AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

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INSURANCE AUTO AUCTIONS, | AXLE HOLDINGS, INC | AXLE MERGER SUB, INC

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Title: AGREEMENT AND PLAN OF MERGER
Governing Law: Illinois Date: 2/23/2005
Industry: Business Services Law Firm: Katten Muchin; Skadden Arps Sector: Services

AGREEMENT AND PLAN OF MERGER, Parties: insurance auto auctions , axle holdings inc , axle merger sub inc

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EXECUTION COPY

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AGREEMENT AND PLAN OF MERGER

BY AND AMONG

INSURANCE AUTO AUCTIONS, INC.

AXLE HOLDINGS, INC.

AND

AXLE MERGER SUB, INC.

DATED AS OF FEBRUARY 22, 2005

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TABLE OF CONTENTS

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ARTICLE I

THE MERGER

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1.1 The Merger............................................................2

1.2 Closing; Effective Time: Filing of Articles of Merger.................2

1.3 Effect of the Merger..................................................2

1.4 Additional Actions....................................................2

ARTICLE II

THE SURVIVING CORPORATION

2.1 Name of Surviving Corporation.........................................3

2.2 Articles of Incorporation.............................................3

2.3 By-Laws...............................................................3

2.4 Directors and Officers................................................3

ARTICLE III

CONVERSION AND CANCELLATION OF SECURITIES;

MERGER CONSIDERATION

3.1 Conversion of Axle Common Stock.......................................3

3.2 Payment for the Axle Common Stock.....................................4

3.3 Stock Transfer Books..................................................5

3.4 Dissenting Shares.....................................................5

3.5 Disposition of Axle Options and ESPP Purchase Rights..................5

3.6 Escheatment of Funds..................................................6

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

OF AXLE

4.1 Organization and Qualification........................................7

4.2 Authorization; Enforceability.........................................7

4.3 Required Vote of Axle Shareholders....................................7

4.4 State Takeover Statutes...............................................8

4.5 Organizational Documents..............................................8

4.6 Capitalization; Subsidiaries..........................................8

4.7 Options...............................................................9

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4.8 SEC Filings; Financial Statements.....................................9

4.9 Proxy Statement......................................................11

4.10 Taxes................................................................11

4.11 Material Contracts...................................................12

4.12 Real Property........................................................13

4.13 Litigation...........................................................14

4.14 Compliance with Applicable Laws......................................14

4.15 No Violation.........................................................15

4.16 Intellectual Property................................................15

4.17 Absence of Certain Changes...........................................16

4.18 Insurance Policies...................................................16

4.19 Licenses and Permits.................................................16

4.20 Employee Benefit Plans...............................................17

4.21 Environmental, Health and Safety Matters.............................18

4.22 Labor Matters........................................................19

4.23 Opinion of Financial Advisor.........................................19

4.24 Brokers..............................................................19

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE BUYER

AND THE BUYER PARENT

5.1 Organization and Standing............................................19

5.2 Authorization; Enforceability........................................19

5.3 No Violation.........................................................20

5.4 Financing............................................................20

5.5 Litigation...........................................................20

5.6 Governmental Approvals and Filings...................................21

5.7 Brokers..............................................................21

ARTICLE VI

COVENANTS OF AXLE

6.1 Conduct of Business..................................................21

6.2 Proxy Statement......................................................23

6.3 Axle Shareholders' Meeting...........................................24

6.4 Filings; Consents; Etc...............................................24

6.5 No Solicitation......................................................24

6.6 Schedules Update; Certain Notices....................................25

6.7 Financial Statements.................................................26

6.8 Regulatory Filings...................................................26

6.9 Certain Real Estate Matters..........................................27

6.10 Financing Cooperation................................................27

6.11 Access to Information................................................27

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ARTICLE VII

COVENANTS OF THE BUYER AND THE BUYER PARENT

7.1 Filings; Consents; Etc...............................................28

7.2 Director and Officer Liability and Indemnification...................28

7.3 Regulatory Filing....................................................29

7.4 Financing............................................................29

ARTICLE VIII

CONDITIONS PRECEDENT TO THE CLOSING

8.1 Conditions Precedent to Each Party's Obligations.....................31

8.2 Conditions Precedent to Obligations of the Buyer and the Buyer

Parent...............................................................31

8.3 Conditions Precedent to Obligations of Axle..........................32

ARTICLE IX

CLOSING

9.1 Deliveries by Axle...................................................33

9.2 Deliveries by the Buyer and the Buyer Parent.........................33

ARTICLE X

TERMINATION

10.1 Termination..........................................................34

10.2 Effect of Termination................................................35

10.3 Termination Payments.................................................35

ARTICLE XI

MISCELLANEOUS

11.1 Notices, Consents, etc...............................................37

11.2 Severability.........................................................38

11.3 Assignment; Successors...............................................38

11.4 Counterparts; Facsimile Signatures...................................39

11.5 Expenses; Transfer Taxes.............................................39

11.6 Governing Law........................................................39

11.7 Table of Contents and Headings.......................................39

11.8 Definitions..........................................................39

11.9 Entire Agreement.....................................................45

11.10 No Survival of Representations, Warranties, Covenants and

Agreements...........................................................45

11.11 Third Parties........................................................45

11.12 Disclosure Generally.................................................46

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11.13 Acknowledgment by the Buyer and the Buyer Parent.....................46

11.14 Interpretive Matters.................................................46

11.15 Amendments, Modification and Waiver..................................47

11.16 Submission to Jurisdiction...........................................47

11.17 Waiver of Jury Trial.................................................47

11.18 Specific Performance.................................................47

11.19 Public Announcements.................................................47

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GLOSSARY OF DEFINED TERMS

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1991 Plan......................................................................5

2003 Plan......................................................................5

Acquired Companies............................................................39

Acquired Companies' Knowledge.................................................39

Acquisition Proposal..........................................................40

Acquisition Transaction.......................................................40

Actions.......................................................................14

Affiliate.....................................................................40

Aggregate ESPP Redemption Amount..............................................40

Aggregate Merger Consideration................................................40

Agreement......................................................................1

Announcement Date.............................................................40

Articles of Merger.............................................................2

Axle...........................................................................1

Axle Board.....................................................................1

Axle Common Stock.............................................................40

Axle Indemnified Parties......................................................28

Axle Option....................................................................5

Axle Preferred Stock..........................................................40

Axle SEC Documents.............................................................9

Axle Shareholder Approval......................................................8

Axle Shareholders.............................................................40

Axle Shareholders' Meeting....................................................11

Axle Subsidiaries.............................................................40

Business......................................................................41

Business Day..................................................................41

Buyer..........................................................................1

Buyer Parent...................................................................1

Buyer Parent Common Stock......................................................6

Buyer's Representatives.......................................................27

Certificates...................................................................4

Change in Recommendation......................................................25

Closing........................................................................2

Closing Date...................................................................2

Code..........................................................................41

Company Licensed Intellectual Property........................................15

Company Owned Intellectual Property...........................................15

Confidentiality Agreement.....................................................41

Consent.......................................................................41

Contract......................................................................41

Disclosure Schedule............................................................7

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Dissenting Shares..............................................................5

Draft Financial Statements....................................................11

Effective Time.................................................................2

Employee Plan.................................................................41

Environmental Claim...........................................................41

Environmental Health and Safety Requirements..................................41

Equity Commitment Letter......................................................20

ERISA.........................................................................42

Escrow Breakage Amount........................................................30

Escrow Breakage Cap...........................................................42

Escrow Closing................................................................30

EscrowCo......................................................................30

EscrowCo Debt.................................................................30

ESPP...........................................................................6

ESPP Notice....................................................................6

ESPP Purchase Period..........................................................42

ESPP Purchase Price...........................................................42

ESPP Purchase Right...........................................................42

ESPP Redemption Amount........................................................42

Exchange Act..................................................................42

Expiration Date...............................................................42

Financing.....................................................................20

Financing Letters.............................................................20

First Person..................................................................44

FTC...........................................................................26

GAAP..........................................................................42

Governmental Authority........................................................42

Governmental Order............................................................42

HSR Act.......................................................................42

Illinois Law..................................................................42

Indebtedness Commitment Letters...............................................20

Insurance Policies............................................................16

Intellectual Property.........................................................43

Last ESPP Issuance Date........................................................9

Law...........................................................................43

Lease.........................................................................14

Leased Property...............................................................14

Lenders.......................................................................20

Letter of Transmittal..........................................................4

Liability.....................................................................43

Licenses and Permits..........................................................43

Lien..........................................................................43

Material Adverse Effect.......................................................43

Material Contracts............................................................12

Material of Environmental Concern.............................................43

Merger.........................................................................1

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Merger Consideration...........................................................3

Option Amount.................................................................44

Option Consent.................................................................6

Option Notice..................................................................5

Option Payment Amount.........................................................44

Option Price..................................................................44

Organizational Documents......................................................44

Outside Date..................................................................34

Owned Property................................................................13

Parties........................................................................1

Party..........................................................................1

Paying Agent...................................................................4

PBGC..........................................................................18

Permitted Liens...............................................................44

Person........................................................................44

Plan Affiliate................................................................44

Proxy Statement...............................................................11

Real Property.................................................................14

Reasonable Efforts............................................................44

Required Cash Amount..........................................................20

SEC...........................................................................44

Securities Act................................................................44

Senior Debt Letter............................................................20

Stock Option Plan..............................................................5

Subordinated Debt Letter......................................................20

Substitute Debt Financing.....................................................29

Superior Proposal.............................................................44

Supplemental Plan..............................................................5

Surviving Corporation..........................................................2

Tax Return....................................................................45

Taxes.........................................................................45

Threatened....................................................................45

Title IV Plan.................................................................17

Transaction Expenses..........................................................45

Updated Financial Statements..................................................26

Voting Agreement...............................................................1

Voting Group...................................................................1

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EXHIBITS

EXHIBITS:

Exhibit 1.2 - Articles of Merger

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AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and

entered into as of February 22, 2005, by and among Axle Holdings, Inc., a

Delaware corporation (the "Buyer Parent"), Axle Merger Sub, Inc., an Illinois

corporation and wholly owned subsidiary of the Buyer Parent (the "Buyer") and

Insurance Auto Auctions, Inc., an Illinois corporation ("Axle"). Each of the

parties named above may be referred to as a "Party" and collectively as the

"Parties." Capitalized terms used, but not otherwise defined, herein shall have

the meanings set forth in Section 11.8.

RECITALS

A. The Parties hereto desire to enter into this Agreement and, subject

to the conditions hereof and in accordance with the provisions of Illinois Law,

consummate the transactions contemplated hereby pursuant to which the Buyer

Parent will acquire all of the capital stock of Axle through a merger of the

Buyer with and into Axle (the "Merger"), following which Axle shall continue as

the surviving corporation.

B. The Board of Directors of Axle (the "Axle Board") has approved and

adopted the terms and conditions of this Agreement and the consummation of the

transactions contemplated hereby, including the Merger, and has determined to

submit the execution and delivery of this Agreement, and the consummation of the

transactions contemplated hereby to the Axle Shareholders for their approval and

adoption by the consents required under Illinois Law and Axle's Articles of

Incorporation.

C. The Axle Board has determined that the terms and conditions of this

Agreement and the consummation of the transactions contemplated hereby,

including the Merger, are fair to and in the best interests of, and are

advisable to, Axle and the Axle Shareholders, and the Axle Board recommends that

the Axle Shareholders vote to approve and adopt the execution and delivery of

this Agreement and the consummation of the transactions contemplated hereby.

D. Axle, on the one hand, and the Buyer and the Buyer Parent, on the

other hand, desire to make certain representations, warranties, covenants and

agreements in connection with the Merger and also prescribe various conditions

to the Merger.

E. Concurrently with the execution of this Agreement, ValueAct Capital

Partners, L.P. and certain of its affiliated entities (collectively, the "Voting

Group") are entering into a Voting Agreement (the "Voting Agreement") with the

Buyer Parent providing, among other things, that, subject to the terms and

conditions thereof, each of the members of the Voting Group will vote its shares

of Axle Common Stock (as hereinafter defined) in favor of the Merger and the

approval and adoption of this Agreement.

AGREEMENT

In consideration of the foregoing and the respective representations,

warranties, covenants and agreements set forth herein, and other good and

valuable consideration, the receipt and sufficiency of which are hereby

acknowledged, the Parties hereby agree as follows:

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ARTICLE I

THE MERGER

1.1 The Merger. Upon the terms and subject to the satisfaction of the

conditions set forth in this Agreement and in accordance with Illinois Law, at

the Effective Time (as defined below), the Buyer shall be merged with and into

Axle and as a result of the Merger, the separate corporate existence of the

Buyer shall cease and Axle shall continue as the surviving corporation (in such

capacity, the "Surviving Corporation") of the Merger.

1.2 Closing; Effective Time: Filing of Articles of Merger. Subject to

the fulfillment or waiver of each of the conditions contained in Article VIII,

as soon as it is reasonably practicable on or after the later of May 2, 2005 or

three (3) Business Days following the satisfaction or waiver of all of the

conditions contained in Article VIII, other than those conditions which by their

terms are to be satisfied or waived at Closing (but subject to the satisfaction

or waiver of such conditions), a closing (the "Closing") shall take place at the

offices of Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New York,

New York (or such other place as the Parties may agree). The "Closing Date"

shall be the date on which the Closing shall actually occur. Subject to the

terms of this Agreement, the Parties shall, on the Closing Date, cause the

Merger to be consummated by filing a properly executed articles of merger, in

the form attached hereto as Exhibit 1.2, or other appropriate documents (the

"Articles of Merger"), with the Secretary of State of the State of Illinois in

accordance with the provisions of Illinois Law. When used herein, the term

"Effective Time" shall mean the date and time when the Articles of Merger have

been accepted for filing by the Secretary of the State of Illinois or on such

date and time as otherwise specified in the Articles of Merger.

1.3 Effect of the Merger. At the Effective Time, the effect of the

Merger shall be as provided in the Articles of Merger and as provided by the

applicable provisions of Illinois Law. Without limiting the generality of the

foregoing, and subject thereto, upon and following consummation of the Merger,

all of the property, rights, privileges, powers and franchises of Axle and the

Buyer shall vest in the Surviving Corporation, and all of the debts,

liabilities, obligations, restrictions and duties of Axle and the Buyer shall

become the debts, liabilities, obligations, restrictions and duties of the

Surviving Corporation.

1.4 Additional Actions. If, at any time after the Effective Time, the

Surviving Corporation shall consider or be advised that consistent with the

terms of this Agreement any further assignments or assurances in Law or any

other acts are necessary or desirable (a) to vest, perfect or confirm, of record

or otherwise, in the Surviving Corporation, title to and possession of any

property or right of either of Axle or the Buyer acquired or to be acquired by

reason of, or as a result of, the Merger, or (b) otherwise to carry out the

purposes of this Agreement, then, subject to the terms and conditions of this

Agreement, each of Axle or the Buyer and its officers and directors shall be

deemed to have granted to the Surviving Corporation an irrevocable power of

attorney to execute and deliver all such deeds, assignments and assurances in

Law and to do all acts necessary or proper to vest, perfect or confirm title to

and possession of such property or rights in the Surviving Corporation and

otherwise to carry out the purposes of this Agreement; and the officers and

directors of the Surviving Corporation are fully authorized in the name of

either of Axle or the Buyer to take any and all such action.

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ARTICLE II

THE SURVIVING CORPORATION

2.1 Name of Surviving Corporation. The name of the Surviving Corporation

shall be Axle, Inc.

2.2 Articles of Incorporation. The Articles of Merger shall include such

amendments, schedules or supplements as may be required under Illinois Law to

provide that the Articles of Incorporation of the Surviving Corporation from and

after the Effective Time shall be, or be the same as, the Articles of

Incorporation of the Buyer as in effect immediately prior to the Effective Time,

until thereafter changed or amended as provided therein or by applicable Law.

2.3 By-Laws. The By-Laws of the Buyer as in effect immediately prior to

the Effective Time shall be the By-Laws of the Surviving Corporation from and

after the Effective Time, until thereafter changed or amended as provided

therein or by applicable Law.

2.4 Directors and Officers. The board of directors of the Buyer

immediately prior to the Effective Time shall be the initial board of directors

of the Surviving Corporation, and the officers of Axle immediately prior to the

Effective Time shall be the initial officers of the Surviving Corporation, in

each case until their respective successors are duly elected or appointed and

qualified. If, at the Effective Time, a vacancy shall exist on the board of

directors of the Surviving Corporation or in any office of the Surviving

Corporation, such vacancy may thereafter be filled in the manner provided by

Law.

ARTICLE III

CONVERSION AND CANCELLATION OF SECURITIES;

MERGER CONSIDERATION

3.1 Conversion of Axle Common Stock. As of the Effective Time, by virtue

of the Merger and without any action on the part of the Parties:

(a) Each share of Axle Common Stock issued and outstanding

immediately prior to the Effective Time shall be cancelled and extinguished and

converted into the right to receive an amount of cash equal to $28.25 per Share

(the "Merger Consideration").

(b) Each issued and outstanding share of Axle Common Stock that

is held in Axle's treasury or in the treasury of any subsidiary of Axle

immediately prior to the Effective Time, if any, shall be cancelled and

extinguished without the payment of any consideration therefor.

outstanding immediately prior to the Effective Time shall be converted into and

become one validly issued, fully paid and non-assessable share of common stock,

par value $.01, of the Surviving Corporation.

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3.2 Payment for the Axle Common Stock.

(a) The Buyer, with the consent of Axle (which consent shall

not be unreasonably withheld), shall select an entity to act as paying agent

(the "Paying Agent") in effecting the payment of the Aggregate Merger

Consideration in respect of (i) stock certificates (the "Certificates") that,

prior to the Effective Time, represented Axle Common Stock and exercised Axle

Options, and (ii) ESPP Purchase Rights remaining in effect as of the Effective

Time, entitled to payment of the Aggregate Merger Consideration. At the

Effective Time, the Buyer Parent shall deposit, or cause to be deposited, with

the Paying Agent the Aggregate Merger Consideration. The expenses of and any

indemnification obligations to the Paying Agent shall be the sole responsibility

of the Buyer Parent and the Surviving Corporation. On or simultaneously with the

Closing Date, Axle, the Buyer, the Buyer Parent and the Paying Agent shall enter

into a paying agent agreement, on terms and conditions that are reasonably

satisfactory to the parties thereto.

(b) Within a reasonable period prior to the Effective Time,

Axle shall provide to the Paying Agent a form of letter of transmittal in a

customary form mutually agreed upon by the Parties (the "Letter of Transmittal")

which shall, among other things, specify that delivery shall be effected, and

risk of loss and title to the Certificates shall pass, only upon proper delivery

of the Certificates to the Paying Agent, and instructions for surrendering such

Certificates and receiving the Merger Consideration in respect thereof. The

Surviving Corporation shall cause the Paying Agent to mail, as soon as

reasonably practicable after the Effective Time, the Letter of Transmittal to

each Axle Shareholder of record at the Effective Time. Upon the surrender of

each such Certificate for cancellation, together with such Letter of

Transmittal, duly completed and validly executed, the Paying Agent shall, as

promptly as practicable, (x) pay to the holder of such Certificate an aggregate

amount equal to (i) the Merger Consideration multiplied by (ii) the number of

shares of Axle Common Stock formerly represented by such Certificate, in

consideration therefor, and such Certificate representing the Axle Common Stock

shall forthwith be cancelled. Until so surrendered, each such Certificate (other

than Certificates representing Axle Common Stock held by Axle or held in the

treasury of Axle) shall represent solely the right to receive the Merger

Consideration multiplied by the number of shares of Axle Common Stock

represented thereby. No interest or dividends shall be paid or accrued on the

Merger Consideration. If the Merger Consideration (or any portion thereof) is to

be delivered to any Person other than the Person in whose name the Certificate

formerly representing Axle Common Stock surrendered thereof is registered, it

shall be a condition to such right to receive payment of such Merger

Consideration that the Certificate so surrendered shall be properly endorsed or

otherwise be in proper form for transfer and that the Person requesting such

payment shall pay to the Paying Agent the transfer or other similar Taxes

required by reason of payment of the Merger Consideration to a Person other than

the registered holder of the Certificate so surrendered, or shall establish to

the satisfaction of the Paying Agent that such Tax has been paid or is not

applicable. The Paying Agent shall withhold or deduct for Taxes as required

under applicable Law.

stolen or destroyed, upon the making of an affidavit of that fact by the Person

claiming such Certificate to be lost, stolen or destroyed and, if required by

the Surviving Corporation, the posting by such Person of a bond, in such

reasonable amount, and otherwise in such substance and form, as the Surviving

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Corporation may reasonably direct, as indemnity against any claim that may be

made against the Surviving Corporation, the Buyer Parent and the Paying Agent

with respect to such Certificate, the Paying Agent will issue in exchange for

such lost, stolen or destroyed Certificate the Merger Consideration to which

such Person is entitled pursuant to this Article III.

3.3 Stock Transfer Books. After the Effective Time, there shall be no

transfers on the stock transfer books of the Surviving Corporation of any shares

of Axle Common Stock which were outstanding immediately prior to the Effective

Time. If, after the Effective Time, Certificates formerly representing shares of

Axle Common Stock are presented to the Surviving Corporation or the Paying

Agent, they shall be surrendered and cancelled in return for the payment of the

Merger Consideration.

3.4 Dissenting Shares. Notwithstanding any provision of this Agreement

to the contrary, shares of Axle Common Stock that are outstanding immediately

prior to the Effective Time and which are held by Axle Shareholders who shall

not have voted in favor of the Merger or consented thereto in writing and who

shall have properly exercised dissenters' rights or rights of appraisal for such

shares of Axle Common Stock in accordance with Illinois Law and who, as of the

Effective Time, have not effectively withdrawn or lost such dissenters' rights

(collectively, the "Dissenting Shares"), shall not be converted into or

represent the right to receive any portion of the amounts to be paid pursuant to

Section 3.1, but the holders thereof shall only be entitled to such rights as

are granted by Illinois Law. All Dissenting Shares held by Axle Shareholders who

shall have failed to perfect or who effectively shall have withdrawn or lost

their dissenters' rights shall thereupon be deemed to have been converted into,

and to have become exchangeable for, as of the later of the Effective Time or

the occurrence of such event, the right to receive the Merger Consideration to

be paid pursuant to this Article III, without any interest thereon, upon

surrender, in the manner provided in Section 3.2, for the Certificates that

formerly evidenced such shares. Axle shall not take any action relating to the

Dissenting Shares prior to the Effective Time without the consent of the Buyer

Parent, which consent shall not be unreasonably withheld or delayed.

3.5 Disposition of Axle Options and ESPP Purchase Rights.

(a) Except as set forth below, the Buyer Parent shall not

assume any options to purchase shares of Axle Common Stock (except for any ESPP

Purchase Right, each an "Axle Option") issued under Axle's 1991 Stock Option

Plan, as amended (the "1991 Plan"), Axle's Supplemental Stock Option Plan, as

amended (the "Supplemental Plan"), and Axle's 2003 Stock Incentive Plan, as

amended (the "2003 Plan," and together with the 1991 Plan and the Supplemental

Plan, collectively, the "Stock Option Plan"), or any other options, warrants or

other rights to acquire Axle Common Stock and as of the Effective Time all

outstanding Axle Options shall terminate, unless validly exercised prior

thereto. Except as set forth below, no less than twenty (20) days prior to the

Effective Time, Axle shall notify each holder of an Axle Option in writing (the

"Option Notice") of the terms of the Merger and that all Axle Options shall be

immediately and fully vested and exercisable, and that (i) all outstanding

unexercised Axle Options granted under the 1991 Plan and the Supplemental Plan

shall terminate as of the Effective Time, unless validly exercised prior

thereto, and (ii) all outstanding unexercised Axle Options granted under the

2003 Plan shall be cancelled as of the Effective Time in exchange for a cash

payment equal to, with respect to each such Axle Option, the excess of the

Merger

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Consideration, if any, over the Option Price. The Axle Shareholders who have

elected to exercise their Axle Options prior to the Expiration Date shall have

the option to either (i) deliver the Option Amount to the Paying Agent pursuant

to the terms of the Option Notice, or (ii) receive an amount equal to the Option

Payment Amount from the Paying Agent, so long as the Merger Consideration is

greater than the Option Price. Notwithstanding the foregoing, upon the Merger,

each Axle Option set forth on Schedule 3.5(a) of the Disclosure Schedule shall

be converted into an option to acquire common stock, par value $0.01 per share

of the Buyer Parent ("Buyer Parent Common Stock") upon substantially the same

terms and conditions (including per share exercise price) as were in effect

immediately prior to the Merger, provided such option holder executes a Consent

to such conversion (the "Option Consent") in a form satisfactory to the Buyer

Parent.

(b) As of the Announcement Date, the Axle Board shall cause

Axle's Employee Stock Purchase Plan, as amended and restated as of June 16, 2004

(the "ESPP"), to be amended to provide that no future contributions to the ESPP

shall be allowed following such date. At such time, Axle shall cause

contributions to the ESPP to be discontinued and shall notify each participant

in the ESPP of such discontinuation. To the extent any ESPP Purchase Right

exists for any participant in the ESPP as of the Effective Time, then, in lieu

of such participant receiving Axle Common Stock pursuant to the exercise of an

ESPP Purchase Right, such ESPP Purchase Right shall be purchased from such

participant (through a payment from the Paying Agent) in an amount equal to the

ESPP Redemption Amount. Within a reasonable period prior to the Effective Time,

Axle shall provide to the Paying Agent a form of letter of transmittal in a

customary form mutually agreed upon by the Parties (the "ESPP Notice") which

shall, among other things, notify each participant who has an ESPP Purchase

Right of the terms of the Merger, and of such participant's ESPP Redemption

Amount. The Buyer Parent shall cause the Paying Agent to mail on or immediately

following the Effective Time the ESPP Notice and the ESPP Redemption Amount to

each participant who has an ESPP Purchase Right. As of the Effective Time, the

ESPP shall be terminated by the Surviving Corporation. Notwithstanding anything

to the contrary in this Section 3.5(b), to the extent this Agreement is

terminated and the Merger is not consummated pursuant to the terms set forth

herein, Axle, shall have the right, in its sole discretion, to reinstate or

terminate the ESPP.

required from any third party or option holder and take, or cause to be done,

all things necessary and proper or advisable in compliance with the terms and

conditions of the Stock Option Plan and the ESPP (including obtaining the Option

Consents referred to in Section 3.5(a) and the Consents of holders of Axle

Options under the 2003 Plan to the treatment described in Section 3.5(a)) to

consummate and make effective, as soon as practicable, the transactions

contemplated by Sections 3.5(a) and 3.5(b) hereof.

3.6 Escheatment of Funds. None of the Parties nor any other Person shall

be liable to any former Axle Shareholder for any amount properly delivered to a

public official pursuant to applicable abandoned property, escheat or similar

Laws. Any such amounts remaining unclaimed by any Axle Shareholder immediately

prior to such time when such amounts would otherwise escheat to or become the

property of any Governmental Authority, shall, to the extent permitted by

applicable Laws, become the property of the Buyer Parent, free and clear of all

claims or interest of any Person previously entitled thereto.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES

OF AXLE

Except as set forth in the corresponding numbered sections of Axle's

disclosure schedule delivered concurrently with the delivery of this Agreement,

after giving effect to Section 11.12 (the "Disclosure Schedule"), Axle hereby

represents and warrants to the Buyer and the Buyer Parent with respect to the

matters specified in this Article IV as follows:

4.1 Organization and Qualification. Each of the Acquired Companies is an

entity duly organized, validly existing and in good standing under the Laws of

its jurisdiction of formation. Each of the Acquired Companies has the requisite

entity power and authority to carry on its business as it is now being

conducted. Each of the Acquired Companies is duly qualified to conduct business

as a foreign entity and is in good standing under the Laws of each jurisdiction

where the nature of its business or the ownership or leasing of its property

requires such qualification, except for such jurisdictions where the failure to

be qualified would not, individually or in the aggregate, reasonably be expected

to have a Material Adverse Effect.

4.2 Authorization; Enforceability.

(a) Axle has the requisite corporate power and authority to

execute and deliver this Agreement and to perform its obligations under this

Agreement and to consummate the transactions contemplated by this Agreement;

provided, that, the Axle Shareholder Approval is required for Axle to consummate

the Merger. The execution and delivery of this Agreement and the performance of

Axle's obligations hereunder have been duly and validly authorized by all

necessary corporate action on the part of Axle, and no other corporate

proceedings on the part of Axle are necessary to authorize the execution,

delivery and performance of this Agreement (subject to, in the case of the

Merger, obtaining the Axle Shareholder Approval). This Agreement has been duly

executed and delivered by Axle and, assuming the due authorization, execution

and delivery in each case by the other Parties hereto, will constitute, upon

such execution and delivery, legal, valid and binding obligations of Axle,

enforceable against Axle in accordance with its terms and conditions, except as

such enforceability may be limited by applicable bankruptcy, insolvency,

reorganization, moratorium or other similar Laws affecting the enforcement of

creditors rights generally, and general principles of equity (regardless of

whether such enforceability is considered in a proceeding in Law or equity).

(b) The Axle Board, at a meeting duly called and held, and not

rescinded or modified in any way, has by unanimous vote of all its members

(other than any recused members) duly (i) approved this Agreement and determined

that this Agreement and the transactions contemplated hereby, including the

Merger, are advisable in the best interests of, the holders of Axle Common

Stock, and (ii) resolved to recommend that the holders of Axle Common Stock vote

for approval and adoption of this Agreement.

4.3 Required Vote of Axle Shareholders. The affirmative vote of

two-thirds (2/3) of the votes of the shares of the Axle Common Stock entitled to

vote thereon is the only vote of any

<PAGE>

class or series of capital stock of Axle required by Illinois Law or Axle's

Organizational Documents to adopt this Agreement (the "Axle Shareholder

Approval").

4.4 State Takeover Statutes. The Axle Board has taken all actions

necessary so that the restrictions contained in Section 7.85 and Section 11.75

of the Illinois Law applicable to a business combination (as defined in Section

11.75 thereof) will not apply to the execution, delivery or performance of this

Agreement or the Voting Agreement, the consummation of the Merger or other

transactions contemplated by this Agreement or the Voting Agreement. True,

correct and complete copies of all resolutions of the Axle Board reflecting such

actions have been provided to the Buyer Parent. No other state takeover statute

or similar statue or regulation is applicable to or purports to be applicable to

the Merger or any of the transactions contemplated by this Agreement.

4.5 Organizational Documents. Axle has made available to the Buyer

Parent copies of each of the Acquired Companies respective Organizational

Documents as currently in effect, and such copies are true and complete as of

the date hereof.

4.6 Capitalization; Subsidiaries.

(a) The authorized capital stock of Axle consists of 20,000,000

shares of Axle Common Stock and 5,000,000 shares of Axle Preferred Stock. As of

the close of business on February 18, 2005, (a) 11,850,796 shares of Axle Common

Stock were issued and outstanding, all of which are validly issued, fully paid

and nonassessable; (b) no shares of Axle Preferred Stock were issued or

outstanding; (c) 906,514 shares of Axle Common Stock were held in the treasury

of Axle; (d) 484,846 shares of Axle Common Stock were reserved for issuance upon

the exercise of outstanding options to purchase Axle Common Stock under the 2003

Plan; (e) 1,216,410 shares of Axle Common Stock were reserved for issuance upon

the exercise of outstanding options to purchase Axle Common Stock under the 1991

Plan; (f) 7,000 shares of Axle Common Stock were reserved for issuance upon the

exercise of outstanding options to purchase Axle Common Stock under the

Supplemental Plan; (g) 133,007 shares of Axle Common Stock were available for

future grant under the 2003 Plan; (h) no shares of Axle Common Stock were

available for future grant under the 1991 Plan; (i) 39,390 shares of Axle Common

Stock were available for future grant under the Supplemental Plan; and (j)

83,524 shares of Axle Common Stock were available for future purchase under the

ESPP. All of the outstanding shares of Axle Common Stock are, and all of the

shares of Axle Common Stock issuable pursuant to the exercise of outstanding

Axle Options and ESPP Purchase Rights will be, when issued in accordance with

the respective terms thereof, issued and granted in compliance with all

applicable securities laws and other applicable Laws, and are, or will be, duly

authorized, validly issued, fully paid and nonassessable and free and clear of

any and all Liens. Except as set expressly forth in this Section 4.6(a), there

are no other shares of common stock or equity interests or other ownership

interests of any class of Axle or any Axle Subsidiary, or any security

exchangeable into or exercisable for such equity securities or other ownership

interests, issued, reserved for issuance or outstanding. Since February 18,

2005, no shares of Axle Common Stock have been issued or agreed to have been

issued by any Acquired Company, except (A) upon the exercise of Axle Options

issued and outstanding as of the close of business on February 18, 2005 or (B)

if the Effective Time occurs on or after July 1, 2005, as a result of the

exercise of ESPP Purchase Rights outstanding on the Announcement Date in a

manner

<PAGE>

consistent with past operation of the ESPP. The weighted average exercise price

of all Axle Options set forth on Schedule 4.6 of the Disclosure Schedule is

$13.5235. As of the date hereof, $75,878.94 has been contributed to the ESPP

since the last bi-annual date that shares of Axle Common Stock were issued

pursuant to the ESPP (the "Last ESPP Issuance Date") and following the Last ESPP

Issuance Date no funds remained in the ESPP with respect to contributions prior

to the Last ESPP Issuance Date. Assuming that the fair market value of Axle

Common Stock at the end of the ESPP purchase period in which this Agreement has

been executed is greater than the fair market value of Axle Common Stock at the

beginning of such purchase period, no more than 4,076 shares of Axle Common

Stock will be issuable under the ESPP in respect of funds contributed to the

ESPP if the Effective Time were to occur on or after July 1, 2005, and the

aggregate ESPP Redemption Amount (with respect to all ESPP Purchase Rights),

pursuant to Section 3.5(b), shall not exceed $39,275. Except as set forth on

Schedule 4.6 of the Disclosure Schedule, Axle has no subsidiaries and owns no

equity securities or other ownership interest of any other corporation,

partnership or other entity. Axle is not a participant in any joint venture or

similar arrangement. Schedule 4.6(a)(ii) of the Disclosure Schedule is a true

and complete schedule of Axle's outstanding indebtedness (including letters of

credit, capitalized leases and maximum amounts payable pursuant to earnout

obligations) as of the close of business on February 18, 2005.

(b) Exhibit 21.1 to Axle's Annual Report on Form 10-K for the

fiscal year ended December 28, 2003 sets forth a list of all of the Axle

Subsidiaries and their respective jurisdictions of incorporation. All of the

issued and outstanding shares of capital stock or other equity interests of each

Axle Subsidiary are validly issued, fully paid and non-assessable, are owned by

Axle or one or more Axle Subsidiaries, free and clear of any and all Liens.

4.7 Options. Except as set forth on Schedule 4.6 of the Disclosure

Schedule, there are no outstanding options, rights (preemptive or otherwise), or

warrants to acquire capital stock from any of the Acquired Companies, and no

calls, convertible or exchangeable securities, commitments, subscriptions or

other rights or any other arrangements to which any of the Acquired Companies is

a party requiring the issuance, sale or transfer of any equity securities of

such entities, voting securities or any securities convertible directly or

indirectly into equity securities or exchangeable for capital stock of any of

such entities, or evidencing the right to subscribe for any equity securities of

any of the Acquired Companies, or giving any Person (other than the Buyer Parent

and the Buyer) any rights with respect to any equity securities of any of the

Acquired Companies.

4.8 SEC Filings; Financial Statements.

(a) Axle has timely filed with the SEC all forms, reports,

schedules, statements and other documents required to be filed by it since

January 1, 2002 under the Exchange Act or the Securities Act (as such documents

have been amended since the time of their filing and all documents incorporated

by reference therein, collectively, the "Axle SEC Documents"). No Axle

Subsidiary is required to file any form, report, schedule, statement or other

document with the SEC. As of their respective dates and if amended prior to the

date hereof, as of the date of the last such amendment, the Axle SEC Documents

including, without limitation, any financial statements or schedules included

therein (i) did not contain any untrue statement of a material fact or omit to

state a material fact required to be stated therein or

<PAGE>

necessary in order to make the statements therein, in the light of the

circumstances under which they were made, not misleading, and (ii) complied in

all material respects with the applicable requirements of the Exchange Act and

the Securities Act, as the case may be, at such time of filing.

(b) Axle and each of its officers and directors are in

compliance with, and have complied, in all material respects with (i) the

applicable provisions of the Sarbanes-Oxley Act of 2002 and the related rules

and regulations promulgated thereunder, and (ii) the applicable listing and

corporate governance rules and regulations of NASDAQ. The management of Axle has

(i) implemented disclosure controls and procedures (as defined in Rule 13a-15(e)

of the Exchange Act) to ensure that material information relating to the

Acquired Companies is made known to the management of Axle by others within

those entities, and (ii) disclosed, based on its most recent evaluation, to

Axle's outside auditors, the audit committee of the Axle Board and the Buyer

Parent (A) all significant deficiencies and material weaknesses in the design or

operation of internal control over financial reporting (as defined in Rule

13a-15(f) of the Exchange Act) that are reasonably likely to materially affect

Axle's ability to record, process, summarize and report financial data, and (B)

any fraud, whether or not material, known to management that involves management

or other employees who, in each case, have a significant role in Axle's internal

control over financial reporting. There have been no material changes since

December 26, 2004 in Axle's internal controls or in other factors that could

significantly affect Axle's internal controls, or any significant deficiencies

or material weaknesses in such internal controls requiring corrective actions.

Axle has delivered to the Buyer Parent complete and accurate copies of notices

received from its independent auditor prior to the date hereof of any

significant deficiencies or material weaknesses in Axle's internal control over

financial reporting since December 28, 2003 and any other management letter or

similar correspondence from any independent auditor of Axle or any Axle

Subsidiary received since December 28, 2003. Axle is implementing such programs

and is taking such steps as it believes are necessary to effect compliance (not

later than the relevant statutory and regulatory deadline therefor) with all

provisions of Section 404 of the Sarbanes-Oxley Act that will become applicable

to Axle and has not received, orally or in writing, any notification that its

independent auditor (i) believes that Axle will not be able to complete its

assessment before the reporting deadline, or, if completed, that it will not be

completed in sufficient time for the independent auditor to complete its

assessment, or (ii) will not be able to issue unqualified attestation reports

with respect thereto. As of December 26, 2004, there were not, and as of the

date hereof there are not, any significant deficiencies or material weaknesses

(as such terms are defined in PCAOB Audit Standard No.2) in Axle's internal

controls with respect to financial reporting requiring corrective action, and

neither Axle's independent auditor nor any accounting firm, if any, which have

reviewed Axle's internal controls have indicated to Axle that such auditor or

firm believes any significant deficiencies or material weaknesses in internal

controls with respect to financial reporting exist.

each case, any related notes thereto), contained in the Axle SEC Documents (i)

was prepared from the books and records of Axle and the Axle Subsidiaries, (ii)

was prepared in accordance with GAAP applied on a consistent basis throughout

the periods involved (except as may be indicated therein or in the notes thereto

or, in the case of unaudited statements, do not contain footnotes as permitted

by Form 10-Q of the Exchange Act), (iii) complied in all material respects with

all applicable accounting requirements and with the published rules and

regulations of the SEC with

<PAGE>

respect thereto as in effect on the date of filing, (iv) except with respect to

the unaudited financial statements contained in the Axle SEC Documents filed on

form 10-Q of the Exchange Act, was accompanied by unqualified reports from the

independent auditor opining on the same as to the financial statements contained

therein and (v) fairly presents, in all material respects, the consolidated

financial position of Axle and the consolidated Axle Subsidiaries as of their

respective dates and the consolidated results of their respective operations and

cash flows for the periods indicated therein, except that the unaudited interim

financial statements were or are subject to normal year end adjustments which

were not or are not expected to be material in amount.

(d) Prior to the date hereof, Axle has delivered to the Buyer

Parent a draft consolidated balance sheet of Axle and the Axle Subsidiaries as

of December 26, 2004 and drafts of the consolidated income statement and

statement of cash flows for the year ended December 26, 2004 (collectively, the

"Draft Financial Statements"). The Draft Financial Statements were prepared from

the books and records of Axle and the Axle Subsidiaries, and fairly present, in

all material respects, the consolidated financial position of Axle and the

consolidated Axle Subsidiaries as of date indicated therein and the consolidated

results of their respective operations and cash flows for the period then ended,

subject to any audit by Axle's auditor.

(e) Except (i) as reserved against in the consolidated balance

sheet (including the notes thereto) of Axle included in its Annual Report on

Form 10-K for the fiscal year ended December 28, 2003, and (ii) for Liabilities

incurred since December 28, 2003 in the ordinary course of business consistent

with past practice, to the Acquired Companies' Knowledge, neither Axle nor any

of the Axle Subsidiaries have any Liabilities of any nature (whether or not

required by GAAP to be reflected in the audited financial statements of Axle and

the Axle Subsidiaries) except for such Liabilities which would not, individually

or in the aggregate, reasonably be expected to have a Material Adverse Effect.

4.9 Proxy Statement. The proxy statement or information statement to be

sent to the Axle Shareholders in connection with the meeting of Axle

Shareholders to consider the adoption of this Agreement, including any

adjournment or postponement thereof (the "Axle Shareholders' Meeting") (such

proxy statement or information statement, as amended or supplemented, is herein

referred to as the "Proxy Statement"), on the date first mailed to the Axle

Shareholders, at the time of any amendment or supplement thereto and at the time

of Axle Shareholders' Meeting, will not contain any untrue statement of a

material fact or omit to state a material fact necessary in order to make the

statements therein, in the light of the circumstances under which they were

made, not misleading. The Proxy Statement will, when filed by Axle with the SEC,

comply in all material respects with the applicable provisions of the Exchange

Act, and the rules and regulations thereunder. Notwithstanding the foregoing,

Axle makes no representation or warranty with respect to information supplied by

or on behalf of the Buyer Parent or the Buyer specifically for inclusion in the

Proxy Statement or any amendment or supplement thereto.

4.10 Taxes. Except where the failure to do so would not have or result

in a Material Adverse Effect or except as set forth on Schedule 4.10 of the

Disclosure Schedule:

(a) The Acquired Companies have timely filed, or have timely

filed for extensions to file, all Federal income and other material Tax Returns

required to be filed by them

<PAGE>

through the date hereof. Such Tax Returns are true, correct and complete in all

material respects. The Acquired Companies have timely paid and discharged all

Taxes due and payable by them (whether or not shown on such Tax Returns). The

Acquired Companies have withheld, collected and paid over to the appropriate

Governmental Authorities or are properly holding for such payment all Taxes

required by Law to be withheld or collected.

(b) None of the Acquired Companies is a party to any Tax

allocation or sharing agreement.

group within the meaning of Section 1504(a) of the Code (or any similar group

defined under a similar provision of state, local, or foreign Law) filing a

consolidated Federal income Tax Return or has any Liability for the Taxes of any

Person (other than any of the Acquired Companies) under Treasury Regulation

Section 1.1502-6 or any analogous or similar provision of Law (other than the

affiliated group of which Axle is the common parent).

(d) There are not being conducted or Threatened any material

audits, examinations, investigations, litigation or other proceedings in respect

of Taxes of the Acquired Companies.

(e) No Acquired Company has consented to extend the time in

which any Tax may be assessed or collected by any taxing authority.

4.11 Material Contracts. Except as filed as exhibits to the Axle SEC

Documents filed prior to the date hereof or as listed or described on Schedule

4.11 of the Disclosure Schedule, as of the date hereof, none of the Acquired

Companies is a party to or bound by (i) any "material contract" (as such term is

defined in Item 601(b)(10) of Regulation S-K) or (ii) any Contract of the type

described below (such Contracts of the type described in (i) and (ii), are

herein referred to as the "Material Contracts"):

(a) any consulting agreement or employment agreement that

provides for annual compensation exceeding $150,000 per year and which cannot be

terminated by the Acquired Companies without penalty on notice of thirty (30)

days or less, and any collective bargaining arrangement with any labor union and

any such agreements currently in negotiation or proposed;

(b) any Contract for capital expenditures or the acquisition of

fixed assets in excess of $500,000;

or the sale or furnishing of materials, supplies, merchandise, equipment, parts

or other property or services requiring remaining aggregate future payments in

excess of $250,000;

(d) any Contract that restricts or purports to restrict the

right of any Acquired Company, or, to Acquired Companies' Knowledge, any officer

or key executive of any of the Acquired Companies, to engage in any line of

business or in any geographic area, compete with any Person or sell any product;

<PAGE>

(e) any Contract relating to the acquisition or disposition of

any material assets or Real Property;

(f) any Contract relating to the borrowing of money, or the

guaranty of another Person's borrowing of money or other obligation, including,

without limitation, all notes, mortgages, indentures and other obligations,

guarantees of performance, agreements and instruments for or relating to any

lending or borrowing, including assumed indebtedness;

(g) any Contract granting any Person a material Lien on all or

any part of the material assets of the Acquired Companies, taken as a whole,

other than Liens which will be released at the Closing;

(h) any Contract between Axle and any of the Axle Subsidiaries,

on the one hand, and any of their respective officers or directors (or

Affiliates) on the other hand, except for such Contracts that are made in the

ordinary course of business or that are de minims in value or effect;

(i) any voting or other Contract governing how any shares of

Axle Common Stock shall be voted; or

(j) any Contract under which any of the Acquired Companies (i)

has granted or received a material license or sublicense, (ii) under which it is

obligated to pay or has the right to receive a royalty, license fee or similar

payment in an amount in excess of $250,000, other than licenses for commercially

available prepackaged software, or (iii) restricting the Acquired Companies

rights to use or register any intellectual property owned or purported to be

owned by the Acquired Companies.

The Acquired Companies have made available to the Buyer Parent a true

and complete copy of each written Material Contract. Except as set forth on

Schedule 4.11 of the Disclosure Schedule, each Material Contract is in full

force and effect, represents a valid and binding obligation of the applicable

Acquired Company, and, to Acquired Companies' Knowledge, a valid and binding

obligation of each other party thereto, and is enforceable against each party

thereto in accordance with its terms, except as such enforceability may be

limited by applicable bankruptcy, insolvency, reorganization, moratorium or

other similar Laws affecting the enforcement of creditors rights generally, and

general principles of equity (regardless of whether such enforceability is

considered in a proceeding in Law or equity). Each of the Acquired Companies has

performed in all material respects all obligations required to be performed by

it under each Material Contract, and to Acquired Companies' Knowledge, each

other party to each Material Contract has performed in all material respects all

obligations required to be performed by it under such Material Contract.

4.12 Real Property

(a) Schedule 4.12 of the Disclosure Schedule sets forth a true

and complete list of all real estate (i) in which any of the Acquired Companies

have an ownership interest (such real estate owned by the Acquired Companies is

herein referred to as the "Owned Property") and (ii) all real property leased or

subleased by any of the Acquired Companies (such real property leased or

subleased by any of the Acquired Companies is herein referred to as the

<PAGE>

"Leased Property"; the Owned Property and the Leased Property being referred to

collectively herein as the "Real Property"). Each Acquired Company has good,

valid and marketable fee simple title to each parcel of Owned Property owned by

such Acquired Company, free and clear of all Liens except for Permitted Liens.

Each Acquired Company has a valid unencumbered leasehold interest in the Leased

Property leased or subleased by such Acquired Company, in each case free and

clear of all Liens, except for (i) Liens listed or described on Schedule 4.12 of

the Disclosure Schedule, or (ii) Permitted Liens. Except as set forth on

Schedule 4.12 of the Disclosure Schedule, the Real Property constitutes all real

properties currently used or occupied by the Acquired Companies in connection

with the Business.

(b) The Acquired Companies have made available to the Buyer Parent true and

complete copies of each underlying lease or sublease with respect to each Leased

Property (each, a "Lease") and all other material agreements pertaining to the

Real Property. With respect to each of the Leases: (i) there are no existing

monetary defaults or material non-monetary defaults under any Lease by any

Acquired Company or, to Acquired Companies' Knowledge, the lessor thereof; (ii)

to Acquired Companies' Knowledge, no event has occurred which (with notice,

lapse of time or both) would constitute a monetary breach or default or material

non-monetary breach or default under any Lease by any party; (iii) each Acquired

Company's possession and quiet enjoyment of any Leased Property under such Lease

has not been disturbed in any material respect; and (iv) except as set forth on

Schedule 4.12 of the Disclosure Schedule, no Acquired Company has assigned its

interest under any Lease or sublet any part of the premises covered thereby or

exercised any right or option thereunder.

4.13 Litigation.

(a) Except as disclosed in the Axle SEC Documents filed prior to the

date hereof or as set forth on Schedule 4.13(a) of the Disclosure Schedule, (i)

there are no suits, actions, proceedings, investigations, claims or orders

(collectively, "Actions") pending or, to Acquired Companies' Knowledge,

Threatened, against, the Acquired Companies or any of their respective

properties, officers or directors, or for which any of the Acquired Companies is

obligated to indemnify a third party, before any court or Governmental

Authority, agency or official, which, if the relief request is granted, would,

individually or in the aggregate, reasonably be expected to have a Material

Adverse Effect, and (ii) no Acquired Company is subject to any Governmental

Order.

(b) Except as set forth on Schedule 4.13(b) of the Disclosure Schedule

(which shall be updated prior to Closing as required by Section 6.6(a)), there

are no Actions pending or, to Acquired Companies' Knowledge, Threatened, against

or otherwise affecting Axle or any of the Axle Subsidiaries relating to "clean

title" matters (including the types of claims which are the subject of dispute

in the matter captioned Gridley v. State Farm Automobile Insurance Company) or

any claim or Action brought under the Racketeer Influenced and Corrupt

Organizations Act.

4.14 Compliance with Applicable Laws. Except as disclosed in the Axle SEC

Documents filed prior to the date hereof or as set forth or referred to on

Schedule 4.14 of the Disclosure Schedule and except where any such violation or

failure to comply would not, individually or in the aggregate, reasonably be

expected to have a Material Adverse Effect, since January 1, 2002, each of the

Acquired Companies has complied in all material respects with all

<PAGE>

Laws applicable to it or to the operation of the Business, or by which any

property or asset of any of the Acquired Companies is bound or affected.

4.15 No Violation.

(a) Except as set forth on Schedule 4.15 of the Disclosure Schedule,

neither the execution and delivery of this Agreement, nor the performance by

Axle of the transactions contemplated hereby will (i) constitute a default

under, or violate any provision of, the Organizational Documents of any of the

Acquired Companies, (ii) result in a default (or an event which with notice or

lapse of time or both would become a default) or breach, or give rise to any

right of termination, cancellation or acceleration, or require any Consent

under, or result in the creation of a Lien on any property or asset of any of

the Acquired Companies pursuant to the terms, conditions or provisions of any

Contract or other instrument or obligation to which an Acquired Company is a

party, or (iii) conflict with or violate any Laws applicable to an Acquired

Company or by which any of its respective properties or assets is bound, except

with respect to clauses (ii) and (iii), for any such conflicts, violations,

breaches, defaults or other occurrences which would not, individually or in the

aggregate, reasonably be expected to (x) have a Material Adverse Effect or (y)

prevent or materially delay the performance of this Agreement by Axle or the

ability of Axle to take any action necessary to consummate the Merger.

(b) The execution and delivery of this Agreement by Axle does not, and

the performance of this Agreement by Axle will not, require any Consent or

permit of, or filing with, or notification to, any Governmental Authority or any

other Person (assuming the Axle Shareholder Approval is obtained), except (i)

under the Exchange Act, the Securities Act, any applicable blue sky laws, or the

rules and regulations of NASDAQ, (ii) under the HSR Act, (iii) the filing and

recordation of the Articles of Merger as required under Illinois Law and (iv)

for such other Consents, filings or notifications, the failure of which to make

or obtain, would not, individually or in the aggregate, reasonably be expected

to (x) have a Material Adverse Effect or (y) prevent or materially delay the

performance of this Agreement by Axle or the ability of Axle to take any action

necessary to consummate the Merger.

4.16 Intellectual Property.

(a) Schedule 4.16(a) of the Disclosure Schedule sets forth a list of

all (i) trademark and service mark registrations and pending registration

applications, trade names, Acquired Companies names, and domain names, (ii)

patents and pending patent applications, (iii) copyright registrations and

registration applications, and (iv) computer software (other than commercially

available prepackaged computer software generally available to the public

pursuant to non-exclusive end-user licenses with an acquisition price of less

than $10,000), which are, in each case, either (x) owned or purported to be

owned by one or more of the Acquired Companies (the "Company Owned Intellectual

Property") or (y) material to the operation of the Business and are owned by

third parties and used or held for use pursuant to a valid license by one or

more of the Acquired Companies (the "Company Licensed Intellectual Property").

Schedule 4.16 of the Disclosure Schedule additionally sets forth a list of all

material license agreements and arrangements with respect to any of the

Intellectual Property to which any of the Acquired Companies is a party, whether

as licensee, licensor or otherwise (other than non-exclusive end-user licenses

for commercially available prepackaged computer software

<PAGE>

generally available to the public). The Acquired Companies are the sole and

exclusive owners of all Company Owned Intellectual Property.

(b) Except as set forth on Schedule 4.16(b) of the Disclosure Sche

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