Document:

Exhibit 10.1

 

ASSET PURCHASE
AGREEMENT

 

This ASSET
PURCHASE AGREEMENT (“Agreement”) is made and entered into
this 22nd day of July, 2004 by and between G. Leblanc Corporation, a Wisconsin
corporation (the “Company”), and Steinway Musical Instruments, Inc., a
Delaware corporation (the “Purchaser”; the Purchaser and the Company are
each a “Party” and are collectively the “Parties”).

 

RECITALS:

 

WHEREAS, the Company is in the business of manufacturing and
distributing musical instruments (the “Business”); and

 

WHEREAS, the
Company desires to sell, transfer and assign to the Purchaser and the Purchaser
desires to purchase from the Company substantially all of the assets,
properties and Business of the Company, other than Excluded Assets (as defined
in Section 1.2) for an amount in cash, all as herein provided and
on the terms and conditions hereinafter set forth.

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto, intending to
be legally bound hereby, agree as follows:

 

ARTICLE
I

Purchase
and Sale of the Assets

 

1.1          Purchased Assets.  At the Closing (as defined in Section 3.2),
the Company shall sell, convey, transfer, assign and deliver to the Purchaser
and the Purchaser shall purchase from the Company, free and clear of all liens,
mortgages, pledges, security interests, claims, assessments, restrictions,
encumbrances and charges of every kind (collectively, “Liens”), on the
terms and subject to the conditions set forth in this Agreement, all of the
properties, business, rights and assets which are owned by the Company and used
in the Business of every kind and description, whether personal or mixed,
tangible or intangible, wherever located, as shall exist on the Closing Date
(as defined in Section 3.2), except for the Excluded Assets (as defined
in Section 1.2), whether or not appearing on the Last Balance Sheet (as
defined in Section 4.4) (collectively, the “Purchased Assets”).
Without limiting the generality of the foregoing, the Purchased Assets shall
include the following:

 

1.1.1       all inventories of instruments, raw
materials, work-in-process, finished goods, products under research and development,
demonstration equipment, office and other supplies, parts, packaging materials
and other accessories related thereto (including but not limited to all such
items which are listed on an inventory schedule dated as of a date not later
than five business days prior to the Closing Date (the “Inventory Schedule”),
provided by the Company to the Purchaser) which are held at, or are in transit
from or to, the locations at which the Business is conducted, or located at
customers’ premises on consignment, in each case, which are used or held for
use by the Company in the conduct of the Business, together with all rights of
the Company against suppliers of such inventories (the “Inventory”);

 

 

1.1.2       all motor vehicles owned or leased by the
Company and used or held for use in the conduct of the Business, including but
not limited to the vehicles listed in Schedule 4.27 (the “Vehicles”);

 

1.1.3       all furniture, fixtures, computers,
equipment, machinery and other tangible personal property (other than Inventory
and Vehicles) used or held for use in the conduct of the Business at the
locations at which the Business is conducted or at customers’ premises on
consignment, or otherwise used or held for use by the Company in the conduct of
the Business, including any of the foregoing purchased subject to any
conditional sales or title retention agreement in favor of any other Person
(the “Tangible Personal Property”);

 

1.1.4       all trade accounts receivable and all
notes, bonds and other evidences of indebtedness of and rights to receive
payments arising out of sales occurring in the conduct of the Business,
including any rights of the Company with respect to any third party collection
procedures or any other actions or proceedings which have been commenced in
connection therewith (the “Accounts Receivable”);

 

1.1.5       all fee, leasehold and other interests of
the Company in real property described in Schedule 4.7, and all of the
rights arising out of the ownership thereof or appurtenant thereto, together
with all buildings, structures, facilities, fixtures and other improvements
thereto (collectively, the “Real Property”);

 

1.1.6       all of the interest of and the rights and
benefits accruing to the Company as lessee or licensee under all leases or
rental agreements covering machinery, equipment, supplies, furniture and
fixtures and other fixed assets related to the Business;

 

1.1.7       all of the rights and benefits accruing
to the Company under (a) all purchase orders and purchase commitments made by
the Company in the ordinary course of business, (b) all agreements to which the
Company is party or by which it is bound that are related to the Business,
including those set forth on Schedule 4.13 (the “Contracts”), (c)
all employment agreements and all other agreements with employees of the
Company with respect to non-disclosure, non-solicitation, non-competition and
inventions assignment (other than (i) the deferred compensation agreements
between the Company and each of Mr. Vito Pascucci and Mr. Leon
Pascucci, and (ii) the Release and Consulting Contract and Covenant Not to
Compete between the Company and each of Ms. Mari Bilotti and Ms. Virjean
Fitchett) and (d) all other choses in action, causes of action and other rights
of every kind of the Company;

 

1.1.8       all operating data and records of the
Company, including customer lists and records, financial, accounting and credit
records, correspondence, budgets and other similar documents and records;

 

1.1.9       all of the proprietary rights of the
Company, including all trademarks, service marks, trade names, patents, patent
applications, licenses thereof, trade secrets, technology, know-how, formulae,
computer software, trade dress, copyrights, other licenses and permits, the
corporate name(s) and all of the other intangible assets or rights of the
Company relating to the Business;

 

1.1.10     all prepaid and deferred items of the
Company, including but not limited to prepaid rent, compensation, utilities,
common area maintenance charges, insurance, taxes and unbilled charges and
deposits relating to the operations of the Company;

 

 

1.1.11     all of the equity interests owned by the
Company in its Subsidiaries (as defined in Section 4.1.2);

 

1.1.12     all of the
sponsorship rights, other rights, and benefits accruing to the Company under
all the Plans listed on Schedule 1.1.12 hereto;

 

1.1.13     all receivables, rights and benefits of the
Company with respect to any liability or obligation of any Subsidiary; and

 

1.1.14     all of the lock
box accounts of the Company.

 

1.2          Excluded Assets.  Anything to the contrary in Section 1.1
notwithstanding, the Purchased Assets shall exclude the following assets of the
Company (the “Excluded Assets”):

 

1.2.1       the Company’s rights under this Agreement
and all documents and instruments executed in connection with this Agreement;

 

1.2.2       any life insurance policies, and the cash
value thereof, associated with deferred compensation obligations of the
Company;

 

1.2.3       the corporate charter, qualifications to
conduct business as a foreign corporation, 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 as a
corporation of the Company;

 

1.2.4       the Company’s
Tax Returns (as defined in Section 4.6.2);

 

1.2.5       all cash and all deposits in all of the
Company’s bank accounts; and

 

1.2.6       the shareholder
receivables listed on Schedule 4.13 under the heading “4.13(d)” and
the loan to a District Manager of the Company listed on Schedule 4.21;

 

1.2.7       any other asset
specifically identified in Schedule 1.2.

 

1.3          Assignment of Contracts.  The Purchaser shall cooperate with the
Company in obtaining any third party consents that may be required to transfer
the Purchased Assets to the Purchaser, including the provision of such
information of the Purchaser as may be reasonably requested by such third
parties in the context of their review of requests for consent; provided that
the Purchaser shall not be obligated to expend any sum or advance any costs, or
commence any litigation or other legal proceedings, in connection with such
cooperation.  Notwithstanding anything
in this Agreement to the contrary, this Agreement shall not constitute an
assignment of any Contract, if an attempted assignment thereof, without the
consent of a third party thereto, would constitute a breach thereof or in any
way adversely affect the rights of the Purchaser thereunder.  If such consent is not obtained, or if an
attempted assignment thereof would be ineffective or would affect the rights of
the Company thereunder so that the Purchaser would not in fact receive all such
rights, the Company and its shareholders (the “Shareholders”) will
cooperate with the Purchaser in any reasonable arrangement designed to provide
for the Purchaser the benefits under such claims, contracts, licenses,
franchises, leases, commitments, sales orders, sales contracts, supply
contracts, service agreements, purchase orders, purchase commitments or
receivables, including enforcement for the benefit of the Purchaser of any and
all rights of the Company against a third party thereto arising out of the
breach or cancellation by such third party or otherwise. If and to the extent
that such arrangement cannot be made, Purchaser shall have no obligation
pursuant to Section 1.4 or

 

 

otherwise with respect to any such real property lease, personal
property lease, Contract or License. 
The provisions of this Section 1.3 shall not affect the
right of Purchaser not to consummate the transactions contemplated by this
Agreement if the condition to its obligations hereunder contained in Section 3.6(b)
has not been fulfilled.

 

1.4          Assumed Liabilities.  The Purchaser will assume only the following
specified liabilities of the Company relating to the Business (collectively,
the “Assumed Liabilities”):

 

(a)           all
current liabilities (except to the extent that such liabilities are Excluded
Liabilities) of the Company that are set forth on the Last Balance Sheet, in each
case only as reflected in Net Book Value;

 

(b)           those
certain liabilities (except to the extent that such liabilities are Excluded
Liabilities) that are of the type set forth on the Last Balance Sheet and
incurred by the Company in the ordinary course of business after the date of
the Last Balance Sheet and through the Closing, in each case only as reflected
in Net Book Value; and

 

(c)           those
certain liabilities and obligations of the Company pursuant to executory
contracts, orders and commitments concerning the purchase of inventory and/or
supplies or the sale of merchandise or services, made in the ordinary course of
business under (i) the contracts identified as “Assumed Liabilities” on Schedule
4.13 and (ii) contracts included in Purchased Assets which are not
identified on Schedule 4.13 solely because they are not material enough
to be required, in accordance with Section 4.13, to be so identified;

 

(d)           liability for the investigation and remediation
obligations arising from the remediation program relating to the presence of
Hazardous Material in the soil, groundwater or surface water at, on, in, under
or in the vicinity of the Leblanc Real Property and the Holton Real Property,
to the extent set forth in the Remediation Plan (as defined in Section 2.2)
(the “Assumed Remediation Obligations”);

 

(e)           the
liabilities and obligations under the Plans listed on Schedule 1.1.12
hereto; and

 

(f)            any
and all liabilities and obligations owed by the Company to any Subsidiary.

 

1.5          Excluded Liabilities.  Except for the Assumed Liabilities, the
Purchaser shall not assume by virtue of this Agreement or the transactions
contemplated hereby, and shall have no liability for, any Liabilities of the
Company (including, without limitation, those related to the Business) of any
kind, character or description whatsoever, including but not limited to the
following liabilities (the “Excluded Liabilities”):

 

1.5.1       any liability or
obligation that arises out of the transactions contemplated by this Agreement
or results from any breach or default by the Company under this Agreement or
any agreement, certificate or other document or instrument that may be executed
or delivered in connection with this Agreement or the transactions contemplated
hereby, or any liability or obligation where the existence, imposition, nature
or extent of such liability or obligation gives rise to or constitutes a breach
or default by the Company under this Agreement or any other agreement,
certificate or other document or instrument that may be executed or delivered
in connection with this Agreement or the transactions contemplated hereby;

 

1.5.2       any liability,
accruals for, or obligation relating to income taxes, franchise, sales,

 

 

use, payroll, unemployment and withholding taxes, including deferred
income taxes reflected on the Last Balance Sheet (as defined in Section 4.4),
including any interest or penalties related thereto, incurred by the Company on
or prior to the Closing Date;

 

1.5.3       any liability or
obligation relating to indebtedness for borrowed money of the Company and all
interest thereon and all fees, charges, penalties and other amounts incurred in
connection therewith, which amounts shall be repaid at the closing;

 

1.5.4       any liability or
obligation relating to any violation of any law, statute,  rule or regulation by the Company or any
employee or agent of the Company that arises out of or results from the Closing
or any act, omission, occurrence or state of facts prior to the Closing;

 

1.5.5       the deferred
compensation obligations of the Company to each of Mr. Vito Pascucci and Mr.
Leon Pascucci and the obligations of the Company under the Release and
Consulting Contract and Covenant Not to Compete between the Company and each of
Ms. Mari Bilotti and Ms. Virjean Fitchett;

 

1.5.6       any liability or obligation of the
Company to the Shareholders or their Affiliates;

 

1.5.7       any liability or
obligation of the Company under any Plan, other than those Plans identified on Schedule
1.1.12;

 

1.5.8       any liability or obligation relating to
those items identified on Schedule 4.14.

 

1.6          No Expansion of Third Party Rights.  The (a) assumption by the Purchaser of the
Assumed Liabilities, (b) transfer thereof by the Company and (c) limitations in
the description of Excluded Liabilities in Section 1.5 shall in no way
expand the rights or remedies of any third party against the Purchaser, the
Company or the Shareholders as compared to the rights and remedies such third
party would have had against the Company or the Shareholders had the Purchaser
not assumed such liabilities. Without limiting the generality of the preceding
sentence, the assumption by the Purchaser of the Assumed Liabilities shall not
create any third party beneficiary rights.

 

1.7          Allocation of the Purchase Price among
the Purchased Assets. 
The Purchaser and the Company agree that $250,000 of the consideration
paid by Purchaser for the Purchased Assets shall be allocated to the covenant
of the Company contained in Section 6.6, and the remainder of which is
allocable to, and deemed to be in consideration of, the Purchased Assets.  Prior to the Closing, the Purchaser and the
Company shall negotiate in good faith the allocation of the consideration paid
by Purchaser for the Purchased Assets. 
The parties shall jointly agree upon, and the Purchaser will prepare (in
a manner consistent with such agreement) Form 8594 and any other notice or
filing required pursuant to Section 1060 of the Internal Revenue Code of 1986,
as amended.  The parties hereto agree to
execute and file the Form 8954 prepared by the Purchaser in accordance with
this Section 1.7 and such other forms, notices and filings as
required by applicable laws.  If no such
agreement can be reached after good faith negotiation, either the Purchaser, or
a Shareholder or the Company, may by written notice to the other, demand
arbitration of the matter in accordance with Section 9.17.  The decision of the arbitrators as to the
proper allocation of the Purchase Price shall be binding and conclusive upon
the Parties.

 

1.8          Insurance Proceeds.  If any of the Purchased Assets are destroyed
or damaged or taken in condemnation on or prior to the Closing Date, the
insurance proceeds or condemnation award with respect thereto shall be a
Purchased Asset.  At the Closing, the
Company shall pay or credit to Purchaser any such insurance proceeds or
condemnation awards received by it on or prior to the Closing and shall assign
to or assert for the benefit of Purchaser all of its rights against any
insurance companies,

 

 

governmental or regulatory authorities and others with respect to such
damage, destruction or condemnation.  As
and to the extent that there is available insurance under policies maintained
by the Company and its Affiliates, predecessors and successors in respect of
any Assumed Liability, except for any such insurance proceeds with respect to
which the insured is directly or indirectly self-insured or has agreed to
indemnify the insurer, the Company shall cause such insurance to be applied
toward the payment of such Assumed Liability. 
The provisions of this Section 1.8 shall not affect the
right of Purchaser not to consummate the transactions contemplated by this
Agreement if the condition to its obligations hereunder contained in Section 3.6(b)
has not been fulfilled.

 

ARTICLE II

 

Purchase Price

 

2.1          Purchase Price.  In consideration for the Purchased Assets,
the Purchaser shall pay to the Company an aggregate amount equal to the one
hundred ten percent (110%) of the Actual Net Book Value (as defined in Section
2.3) of the Company (the “Purchase Price”).  In addition, at the Closing the Purchaser
shall assume the Assumed Liabilities.

 

2.2          Payment of Purchase Price.  Not more than ten (10) days and at least two
(2) business days prior to the Closing Date, the Company and the Purchaser
shall jointly prepare a statement setting forth their good faith estimate of
the Net Book Value of the Company as of the end of the last full calendar month
prior to the Closing (the “Estimate Date”) for which monthly financial
statements of the Company have been prepared (the “Estimated Net Book Value”)
and which statement shall provide reasonable detail with respect to the various
components thereof.  In calculating Estimated Net Book Value, the
Company and the Purchaser shall use their reasonable efforts exercised in good
faith to agree on an appropriate remediation plan (the “Remediation Plan”)
for, and an accrual for all costs and expenses associated with, the Assumed
Remediation Obligations (the “Assumed Remediation Obligation Reserve”),
which accrual amount shall be included in the calculation of Estimated Net Book
Value and, provided that (i) the known, disclosed and/or discovered
environmental conditions at the Leblanc Real Property and the Holton Real
Property that form the basis for the Assumed Remediation Obligations have not
changed and (ii) no governmental authority has imposed any material changes to
the Remediation Plan, in the calculation of the Lowest Estimated Value, the
Greatest Estimated Value and the Actual Net Book Value. The Parties agree that
the Remediation Plan agreed to by the Parties shall be deemed to be an integral
part of this Agreement to the same extent as if the same had been set forth in
a schedule hereto and that, subject to the provisions of clauses (i) and (ii)
of the immediately preceding sentence, the Assumed Remediation Obligation
Reserve agreed upon by the Parties shall be deemed to have been determined
in accordance with generally accepted accounting principles.

 

2.2.1       At the Closing, the Purchaser shall pay
to the Company an amount (the “Closing Payment”) equal to (i)
ninety-five percent (95%) of one-hundred ten percent (110%) of the Estimated
Net Book Value (such 110% being the “Estimated Purchase Price”) minus
(ii) the amount of the Escrow Amount (as defined in Section 2.2.2 below)
and minus (iii) the amount of the payment pursuant to Section 2.2.4.

 

2.2.2       The Purchaser shall deposit into escrow
for eighteen (18) months after the Closing with a financial institution
(the “Escrow Agent”) that is mutually acceptable to the Purchaser and the
Company an amount equal to $4,500,000 (the “Escrow Amount”) to offset,
in whole or in part, amounts, if any, owed by the Company pursuant to any
section of this Agreement.

 

 

2.2.3       The Purchaser shall holdback an amount
equal to five percent (5%) of the Estimated Purchase Price (the “Holdback
Amount”) to offset, in whole or in part, amounts, if any, owed by the
Company pursuant to Section 2.3.

 

2.2.4       At the Closing, the Purchaser shall pay
to Leon Pascucci $250,000 in consideration of the covenants made by him
pursuant to the Non-competition Agreement in the form of Exhibit C
hereto.

 

2.2.5       Based upon the instructions, and at the
direction, of the Company, at the Closing the Purchaser shall pay a specified
portion of the Closing Payment directly to Bank One NA and to US Bank National
Association.

 

2.2.6       The Parties shall make, or cause to be
made, additional payments with respect to the Purchase Price in accordance with
Section 2.3.2.  Sample
calculations of Estimated Net Book Value and the Estimated Purchase Price,
determined using the Company’s financial statements for the month ending May
29, 2004 are set forth in Schedule 2.2

 

2.3          Net Book Value.  For purposes of this Section 2.3,
“Net Book Value” shall mean the book value of the Purchased Assets minus
the book value of (i) accounts payable, (ii) accrued liabilities, and (iii)
receivable financing liabilities (including the receivable financing
liabilities relating to the Rayburn Musical Instruments receivable(s) financed
through Textron Financial Corporation pursuant to that certain Manufacturer’s
Indemnification Agreement dated November 8, 1989  (the “Rayburn Receivable”))
included in the Assumed Liabilities, all determined in accordance with
generally accepted accounting principles and on a consolidated basis, including
the Company and all of its Subsidiaries. 
The Parties agree that shortfalls in collections of the Rayburn
Receivable shall be resolved in accordance with the terms of Article VII.  Notwithstanding generally accepted
accounting principals, the Parties agree that they shall not establish reserves
for the Rayburn Receivable on the Draft Balance Sheet (as defined in
Section 2.3.1) or in determining the Estimated Net Book Value.

 

2.3.1       Actual Net Book Value.  Within sixty (60) days after the Closing
Date, the Purchaser will conduct a review (the “Closing Review”) of the
Net Book Value of the Company as of the Closing Date determined immediately
following completion of the Closing and will prepare and deliver to the Company
a computation of the amount of the Net Book Value as of such date (the “Draft
Balance Sheet”).  The Purchaser will
make available to the Company all records and work papers used in preparing the
Draft Balance Sheet.  If the Company
agrees with the Purchaser’s computation of the Draft Balance Sheet, then such
calculation shall be hereinafter considered as the “Actual Net Book Value.”  If the Company disagrees with the
computation of the Net Book Value reflected on the Draft Balance Sheet, the
Company may, within thirty (30) days after receipt of the Draft Balance Sheet,
deliver a written notice (an “Objection Notice”) to the Purchaser
setting forth the Company’s calculation of the amount of the Net Book Value as
of the Closing Date.  Notwithstanding
the foregoing, to the extent that 110% of the lower of the estimated Net Book
Value asserted by the Purchaser or the Company (the “Lowest Estimated Value”)
exceeds the sum of the Closing Payment and the Escrow Amount, the Purchaser
promptly following determination thereof shall pay to the Company from the
Holdback Amount an amount equal to (a) the Lowest Estimated Value minus (b) the
sum of the Closing Payment and the Escrow Amount, while the parties determine
the Actual Net Book Value in accordance with this Section.  To the extent that the greater of the
estimated Net Book Value asserted by the Purchaser or the Company (the “Greatest
Estimated Value”) is less than the sum of the Closing Payment, the Escrow
Amount, and the Holdback Amount, the Company promptly following determination
thereof shall pay to the Purchaser an amount equal to the sum of the Closing

 

 

Payment, the
Escrow Amount, and the Holdback Amount, less the Greatest Estimated Value,
while the parties determine the Actual Net Book Value in accordance with this
Section; provided, however, that if the amount to be paid by the Company is
less than the Holdback Amount, in lieu of a separate payment by the Company,
the Purchaser shall reduce the Holdback Amount by such amount in fulfillment of
the payment obligation of the Company; provided, further that, if the amount to
be paid by the Company exceeds the Holdback Amount, the Purchaser shall retain
the entire Holdback Amount, and the Company shall pay to the Company the amount
by which its payment obligation exceeds the Holdback Amount. The Purchaser and
the Company will use commercially reasonable efforts to resolve any
disagreements as to the computation of the Net Book Value, but if they do not
obtain a final resolution within thirty (30) days after the Purchaser has received
the Objection Notice, the Purchaser and the Company will jointly retain a
mutually acceptable independent public accounting firm with recognized regional
or national standing (the “Firm”) to resolve any remaining
disagreements.  The Purchaser and the
Company will direct the Firm to render a determination within thirty (30) days
of its retention and the Purchaser and the Company and their respective agents
will cooperate with the Firm during its engagement.  The Firm will consider only those items and amounts in the Draft
Balance Sheet set forth in the Objection Notice which the Purchaser and the
Company are unable to resolve.  In
resolving any disputed item, the Firm may not assign a value to any item
greater than the greatest value for such item claimed by either Party or less
than the smallest value for such item claimed by either Party.  The Firm shall make its determination based
upon the terms of this Agreement, including the definition of Net Book Value.  The determination of the Firm as to the
Actual Net Book Value will be conclusive and binding upon the Purchaser and the
Company.  The Purchaser and the Company
shall bear the costs and expenses of the Firm based on the percentage which the
portion of the net contested amount not awarded to each Party bears to the
amount actually contested by such Party. 
If the Company does not agree with the Purchaser’s computation of the
Draft Balance Sheet, the amount of the Net Book Value, as finally determined
pursuant to this Section 2.3.1, is referred to herein as the “Actual
Net Book Value.”

 

2.3.2       Purchase Price Adjustment. Within three (3)
business days following the preparation or computation and final determination
of the Actual Net Book Value pursuant to Section 2.3.1 hereof, and the
determination of the Purchase Price based upon such final determination,

 

(i)            to the extent the
amount of the Purchase Price is greater than an amount (the “Interim Paid
Amount”) equal to (a) the Closing Payment plus (b) the Escrow Amount
plus (c) the amount of the payment made to Leon Pascucci pursuant to Section
2.2.4  plus (d) the amount of any interim payment made to the Company
pursuant to Section 2.3.1  minus (e) the amount of any interim
payment made to the Purchaser pursuant to Section 2.3.1, the Purchaser
shall promptly pay to the Company by wire transfer of immediately available
funds to an account designated by the Company, the amount by which the Purchase
Price is greater than the Interim Paid Amount, and

 

(ii)           to the extent the
Interim Paid Amount is greater than the Purchase Price, the Company shall
promptly pay to the Purchaser by wire transfer of immediately available funds
to an account designated by the Purchaser, the amount by which the Interim Paid
Amount is greater than the Purchase Price.

 

 

ARTICLE III

Pre-Closing; Closing
Conditions; Pre-Closing Covenants; Execution

 

3.1          Pre-Closing.  From the date of this Agreement through the
earlier of termination hereof or Closing, the Parties shall use their
reasonable best efforts to (a) in the case of the Company except as
provided in the next sentence, provide the information, materials and access
reasonably requested by the Purchaser to allow the Purchaser to perform its due
diligence reviews, investigations and tests of the Company and its
Subsidiaries, including, without limitation, with respect to their businesses,
operations, financial condition, legal and corporate matters, and Real
Property, and (b) in the case of the Purchaser, to perform its due diligence
review of the Company.  The Company
shall also (y) provide to the Purchaser information, materials and access
(including reasonable in person meetings) requested by the Purchaser with
respect to the customers, offices, employees, suppliers, vendors, and other
agents of the Company and its Subsidiaries and (z) provide such assistance and
information as the Purchaser shall reasonably request to allow the Purchaser to
negotiate and finalize any employment agreements with the employees of the
Company and its Subsidiaries as contemplated by this Agreement.

 

3.2          Time and Place of the Closing.  The closing of the transactions contemplated
by this Agreement (the “Closing”) shall take place at the offices of
Freeborn & Peters LLP, 311 South Wacker Drive, Suite 3000,
Chicago, Illinois, 60606, or by mail or facsimile transmission of the
documents, certificates and instruments required to consummate the transactions
contemplated hereby, on the second business day following the date of the
satisfaction of the conditions contained in Sections 3.6 and 3.7,
which date shall be on or before August 11, 2004, or which shall be such
other date and place as the Parties shall mutually determine (the “Closing
Date”).

 

3.3          Closing Transactions.  Subject to the conditions set forth in this
Agreement, the Parties shall consummate the following transactions (the “Closing
Transactions”) on the Closing Date:

 

(a)           the
Company shall execute and deliver to the Purchaser a Bill of Sale and
Assignment and Assumption Agreement in the form attached hereto as Exhibit A;

 

(b)           the Purchaser, or its
designee, shall deliver the Closing Payment to the Company by wire transfer of
immediately available funds to an account designated by the Company or, at the
Company’s direction, to the Company’s banks;

 

(c)           Leon Pascucci and
the Purchaser shall execute an Employment Agreement in the form of Exhibit B;

 

(d)           Leon Pascucci and
the Purchaser shall execute a Non-competition Agreement in the form of Exhibit C;

 

(e)           the Company shall have assigned and
transferred to the Purchaser all of the issued and outstanding equity interests
in the Subsidiaries (as defined in Section 4.1.2);

 

(f)            the
Company shall deliver to the Purchaser, or leave at the Premises (as defined in
Section 4.7.2) at which they are located, all of the books,
records, documents and other materials relating to the Purchased Assets, except
for those books, records, documents and other materials that are Excluded
Assets;

 

(g)           the Company shall
have delivered to First American Title Company a deed to be

 

 

recorded with
recorder of deeds of the county(ies) in which each parcel of the Owned Real
Property (as defined in Section 4.7.1) is located, together with such
other documentation required to transfer to the Purchaser title to the Owned
Real Property free and clear of all Liens other than Permitted Exceptions (as
defined Section 4.7.1), including a quitclaim deed with respect to the
real property, if any, referenced in Section 3.6(m); and

 

(h)           the
Company, the Purchaser and the Escrow Agent shall execute and deliver an Escrow
Agreement in form and substance reasonably acceptable to the Purchaser and the
Company (the “Escrow Agreement”) and the Purchaser shall deposit the
Escrow Amount into escrow pursuant to such Escrow Agreement.

 

3.4          The Company’s Closing Deliveries.  Subject to and
conditioned upon the Closing, on or prior to the Closing Date, the Company
shall have delivered to the Purchaser all of the following:

 

(a)           copies of all third party (including
landlords) and governmental consents, approvals, filings, releases and
terminations required in connection with the consummation of the transactions
contemplated herein;

 

(b)           a certificate of the
Secretary of State of the State of Wisconsin that the Company is in good
standing in such State;

 

(c)           a legal opinion
issued by counsel to the Company, dated as of the Closing Date, in a form
reasonably acceptable to the Purchaser and its counsel;

 

(d)           such other documents or instruments
as the Purchaser may reasonably request to effect the transactions contemplated
hereby, including title to Vehicles;

 

(e)           certificate
of the Company certifying that the conditions to the Closing set forth in Section
3.6(a) and (b) have been satisfied;

 

(f)            all of the
documentation required to record the transfer of, and transfer to, the
Purchaser title to the Owned Real Property and the Company’s right, title and
interest in the Leased Real Property;

 

(g)           (a) an ALTA owner’s
and/or leasehold owner’s policy of title insurance on forms of and issued by
one or more title insurer’s reasonably satisfactory to Purchaser (“Title
Insurer”) insuring the title of Purchaser to the Owned Real Property
located in the United States listed in Schedule 4.7, in an amount equal
to the value of such Owned Real Property as determined by the mutual agreement
of the parties, subject only to Permitted Exceptions and such other exceptions
as are reasonably satisfactory to Purchaser (the “Title Policies”), and
the Company shall have paid to such title companies all expenses and premiums
of such title companies in connection with the issuance of such policies,
including any endorsements thereto and (b) Estoppel Certificates with respect
to the real property leases listed in Schedule 4.7, if any;

 

(h)           such members of the
boards of directors and such officers of the Subsidiaries as are designated in
a written notice delivered at least five (5) business days prior to the Closing
Date by Purchaser to the Company shall have tendered, effective at the Closing,
their resignations as such directors and officers; and

 

(i)            stock certificates
of the Subsidiaries with stock transfers in blank, or other assignment
documents required to transfer the equity interest in the Subsidiaries to
Purchaser.

 

 

3.5          The Purchaser’s Closing Deliveries.  Subject to and conditioned upon the Closing,
on or prior to the Closing Date, the Purchaser shall have delivered to the
Company, all of the following:

 

(a)           certificate of the Secretary of State
of Delaware providing that the Purchaser is in good standing;

 

(b)           certificate
of the Purchaser certifying that the conditions to the Closing set forth in Section
3.7(a) and (b) have been satisfied; and

 

(c)           such other documents or instruments
as the Company may reasonably request to effect the transactions contemplated
hereby.

 

3.6          Conditions to the Purchaser’s
Obligations.  The
obligation of the Purchaser to consummate the transactions contemplated by this
Agreement is subject to the satisfaction of the following conditions as of the
Closing Date or such other date as specifically provided below:

 

(a)           the representations
and warranties set forth in Article IV shall be true and correct in all
material respects at and as of the Closing Date as though then made and as
though the Closing Date were substituted for the date of this Agreement
throughout such representations and warranties;

 

(b)           the Company shall
have performed and complied with all of the covenants and agreements required
to be performed by it under this Agreement on or prior to the Closing;

 

(c)           Leon Pascucci shall
have entered into an Employment Agreement with the Purchaser;

 

(d)           the Purchaser shall
have completed its due diligence review of the Company and its Subsidiaries,
including its review of the Company’s and such other entities’ operations
(including those located outside of the State of Wisconsin), environmental
issues and status, intellectual property issues, legal issues, license and
permitting issues; management, method of accounting, competitive position,
customer and supplier relationships and all other relevant aspects of the
Company and the Business, and the results of such review are satisfactory to
the Purchaser; provided, however, that if Purchaser shall not have provided
notice that it is not satisfied with its due diligence review on or before the
date that is seven days from the date hereof, then this condition shall be
deemed to be waived;

 

(e)           the Transactions
shall not be prohibited by any applicable law or governmental regulation, shall
not subject the Purchaser to any penalty, liability or other materially adverse
condition under or pursuant to any applicable law or governmental regulation,
and shall be permitted by laws and regulations of the jurisdictions to which
the Purchaser are subject;

 

(f)            the Company shall
be in compliance with the requirements of all Permits (as defined in Section 4.10),
the failure with which to comply would have a material adverse effect on the
Company;

 

(g)           no action, suit, or
proceeding shall be pending or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator wherein an unfavorable judgment, decree, injunction,
order or ruling would prevent the performance of this Agreement or any of the
transactions contemplated hereby,

 

 

declare
unlawful the transactions contemplated by this Agreement, cause such
transactions to be rescinded or materially and adversely affect the right of
the Purchaser to own the Purchased Assets, and no judgment, decree, injunction,
order or ruling shall have been entered which has any of the foregoing effects;

 

(h)           Bank One NA shall
have provided a letter that the principal and interest outstanding under the
Loan Agreement has been paid and shall have terminated its Liens in, and
delivered to the Company  proper termination statements (Form UCC-3)
necessary to terminate the effectiveness of any Financing Statements filed with
respect to, the assets of the Company and its Subsidiaries, including but not
limited to the Purchased Assets;

 

(i)            US Bank National
Association shall have provided a letter that the principal and interest
outstanding under the Industrial Revenue Bond Obligations has been paid and
shall have terminated its Liens in, and delivered to the Company  proper
termination statements (Form UCC-3) necessary to terminate the effectiveness of
any Financing Statements filed with respect to, the assets of the Company and
its Subsidiaries, including but not limited to the Purchased Assets;

 

(j)            the Company shall
have filed a name change with the Wisconsin Secretary of State changing the
Company’s corporate name to a name that does not include the word “Leblanc”;

 

(k)           the Purchaser shall
have received all material permits, licenses, registrations and other
governmental approvals required for Purchaser’s operation of the Business and
occupation of the Premises (including without limitation all permits, licenses,
registrations and other governmental approvals required under Environmental
Laws), provided, that the Purchaser has used commercially reasonable efforts to
file applications to obtain or, to the extent any of the Company’s material
permits, licenses, registrations or other governmental authorizations are
transferable to the Purchaser and included in the Purchased Assets, to file
requests to transfer, reissue or modify, any such permits, licenses,
registrations and approvals;

 

(l)            Title Insurer shall
be irrevocably committed and unconditionally prepared to issue the Title
Policies; and

 

(m)          the Company shall
have caused G. Leblanc Building, Inc. to convey by quitclaim deed to the
Company prior to the Closing all of its right, title and interest in, to and
under any real property, if any, used in connection with the Business, free and
clear of all liens and encumbrances created or permitted by G. Leblanc
Building, Inc. so that such real property shall constitute Purchased Assets;
and

 

(n)           the Company and the
Purchaser shall have agreed upon the Remediation
Plan and the Assumed Remediation Obligation Reserve.

 

Any condition specified in this
Section 3.6 may be waived pre-Closing by the Purchaser; provided that no
such waiver shall be effective against the Purchaser unless it is set forth in
a written instrument executed by the Purchaser. In the event that the Purchaser
elects to consummate the transactions contemplated by this Agreement even
though certain of the conditions set forth in this Section 3.6 have
not been all of the satisfied, upon the Closing, any conditions in Section
3.6 that have not otherwise been satisfied shall be identified in a writing
to be signed by the Parties and considered waived by Purchaser.

 

3.7          Conditions to the Company’s
Obligations. 
The obligation of the Company to consummate the transactions
contemplated by this Agreement is subject to the satisfaction of the

 

 

following conditions as of the Closing Date:

 

(a)           the representations
and warranties set forth in Article V shall be true and correct in all material
respects at and as of the Closing Date as though then made and as though the
Closing Date were substituted for the date of this Agreement throughout such
representations and warranties;

 

(b)           the Purchaser shall
have performed and complied with all of the covenants and agreements required
to be performed by it under this Agreement on or prior to the Closing;

 

(c)           the Transactions
shall not be prohibited by any applicable law or governmental regulation, shall
not subject the Company to any penalty, liability or other materially adverse
condition under or pursuant to any applicable law or governmental regulation,
and shall be permitted by laws and regulations of the jurisdictions to which the
Company are subject; and

 

(d)           no action, suit, or
proceeding shall be pending before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator wherein an unfavorable judgment, decree, injunction,
order or ruling would prevent the performance of this Agreement or any of the
transactions contemplated hereby, declare unlawful the transactions
contemplated by this Agreement, cause such transactions to be rescinded or
materially and adversely affect the right of the Company to retain the Purchase
Price, including the Closing Payment, and no judgment, decree, injunction,
order or ruling shall have been entered which has any of the foregoing effects;
and

 

(e)           the Company and the
Purchaser shall have agreed upon the Remediation
Plan and the Assumed Remediation Obligation Reserve.

 

Any condition specified in this
Section 3.7 may be waived by the Company provided that no such waiver
shall be effective against the Company unless it is set forth in a writing
executed by the Company.  In the event
that the Company elects to consummate the transactions contemplated by this
Agreement even though certain of the conditions set forth in this Section 3.7
have not been all of the satisfied, upon the Closing, any conditions in Section 3.7
that have not otherwise been satisfied shall be identified in a writing to be
signed by the Parties and considered waived by the Company.

 

3.8          Affirmative Covenants of the Company.  Prior to the Closing, unless the Purchaser
otherwise agrees in writing and except as expressly contemplated by this
Agreement, the Company shall and the Company shall cause its Subsidiaries to:

 

(a)           except as set forth
in the schedules to this Agreement, conduct the Business and operations
only in the ordinary course of business, consistent with past practice.  Without limiting the generality of the
foregoing, the Company will:

 

(i)            use reasonable best
efforts to (A) preserve intact the present business organization and
reputation of the Business, (B) keep available (subject to dismissals and
retirements in the ordinary course of business consistent with past practice)
the services of the employees, customers and suppliers (C) maintain the
Purchased Assets in customary repair, order and condition, ordinary wear and
tear excepted, (D) maintain the good will of customers, suppliers, lenders
and other Persons to whom the Company sells goods or provides services or with
whom the Company otherwise has significant business relationships in connection
with the Business and (E) continue all current sales, marketing and
promotional activities relating to the Business;

 

 

(ii)           except to the
extent required by applicable law, cause the books and records to be maintained
in the usual, regular and ordinary manner, and not permit any material change
in any pricing, investment, accounting, financial reporting, inventory, credit,
allowance or Tax practice or policy of the Company that would adversely affect
the Business, the Purchased Assets or the Assumed Liabilities;

 

(iii)          (A) use reasonable
best efforts to maintain in full force and effect until the Closing
substantially the same levels of coverage as the insurance listed in Schedule
4.15, (B) to the extent requested by Purchaser prior to the Closing Date,
use all reasonable best efforts to cause such insurance coverage to continue to
be provided at the expense of the Purchaser for at least 90 days after the
Closing on substantially the same terms and conditions as provided on the date
of this Agreement, and (C) cause any and all benefits under such insurance
coverage paid or payable with respect to the Purchased Assets or the Business
to be paid to the Company; and

 

(iv)          comply, in all
material respects, with all laws and orders applicable to the Business and promptly
following receipt thereof to give Purchaser copies of any notice received from
any governmental or regulatory authority or other person alleging any violation
of any such law or order.

 

(b)           as promptly as
practicable and in any event no later than 45 days after the end of each fiscal
quarter ending after the date hereof and before the Closing Date (other than
the fourth quarter) or 90 days after the end of each fiscal year ending after
the date hereof and before the Closing Date, as the case may be, deliver to
Purchaser true and complete copies of the unaudited balance sheet, and the
related unaudited statement of operations, of the Business, as of and for the
fiscal year then ended or as of and for the fiscal quarter and the portion of
the fiscal year then ended, as the case may be, together with the notes, if
any, relating thereto, which financial statements shall be prepared on a basis
consistent with the Financial Statements;

 

(c)           promptly (once it or
either of them obtains knowledge thereof) inform the Purchaser in writing of
any variances from the representations and warranties contained in Article IV
or any breach of any covenant hereunder by the Company;

 

(d)           cooperate with the
Purchaser and use reasonable best efforts to cause the conditions to the
Purchaser’s obligation to consummate the transactions contemplated by this
Agreement to be satisfied, including, without limitation, using reasonable
efforts exercised in good faith to establish with the Purchaser the Remediation
Plan and the Assumed Remediation Obligation Reserve by no later than
August 4, 2004, and the execution and delivery of all agreements
contemplated hereunder to be so executed and delivered (including, without
limitation, the making and obtaining of all third party and governmental
filings, authorizations, approvals, consents, releases and terminations);

 

(e)           on the business day
immediately preceding the Closing Date, deliver irrevocable written
instructions to JP Morgan Chase & Co. (as successor by merger to Bank One)
(the “Bank”) to sweep all amounts, as of the end of the banking business
day immediately preceding the Closing Date, from the lock box (or boxes)
identified on Schedule 4.30 (collectively, the “Lock Box”) into a
separate account for the benefit of the Company.  On the business day immediately preceding the Closing Date, the
Company shall deliver irrevocable written instructions to the Bank to hold,
from and after the end of the banking business day immediately preceding the
Closing Date, any and all payments made into the Lock Box for the sole benefit
of the Purchaser.  The Parties shall
work with the Bank to obtain signature cards required by the

 

 

Bank to change
or add to persons authorized to access the Lock Box with sufficient time for
the Purchaser to complete and transmit same to the Bank prior to the Closing
Date; and

 

(f)            deliver to the
Purchaser the Inventory Schedule no later than five business days prior to the
Closing Date.

 

3.9          Negative Covenants of the Company.  Prior to the Closing, except as set forth on
Schedule 3.9, as the Purchaser otherwise agrees in writing or as
expressly contemplated by this Agreement or except if such action is undertaken
in the ordinary course of business, the Company shall not and the Company shall
not permit any of its Subsidiaries to:

 

(a)           take any action that
would require disclosure under Section 4.16;

 

(b)           make any loans,
enter into any transaction with any officer, director, shareholders or
Affiliate (as defined in Section 4.21) of the Company or make or
grant any increase in any employee’s or officer’s compensation (other than in
the ordinary course of business consistent with past practice) or any bonus or
incentive compensation or make or grant any increase in benefits provided under
any employee benefit plan, policy or program, incentive arrangement or other
benefit covering any of the employees of the Company, or adopt, enter into or
become bound by any benefit plan, employment-related contract or collective
bargaining agreement with respect to the Business or any of the employees, or
amend, modify or terminate (partially or completely) any such benefit plan,
employment-related contract or collective bargaining agreement, except to the
extent required by applicable law and, in the event compliance with legal
requirements presents options, only to the extent that the option which the
Company reasonably believes to be the least costly is chosen;

 

(c)           establish or, except
in the ordinary course of business consistent with past practice, contribute to
any pension, retirement, profit sharing or stock bonus plan or multiemployer
plan covering the employees of the Company;

 

(d)           enter into any
contract, agreement or transaction, other than in the ordinary course of
business consistent with past practice with third parties who are not
Affiliates of the Company;

 

(e)           make any non-cash
distributions, including distributions to pay income taxes, declare, pay, make
or otherwise effectuate any non-cash dividends, distributions, redemptions,
equity repurchases or other transactions involving the Company’s capital stock
or equity securities;

 

(f)            authorize, issue,
sell or transfer any equity securities, any securities convertible,
exchangeable or exercisable into shares of its capital stock or other equity
securities, or warrants, options or other rights to acquire shares of its
capital stock or other of its equity securities;

 

(g)           incur, guarantee, or
become subject to any liabilities, except liabilities incurred in the ordinary
course of business consistent with past practices pursuant to existing loan and
receivables financing agreements;

 

(h)           other than in the
ordinary course of business consistent with past practice, engage in any
activity which would accelerate the collection of its accounts or notes
receivable or delay the payment of its accounts payable or delay its capital
expenditures;

 

 

(i)            acquire or dispose
of any assets and properties used or held for use in the conduct of the
Business, other than Inventory in the ordinary course of business consistent
with past practice and other acquisitions or dispositions not exceeding in
either case $25,000 in the aggregate, or creating or incurring any Lien, other
than a Permitted Lien, on any Purchased Assets used or held for use in the
conduct of the Business (for purposes hereof, “Permitted Lien” means (i) any
Lien for Taxes not yet due or delinquent or being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with GAAP, (ii) any statutory Lien arising in the ordinary course of
business by operation of law with respect to a liability that is not yet due or
delinquent, or (iii) any minor imperfection of title or similar Lien which
individually or in the aggregate with other such Liens does not materially
impair the value of the property subject to such Lien);

 

(j)            enter into, amend,
modify, terminate (partially or completely), grant any waiver under or give any
consent with respect to any material Contract or any material License;
provided, that following notice to the Purchaser, the Company may agree to
modify or grant a waiver with respect to any such agreement where such
modification or waiver is reasonably necessary to comply with the provisions of
Section 3.8(a)(i);

 

(k)           violate, breach or
default under in any material respect, or take or fail to take any action that
(with or without notice or lapse of time or both) would constitute a material
violation or breach of, or default under, any term or provision of any Contract
or any License;

 

(l)            incur, purchase,
cancel, prepay or otherwise provide for a complete or partial discharge in
advance of a scheduled payment date with respect to, or waive any right of the
Company under, any liability of or owing to the Company in connection with the
Business, other than in the ordinary course of business consistent with past
practice;

 

(m)          engage in any
transaction with respect to the Business with any officer, director or
Affiliate of the Company, either outside the ordinary course of business
consistent with past practice or other than on an arm’s-length basis;

 

(n)           make capital
expenditures or commitments for additions to property, plant or equipment
constituting capital assets on behalf of the Business in an aggregate amount
exceeding $25,000; or

 

(o)           enter into any
agreement to do or engage in any of the foregoing.

 

3.10        Covenants of Purchaser.  Prior to the Closing, the Purchaser shall:

 

(a)           promptly (once it
obtains knowledge thereof) inform the Company in writing of any variances from
the representations and warranties contained in Article V or any breach of any
covenant hereunder by the Purchaser; and

 

(b)           cooperate with the
Company and use its reasonable best efforts to cause the conditions to the
Company’s obligation to consummate the transactions contemplated by this
Agreement to be satisfied, including, without limitation, using reasonable
efforts exercised in good faith to establish with the Company the Remediation
Plan and the Assumed Remediation Obligation Reserve  by no later than August 4, 2004, and the execution and delivery
of all agreements contemplated hereunder to be so executed and delivered
(including, without limitation, the making and obtaining of all third party and
governmental filings, authorizations, approvals, consents, releases and
terminations).

 

 

ARTICLE IV

Representations and
Warranties of the Company

 

To induce the Purchaser to enter into this Agreement and to consummate
the transactions contemplated hereunder, the Company makes the following
representations and warranties, all of which representations and warranties
shall survive the Closing as provided in Section 7.2.3.  For purposes of this Article IV, unless the
context otherwise requires, the “Company” shall mean, collectively, the Company
and all Subsidiaries of the Company, 100% of the equity of which is included,
directly or indirectly, in the Purchased Assets, which term shall, for purposes
of this Article IV, include all assets of such Subsidiaries. All references to
the “Company’s knowledge” or to words of similar import will be deemed to be references
to the actual knowledge of one or more of the officers or directors of Company.

 

4.1          Organization, Power and Authority;
Subsidiaries.

 

4.1.1       The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Wisconsin and has all requisite corporate power and
authority to own or lease its properties, to carry on its business as it is now
being conducted and to enter into this Agreement and all other agreements
contemplated hereby and to perform its obligations hereunder and
thereunder.  The Company is legally
qualified to transact business as a foreign corporation in each of the
jurisdictions in which its business or property is such as to require that it
be thus qualified, and it is in good standing in each of the jurisdictions in
which it is so qualified and each such jurisdiction is listed on Schedule
4.1.

 

4.1.2       Schedule 4.1 sets forth: (a) the
name of each Subsidiary; (b) the number and type of outstanding equity
securities of each Subsidiary and a list of the holders thereof; (c) the
jurisdiction of organization of each Subsidiary; (d) the names of the
officers and directors of each Subsidiary; and (e) the jurisdictions in which
each Subsidiary is qualified or holds licenses to do business as a foreign
corporation or other entity.  For
purposes of this Agreement, “Subsidiary” shall mean any corporation,
partnership, trust, limited liability company or other non-corporate business
enterprise in which the Company (or another Subsidiary) holds stock or other
ownership interests representing:  (i)
more than fifty percent (50%) of the voting power of all outstanding stock or
ownership interests of such entity or (ii) the right to receive more than fifty
percent (50%) of the net assets of such entity available for distribution to
the holders of outstanding stock or ownership interests upon a liquidation or
dissolution of such entity.  Except as
identified on Schedule 4.1, the Company does not directly or indirectly
own any capital stock of, or other equity interests in, any corporation,
partnership, joint venture or other entity.

 

4.1.3       Each Subsidiary is a corporation, limited
liability company or general partnership duly organized, validly existing and
in corporate, limited liability company or general partnership good standing
under the laws of the jurisdiction of its incorporation or organization.  Each Subsidiary is duly qualified to conduct
business and is in corporate or limited liability company good standing under
the laws of each jurisdiction in which the nature of its businesses or the
ownership or leasing of its properties requires such qualification.  Each Subsidiary has all requisite power and
authority to carry on the businesses in which it is engaged and to own and use
the properties owned and used by it. 
The Company has delivered to the Purchaser complete and accurate copies
of the charter, by-laws or other organizational documents of each Subsidiary,
including board and shareholder minute books since January 1, 1999.  No Subsidiary is in default under or in
violation of any provision of its charter, by-laws or other organizational
documents.  All of the issued and
outstanding shares of capital stock or ownership interests of each Subsidiary
are duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights.  All shares or
ownership interests of each Subsidiary that are held of record or owned

 

 

beneficially by either the Company or any Subsidiary are held or owned
free and clear of any restrictions on transfer (other than restrictions under
the Securities Act of 1933 and state securities laws), claims, Liens, options,
warrants, rights, contracts, calls, commitments, equities and demands.  There are no outstanding or authorized
options, warrants, rights, agreements or commitments to which the Company or
any Subsidiary is a party or which are binding on any of them providing for the
issuance, disposition or acquisition of any capital stock or ownership
interests of any Subsidiary.  There are
no outstanding stock appreciation, phantom stock or similar rights with respect
to any Subsidiary.  There are no voting
trusts, proxies or other agreements or understandings with respect to the
voting of any capital stock or ownership interests of any Subsidiary.

 

4.2          Due Authorization; Binding Obligation;
No Conflicts. 
The execution, delivery and performance of this Agreement and all other
agreements contemplated hereby and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
of the Company.  This Agreement has been
duly executed and delivered by the Company and is a valid and binding
obligation of the Company enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency and other similar laws affecting the
enforceability of creditor’s rights generally, general equitable principles and
the discretion of courts in granting equitable remedies.  Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will:
(a) contravene any provision of the Articles of Incorporation or by-laws of the
Company; (b) violate or conflict with any federal, state or local law, statute,
ordinance, rule, regulation or any decree, writ, injunction, judgment or order of
any court or administrative or other governmental body or of any arbitration
award which is either applicable to, binding upon or enforceable against the
Company, except for such violations or conflicts that, taken in the aggregate,
could not reasonably be expected to have a material adverse effect upon the
Company; or (c) conflict with, result in any breach of or default (or an event
which would, with the passage of time or the giving of notice or both,
constitute a default) under any material mortgage, contract (except for the
Loan Agreement and related security agreements, collateral assignments, which
shall be repaid or terminated at the Closing, as appropriate), agreement,
lease, license, indenture, will, trust or other instrument which is either binding
upon or enforceable against the Company.

 

4.3          Records of the Company.  Copies of the articles of incorporation and
by-laws of the Company have been provided to the Purchaser and such copies are
true, accurate and substantially complete and reflect all amendments made
through the Closing Date.  Copies of the
minute books for the Company have been provided or made available to the
Purchaser and such copies are true, accurate and substantially complete, no
further entries have been made through the Closing Date, such minute books
contain the true signatures of the persons purporting to have signed them, and
such minute books contain an accurate record of all material corporate actions
of the shareholders and directors (and any committees thereof) of the Company
taken by written consent or at a meeting since the inception of the
Company.  All corporate actions taken by
the Company have been duly authorized or ratified.  All accounts, books, ledgers and official and other records of
the Company have been fully, properly and accurately kept and substantially
completed, and there are no material inaccuracies or discrepancies of any kind
contained therein.  The stock ledgers of
the Company, as previously made available to the Purchaser, contain accurate
and complete records of all issuances, transfers and cancellations of shares of
the capital stock of the Company.

 

4.4          Financial Statements.  The Company previously has furnished to the
Purchaser the following financial statements (the “Financial  Statements”)
of the Company:

 

(a)           balance sheets as of
December 31, 2001, December 31, 2002 and December 31, 2003, including the notes
pertaining thereto, prepared and certified by the Company’s outside
accountants;

 

 

(b)           balance sheet as of
May 29, 2004 (the “Last Balance Sheet”);

 

(c)           statements of income
for the years ended December 31, 2001, December 31, 2002 and December 31,
2003, including the notes pertaining thereto, prepared and certified by the
Company’s outside accountants; and

 

(d)           statement of income
for the five (5) months ended May 29, 2004.

 

The Financial Statements
(including in all cases any notes thereto) are accurate and complete in all
material respects, are consistent with the information contained in the books
and records (which, in turn, are accurate and complete in all material
respects), fairly present the financial condition and results of operations of
the Company as of the times and for the periods referred to therein and have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods indicated, subject in the case of
interim financial statements, to the absence of footnote disclosure and normal
year-end adjustments.

 

4.5          Liabilities.  Except as set forth on Schedule 4.5,
the Company has no liabilities or obligations, either accrued, absolute,
contingent or otherwise, except:  (a)
liabilities set forth on the Last Balance Sheet and not heretofore paid or
discharged; (b) obligations to the extent specifically set forth in or
incorporated by express reference on Schedules 4.13 and 4.28
hereto; and (c) normal liabilities incurred in the ordinary course of business
since the date of the Last Balance Sheet.

 

4.6          Tax Matters.  Except as set forth on Schedule 4.6:

 

4.6.1       All taxes, assessments, charges, duties,
fees, levies or other governmental charges, including all U.S. and non-U.S.
federal, state, local and other income, franchise, profits, capital gains,
capital stock, transfer, sales, use, value added, occupation, property, excise,
severance, windfall profits, stamp, license, payroll, withholding and other
taxes, assessments, charges, duties, fees, levies or other governmental charges
of any kind whatsoever, all estimated taxes, deficiency assessments, additions
to tax, penalties and interest (collectively “Taxes”) required to be
paid by  the Company on or before the
date hereof have been timely paid, and any Taxes required to be paid by the
Company after the date hereof and on or before the Closing Date shall be timely
paid.

 

4.6.2       All returns and other reports required to
be filed by the Company with respect to Taxes (all such returns and other
reports, “Tax Returns”) on or before the Closing Date have been timely
filed and were true, correct and complete in all material respects.  All Tax Returns required to be filed by or
with respect to the Company after the date hereof and on or before the Closing
Date shall be prepared and timely filed, in a manner consistent with prior
years and applicable laws, rules and regulations and shall be true, correct and
complete in all material respects.  Schedule
4.6 contains a complete list of all Tax Returns of the Company that have
been filed or that the Company has been required to file for all taxable
periods subsequent to December 31, 2000.

 

4.6.3       Schedule 4.6 sets forth the status
of federal, state, county, local and foreign Tax audits of the Tax Returns of
the Company for each fiscal year for which the statute of limitations has not
expired, including amounts of any deficiencies and additions to Tax, interest
and penalties indicated on any notices of proposed deficiency or statutory
notices of deficiency, and other amounts of any payments made by the
Company.  Any adjustments made on any
Tax Return of the Company as a result of any Tax audit, amended Tax Return or
otherwise have been timely and duly reported to each applicable state, county,
local, United States federal and foreign taxing authority to the extent
required by Law.

 

 

4.7          Real Estate.

 

4.7.1       Schedule 4.7 contains a
description of (i) each parcel of real property owned by the Company (the “Owned
Real Property”) (showing the record title holder, legal description,
permanent index number, location, improvements, the uses being made thereof and
any indebtedness secured by a mortgage or other Lien thereon) and (ii) each
option held by the Company to acquire any real property.  To the best of the Company’s knowledge, all
public utilities, including water, sewer, gas, electric, telephone and drainage
facilities, give adequate service to the Owned Real Property for its current
uses and uses currently intended by the Company, and the Owned Real Property
has unlimited access to and from publicly dedicated streets, the responsibility
for maintenance of which has been accepted by the appropriate governmental
body.  Except for Permitted Exceptions
(as defined below) and except as disclosed in Schedule 4.7, the
Company has good, marketable and insurable fee title to all of the Owned Real
Property, free and clear of all leases, covenants, conditions, restrictions,
reservations, reversions, licenses, easements, mortgages and other Liens,
claims, charges, options, rights of purchase and other encumbrances, which do
not impair the current use, occupancy, value, or marketability of title with
respect to the Owned Real Property. 
Except as disclosed in Schedule 4.7, the Company is not a
party to any contract or option to purchase, sell, assign or otherwise acquire
or dispose of, or to grant or create any Lien on or affecting any real
property, including the Owned Real Property and Leased Property, and since the
date of the Last Balance Sheet, the Company has not purchased, sold, assigned
or otherwise acquired or disposed of any real property.  All parcels of land described in Schedule 4.7
which purport to be contiguous to other parcels described therein are
contiguous and not separated by strips or gores. Complete and correct copies of
any surveys and appraisals in the Company’s possession or under its control or
any policies of title insurance currently in force and in the possession or
under the control of the Company with respect to each parcel of Owned Real
Property have heretofore been delivered by the Company to the Purchaser.  As used herein, “Permitted Exceptions” means
the: (i) general real estate taxes and Special Assessments which are not yet
due or payable; (ii) exception numbers 1, 3, 5 as disclosed in First American
Title Policy Number NCS-607043-MAD (Elkhorn Property); (iii) exception numbers
1, 3, 4, 5, 6, 7, 8, 9, 10,  as
disclosed in First American Title Policy Number NCS-607043-MAD (Kenosha
Property); and (iv) covenants, conditions, easements and restrictions of
record.

 

4.7.2        Schedule 4.7 sets forth a list and brief description
of each lease or similar agreement (showing the parties thereto, annual rental,
expiration date, renewal and purchase options, if any, the improvements
thereon, the uses being made thereof, and the location of the real property
covered by such lease or other agreement) under which:  (a) the Company is lessee of, or holds or
operates, any real property owned by any third Person (the “Leased Real
Property,” the Owned Real Property and the Leased Real Property,
collectively, the “Premises”) or (b) the Company is lessor of any of the
Owned Real Property (the “Leblanc Leased Property”, and together with
the Leased Real Property, the “Leased Property”).  Except as set forth in Schedule 4.7,
the Company has the right to quiet enjoyment of all the Leased Real Property
for the full term of the lease or similar agreement (and any renewal option
related thereto) relating thereto and the leasehold or other interest of the
Company in the Leased Real Property is not subject or subordinate to any
Lien.  Each of the leases with respect
to Leased Property is in full force and effect, and has not, except as
specifically stated in Schedule 4.7, been modified, amended or changed
in any manner whatsoever and each such lease constitutes the entire agreement
between the parties.  The current
monthly rent under each lease of Leased Property has been provided to the
Purchaser.  The Company is not in
default under any of the terms, covenants or conditions of any of the leases of
Leased Property, and no event has occurred which with the passage of time or
the giving of

 

 

notice, or both,
would constitute a default by the Company under any of such leases.  To the Company’s knowledge, no landlord
under any of the leases of Leased Real Property is in default under its
respective lease, and no event has occurred which with the passage of time or
the giving of notice, or both, would constitute a default by any such landlord
under any of such leases.  All the
material covenants to be performed by the Company and the landlord under each
such lease have been performed in all material respects.  Neither the Company nor, to the Company’s
knowledge, any landlord under any of the leases of Leased Property, has
commenced any action or has given or received any notice for the purpose of
terminating any such lease.  Complete
and correct copies of any title opinions, surveys and appraisals in the
Company’s possession or any policies of title insurance currently in force and
in the possession of the Company with respect to each parcel of Leased Property
have heretofore been delivered by the Company to the Purchaser and are set forth
on Schedule 4.7.

 

4.7.3        The improvements
owned by the Company or as to which it has a leasehold interest and the
operations of the Company do not encroach on the property of others, and all
such improvements are structurally sound, are in good working order and repair
and are free from material defects, and such improvements are sufficient for
the continued operation of the Business in substantially the same manner as
currently conducted after the consummation of the transactions contemplated
herein.  All such improvements,
occupancy and use of such improvements, occupancy and use of the real property
listed in Schedule 4.7, and all such operations conform in all material
respects with all applicable zoning, building, fire and safety Laws, and the
Company has not received notice of noncompliance with any such Laws.  To the best of the Company’s knowledge, all
permits, licenses and other governmental approvals, including but not limited
to certificates of occupancy, required for the current use and occupancy of
such improvements and the Owned Real Property have been obtained and are valid
and in effect.  There are no
encroachments onto the Owned Real Property of any improvements on any adjoining
property and the improvements on the Owned Real Property are not in violation
of applicable setback requirements, zoning laws, and ordinances (including
being classified as a “permitted non-conforming use” or “permitted
non-conforming structure”), and the Owned Real Property is not located within
any flood plain or subject to any similar type of restrictions for which any
permit, license or additional insurance may be necessary for the use and
operation thereof.

 

4.7.4        Each parcel of the
Owned Real Property is assessed separately from all other adjacent property for
purposes of real estate taxes.  There
are no parties (other than the Company) in possession of any parcel of Owned
Real Property, other than the tenants under any leases or subleases as listed
on Schedule 4.7, who are in possession of space to which they are
entitled.

 

4.7.5        To the Company’s knowledge:

 

(a)           there are no pending special assessments, condemnation
proceedings, lawsuits, or administrative actions relating to the Owned Real
Property or Leased Property, or any proposed federal, state or local statute,
ordinance, order, requirement, law or regulation (including, but not limited
to, zoning changes) or other matters which may adversely affect the current or
planned use of such real property.

 

(b)           there is no existing or proposed plan to modify or realign
any street or highway or any existing or proposed eminent domain proceeding
that would result in the taking of all or any part of the Owned Real Property
or Leased Property or that would adversely affect the current or planned use of
such real property.

 

 

(c)           there is no plan, study or report by any governmental
authority or any non-governmental person or agency which if implemented may
adversely affect the current or planned use of the Owned Real Property or
Leased Property.

 

4.7.6        No real property owned or controlled directly or indirectly
by the Company or any of the directors or officers of the Company adjoins,
abuts or is adjacent to any of the Owned Real Property or Leased Property.

 

4.7.7        Except as set forth in Schedule 4.7, the Company does
not have any oral or written agreement with any real estate broker, agent or
finder with respect to the Owned Real Property or Leased Property.

 

4.7.8       Neither the whole nor any part of the
Owned Real Property or the Leased Property is subject to any pending suit for
condemnation or other taking by any governmental body, and, to the Company’s
knowledge, no such condemnation or other taking is threatened or contemplated.

 

4.7.9       Except as set forth in Schedule 4.7,
there are no claims, causes of action or other litigation or proceedings
pending or, to the Company’s knowledge, threatened in respect to the ownership
or operation of the Owned Real Property or the Leased Property or any part
thereof (including disputes with tenants, mortgagees, governmental authorities,
utilities, contractors, adjoining land owners and suppliers of goods or
services).

 

4.7.10     The leases relating to the Leased Property
delivered to the Purchaser by Company are true, correct and complete copies
thereof.  To the Company’s knowledge,
neither the landlord nor the tenant is in default under any such lease.

 

4.8          Good Title to Assets. Except
as set forth in Schedule 4.8, as of the Closing, the Company will have
good and marketable title to all of its assets, free and clear of any Liens,
including all of the Purchased Assets. 
The Company’s fixed assets currently in use or necessary for normal
sales levels, are in good operating condition, normal wear and tear excepted.

 

4.9          Accounts Receivables.  Except as set forth in Schedule 4.9,
all of the Company’s accounts receivable (i) arose from bona  fide
sales transactions in the ordinary course of business and are payable on
ordinary trade terms, (ii) are valid and legally binding obligations of the
respective debtors, enforceable in accordance with their terms, (iii) are not
subject to any valid set-off or counterclaim, (iv) do not represent obligations
for goods sold on consignment, on approval or on a sale-or-return basis or
subject to any other repurchase or return arrangement, (v)

 

are, to the knowledge of the
Company, collectible in the ordinary course of business consistent with past
practice in the aggregate recorded amounts thereof, net of any applicable
reserve reflected in the Last Balance Sheet; provided, however, that the
Company does not warrant that the accounts receivables shall be collected; and
(vi) are not the subject of any actions or proceedings brought by or on behalf
of the Company.  The Company has
delivered to the Purchaser a  complete
and accurate list of all accounts receivable of the Company as of July 8, 2004.

 

4.10        Licenses and Permits.  The
Company possesses all licenses and required governmental or official approvals,
permits or authorizations (collectively, the “Permits”) necessary for
the business and operations of the Company. 
Until immediately prior to the Closing, all such Permits are valid and
in full force and effect, the Company is in compliance with their requirements,
and no proceeding is pending or threatened to revoke or amend any of them.  Schedule 4.10 contains a complete
list of all such Permits.

 

 

4.11        Intellectual Property Rights.

 

4.11.1     Schedule 4.11 contains a complete
and accurate list of all of the intellectual property rights owned or used by
the Company that are either material to the Business or are registered,
including all trademarks, service marks, trade names, patents, patent
applications, licenses thereof, trade secrets, technology, know-how, formulae,
computer software, trade dress, copyrights, other licenses, agreements and
permits, and other similar intangible property and rights relating to the
Business, except for off-the-shelf software and licenses implied in the sale of
such software (the “Company Intellectual Property”).

 

4.11.2     All licenses and agreements listed on Schedule
4.11 are, except as set forth thereon, evidenced by written agreements that have not
been materially breached, terminated or canceled by the Company or the other
party to such licenses and agreements and (a) the Company does not have
any knowledge of any anticipated breach, termination or cancellation by any
other party to such licenses and agreements, (b) the Company has performed
all the material obligations required to be performed by it as of the date
hereof in connection with such licenses and agreements and is not in material
default under or in material breach of any such licenses and agreements, and no
event has occurred which with the passage of time or the giving of notice or
both would result in a material default or material breach thereunder, and (c)
each such license and agreement is legal, valid, binding, enforceable and in
full force and effect.

 

4.11.3     Except as set forth on Schedule 4.11,
(a) the Company owns all right, title and interest in and to all of the Company
Intellectual Property; (b) the Company has not received a notice of any claim
by any third party asserting the invalidity, misuse, or enforceability of the
Company Intellectual Property, and, to the Company’s knowledge, there are no
grounds for the same; (c) the Company has not received a notice of conflict
with the asserted rights of others since the inception of the Company; and (d)
the conduct of the Business has not infringed any intellectual property rights
of others.

 

4.12        Relationships with Customers and
Suppliers.  Schedule
4.12 lists the ten (10) largest customers of the Business, on the basis of
revenues for goods sold or services provided for the most recently-completed
fiscal year.  Schedule 4.12 lists
the ten (10) largest suppliers of the Business, on the basis of cost of goods or
services purchased for the most recently-completed fiscal year.  Except as disclosed in Schedule 4.12,
to the knowledge of the Company, no such customer or supplier is threatened
with bankruptcy or insolvency.  The
Company has not received any written or oral communication prior to the date of
this Agreement that:

 

(a)           any current customer
of the Company which accounted for over one percent (1%) of the total
consolidated revenue of the Company for the twelve (12) months ended
December 31, 2003 will terminate its business relationship with the
Company; or

 

(b)           any current supplier
to the Company of items important to the conduct of the Business, which items
cannot be replaced by the Company at comparable cost to the Company and the
loss of which would have a material adverse effect on the business or
operations of the Company, will terminate its business relationship with the
Company.

 

4.13        Contracts and Agreements with Respect to
the Company.  Schedule
4.13 sets forth a complete and accurate list of the following contracts and
agreements to which the Company is a party:

 

(a)           any collective bargaining agreement
or other contract with any labor union or any bonus, pension, profit sharing,
retirement or any other form of deferred compensation plan or any

 

 

stock purchase, stock option,
hospitalization insurance or similar plan or practice, whether formal or
informal;

 

(b)           any express contract for the
employment of any officer, individual employee or other Person (as defined in Section
4.21) on a full-time or consulting or independent sales representative
basis and any severance agreements, plans or programs, or any other agreements,
written or oral, providing for payments or benefits upon termination of
employment or any consulting or independent sale representative arrangement;

 

(c)           any agreement or indenture relating
to the borrowing of money or to mortgaging, pledging or otherwise placing a
Lien on any of its assets, including the Purchased Assets, including, without
limitation, the documents related to any equipment financing;

 

(d)           any contract (excluding accounts
receivable from customers in the ordinary course of business) under which the
Company has advanced or loaned any other Person amounts in the aggregate
exceeding $25,000; and which are not reflected on the Last Balance Sheet;

 

(e)           any agreement
with respect to the lending or investing of funds;

 

(f)            any license
or royalty agreement (excluding licenses or agreements pertaining to
“off-the-shelf” software);

 

(g)           any guaranty
of any obligation, other than endorsements made for collection;

 

(h)           any outstanding
powers of attorney executed on behalf of the Company;

 

(i)            any lease
or agreement under which it is lessee or permitted to hold or operate any
property, real or personal, or is lessor of or permits any third party to hold
or operate any property, real or personal, owned or controlled by it;

 

(j)            any contract
or group of related contracts with the same party or related party continuing
over a period of more than six (6) months from the date or dates thereof, not
terminable by it on thirty (30) days or less notice without penalties and which
involve more than $25,000;

 

(k)           any confidentiality
agreement or similar arrangement, other than those which were entered into with
potential third party purchaser of the Company or the Company’s assets,
including the Purchased Assets;

 

(l)            any non-compete
or similar contract which prohibits it from freely engaging in business
anywhere in the world; or

 

(m)          any other
agreement material to it whether or not entered into in the ordinary course of
business, except for this Agreement or the agreements contemplated hereby.

 

Except as disclosed on Schedule 4.13, (i) no contract or
commitment required to be disclosed on Schedule 4.13 has been
terminated, canceled or materially breached by the other party and the Company
does not have any knowledge of any anticipated termination, cancellation or
breach by any other party to any contract set forth on Schedule 4.13,
and (ii) the Company has performed all the obligations required to be
performed by it as of the date hereof in connection with the contracts or
commitments required to be disclosed on Schedule 4.13 and is not in
default under or in material breach of any contract or

 

 

commitment required to be disclosed on Schedule 4.13, and no
event has occurred which with the passage of time or the giving of notice or
both would result in a material default or breach thereunder, and (iii) each
agreement is legal, valid, binding, enforceable and in full force and effect.

 

4.13.1     The Company has no
agreements, contracts or commitments with any independent sales representatives
pertaining to the Business of the Company.

 

4.14        Litigation.  Except as set forth on Schedule 4.14,
there are no actions, suits, claims, governmental investigations or arbitration
proceedings pending or, to the knowledge of the Company threatened against the
Company, or any of its assets, including the Purchased Assets, or which
question the validity or enforceability of this Agreement or any action
contemplated herein.  There are no
outstanding unsatisfied orders, decrees or stipulations issued by any federal,
state, local or foreign judicial or administrative authority in any proceeding
to which the Company is or was a party or which apply to any of the Company’s
assets, including the Purchased Assets. Schedule 4.14 sets forth a
complete list of all actions, suits, claims, governmental investigations and
arbitration proceedings involving the Company or any of its assets occurring in
the five (5) years prior to the Closing.

 

4.15        Insurance. Schedule
4.15 lists and briefly describes each insurance policy maintained by the
Company which is included in the Purchased Assets with respect to its
properties, assets, including Purchased Assets, and business.  The Company has delivered a claims history
for the five (5) years prior to the Closing. 
All premiums and other payments which have become due under the policies
of insurance listed on Schedule 4.15 have been paid in full, all of such
policies are now in full force and effect and the Company has not received
notice from any insurer, agent or broker of the cancellation of, or any
increase in premium with respect to, any of such policies or bonds.  Except as set forth on Schedule 4.15,
the Company has no self-insurance or co-insurance programs, and the reserves
set forth on the Last Balance Sheet are adequate to cover all anticipated
liabilities with respect to any such self-insurance or coinsurance
programs.  Except as set forth on Schedule
4.15, the Company has not received any notification from any insurer, agent
or broker denying or disputing any claim made by the Company or denying or
disputing any coverage for any such claim or the amount of any claim.  Except as set forth on Schedule 4.15,
the Company has no claim against any of its insurers under any of such policies
pending or anticipated and there has been no occurrence of any kind which would
give rise to any such claim.

 

4.16        Absence of Certain Developments.  Except as set forth on Schedule 4.16
and except as expressly contemplated by this Agreement, since the date of the
Last Balance Sheet, the Company has not:

 

(a)           suffered any
material adverse change in the Business, assets, including the Purchased
Assets, liabilities, properties or prospects of Company or in the financial
condition or results of operations of the Company, other than changes occurring
in the ordinary course of business consistent with past practice, or suffered
any theft, damage, destruction or casualty to any assets, including the
Purchased Assets, whether or not covered by insurance or suffered any
substantial destruction of its books and records;

 

(b)           redeemed or
repurchased, directly or indirectly, any shares of capital stock or other
equity security or declared, set aside or paid any dividends (except to the
extent that distributions from S Corporations are considered as “dividends”) or
made any other distributions (whether in cash or in kind) with respect to any
shares of its capital stock or other equity security;

 

(c)           authorized, issued, sold
or transferred any equity securities, any securities convertible, exchangeable
or exercisable into shares of its capital stock or other equity securities, or
warrants, options or other rights to acquire shares of its capital stock or
other of its equity

 

 

securities;

 

(d)           incurred or become
subject to any liabilities, except liabilities incurred in the ordinary course
of business consistent with past practice;

 

(e)           subjected any
portion of its properties or assets, including the Purchased Assets, to any
Lien which will not be discharged as of the Closing;

 

(f)            sold, leased,
assigned or transferred (including, without limitation, transfers to the
Shareholders, officers and directors of the Company) any of its tangible
assets, including the Purchased Assets, except for sales of inventory in the
ordinary course of business consistent with past practice or in connection with
replacement of equipment or as otherwise contemplated by this Agreement, or
canceled without fair consideration any debts or claims owing to or held by it;

 

(g)           sold, assigned,
licensed or transferred (including, without limitation, transfers to the
Shareholders, officers and directors of the Company) any proprietary rights
owned by, issued to or licensed to it or disclosed any confidential information
(other than pursuant to agreements requiring the recipient of such confidential
information to maintain the confidentiality of and preserving all its rights in
such confidential information);

 

(h)           suffered any
extraordinary losses or waived any rights of material value;

 

(i)            entered into,
amended or terminated any lease, contract, agreement or commitment, or taken
any other action or entered into any other transaction other than in the
ordinary course of business consistent with past practice;

 

(j)            entered into any
other material transaction, or materially changed any business practice;

 

(k)           made or granted any
bonus or any increase in any wage, salary, fee, commission or other
compensation or remuneration arrangement to any director, officer, employee or
sales representative, group of employees or consultant or made or granted any
increase in any employee benefit plan or arrangement, or amended or terminated
any existing employee benefit plan or arrangement or adopted any new employee
benefit plan or arrangement, except as contemplated by this Agreement or
required pursuant to the terms of any existing Contract;

 

(l)            made any other
change in employment terms for any of its directors, officers, and employees;

 

(m)          conducted its cash
management customs and practices other than in the ordinary course of business
consistent with past practice (including, without limitation, with respect to
collection of accounts receivable, purchases of inventory and supplies, repairs
and maintenance, payment of accounts payable and accrued expenses, levels of
capital expenditures and operation of cash management practices generally);

 

(n)           made, paid or
incurred any capital expenditures or commitments for capital expenditures that
aggregate in excess of $25,000;

 

(o)           made, paid or
incurred any loans or advances to, or guarantees for the benefit of, any
Person;

 

 

(p)           made, paid or
incurred charitable contributions, pledges, association fees or dues in excess
of $25,000 in the aggregate;

 

(q)           entered into,
terminated, or received notice of termination of (i) any license,
distributorship, dealer, sales representative, joint venture, credit, or
similar agreement, or (ii) any contract, agreement or transaction involving a
total remaining commitment by or to the Company of at least $25,000, other than
those transactions in the ordinary course of business consistent with past
practice;

 

(r)            amended its
articles of incorporation or by-laws (or comparable governing instrument(s));
or

 

(s)           committed, either
orally or in writing, to do any of the foregoing.

 

4.17        Compliance with Laws.

 

4.17.1     The Company is in compliance with all laws,
rules, regulations and orders applicable to it the failure with which to comply
could reasonably be expected individually or in the aggregate to have a
material adverse effect on the Company or the Business.  Except as set forth in Schedule 4.17,
since January 1, 1999, the Company has not been cited, fined or otherwise
notified of any asserted past or present failure to comply with any laws and no
proceeding with respect to any such violation is pending.

 

4.17.2     The Company has not made or incurred any
payment of funds in connection with the Business of the Company prohibited by
law, and no funds have been set aside to be used in connection with the
Business of the Company for any payment prohibited by law.

 

4.17.3     The Company is and at all times has been in
full compliance with the terms and provisions of the Immigration Reform and
Control Act of 1986 (the “Immigration Act”).  With respect to each Employee (as defined in 8 C.F.R. 274a.1(f))
of the Company for whom compliance with the Immigration Act by the Company as
Employer is required, the Company will deliver prior to the Closing to the
Purchaser a complete and accurate copy of (a) each Employee’s Form I-9
(Employment Eligibility Verification Form) and (b) all other records, documents
or other papers prepared, procured and/or retained by the Company pursuant to
the Immigration Act.  The Company has
not been cited, fined, served with a Notice of Intent to Fine or with a Cease
and Desist Order, or any other notice of finding of a violation of the
Immigration Act, nor has any action or administrative proceeding been initiated
or threatened against the Company by reason of any actual or alleged failure to
comply with the Immigration Act.

 

4.18        Environmental Matters.  Except as set forth in Schedule 4.18:  (a) 
the operations, processes, practices, equipment and activities of the
Company comply and have complied in all material respects with applicable
Environmental Laws; (b) the Company has timely obtained and is in material
compliance with all permits, licenses, registrations and other governmental
approvals and authorizations required for its operations and the occupation of
the Premises under Environmental Laws (a list of all such permits, licenses,
registrations and other governmental approvals and authorizations is disclosed
on Schedule 4.18) and has timely filed all reports and other documents
required by applicable Environmental Laws; (c) the Company has not received any
written or oral notice, report or other information regarding any actual or
alleged violation of Environmental Laws, or any liabilities or potential
liabilities, including any investigatory, remedial or corrective obligations, relating
to the Business or the Purchased Assets and arising under Environmental Laws;
(d) the Company has not caused any Release, threatened Release or disposal of
any Hazardous Material at the Premises or at any other location; (e) the
Company has not

 

 

expressly or by operation of law assumed or undertaken any liability,
including, without limitation, any obligation for corrective or response
action, of any person relating to Environmental Laws; (f) the Company has not
treated, stored, disposed of, arranged for or permitted the disposal of,
transported, handled, or Released any Hazardous Material, or owned or operated
any property or facility (and no such property or facility is contaminated by
any Hazardous Material) so as to give rise to any liabilities, including any
liability for response costs, corrective action costs, personal injury,
property damage, natural resources damages or attorney fees, or any
investigative, corrective or remedial obligations, pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended (“CERCLA”) or any other Environmental Laws; (g) no Lien relating to
any Environmental Law or Hazardous Materials has attached to the Premises or
any asset of the Company, including the Purchased Assets; and (h) none of the
following exists at the Premises: (1) underground storage tanks; (2)
asbestos-containing material in any form or condition; (3) materials or
equipment containing polychlorinated biphenyls; or (4) landfills, surface
impoundments, or disposal areas.

 

4.18.1     For purposes of this Agreement, the
following terms shall have the following meanings:

 

(a)           “Environmental
Law(s)” shall mean all applicable foreign, federal, state, regional, county
or local, statutes, laws, regulations, ordinances, codes, rules, judgments,
orders, decrees, permits, concessions, grants, agreements, licenses or other
requirements or restrictions of law, including all common law, pertaining to
protection of the indoor or outdoor environment, health, safety of persons,
management or use of natural resources, protection or use of surface water and
groundwater, conservation, wildlife, waste management, hazardous substances,
materials or wastes or pollution (including, without limitation, regulation of
releases and disposal to air, land, water and groundwater), each as amended and
in effect on or prior to the Closing, and includes, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C. §§ 9601 et seq., Solid Waste Disposal Act, as amended by the
Resource Conversation and Recovery Act of 1986 and Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C. §§ 6901 et seq., Federal Water Pollution Control
Act, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.,
Clean Air Act of 1966, as amended, 42 U.S.C. §§ 7401 et seq., Toxic Substances
Control Act of 1976, 15 U.S.C. §§ 2601 et seq., Hazardous Materials
Transportation Act 49 U.S.C. App. §§ 1801 et seq., Occupational Safety and Health
Act of 1970, as amended 29 U.S.C. §§ 651 et seq., Oil Pollution Act of 1990, 33
U.S.C. §§ 2701 et seq., Emergency Planning and Community Right-to-Know Act
of 1986, 42 U.S.C. §§ 11001 et seq., National Environmental Policy Act
of 1969, 42 U.S.C. §§ 4321 et seq., Safe Drinking Water Act of 1974,
as amended, 42 U.S.C. §§ 300(f) et seq., any similar or implementing state
law, and all successor statutes, amendments, rules, orders, directives and
regulations promulgated thereunder.

 

(b)           “Hazardous
Material” shall mean any substance, chemical, compound, product, solid,
gas, liquid, waste, byproduct, pollutant, contaminant, condition, object or
material which is or may be hazardous to human health or safety or the environmental
due to its ignitability, corrosivity, reactivity, explosiveness, toxicity,
carcinogenicity, infectiousness, radioactivity or other harmful or potentially
harmful properties or effects, including, without limitation, all of those
substances, chemicals, compounds, products, solids, gases, liquids, wastes,
byproducts, pollutants, contaminants, conditions, objects and materials and
combination thereof which are now or hereafter listed or defined as hazardous
or toxic, or are regulated or with respect to which liability of standards of
conduct are imposed under any Environmental Laws and includes, without
limitation, asbestos, polychlorinated biphenyls and petroleum (including crude
oil or any fraction thereof).

 

 

(c)           “Release” shall mean any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping, or disposing of Hazardous Material into the indoor
or outdoor environment, including, without limitation, the abandonment or
discarding of barrels, drums, containers, tanks, and other receptacles
containing or previously containing any Hazardous Material.

 

4.18.2   The Company
has made available to Purchaser all environmental audits, reports and other
material environmental documents relating to its or its affiliates or
predecessors past or current properties, facilities or operations which are in
its possession or under its reasonable control.

 

4.18.3  This Section
4.18 contains the sole representations and warranties of the Company with
respect to environmental, health and safety matters, including, without
limitation, all matters arising under Environmental Laws or in any way related
to Hazardous Materials, other than those representations and warranties of the
Company which are set forth in Section 4.4.

 

4.19        Labor Relations.  Except as set forth on Schedule 4.19,
the Company is not a party to or bound by any collective bargaining agreement
or any other agreement with a labor union, and there has been no effort by any
labor union during the twenty-four (24) months prior to the date hereof to
organize any employees of the Company into one or more collective bargaining
units.  There is not pending or, to the
knowledge of the Company, threatened any labor dispute, strike or work stoppage
which affects or which may affect the Business of the Company or which may
interfere with its continued operation. 
Neither the Company nor any agent, representative or employee of the
Company has within the last twenty-four (24) months been charged with any
unfair labor practice as defined in the National Labor Relations Act, as
amended, and there is not now pending or, to the knowledge of the Company,
threatened any charge or complaint against the Company by or with the National
Labor Relations Board or any representative thereof.  There has been no strike, walkout or work stoppage involving any
of the employees of the Company during the twenty-four (24) months prior to the
date hereof.  The Company is not aware
that any executive or key employee or group of employees has any plans to
terminate his, her or their employment with the Company.

 

4.20        Employee Benefits.

 

4.20.1     Except as set
forth on Schedule 4.20, with respect to current or former employees of
the Company, the Company does not maintain or contribute to or have any actual
or potential liability with respect to any (a) deferred compensation or
bonus or retirement plans or arrangements, (b) qualified or nonqualified
defined contribution or defined benefit plans or arrangements which are
employee pension benefit plans (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended  (“ERISA”)), or (c) employee welfare benefit plans,
(as defined in Section 3(1) of ERISA), stock option or stock purchase plans, or
material fringe benefit plans or programs whether in writing or oral.  The Company has never contributed to any
multiemployer pension plan (as defined in Section 3(37) of ERISA), and the
Company never maintained or contributed to any defined benefit plan (as defined
in Section 3(35) of ERISA).  The plans,
arrangements, programs and agreements referred to the preceding two sentences
are referred to collectively as the “Plans,” each of which is listed on Schedule
4.20.  Except as set forth on Schedule
4.20, the Company does not maintain or contribute to any Plan which
provides health, accident or life insurance benefits to former employees, their
spouses or dependents, other than in accordance with Section 4980B of the Code
(as defined in Section 4.20(b)) (“COBRA”).

 

4.20.2     The Plans (and related trusts and insurance
contracts) set forth on Schedule 4.20 comply in all material respects in
form and in operation with the requirements of applicable laws and regulations,
including ERISA and the Internal Revenue Code (the “Code”) and the nondiscrimination

 

 

rules thereof.  All
contributions, premiums or payments which are due on or before the Closing Date
under each Plan have been paid.  Each
Plan which is intended to be qualified under section 401(a) of the Code (a) has
been amended on a timely basis in compliance with the Code and (b) has received
from the Internal Revenue Service a favorable determination letter which
considers the terms of such Plan as amended.

 

4.20.3     All required reports and descriptions
(including Form 5500 Annual Reports, Summary Annual Reports and Summary Plan
Descriptions) with respect to the Plans set forth on Schedule 4.20 have
been properly and timely filed with the appropriate government agency and
distributed to participants as required. 
The Company has complied in all material respects with the requirements
of COBRA.

 

4.20.4     With respect to each Plan set forth on Schedule
4.20, (a) there have been no prohibited transactions as defined in
Section 406 of ERISA or Section 4975 of the Code that are not exempt under a
statutory or regulatory exemption, (b) no fiduciary (as defined in Section
3(21) of ERISA) has any liability for breach of fiduciary duty or any other
failure to act or comply in connection with the administration or investment of
the assets of such Plans, and (c) no actions, investigations, suits or
claims with respect to the assets thereof (other than routine claims for
benefits) are pending or threatened, and the Company does not have any
knowledge of any facts which would give rise to or could reasonably be expected
to give rise to any such actions, suits or claims.

 

4.20.5     With respect to each of the Plans listed on
Schedule 4.20, the Company has furnished to the Purchaser true and
complete copies of (a) the plan documents, summary plan descriptions and
summaries of material modifications, (b) the Form 5500 Annual Report (including
all schedules and other attachments for the most recent three years),
(c) all related trust agreements, insurance contracts or other funding
agreements which implement such plans and (d) all contracts relating to each
such plan, including, without limitation, service provider agreements,
insurance contracts, investment management agreements and record keeping
agreements.

 

4.20.6     The Company has not incurred (except as may
have been fully satisfied) and has no reason to expect that it will incur, any
liability to the Pension Benefit Guaranty Corporation (other than routine
premium payments) or otherwise under Title IV of ERISA (including any
withdrawal liability) or under the Code with respect to any employee pension
benefit plan (as defined in Section 3(2) of ERISA) that the Company or any
member of its “controlled group” (within the meaning of Code Section 414)
maintains or ever has maintained or to which any of them contributes, ever has
contributed, or ever has been required to contribute.

 

4.21        Affiliate Transactions.  Except as set forth on Schedule 4.21,
no Subsidiary is a party to any agreement, contract or commitment with the
Company or any Affiliate of the Company (which shall, for purposes of this
sentence only, refer solely to G. Leblanc Corporation) and no officer,
director, employee or shareholder of the Company or Affiliate of any such
Person is a party to any agreement, contract, commitment or transaction with
the Company or which is pertaining to the Business of the Company or has any
interest in any property, real or personal or mixed, tangible or intangible,
used in or pertaining to the Business of the Company (excluding items of
personal property that are personal in nature).  “Affiliate” means, with respect to any particular Person,
any Person controlling, controlled by or under common control with such
Person.  “Person” means an
individual, a partnership, a corporation, an association, a limited liability
company, a joint stock company, a trust, a joint venture, an unincorporated
organization, a governmental entity or any department, agency or political
subdivision thereof or any other entity.

 

4.22        Officers and Directors; Employees; Sales
Representatives.

 

 

4.22.1     Schedule 4.22
lists all officers and directors of the Company.

 

4.22.2     The Company has delivered on or prior to
the date hereof complete and accurate lists of the following information with
respect to each employee or director of the Company, including each employee on
leave of absence or layoff status: employer; name; job title; current
compensation paid or payable and any change in compensation since December 31,
2003; status as exempt or non-exempt, vacation accrued; sick days accrued; and
service credited for purposes of vesting and eligibility to participate under
the Company’s pension, retirement, profit-sharing, thrift-savings, deferred
compensation, stock bonus, stock option, cash bonus, employee stock ownership
(including investment credit or payroll stock ownership), severance pay,
insurance, medical, welfare, or vacation plan, other Plan, or any other
employee benefit plan.  The Company has
not received any information that would lead it to believe that a material
number of employees will or may cease to be employees, or will refuse offers of
employment from Purchaser because of the consummation of the transactions
contemplated by this Agreement.

 

4.22.3     The Company has delivered on or prior to
the date hereof complete and accurate lists of the following information with
respect to each sales representative of the Company; name; sale territory;
current rate of remuneration payable and any change in remuneration since
December 31, 2003, and the length of time in which the sales representative has
been providing services to or on behalf of the Company.  The Company has not received any information
that would lead it to believe that a material number of sales representatives
will or may cease to provide sales services to or on behalf of the Company, or
will decline the opportunity to provide such services to or on behalf of the
Purchaser because of the consummation of the transactions contemplated by this
Agreement.

 

4.22.4     Except as listed on Schedule 4.22,
no employee or director of the Company is a party to, or is otherwise bound by,
any agreement or arrangement, including any confidentiality, noncompetition, or
proprietary rights agreement, between such employee or director and any other
Person (“Proprietary Rights Agreement”) that in any way adversely
affects or will affect (a) the performance of his or her duties as an employee
or director of the Company, or (b) the ability of the Company to conduct its
Business.

 

4.22.5     No retired
employee or director of the Company or any Subsidiary, or any of their
dependents, receives benefits or is scheduled to receive benefits in the
future.

 

4.23        Full Disclosure. The
Company shall not be deemed to have made to the Purchaser any representation or
warranty other than those expressly set forth in this Agreement and any
schedules attached hereto. In particular, the Company makes no representation
or warranty with respect to (a) any projections, estimates or budgets
heretofore delivered and made available to the Purchaser concerning future
revenues, expenses, expenditures or results of operations; or (b) any other
information or documents made available to the Purchaser or its representatives
with respect to the Company.

 

4.24        Closing Date.  All of the representations and warranties
contained in this Article IV and elsewhere in this Agreement and all
information delivered in any schedule, attachment or Exhibit hereto or in any
writing delivered to the Purchaser are true and correct on the date of this
Agreement and shall be true and correct on the Closing Date.

 

4.25        Governmental Authorization; Consents.  The execution, delivery and performance by
the Company of this Agreement require no action by or in respect of, or filing
with, any governmental body, agency, official or authority. 
Except as set forth on Schedule 4.25, no consent,
approval, waiver or other action by any private party under any contract,
agreement, indenture, lease, instrument or other

 

 

document to which the Company or any Shareholder is a party or by which
the Company is bound is required for the execution, delivery and performance of
this Agreement by the Company or any Shareholder or the consummation of the
transactions contemplated hereby.

 

4.26        Inventory.  All the Inventory consists of a quality
usable and salable in the ordinary course of business consistent with past
practice, subject to normal and customary allowances in the industry for
spoilage, damage and outdated items. 
All items included in the Inventory are the property of the Company, free
and clear of any Lien other than Permitted Liens and liens in favor of Bank One
NA and to US Bank National Association (the “Secured Lenders”) which shall be
terminated as of the Closing, have not been pledged as collateral, are not held
by the Company on consignment from others and conform in all material respects
to all standards applicable to such inventory or its use or sale imposed by
governmental or regulatory authorities.

 

4.27        Vehicles.  Schedule 4.27 contains a true and
complete list of all motor vehicles owned or leased by the Company and used or
held for use in the conduct of the Business. 
Except as disclosed in Schedule 4.27, the Company has good and
valid title to, or has valid leasehold interests in or valid rights under
Contract to use, each Vehicle, free and clear of all Liens other than Permitted
Liens and liens in favor of the Secured Lenders which shall be terminated as of
the Closing.

 

4.28        No Guarantees.
Except as set forth on Schedule 4.28, none of the Liabilities of the
Business or of the Company incurred in connection with the conduct of the
Business is guaranteed by or subject to a similar contingent obligation of any
other Person, nor has the Company guaranteed or become subject to a similar
contingent obligation in respect of the Liabilities of any customer, supplier or
other Person to whom the Company sells goods or provides services in the
conduct of the Business or with whom the Company otherwise has significant
business relationships in the conduct of the Business.

 

4.29        Entire Business.  The sale of the Purchased Assets by the
Company to Purchaser pursuant to this Agreement will effectively convey to
Purchaser the entire Business and all of the tangible and intangible property
used by the Company (whether owned, leased or held under license by the
Company, by any of the Company’s Affiliates or by others) in connection with
the conduct of the Business as heretofore conducted by the Company (except for
the Excluded Assets and subject to obtaining requisite consents under any
Contracts) including, without limitation, all tangible assets and properties of
the Company reflected in the balance sheet included in the Financial Statements
and assets and properties acquired since the date of the Last Balance Sheet in
the conduct of the Business, other than the Excluded Assets and assets and
properties disposed of in the ordinary course of business since such date.  Except as disclosed in Schedule 4.29,
there are no shared facilities or services which are used in connection with
the Business or other operations of the Company or any of the Company’s
Affiliates other than the Business.

 

4.30        Bank Accounts.  Schedule 4.30 identifies all of the
bank accounts, safety deposit boxes and lock boxes of the Company and each
authorized signatory with respect thereto.

 

ARTICLE V

Representations and
Warranties of Purchaser

 

To induce the
Company to enter into this Agreement and to consummate the transactions
contemplated hereunder, the Purchaser makes the following representations and
warranties.

 

5.1          Organization, Power and Authority.  The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all requisite corporate power and authority to enter into
this Agreement and all other agreements contemplated hereby

 

 

and to perform its obligations hereunder and thereunder.

 

5.2          Due Authorization; Binding Obligation;
No Conflicts. 
The execution, delivery and performance of this Agreement and all other
agreements contemplated hereby and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action of the
Purchaser.  This Agreement has been duly
executed and delivered by the Purchaser and is a valid and binding obligation
of the Purchaser enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency and other similar laws affecting the
enforceability of creditor’s rights generally, general equitable principles and
the discretion of courts in granting equitable remedies.  Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will:
(a) contravene any provision of the Articles of Organization or operating
agreement of the Purchaser; (b) violate or conflict with any federal, state or
local law, statute, ordinance, rule, regulation or any decree, writ,
injunction, judgment or order of any court or administrative or other
governmental body or of any arbitration award which is either applicable to,
binding upon or enforceable against the Purchaser; or (c) conflict with, result
in any breach of or default (or an event which would, with the passage of time
or the giving of notice or both, constitute a default) under any material
mortgage, contract, agreement, lease, license, indenture, will, trust or other
instrument which is either binding upon or enforceable against the Purchaser.

 

5.3          Litigation.  There are no actions, suits, claims,
governmental investigations or arbitration proceedings pending or, to the
Purchaser’s actual knowledge, threatened against or affecting the Purchaser
that question the validity or enforceability of this Agreement or any action
contemplated herein.

 

5.4          Closing Date.  All of the representations and warranties
contained in this Article V and made by Purchaser elsewhere in this Agreement
and all information delivered in any schedule, attachment or exhibit hereto or
in any writing delivered to the Company by Purchaser are true and correct on
the date of this Agreement and shall be true and correct on the Closing Date,
except to the extent that the Purchaser has advised the Company otherwise in
writing prior to the Closing.

 

ARTICLE VI

Certain Actions After
the Closing

 

6.1          Taxes; Tax Returns.

 

6.1.1       The Parties will
file their respective income tax returns for 2004 and make any other required
filings.  With respect to any Taxes of
the Company or its Subsidiaries that are not Assumed Liabilities pursuant to Section
1.4, the Company shall pay, and indemnify and hold harmless the Purchaser
from and against any Taxes imposed upon the Company, the Subsidiaries or the
Purchaser attributable to the Company or its Subsidiaries for all the taxable
periods ending before the Closing Date and for that portion of any taxable
period that includes the Closing Date, calculated as if the Closing Date were
the end of a taxable period, including any taxes that may arise, or be
determined to exist, after the Parties determine the Actual Net Book Value.

 

6.1.2       If any Tax for
which the Company is to indemnify the Purchaser pursuant to this Section 6.1
is payable after the Closing Date, the Company shall pay or cause to be paid to
the Purchaser the amount of such Tax no later than the later of ten (10)
business days before the date such Tax is due and payable.

 

6.1.3       The Company and
the Purchaser shall be bound by the Purchase Price allocation agreement
described in Section 1.7, for purposes of determining any Taxes and
shall prepare and shall file

 

 

Tax Returns on a basis consistent with the Purchase Price
Allocation.  Further, neither the
Company nor the Purchaser shall take a position that is inconsistent with the
treatment of the transactions contemplated hereby as an asset sale or  that is inconsistent with the agreed upon
Purchase Price allocations on any Tax Return, in any proceeding before any taxing
authority or otherwise.

 

6.2          Use of Name.  The Company agrees that after the
Closing it will not use, and it will not permit any entity in which it has an
ownership interest to use, the names “G. Leblanc Corporation,” “Leblanc Online
LLC,” “G. Leblanc S.A.” “Leblanc” or “G. Leblanc SNC” or any other trade name
or trademark listed on Schedule 4.11 (either alone or together with
other names or words) or license to, or permit, other people to use such names
in connection with any business.  The
Company will, at the request of the Purchaser, take all actions necessary so as
to permit the Purchaser to change its company name to any name including
“Leblanc” upon Closing, including executing or filing such consents or other
documents as shall be necessary to permit such name change in Wisconsin and all
other states requested by the Purchaser.

 

6.3          Remedy.  If the Company breaches the covenant set
forth in Section 6.2, in addition to all other rights and remedies it may have
pursuant to this Agreement or otherwise, the Purchaser shall be entitled to
obtain injunctive or other equitable relief to restrain such breach, or any
other breaches or threatened breaches, or otherwise to specifically enforce the
provisions of Section 6.2, each Party hereby agreeing that money damages
alone would be inadequate to compensate the Purchaser and would be an
inadequate remedy for any such breach or threatened breach.  All remedies expressly provided for herein
are cumulative of any and all other remedies now existing at law or in equity.

 

6.4          Continued
Employment of the Company’s Employees. 
Effective after the Closing, the Purchaser shall offer employment at
will to all persons actively employed by the Company immediately prior to the
Closing Date at the same base salary, with comparable incentive compensation
opportunities and benefits in the aggregate, including vacation, and in the
same position as in effect immediately prior to the Closing Date; provided,
however, that the Purchaser shall not be required to offer employment to any
employee of the Company who is on an approved absence on the Closing Date
unless such employee returns to work immediately upon the conclusion of the
period of time approved for such absence, but in no event shall the Purchaser
be required to offer employment to any employee whose absence has exceeded six
(6) months.  The collective bargaining
agreement identified in Schedule 4.19 shall be assumed by the Purchaser,
and shall govern the terms and conditions of employment of the employees in the
applicable collective bargaining unit. 
Each such employee who accepts such employment as of the Closing Date,
shall be referred to herein as a “Transferred Employee”.  Purchaser agrees to make available, at or as
soon as practicable after the Closing Date, to the Transferred Employees, a
tax-qualified section 401(k) retirement plan that provides benefits at least as
favorable to the Transferred Employees as provided by the tax-qualified section
401(k) retirement plan maintained by the Company immediately prior to the
Closing Date.  Purchaser and Purchaser’s
employee benefits plans shall treat service with the Company prior to the
Closing Date as service with Purchaser for purposes of eligibility to
participate and vesting, but not for accrual purposes, with respect to all
employee benefit plans covering Transferred Employees.  Purchaser shall assume and recognize
vacation entitlements for Transferred Employees accruing prior to the Closing
Date, provided that such accrual is included in the Draft Balance Sheet.  The Purchaser agrees that each
Participating Employee’s salary reduction election with the Company and its
Subsidiaries, as in effect immediately prior to the Closing Date, will be
treated as a salary reduction election with Purchaser through December 31, 2004
with respect to the Company’s flexible benefits plan assumed by the Purchaser.

 

6.5          COBRA.

 

6.5.1  The Purchaser agrees to offer, on and after
the Closing Date, health continuation

 

 

coverage pursuant to part 6 of Subtitle B of Title I of ERISA, section
4980B of the Code, or similar state law (“COBRA”) to each former
employee of the Company and their “qualified beneficiaries” who, as of the
Closing Date, has or is entitled to elect health continuation coverage pursuant
to COBRA in connection with a group health plan of the Company.

 

6.5.2  The Company agrees to provide coverage
records to Purchaser, as reasonably required by Purchaser to meet its
obligations hereunder.

 

6.6          Noncompetition.  (a) 
The Company will, for a period of five (5) years from the Closing Date,
refrain from, either alone or in conjunction with any other Person, or directly
or indirectly through its present or future Affiliates:

 

(i)            employing, engaging
or seeking to employ or engage any Person who within the prior twelve (12)
months had been an employee or sales representative of Purchaser or any of its
Affiliates engaged in the Business, unless such employee (A) resigns
voluntarily (without any solicitation from the Company or any of its
Affiliates) or terminates his or her relationship with Purchaser or (B) is
terminated by Purchaser or any of its Affiliates after the Closing Date;

 

(ii)           causing or
attempting to cause (A) any client, customer or supplier of the Business to
terminate or materially reduce its business with Purchaser or any of its
Affiliates or (B) any officer, employee or consultant of Purchaser or any of
its Affiliates engaged in the Business to resign or sever a relationship with
Purchaser or any of its Affiliates;

 

(iii)          disclosing any
documents or information (unless compelled by judicial or administrative
process) or using any confidential or secret information relating to the
Business or any client, customer or supplier of the Business; or

 

(iv)          participating or
engaging in (other than through the ownership of 5% or less of any class of
securities registered under the Securities Exchange Act of 1934, as amended),
or otherwise lending assistance (financial or otherwise) to any Person
participating or engaged in, any of the lines of business which comprised the
Business on the Closing Date anywhere in the world.

 

(b)           The parties hereto
recognize that the laws and public policies of the various states of the United
States may differ as to the validity and enforceability of covenants similar to
those set forth in this Section.  It is
the intention of the parties that the provisions of this Section be enforced to
the fullest extent permissible under the laws and policies of each jurisdiction
in which enforcement may be sought, and that the unenforceability (or the
modification to conform to such laws or policies) of any provisions of this
Section shall not render unenforceable, or impair, the remainder of the
provisions of this Section. 
Accordingly, if any provision of this Section shall be determined to be
invalid or unenforceable, such invalidity or unenforceability shall be deemed
to apply only with respect to the operation of such provision in the particular
jurisdiction in which such determination is made and not with respect to any
other provision or jurisdiction.

 

(c)           The parties hereto
acknowledge and agree that any remedy at law for any breach of the provisions
of this Section would be inadequate, and the Company hereby consents to the
granting by any court of an injunction or other equitable relief, without the
necessity of actual monetary loss being proved, in order that the breach or
threatened breach of such provisions may be effectively restrained.

 

 

6.7          Confidentiality.  Each party hereto will hold,
and will use its best efforts to cause its Affiliates and their respective
representatives to hold, in strict confidence from any Person (other than any
such Affiliate or representative), all documents and information concerning the
other party or any of its Affiliates furnished to it by the other party or such
other party’s representatives in connection with this Agreement or the
transactions contemplated hereby, unless (i) compelled to disclose by judicial
or administrative process (including without limitation in connection with
obtaining the necessary approvals of this Agreement and the transactions
contemplated hereby of governmental or regulatory authorities) or by other
requirements of law or (ii) disclosed in an action or proceeding brought by a
party hereto in pursuit of its rights or in the exercise of its remedies
hereunder, except to the extent that such documents or information can be shown
to have been (a) previously known by the party receiving such documents or
information, (b) in the public domain (either prior to or after the furnishing
of such documents or information hereunder) through no fault of such receiving
party or (c) later acquired by the receiving party from another source if the
receiving party is not aware that such source is under an obligation to another
party hereto to keep such documents and information confidential; provided that
following the Closing the foregoing restrictions will not apply to Purchaser’s
use of documents and information concerning the Business, the Purchased Assets
or the Assumed Liabilities furnished by the Company hereunder.  In the event the transactions contemplated
hereby are not consummated, upon the request of the other party, each party
hereto will, and will cause its Affiliates and their respective representatives
to, promptly (and in no event later than five (5) Business Days after such
request) redeliver or cause to be redelivered all copies of documents and
information furnished by the other party in connection with this Agreement or
the transactions contemplated hereby and destroy or cause to be destroyed all
notes, memoranda, summaries, analyses, compilations and other writings related
thereto or based thereon prepared by the party furnished such documents and
information or its representatives.

 

6.8          Accounts Receivable.  The Company agrees to promptly remit to
Purchaser the amount of any payments received by the Company with respect to
the Purchased Assets (including the Accounts Receviable) or the accounts
receivable of the Subsidiaries or the Purchaser.  In addition to receipts in the Lock Box as of and after the
Closing Date, all payments to the Company relating to the Purchased Assets
otherwise received on or after the Closing Date will be for the sole benefit of
Purchaser and, provided the Closing occurs, shall be promptly remitted by the
Company or the Bank, as the case may be, to the Purchaser.  The Purchaser shall use commercially
reasonable efforts to collect the total amount of the Rayburn Receivable on a
timely basis.

 

6.9          Mail and Communications.  The Company will promptly remit to Purchaser
any mail or other communications, including, without limitation, any written
inquiries received by the Company relating to the Purchased Assets and any
mail, invoices or other communications received by the Company relating to
Assumed Liabilities which are received by the Company from and after the
Closing Date.  The Purchaser will
promptly remit to the Company any mail or other communications, including,
without limitation, any written inquiries and payments received by the
Purchaser relating to the Excluded Assets, and any invoices received by the
Purchaser relating to liabilities of the Company other than the Assumed
Liabilities which are received by the Purchaser from and after the Closing
Date.

 

6.10        Power of Attorney; Right of Endorsement, Etc.
Subject to Closing having occurred and
effective as of the Closing Date, the Company hereby constitutes and appoints
the Purchaser the true and lawful attorney of the Company, with full power of
substitution, in the name of the Company or the Purchaser, but on behalf of and
for the benefit of the Purchaser: (i) to demand and receive from time to time
any and all the Purchased Assets and to make endorsements and give receipts and
releases for and in respect of the same and any part thereof; (ii) to
institute, prosecute, compromise and settle any and all actions or proceedings
that the Purchaser may deem proper in order to collect, assert or enforce any
claim, right or title of any kind in or to the Purchased Assets; (iii) to
defend or compromise any or all actions or

 

 

proceedings in respect of any of the Assets;
and (iv) to do all such acts and things in relation to the matters set forth in
the preceding clauses (i) through (iii) as the Purchaser shall deem desirable.
The Company hereby acknowledges that the appointment hereby made and the powers
hereby granted are coupled with an interest and are not and shall not be
revocable by it in any manner or for any reason.

 

ARTICLE VII

Indemnification

 

7.1          Indemnification.

 

7.1.1       The Company shall indemnify
and hold harmless the Purchaser, and the Purchaser’s officers, directors,
employees, members, managers, shareholders, subsidiaries, assigns and
successors and the Affiliates of the foregoing persons and entities
(individually, a “Purchaser Indemnified Person” and collectively, the “Purchaser
Indemnified Persons”), from and against and in respect of, and shall pay to
the Indemnified Persons the amount of, any and all claims, demands, lawsuits,
actions, causes of actions, administrative proceedings (including informal proceedings),
losses, assessments, costs, damages, judgments, liabilities (including sums
paid and costs and expenses including, without limitation, reasonable legal
fees and disbursements) of every kind, nature and description, whether or not
involving a third party claim (collectively, “Indemnifiable Damages”)
that arise or result from or relate to, directly or indirectly,

 

(a)           any breach of any of the
representations and warranties given or made by the Company in this Agreement
or any certificate, document, or instrument delivered by or on behalf of the
Company pursuant to this Agreement (a “Breach of Warranty Claim”);

 

(b)           any violation by the Company of any
covenant or agreement made by the Company in this Agreement, or any
certificate, document, or instrument delivered by or on behalf of the Company
pursuant to this Agreement;

 

(c)           any Excluded Liability;

 

(d)           any action or proceeding commenced or
asserted by any employee or any other person or entity acting on his or her
behalf, arising out of, relating to, resulting from or in connection with any
of the following, to the extent occurring or accruing prior to the Closing
Date:

 

(i)            any Claim based on any alleged
violation of federal, state, local or international statutes or other laws or
regulations or any common law protecting persons or members of a protected
class or category, including without limitation, Claims based on the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Act of 1866,
the Age Discrimination in Employment Act of 1967 (including the Older Workers
Benefit Protection Act), the Americans with Disabilities Act, the Fair Labor
Standards Act, the National Labor Relations Act, the Equal Pay Act, the Family
and Medical Leave Act and the Employee Retirement Income Security Act of 1974,
and any similar federal, state or local labor laws or fair employment laws,

 

(ii)           any Claim for payment of salaries,
wages, bonuses, incentive compensation, separation payments, benefits or any
other form of remuneration or any employee pension or welfare benefits or other
fringe benefits, including any claims under any 401(k) or other employee
benefit plan, including related taxes, contributions and all other liabilities
and expenses related thereto;

 

(iii)          any Claim based on any representations,
oral or written, made by the Company or any Subsidiary to any employees, and

 

(iv)          any Claim based on any aspect of the
termination of any employee’s employment with the Company or any Subsidiary;

 

 

(e)           any liability or obligation of any
Subsidiary of the Company which, if such liability or obligation were a
liability or obligation of the Company, would be an Excluded Liability
identified in Sections 1.5.3 through 1.5.8, and any liability or
obligation of any Subsidiary to any Affiliate or Shareholder of the Company;

 

(f)            as a result of any of the following
items (in each case regardless of any disclosure made by the Company on the
disclosure schedules attached hereto): 
(i) any income, sales or other taxes payable by the Company prior to or
as of the Closing Date which are not included in the calculation of Actual Net
Book Value, including, in each case, any interest or penalties related thereto;
(ii) any liability under any 401(k) or other employee benefit plan, including
related taxes, contributions and all other liabilities and expenses related
thereto; or (iii) any claims by or liabilities to any third party with whom the
Company may have had discussions regarding the disposition of the stock or
assets of the Company, including any legal or other expenses incurred in
connection with the defense of any such claims;

 

(g)           the Rayburn Receivable, to the extent
the ultimate amount collected by the Purchaser, net of reasonable and customary
costs of collection incurred by the Purchaser with third parties, is less than
$1,000,000; provided that in no event shall Indemnifiable Damages for claims
relating to the Rayburn Receivable exceed $660,000; or

 

(h)                                 any liability or obligation relating to:

 

(i)            the on-going required remediation
program, as currently contemplated, relating to the presence of Hazardous
Material in the soil, groundwater or surface water at, on, in, under or in the
vicinity of the Leblanc Real Property and the Holton Real Property, to the
extent the remediation obligations relating thereto that are required by any
governmental authority with jurisdiction over the Leblanc Real Property and/or
the Holton Real Property are different than or in addition to those set forth
in the Remediation Plan and the costs associated therewith exceed the Assumed
Remediation Obligation Reserve; or

 

(ii)           the presence of or the treatment,
storage, disposal, arrangement for disposal, transportation, handling or
Release (as defined in Section 4.18) of Hazardous Material (as defined in
Section 4.18), or the violation of any Environmental Laws (as defined in
Section 4.18), by or relating to the Company or any Subsidiary or Affiliate or
with respect to any of the Purchased Assets or any asset of any Subsidiary, in
each above case on or prior to the Closing Date, other than with respect to the
obligations of Purchaser under the Remediation Plan referenced in clause (i)
immediately above.

 

7.1.2       The Purchaser shall
indemnify and hold harmless the Company, the Company’s officers, directors,
employees, members, managers, shareholders, assigns and successors and the
Affiliates of the foregoing persons and entities (individually, a “Company
Indemnified Person” and collectively, the “Company Indemnified Persons”),
from and against and in respect of any and all Indemnifiable Damages that arise
or result from or relate to, directly or indirectly, (a) any breach of any of
the representations, warranties, and covenants given or made by the Purchaser
in this Agreement or any certificate, document, or instrument delivered by or
on behalf of the Purchaser pursuant hereto or (b) any Assumed Liability.

 

7.2          Limitations
and Expiration.  Notwithstanding the above:

 

7.2.1       Following the Closing, there shall be no
liability for indemnification under this Article VII for any breach of a
representation, warranty or covenant or agreement made by the Purchaser, or the
Company, as the case may be, in this Agreement unless and until the aggregate
amount of all

 

 

Indemnifiable Damages exceeds one percent (1%) of the Purchase Price (without
giving effect to any materiality or material adverse effect qualifications or
materiality exceptions contained in any provision of this Agreement), in which
event the Purchaser or the Company, as the case may be, shall be entitled to
claim indemnity for the full amount of such Indemnifiable Damages, subject to
the other limitations set forth in this Section 7.2.

 

7.2.2       With respect to the
Company, the limitation set forth in Section 7.2.1 above shall not apply
(i) to breaches of the representations or covenants set forth in Sections
9.12 (Brokers’ and Finders’ Fees) or 1.8 (Insurance Proceeds), or
(ii) to discharge the Excluded Liabilities or for failure to pay pursuant to Section
2.3.

 

7.2.3       With respect to the
Purchaser, the limitation set forth in Section 7.2.1 above shall not
apply (i) to a breach of the representation set forth in Section 9.12
(Brokers’ and Finders’ Fees), (ii) for failure to pay the Purchase Price, or
(iii) to discharge the Assumed Liabilities in accordance with their terms.

 

7.2.4       Notwithstanding anything to
the contrary herein, except with respect to claims based upon fraud or with
respect to Sections 4.1.1 (first sentence), 4.2 (other than clause (c) of the
last sentence thereof), 4.8 (first sentence) and 9.12 (which claims shall not
be subject to any limitation on the aggregate amount of payment made to satisfy
Indemnifiable Damages with respect to such claims), following the Closing, the
aggregate amount of all payments made by the Company or the Purchaser in
satisfaction of Indemnifiable Damages (a) for Breach of Warranty Claims
under this Agreement, (b) relating to the Rayburn Receivable and
(c) related to the Release of Hazardous Materials or the violation or
operation of Environmental Laws on or before the Closing Date, shall not exceed
the Escrow Amount.

 

7.2.5       Except as set forth below,
each of the representations and warranties made by the Parties in this
Agreement, shall survive for a period of eighteen (18) months after the Closing
Date, notwithstanding any investigation at any time made by or on behalf of any
Party, and upon the expiration of such eighteen (18) month period such
representations and warranties shall expire; provided, however,
(a) the representations and warranties of the Company contained in Sections
4.6 (Tax Matters) and 4.20 (Employee Benefits) shall expire sixty
days after the time the period of limitations expires for the assessment by the
taxing authority of additional taxes or penalties with respect to which the
representations and warranties relate; (b) the representations and warranties
of the Company contained in Section 4.17 (Compliance with Laws) and
Section 4.18  (Environmental Matters) shall expire at the time the latest
period of limitations expires for the enforcement by an applicable governmental
authority of any remedy with respect to which the particular representation or
warranty relates; and (c) the representations in Sections 4.1.1 (first
sentence), 4.2 (other than clause (c) of the last sentence thereof), 4.8 (first
sentence) and 9.12 shall survive indefinitely. 
No claim for the recovery of Indemnifiable Damages based upon a Breach
of Warranty Claim may be asserted by any Party against the another Party after
such representations and warranties shall thus expire; provided, however,
that good faith claims for Indemnifiable Damages first asserted in writing by
the Party or Parties seeking indemnification as provided in Article VII within
the applicable period shall not thereafter be barred.

 

7.2.6       Following the Closing,
except with respect to claims based upon fraud and injunctive relief provided
elsewhere and except as otherwise provided in this Agreement, the
indemnification provided by this Article VII shall be the sole and exclusive
remedy for any Indemnifiable Damages of Purchaser or the Company with respect
to this Agreement, any exhibit or schedule hereto or any certificate delivered
hereunder or the Business, assets or operations of the Company.  The Purchaser and the Company and their
respective successors and permitted assigns hereby waive any statutory,
equitable or common law rights or remedies against each other relating to
environmental matters, including, without limitation, any such matters arising
under Environmental Laws.

 

 

7.3          Claims
by Purchaser.
Upon receipt by the Company of a certificate signed by an officer of the
Purchaser (a “Purchaser Certificate”) providing notice of any claim (a “Purchaser
Claim”) for Indemnifiable Damages and specifying in reasonable detail the
date such Indemnifiable Damages were paid, incurred or otherwise arose, and, if
applicable, the nature of the breach to which such Indemnifiable Damages are
related, the Company shall deliver to the Purchaser, as promptly as
practicable, an amount equal to such Indemnifiable Damages, unless, within
thirty (30) days of the delivery of such Purchaser Certificate, the Company
disputes in good faith the Purchaser Claim set forth in such certificate, with
the basis for such dispute set forth in writing in reasonable detail.

 

7.4          Claims
by the Company.
Upon receipt by the Purchaser of a certificate signed by the Company (a “Company
Certificate”) providing notice of any claim (a “Company Claim”) for
Indemnifiable Damages and specifying in reasonable detail the date such
Indemnifiable Damages were paid, incurred or otherwise arose, and the nature of
the breach to which such Indemnifiable Damages are related, the Purchaser shall
deliver to the Company as promptly as practicable, an amount equal to such
Indemnifiable Damages as indemnity, unless, within thirty (30) days of the delivery
of such Company Certificate, the Purchaser in good faith disputes the Company
Claim set forth in such certificate, with the basis for such dispute set forth
in writing in reasonable detail.

 

7.5          Claims
by Third Parties.

 

7.5.1       Purchaser
will give notice to the Company promptly after the Purchaser has actual
knowledge of any claim from a third party, as to which indemnity may be sought,
and will permit the Company (at its expense) to assume the defense of any claim
or any litigation resulting therefrom; provided that (a) counsel for the
Company who shall conduct the defense of such claim or litigation shall be
satisfactory to the Purchaser and (b) the omission by the Purchaser or any
Purchaser Indemnified Person to give notice as provided herein will not relieve
the Company of its or their indemnification obligations under this
Agreement.  Neither the Purchaser nor
any other Purchaser Indemnified Person shall be required to commence litigation
or to take any action against any third party prior to making a claim for
indemnification hereunder.  The Company
in the defense of any such claim or litigation, will not, except with the
written consent of the Purchaser, consent to the entry of any judgment or enter
into any settlement.  If the Company
assumes the defense of such claim or litigation, no compromise or settlement of
such claims may be effected by the Company without the Purchaser’s consent,
which shall not be unreasonably withheld. 
Notwithstanding the foregoing, a Purchaser Indemnified Person will have
the right at all times to take over and assume control of the defense,
settlement, negotiations or lawsuit relating to any claim or demand, including,
without limitation, in the event that (y) the Company is also a party to such
claim or litigation and the Purchaser determines in good faith that joint
representation would be inappropriate or (z) the Company fails to provide
reasonable assurance to the Purchaser of its financial capacity to defend such
claim or litigation and to provide indemnification with respect to such claim
or litigation.  In the event that the
Company does not accept the defense of any matter as above provided, a
Purchaser Indemnified Person will have the full right to defend against any
such claim or demand, and will be entitled to settle or agree to pay in full
such claim or demand, in its sole and absolute discretion.  In any event, the Company will cooperate in
the defense of such action and the records of the Company shall be available to
the Purchaser and the other Purchaser Indemnified Persons with respect to such
defense.  Nothing in this Section 7.5.1
is intended to prevent or restrict the Purchaser from retaining its own counsel
in any such matter, and the Purchaser shall have such right at all times.

 

7.5.2       The
Company will give notice to the Purchaser promptly after the Company has actual
knowledge of any claim from a third party, as to which indemnity may be sought,
and will

 

 

permit the Purchaser (at
its expense) to assume the defense of any claim or any litigation resulting
therefrom; provided that (a) counsel for the Purchaser who shall conduct
the defense of such claim or litigation shall be satisfactory to the Company
and (b) the omission by the Company to give notice as provided herein will not
relieve the Purchaser of its indemnification obligations under this
Agreement.  The Company shall not be
required to commence litigation or to take any action against any third party
prior to making a claim for indemnification hereunder.  The Purchaser in the defense of any such
claim or litigation, will not, except with the written consent of the Company,
consent to the entry of any judgment or enter into any settlement.  If the Purchaser assumes the defense of such
claim or litigation, no compromise or settlement of such claims may be effected
by the Purchaser without the Company’s consent, which shall not be unreasonably
withheld.  Notwithstanding the
foregoing, the Company will have the right at all times to take over and assume
control of the defense, settlement, negotiations or lawsuit relating to any
claim or demand, including, without limitation, in the event that (y) the
Purchaser is also a party to such claim or litigation and the Company
determines in good faith that joint representation would be inappropriate or
(z) the Purchaser fails to provide reasonable assurance to the Company of its
financial capacity to defend such claim or litigation and to provide
indemnification with respect to such claim or litigation.  In the event that the Purchaser does not
accept the defense of any matter as above provided, the Company will have the
full right to defend against any such claim or demand, and will be entitled to
settle or agree to pay in full such claim or demand, in its sole and absolute
discretion.  In any event, the Purchaser
will cooperate in the defense of such action and the records of the Purchaser
shall be available to the Company with respect to such defense.

 

7.6          Resolution
of Conflicts; Arbitration.

 

7.6.1       In case the Company or the Purchaser, as
applicable, shall object in writing to any claim made in any Purchaser
Certificate as described in Section 7.3, or in any Company Certificate
as described in Section 7.4, the Purchaser, or the Company as
applicable, shall have thirty (30) days to respond in a written statement to
such objection.  If after such thirty
(30)-day period there remains a dispute as to any claims, the Company and the
Purchaser shall attempt in good faith for sixty (60) days thereafter to agree
upon the rights of the respective Parties with respect to each of such claims.

 

7.6.2       If no such agreement can be reached after
good faith negotiation, either the Purchaser or the Company, may by written
notice to the other, demand arbitration of the matter in accordance with Section
9.16, unless the amount of the damage or loss is at issue in pending
litigation with a third party, in which event arbitration shall not be
commenced until such amount is ascertained or both Parties agree to
arbitration.  The decision of the arbitrators
as to the validity and amount of any claim in such Purchaser Officer’s
Certificate or Company Certificate shall be binding and conclusive upon the
Parties.

 

7.7          Escrow. 
In the event any Purchaser Indemnified Party is entitled to
indemnification under Section 7.1.1 prior to the date specified for
payment of a portion of the Escrow Amount in Section 2.2, the
Purchaser and the Company shall instruct the Escrow Agent to pay the full
amount of the Indemnifiable Damages to the Purchaser.  Upon the expiration of the Escrow Agreement, the Escrow Agent
shall distribute to the Company the remaining balance of the Escrow Amount, and
interest accrued thereon; provided, however, that if upon the expiration of the
Escrow Agreement the Purchaser has an unresolved claim for Indemnifiable
Damages under this Article VII, the Company and the Purchaser shall extend
the term of the Escrow Agreement and retain in escrow the disputed amount and
the Escrow Agent shall distribute the remaining Escrow Amount, and interest
accrued thereon, to the Company. .

 

 

ARTICLE VIII

 

Termination; Exclusivity

 

8.1          Termination.  This Agreement may be terminated:

 

(a)           at any time prior to
the Closing by mutual written consent of the Company and the Purchaser;

 

(b)           at any time prior to
the Closing by the Company or the Purchaser if there has been a material
misrepresentation or breach on the part of the other Party of the
representations, warranties or covenants set forth in this Agreement or if
events have occurred which have made it impossible to satisfy a condition
precedent to the terminating Party’s obligations to consummate the transactions
contemplated hereby, unless such terminating Party’s willful or knowing breach
of this Agreement has caused the condition to be unsatisfied; or

 

(c)           at any time after
August 31, 2004 by the Company or Purchaser upon notification of the
non-terminating party by the terminating party if the Closing shall not have
occurred on or before such date and such failure to consummate is not caused by
a breach of this Agreement by the terminating party.

 

8.2          Effect of Termination.  In the event of termination of this
Agreement as provided in Section 8.1, this Agreement shall forthwith
become void and there shall be no liability on the part of any Party to any
other Party under this Agreement, except that nothing herein shall relieve any
Party from liability for any breach of this Agreement prior to such
termination.

 

8.3          Exclusivity.  From the date of this Agreement until the
earlier of the termination of this Agreement in accordance with this Article VIII
or the Closing Date, the Company covenants and agrees that neither the Company
nor its Subsidiaries or any of their Shareholders, respective employees,
officers, Affiliates, agents or representatives shall, directly or indirectly
(a) solicit, initiate or encourage any inquiries, proposals or offers from any
person relating to any sale, exchange, tender, acquisition or purchase of all
or a material amount of the assets or securities (including those held by the
Shareholders) of the Company or the Subsidiaries, or any merger, consolidation
or business combination with, the Company or the Subsidiaries, or (b) with
respect to any effort or attempt by any other person to do or seek any of the
foregoing (i) participate in any discussions or negotiations, (ii) furnish to
any other person any confidential information with respect to the Company or
its Business, or (iii) otherwise cooperate in any way with, or assist or
participate in, or facilitate or encourage any such effort.  The Company shall promptly notify the
Purchaser if any such proposal or offer, or any inquiry or contact with any
person with respect thereto, is made. 
The Company agrees that taking any such action shall constitute a
material breach of this Agreement.

 

ARTICLE
IX

Miscellaneous

 

9.1          Transaction Expenses.  The Purchaser will indemnify and hold
harmless the Company from the commission, fee or claim of any Person employed
or retained or claiming to be employed or retained by the Purchaser to bring
about, or to represent it in, the transactions contemplated hereby.  The Company will indemnify and hold harmless
the Purchaser from the commission, fee or claim of any Person, firm or
corporation employed or retained or claiming to be employed or retained by the
Company to bring about, or to represent any of them in, the transactions
contemplated hereby.  In addition, each

 

 

Party shall pay their own expenses (including legal and accounting
fees) incident to the negotiation and preparation of this Agreement and any
other documents prepared in connection therewith, and the consummation of the
transactions contemplated herein, including for the fees and expenses of Fort
Dearborn Partners, Inc., which shall be paid by the Company prior to or
simultaneously with the Closing.

 

9.2          Amendment and Modification.  The Parties may amend, modify and supplement
this Agreement in such manner as may be agreed upon by all of them in writing.

 

9.3          Entire Agreement.  This Agreement, including the exhibits,
schedules, certificates and other documents and agreements delivered on the
date hereof in connection herewith, including the Promissory Note, contains the
entire agreement of the Parties with respect to the Transactions, and
supersedes all prior understandings and agreements (oral or written) of
the Parties with respect to the subject matter hereof.  The Parties expressly represent and warrant
that in entering into this Agreement they are not relying on any prior
representations made by any other Party concerning the terms, conditions or
effects of this Agreement which terms, conditions or effects are not expressly
set forth herein.  Any reference herein
to this Agreement shall be deemed to include the schedules and exhibits.

 

9.4          Interpretation.  When a reference is made in this Agreement
to an article, section, paragraph, clause, schedule or exhibit, such reference
shall be to an article, section, paragraph, clause, schedule or exhibit of this
Agreement unless otherwise indicated. 
The headings contained herein and on the schedules are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement or the schedules. 
Whenever the words “include,” “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation.”  The term “knowledge” or
“best of knowledge” when applied to any Person, shall mean the actual
knowledge, without further investigation, of such Person.  Time shall be of the essence in this
Agreement.

 

9.5          Execution in Counterpart.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.

 

9.6          Notices.  All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by telecopier (with written confirmation of receipt),
provided that a copy is mailed by registered mail, return receipt requested, or
(c) three (3) days after deposited with a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate addresses
and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a Party may designate by written notice to the other
Parties):

 

If the Company:

 

c/o  Joseph Madrigrano

Madrigrano,
Aiello & Santarelli, L.L.C.,

1108 56th
Street

Kenosha, WI
53141

Fax:  (262) 657-0138

Re:  Leblanc/Mr. Leon Pascucci

 

with a copy to:

 

Freeborn &
Peters LLP

311 South
Wacker Drive

 

 

Suite 3000

Chicago,
IL  60606-6677

Fax: (312)
360-6570

Attention:
Peter I. Mason

 

If to the Purchaser:

 

Steinway
Musical Instruments, Inc.

800 South Street, Suite 305

Waltham, Massachusetts 
02453-1439

Fax:  (781) 894-9803

Attention:  Dennis M. Hanson

 

with a copy to:

 

Milbank, Tweed, Hadley & McCloy LLP

601 S. Figueroa Street, 30th Floor

Los Angeles, CA  90017

Fax: (213)
892-4710

Attention:  Neil J Wertlieb,
Esq.

 

Any Party may, by Notice given as aforesaid, change its address for all
subsequent Notices. Notices shall be deemed given on the date delivered.

 

9.7          Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York  without
regard to conflicts of laws principles that would cause any state’s laws, other
than the laws of the State of New York, to apply.

 

9.8          Confidentiality; Publicity.  Except as may be required by law, rule or
regulation or as otherwise permitted or expressly contemplated herein, or for
the disclosure to the legal, financial and accounting advisors of the Company,
the Shareholders or the Purchaser who have a need to know such information,
none of the Parties or their Affiliates, agents or representatives shall
disclose to any third party the subject matter or terms of this Agreement
without the prior consent of the other Parties.  In addition, no press release or other public announcement
related to this Agreement or the transactions contemplated hereby will be
issued by any of the Parties without the prior approval of the other Parties.

 

9.9          Severability.  If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, 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 is not affected in any manner
adverse to any Party.  Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the Parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the Parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the greatest extent possible.

 

9.10        Assignment.  Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
Parties hereto without the prior consent of the other Parties, and any attempt
to do so will be void, except (a) for assignments and transfers by operation of
law and (b) that Purchaser may assign any or all of its rights, interests and
obligations hereunder to (i) an affiliate or wholly-owned subsidiary, provided
that any such affiliate or subsidiary agrees in writing to be bound by

 

 

all of the terms, conditions and provisions contained herein, (ii) any
post-Closing purchaser of all of the issued and outstanding stock of the
Purchaser or a substantial part of its assets or (iii) any financial
institution providing purchase money or other financing to Purchaser from time
to time as collateral security for such financing, but no such assignment
referred to in clause (i), (ii) or (iii) shall relieve Purchaser of its
obligations hereunder.  Subject to the
preceding sentence, this Agreement is binding upon, inures to the benefit of
and is enforceable by the parties hereto and their respective successors and
assigns.

 

9.11        Binding Effect; No Third Party
Beneficiaries. 
This Agreement shall inure to the benefit of, be binding upon and be
enforceable by and against the Company and the Purchaser and their respective
successors and permitted assigns, and nothing herein expressed or implied shall
be construed to give any other Person any legal or equitable rights hereunder;
provided that the Purchaser’s lenders may rely on the representations,
warranties and covenants of the Company contained herein.

 

9.12        Brokers’ and Finders’ Fees.  Except for the fees
and expenses of Fort Dearborn Partners, Inc., the Company has not incurred, nor
will the Company incur, directly or indirectly, any liability for brokerage or
finders’ fees or agents’ commissions or any similar charges in connection with
this Agreement or any transaction contemplated hereby.  The Purchaser has not incurred, nor will the
Purchaser incur, directly or indirectly, any liability for brokerage or
finders’ fees or agents’ commissions or any similar charges in connection with this
Agreement or any transaction contemplated hereby.

 

9.13        Negotiation Representations.  Each Party expressly represents and warrants
to all other Parties hereto that (a) before executing this Agreement, said
Party has fully informed itself or himself of the terms, contents, conditions
and effects of this Agreement; (b) said Party has relied solely and completely
upon its or its or his own judgment in executing this Agreement; (c) said Party
has had the opportunity to seek and has obtained the advice of counsel before
executing this Agreement; (d) said Party has acted voluntarily and of its or
his own free will in executing this Agreement; (e) said Party is not acting
under duress, whether economic or physical, in executing this Agreement; and
(f) this Agreement is the result of arm’s-length negotiations conducted by and
among the Parties and their counsel.

 

9.14        Waiver.  The rights and remedies of the parties are
cumulative and not alternative.  Neither
the failure nor any delay by any Party in exercising any right, power, or
privilege under this Agreement or the documents referred to in this Agreement
will operate as a waiver of such right, power, or privilege, and no single or
partial exercise of any such right, power, or privilege will preclude any other
or further exercise of such right, power, or privilege or the exercise of any
other right, power, or privilege. To the maximum extent permitted by applicable
law, (a) no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by any of the Purchaser or the
Company or either of them, in whole or in part, by a waiver or renunciation of
the claim or right unless in writing signed by the other affected Party or
Parties; (b) no waiver that may be given by a Party will be applicable
except in the specific instance for which it is given; and (c) no notice
to or demand on one Party will be deemed to be a waiver of any obligation of
such Party or of the right of the Party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.

 

9.15        Further Assurances.  At any time and from time to time (including
after the Closing), upon reasonable request and at the expense of the
Purchaser, the Company shall do, execute, acknowledge and deliver such further
acts, assignments, transfers, conveyances and assurances as the Purchaser may
reasonably deem necessary or desirable in order more effectively to transfer,
convey and assign to the Purchaser, and to confirm the Purchaser’s title to,
all of the Purchased Assets, and, to the full extent permitted by law, to put
the Purchaser in actual possession and operating control of the Purchased

 

 

Assets and to assist the Purchaser in exercising all rights with
respect thereto.

 

9.16        Arbitration.

 

9.16.1     All
disputes or controversies (whether of law or fact) of any nature whatsoever
arising from or relating to this Agreement and the transactions contemplated
hereby shall be decided by binding arbitration administered by the American
Arbitration Association (the “AAA”) in accordance with the its
Commercial Arbitration Rules.

 

9.16.2     The arbitrators shall be selected as
follows: the Purchaser and the Company shall, within sixty (60) days of the
date of demand by any Party for arbitration, each select one independent,
qualified arbitrator and the two arbitrators so selected shall select the third
arbitrator within thirty (30) days after their appointment as Party
arbitrators.  Each Party reserves the
right to object to any individual arbitrator who shall be employed by or
affiliated with a competing organization. 
In the event objection is made, the AAA shall resolve any dispute
regarding the propriety of an individual arbitrator acting in that capacity.  The Parties shall each bear the expenses of
the arbitrator chosen by it, and shall bear one-half the expenses of the
independent arbitrator.  The Parties
shall use their reasonable best efforts to cause the hearings in the proceeding
to commence within one hundred twenty (120) days of the selection of the
neutral arbitrator.

 

9.16.3     Arbitration shall
take place in  New
York, New York.  At the request of any
Party, arbitration proceedings will be conducted confidentially; in such case
all documents, testimony and records shall be received, heard and maintained by
the arbitrators in confidence under seal, available for the inspection only by
the AAA, the Company and the Purchaser and their respective attorneys and their
respective experts who shall agree in advance and in writing to receive all
such information confidentially and to maintain such information in
confidence.  The arbitrators, who shall
act by majority vote, shall be able to decree any and all relief of an
equitable and legal nature, including but not limited to, such relief as a
temporary restraining order, a temporary and/or a permanent injunction, and
shall also be able to award damages, with or without an accounting and
costs.  The decree or award rendered by
the arbitrators may be entered as a final and binding judgment in any court
having jurisdiction thereof.

 

9.16.4     Reasonable notice
of time and place of arbitration shall be given to all persons, other than the
Parties, as shall be required by law, in which case such persons or those
authorized representatives shall have the right to attend and/or participate in
all the arbitration hearings in such manner as the law shall require.

 

9.17        Schedules and Exhibits.  The disclosures in the schedules and
exhibits attached hereto, and the Remediation Plan agreed to by the Parties, shall
be construed with and as an integral part of this Agreement to the same extent
as if the same had been set forth herein. Any matter disclosed by the Company
on any one Schedule with respect to any representation, warranty or covenant of
the Company shall be deemed disclosed for purposes of all other
representations, warranties or covenants of the Company to the extent that it
is reasonably apparent from such disclosure that is also relates to such other
representations, warranties or covenants, and to the extent any matter
disclosed on any Schedule conflicts with any representation, warranty or
covenant of the Company contained in this Agreement, this Agreement will
control.

 

[SIGNATURE PAGE FOLLOWS]

 

 

IN WITNESS WHEREOF, the undersigned have
caused this Agreement to be duly executed as of the day and year first above
written.

 

 

	
   

  	
  STEINWAY MUSICAL

  
	
   

  	
  INSTRUMENTS, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dana D.
  Messina

  	
   

  
	
   

  	
  Its:

  	
  Dana D.
  Messina

  	
   

  
	
   

  	
   

  	
  Chief
  Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  G. LEBLANC CORPORATION,

  
	
   

  	
  a Wisconsin corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Leon
  Pascucci

  	
   

  
	
   

  	
  Its:

  	
  Leon
  Pascucci

  	
   

  
	
   

  	
   

  	
  Chief
  Executive Officer; President

  	
   

  

 

 

INDEX
OF SCHEDULES AND EXHIBITS TO ASSET PURCHASE AGREEMENT

 

DISCLOSURE
SCHEDULES

 

	
  Schedule
  1.1.12

  	
  Assumed
  Plans

  
	
  Schedule 1.2

  	
  -

  	
  Excluded
  Assets

  
	
  Schedule 2.2

  	
  -

  	
  Sample
  Calculation of Net Book Value

  
	
  Schedule 3.9

  	
  -

  	
  Negative
  Covenants of the Company

  
	
  Schedule 4.1

  	
  -

  	
  Organization,
  Power and Authority; Subsidiaries

  
	
  Schedule 4.5

  	
  -

  	
  Liabilities

  
	
  Schedule 4.6

  	
  -

  	
  Tax Matters

  
	
  Schedule 4.7

  	
  -

  	
  Real
  Property; Leases

  
	
  Schedule 4.8

  	
   

  	
  Good Title

  
	
  Schedule 4.9

  	
  -

  	
  Accounts
  Receivable

  
	
  Schedule
  4.10

  	
  -

  	
  Licenses and
  Permits

  
	
  Schedule
  4.11

  	
  -

  	
  Proprietary
  Rights

  
	
  Schedule
  4.12

  	
  -

  	
  Relationships
  with Customers and Suppliers

  
	
  Schedule
  4.13

  	
  -

  	
  Contracts
  and Agreements

  
	
  Schedule
  4.14

  	
  -

  	
  Litigation

  
	
  Schedule
  4.15

  	
  -

  	
  Insurance

  
	
  Schedule
  4.16

  	
  -

  	
  Absence of
  Certain Developments

  
	
  Schedule
  4.17

  	
   

  	
  Compliance
  with Laws

  
	
  Schedule
  4.18

  	
  -

  	
  Environmental
  Matters

  
	
  Schedule
  4.19

  	
  -

  	
  Labor
  Relations

  
	
  Schedule
  4.20

  	
  -

  	
  Employee
  Benefits Plans

  
	
  Schedule
  4.21

  	
  -

  	
  Affiliate
  Transactions

  
	
  Schedule
  4.22

  	
  -

  	
  Officers and
  Directors; Employees; Sales Representatives

  
	
  Schedule
  4.25

  	
  -

  	
  Governmental
  Authorization; Consents

  
	
  Schedule
  4.27

  	
  -

  	
  Vehicles

  
	
  Schedule
  4.28

  	
  -

  	
  No
  Guarantees

  
	
  Schedule
  4.29

  	
  -

  	
  Entire Business

  

 

	
  Exhibit A

  	
  -

  	
  Bill of Sale
  and Assignment and Assumption Agreement

  
	
  Exhibit B

  	
  -

  	
  Form of
  Employment Agreement

  
	
  Exhibit C

  	
  -

  	
  Form of
  Non-Competition AgreementExhibit 10.1

 

 

Amendment No. 19

 

To the A320 Purchase Agreement

Dated as of April 20, 1999

 

Between

 

AVSA, S.A.R.L.

 

And

 

JetBlue Airways Corporation

 

 

This Amendment No. 19 (hereinafter referred to as the “Amendment) is
entered into as of

 

June 4, 2004, between AVSA, S.A.R.L., a société à responsabilité
limitée organized and existing under the laws of the Republic of France, having
its registered office located at 2, Ron-Point Maurice Bellonte, 31700 Blagnac,
France (hereinafter referred to as the “Seller”), and JetBlue Airways
Corporation, a corporation organized and existing under the laws of the State
of Delaware, United States of America, having its principal corporate offices
located 118-29 queens Boulevard, 5th Floor, Forest Hills, New York
11375 USA (hereinafter referred to as the “Buyer”).

 

WITNESSETH

 

WHEREAS, the Buyer and the Seller entered into an A320 Purchase
Agreement, dated as of April 20, 1999, relating to the sale by the Seller
and the purchase by the Buyer of certain Airbus Industrie A320-200 aircraft
(the “Aircraft”), including twenty-five option aircraft (the “Option
Aircraft”), which, together with all Exhibits, Appendixes and Letter Agreements
attached thereto and as amended by Amendment No. 1, dated as of
September 30, 1999, Amendment No. 2, dated as of March 13, 2000,
Amendment No. 3 dated as of March 29, 2000, amendment No. 4, dated as of
September 29, 2000, Amendment No. 5 dated as of November 7, 2000,
Amendment No. 6 dated as November 20, 2000, Amendment No. 7 dated as of
January 29, 2001, Amendment No. 8 dated as of May 3, 2001, Amendment No. 9
dated as of July 18, 2001, Amendment No. 10 dated as of November 16,
2001, Amendment No. 11 dated as of December 31, 2001, Amendment No. 12
dated as of April 19, 2002, Amendment No. 13 dated as of November 22,
2002, Amendment No. 14 dated as of December 18, 2002, Amendment No. 15
dated as of February 10, 2003, Amendment No. 16 dated as of April 23,
2003, Amendment No. 17 dated as of October 1, 2003 and Amendment No. 18
dated as of November 12, 2003 is hereinafter called the “Agreement.”

 

1

 

WHEREAS the Seller and the Buyer have agreed to amend the Agreement as
follows.

 

1.                                       DEFINITIONS

 

1.1                                 Capitalized terms used
herein and not otherwise defined herein will have the meanings assigned to them
in the Agreement.  The terms
“herein”,  “hereof” and “hereunder” and
words of similar import refer to this Amendment.

 

2.                                      ***

 

3.              EFFECT OF THE
AMENDMENT

 

The Agreement will be deemed amended to the extent herein provided,
and, except as specifically amended hereby, will continue in full force and
effect in accordance with its original terms. 
This Amendment supersedes any previous understandings, commitments, or
representations whatsoever, whether oral or written, related to the subject
matter of this Amendment.

 

Both parties agree that this Amendment will constitute an integral,
nonseverable part of the Agreement and be governed by its provisions, except
that if the Agreement and this Amendment have specific provisions that are
inconsistent, the specific provisions that are inconsistent, the specific
provisions contained in this Amendment will govern.

 

This Amendment will become effective upon execution hereof and upon
payment of the amounts due as per Clause 5.2.5 of the Agreement.

 

4.              CONFIDENTIALITY

 

This Amendment is subject to the confidentiality provisions set forth
in Clause 22.5 of the Agreement.

 

5.              ASSIGNMENT

 

Notwithstanding any other provisions of this Amendment or of the
Agreement, this Amendment will not be assigned or transferred in any manner
without the prior written consent of the Seller, and any attempted assignment
or transfer in contravention of the provisions of this Paragraph 5 will be void
and of no force or effect.

 

[***]                   Represents
material which has been redacted and filed separately with the Commission
pursuant to a request for confidential treatment pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934, as amended.

 

2

 

6.              COUNTERPARTS

 

This Amendment may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.

 

3

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers or agents on the dates written below.

 

	
   

  	
  AVSA, S.A.R.L.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARIE-PIERRE MERLE-BERAL

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  AVSA Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  June 4, 2004

  
					

 

	
  JETBLUE AIRWAYS CORPORATION

  
	
   

  
	
  By:

  	
  /s/ THOMAS E. ANDERSON

  	
   

  
	
   

  
	
  Its:

  	
  Senior Vice President

  	
   

  
	
   

  
	
  Date:

  	
  June 4, 2004

  	
   

  
					

 

4

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