Table of Contents

		Page #
ARTICLE I DEFINITIONS		2
Section 1.1	Definitions	2
Section 1.2	Construction	12
ARTICLE II MERGER		12
Section 2.1	The Merger	12
Section 2.2	Effective Time	12
Section 2.3	Effect of the Merger	12
Section 2.4	Certificate of Incorporation; Bylaws	13
Section 2.5	Directors and Officers	13
Section 2.6	Merger Consideration	13
Section 2.7	BCCM Holdback	13
Section 2.8	Conversion of the BCCM Shares	13
Section 2.9	Exchange of Certificates	14
ARTICLE III UNIT PURCHASE AND CLOSING		14
Section 3.1	Unit Purchase	14
Section 3.2	Purchase Price	14
Section 3.3	Crompton, Management Members’ and Carryholders’ Holdback	14
Section 3.4	Sellers’ Agents	15
Section 3.5	The Closing	15
Section 3.6	Adjustment Amount	15
Section 3.7	Free Cash Flow Payment	16
Section 3.8	Post-Closing Free Cash Flow Payment	16
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY		17
Section 4.1	Existence and Power	17
Section 4.2	Authorization; Enforceability	17
Section 4.3	Governmental Authorization	18
Section 4.4	Non-Contravention; Consents	18
Section 4.5	Capitalization	18
Section 4.6	Subsidiaries	19
Section 4.7	Financial Statements	19
Section 4.8	No Undisclosed Liabilities	19
Section 4.9	Tax Matters	19
Section 4.10	Absence of Certain Changes	20
Section 4.11	Contracts	20
Section 4.12	Insurance Coverage	22
Section 4.13	Litigation	23
Section 4.14	Compliance with Laws; Permits	23
Section 4.15	Assets; Properties; Sufficiency of Assets	23
Section 4.16	Intellectual Property	24
Section 4.17	Environmental Matters	25
Section 4.18	Plans and Material Documents	26

 

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Section 4.19	Affiliate Transactions	28
Section 4.20	Customer and Supplier Relations	28
Section 4.21	Other Employment Matters	28
Section 4.22	Accounts Receivable	29
Section 4.23	Inventory	29
Section 4.24	Product and Service Warranties; Liability	29
Section 4.25	Finders’ Fees	29
Section 4.26	Disclaimer of Other Representations and Warranties	29
ARTICLE V REPRESENTATIONS AND WARRANTIES OF CROMPTON		30
Section 5.1	Existence and Power	30
Section 5.2	Authorization; Enforceability	30
Section 5.3	Governmental Authorization	30
Section 5.4	Non-Contravention; Consents	30
Section 5.5	Capitalization	30
Section 5.6	Litigation	31
Section 5.7	Finders’ Fees	31
Section 5.8	Crompton’s Knowledge	31
Section 5.9	Disclaimer of Other Representations and Warranties	31
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BCCM SHAREHOLDERS		31
Section 6.1	Existence and Power	31
Section 6.2	Authorization; Enforceability	32
Section 6.3	Governmental Authorization	32
Section 6.4	Non-Contravention; Consents	33
Section 6.5	Capitalization	33
Section 6.6	Subsidiaries	34
Section 6.7	No Undisclosed Liabilities	34
Section 6.8	Tax Matters	34
Section 6.9	Litigation	35
Section 6.10	Finders’ Fees	35
Section 6.11	Disclaimer of Other Representations and Warranties	35
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE MANAGEMENT MEMBERS		36
Section 7.1	Authorization; Enforceability	36
Section 7.2	Governmental Authorization	36
Section 7.3	Non-Contravention; Consents	36
Section 7.4	Capitalization	36
Section 7.5	Litigation	37
Section 7.6	Finders’ Fees	37
Section 7.7	Disclaimer of Other Representations and Warranties	37
ARTICLE VIII REPRESENTATIONS AND WARRANTIES OF PURCHASER		37
Section 8.1	Corporate Existence and Power	37
Section 8.2	Corporate Authorization; Enforceability	37

 

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Section 8.3	Non-Contravention	38
Section 8.4	Governmental Authorization	38
Section 8.5	Finders’ Fees	38
Section 8.6	Litigation	38
Section 8.7	Investigation by Purchaser; Exclusivity of Representations	38
Section 8.8	Hart-Scott-Rodino	39
Section 8.9	Purchaser’s Knowledge	39
Section 8.10	Payments Under the Credit Agreement.	39
ARTICLE IX CERTAIN COVENANTS		39
Section 9.1	Access	39
Section 9.2	Employees and Employment	39
Section 9.3	Commercially Reasonable Efforts	40
Section 9.4	Transfer Laws.	40
Section 9.5	Further Assurances	40
ARTICLE X TAX MATTERS		41
Section 10.1	Tax Allocation	41
Section 10.2	Tax Returns	41
Section 10.3	Refunds	42
Section 10.4	Miscellaneous	42
ARTICLE XI CLOSING DELIVERABLES		42
Section 11.1	Seller Deliverables	42
Section 11.2	Purchaser Deliverables	43
ARTICLE XII LIABILITIES AND INDEMNIFICATION		43
Section 12.1	Survival Periods	43
Section 12.2	Sellers’ Agreement to Indemnify	44
Section 12.3	Purchaser’s Agreement to Indemnify	46
Section 12.4	Indemnification Procedure	48
Section 12.5	Reduction of Sellers’ Holdbacks	49
Section 12.6	Settlement of Claims	50
Section 12.7	Insurance	51
Section 12.8	No Duplication	51
Section 12.9	Contribution Agreement Indemnities	51
Section 12.10	Remedies	51
Section 12.11	No Special Damages	52
Section 12.12	Materiality	52
ARTICLE XIII MISCELLANEOUS		52
Section 13.1	Notices	52
Section 13.2	Amendments and Waivers	54
Section 13.3	Expenses	54
Section 13.4	Successors and Assigns	54
Section 13.5	No Third-Party Beneficiaries	54
Section 13.6	Governing Law	54

 

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Section 13.7	Public Announcements	54
Section 13.8	Jurisdiction	55
Section 13.9	Counterparts	55
Section 13.10	Table of Contents; Headings	55
Section 13.11	Entire Agreement	55
Section 13.12	Termination of Certain Agreements	55
Section 13.13	Severability; Injunctive Relief	55
Section 13.14	Waiver of Conflict	56

 

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MERGER AND UNIT PURCHASE AGREEMENT

MERGER AND UNIT PURCHASE AGREEMENT, dated as of October 30, 2006, by and among Davis-Standard, LLC, a limited liability corporation organized under the laws of Delaware (“ DS LLC ”), BCCM Holdings, Inc., a corporation organized under the laws of Delaware (“ BCCM ”), Crompton Holding Corporation, a corporation organized under the laws of Delaware (“ Crompton ”), the shareholders of BCCM listed on Exhibit A (the “ BCCM Shareholders ”), the persons listed on Exhibit B , each of whom is a management member in DS LLC (the “ Management Members ”), Robert Armstrong as agent for the Carryholders hereunder (the “ Carryholders’ Agent ”) and together with Crompton, the BCCM Shareholders and the Management Members, the “ Sellers ”) and D-S Acquisition Co., a corporation organized under the laws of Delaware (the “ Purchaser ”).

R E C I T A L S

WHEREAS, the BCCM Shareholders own, as a group, all of the authorized, issued and outstanding shares of every class of Capital Stock of BCCM (the “ BCCM Shares ”);

WHEREAS, BCCM owns an Interest in DS LLC (the “ BCCM Interest ”);

WHEREAS, Crompton owns an Interest in DS LLC (the “ Crompton Interest ”);

WHEREAS, the Management Members own an Interest in DS LLC (the “ Management Members’ Interest ”);

WHEREAS, the Carryholders have a contingent right to receive certain amounts from the sale of DS LLC pursuant to the terms of the DS Operating Agreement (the “ Carried Interest ”);

WHEREAS, the BCCM Interest, the Crompton Interest, the Management Members’ Interest and the Carried Interest constitute all of the Interests in DS LLC;

WHEREAS, the respective governing bodies of Purchaser and BCCM have approved the merger of the Purchaser with and into BCCM (the “ Merger ”), pursuant to which BCCM will be the surviving company and the BCCM Shareholders will be entitled to receive the consideration provided for in this Agreement, all upon the terms and subject to the conditions set forth herein; and

WHEREAS, Crompton, the Management Members and the Carryholders (together, the “ DS Sellers ”) desire to sell to the Purchaser and the Purchaser desires to purchase from the DS Sellers, their respective interests in DS LLC, upon the terms and subject to the conditions set forth herein (the “ Unit Purchase ”).

NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, the Purchaser, the Sellers, DS LLC and BCCM hereby agree as follows:

 

ARTICLE I
DEFINITIONS

Section 1.1      Definitions .  The capitalized terms used in this Agreement shall have the meanings set forth below:

“ Accountants ” as used in this Agreement, means a mutually acceptable independent accounting firm.

“ Accounts Receivable ” means all accounts and notes receivable relating to the Business.

“ Adjustment Amount ” has the meaning set forth in Section 3.6(a) .

“ Adjustment EBITDA ” means EBITDA of the Company for the fiscal year ended the Balance Sheet Date, based on the Audited Balance Sheet.

“ Adjustment Percentage ” means with respect to any Seller, the percentage set forth opposite such Seller’s name in column C of Schedule 3.1 .

“ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with the first Person and, if such first Person is an individual, any member of the immediate family (including parents, spouse and children) of such individual and any trust whose principal beneficiary is such individual or one or more members of such individual’s immediate family, and any Person who is controlled by any such member or trust.  For the purposes of this Agreement, “ control ,” when used with respect to any Person, means the possession, directly or indirectly, of the power to (a) vote 10% or more of the securities having ordinary voting power for the election of directors (or comparable positions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “ controlling ” and “ controlled ” have meanings correlative to the foregoing.

“ Agency Agreement ” shall mean any of the BCCM Agency Agreement, the Management Members’ Agency Agreement or the Carryholders’ Agency Agreement.

“ Agreement ” means this Merger and Unit Purchase Agreement, as the same may be amended from time to time in accordance with the terms hereof.

“ Ancillary Agreements ” means the Certificate of Merger, the Non-Competition Agreements, each Agency Agreement and all other instruments, certificates and other agreements entered into by one or more of the Sellers, BCCM, the Company or the Purchaser in connection with the consummation of the transactions contemplated by this Agreement.

“ Anniversary EBITDA ” means EBITDA of the Company for the period ending on the twelve (12) month anniversary of the Closing Date or any twelve (12) month period ending on any calendar month thereafter, excluding Transaction Expenses and management fees.

“ Applicable Reserves ” means the aggregate reserves for Accounts Receivable.

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“ Audited Balance Sheet ” means the audited balance sheet of the Company as of the Balance Sheet Date, prepared by the Purchaser in accordance with Section 3.6(b) .

“ Balance Sheet Date ” means September 30, 2006.

“ BCCM ” has the meaning set forth in the recitals to this Agreement.

“ BCCM Agency Agreement ” means the Agency Agreement among the BCCM Agent and the BCCM Shareholders, in substantially the form attached hereto as Exhibit C-1 .

“ BCCM Agent ” means the agent appointed by the BCCM Shareholders pursuant to the BCCM Agency Agreement.

“ BCCM Holdback ” has the meaning set forth in Section 2.7 .

“ BCCM Interest ” has the meaning set forth in the recitals to this Agreement.

“ BCCM Representations and Warranties ” means the representations and warranties contained in Article VI other than the BCCM Selected Representations and Warranties.

“ BCCM Shareholder Representations ” means the representations and warranties contained in Section 6.1(b) , Section 6.4(b) , Section 6.5(b) and Section 6.9 .

“ BCCM Shareholders’ Agreement ” means the Stockholders and Registration Rights Agreement of BCCM, dated March 31, 2005, among the BCCM Shareholders and BCCM.

“ BCCM Shares ” has the meaning set forth in the recitals to this Agreement.

“ BCCM Title Representation ” means the representations and warranties contained in Section 6.5(b) .

“ Benefit Plan ” means any employee benefit plan within the meaning of Section 3(3) of ERISA, and any other plan, program, agreement, arrangement, policy, contract, commitment or scheme, written or oral, statutory or contractual, that provides for compensation or benefits, including any deferred compensation, severance, supplemental income, executive compensation, bonus, stock option or incentive plan, any welfare plan, cafeteria plan or any holiday, personnel or vacation plan or practice.

“ Business ” means the business of the Company as presently conducted, including, but not limited to, the business of the design, sale, installation, service and support of extrusions systems and converting machinery.

“ Business Day ” means a day that is not a Saturday, Sunday or a day on which commercial banking institutions located in New York City, New York are authorized or required to close.

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“ Capitalized Lease Obligations ” means the obligations of such Person that are required to be classified and accounted for as capital lease obligations under GAAP, together with all obligations to make termination payments under such capitalized lease obligations.

“ Capital Stock ” means (a) with respect to any Person that is a corporation, any and all shares, interests, participation or other equivalents (however designated and whether or not voting) of corporate stock, including the common stock of such Person but excluding stock held as treasury stock, and (b) with respect to any Person that is not a corporation, any and all partnership or other equity interests of such Person.

“ Carried Interest ” has the meaning set forth in the recitals to this Agreement.

“ Carryholders ” means the individuals listed in Schedule 1.1 hereto.

“ Carryholders’ Agency Agreement ” means the Agency Agreement among the Carryholders’ Agent, the Carryholders and the Purchaser, in substantially the form attached hereto as Exhibit C-2 .

“ Carryholders’ Agent ” has the meaning set forth in the recitals to this Agreement.

“ Carryholders’ Holdback ” has the meaning set forth in Section 3.3 .

“ CERCLA ” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§ 9601, et seq. , as amended.

“ Certificate of Merger ” has the meaning set forth in Section 2.2 .

“ Closing ” has the meaning set forth in Section 3.5 .

“ Closing Date ” has the meaning set forth in Section 3.5 .

“ Closing Balance Sheet ” means the audited balance sheet of the Company as of the Closing Date, prepared by the Purchaser in accordance with Section 3.8(a) .

“ Closing Free Cash Flow Payment ” has the meaning set forth in Section 3.7 .

“ CMP ” has the meaning set forth in Section 13.14 .

“ Code ” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

“ Company ” means, collectively, DS LLC and its Subsidiaries.

“ Company Knowledge ” means, for the purposes of this Agreement, the actual knowledge of Messrs. Charles Buckley, Robert Armstrong, Steven Rachlis, Mark Panozzo, James Murphy, Ernest Plasse, Hassan Helmy and Joseph Genovese.

“ Company Representation and Warranty ” means the representations and warranties contained in Article IV .

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“ Consideration ” means the Merger Consideration and the Purchase Price.

“ Constituent of Concern ” means any substance defined as a hazardous substance, hazardous waste, hazardous material, pollutant or contaminant by any Environmental Law, any petroleum hydrocarbon and any degradation product of a petroleum hydrocarbon, asbestos, PCB or similar substance, the generation, recycling, use, treatment, storage, transportation, Release, disposal or exposure of or to which is subject to regulation under any Environmental Law.

“ Contracts ” has the meaning set forth in Section 4.11(a) .

“ Contribution Agreement ” means the Contribution Agreement among Crompton, Davis Standard Corporation, BCCM, BCCM LLC and DS LLC, dated as of March 31, 2005.

“ Credit Agreement ” means the Credit and Security Agreement, dated the date of this Agreement, among the Company, as borrower, KeyBank National Association, as lead arranger, sole book runner and administrative agent and the lenders named therein.

“ Crompton ” has the meaning set forth in the recitals to this Agreement.

“ Crompton Holdback ” has the meaning set forth in Section 3.3 .

“ Crompton Interest ” has the meaning set forth in the recitals to this Agreement.

“ Crompton Knowledge ” means, for the purposes of this Agreement, the actual knowledge of Gregory McDaniel and Arthur Wienslaw.

“ Crompton Representations and Warranties ” means the representations and warranties contained in Article V .

“ Crompton Title Representation ” means the representations and warranties contained in Section 5.5(a) .

“ Damages ” means Purchaser Damages and Sellers’ Damages.

“ DGCL ” means the Delaware General Corporations Law.

“ DS LLC ” has the meaning set forth in the recitals to this Agreement.

“ DS Operating Agreement ” means the Amended and Restated Limited Liability Agreement of DS LLC, dated April 29, 2005, as amended from time to time prior to the Closing Date.

“ DS Sellers ” has the meaning set forth in the recitals to this Agreement.

“ DS Units ” has the meaning set forth in Section 4.5 .

“ EBITDA ” means, with regard to the Company for any twelve month period, the net income of the Company for that period plus , to the extent deducted from revenues in determining net income, (i) interest expense, (ii) expense for income or similar taxes paid or accrued,

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(iii)  depreciation, (iv) amortization and (v) extraordinary non-recurring losses, minus , to the extent included in net income, extraordinary non-recurring gains, all in accordance with GAAP.

“ Effective Time ” has the meaning set forth in Section 2.2 .

“ Election Period ” has the meaning set forth in Section 12.4 .

“ Environmental Claims ” means administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, citations, summonses, notices of non-compliance or violation, requests for information, investigations or proceedings relating in any way to the Release of Constituents of Concern or any Environmental Law, including (a) Environmental Claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law and (b) Environmental Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from a Release of Constituents of Concern on at or underlying the Real Property.

“ Environmental Condition ” means a condition with respect to the environment which has resulted or could reasonably be expected to result in a loss, liability, cost or expense to the Company.

“ Environmental Law ” means any Law, administrative order, consent decree or judgment, or common law relating to the environment, human health and safety, including CERCLA, and any state and local counterparts or equivalents.

“ Environmental Liabilities and Costs ” shall mean any Sellers’ Damages arising from or relating to: (a) any Claim pursuant to Environmental Law for personal injury, property damage, damage to natural resources or the Environment, or threatened or actual Release (whether based on negligent acts or omissions, statutory liability, or strict liability without fault or otherwise); (b) any investigation, study, assessment, testing, monitoring, containment, removal, remediation, response, cleanup or abatement of any threatened or actual Release, whether on-site or off-site, in connection with the Property or the activities or operations conducted thereon; and (c) the failure at any time to comply with all applicable Environmental Laws, including without limitation: (i) any fines and penalties assessed, levied or asserted by a Governmental Authority; and (ii) any Sellers’ Damages necessary to enable compliance with all applicable Environmental Laws currently in effect and requiring compliance as of the Closing.

“ Environmental Permits ” means all Permits, licenses, authorizations, certificates and approvals of Governmental Authorities relating to or required by Environmental Laws.

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

“ ERISA Affiliate ” means any Person that, together with the Company, would be considered a single employer within the meaning of Section 4001 of ERISA or Section 414 of the Code.

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

“ Financial Statements ” means the audited balance sheet of the Company as of September 30, 2005 and the unaudited balance sheet of the Company as of September 30, 2006, together with the related statements of income and cash flow for the periods then ended, all of which are attached hereto as Schedule 4.7 .

“ FTC ” has the meaning set forth in Section 8.8 .

“ GAAP ” means U.S. generally accepted accounting principles, as consistently applied by the Company.

“ Governmental Authority ” means any domestic or foreign governmental or regulatory agency, authority, bureau, commission, department, official or similar body or instrumentality thereof, or any governmental court, arbitral tribunal or other body administering alternative dispute resolution.

“ Holdback Acceleration Event ” has the meaning set forth in Section 12.5(b) .

“ Holdback Percentage ” means, with respect to any Seller, the percentage set forth opposite such Seller’s name in column B of Schedule 3.1 hereof, calculated as the quotient of (i) the original amount of such Seller’s Holdback and (ii) $10 million.

“ HRCo ” has the meaning set forth in Section 13.14 .

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

“ HSR Letter ” has the meaning set forth in Section 8.8 .

“ Indebtedness ” means with respect to any Person, at any date, without duplication, (a) all obligations of such Person for borrowed money, including all principal, interest, premiums, fees, expenses, overdrafts and penalties with respect thereto, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase price of the property or services, except trade payables incurred in the Ordinary Course of Business, (d) all guaranties of any nature with respect to the indebtedness of any Person and obligations of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit or similar instrument, (e) all Capitalized Lease Obligations, (f) all other obligations of a Person which would be required to be shown as indebtedness on a balance sheet of such Person prepared in accordance with GAAP, (g) every obligation of a Person under interest rates swaps, caps, collars and similar arrangements, and (h) all indebtedness of any other Person of the type referred to in Sections (a) to (g) above directly or indirectly guaranteed by such Person or secured by any assets of such Person, whether or not such Indebtedness has been assumed by such Person.

“ Indemnity Notice ” has the meaning set forth in Section 12.4(b) .

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“ Indemnified Party ” has the meaning set forth in Section 12.4(a)(i) .

“ Indemnifying Party ” has the meaning set forth in Section 12.4(a)(i) .

“ Intellectual Property ” means any trademark, service mark, trade name, product designation, logo, slogan, invention, patent, trade secret, copyright, know-how, proprietary design or process, computer software and database, Internet address or domain name (including any registrations or applications for registration or renewal of any of the foregoing), research in progress, or any other similar type of proprietary intellectual property right.

“ Intellectual Property Right ” means any Intellectual Property which is used or held for use or otherwise necessary in connection with the conduct of the Business.

“ Interest ” means the DS Units owned by a Person, together with such Person’s contractual rights pursuant to the DS Operating Agreement.

“ Inventory ” means raw materials, work in progress and finished goods inventory.

“ IRS ” means the Internal Revenue Service.

“ Law ” means any applicable federal, foreign, state or local statute, law, including common law, rule, regulation, ordinance, code, permit or license.

“ Lien ” means, with respect to the Company’s ownership or leasehold interest in any Property or asset, any mortgage, lien, pledge, charge or security interest.  For the purposes of this Agreement, a Person will be deemed to own, subject to a Lien, any property or asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capitalized Lease Obligations or other title retention agreement relating to such property or asset.

“ LR ” has the meaning set forth in Section 13.14(c) .

“ Management Members ” has the meaning set forth in the recitals to this Agreement.

“ Management Members’ Agency Agreement ” means the Agency Agreement among the Management Members’ Agent and the Management Members, in substantially the form attached hereto as Exhibit C-3 .

“ Management Members’ Interest ” has the meaning set forth in the recitals to this Agreement.

“ Management Members’ Agent ” means the agent appointed by the Management Members pursuant to the Management Members’ Agency Agreement.

“ Management Members’ Holdback ” has the meaning set forth in Section 3.3 .

“ Management Members’ Representations and Warranties ” means the representations and warranties contained in Article VII .

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“ Management Members’ Title Representation ” means the representations and warranties contained in Section 7.4(a) .

“ Material Adverse Effect ” means a material adverse effect on the business, assets, liabilities, condition (financial or otherwise), results of operations of the Company or the Business, taken as a whole, provided that the effects of changes that are generally applicable to the industries or economies of the countries in which the Business operates or does business shall be excluded from such determination.

“ Merger ” has the meaning set forth in the recitals to this Agreement.

“ Merger Consideration ” has the meaning set forth in Section 2.6 .

“ Non-Competition Agreement ” means the non-competition agreement between Purchaser and Crompton in substantially the form of Exhibit D hereto.

“ Order ” means any judgment, injunction, judicial or administrative order or decree.

“ Ordinary Course of Business ” means, with respect to any Person, the ordinary course of business of such Person, substantially consistent with such Person’s past practice and custom, including, with respect to any category, quantity or dollar amount, term and frequency of payment, delivery, accrual, expense or any other accounting entry.

“ Permit ” has the meaning set forth in Section 4.14(b) .

“ Permitted Lien ” means (a) mechanics’ Liens, workmen’s Liens, carriers’ Liens, repairmen’s Liens, material men’s Liens, landlord’s Liens or other like Liens arising or incurred in the Ordinary Course of Business in respect of obligations that are not overdue, (b) Liens for Taxes, assessments and other similar governmental charges that are not overdue or are being contested in good faith and for which appropriate reserves have been established, (c) Liens incurred or deposits made to secure the performance of bids, contracts, statutory obligations, surety and appeal bonds incurred in connection with the Business and in the Ordinary Course of Business by the Company, (d) Liens that arise under or violations of or non-compliance with any zoning, land use or other similar imperfections of title that arise in the Ordinary Course of Business that, in the aggregate, do not materially affect the value or use of the property subject thereto, or (e) statutory liens held by landlords under leases and liens expressly created in any lease against fixtures, chattels or other property of the Company that are placed in, or become a part of, the leased real property.

“ Person ” means an individual, corporation, partnership, limited liability company, joint venture, association, trust or other entity or organization or Governmental Authority.

“ Post-Closing Tax Period ” means any Tax period (or portion thereof) ending after the Closing Date.

“ Pre-Closing Tax Period ” means any Tax period (or portion thereof) that ends on or before the Closing Date.

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“ Product Liability Claims ” shall mean any product liability and/or product warranties Claims or Losses (as each is defined in the Contribution Agreement) arising out of or relating to goods manufactured, sold and/or shipped by the Davis Standard Business (as defined in the Contribution Agreement), or the services provided in connection thereto, including without limitation the services provided and goods manufactured, sold and/or shipped during the period of time the business of Davis-Standard was operated as a division of Crompton Corporation (as defined in the Contribution Agreement), together with any equipment and related service product liability and/or product warranty liabilities assumed by Davis-Standard and/or Crompton Corporation as a result of an acquisition of a business or manufacturing facility that is now operated by the Company.

“ Property ” means any Real Property and improvements at any time owned, leased, used, operated or occupied (whether for storage, disposal or otherwise) by the Company.

“ Purchaser ” has the meaning set forth in the introductory paragraph of this Agreement.

“ Purchaser Damages ” has the meaning set forth in Section 12.2(a) .

“ Purchaser Indemnitees ” has the meaning set forth in Section 12.2(a) .

“ Purchaser Knowledge ” means, for the purposes of this Agreement, the actual knowledge of Messrs. Scott I. Oakford and Phillip J. Cagnassola.

“ Real Property ” has the meaning set forth in Section 4.15(b) .

“ Reference Balance Sheet ” means the balance sheet of the Company as of the Balance Sheet Date attached hereto as Section 4.7 .

“ Release ” means any release, spill, emission, discharge, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the environment (including ambient air, surface water, groundwater and surface or subsurface strata) or into or out of any Property, including the movement of Constituents of Concern through or in the air, soil, surface water, groundwater or property.

“ Restrictive Covenants ” has the meaning set forth in Section 12.10(a) .

“ Sellers ” has the meaning set forth in the recitals to this Agreement.

“ Sellers’ Indemnification Cap ” has the meaning set forth in Section 12.2(b)(ii) .

“ Sellers’ Indemnitees ” has the meaning set forth in Section 12.3 .

“ Sellers’ Damages ” has the meaning set forth in Section 12.3 .

“ Sellers’ Holdbacks ” means the Crompton Holdback, the BCCM Holdback, the Management Members’ Holdback and the Carryholders’ Holdback.

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“ Subsidiary ” means, with respect to any Person, (a) any corporation 50% or more of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person, directly or indirectly through Subsidiaries, and (b) any partnership, limited liability company, association, joint venture, trust or other entity in which such Person, directly or indirectly through Subsidiaries, is either a general partner, has a 50% or greater equity interest at the time or otherwise owns a controlling interest.

“ Survival Period ” has the meaning set forth in Section 12.1 .

“ Surviving Company ” has the meaning set forth in Section 2.1 .

“ Tax ” or “ Taxes ” shall mean all federal, state, local or foreign income, gross receipts, windfall profits, severance, property, production, sales, use, license, excise, franchise, employment, withholding, transfer, payroll, goods and services, ad valorem, value-added or minimum tax, or any other tax, custom, duty, governmental fee, or other like assessment or charge of any kind whatsoever, together with any interest or any penalty, addition to tax or additional amount imposed by any Governmental Authority, whether disputed or not and including any obligations to indemnify or otherwise assume or succeed to the liability of any other Person for any of the foregoing.

“ Tax Return ” shall mean any return, report or similar statement required to be filed with respect to any Taxes (including any attached schedules), including, without limitation, any information return, claim or refund, amended return and declaration of estimated Tax.

“ Third-Party Claim ” has the meaning set forth in Section 12.4(a)(i) .

“ Third-Party Claim Notice ” has the meaning set forth in Section 12.4(a)(i).

“ Title Representations ” means the BCCM Title Representations, the Crompton Title Representations and the Management Members Title Representations.

“ Transaction Expenses ” means all fees and expenses of any broker, finder, financial advisor, legal advisor or similar Person paid by the Company in connection with the transactions contemplated in this Agreement.

“ Transfer Laws ” has the meaning set forth in Section 9.4 .

“ Utilities ” has the meaning set forth in Section 4.15(b) .

“ Unit Purchase ” has the meaning set forth in the recitals to this Agreement.

“ Workers Compensation Claims ” shall mean liability under United States workers’ compensation laws or comparable foreign laws for Claims or Losses (as each is defined in the Contribution Agreement) for, by or related to, employees of the Davis-Standard Business (as defined in the Contribution Agreement), including when the business of Davis-Standard was

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operated as a division of Crompton Corporation (as defined in the Contribution Agreement), together with any liability under United States workers’ compensation laws or comparable foreign laws assumed by Davis-Standard and/or Crompton Corporation as a result of an acquisition of a business or manufacturing facility that is now operated by the Company.

Section 1.2      Construction .  (a)  Whenever the context requires, the meanings of the terms set forth in Article 1.1 shall be equally applicable to the singular and plural forms thereof, and the gender of all words used in this Agreement shall include the masculine, feminine and neuter.  All references to Articles refer to articles of this Agreement, and all references to Schedules and Exhibits are to schedules and exhibits attached to this Agreement, each of which is made a part of this Agreement for all purposes.

(b)    No provision of this Agreement will be interpreted in favor of, or against, any of the parties hereto by reason of the extent to which any such party or its counsel participated in the drafting thereof or by reason of the extent to which any such provision is inconsistent with any prior draft hereof or thereof.

ARTICLE II
MERGER

Section 2.1      The Merger .  Upon the terms and subject to the conditions of this Agreement, and in accordance with the DGCL, at the Effective Time the Purchaser shall be merged with and into BCCM.  As a result of the Merger, the separate corporate existence of the Purchaser shall cease, and BCCM shall continue as the surviving company of the Merger (BCCM from and after the Effective Time hereinafter referred to as the “ Surviving Company ”).

Section 2.2      Effective Time .  Upon the terms and subject to the conditions of this Agreement, on the Closing Date, BCCM and the Purchaser shall cause the Merger to be consummated by filing the certificate of merger (the “ Certificate of Merger ”) substantially in the form attached hereto as Exhibit E with the Secretary of State of the State of Delaware, in such form as is required by, and executed in accordance with the applicable provisions of, the DGCL (the date and time of such filing being hereinafter referred to as the “ Effective Time ”). Notwithstanding the foregoing, the parties hereto shall be under no obligation to effect the Merger hereunder unless Crompton, the Management Members, and the Carryholders, as a group, sell to Purchaser all of their respective Interests pursuant to Article III .

Section 2.3      Effect of the Merger .  At the Effective Time, the effect of the Merger shall be as provided in this Agreement and the applicable provisions of the DGCL.  Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all the property, rights, privileges, powers and franchises of the Purchaser and BCCM shall vest in the Surviving Company, and all debts, liabilities, obligations and duties of the Purchaser and BCCM shall become the debts, liabilities, obligations and duties of the Surviving Company.

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Section 2.4      Certificate of Incorporation; Bylaws .

(a)    At the Effective Time, the certificate of incorporation of the Surviving Company shall be amended to conform to the certificate of incorporation of the Purchaser, as in effect immediately prior to the Effective Time, and to change the name of the Surviving Company to “Davis-Standard Corporation”, until such time as it may be thereafter further amended in accordance with the applicable provisions of the DGCL and such certificate of incorporation.

(b)    At the Effective Time, the bylaws of the Surviving Company shall be amended to conform to the bylaws of the Purchaser, as in effect immediately prior to the Effective Time, until such time as it may be thereafter amended in accordance with the applicable provisions of the DGCL, the certificate of incorporation and such bylaws.

Section 2.5      Directors and Officers .  The directors, officers and managers of the Purchaser immediately prior to the Effective Time shall be the initial directors, officers and managers of the Surviving Company, each to hold office in accordance with the certificate of incorporation and bylaws of the Surviving Company.

Section 2.6      Merger Consideration .  The aggregate consideration payable pursuant to the Merger to each of the BCCM Shareholders shall be equal to the amounts set forth opposite their names on Schedule 6.5 (the “ Merger Consideration ”), payable at Closing by wire transfer of immediately available funds pursuant to written wire transfer instructions delivered by the BCCM Shareholders to Purchaser at least two (2) business days prior to the Closing.

Section 2.7      BCCM Holdback .    Subject to the rights contained in Article XII , including Section 12.5 and Section 12.6 therein, the Surviving Company shall pay to the BCCM Shareholders the amounts set forth opposite their names on Schedule 3.1 , plus interest accrued thereon at the rate of ten percent (10%) per annum (in the aggregate, the “ BCCM Holdback ”) as follows: (a) one half of such total amount, after such amount is adjusted pursuant to Section 12.5 and Section 12.6 , on the twelve (12) month anniversary of the Closing Date, and (b) the remainder of such total amount, after such amount is adjusted pursuant to Section 12.5 and Section 12.6 , on the eighteen (18) month anniversary of the Closing Date; provided, that such payment schedule may be adjusted upon the occurrence of a Holdback Acceleration Event pursuant to Section 12.5(b); provided further that no such amount shall be payable if, and to the extent, that any claim for Purchaser Damages under Article XII remains in dispute and unsettled with respect to such BCCM Shareholder; and provided further that any amounts in dispute and unsettled shall be deposited into an interest bearing escrow account at the time such amount would otherwise be payable to the BCCM Shareholders hereunder and released upon settlement or final disposition of such claim.  If the Company fails to deposit any such amounts into such escrow account at such time, the Company will be deemed to have waived its right to indemnification with respect to such disputed and unsettled matters.

Section 2.8      Conversion of the BCCM Shares .

(a)    Conversion of Shares . All of the BCCM Shares outstanding as of the Effective Time shall, by virtue of the Merger and without any action on the part of the BCCM

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Shareholders or the Purchaser, automatically be converted into the right to receive Merger Consideration.

(b)    Treasury Shares .  Each share of capital stock held in BCCM’s treasury as of the Effective Time, if any, shall, by virtue of the Merger, be canceled without payment of any consideration therefor.

(c)    Purchaser Shares . Each share of capital stock of Purchaser issued and outstanding immediately prior to the Effective Time will remain issued and outstanding and shall constitute one (1) share of capital stock of the Surviving Company.

Section 2.9      Exchange of Certificates . At the Closing, certificates representing the BCCM Shares shall be canceled in exchange for the Merger Consideration.

ARTICLE III
UNIT PURCHASE AND CLOSING

Section 3.1      Unit Purchase .  (a)  Upon the terms and subject to the conditions of this Agreement, at the Closing, (i) Crompton agrees to sell to Purchaser, and the Purchaser shall purchase from Crompton, the Crompton Interest, free and clear of all Liens, (ii) each of the Management Members agrees to sell to Purchaser, and the Purchaser shall purchase from the Management Members, the Management Members’ Interest, free and clear of all Liens and (iii) each of the Carryholders agrees to receive payment hereunder in full satisfaction of such Carryholder’s rights to its Carried Interest, all in accordance with numbers and amounts set forth on Schedule 4.5, with respect to the Crompton and Management Members, and Schedule 1.1 with respect to the Carryholders.

(b)    Purchaser shall not be required to purchase the Crompton Interest, the Management Members’ Interest or the Carried Interest, unless (i) the DS Sellers, as a group, sell and convey to Purchaser all of the Crompton Interest, the Management Members’ Interest and the Carried Interest, and (ii) the Merger has been effected pursuant to Article II .

Section 3.2              Purchase Price .  (a)  In consideration for the sale and conveyance by Crompton to Purchaser of the Crompton Interest, the sale and conveyance by the Management Members of the Management Members’ Interest and the full satisfaction of all Carryholders’ right to their respective Carried Interest, Purchaser shall, at the Closing, subject to Section 3.1(b) , (i) pay to Crompton the amount set forth opposite its name on Schedule 4.5 , (ii) pay to each of the Management Members the amounts set forth opposite each of their names on Schedule 4.5 and (iii) pay to each of the Carryholders the amounts set forth opposite each of their names on Schedule 1.1 pursuant to the terms of the Carryholders’ Agency Agreement (the consideration described in the foregoing items (i) through (iii), the “ Purchase Price ”).  All amounts payable at Closing shall be paid in cash by wire transfer in immediately available funds to accounts designated by DS Sellers at least two Business Days prior to Closing.

Section 3.3      Crompton, Management Members’ and Carryholders’ Holdback .    Subject to the rights contained in Article XII , including Section 12.5 and Section 12.6 therein, the Surviving Company shall pay (a) to Crompton the amount set forth opposite its name on Schedule 3.1 , plus interest accrued thereon at the rate of ten percent (10%) per annum (the

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“ Crompton Holdback ”), (b) to the Management Members the amounts set forth opposite their names on Schedule 3.1 , plus interest accrued thereon at the rate of ten percent (10%) per annum (in the aggregate, the “ Management Members’ Holdback ”), and (c) to the Carryholders the amounts set forth opposite their names on Schedule 3.1 , plus interest accrued thereon at the rate of ten percent (10%) per annum, pursuant to the terms of the Carryholders’ Agency Agreement (in the aggregate, the “ Carryholders’ Holdback ”) as follows: (a) one half of each such Sellers’ Holdback, after such amount is adjusted pursuant to Section 12.5 and Section 12.6 , on the twelve (12) month anniversary of the Closing Date, and (b) the remainder of each such Sellers’ Holdback, after such amount is adjusted pursuant to Section 12.5 and Section 12.6 , on the eighteen (18) month anniversary of the Closing Date, provided that no such amount shall be payable if, and to the extent, that any claim for Purchaser Damages under Article XII remains in dispute and unsettled with respect to such Seller; provided further that any amounts in dispute and unsettled shall be deposited into an interest bearing escrow account at the time such amount would otherwise be payable to a DS Seller hereunder and released upon settlement or final disposition of such claim.   If the Company fails to deposit any such amounts into such escrow account at such time, the Company will be deemed to have waived its right to indemnification with respect to such disputed and unsettled matters.

Section 3.4      Sellers’ Agents .  The BCCM Agent, the Management Members’ Agent and the Carryholders’ Agent shall serve as the representative of, respectively, the BCCM Shareholders, the Management Members and the Carryholders with respect to all matters set forth in the respective Agency Agreement.  Crompton shall act on its own behalf with respect to the Crompton Holdback. The duties and obligations of each Agent shall be determined solely by the express provisions of the respective Agency Agreement.

Section 3.5      The Closing .  The closing of the Merger and Unit Purchase (the “ Closing ”) will take place at the offices of Curtis, Mallet-Prevost, Colt & Mosle LLP, 101 Park Avenue, New York, NY 10178 at 10:00 a.m., Eastern Standard Time, on the date of this Agreement, unless the parties agree in writing to change the Closing to another time, date or place.  The date upon which the Closing occurs is herein called the “ Closing Date .”  Notwithstanding any other provision hereof, the Closing will be deemed effective for accounting, tax and all other purposes as of 12:00 a.m., Eastern Standard Time, on the Closing Date.

Section 3.6      Adjustment Amount

(a)    The “ Adjustment Amount ” (which may only be a positive number) will be the amount equal to the product of (i) two and (ii) the Adjustment EBITDA less $24,000,000; provided that such amount may not exceed $5,000,000, and if such amount is a negative number, the Adjustment Amount shall be zero.

(b)    As promptly as practicable, but in any event within sixty (60) calendar days following the Closing Date, Purchaser shall deliver to Sellers the Audited Balance Sheet, together with a certificate of Purchaser containing a calculation of the Adjustment Amount on the same basis and applying the same accounting principles, including GAAP, that were used to prepare the Reference Balance Sheet.  If within thirty (30) days following delivery of the Audited Balance Sheet, none of Crompton, the BCCM Agent or the Management Members’ Agent have given Purchaser notice of an objection to the Audited Balance Sheet (including a

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statement of the basis of such objection), then the Audited Balance Sheet will be determinative in computing the Adjustment Amount, based on the formula set forth in Section 3.6(a) hereof. If any of Crompton, the BCCM Agent or the Management Members’ Agent gives such notice of objection, Crompton, the BCCM Agent, the Management Members’ Agent and Purchaser shall attempt a good faith resolution of the dispute.  If no such resolution is reached within a period of twenty (20) days from such objection, then the issues in dispute will be submitted to the Accountants for resolution. If issues in dispute are submitted to the Accountants for resolution, (i) each party will furnish to the Accountants such workpapers and other documents and information relating to the disputed issues as the Accountants may request and are available to that party or its subsidiaries (or its independent public accountants), and will be afforded the opportunity to present to the Accountants any material relating to the determination and to discuss the determination with the Accountants; (ii) the determination by the Accountants, as set forth in a notice delivered to both parties by the Accountants as soon as practicable following submission of such dispute to the Accountants, will be binding and conclusive on the parties; and (iii) Sellers on the one hand and Purchaser on the other hand will each bear fifty percent (50%) of the fees of the Accountants for such determination.

(c)   Payment of any Adjustment Amount that is owed by Purchaser to Sellers pursuant to this Section 3.6 shall be made by Purchaser to Sellers, pro rata based on their Adjustment Percentage as follows: (i) 50% of the Adjustment Amount shall be paid to the Sellers on the twelve (12) month anniversary of the Closing Date, and (ii) 50% of the Adjustment Amount shall be paid to the Sellers on the eighteen (18) month anniversary of the Closing Date; provided that if a Holdback Acceleration Event occurs, the full amount of the Adjustment Amount shall be paid to the Sellers on the twelve (12) month anniversary of the Closing Date (or at the completion of any calendar month thereafter during which the Holdback Acceleration Event occurs as set forth in Section 12.5(b) below).  The Adjustment Amount will accrue interest at the rate of ten percent (10%) per annum from the Closing Date.  The Adjustment Amount, including any accrued interest, will not be made part of the Holdback Amount, nor will it be subject to any indemnification or other claims by Purchaser or any Purchaser Indemnitees, except as provided in Section 3.8(b) .

Section 3.7     Free Cash Flow Payment .  As of the Closing Date, the Company shall have distributed to its members on a pro rata basis as set forth on Schedule 3.7 , the aggregate Free Cash Flow (as such term is defined in the DS Operating Agreement, which amount reflects all prior distributions of Free Cash Flow, including but not limited to the BCCM Special Distribution Amount (as defined in the DS Operating Agreement)), since April 29, 2005, through and including the Balance Sheet Date (the “ Closing Free Cash Flow Payment ”).

Section 3.8     Post-Closing Free Cash Flow Payment .

(a)   As promptly as practicable, but in any event within sixty (60) calendar days following the Closing Date, Purchaser shall deliver to Sellers the Closing Balance Sheet.  If within thirty (30) days following delivery of the Closing Balance Sheet, none of Crompton, the BCCM Agent or the Management Members’ Agent have given Purchaser notice of an objection to the Closing Balance Sheet (including a statement of the basis of such objection), then the Closing Balance Sheet will be determinative in computing the Free Cash Flow Adjustment Amount, based on the formula set forth in Section 3.8(b) hereof. If any of Crompton, the BCCM

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Agent or the Management Members’ Agent gives such notice of objection, Crompton, the BCCM Agent, the Management Members’ Agent and Purchaser shall attempt a good faith resolution of the dispute.  If no such resolution is reached within a period of twenty (20) days from such objection, then the issues in dispute will be submitted to the Accountants for resolution. If issues in dispute are submitted to the Accountants for resolution, (i) each party will furnish to the Accountants such workpapers and other documents and information relating to the disputed issues as the Accountants may request and are available to that party or its subsidiaries (or its independent public accountants), and will be afforded the opportunity to present to the Accountants any material relating to the determination and to discuss the determination with the Accountants; (ii) the determination by the Accountants, as set forth in a notice delivered to both parties by the Accountants as soon as practicable following submission of such dispute to the Accountants, will be binding and conclusive on the parties; and (iii) Sellers on the one hand and Purchaser on the other hand will each bear fifty percent (50%) of the fees of the Accountants for such determination.

(b)   As soon as practicable following the date on which the Closing Balance Sheet is finally accepted pursuant to the terms of Section 3.8(a) , but in no event more than ten (10) days following such date, the Purchaser shall cause the Company to pay to the Sellers pro rata based on Schedule 3.7 , an amount, if a positive number, equal to (i) the amount of Free Cash Flow (as such term is defined in the DS Operating Agreement, which amount reflects all prior distributions of Free Cash Flow, including but not limited to the BCCM Special Distribution Amount (as defined in the DS Operating Agreement)) since April 29, 2005, through and including the date of the Closing, less (ii) the Closing Free Cash Flow Payment (the “ Free Cash Flow Adjustment Amount ”).  In the event that the Free Cash Flow Adjustment Amount is a negative number, the Adjustment Amount shall be reduced pro rata by the amount of such Free Cash Flow Adjustment Amount; provided that the Adjustment Amount may not be reduced below zero.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Purchaser as follows:

Section 4.1     Existence and Power .  DS LLC is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware.  A copy of the certificate of formation and the DS Operating Agreement have been delivered to Purchaser and, as of the Closing Date, are complete, correct and are in full force and effect, and there have been no amendments or modifications thereto either made and/or approved.

Section 4.2     Authorization; Enforceability .  The execution, delivery and performance by DS LLC of this Agreement and each of the Ancillary Agreements to which it will be a party at the Closing are, and will be at the Closing, duly authorized by all necessary actions, and no other action on the part of DS LLC is necessary to authorize this Agreement or any of the Ancillary Agreements to which DS LLC will be a party at the Closing.  This Agreement has been, and each of the Ancillary Agreements to which DS LLC will be a party at the Closing will have been, duly executed and delivered by DS LLC.  Assuming the due execution and delivery by Purchaser of this Agreement and each of the Ancillary Agreements to

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which DS LLC will be a party at the Closing, this Agreement constitutes, and each Ancillary Agreement to which DS LLC will be a party at the Closing will constitute at the Closing, the valid and binding agreements of DS LLC, enforceable against DS LLC in accordance with their terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting enforcement of creditors’ rights generally and by general principles of equity (whether applied in a proceeding at law or in equity).

Section 4.3     Governmental Authorization .  Except as disclosed in Schedule 4.3 , the execution, delivery and performance by DS LLC of this Agreement and each Ancillary Agreement to which DS LLC will be a party at the Closing require no consent, approval, order, authorization or action by or in respect of, or filing with, any Governmental Authority, except that the Company makes no representation or warranties regarding the HSR Act.

Section 4.4     Non-Contravention; Consents .  Except as disclosed in Schedule 4.4 , the execution, delivery and performance by DS LLC of this Agreement and each Ancillary Agreement to which DS LLC will be a party at the Closing, and the consummation of the transactions contemplated hereby and thereby do not and will not at the Closing (i) violate the certificate of formation of DS LLC or the DS Operating Agreement, (ii) violate any Law or Order, (iii) require any filing with or the issuance of any Permit, consent or approval of, or the giving of any notice to, any Person (including filings, consents or approvals required under any Permits of DS LLC or any licenses to which DS LLC is a party) except that the Company makes no representation or warranties regarding the HSR Act, (iv) result in a violation or breach of, constitute (with or without due notice or lapse of time or both) a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of the Company or to a loss of any benefit to which the Company is entitled under, any Contract, agreement or other instrument binding upon the Company or any license, franchise, Permit or other similar authorization held by the Company, or (v) result in the creation or imposition of any Lien (other than Permitted Liens) on any ownership or leasehold interest in any asset of the Company, except to the extent that any of the foregoing would not have a Material Adverse Effect.

Section 4.5     Capitalization .  The authorized capital stock of DS LLC consists of 100 Common Units, all of which are issued and outstanding and owned of record as set forth on Schedule 4.5 .  All of the Capital Stock of DS LLC (the “ DS Units ”) are duly authorized, validly issued and outstanding, fully paid and nonassessable, and were issued, except as set forth in the DS Operating Agreement, free of preemptive rights.  Except as set forth in the DS Operating Agreement, there are no options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, convertible securities or other rights, agreement, arrangements or commitments of any character relating to the DS Units or obligating DS LLC to issue, sell or otherwise cause to become outstanding any shares of capital stock.  There are no outstanding contractual obligations of DS LLC to repurchase, redeem or otherwise acquire any shares of, or interests in, DS LLC or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person.  Except as may be set forth in the DS Operating Agreement, there are no outstanding or authorized stock appreciation, phantom stock participation or similar rights with respect to DS LLC.

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Section 4.6     Subsidiaries .  Except as disclosed in Schedule 4.6 , DS LLC does not own any Capital Stock or other equity or ownership or proprietary interest in any corporation, partnership, association, trust, joint venture or other entity.

Section 4.7     Financial Statements .  (a)  DS LLC has heretofore furnished Purchaser with a true and complete copy of the Financial Statements which are attached hereto as Schedule 4.7 .  The Financial Statements have been derived from the books and records of the Company, have been prepared in accordance with GAAP (except for, with respect to the Reference Balance Sheet and the related statement of income and cash flow, the absence of footnote disclosure and usual and customary year-end audit adjustments) and fairly present in all material respects the financial position of the Company at the respective dates thereof and the results of the operations of the Company for the periods indicated.

(b)   The books of account of the Company, all of which have been made available to Purchaser, reflect the operations of the Company in all material respects.

Section 4.8     No Undisclosed Liabilities .  To the Company’s Knowledge, the Company has no liabilities, whether accrued, contingent, absolute, determined, determinable or otherwise, other than (i) liabilities provided for in the Financial Statements, (ii) liabilities disclosed in Schedule 4.8 , (iii) other undisclosed liabilities incurred since the Balance Sheet Date in the Ordinary Course of Business, and (iv) liabilities arising out of the terms and conditions of the Company’s contracts, including the Contracts and, in each case (i) – (iv), which would not have a Material Adverse Effect.  Except as disclosed in the Schedules to this Agreement, including, Schedule 4.8 and Schedule 4.11(a), or provided for in the Financial Statements of the Company, the Company has no material Indebtedness.

Section 4.9     Tax Matters .

(a)   DS LLC is a “partnership” for purposes of Code §7701 and the associated Treasury Regulations.  Each of DS LLC’s Subsidiaries is a “corporation” for purposes of Code §7701 and the associated Treasury Regulations.

(b)   Except as set forth on Schedule 4.9, the Company has filed all Tax Returns that it was required to file under applicable laws and regulations.  All such Tax Returns were correct and complete in all respects and have been prepared in substantial compliance with all applicable laws and regulations.  All Taxes due and owing by the Company (whether or not shown on any Tax Return) have been paid.  Except as set forth on Schedule 4.9 , the Company is not currently the beneficiary of any extension of time within which to file any Tax Return.  To the Company’s Knowledge, no claim has been made by an authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.  No Tax authority has formally or, to the Company’s Knowledge, informally proposed any adjustment relating to such Tax Returns.  Except as set forth on Schedule 4.9, there are no pending or, to Company’s Knowledge, threatened actions or proceedings for the assessment or collection of Taxes against the Company.  There are no liens for Taxes (other than Taxes not yet due and payable) upon any of the assets of the Company.

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(c)   Except as set forth on Schedule 4.9, the Company has withheld and paid all Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, stockholder or, to the Company’s Knowledge, any creditor or other third party.

(d)   Schedule 4.9 lists all federal, state, local, and foreign Tax Returns filed with respect to the Company for taxable periods ended on or after December 31, 2001, indicates those Tax Returns that have been audited, and indicates those Tax Returns that currently are the subject of audit.  The Company has delivered, or made available, to the Purchaser correct and complete copies of all federal income Tax Returns, examination reports, and statements of deficiencies assessed against, or agreed to by the Company since December 31, 2001.

(e)   The Company has not waived any statute of limitations in respect of Taxes since April 28, 2005, and has no current agreement in effect that grants an extension of time with respect to a Tax assessment or deficiency.

(f)    The DS Units are not and have not been “United States real property interests” within the meaning of Code §897 at any time.  The Company is not a party to or bound by any Tax allocation or sharing agreement.  The Company has not been a member of an affiliated group filing a consolidated federal income Tax Return, and the Company does not have any liability for the Taxes of any Person under Treasury Regulation §1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise.

(g)   The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (A) change in method of accounting for a taxable period ending on or prior to the Closing Date; (B) “closing agreement” as described in Code §7121 (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date; (C) intercompany transactions or any excess loss account described in Treasury Regulations under Code §1502 (or any corresponding or similar provision of state, local or foreign income Tax law); (D) installment sale or open transaction disposition made on or prior to the Closing Date; or (E) prepaid amount received on or prior to the Closing Date.

(h)   The Company has not participated in any transaction required to be disclosed under Treasury Regulation §301.6011-4.

Section 4.10   Absence of Certain Changes .  Except as disclosed in Schedule 4.10 , since the Balance Sheet Date, the Company has conducted the Business in the Ordinary Course of Business and to the Company’s Knowledge there has not been any event, occurrence, development or circumstances that has had or which could reasonably be expected to have a Material Adverse Effect.  Since the Balance Sheet Date, there has not occurred any material damage, destruction or casualty loss (whether or not covered by insurance) with respect to any material asset owned or operated by the Company.

Section 4.11   Contracts .  (a)  Except as disclosed in Schedule 4.11(a) , the Company is not a party to or bound by any lease, agreement, contract, commitment or other

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legally binding contractual right or obligation (whether written or oral) (collectively, “ Contracts ”) that is of a type described below:

(i)            any lease (whether of real or personal property) under which the aggregate payments would be $300,00 or more annually, including the leases disclosed or required to be disclosed on Schedule 4.15(b) ;

(ii)           except pursuant to purchase orders issued in the Ordinary Course of Business, any agreement for the purchase of materials, supplies, goods, services, equipment or other assets that provides for aggregate payments by the Company of $300,000 or more annually;

(iii)          any sales, distribution or other similar agreement providing for the sale by the Company of materials, supplies, goods, services, equipment or other assets that provides for aggregate payments to the Company of $500,000 or more annually;

(iv)          any partnership or joint venture agreement that involves the sharing of profits, losses, costs or liabilities with any other Person;

(v)           except pursuant to any contract or commitment made in the Ordinary Course of Business in connection with the sale of products or services to the Company’s customers, any Contract pursuant to which any third party has rights to acquire or use any material asset owned by the Company, including any Intellectual Property Right of the Company;

(vi)          any agreement relating to the acquisition or disposition of any business (whether by merger, sale of stock, sale of assets or otherwise) or, except pursuant to any contract or commitment made in the Ordinary Course of Business, granting to any Person a right of first refusal, first offer or other right to purchase any of the assets owned by the Company;

(vii)         any agreement pursuant to which the Company incurs material Indebtedness, other than accruals recorded in the Ordinary Course of Business;

(viii)        except pursuant to any Contract made in the Ordinary Course of Business in connection with the sale of products or services to the Company’s customers, any license, franchise or similar agreement;

(ix)           any material agency, dealer, sales representative, marketing or other similar agreement;

(x)            except pursuant to any Contract made in the Ordinary Course of Business in connection with the sale of products or services to the Company’s customers, any Contract (other than leases and subleases, but including shared services and occupancy agreements) that provide for payment by or to the Company of $300,000 or more annually and may not be terminated by the Company without payment of penalty on less than 90 days’ prior notice;

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(xi)           except pursuant to any Contract made in the Ordinary Course of Business, any management service or consulting agreement providing for payment by the Company of $300,000 or more annually or made with an Affiliate of the Company;

(xii)          except pursuant to any sale of products or services in the Ordinary Course of Business, any warranty, guaranty or other similar undertaking with respect to any contractual performance (including any liquidated damage or performance penalty provisions) or agreement to indemnify any Person (other than in connection with any leases and subleases) for which the Company has liability or potential liability of $500,000 or more;

(xiii)         any management employment agreement or deferred compensation, severance, bonus or retirement agreement or plan in effect as of the date hereof (including in respect of any advances or loans to any employees) and entered into or adopted by the Company;

(xiv)        any Contract involving foreign currency transactions entered into for the purpose of hedging any currency or pricing risk; or

(xv)         any other agreement, commitment, arrangement or plan not made in the Ordinary Course of Business of the Company that provides for the payment by or to the Company of $300,000 or more annually that may not be terminated by the Company without penalty on less than 90 days’ prior notice.

(b)   Except as set forth in Schedule 4.11(b) , each Contract disclosed in Schedule 4.11(a) is a valid and binding agreement of the Company and, to the Company’s Knowledge, each other party thereto, enforceable in accordance with its respective terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting enforcement of creditors’ rights generally and by general principles of equity (whether applied in a proceeding at law or in equity).  Except as set forth in Schedule 4.11(b) , neither the Company nor, to the Company’s Knowledge, any other party to any such Contract is in default or breach (with or without due notice or lapse of time or both) in any material respect under the terms of any such Contract.  The Company has delivered or made available to Purchaser true and complete originals or copies of all Contracts disclosed in Schedule 4.11(a) .

Section 4.12   Insurance Coverage .  Schedule 4.12 contains a list of all of the insurance policies and fidelity bonds covering the assets, Business, operations, employees, officers and directors of the Company.  There is no material claim by the Company pending under any of such policies or bonds as to which coverage has been questioned, denied or disputed in writing by the underwriters of such policies or bonds.  All premiums due and payable under all such policies and bonds have been paid and the Company has complied with the terms and conditions of all such policies and bonds in all material respects.  To the Company’s Knowledge, such policies of insurance and bonds (or other policies and bonds providing substantially similar insurance coverage) are in full force and effect.  To the Company’s Knowledge, since the last renewal date of any insurance policy, there has been no written notice

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of any material adverse change in the relationship of the Company with its respective insurers or the premiums payable pursuant to such policies.

Section 4.13   Litigation .  (a)  Except as disclosed in Schedule 4.13(a) , there is no action, suit, investigation, arbitration or administrative or other proceeding pending or, to the Company’s Knowledge, threatened, against the Company before any court or arbitrator or any Governmental Authority which would have or could reasonably be expected to have a Material Adverse Effect or which in any manner challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement and any Ancillary Agreements to which Seller will be a party at Closing.  Except as disclosed in Schedule 4.13(a) , there are no outstanding judgments, orders, injunctions, decrees, stipulations or awards (whether rendered by a court, administrative agency, arbitral body or Governmental Authority) against the Company.

(b)   All material written claims, whether in contract or tort, for defective or allegedly defective products or workmanship pending against the Company are listed or described on Schedule 4.13(b) .

Section 4.14   Compliance with Laws; Permits .  (a)  Except as described in Schedule 4.14(a) , the Company has complied with all Laws applicable to its business in all material respects, except where failure to so comply would not have a Material Adverse Effect.  The Company has not received written notice that the use or condition of any of the leased Real Property or any other asset owned or leased by the Company is in violation of any Law.  Except as set forth in Schedule 4.14(a) , the Company has not received written notice of any violation of any Law relating to the operation of the Business or to any of its assets, operations, processes, results or products.

(b)   Schedule 4.14(b) sets forth a list of each government or regulatory license, authorization, permit, franchise, consent and approval (the “ Permits ”) issued to and held by the Company as same are required to be so issued and held to carry on the Business as currently conducted except where failure to have any such Permit would not have a Material Adverse Effect.  The Company is the authorized legal holder of the Permits, and, to the Company’s Knowledge, each Permit is valid and in full force and effect.  The Company is not in default under, and, to the Company’s