2.6. 
  
 1.10 “Closing Date” means January 17, 2005 or such other date as shall be mutually agreed upon by the Parties. 
  
 1.11 “Code” means the United States Internal Revenue Code of 1986, as amended. 
  
 1.12 “Contract” means any contract, lease, binding
commitment, or instrument to which Huttig (in respect of the Business) is a party or by which it is bound. 
  
 1.13 “Disclosure Schedule” means the schedule, dated the date hereof of and as may be amended or supplemented from time to time on or
prior to closing, exceptions to the representation and warranties made, and the listings of information provided, by Huttig hereunder. 
  
 1.14 “Effective Time” means the effective time of the Closing, which shall be deemed to be 12:00 a.m. Central Standard Time on the
Closing Date. 
  
 1.15 “Employees” means the
individuals listed on Exhibit A, which shall be updated by Huttig and delivered to the Buyer at the Closing, who as of the date of this Agreement and, as such Exhibit may be updated, as of the Effective Time, are all of the employees of
Huttig who are primarily employed in the Business. 
  
 1.16
“Encumbrances” means material mortgages, liens, charges, claims, security interests, easements or other encumbrances. 
  
 1.17 “Environmental Law” means all material laws, regulations or orders relating to pollution or protection of the environment, and all
material permits, approvals, consents or other authorizations by or pursuant to any such laws, regulations or orders. 
  
 1.18 “Excluded Assets” has the meaning set forth in Section 2.2. 
  
 1.19 “Excluded Liabilities” has the meaning set forth in Section 2.4. 
  
 1.20 “Facilities” means the facilities of the Business at
the addresses listed on Exhibit B. 
  
 1.21
“Financial Statements” means the unaudited balance sheets of the Business as of December 31, 2002 and 2003, and September 30, 2004, and the related unaudited statements of operations for the periods then ended, and for the
nine-month period ended September 30, 2004. 
  

 2 

 1.22 “GAAP” means generally accepted accounting principles and practices which are used
in the United States and recognized as such by the American Institute of Certified Public Accountants acting through its Accounting Principles Board or by the Financial Accounting Standards Board or through other appropriate boards or committees
thereof, as in effect as of the date of this Agreement. 
  
 1.23
“Huttig” has the meaning set forth in the preamble. 
  
 1.24 “Indemnifying Party” has the meaning set forth in Section 9.3. 
  
 1.25 “Indemnity Threshold” has the meaning set forth in Section 9.6. 
  
 1.26 “Injured Party” has the meaning set forth in Section 9.3. 
  
 1.27 “Knowledge” or “knowledge” means a
Person’s actual knowledge (i.e., the conscious awareness of facts or other information) after due inquiry. The words “know,” “knowing” and “known” shall be construed accordingly. In the case of Huttig,
“Knowledge” or “knowledge” means the knowledge of the persons listed on Exhibit C 
  
 1.28 “Law” means any statute, law, ordinance, decree, order, injunction, rule, directive, or regulation of any government or
quasi-governmental authority, and includes rules and regulations of any regulatory or self-regulatory authority compliance with which is required by Law. 
  
 1.29 “Leased Personal Property” has the meaning set forth in Section 3.10. 
  
 1.30 “Leased Real Property” has the meaning set forth in
Section 3.10. 
  
 1.31 “Leases” has the
meaning set forth in Section 3.10. 
  
 1.32
“Loss” or “Losses” means each and all of the following items to the extent actually paid or incurred: losses, liabilities, damages, judgments, fines, costs, penalties, amounts paid in settlement and reasonable
out-of-pocket costs and expenses incurred in connection therewith (including, without limitation, costs and expenses of suits and proceedings, and reasonable fees and disbursements of counsel), but net of any insurance proceeds received or
receivable by the Injured Party with respect to such Losses and net of any tax benefit received or receivable by the Injured Party in respect of such Losses. Losses shall not include any Tax which becomes due or payable as a result of receipt of an
indemnification payment made pursuant to this Agreement. 
  
 1.33
“Material Adverse Effect” means a material adverse effect on the assets, business, financial condition or results of operations of the Business taken as a whole, but shall not be deemed to include (i) any changes resulting from
general economic, regulatory or political conditions, (ii) acts attributable to, omissions by or circumstances affecting the Buyer and/or its Affiliates, (iii) circumstances that affect the industries in which the Business operates generally, or
(iv) any changes resulting from the announcement or pendency of the transactions provided for in this Agreement. 
  
 1.34 “Material Contract” has the meaning set forth in Section 3.13. 
  
 1.35 “Maximum Indemnity Amount” has the meaning set forth in Section 9.6. 
  

 3 

 1.36 “Notice of Claim” has the meaning set forth in Section 9.3. 
  
 1.37 “Ordinary Course” means, with respect to the Business,
the ordinary course of commercial operations customarily engaged in by the Business. 
  
 1.38 “Owned Real Property” has the meaning set forth in Section 3.9. 
  
 1.39 “Party” means either Huttig or the Buyer, and “Parties” means both of them. 
  
 1.40 “Permitted Encumbrances” means, collectively, (a)
Encumbrances that are disclosed in the Disclosure Schedule, (b) liens for Taxes, fees, levies, duties or other governmental charges of any kind which are not yet delinquent or are being contested in good faith by appropriate proceedings, (c) liens
for mechanics, materialmen, laborers, employees, suppliers or similar liens arising by operation of law for amounts which are owed, but not yet delinquent, and (d) in the case of real property, any matters, restrictions, covenants, conditions,
limitations, rights, rights-of-way, encumbrances, encroachments, reservations, easements, agreements and other matters of record, such state of facts of which an accurate survey or inspection of the property would reveal, and the provisions of any
Law. 
  
 1.41 “Person” shall be construed broadly
and shall include an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity (or any department, agency or
political subdivision thereof). 
  
 1.42 “Prepaid
Expenses” means all payments made and deposits with suppliers for inventory, goods and services used in the conduct of the Business that have not been delivered to the Business. 
  
 1.43 “Proratable Items” has the meaning set forth in Section 2.8(c). 
  
 1.44 “Purchase Price” has the meaning set forth in
Section 2.5. 
  
 1.45 “Purchased Assets”
has the meaning set forth in Section 2.1. 
  
 1.46
“Records” has the meaning set forth in Section 6.1. 
  
 1.47 “Straddle Period” means any taxable period or billing period that begins prior to and ends after the Effective Time. 
  
 1.48 “Taxes” means all taxes, charges, fees, levies, or other like governmental assessments applicable to
the Business that are assessed on income, capital, or property, in the countries in which it operates, including, without limitation, all material federal, possession, state, city, county and foreign (or governmental unit, agency, or political
subdivision of any of the foregoing) income, profits, franchise, gross receipts, sales, use, transfer, stamp, occupation, property, capital, windfall profits, customs, duties, ad valorem, value-added and excise taxes; and all penalties, additions to
tax and interest relating to any such taxes, or charges. Any one of the foregoing Taxes shall be referred to sometimes as a “Tax.” 
  
 1.49 “Third-Party Claim” has the meaning set forth in Section 9.4. 
  

 4 

 1.50 “Transferred Employees” means those Employees who accept employment with the Buyer
or any of its Affiliates pursuant to Section 5.1. 
  
 1.51
“Union Benefit Plans” means those Benefit Plans applicable only to those Employees who are represented by unions identified in Disclosure Schedule Section 3.17(c). 
  
 ARTICLE 2 
 PURCHASE AND SALE OF THE BUSINESS 
  
 2.1
Transfer of Assets. Upon the terms and subject to the conditions of this Agreement, at the Closing and as of the Effective Time, Huttig shall sell, assign, transfer and convey to the Buyer and the Buyer shall purchase, acquire and accept from
Huttig, all of Huttig’s right, title and interest to and in all assets, properties and rights owned by Huttig as of the Effective Time that are located at the Facilities (other than the Excluded Assets) (the “Purchased
Assets”), free and clear of all Encumbrances other than Permitted Encumbrances. The Purchased Assets shall include, but not be limited to: 
  
 (a) all equipment, machinery, supplies, vehicles, spare parts, tools, furniture and other tangible personal property owned by Huttig and set forth on
Exhibit D; 
  
 (b) all inventory of Huttig with respect to
the Business, including without limitation items in transit, raw materials, works-in-progress and finished goods, whether stored at a Business location or stored at a third-party location or other location of Huttig; 
  
 (c) all accounts receivable, promissory notes, and other amounts owed to
Huttig in connection with the Business; 
  
 (d) all Prepaid
Expenses; 
  
 (e) all Owned Real Property; 
  
 (f) all of Huttig’s rights pursuant to the Assigned Leases; 

 
 (g) all of Huttig’s rights pursuant to the Contracts; 
  
 (h) all customer and vendor lists to the extent relating primarily to the
Business, and all files and documents, including customer credit files, customer and vendor supply agreements, terms of sale and pricing agreements, to the extent relating solely to customers and vendors of the Business, and all other Records
(whether in hard copy, computer format or any other storage media; provided that such records shall be in hard copy to the extent that Buyer’s computer system cannot accept a particular computer format) to the extent relating primarily to the
Business, provided, however, this information does not include any information owned by Huttig that is not related to the Business; 
  
 (i) all advertising, marketing, sales, creative and promotional materials relating primarily to the Business; 
  
 (j) all warranties and all claims in respect of rights of set off against
third parties, that relate primarily to the Purchased Assets; 
  

 5 

 (k) telephone numbers and listings, operations manuals, repair or service manuals and fire, safety and
environmental reports related to the Business; and 
  
 (l) the
“Builder Resource” name and any derivations thereof; provided that Huttig shall retain the right to continue use of such name for a period of 3 months following Closing for the limited purpose of transitioning the use of the name.

  
 2.2 Excluded Assets of the Business. Notwithstanding
any provision in this Agreement to the contrary, the following assets of Huttig (the “Excluded Assets”) are not part of the sale and purchase contemplated hereunder, are excluded from the Purchased Assets and shall remain the
property of Huttig after the Closing: 
  
 (a) all cash, cash
equivalents, including without limitation, bank deposits, investments in “money market” funds, commercial paper funds, certificates of deposit, Treasury Bills and accrued interest thereon; 
  
 (b) the corporate minute books and records of Huttig; 
  
 (c) all refunds of Taxes and interest thereon received by, or credited
against Tax liability of the Buyer or any Affiliate of the Buyer attributable to Taxes paid by Huttig or an Affiliate of Huttig for periods or portions thereof ending on or prior to the Effective Time; 
  
 (d) any assets utilized by Huttig in connection with businesses other than
the Business, provided that such assets are not located at the Facilities or primarily used by the Business; 
  
 (e) all current and prior insurance policies, and any reimbursement for, or other benefit associated with, prepaid insurance, and any rights associated
with any prepaid expense for which the Buyer will not receive the benefit after the Effective Time, including without limitation any insurance proceeds with respect to events occurring prior to the Effective Time; 
  
 (f) all assets of any Benefit Plan; 
  
 (g) the “Huttig” name and logo and any derivations thereof;

  
 (h) non-transferable software licenses; 
  
 (i) licenses, permits and government authorizations which by their terms are
not transferable; and 
  
 (j) any rights, claims or causes of
action that Huttig may have against any Person arising from or related to the ownership or use of the Purchased Assets or operation of the Business before the Effective Time. 
  

 6 

 2.3 Liabilities to be Transferred with the Business. On the Closing Date, the Buyer shall assume
and discharge when and as due only the following debts, liabilities and obligations of Huttig, as of the Effective Time, arising out of or pertaining to the Business or the Purchased Assets (other than the Excluded Liabilities) (the “Assumed
Liabilities”) and the Buyer shall indemnify and hold Huttig harmless with respect thereto: 
  
 (a) liabilities for Taxes, to the extent set forth in Section 2.8; 
  
 (b) all liabilities to suppliers for materials and services relating to the Business ordered in the Ordinary Course prior
to the Effective Time, but scheduled to be delivered or provided thereafter, and all liabilities to customers under purchase orders for products of the Business which have not yet been shipped at the Effective Time; 
  
 (c) executory obligations arising after the Effective Time under the
Contracts included in the Purchased Assets, but excluding any obligations arising from or relating to any breach of a performance under such Contracts prior to the Effective Time; 
  
 (d) all liabilities and obligations under the Assigned Leases arising after the Effective Time; 
  
 (e) all liabilities related to the Transferred Employees arising after the
Effective Time;  
  
 (f) any accrued vacation liability
and accrued holiday pay liability, as of the Closing Date with respect to the Transferred Employees, whether or not vested; 
  
 (g) any fines, back pay liabilities, penalties, losses, or other obligations imposed on Huttig pursuant to Worker Adjustment and Retraining Notification
Act or similar state or local “plant shutdown” laws pursuant to the transactions contemplated hereby; 
  
 (h) any (i) returned goods and/or product warranty and liability claims (other than claims made prior to Closing and claims described in Section 2.4(b)),
(ii) credits (including credits for damaged or defective goods, goods not received or returned merchandise), (iii) deductions, set-offs and chargebacks, (iv) customer rebates and (v) allowances, returns and discounts, in each case in respect of
goods sold by the Business prior to the Closing Date in an aggregate amount not to exceed $25,000; and 
  
 (i) all other liabilities and obligations arising, and related to periods, after the Effective Time relating to the operation of the Business or
ownership or use of the Purchased Assets following the Effective Time. 
  
 2.4 Excluded Liabilities of the Business. Except as specifically provided in Section 2.3, Buyer shall not assume or be liable for, and Huttig shall remain liable for and pay and discharge all the
liabilities and obligations of the Business and Huttig (the “Excluded Liabilities”), including without limitation: 
  
 (a) all trade accounts payable and other current liabilities of the Business not included in the Assumed Liabilities; 
  

 7 

 (b) any and all product and installation warranty and liability claims in respect of goods or services
sold by the Business prior to the Closing Date; 
  
 (c) any and
all liabilities arising under or relating to the Benefit Plans; 
  
 (d) any and all Taxes owed by Huttig arising out of the transactions contemplated by this Agreement or otherwise, except to the extent otherwise set forth of Section 2.8(a); 
  
 (e) any and all liabilities for breach of contract and tort liabilities with respect to the Business arising out of events
occurring prior to the Effective Time; 
  
 (f) any and all
pending litigation as of the Effective Time; and 
  
 (g) any and
all workers’ compensation claims of the Business arising from injuries occurring prior to the Effective Time. 
  
 2.5 Consideration. The consideration that the Buyer shall pay Huttig for the Purchased Assets and other rights hereunder shall consist of the
assumption of the Assumed Liabilities and Ten Million Two Hundred Fifty Thousand Dollars ($10,250,000.00) (the “Purchase Price”). 
  
 2.6 Closing. The Closing shall take place at 9:00 a.m. on the Closing Date at the offices of Huttig, or on such other date (which shall in any
event be within 5 Business Days from the satisfaction or waiver of all applicable conditions to Closing set out herein) and at such other place as the Parties may agree in writing. At Closing, Huttig shall deliver or cause to be delivered to the
Buyer the documents and other items identified in Article 7, and the Buyer shall deliver to Huttig (a) by wire transfer of immediately available funds, in accordance with the wire transfer instructions set forth on Exhibit E, an amount
equal to the Purchase Price and (b) the documents and other items identified in Article 8. 
  
 2.7 Closing Inventory. On a mutually agreed date before Closing, the Buyer and Huttig shall jointly conduct a physical inventory to determine the
quantity of the inventory of the Business. The physical inventory shall be conducted pursuant to procedures reasonably satisfactory to the Buyer and Huttig and in a manner that either assures the quantity of inventory does not change between the
time such physical inventory begins and the Closing Date or can be accurately rolled forward. 
  
 2.8 Proration and Sales Taxes. 
  
 (a) All sales, use, value-added, gross receipts, registration, stamp duty or other similar transfer Taxes, if any, together with all recording or filing fees, notarial fees and other similar costs of Closing, that may be imposed upon, or
payable, collectible or incurred in connection with the transfer and sale of the Purchased Assets as contemplated by the terms of this Agreement shall be borne by the Buyer. 
  
 (b) Huttig, upon request, shall use its reasonable efforts to provide or obtain from any taxing authority any certificate
or other document necessary to mitigate, reduce or eliminate any Taxes (including additions thereto or interest and penalties thereon) that otherwise would be imposed with respect to the transactions contemplated in this Agreement. 
  

 8 

 (c) For any personal property, ad valorem and any other similar local or state Taxes, any power and
utilities charges and deposits, any rents, and any similar prepaid and deferred items not otherwise specifically allocated between the parties in this Agreement (collectively, the “Proratable Items”) relating solely to the Purchased
Assets or the Business for a Straddle Period, Huttig shall pay to the Buyer within 15 days after the date on which any Proratable Item is paid by the Buyer an amount that relates to the portion of the period to which such Proratable Item relates
ending on the Closing Date to the extent such Proratable Item is not paid by Huttig prior to Closing, and the Buyer shall pay all Proratable Items. For purposes of this Section, the portion of any Proratable Item that is allocated to Huttig shall be
deemed to be the amount of such Proratable Item for the entire period to which the Proratable Item relates multiplied by a fraction, the numerator of which is the number of days in the period to which the Proratable Item relates ending on the
Closing Date, and the denominator of which is the number of days in the entire period to which the Proratable Item relates. Any credits relating to a period to which a Proratable Item relates that begins before and ends after the Closing Date shall
be taken into account as though the relevant period ended on the Closing Date. All determinations necessary to give effect to the allocations described in this Section shall be made in a manner consistent with the prior practice of Huttig, except
for changes required by changes in Law or fact. 
  
 (d) The Buyer
and Huttig agree to furnish or cause to be furnished to each other, upon request, as promptly as practical, such information (including reasonable access to books and records) and assistance as is reasonably necessary for the filing of any Tax
return, the conduct of any Tax audit, and for the prosecution or defense of any claim, suit or proceeding relating to any Tax matter. The Buyer and Huttig shall cooperate with each other in the conduct of any Tax audit or other Tax proceedings. Any
Tax audit or other Tax proceeding that gives rise to a Loss subject to indemnification pursuant to Article 9 shall be deemed to be a Third Party Claim subject to the procedures set forth in Section 9.4 of this Agreement. 
  
 2.9 Allocation of Purchase Price. The amount of the Purchase Price and
the Assumed Liabilities shall be allocated as set forth on Exhibit F, which represents the fair market value of the respective Purchased Assets. The Buyer and Huttig hereby agree and acknowledge that such allocation shall be made in
accordance with Section 1060 of the Code and the regulations thereunder, and to report such allocation for all Tax purposes in a consistent manner and take no position contrary thereto and to prepare and file Tax Returns, including Form 8594, in a
manner consistent with such allocation. The allocation may not be amended or changed without the mutual written consent of the Parties. 
  
 2.10 Completion of Transfers. 
  
 (a) The entire beneficial interest in and to, and the risk of loss with respect to, the Purchased Assets and the Assumed Liabilities, shall, regardless
of when legal title thereto shall be transferred to the Buyer, pass to the Buyer at Closing as of the Effective Time. All operations of the Business shall be for the account of Huttig up to the Effective Time and shall be for the account of the
Buyer thereafter. In the event legal title to any of the Purchased Assets or the Assumed Liabilities is not transferred at Closing, Huttig shall hold such Purchased Assets or the Assumed Liabilities as nominee for the Buyer until completion of such
transfers. 
  

 9 

 (b) In the event that the legal interest in any of the Purchased Assets or the Assumed Liabilities to be
sold, assigned, transferred or conveyed pursuant to this Agreement, or any claim, right or benefit arising thereunder or resulting therefrom cannot be sold, assigned, transferred or conveyed hereunder as of the Closing Date because any waiting or
notice period has not expired or any consents or approvals required for such sale, assignment, transfer or conveyance have not been obtained or waived, then the legal interest in such Purchased Assets or the Assumed Liabilities shall not be sold,
assigned, transferred or conveyed unless and until such waiting or notice period shall have expired or until approval, consent or waiver thereof is obtained. In such event, Huttig shall, at its expense, and the Buyer shall, at its expense, use
reasonable efforts to cooperate in obtaining such consents, approvals or waivers as may be necessary to complete such transfers as soon as practicable. Notwithstanding the forgoing, to the extent a landlord or lessor, under a Material Contract,
requires any reasonable administrative, processing, expediting or legal fees to be paid in connection with obtaining the consents or approvals for assignment required under this Agreement, Huttig shall pay any such fee. Except as set forth in
Section 7.2, the failure of Huttig to obtain any required consents or approvals prior to Closing shall not affect the Buyer’s obligation to close under this Agreement or to pay, or cause to be paid, the Purchase Price. Nothing in this
Agreement shall be construed as an attempt to assign to the Buyer any legal interest in any of the Purchased Assets or the Assumed Liabilities that, as a matter of law or by the terms of any legally binding contract, engagement or commitment to
which Huttig is subject, is not assignable without the consent of any other party, unless such consent shall have been given. 
  
 (c) Pending the assignments, conveyances and transfers referred to in paragraph (b), Huttig shall hold any such non-assigned, non-conveyed and
non-transferred Purchased Assets or Assumed Liabilities for the benefit and at the risk of the Buyer and shall cooperate with the Buyer in any lawful and reasonable arrangements designed to provide the benefits of ownership thereof to the Buyer.

  
 2.11 Removal of Names. Promptly following Closing, the
Buyer and Huttig shall make reasonable efforts to remove all of Huttig’s trademarks from the Purchased Assets and the Facilities. The Buyer and Huttig shall remove all such trademarks from the Purchased Assets and the Facilities within 90 days
following the Closing Date. Only to the extent necessary to give effect to the foregoing limited right to continue to use the trademarks of Huttig, Huttig hereby grants to the Buyer a limited license to retain such marks on the Facilities and the
Purchased Assets for a period of 90 days following the Closing Date. 
  
 2.12 Further Assurances. From and after the Closing, the Parties shall do such acts and execute such documents and instruments as may be reasonably required to make effective the transactions contemplated hereby. 
  

 10 

 ARTICLE 3 
 REPRESENTATIONS AND WARRANTIES OF HUTTIG 
  
 Huttig hereby makes the following representations and warranties, each of which is true and correct on the date hereof and shall survive the Closing Date and the transactions contemplated hereby to the extent set
forth herein. 
  
 3.1 Existence and Power. 
  
 (a) Huttig has the corporate power and authority to execute and deliver
this Agreement, to perform its obligations hereunder, to transfer the Purchased Assets, to assign the Assumed Liabilities and to consummate the transactions contemplated hereby. 
  
 (b) Huttig is a corporation validly existing and in good standing under the laws of its jurisdiction of formation and each
jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary, except where the failure to be so qualified and in good standing would not have a Material Adverse Effect. 

 
 (c) Huttig is not a party to, subject to or bound by any Contract,
Encumbrance or Law which would (i) be breached or violated or its obligations thereunder accelerated or increased (whether or not with notice or lapse of time or both) in any material respect by the execution or delivery by Huttig of this Agreement
or the performance by Huttig of the transactions contemplated by this Agreement, or (ii) prevent the carrying out of the transactions contemplated hereby. Except as set forth on Disclosure Schedule Section 3.1(c), no permit, consent, waiver,
approval or authorization of, or declaration to or filing or registration with, any governmental or regulatory authority or third party is required in connection with the execution, delivery or performance of this Agreement by Huttig or the
consummation by Huttig of the transactions contemplated hereby and thereby, except for any such permits, consents, waivers, approvals, authorizations, declarations, filings or registrations the failure of which to obtain would not have a Material
Adverse Effect. The transactions contemplated hereby will not result in the creation of any Encumbrance against the Purchased Assets. 
  
 (d) Huttig has the power and authority to own, lease and use its assets and to transact the business in which it is engaged, and holds all material
authorizations, franchises, licenses and permits required therefore. 
  
 3.2 Valid and Enforceable Agreement; Authorization. This Agreement has been duly executed and delivered by Huttig and constitutes a legal, valid and binding obligation of Huttig, enforceable against Huttig in accordance with its
terms, except that such enforcement may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally, and (ii) general principles of equity. The
execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized, approved and ratified by all necessary corporate action on the part of Huttig. 
  
 3.3 Ownership. Except for the Encumbrances set forth on Disclosure
Schedule Section 3.3 and the Permitted Encumbrances, Huttig has good title to and is the sole and exclusive owner of all right, title and interest in and to all of the Purchased Assets, free and clear of all Encumbrances. Except as set forth on
Disclosure Schedule Section 3.3, none of the Purchased Assets are in the possession of others or held on consignment. 
  

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 3.4 Financial Statements. Attached as Disclosure Schedule Section 3.4 are the Financial
Statements. The Financial Statements (a) were derived from the books and records of the Business and (b) fairly present, in all material respects, the financial condition of the Business, including but not limited to the net book value, and the
results of operations of the Business at the dates and for the periods indicated and were prepared in accordance with GAAP. 
  
 3.5 Absence of Certain Developments. Except as set forth in Disclosure Schedule Section 3.5, since September 30, 2004, neither the Business
nor Huttig (in respect of the Business) have: 
  
 (a) suffered a
Material Adverse Effect; 
  
 (b) incurred any liability or
entered into any other transaction except in the Ordinary Course and except for liabilities and transactions that have not had a Material Adverse Effect; 
  
 (c) suffered any material adverse change in its relationship with any of the suppliers, customers, distributors, lessors, licensors, licensees or other
third parties which are material to the Business; 
  
 (d)
increased the rate or terms of compensation or benefits payable to or to become payable by it to the Employees or increased the rate or terms of any bonus, pension or other employee benefit plan covering any of the Employees except in each case
increases occurring in the Ordinary Course in accordance with its customary practice (including normal periodic performance reviews and related compensation and benefits increases); 
  
 (e) waived any claims or rights of material value other than in the Ordinary Course; 
  
 (f) sold, leased, licensed or otherwise disposed of any of its material
assets, other than in the Ordinary Course; 
  
 (g) amended or
terminated any Material Contract to which it is or was a party other than in the Ordinary Course; or 
  
 (h) entered into any agreement, arrangement, or transaction with any of its current or former directors, officers or Employees that is not on an
arm’s-length basis, or that require payments in excess of $25,000; 
  
 (i) committed pursuant to a legally binding agreement to do any of the things set forth in clauses (b) through (h) above. 
  

 12 

 3.6 Taxes. Except as set forth on Disclosure Schedule Section 3.6: 
  
 (a) All material Tax returns required to be filed with respect to the
Purchased Assets or the Business have been properly filed in a timely manner (taking into account all extensions of due dates) and are true, correct and complete in all material respects. 
  
 (b) All Taxes that are shown as due on such Tax returns have been or will be timely paid. 
  
 (c) No deficiencies for any Taxes (including penalties and interest) in
respect of the Purchased Assets or the Business have been asserted or assessed in writing, which remain unpaid. 
  
 (d) Huttig has not waived any statute of limitations with respect to Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency that, in either case, would materially adversely affect the Purchased Assets or the Business. 
  
 3.7 Litigation. Except as set forth on Disclosure Schedule Section 3.7, there are no material actions, suits or proceedings pending or, to
Huttig’s Knowledge, threatened against Huttig (in respect of the Business). Huttig (in respect of the Business) is not subject to any adverse order, judgment, writ, injunction or decree of any court or governmental or regulatory authority or
body (excluding any such matters of general applicability or applicable to entities situated similarly to Huttig rather than to them specifically) that would have a Material Adverse Effect. 
  
 3.8 Inventory and Accounts Receivable. 
  
 (a) Huttig is the sole owner of the inventory included in the Purchased
Assets, free and clear of all Encumbrances other than Permitted Encumbrances. The Inventory is fit for its intended use, is in compliance with all applicable Laws and is at a level, quality and age which is consistent with Huttig’s past
practices for normal operations. 
  
 (b) All of the accounts
receivable of the Business arose out of bona fide sales and deliveries of products or the performance of services in the Ordinary Course and are subject to no known defenses, counterclaims or setoffs. 
  
 3.9 Owned Real Property. Disclosure Schedule Section 3.9
contains a description of all real property owned by Huttig and used in the Business (“Owned Real Property”). Huttig has good and valid title to the Owned Real Property, free and clear of Encumbrances (other than Permitted
Encumbrances). 
  
 3.10 Leased Property. 
  
 (a) Disclosure Schedule Section 3.10(a) sets forth a list of all
leases (the “Leases”) with respect to real property to which Huttig (in relation to the Business) is a party as of the date hereof, other than any such property which constitutes an Excluded Asset (the “Leased Real
Property”). Huttig has made available to the Buyer correct and complete copies of the Leases prior to the Closing Date. With respect to each of the Leases: 
  
 (i) Neither Huttig nor, to Huttig’s Knowledge, any other party to the Leases is in breach or default,
and to Huttig’s Knowledge, no event has occurred that, with notice or lapse of time, would constitute a breach or default or permit termination, modification or acceleration thereunder; and 
  

 13 

 (ii) Huttig has not transferred any interest in the Leases. 
  
 (b) Disclosure Schedule Section 3.10(b) sets forth a list of all
leases with respect to personal property material to the conduct of the Business to which Huttig (in relation to the Business) is a party as of the date hereof (the “Leased Personal Property”). Neither Huttig nor, to Huttig’s
Knowledge, any other party to any lease or sublease entered into in connection with the Leased Personal Property is in breach or default, and to Huttig’s Knowledge, no event has occurred that, with notice or lapse of time, would constitute a
breach or default or permit termination, modification or acceleration thereunder. 
  
 (c) Each of the leases set forth on Disclosure Schedule Section 3.10(a) and Disclosure Schedule Section 3.10(b) is legal, valid and binding on Huttig and, to Huttig’s Knowledge, the other party
thereto, except where the failure to be legal, valid and binding does not have a Material Adverse Effect. 
  
 (d) Except as set forth in Disclosure Schedule Section 3.10(d), there are no leases, tenancy agreements, easements, written covenants, or written
restrictions to which Huttig is a party as of the date hereof which create or confer on any Person other than Huttig a material right to use, occupy or possess all or any of the Leased Real Property or any portion thereof or interest therein.

  
 3.11 Condition of Real and Personal Property.

  
 (a) Except as listed in Disclosure Schedule Section
3.11, all of the buildings, offices and other structures located on the Owned Real Property and Leased Real Property which are material to the conduct of the Business, have been maintained in reasonable condition in the Ordinary Course in a
manner consistent with past maintenance practices of the Business. 
  
 (b) Except as set forth in Disclosure Schedule Section 3.11, all tangible personal property which is material to the conduct of the Business has been maintained in reasonable operating condition and repair, in the Ordinary Course in
a manner consistent with past maintenance practices of the Business. 
  
 3.12 Property; Title. On the Closing Date, the Purchased Assets, including without limitation Huttig’s rights in the Leased Real Property and the Leased Personal Property, will constitute all material property, real and
personal, tangible and intangible, primarily used by Huttig to transact the Business as presently conducted in the Ordinary Course, except (i) the Excluded Assets, and (ii) where the absence thereof does not have a Material Adverse Effect. Huttig
(in respect of the Business) is the sole owner of all right, title and interest in and to all of the Purchased Assets free and clear of all Encumbrances other than Permitted Encumbrances. 
  
 3.13 Contracts. 
  
 (a) Disclosure Schedule Section 3.13(a)sets forth a list of all Contracts to which Huttig (in respect of the Business) is a party as of the date
hereof that are material to the 
  

 14 

 conduct of the Business (the “Material Contracts”). Huttig has provided to the Buyer a copy of each
written Material Contract. Disclosure Schedule 3.13(a) describes the terms of each oral Material Contract. 
  
 (b) Except as set forth on Disclosure Schedule Section 3.13(b), each Material Contract is legal, valid, and binding on Huttig, enforceable and in
full force and effect, and to Huttig’s Knowledge, each Material Contract will continue to be legal, valid, binding on the other parties thereto, enforceable and in full force and effect on identical terms following the consummation of the
transactions contemplated by this Agreement and following delivery of any consents or approval contemplated hereby. 
  
 (c) To Huttig’s Knowledge, neither Huttig nor any other party thereto is in default under or in breach of any of the Material Contracts, other than
such defaults or breaches, if any, which would not, individually or in the aggregate, have a Material Adverse Effect. 
  
 (d) Huttig has not received any written notice of any intention to terminate, repudiate or disclaim any such Material Contract. 
  
 3.14 Licenses and Permits. Set forth on Disclosure Schedule Section
3.14 is a list of all governmental permits, licenses and authorizations necessary for the conduct of the Business as presently conducted in the Ordinary Course, except where the absence thereof does not have a Material Adverse Effect, and all
such permits, licenses and authorizations are valid and in full force and effect in all material respects. Except as set forth on Disclosure Schedule Section 3.14, Huttig (in respect of the Business) is in compliance in all material respects
with such permits, licenses and authorizations. No such permit, license or authorization has been, or to Huttig’s Knowledge is threatened to be, revoked, canceled, suspended or materially adversely modified. 
  
 3.15 Compliance with Laws. Except as set forth in Disclosure Schedule
Section 3.15, Huttig (in respect of the Business) is in compliance with all applicable laws, rules and regulations currently in effect, except where non-compliance does not have a Material Adverse Effect. 
  
 3.16 Environmental Matters. Except as set forth on Disclosure
Schedule Section 3.16: 
  
 (a) Huttig (in respect of the
Business), the Business and the Purchased Assets are in compliance in all significant respects with all Environmental Laws. There is no civil, criminal or administrative action, suit, investigation or proceeding pending or, to Huttig’s
Knowledge, threatened against Huttig (in respect of the Business) relating to or arising from any Environmental Laws. 
  
 (b) Huttig (in respect of the Business) has not received any written notice, report or other information regarding any actual or alleged violation of, or
liability under, Environmental Laws relating to it or its past or current operations or Facilities except such notices, reports or other information that have been complied with and resolved. Huttig (in respect of the Business) has not treated,
stored, disposed of, arranged for or permitted the disposal of, transported, handled, or released any substance, including without limitation any hazardous materials, or owned or operated the Business or Leased Real Property in a manner that has
given or will give rise to any 
  

 15 

 significant liability under any Environmental Law. The off-site treatment, storage or disposal (or arrangement for
off-site disposal) of hazardous materials, substances or wastes by Huttig (in relation to the Business), including without limitation any such materials, substances or wastes produced or generated in connection with operations upon any Leased Real
Property, has not given and will not give rise to any significant liability under any Environmental Law. 
  
 3.17 Labor Matters.  
  
 (a) Except as set forth on Disclosure Schedule Section 3.17(a), there is no controversy existing, pending or, to Huttig’s Knowledge,
threatened with any association or union or collective bargaining representative of the Employees of the Business which is reasonably expected to have a Material Adverse Effect. 
  
 (b) Except as set forth on Disclosure Schedule Section 3.17(b), there is no charge or complaint relating to unfair
labor practices pending against Huttig arising out of its activities in relation to the Business, nor is there any labor strike, work stoppage, material grievance or other labor dispute pending or, to Huttig’s Knowledge, threatened against
Huttig in relation to the Business, which is reasonably expected to have a Material Adverse Effect. 
  
 (c) Except as set forth on Disclosure Schedule Section 3.17(c), there are no material collective bargaining, works council and similar agreements
between Huttig (in respect of the Business) or any employers’ or trade association of which Huttig (in respect of the Business) is a member and any trade union, staff association or other body representing employees of Huttig (in respect of the
Business). 
  
 (d) Except as set forth on Disclosure Schedule
3.17(d), (i) Huttig (in respect of the Business) is not delinquent in payments to any of its Employees for any wages, overtime, or other compensation for any services performed by them or amounts required to be reimbursed to such employees, (ii)
upon termination of the employment of any the Employees, Buyer will not by reason of any action taken or not taken prior to the Closing be liable to any of such employees for severance pay or any other payments except as required by Law, collective
bargaining agreement or any other Material Contract or Benefit Plan, (iii) upon the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and thereby on the basis and terms provided for herein and
therein, Buyer will not be liable to any of the Employees for severance pay or any other payments except as required by Law, collective bargaining agreement or any other Material Contract or Benefit Plan and (iv) to Huttig’s Knowledge no Key
Employee intends to terminate his or her employment with Huttig. 
  
 (e) Disclosure Schedule 3.17(e) contains a complete list of the Employees and sets forth with respect to each such Employee the date of the Employee’s hire; the salary and wages, bonus, compensation, and commissions paid or
scheduled to be paid to such Employee in 2004 with respect to services provided prior to the Effective Time; and the number of accrued vacation and sick leave days possessed by such Employee on the date of this Agreement. 
  
 3.18 Product Liability Claims. Except as set forth on Disclosure
Schedule Section 3.18, Huttig (in respect of the Business) has not received notice of any unresolved claim of personal injury, death, or property or economic damages, or any unresolved claim for injunctive relief in connection with any product
manufactured or sold by the Business. 
  

 16 

 3.19 Brokers, Finders. No finder, broker, agent or other intermediary acting on behalf of Huttig
is entitled to a commission, fee or other compensation in connection with the negotiation or consummation of this Agreement or any of the transactions contemplated hereby. 
  
 3.20 Disclosure. No representation or warranty by Huttig in this Agreement or any Exhibit or Schedule referred to
herein contains any untrue statement of a material fact or any omission of a material fact necessary to make the respective statements contained herein and therein, in the light of the circumstances under which the statements were made, not
misleading. 
  
 3.21 No Other Representations or
Warranties. Except for the representations and warranties contained in this Article 3, neither Huttig, nor any other Person, makes any other express or implied representation or warranty on behalf of Huttig or any Affiliate of Huttig with
respect to the Business, the Purchased Assets, the Assumed Liabilities or otherwise with respect to the subject matter of this Agreement. 
  
 ARTICLE 4 
 REPRESENTATIONS AND
WARRANTIES OF THE BUYER 
  
 The Buyer hereby makes the
following representations and warranties to Huttig, each of which is true and correct on the date hereof and shall survive the Closing Date and the transactions contemplated hereby to the extent set forth herein. 
  
 4.1 Existence and Power. 
  
 (a) The Buyer has the corporate power and authority to execute and deliver
this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby. 
  
 (b) The Buyer is a corporation validly existing and in good standing under the laws of Alabama and is duly qualified and in good standing in all foreign
jurisdictions in which the nature of its business so requires, except where the failure to be so qualified and in good standing would not have a material adverse effect on the Buyer. 
  
 (c) The Buyer is not a party to, subject to or bound by any contract, Encumbrance or Law which would (i) be breached or
violated or its obligations thereunder accelerated or increased (whether or not with notice or lapse of time or both) by the execution or delivery by the Buyer of this Agreement or the performance by the Buyer of the transactions contemplated
hereby, or (ii) prevent the carrying out of the transactions contemplated by this Agreement. Except as provided for herein, no permit, consent, waiver, approval or authorization of, or declaration to or filing or registration with, any governmental
or regulatory authority or third party is required in connection with the execution, delivery or performance of this Agreement by the Buyer or the consummation by the Buyer of the transactions contemplated by this Agreement, except for any such
permits, consents, waivers, approvals, authorizations, declarations, filings or registrations the failure of which to obtain would not have a material adverse effect on Huttig or its Affiliates or upon the consummation of the transactions
contemplated by this Agreement. 
  
 4.2 Valid and Enforceable
Agreement; Authorization. This Agreement has been duly executed and delivered by the Buyer and constitutes a legal, valid and binding obligation of the Buyer, enforceable against it in accordance with its terms, except that such enforcement may
be 
  

 17 

 subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to
enforcement of creditors’ rights generally and (ii) general principles of equity. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized, approved and ratified by all
necessary action on the part of the Buyer. 
  
 4.3 Brokers,
Finders. No finder, broker, agent or other intermediary acting on behalf of the Buyer is entitled to a commission, fee or other compensation in connection with the negotiation or consummation of this Agreement or any of the transactions
contemplated hereby. 
  
 4.4 Litigation. There are no
actions, suits, proceedings, orders or investigations pending or, to the Buyer’s Knowledge, threatened against the Buyer or any of the Buyer’s Affiliates, at law or in equity, which if adversely determined would have a material adverse
effect on the Buyer’s performance under this Agreement or the consummation of the transactions contemplated hereby. There are no injunctions, decrees or unsatisfied judgments outstanding against or related to the Buyer that could interfere with
the Buyer’s ability to consummate the transactions contemplated by this Agreement. 
  
 4.5 No Knowledge of Breach of Huttig Representations. The Buyer is not aware of any facts, events or occurrences that would cause Huttig to be in breach of any of its representations or warranties contained in
this Agreement or any other agreements contemplated hereby. 
  
 4.6 Disclosure. No representation or warranty by Buyer in this Agreement or any Exhibit or Schedule referred to herein contains any untrue statement of a material fact or any omission of a material fact necessary to make the
respective statements contained herein and therein, in the light of the circumstances under which the statements were made, not misleading. 
  
 4.7 No Other Representations or Warranties. Except for the representations and warranties contained in this Article 4, neither the Buyer,
nor any other Person, makes any other express or implied representation or warranty on behalf of the Buyer. In entering into this Agreement, the Buyer acknowledges that it has not relied on, and is not relying on, any projections, predictions,
forecasts or similar forward-looking statements by Huttig or any Person acting on their behalf. 
  
 ARTICLE 5 
 EMPLOYEES 
  
 5.1 Offer of Employment. Buyer will offer or will cause one of its Affiliates to offer employment, effective at the
Effective Time, to each of the Employees on terms and conditions comparable to the terms and conditions on which such Employee is employed by Huttig immediately prior to the Effective Time (the “Transferred Employees”).
Notwithstanding anything in this Agreement or otherwise to the contrary, the Buyer shall have no obligation to employ any Transferred Employee other than on an “at will” basis or to assume any of the obligations or liabilities under any
collective bargaining agreement between Seller and its Employees, and nothing in this Agreement shall be construed so as to impose any limitation on Buyer’s ability to negotiate in good faith with any union or collective bargaining
representative of the Employees. Prior to the Closing Date, Huttig shall provide reasonable access to the Transferred Employees, and, to the extent permitted by applicable law, such information regarding the Transferred Employees as is contained in
personnel records. 
  

 18 

 5.2 WARN Payments. The Buyer shall have the sole responsibility for any obligations or liabilities
to the Employees under the Worker Adjustment and Retraining Notification Act or similar state or local “plant shutdown” Law as a result of any action taken by the Buyer on or after the Effective Time. The Buyer shall indemnify Huttig and
its Affiliates and hold them harmless from and against any Losses which may be incurred or suffered by any of them in connection with any claim made by an Employee for any reason due to an Employee’s termination or deemed termination of
employment on or after the Effective Time for any reason. 
  
 5.3
Certain Benefits. 
  
 (a) To the extent that length of
service is relevant in determining the number of vacation days awarded each year under the Buyer’s vacation day plan, all Transferred Employees shall receive credit for periods of service with Huttig or its Affiliates for purposes of
determining length of service under such plan. All Transferred Employees shall receive credit for their unused and accrued vacation days incurred and outstanding with Huttig prior to the Closing Date. The Buyer will allow the Transferred Employees
to take their accrued vacation days at any time following the Closing Date in accordance with the policies of the Buyer. 
  
 (b) For purposes of each welfare benefit plan of the Buyer providing medical, dental, pharmaceutical and/or vision benefits (if any) to any Transferred
Employee who, as of the Closing Date, is participating in the corresponding welfare Benefit Plan of Huttig, the Buyer shall cause all waiting periods under such welfare benefit plan of the Buyer to be waived for such Transferred Employees and his or
her covered spouse and/or dependents, to the extent such waiver is allowed under such welfare benefit plan of the Buyer. 
  
 (c) Transferred Employees shall be eligible to participate in other benefit plans and programs of the Buyer on the terms of such plans and subject to
such plans’ eligibility requirements. 
  
 5.4
Cooperation. The Buyer and Huttig shall, to the extent possible, (i) treat the Buyer or an Affiliate of the Buyer as a “successor employer” and Huttig as a “predecessor,” within the meaning of Sections 3121(a)(1) and
3306(b)(1) of the Code, with respect to Transferred Employees for purposes of taxes imposed under the United States Federal Unemployment Tax Act or the United States Federal Insurance Contributions Act, and (ii) cooperate with each other to avoid
the filing of more than one IRS Form W-2 with respect to each such Transferred Employee for the calendar year in which the Closing Date occurs. 
  
 ARTICLE 6 
 ADDITIONAL COVENANTS OF
THE PARTIES 
  
 6.1 Books and Records. From and
after the Closing, the Buyer shall provide Huttig and its Affiliates and their representatives with reasonable access, for any reasonable purpose, including but not limited to (a) preparing Tax returns, and (b) defending any claim in respect of
which a Notice of Claim has been served on Huttig, during normal business hours, to all books and records of the Business, including, but not limited to, accounting and Tax records, sales and 
  

 19 

 purchase documents, notes, memoranda, and any other electronic or written data (“Records”) pertaining or
relating to the period prior to the Effective Time. To the extent deemed necessary by Huttig and its Affiliates with respect to their other business operations, Huttig and its Affiliates may retain copies of such Records prior to providing the
originals to the Buyer, or, as soon as practicable after Closing, the Buyer shall provide to Huttig and its Affiliates copies of all or any portion of such Records as requested by Huttig and its Affiliates. Unless otherwise consented to in writing
by Huttig, the Buyer shall not, for a period of 10 years following the date hereof or such longer period as retention thereof is required by applicable Law, destroy, alter or otherwise dispose of (or allow the destruction, alteration or disposal of)
any of the Records without first offering to surrender to Huttig such Records. 
  
 6.2 Confidentiality. 
  
 (a) In addition to the terms, provisions and covenants of the Confidentiality Agreement dated May 25, 2004, between Tendura, an Affiliate of the Buyer, and Huttig, which the Buyer acknowledges and agrees is binding upon the Buyer and shall
remain in full force and effect until Closing, the Buyer acknowledges that, in the course of its investigations of the Business, the Buyer and its representatives have and will become aware of confidential information and documents of the Business,
and that its use of such confidential information and documents, or communication of such information to third parties, could be detrimental to the Business. The Buyer covenants that prior to Closing all information and documents concerning the
Business reviewed by the Buyer or its representatives in connection with this Agreement or the transactions contemplated hereby and, following either Closing or termination of this Agreement, all such information and documents to the extent related
to any of the Excluded Assets or the Excluded Liabilities and any confidential information known to the Buyer (including through any Transferred Employee) with respect to other businesses operated by Huttig or any of its Affiliates, shall be
maintained in confidence and shall not be disclosed or used by the Buyer or its representatives without Huttig’s prior written consent, unless the Buyer can demonstrate that such information is (i) otherwise publicly available, (ii) required to
be disclosed pursuant to judicial order, regulation or law, or (iii) required to be disclosed by the rules of a securities exchange on which the Buyer may from time to time be listed. In the event that the Buyer or any of its representatives becomes
legally compelled to disclose any such information or documents as referred to in this paragraph, the Buyer shall, to the extent reasonably practicable, provide Huttig with prompt written notice before such disclosure, sufficient to enable Huttig
either to seek a protective order, at its expense, or other appropriate remedy preventing or prohibiting such disclosure or to waive compliance with the provisions of this Section 6.2 or both. With respect to information and documents related
to the Business, at Huttig’s request, in the event that the Closing shall not occur, and, with respect to information and documents related to the Excluded Assets, the Excluded Liabilities or other businesses operated by Huttig or any of its
Affiliates, as soon as practicable following Closing, (i) the Buyer shall, and shall cause its representatives to, promptly destroy all information and documents concerning the Business, the Excluded Assets, the Excluded Liabilities or other
businesses operated by Huttig or any of its Affiliates, as the case may be (including any copies thereof or extracts therefrom); (ii) an officer of the Buyer shall certify to Huttig such destruction; and (iii) the Buyer shall and shall cause its
representatives to keep confidential and not use any such information or documents unless required to disclose such information or documents pursuant to judicial order, regulation or law. 
  

 20 

 (b) Following the Closing, Huttig and its representatives shall maintain in confidence any information
it or they may have in relation to the Business, other than with respect to the Excluded Assets and the Excluded Liabilities, and such information shall not be disclosed or used by Huttig without the Buyer’s prior written consent, unless such
information is (i) otherwise publicly available, (ii) required to be disclosed pursuant to judicial order, regulation or Law or (iii) required to be disclosed by the rules of the New York Stock Exchange or any other applicable exchange or quotation
system. In the event that Huttig becomes legally compelled to disclose any such information or documents as referred to in this paragraph, Huttig shall, to the extent reasonably practicable, provide the Buyer with prompt written notice before such
disclosure, sufficient to enable the Buyer either to seek a protective order, at its expense, or other appropriate remedy preventing or prohibiting such disclosure or to waive compliance with the provisions of this Section 6.2 or both.

  
 6.3 Public Announcements. Except with the prior written
consent of the other Party, or as otherwise expressly permitted by this Agreement, or as may otherwise be reasonably determined by either Party as being required under Law or by stock exchange regulation, neither Party nor any of their
representatives will disclose to any Person any information about the existence, terms, negotiation, execution or delivery of this Agreement or the transactions contemplated hereunder. In connection with the foregoing, the Parties agree to work
together in good faith to reach a mutual agreement as to the content and form of any public announcement, press release or similar publicity. 
  
 6.4 Filings; Cooperation. 
  
 (a) Prior to the Closing, the Parties shall proceed expeditiously and in good faith to make such filings and take such other actions as may be reasonably
necessary to satisfy the conditions to Closing set forth in Sections 7.2 and 8.2. 
  
 (b) On or after the Closing Date, the Parties shall, on request, cooperate with one another by furnishing any additional information, executing and
delivering any additional documents and instruments, including contract assignments, and doing any and all such other things as may be reasonably required by the Parties or their counsel to consummate or otherwise implement the transactions
contemplated by this Agreement. In connection with the liabilities assumed by the Buyer pursuant to this Agreement, and the liabilities retained by Huttig pursuant to this Agreement, each of the Parties hereto shall, and shall cause their Affiliates
and employees to, aid, cooperate with and assist the other Party in their defense of such assumed or retained liabilities, by, among other things, providing such other Party with full access to pertinent records at such times as such other party or
parties may reasonably request. 
  
 6.5 Notice of
Developments. Huttig shall notify the Buyer of any development or other information occurring after the date hereof and prior to Closing in the Ordinary Course which renders any representation, warranty or statement contained in this Agreement
or the Disclosure Schedule hereto inaccurate or incomplete at any time prior to the Closing, including any such development or information which first becomes known to Huttig after the date hereof. The written notice pursuant to this Section
6.5 shall not (other than for purposes of Section 9.1(b)) be deemed to have amended the Disclosure Schedule, to have qualified the representations and warranties contained in this Agreement, or to have cured any misrepresentation or
breach of warranty that otherwise might have existed hereunder by reason of the development or information and the Buyer shall have the right to terminate this Agreement as provided in Section 10.2. 
  

 21 

 6.6 Limited License of Software. Upon Closing, Huttig shall grant to Buyer a limited license to
use certain operating software of Huttig currently used by the Business for a period of 6 months following the Closing Date in accordance with the terms of use and at such costs as set forth in Exhibit G. Subject to the restrictions contained
in any license agreement with respect to the software packages used by the Business, Huttig shall permit Buyer to use such software packages, and will use commercially reasonable efforts to provide Buyer with any updates to such software packages,
for so long as Buyer continues the active use of such software packages during the 6 months following Closing; provided, however that Buyer may discontinue its active use of such software packages in its sole discretion at any time.
The Parties acknowledge that Huttig is not making any representation or warranty regarding such software or upgrades and Huttig will not provide any “help line” support, installation or manuals other than as set forth in Exhibit G.

  
 6.7 Access Pending Closing. Between the date of this
Agreement and the Closing Date, Huttig will, upon reasonable prior notice afford Buyer and its representatives reasonable access to Huttig’s senior personnel, properties, contracts, books and records, and other documents and data in respect of
the Business during regular business hours. 
  
 6.8 Conduct of
Business Until Closing. Between the date of this Agreement and the Closing Date, Huttig (in respect of the Business) will: 
  
 (a) not suffer a Material Adverse Effect; 
  
 (b) not incur any liability or enter into any other transaction except in the Ordinary Course and except for liabilities and transactions that will not
have a Material Adverse Effect; 
  
 (c) not suffer any material
adverse change in its relationship with any of the suppliers, customers, distributors, lessors, licensors, licensees or other third parties which are material to the Business; 
  
 (d) not increase the rate or terms of compensation or benefits payable to or to become payable by it to the Employees or
increase the rate or terms of any bonus, pension or other employee benefit plan covering any of the Employees except in each case increases occurring in the Ordinary Course in accordance with its customary practice (including normal periodic
performance reviews and related compensation and benefits increases); 
  
 (e) not waive any claims or rights of material value other than in the Ordinary Course; 
  
 (f) not sell, lease, license, or otherwise dispose of any of its material assets, other than in the Ordinary Course; 
  
 (g) not amend or terminate any Material Contract to which it is a party
other than in the Ordinary Course; or 
  

 22 

 (h) not enter into any agreement, arrangement, or transaction with any of its directors, officers or
Employees other than on an arms-length basis; 
  
 (i) conduct the
Business only in the Ordinary Course of Business; and 
  
 (j) use
reasonable efforts to keep available the services of the Employees, and maintain its existing relations and goodwill with suppliers and customers. 
  
 ARTICLE 7 
 CONDITIONS PRECEDENT TO
OBLIGATIONS OF THE BUYER 
  
 The obligation of the Buyer
to proceed with the Closing shall be subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions precedent, any of which may be waived by the Buyer and the consummation of the Closing by the Buyer shall be
deemed to be a complete waiver of all of the following conditions: 
  
 7.1 Accuracy of Representations and Warranties and Performance of Obligations. All representations and warranties made by Huttig in this Agreement shall be true and correct in all material respects on and as of the Closing Date with
the same effect as if such representations and warranties had been made on and as of the Closing Date, except to the extent that any such representation or warranty by its terms relates to an earlier date, and except to the extent of any change
permitted by the terms of this Agreement (other than the delivery of a notice by Huttig pursuant to Section 6.5 of a matter which would constitute a Material Adverse Effect with respect to the Business) or consented to by the Buyer, and
Huttig shall have performed or complied in all material respects with all covenants, agreements and conditions contained in this Agreement on its part required to be performed or complied with at or prior to the Closing. Huttig shall deliver to the
Buyer at the Closing a certificate of an officer of Huttig certifying that the conditions stated in this Section 7.1 have been fulfilled. 
  
 7.2 Consents and Approvals. All material filings with government authorities or any other third parties shall have been made and any necessary
authorizations, consents or approvals required from such authorities and third parties shall have been obtained and shall be in full force and effect. 
  
 7.3 No Contrary Judgment. On the Closing Date there shall exist no valid judicial order that prohibits the consummation of the transactions
contemplated by this Agreement. 
  
 7.4 Deliveries. Huttig
or its Affiliates, as applicable, shall have made or tendered, or caused to be made or tendered, delivery to the Buyer of the following documents: 
  
 (a) bills of sale or other applicable documents of transfer necessary to effect the sale of the Purchased Assets, duly executed by Huttig; 
  
 (b) an assignment and assumption agreement or other applicable documents of
transfer necessary to effect the transfer of the Purchased Assets that are intangible personal property, including the Contracts, and the Assumed Liabilities, duly executed by Huttig; 
  
 (c) an assignment of each of the Assigned Leases, duly executed by Huttig and including any required landlord consent;

  

 23 

 (d) a general warranty deed for each parcel of Owned Real Property; 
  
 (e) the certificate required by an officer of Huttig pursuant to Section
7.1; and 
  
 (f) such other customary documents, instruments
or certificates as shall be reasonably requested by the Buyer and as shall be consistent with the terms of this Agreement. 
  
 ARTICLE 8 
 CONDITIONS PRECEDENT TO
OBLIGATIONS OF HUTTIG 
  
 The obligation of Huttig to
proceed with the Closing shall be subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions precedent, any of which may be waived by Huttig and the consummation of the Closing by Huttig shall be deemed to be a
complete waiver of all of the following conditions: 
  
 8.1
Accuracy of Representations and Warranties and Performance of Obligations. All representations and warranties made by the Buyer in this Agreement shall be true and correct in all material respects on and as of the Closing Date with the same
effect as if such representations and warranties had been made on and as of the Closing Date, except to the extent that any such representation or warranty by its terms relates to an earlier date, and the Buyer shall have performed or complied in
all respects material with all covenants, agreements and conditions contained in this Agreement on its part required to be performed or complied with at or prior to the Closing. The Buyer shall deliver to Huttig at the Closing a certificate of an
officer of the Buyer certifying that the conditions stated in this Section 8.1 have been fulfilled. 
  
 8.2 Consents and Approvals. All material filings with government authorities or any other third parties shall have been made and any necessary
authorizations, consents or approvals required from such authorities shall have been obtained and shall be in full force and effect. 
  
 8.3 No Contrary Judgment. On the Closing Date there shall exist no valid judicial order that prohibits the consummation of the transactions
contemplated by this Agreement. 
  
 8.4 Deliveries. The
Buyer shall have made or tendered, or caused to be made or tendered, delivery to Huttig of the Purchase Price in accordance with Section 2.6 and the following documents: 
  
 (a) a counterpart signature page to any assignment and assumption agreement or other applicable document of transfer to
effect the transfer of the Purchased Assets that are intangible personal property, including the Contracts, and the Assumed Liabilities, duly executed by the Buyer; 
  
 (b) a counterpart signature page to any assignment and assumption agreement or other applicable document of transfer to
effect the transfer of the Leases, duly executed by the Buyer; 
  
 (c) the certificate required by an officer of the Buyer pursuant to Section 8.1; and 
  

 24 

 (d) such other customary documents, instruments or certificates as shall be reasonably requested by
Huttig and as shall be consistent with the terms of this Agreement. 
  
 ARTICLE 9 
 INDEMNIFICATION 
  
 9.1 Indemnification by Huttig. Subject to the limitations set forth in this Article 9, Huttig shall indemnify
and hold harmless the Buyer against and in respect of any and all Losses arising from: 
  
 (a) any breach or violation of the covenants made in this Agreement by Huttig; 
  
 (b) any breach of any of the representations and warranties made in Article 3 by Huttig, except to the extent of any notice provided by Huttig
pursuant to Section 6.5; 
  
 (c) the ownership, use or
possession by Huttig of the Excluded Assets; or 
  
 (d) the
Excluded Liabilities. 
  
 9.2 Indemnification by the Buyer.
Subject to the limitations set forth in this Article 9, the Buyer shall indemnify and hold harmless Huttig against and in respect of any and all Losses arising from: 
  
 (a) any breach or violation of the covenants made in this Agreement by the Buyer or any of its Affiliates; 
  
 (b) any breach of any of the representations or warranties made in
Article 4 by the Buyer; 
  
 (c) the ownership, use or
possession by the Buyer of the Purchased Assets, or the conduct or operation of the Business, occurring at or after the Effective Time; 
  
 (d) the Assumed Liabilities; or 
  
 (e) any claim made by an Employee as a result of Buyer’s failure to fulfill its covenants under Article 5. 
  
 9.3 Notice and Payment of Losses. Upon obtaining knowledge of any
Loss, the Party entitled to indemnification (the “Injured Party”) shall promptly notify the Party liable for such indemnification (the “Indemnifying Party”) in writing of such Loss which the Injured Party has
determined has given or could give rise to a claim under Sections 9.1 or 9.2 (such written notice being hereinafter referred to as a “Notice of Claim”); provided, however, that failure of an Injured Party timely to
give a Notice of Claim to the Indemnifying Party shall not release the Indemnifying Party from its indemnity obligations set forth in this Article 9 except to the extent that such failure adversely affects the ability of the Indemnifying
Party to defend such claim or increases the amount of indemnification which the Indemnifying Party is obligated to pay hereunder, in which event the amount of indemnification which the Injured Party shall be entitled to receive shall be reduced to
an 
  

 25 

 amount which the Injured Party would have been entitled to receive had such Notice of Claim been timely given. The
Injured Party shall use reasonable efforts to mitigate any continuing Losses (including without limitation by using its reasonable efforts to obtain any applicable insurance proceeds and/or indemnity payments) and to obtain or use any Tax savings,
benefit, relief, deduction or credit available to the Injured Party. If the Injured Party settles or compromises any third-party claims, or initiates action which is for the purpose in whole or in part of causing a claim to be asserted, prior to
giving a Notice of Claim to the Indemnifying Party, the Indemnifying Party shall be released from its indemnity obligation. A Notice of Claim shall specify in reasonable detail, to the extent known by the Injured Party, the nature and, to the extent
reasonably calculable, estimated amount of any such claim giving rise to a right of indemnification. The Indemnifying Party shall satisfy its obligations under Sections 9.1 or 9.2 as the case may be, within 60 days of its receipt of a
Notice of Claim; provided, however, that for so long as the Indemnifying Party is disputing its liability or defending a third-party claim in good faith pursuant to Section 9.4, its obligations to indemnify the Injured Party with respect
thereto shall be suspended until a final unappealable judgment of a court of competent jurisdiction is given in relation to such claim. The Indemnifying Party shall have 30 Business Days (or such shorter period of time that the Injured Party may be
required to respond to any suit or governmental action) after receipt of a Notice of Claim to notify the Injured Party (a) whether or not it disputes its liability to the Injured Party with respect to such Notice of Claim and (b) whether it elects
to defend a third-party claim pursuant to Section 9.4. 
  
 9.4 Defense of Third-Party Claims. With respect to any action or any claim set forth in a Notice of Claim relating to a third-party claim (a “Third-Party Claim”), the Indemnifying Party shall have the right, but not
the obligation, to assume the defense of any Third-Party Claim in good faith and at its own expense and the Injured Party may participate (but not control) at its expense in the defense of such Third-Party Claim. So long as the Indemnifying Party is
defending any such Third-Party Claim in accordance with this Section 9.4, the Injured Party shall not settle or compromise such Third-Party Claim without the consent of the Indemnifying Party. If such claim is settled by the Injured Party
without the Indemnifying Party’s consent, the Injured Party shall be deemed to have waived all rights hereunder for indemnification, or other remedies with respect to such claim. The Indemnifying Party may settle or compromise such Third-Party
Claim without the consent of the Injured Party, unless there has not been a complete release of the Injured Party, in which case the Indemnifying Party may not settle or compromise such Third-Party Claim without the consent of the Injured Party,
which consent shall not be unreasonably withheld. The Injured Party shall make available to the Indemnifying Party or its representatives all records and other materials reasonably required for use in contesting any Third-Party Claim. The Injured
Party shall cooperate fully with the Indemnifying Party in the defense of all such claims. If the Indemnifying Party elects not to defend any such Third-Party Claims, the Injured Party shall have no obligation to do so, but may settle or compromise
any such Third-Party Claim at the risk and expense of the Indemnifying Party. The Indemnifying Party will not, however, be responsible for any Losses if and to the extent that they arise from action taken or omitted to be taken by the Injured Party
in bad faith, fraudulently, negligently or as a result of a breach of this Agreement by the Injured Party. 
  
 9.5 Survival of Representations and Warranties. All of the representations and warranties made by any Party in Article 3 and Article 4
shall survive for a period of twelve (12) months following the Closing Date and thereafter to the extent a Notice of Claim is made prior to such expiration with respect to any breach of such representation or warranty occurring prior to such
expiration and set out in such Notice of Claim; provided, however, that (i) the representations 
  

 26 

 and warranties contained in Sections 3.1, 3.2, 3.3, 4.1 and 4.2
shall survive the Closing Date without any time limit, (ii) the representations and warranties contained in Section 3.6 shall survive the Closing Date until the expiration of the applicable statutes of limitations and (iii) the
representations and warranties contained in Section 3.16 shall survive the Closing Date for a period of five (5) years following the Closing Date. No Injured Party shall be entitled to indemnification for breach of any representation and
warranty set forth in Article 3 and Article 4 unless a Notice of Claim of such breach has been given to the Indemnifying Party within the period of survival of such representation and warranty as set forth herein. 
  
 9.6 Limitation on Indemnification. 
  
 (a) The provisions for indemnity under Sections 9.1(b) and
9.2(b), as the case may be, shall be effective only when the aggregate amount of all Losses for which indemnification is sought from either Huttig or the Buyer, respectively, under such sections, exceeds One Hundred Thousand U.S. Dollars
(US$100,000) (the “Indemnity Threshold”), in which case the Injured Party shall be entitled to indemnification of the Injured Party’s Losses only in excess thereof; provided, however that any Losses for which indemnification is
sought pursuant to Sections 9.1(b) and 9.2(b), as applicable, which, individually or (if such Losses are substantially related to one another) in the aggregate are less than Three Thousand U.S. Dollars (US$3,000) shall not be included
in calculating the Indemnity Threshold until such Losses exceed $25,000 in the aggregate, in which case the Losses in excess of $25,000 shall be included in calculating the Indemnity Threshold. 
  
 (b) The indemnification obligations of each of Huttig and the Buyer pursuant
to Sections 9.1(a), 9.1(b), 9.2(a) and 9.2(b), as the case may be, shall be limited to Losses that, in the aggregate, do not exceed 50% of the Purchase Price (the “Maximum Indemnity Amount”) and in no event shall
either Party be liable for indemnification of Losses under such sections in excess of the Maximum Indemnity Amount. Notwithstanding the foregoing, Losses based upon a breach of representation or warranty made pursuant to Sections 3.1, 3.2,
3.3, 4.1 and 4.2 shall not be limited to the Maximum Indemnity Amount but such amounts recovered by the Injured Party with respect to a breach under Sections 3.1, 3.2, 3.3, 4.1 and 4.2 shall be
applied toward the Maximum Indemnity Amount. 
  
 (c)
Notwithstanding anything in this Agreement to the contrary, no action, event, occurrence, liability, obligation, contract or other matter shall constitute a breach of any covenant, representation or warranty of Huttig that entitles the Buyer to
indemnification hereunder: 
  
 (i) if the
action, event or occurrence giving rise to liability or the liability, obligation, contract or other matter is set out in the Disclosure Schedules; 
  
 (ii) to the extent that the action, event or, occurrence giving rise to liability or the liability, obligation, contract or other matter
was provided for, or specifically referred to, in the Closing Statement; or 
  
 (iii) if the action, event or occurrence giving rise to liability or liability, obligation, contract or other matter was actually known to the Buyer as of the Closing Date. 
  

 27 

 9.7 Exclusive Remedy. In the absence of fraud, the indemnification provisions set forth in this
Article 9 shall provide the exclusive remedy for breaches of any covenant, agreement, representation or warranty set forth in this Agreement or any other agreement ancillary hereto executed pursuant to this Agreement. Notwithstanding the
foregoing, each Party shall be entitled to such equitable remedies to which such Party may otherwise be entitled, including, without limitation, the ability to apply to any court of competent jurisdiction for specific performance or injunctive
relief. 
  
 9.8 Other Limitations. Notwithstanding anything
to the contrary contained herein, in the absence of fraud, no Party shall be liable to or otherwise responsible to any other party hereto or any Affiliate of any other Party for consequential, incidental, punitive or special damages or for
diminution in value or lost profits that arise out of or relate to this Agreement or the performance or breach hereof or any liability retained or assumed hereunder or thereunder. 
  
 ARTICLE 10 
 MISCELLANEOUS PROVISIONS 
  
 10.1
Notice. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and made upon (i) in the case of personal delivery or delivery by
facsimile, on the date of such delivery, (ii) in the case of nationally-recognized overnight courier, on the next Business Day following dispatch and (iii) in the case of mailing, on the third Business Day following such mailing if sent by certified
mail, return receipt requested, postage prepaid, addressed at the address or facsimile number shown in this Section 10.1 for, or such other address as may be designated in writing hereafter by, such Party: 
  
 If to the Buyer: 
 Hendricks Companies, Inc. 
 1015 Brundidge
Blvd., P.O. Box 589 
 Troy, AL 36081-0589 
 Fax: (334) 566-4629Attention: S. Kenneth Hendricks 
  
 With copies to: 
 Kaufman & Rothfeder, P.C. 
 P.O. Drawer 4540 
 Montgomery, Alabama 36103

 Telephone: (344) 244-1111 
 Fax: (344) 244-1969 
 Attention: Jo K. Parr 
  
 If to Huttig: 
 Huttig Building Products Inc. 
 555 Maryville University Dr., Suite 240 
 St. Louis, MO 63141 
 Fax number (314)
216-8793 
 Attention: Nick H. Varsam, Vice President – General Counsel 
  

 28 

 With copies to: 
 Bryan Cave LLP 
 One Metropolitan Square 
 211 North Broadway, Suite 3600 
 St. Louis,
Missouri 63102 
 Telephone: (314) 259-2000 
 Fax: (314) 259-2020 
 Attention: John M. Welge, Esq. 
  
 10.2 Termination. This Agreement may be terminated at any time prior
to the Closing only: 
  
 (a) by mutual written consent of Huttig
and the Buyer; 
  
 (b) by the Buyer in the event of the
disclosure by Huttig of any development or other information occurring after the date hereof in the Ordinary Course which renders any representation, warranty or statement contained in this Agreement or the Disclosure Schedule hereto inaccurate or
incomplete at any time prior to Closing, provided that such subsequent disclosure is material and adverse to the business of any branch and further provided that the Buyer shall furnish Huttig with a written explanation setting forth the basis under
which Buyer has elected to terminate; 
  
 (c) by Huttig or the
Buyer if the other Party shall have breached any material provisions of this Agreement and shall not have cured such breach within 10 days of receiving notice of such breach by the non-breaching party; or 
  
 (d) if the Closing shall not have occurred prior to January 31, 2005.

  
 (e) In the event of any termination of this Agreement as
provided in this Section 10.2, this Agreement shall forthwith become wholly void and of no further force and effect and there shall be no liability on the part of the Buyer or Huttig, except that the provisions of Section 6.2 shall
survive any such termination of this Agreement. 
  
 10.3 Entire
Agreement. This Agreement and the Disclosure Schedule and Exhibits hereto embody the entire agreement and understanding of the parties hereto with respect to the subject matter hereof, and supersede all prior and contemporaneous agreements and
understandings relative to such subject matter. 
  
 10.4
Severability. If any provision hereof shall be held invalid or unenforceable by any court of competent jurisdiction or as a result of future legislative action, such holding or action shall be strictly construed and shall not affect the
validity or effect of any other provision hereof, as long as the remaining provisions, taken together, are sufficient to carry out the overall intentions of the Parties as evidenced hereby. 
  
 10.5 Assignment; Binding Agreement. This Agreement and various rights
and obligations arising hereunder shall inure to the benefit of and be binding upon the Parties hereto and their successors and permitted assigns. Neither this Agreement nor any of the rights, interests, or obligations hereunder shall be
transferred, delegated, or assigned by the Parties hereto without the 
  

 29 

 prior written consent of the other Party (which consent shall not be unreasonably withheld), except that the Buyer shall
have the right to transfer and assign its rights hereunder to any entity which is controlled by the Buyer or by the Affiliates of the Buyer. No such assignment shall relieve the Buyer of any liability or obligation hereunder. 
  
 10.6 Counterparts. This Agreement may be executed simultaneously in
multiple counterparts, and in separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. 
  
 10.7 Headings; Interpretation. The article and section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation of this Agreement. Each reference in this Agreement to an Article, Section, Schedule, or Exhibit, unless otherwise indicated, shall mean an Article or a Section of this
Agreement or a Schedule or Exhibit attached to this Agreement, respectively. References herein to “days”, unless otherwise indicated, are to consecutive calendar days. All Parties have participated substantially in the negotiation and
drafting of this Agreement and no ambiguity herein should be construed against the draftsman. 
  
 10.8 Governing Law. This Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware applicable to contracts to be carried out wholly within such State. 
  
 10.9 Disclosure Generally. The information furnished in the Disclosure
Schedule is arranged in sections corresponding to the sections contained in this Agreement, and the disclosures in any section of the Disclosure Schedule shall qualify (i) the corresponding section of this Agreement, and (ii) other sections of this
Agreement to the extent (notwithstanding the absence of a specific cross-reference) it is clear from a reasonable reading of the Disclosure Schedules and such other sections of this Agreement that such disclosure is also applicable to other sections
of this Agreement. The Disclosure Schedule and the information and disclosures contained in the Disclosure Schedule is intended only to qualify and limit the representations and warranties of Huttig contained in this Agreement and shall not be
deemed to expand in any way the scope of any such representation, or warranties or covenants. The inclusion of any information in the Disclosure Schedule shall not be deemed to be an admission or acknowledgment that such information is material or
outside the Ordinary Course. 
  
 10.10 No Third Party
Beneficiaries or Other Rights. Nothing herein shall grant to or create in any Person not a party hereto, including but not limited to an employee of Huttig, the Buyer or any Affiliate of either, or any such person’s Affiliates, any right to
any benefits hereunder, and no such party shall be entitled to sue either Party to this Agreement with respect thereto. The representations and warranties contained in this Agreement are made for purposes of this Agreement only and shall not be
construed to confer any additional rights on the Parties under applicable state or federal or foreign securities laws. 
  
 [Signatures on following page] 
  

 30 

 IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be executed as of the date
first above written. 
  

			
	 “BUYER”

	 HENDRICKS COMPANIES, INC.

		
	 By:
	 	  

	 Name:
	 	  

	 Title:
	 	  

	
	 “HUTTIG”

	 HUTTIG BUILDING PRODUCTS, INC.

		
	 By:
	 	  

	 Name:
	 	  

	 Title:
	 	  

  

 31 

 TABLE OF SCHEDULES AND EXHIBITS 
  

							
	 Exhibit A
	 	 List of Employees
	  	 	  	 
	 Exhibit B
	 	 List of Facilities
	  	 	  	 
	 Exhibit C
	 	 List of Knowledge Persons
	  	 	  	 
	 Exhibit D
	 	 List of Equipment
	  	 	  	 
	 Exhibit E
	 	 Wire Transfer Instructions
	  	 	  	 
	 Exhibit F
	 	 Allocation of Purchase Price
	  	 	  	 
	 Exhibit G
	 	 IT Transitional Services
	  	 	  	 

  
 Disclosure Schedule 
  
 Section 3.1(c) – Consents

 Section 3.2 –Authorizations 
 Section 3.3 - Ownership 
 Section 3.4 – Financial Statements 
 Section 3.5 – Absence of Certain Developments 
 Section 3.6 - Taxes 
 Section 3.7 - Litigation 
 Section 3.9 – Owned Real Property 
 Section 3.10 - Real and Personal Property Leases 
 Section 3.11 – Condition of Assets 
 Section 3.13- Contracts 
 Section 3.14 – Licenses and Permits 
 Section 3.15 – Compliance with Laws 
 Section 3.16 – Environmental 
 Section 3.17 – Labor Matters 
 Section 3.18 – Product Liability 
  

 32

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