ASSET PURCHASE AGREEMENT

Exhibit 10.14

ASSET PURCHASE AGREEMENT

by and among

UNITED COMPONENTS, INC.;

NEAPCO INC.;

AND

NEAPCO, LLC

Dated as of June 30, 2006

TABLE OF CONTENTS

		Page
ARTICLE I CERTAIN DEFINITIONS			1
1.1 Definitions			1
ARTICLE II PURCHASE AND SALE OF ASSETS			8
2.1 Agreement to Purchase and Sell			8
2.2 Enumeration of Purchased Assets			9
2.3 Excluded Assets			10
2.4 Certain Consents to Assignment			11
ARTICLE III ASSUMPTION OF LIABILITIES			11
3.1 Agreement to Assume			11
3.2 Description of Assumed Liabilities			11
3.3 Excluded Liabilities			12
3.4 No Expansion of Third Party Rights			12
ARTICLE IV PRICE AND CLOSING			12
4.1 Closing			12
4.2 Purchase Price			12
4.3 Allocation of Total Consideration			14
ARTICLE V CLOSING DELIVERIES			14
5.1 Conditions to the Obligations of Buyer			14
5.2 Conditions to the Obligations of Parent and Seller			16
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PARENT AND SELLER			16
6.1 Organization and Power			16
6.2 Authorization; No Breach			17
6.3 Sole Shareholder; No Subsidiaries			17
6.4 Financial Statements			17
6.5 Absence of Undisclosed Liabilities			18
6.6 No Material Adverse Change			18
6.7 Absence of Certain Developments			18
6.8 Assets			19
6.9 Owned Real Property			20
6.10 Leased Real Property			20
6.11 Real Property			20
6.12 Tax Matters			21
6.13 Contracts and Commitments			21
6.14 Intellectual Property			22
6.15 Litigation			24
6.16 Employees; Employee Benefit Plans; ERISA and Labor			24
6.17 Compliance with Laws; Licenses			26
6.18 Environmental Matters			26
6.19 Customers and Suppliers			27
6.20 Insurance			28
6.21 Governmental Consents			28

 i

6.22 Affiliated Transactions			28
6.23 Inventory			28
6.24 Product Warranty			28
6.25 Product Liability			28
6.26 Brokers and Bonuses			28
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF BUYER			29
7.1 Organization and Power			29
7.2 Authorization; No Breach			29
7.3 Litigation			29
7.4 Brokers and Bonuses			29
7.5 Buyer Acknowledgment			30
ARTICLE VIII INDEMNIFICATION; SURVIVAL			30
8.1 Indemnification by Parent and Seller			30
8.2 Indemnification by Buyer			30
8.3 Manner of Payment			31
8.4 Defense of Third-Party Claims			31
8.5 Additional Indemnification Procedures			32
8.6 Intentionally Omitted			32
8.7 Survival of Representations and Warranties			32
8.8 Sole Remedy and Limitations			32
ARTICLE IX ADDITIONAL AGREEMENTS			33
9.1 Mutual Assistance			33
9.2 Non-Competition; Non-Solicitation			33
9.3 Confidentiality			34
9.4 Specific Performance			34
9.5 Tax Matters			35
9.6 Payment of Debts			35
9.7 Name Following the Closing			35
9.8 Certain Employee Benefits Matters			35
9.9 Accounts Receivable			36
9.10 Environmental			37
9.11 Refunds and Remittances			37
ARTICLE X MISCELLANEOUS			38
10.1 Expenses			38
10.2 Arbitration			38
10.3 Consent to Amendments; Waiver			38
10.4 Successors and Assigns			38
10.5 Severability			39
10.6 Counterparts			39
10.7 Descriptive Headings			39
10.8 Notices			39
10.9 No Third-Party Beneficiaries			40
10.10 Entire Agreement			40
10.11 Exhibits and Schedules			40
10.12 Governing Law			40
10.13 Delivery by Facsimile			40
10.14 Further Assurances			41
10.15 Construction			41

ii

EXHIBITS AND SCHEDULES

Exhibits:
Exhibit A		-		Form of Opinion of Seller’s Counsel
Exhibit B		-		Form of Secretary’s Certificate of Seller Exhibit C-Form of Bill of Sale
Exhibit D		-		Form of Assignment Agreement
Exhibit E		-		Form of Assignment and Assumption Agreement
Exhibit F		-		Form of Transition Services Agreement
Exhibit G		-		Form of Secretary’s Certificate of Buyer

Schedules		Section Reference
Excluded Contracts			2.3	(c)
Excluded Agreement			2.3	(k)
Excluded Assets			2.3	(l)
Working Capital			4.2	(c)
Allocation Statement			4.3
Employment Agreements			5.1	(f)
Authorization; No Breach			6.2
Financial Statements			6.4
Undisclosed Liabilities			6.5
Certain Developments			6.7
Assets			6.8
Owned Real Property			6.9
Leased Real Property			6.10
Real Property Permits and Agreements			6.11
Material Contracts			6.13
Intellectual Property			6.14
Litigation			6.15
Employees			6.16
Environmental Matters			6.18
Customers and Suppliers			6.19
Insurance			6.20
Affiliated Transactions			6.22
Accounts Receivable			6.23
Inventory			6.24
Product Warranty			6.25
Product Liability			6.26
Buyer and VEMI’s Brokers and Bonuses			6.27
Seller and Parent’s Brokers and Bonuses			7.4
Special Indemnification Schedule			8.1

iii

ASSET PURCHASE AGREEMENT

          THIS ASSET PURCHASE AGREEMENT (this “ Agreement ”) is made and entered into as of June 30, 2006, by and among United Components, Inc., a Delaware corporation (“ Parent ”); Neapco Inc., a Pennsylvania corporation (“ Seller ”); and Neapco, LLC, a Delaware limited liability company (“ Buyer ”).

     A. Seller designs, manufactures and distributes universal joints, constant velocity joints, steering shafts and the individual components that collectively constitute such products for both original equipment and aftermarket applications (as presently conducted, the “ Business ”).

     B. Seller desires to sell to Buyer substantially all of Seller’s assets and the Business, and Buyer desires to purchase said assets and the Business, all on the terms and subject to the conditions contained in this Agreement.

          NOW, THEREFORE, in consideration of the foregoing premises (which constitute an integral part of this Agreement) and the mutual covenants, agreements and understandings hereinafter set forth, and for other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

ARTICLE I
CERTAIN DEFINITIONS

     1.1 Definitions . For the purposes of this Agreement, the following terms have the meanings set forth below:

          “ Accounting Firm ” has the meaning set forth in Section 4.2(d) .

          “ Accounts Payable ” has the meaning set forth in Section 3.2 .

          “ Accounts Receivable ” has the meaning set forth in Section 2.2 .

          “ Accrued Expenses ” has the meaning set forth in Section 3.2 .

          “ Affiliate ” of any particular Person means any other Person controlling, controlled by or under common control with such Person, any partner of such Person and any partner or member of a Person that is a partnership or limited liability company. For purposes of this definition, “ control ” (including the terms “ controlling ,” “ controlled by ” and “ under common control with ”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and such “control” will be presumed if any Person owns fifty percent (50%) or more of the voting Equity Interests or other ownership interests, directly or indirectly, of any other Person.

          “ Affiliated Group ” means any affiliated group as defined in Section 1504 of the Code (or any analogous combined, consolidated or unitary group defined under state, local or foreign income Tax law).

          “ Agreement ” has the meaning set forth in the Preamble.

          “ Applicable Rate ” means seven percent (7%) per annum calculated on the basis of the actual number of days elapsed over a three hundred sixty (360) day year.

          “ Assumed Liabilities ” has the meaning set forth in Section 3.1 .

          “ Assumed Taxes ” has the meaning set forth in Section 3.2(d) .

          “ Business ” has the meaning set forth in the Recitals.

          “ Buyer ” has the meaning set forth in the Preamble.

          “ Buyer Parties ” means Buyer and its Affiliates and its shareholders, officers, directors, employees, agents, partners, representatives, successors and assigns.

          “ Buyer’s Defined Benefit Plan ” has the meaning set forth in Section 9.8(e) .

          “ Closing ” has the meaning set forth in Section 4.1 .

          “ Closing Date ” has the meaning set forth in Section 4.1 .

          “ Closing Statement ” has the meaning set forth in Section 4.2(c) .

          “ COBRA Continuation Coverage ” has the meaning set forth in Section 9.8(c) .

          “ Code ” means the Internal Revenue Code of 1986, as amended, and any reference to any particular Code section shall be interpreted to include any revision of or successor to that section regardless of how numbered or classified.

          “ Confidential Information ” means all information of a confidential or proprietary nature (whether or not specifically labeled or identified as “confidential”), in any form or medium, to the extent that it relates to the Business. Confidential Information includes the following, to the extent that it relates to the Business: (i) internal business information (including historical and projected financial information and budgets and information relating to strategic and staffing plans and practices, business, training, marketing, promotional and sales plans and practices, cost, rate and pricing structures and accounting and business methods); (ii) identities of, individual requirements of, specific contractual arrangements with, and other confidential or proprietary information about, Seller’s suppliers, distributors, customers, independent contractors or other business relations and their confidential or proprietary information; (iii) trade secrets, know-how, compilations of data and analyses, techniques, systems, formulae, research, records, reports, manuals, documentation, models, data and data bases relating thereto; and (iv) inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable). Confidential Information shall not include any information that is or becomes generally known to and available for use by the public other than as a result of a breach of this Agreement by Seller or Parent.

          “ Continuation Period ” has the meaning set forth in Section 9.8(a) .

          “ COTS ” means computer software programs that are widely available to the public on standard terms, provided that the annual license fee does not exceed $25,000.00.

          “ Employee Pension Benefit Plan ” has the meaning set forth in Section 3(2) of ERISA.

          “ Environmental Law ” means all applicable domestic and foreign federal, state and local laws, statutes, ordinances, regulations, judicial orders and common law that impose liability or standards of conduct concerning: (i) the regulation and protection of human health and safety, worker health and safety, the environment and natural resources, including ambient air, surface water, groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic species and vegetation; or (ii) the manufacture, processing, generation, distribution, use, treatment, storage, disposal, cleanup, transport, presence, testing, discharging or handling of Hazardous Substances.

          “ Environmental Permit ” means any permit, license, approval, consent or other authorization required by, or pursuant to, any Environmental Law.

          “ EPA ” means the United States Environmental Protection Agency.

          “ Equipment ” has the meaning set forth in Section 2.2(b) .

          “ Equity Interests ” means (i) any and all shares, membership interests, interests, participations or other equivalents (however designated) of capital stock of a corporation and (ii) any and all ownership interests in a Person (other than a corporation), including shares (restricted or unrestricted), membership interests, partnership interests, participation interests and beneficial interests (however designated) and any and all warrants, options, securities or other rights convertible into, or exercisable or exchangeable for, any of the foregoing.

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

          “ Estimated Working Capital ” has the meaning set forth in Section 4.2(a) .

          “ Excluded Assets ” has the meaning set forth in Section 2.3 .

          “ Excluded Liabilities ” has the meaning set forth in Section 3.1 .

          “ Executives ” means Robert Hawkey, J. Robert Mangini, Keith Sanford and John Lion.

          “ Financial Statements ” has the meaning set forth in Section 6.4 .

          “ Final Working Capital ” has the meaning set forth in Section 4.2(c) .

          “ FIRPTA ” means the Foreign Investment in Real Property Tax Act.

          “ GAAP ” means United States generally accepted accounting principles, as in effect from time to time, consistently applied during all periods covered by the Financial Statements.

          “ Governmental Authority ” means any court or any agency, commission, department (including the executive department) or body of any municipal, township, county, local, state, federal or foreign governmental, regulatory, administrative, judicial or quasi-governmental unit, entity or authority.

          “ Hazardous Substances ” means any: (i) substance, waste or material that constitutes a “hazardous substance,” “toxic substance,” “hazardous waste,” “extremely hazardous waste,” “restricted hazardous waste,” “contaminant,” “hazardous constituent,” “special waste,” or “pollutant” (as such terms are defined by any Environmental Law) or any similar term or phrase; (ii) petroleum or any fraction or by-product thereof, asbestos, polychlorinated byphenyls (PCBs) or any radioactive substance, waste or material; or (iii) substance, waste or material that is regulated as a hazardous substance, toxic substance, hazardous waste, extremely hazardous waste, restricted hazardous waste, contaminant, hazardous constituent, special waste or pollutant pursuant to any Environmental Law.

          “ Indebtedness ” means with respect to any Person at any particular date, without duplication: (i) all obligations of such Person for borrowed money; (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments or debt securities; (iii) all obligations arising from cash/book overdrafts; (iv) all capital lease obligations; (v) all amounts due or which may become due in connection with the purchase of any assets, businesses, properties or services acquired as of such date, contingent or otherwise (other than trade payables incurred in the ordinary course of business); and (vi) all accrued interest, prepayment premiums, penalties or similar amounts related to any of the foregoing (assuming all of the foregoing amounts were prepaid at such particular date).

          “ Indemnitee ” has the meaning set forth in Section 8.4 .

          “ Indemnitor ” has the meaning set forth in Section 8.4 .

          “ Insurance Policies ” means all of the insurance policies held or maintained by or for the Seller with respect to its properties, assets and business.

          “ Intellectual Property ” means all of the following in any jurisdiction throughout the world: (i) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereof and all patents, patent applications and patent disclosures, together with all reissuances, continuations, continuations-in-art, revisions, extensions and reexaminations thereof; (ii) all trademarks, service marks, trade dress, logos, slogans, trade names, corporate names, Internet domain names and rights in telephone numbers, together with all translations, adaptations, derivations and combinations thereof and including all goodwill associated therewith and all applications, registrations and renewals in connection therewith; (iii) all copyrightable works, all copyrights and all applications, registrations and renewals in connection therewith; (iv) all mask works and all applications, registrations and renewals in connection herewith; (v) all trade secrets and confidential business information (including research and development; methods; systems; engineering; models; formulas; compositions; manufacturing, servicing, repair, production and other proprietary processes and techniques; technical data; designs; drawings; specifications; customer and supplier lists; pricing and cost information; and business and marketing plans and proposals); (vi) all computer software

(including source code, executable code, data, databases, uniform resource locators and related documentation); (vii) all advertising and promotional materials; (viii) all other proprietary rights; and (ix) all copies and tangible embodiments thereof (in whatever form or medium).

          “ Inventory ” has the meaning set forth in Section 2.2 .

          “ Investment ” as applied to any Person means (i) any direct or indirect purchase or other acquisition by such Person of any notes, obligations, instruments or Equity Interests of any other Person and (ii) any capital contribution by such Person to any other Person.

          “ Knowledge ” means, when referring to the “knowledge” of any of the Seller Parties, or any similar phrase or qualification based on knowledge, the actual knowledge of any of David Barron, Charles Dixon, David Forbes or George Milano and, with respect to Sections 6.11 , 6.14 , 6.15 , 6.16 , 6.17 and 6.18 only, Keith Zar.

          “ Latest Financial Statements ” has the meaning set forth in Section 6.4 .

          “ Lien ” means any mortgage, security deed, deed of trust, pledge, hypothecation, assignment, deposit arrangement, lien, charge, restriction, claim, security interest, security title, easement, encumbrance, preference, priority or other security agreement, and any financing lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement.

          “ Losses ” means, collectively, all damages, claims, liabilities, fines, penalties, levies, fees, costs or expenses (including reasonable expenses and disbursements of accountants and legal counsel), but not including any punitive, consequential or special damages (or losses of revenue or business opportunity) other than to the extent such may be payable to third parties as a result of a final adjudication.

          “ Material Adverse Effect ” means any event or occurrence that has or would reasonably be expected to have an effect that is materially adverse to the assets, liabilities, financial condition, or results of operations of the Business, taken as a whole.

          “ Multiemployer Plan ” has the meaning set forth in ERISA Section 3(37).

          “ Notice of Closing Statement Disagreement ” has the meaning set forth in Section 4.2(d) .

          “ OSHA ” means the occupational Safety and health Administration.

          “ Outstanding Receivables ” has the meaning set forth in Section 9.9 .

          “ Owned Real Property ” has the meaning set forth in Section 2.2 .

          “ Parent ” has the meaning set forth in the Preamble.

          “ Permit ” means any permit, license, approval, consent or other authorization.

          “ Permitted Liens ” means (i) any Liens expressly reflected in the Financial Statements; (ii) zoning laws, easements and other land use restrictions that do not materially impair the present or anticipated use or occupancy of the property subject thereto; (iii)

mechanic’s, materialmen’s, workmen’s, repairmen’s, warehousemen’s, carriers’ or other similar Liens which are being contested in good faith or (iv) Liens for Taxes not yet due and payable or which are being contested in good faith.

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

          “ Plans ” has the meaning set forth in Section 6.16 .

          “ Prepaid Taxes ” has the meaning set forth in Section 2.2(m) .

          “ Purchase Price ” has the meaning set forth in Section 4.2(a) .

          “ Purchased Assets ” has the meaning set forth in Section 2.1 .

          “ Real Property ” means the Owned Real Property and the Leased Real Property.

          “ Real Property Permits ” has the meaning set forth in Section 6.11 .

          “ Restrictive Covenants ” has the meaning set forth in Section 9.2(c) .

          “ Restricted Amount ” has the meaning set forth in Section 8.1 .

          “ Revised Two Year Quantities ” has the meaning set forth in the definition of Working Capital.

          “ Seller ” has the meaning set forth in the Preamble.

          “ Seller Parties ” means Seller and its Affiliates, employees, agents, partners, representatives, successors and permitted assigns (other than Buyer).

          “ Seller’s Defined Benefit Plan ” has the meaning set forth in Section 9.8(e) .

          “ Special Indemnification Schedule ” has the meaning set forth in Section 8.1 .

          “ Subsidiary ” means, with respect to any Person, any corporation, partnership, limited liability company, association or other business entity of which: (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person, or a combination thereof; or (ii) if a partnership, limited liability company, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person, or a combination thereof. For purposes of clause (ii) of this definition, a Person or Persons will be deemed to have a majority ownership interest in a partnership, limited liability company, association or other business entity if such Person or Persons are allocated a majority of partnership, limited liability company, association or other business entity gains or losses or control the managing director or general partner of such partnership, limited liability company, association or other business entity.

          “ Target Working Capital ” has the meaning set forth in Section 4.2 .

          “ Tax ” means any: (i) federal, state, local or foreign income, gross receipts, franchise, alternative minimum, add-on minimum, sales, use, transfer, registration, value added, excise, natural resources, severance, stamp, occupation, premium, windfall profit, environmental, customs, duties, real property, personal property, capital stock, social security, unemployment, disability, payroll, license, employee or other withholding or other tax, of any kind whatsoever, including any interest, penalties or additions to tax or additional amounts in respect of the foregoing; (ii) liability of Seller for the payment of any amounts of the type described in clause (i) above arising as a result of being (or ceasing to be) a member of any Affiliated Group (or being included (or required to be included) in any Tax Return relating thereto); and (iii) liability of Seller for the payment of any amounts of the type described in clause (i) above as a result of any express or implied obligation to indemnify or otherwise assume or succeed to the liability of any other Person.

          “ Tax Asset ” means any net operating loss, net capital loss, investment tax credit, foreign tax credit, charitable deduction, refund of Taxes, prepayment or claim for refund of Taxes or any other credit or Tax attribute which could reduce Taxes (including, without limitation, deductions and credits related to alternative minimum taxes) other than any tax incentives to which Seller is entitled pursuant to the Employment and Investment Growth Act Project Agreement, Number 24-7981023 (the “Nebraska Agreement”).

          “ Tax Returns ” means returns, declarations, reports, claims for refund, information returns or other documents (including any related or supporting schedules, statements or information), including any amendment thereto, filed or required to be filed in connection with the determination, assessment or collection of any Taxes of any party or the administration of any laws, regulations or administrative requirements relating to any Taxes.

          “ Third-Party Approvals ” has the meaning set forth in Section 5.1(b) .

          “ Threshold Amount ” has the meaning set forth in Section 8.1 .

          “ Transaction Documents ” means all documents, agreements, instruments and certificates executed and delivered in connection with the Closing, this Agreement and the transactions contemplated hereunder.

          “ Transferred Employee ” means each employee of Seller, who is, immediately prior to the Closing, actively employed, on vacation or on leave of absence, short-term disability or sick leave.

          “ Two Year Quantities ” has the meaning set forth in the definition of Working Capital.

          “ Two Year Usage ” has the meaning set forth in the definition of Working Capital.

          “ Union Employees ” has the meaning set forth in Section 9.8(e) .

          “ Working Capital ” means, as of any date of determination, the excess of the total current assets of Seller included in the Purchased Assets as of such date over the total current liabilities of Seller included in the Assumed Liabilities, determined on a basis consistent with the methodologies, practices and principles used in the preparation of the Latest Financial

Statements; provided , (i) that the calculation of Working Capital and Final Working Capital shall not include current liabilities relating to the categories of bonus plans, medical insurance and general insurance; (ii) notwithstanding the fact that such assets were capitalized in the Latest Financial Statements, the calculation of Working Capital and Final Working Capital shall include as current assets the categories of small tools and supplies of the type that were capitalized by Seller for the first time in December 2005; and (iii) the reserve for excess, obsolete and slow moving inventory included in the calculation of Working Capital and Final Working Capital shall be determined in accordance with Seller’s policy for establishing such reserve and shall be determined consistently with the methodologies, practices, principles and application of judgment used in the Latest Financial Statements. The Seller’s policy for establishing a reserve for excess, obsolete and slow moving inventory is as follows:

          (i) determine quantities of finished product sold during the most recently available 24-month period (“ Two Year Usage ”);

          (ii) at the determination date, determine quantities of finished product and related work in process and raw materials (collectively, “ Working Capital Inventory ”) with book value on hand greater than Two Year Usage (“ Two Year Quantities ”);

          (iii) subtract from Two Year Quantities the following quantities of Working Capital Inventory: (a) Working Capital Inventory related to finished goods that have been first introduced into the market within the past 24 months and (b) Working Capital Inventory related to Working Capital Inventory that management is certain will be used within 12 months;

          (iv) the results of the calculation as set forth in (iii) above is referred to as “ Revised Two Year Quantities ”; and

          (v) the reserve as of the determination date for slow moving, excess and obsolete Working Capital Inventory is the book value of the Revised Two Year Quantities.

          At Buyer’s election, all Inventory not written off in the Working Capital shall be subject to a physical count as of the Closing Date, in which Seller and its representatives shall be provided an opportunity to participate, in order to: (i) verify and, if necessary, adjust the quantity of inventory included in Final Working Capital and (ii) inspect and, if necessary, adjust for defective Inventory. Buyer shall have responsibility for uncleared checks reflected in Working Capital and Final Working Capital.

          “ Working Capital Inventory ” has the meaning set forth in the definition of Working Capital.

ARTICLE II
PURCHASE AND SALE OF ASSETS

     2.1 Agreement to Purchase and Sell . On the terms and subject to the conditions contained in this Agreement, Buyer agrees to purchase from Seller, and Seller agrees to sell to Buyer, all of the assets, properties, rights and business as a going concern as of the Closing Date, of whatever kind or nature and wherever situated or located and whether reflected on Seller’s books and records or previously written-off or otherwise not shown on Seller’s books and records, of Seller which are primarily used in or primarily relate to the conduct of the Business (other than the items set forth in Section 2.3 (the “ Excluded Assets ”)). All of said assets, properties, rights and business (other than the Excluded Assets) are collectively referred

to in this Agreement as the “ Purchased Assets ”. All of the Purchased Assets shall be sold to Buyer free and clear of any Liens other than Permitted Liens.

     2.2 Enumeration of Purchased Assets . The Purchased Assets include the following items of Seller as they exist at Closing:

          (a) all inventory (including raw materials, work in process, finished goods, service parts and supplies), including supplies and parts which have historically been expensed or are not valued on Seller’s financial statements (collectively, the “ Inventory ”);

          (b) all furniture, fixtures, equipment (including office equipment), machinery, parts, computer hardware, tools, dies, jigs, patterns, molds, automobiles and trucks and all other tangible personal property (other than Inventory) (collectively, the “ Equipment ”);

          (c) that certain real property commonly known as 740 Queen Street, Pottstown, Pennsylvania and 501 Sargent Street, Beatrice, Nebraska (the “ Owned Real Property ”), and all appurtenances, easements and other rights, buildings and other improvements located thereon or relating thereto;

          (d) all leasehold interests and leasehold improvements created by all leases, including capitalized leases, of real property or personal property under which Seller is a lessee or lessor;

          (e) all trade accounts receivable, notes receivable, negotiable instruments and chattel paper (collectively, the “ Accounts Receivable ”);

          (f) all deposits and rights with respect thereto in connection with the Business and all rebates due to Seller from vendors;

          (g) subject to Section 2.4 , all contracts, claims and rights (and benefits arising therefrom) primarily relating to or arising out of the Business, all rights against suppliers under warranties covering any of the Inventory or Equipment or other tangible assets of the Business and all transferable rights relating to Permits and Environmental Permits;

          (h) all sales orders and sales contracts, purchase orders and purchase contracts, quotations and bids generated by the operation of the Business;

          (i) all Intellectual Property that is primarily relating to the Business;

          (j) subject to Section 2.4 , all license agreements, distribution agreements, sales representative agreements, service agreements, supply agreements, franchise agreements, computer software agreements and technical service agreements to which Seller is a party;

          (k) all customer lists, customer records and information to the extent relating to the Business;

          (l) except as provided in Section 2.3(h), all books and records to the extent relating to the Business, including blueprints, drawings and other technical papers, payroll, employee benefit, accounts receivable and payable, inventory, maintenance and asset history

records, ledgers and books of original entry and OSHA and EPA files, all to the extent allowable under applicable law;

          (m) all rights in connection with prepaid expenses with respect to the Purchased Assets, including any prepaid Taxes other than prepaid income or franchise Taxes (“ Prepaid Taxes ”);

          (n) subject to Section 2.4 , all letters of credit issued to Seller;

          (o) all sales and promotional materials, catalogues and advertising literature primarily relating to the Business;

          (p) all rights under the Nebraska Agreement arising out of events or actions following Closing, but only to the extent such rights are transferable to Buyer under applicable Law, it being understood that Parent and Seller make no representation or warranty of any kind regarding whether, or to what extent such rights are transferable to Buyer; and

          (q) all telephone numbers and internet uniform resource locators owned by Seller and all lock boxes relating to the Business to which Seller’s account debtors remit payments.

     2.3 Excluded Assets . The Excluded Assets shall consist of :

          (a) all cash on hand and in banks and cash equivalents (exclusive of letters of credit issued by customers of Seller to Seller);

          (b) Seller’s bank accounts (exclusive of the bank accounts referred to in Section 2.3(c) ), checkbooks and cancelled checks;

          (c) those contracts with Seller’s Affiliates set forth on Schedule 2.3(c) hereto;

          (d) rights in and to claims and litigation (and in each case benefits to the extent they arise therefrom) against third parties to the extent such claims and litigation are not primarily related to the Purchased Assets or the Assumed Liabilities, and rights in and to claims and litigation (and benefits to the extent they arise therefrom) that relate to Excluded Liabilities;

          (e) Insurance Policies of Seller and rights in connection therewith;

          (f) rights arising from any refunds due with respect to insurance premium payments to the extent they relate to Insurance Policies which constitute Excluded Assets and refunds due from federal, state, local and/or foreign taxing authorities with respect to taxes heretofore paid by Seller;

          (g) Seller’s rights under this Agreement;

          (h) Seller’s corporate charter and the organizational documents, minute and stock record books, corporate seal, Tax Returns (including supporting materials but excluding any documents relating to Seller’s rights under the Nebraska Agreement; provided , that copies of Tax Returns and such documents may be retained by Sellers), all original financial statements and supporting materials, all books and records Seller is required by law to retain,

and all records of Seller relating to the sale of the Purchased Assets and any documents relating to any Excluded Assets;

          (i) any right or interest in and to any Tax Asset, other than Prepaid Taxes, for periods (or portions thereof) ending on or before the Closing Date and any rights under the Nebraska Agreement accruing on or prior to the Closing Date;

          (j) each Plan, including all assets related thereto;

          (k) the agreements set forth on Schedule 2.3(k) ; and

          (l) the assets, if any, described on Schedule 2.3(l) .

     2.4 Certain Consents to Assignment . If any assignment of any material right or agreement the benefit of which is to be acquired by Buyer pursuant to this Agreement shall require the consent of any other party and such consent has not been obtained prior to Closing, (a) this Agreement shall not constitute or be deemed to be a contract to assign or assume the same if an attempted assignment without such consent, approval or waiver would constitute a breach of such right or agreement or create in any party thereto the right or power to cancel or terminate such right or agreement and (b) Seller and Parent will cooperate with Buyer, in any reasonable arrangement requested by Buyer designed to provide to Buyer the benefit, monetary or otherwise, of Seller’s rights under such right or agreement, including enforcement of any and all rights of Seller against the other party thereto arising out of a breach or cancellation thereof by such other party.

ARTICLE III
ASSUMPTION OF LIABILITIES

     3.1 Agreement to Assume . At the Closing, Buyer shall assume and agree to discharge and perform when due, the liabilities and obligations of Seller (and only those liabilities of Seller) with respect to the Business which are enumerated in Section 3.2 (the “ Assumed Liabilities ”). Seller shall remain liable for all liabilities and obligations that are not Assumed Liabilities.

     3.2 Description of Assumed Liabilities . The Assumed Liabilities shall consist of the following, and only the following, liabilities of Seller with respect to the Business:

          (a) trade accounts payable as of the Closing Date to the extent incurred in the ordinary course of business and included on the Closing Statement (the “ Accounts Payable ”);

          (b) all accrued and unpaid expenses as of the Closing Date to the extent incurred in the ordinary course of business and included on the Closing Statement (the “ Accrued Expenses ”), including accrued salaries, wages and vacation pay with respect to those employees of Seller who become employees of Buyer immediately after the Closing;

          (c) liabilities and obligations of Seller (other than obligations to pay amounts accrued as of the Closing unless such liabilities and obligations are reflected in the calculation of Final Working Capital) under any purchase order, sales order, lease, license, agency and distributorship agreement or other agreement or commitment of any kind (x) by which Seller is bound on the Closing Date and (y) which is either (i) set forth on Schedule 6.13 or

Schedule 6.19 of the Disclosure Schedule or (ii) was made in the ordinary course of business (but in each case, only to the extent such liabilities and obligations relate to performance after the Closing Date or are reflected in the calculation of Final Working Capital);

          (d) all liabilities of Seller set forth on the face of the balance sheet included in the Latest Financial Statements (rather than in any notes thereto);

          (e) all liabilities of Seller that have arisen after the Latest Financial Statements in the ordinary course of business (but in each case only to the extent such liabilities are reflected in the calculation of Final Working Capital); and

          (f) all obligations of Seller under the agreements, contracts, leases, licenses, and other arrangements included in Purchased Assets.

Notwithstanding anything else contained in this Agreement to the contrary, Buyer shall not assume any liabilities relating to the categories of medical insurance or general insurance as described in the definition of “Working Capital” contained in Section 1.1 above.

     3.3 Excluded Liabilities . Except as specifically provided in Sections 3.1 and 3.2 hereof, Buyer shall not assume, or in any way become liable for, any liabilities or obligations of Seller, Parent, or the Business of any kind or nature (including any liabilities or obligations that relate to any Excluded Assets, any bonus plans of Seller or that are owed to any Affiliate of Seller), whether accrued, absolute, contingent or otherwise, or whether due or to become due, or otherwise, whether known or unknown, arising out of events, transactions or facts which shall have occurred, arisen or existed on or prior to the Closing Date (the “ Excluded Liabilities ”), which liabilities and obligations, if ever in existence, shall continue to be liabilities and obligations of Seller or Parent, as the case may be.

     3.4 No Expansion of Third Party Rights . The assumption by Buyer of the Assumed Liabilities shall not expand the rights or remedies of any third party against Buyer or Seller as compared to the rights and remedies which such third party would have had against Seller had Buyer not assumed the Assumed Liabilities. Without limiting the generality of the preceding sentence, the assumption by Buyer of the Assumed Liabilities shall not create any third party beneficiary rights.

ARTICLE IV
PRICE AND CLOSING

     4.1 Closing . The closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at the offices of Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP, or at such other place as is mutually agreeable to Buyer and Seller, at 10:00 a.m. local time on the date hereof (the “ Closing Date ”). The Closing shall be deemed to be effective as of 11:59 p.m. Eastern time on the Closing Date.

     4.2 Purchase Price . Subject to the terms and conditions contained herein, Buyer agrees to pay, and Seller agrees to accept, as the aggregate purchase price for all of the Purchased Assets and the agreements of Parent and Seller pursuant to Section 9.2 (the “ Purchase Price ”) an amount equal to (i) $22,500,000.00; plus (or minus ) (ii) the amount (if any) by which the Final Working Capital is greater than (or less than) $25,375,000.00 (the “ Target Working Capital ”); plus (iii) $640,000.00, which Buyer shall pay to Seller at Closing by wire transfer of immediately available funds to a bank account designated by Seller.

          (a) At the Closing, Buyer shall pay to Seller an amount equal to $24,512,000.00 by wire transfer of immediately available funds to a bank account designated by Seller. For purposes of determining this amount, the Working Capital as of the Closing is estimated to be $26,747,000.00 (“ Estimated Working Capital ”) and any post-closing adjustment in accordance with Section 4.2(d) shall be determined based upon the difference between the Final Working Capital and the Estimated Working Capital.

          (b) Intentionally Omitted.

          (c) Within ninety (90) days following the Closing Date, Buyer shall deliver to Seller a statement (in its final and binding form as determined below, the “ Closing Statement ”) setting forth its good faith calculation of (i) the Working Capital as of the Closing Date (the “ Final Working Capital ”) and (ii) the Purchase Price that shall be accompanied by reasonably sufficient back-up or supporting data used in the preparation of the Closing Statement as is sufficient to reflect how Buyer made such determinations and calculations; provided , that such statement shall be executed by Buyer’s chief financial officer. Seller shall cooperate with Buyer as reasonably requested in connection with the preparation of the Closing Statement, and agrees that the items comprising the Final Working Capital shall consist only of the categories set forth on Schedule 4.2(c) . Seller and its representatives shall be provided access to all of Buyer’s books, records and employees related to the preparation of the Closing Statement. The Closing Statement shall become final and binding upon the parties forty-five (45) days following Seller’s receipt thereof, unless Seller shall give written notice of its disagreement (a “ Notice of Closing Statement Disagreement ”) to Buyer prior to such date. Any Notice of Closing Statement Disagreement shall specify in reasonable detail the nature and dollar amount of any disagreement so asserted and shall be accompanied by reasonably sufficient back-up or supporting data used in the preparation of the Notice of Closing Statement Disagreement to reflect the basis of each such disagreement described therein. Buyer and its representatives shall be provided access to all of Seller’s books, records and employees related to the preparation of the Notice of Closing Statement Disagreement. If a timely Notice of Closing Statement Disagreement is received by Buyer, then the Closing Statement (as revised in accordance with clause (x) or (y) below) and the Purchase Price shall become final and binding upon the parties on the earlier of: (x) the date the parties resolve in writing any differences they have with respect to the matters specified in the Notice of Closing Statement Disagreement; and (y) the date all matters in dispute are finally resolved in writing by the Accounting Firm. During the twenty (20) days following delivery of a Notice of Closing Statement Disagreement, Buyer and Seller shall seek in good faith to resolve in writing any differences which they may have with respect to the matters specified in the Notice of Closing Statement Disagreement. If, at the end of the twenty (20) day period referred to above, the matters in dispute have not been fully resolved, then the parties shall submit to McGladrey & Pullen, LLP or such other mutually satisfactory independent accounting firm (the “ Accounting Firm ”) for review and resolution of all matters (but only such matters) which remain in dispute, and the Accounting Firm shall make a final determination of the Final Working Capital and the Purchase Price to the extent such amounts are in dispute, in accordance with the guidelines and procedures set forth in this Agreement. The parties will cooperate with the Accounting Firm during the term of its engagement. In resolving any matters in dispute, the Accounting Firm may not assign a value or cost to any item in dispute greater than the greatest value or cost for such item assigned by Buyer, on the one hand, or Seller, on the other hand, or less than the smallest value or cost for such item assigned by Buyer, on the one hand, or Seller, on the other hand. The Accounting Firm’s determination will be based solely on presentations by Buyer and Seller which are in accordance with the guidelines and procedures set forth in this Agreement (i.e., not on the basis of an independent review). The Closing Statement and the determination of the Final Working

Capital and the Purchase Price shall become final and binding on the parties on the date the Accounting Firm delivers its final resolution in writing to the parties (which the Accounting Firm shall be instructed to deliver not more than forty-five (45) days following submission of such disputed matters). The Accounting Firm’s fees shall be borne by Seller and Buyer in inverse proportion (as a percent of the absolute dollar amount disputed) as Seller and Buyer prevail on matters resolved by the Accounting Firm.

          (d) If the Estimated Working Capital amount is greater than the Final Working Capital amount, Seller shall, and if the Final Working Capital amount is greater than the Estimated Working Capital amount, Buyer shall, within ten (10) business days after the Closing Statement becomes final and binding on the parties, make payment by wire transfer to Buyer or Seller, as the case may be, in immediately available funds of the absolute amount of such difference, together with interest at the Applicable Rate from the Closing Date to the date of payment. Any such payment shall be treated as an adjustment to the Purchase Price.

     4.3 Allocation of Total Consideration . The Purchase Price, as adjusted pursuant to Section 4.2(d) , shall be allocated as agreed between the parties as soon as practicable after the Closing. Buyer shall prepare and deliver to Seller a written statement setting forth Buyer’s good faith allocation together with such supporting materials as will allow Seller to reasonably evaluate the proposed allocation and any other materials reasonably requested by Seller within thirty (30) days after determination of Final Working Capital. The Purchase Price allocation shall become final and binding upon the parties thirty (30) days following Seller’s receipt thereof, unless Seller shall give written notice of its disagreement (a “ Notice of Allocation Disagreement ”) to Buyer prior to such date. Any Notice of Allocation Disagreement shall specify in reasonable detail the nature and dollar amount of any disagreement so asserted. If a timely Notice of Allocation Disagreement is received by Buyer, then the allocation shall become final and binding upon the date the parties resolve in writing any differences they have with respect to the matters specified in the Notice of Allocation Disagreement. The parties agree that the allocations described in this Section 4.3 shall be used by them and respected for all income tax purposes, if in conformance with the rules and regulations of the Code, and that the parties shall follow such allocations for all initial income tax reporting purposes, including Form 8594 to be filed pursuant to the Code.

ARTICLE V
CLOSING DELIVERIES

     5.1 Conditions to the Obligations of Buyer . The obligation of Buyer to consummate the transactions contemplated by this Agreement is subject to the delivery as of the Closing Date of the following by Seller:

          (a) A certificate duly executed by an authorized officer of Parent to the effect that, to his knowledge: (i) the representations and warranties set forth in Article VI are true and correct in all material respects as of the Closing Date and (ii) no suit, action or other proceeding is pending before any court or governmental or regulatory official, body or authority or any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling or charge would reasonably be expected to prevent the consummation of any of the transactions contemplated hereby or cause any of the transactions contemplated by this Agreement to be rescinded following consummation;

          (b) Evidence that all third party consents and approvals set forth on Schedule 6.2 (collectively, the “ Third-Party Approvals ”) have been obtained, in each case on terms and conditions reasonably satisfactory to Buyer;

          (c) An opinion from Latham & Watkins LLP, counsel for Seller, with respect to the matters set forth in Exhibit A attached hereto, which shall be addressed to Buyer, dated as of the Closing Date and in form and substance satisfactory to Buyer;

          (d) (i) certified copies of the resolutions of (A) Seller’s board of directors and (B) Seller’s shareholder authorizing the execution, delivery and performance of this Agreement and each of the Transaction Documents and the consummation of the transactions contemplated hereby and thereby; (ii) good standing certificates for Seller from the Pennsylvania Secretary of State, dated as of a recent date prior to the Closing Date; and (iii) a Secretary’s certificate of Seller duly executed in the form of Exhibit B attached hereto dated as of the Closing Date;

          (e) Evidence of releases of all Liens related to the assets and properties of Seller, other than Permitted Liens;

          (f) A bill of sale conveying all of the Inventory, Equipment and other tangible personal property included in the Purchased Assets to Buyer, free and clear of all Liens other than Permitted Liens duly executed in the form of Exhibit C attached hereto dated as of the Closing Date;

          (g) An assignment to Buyer assigning to Buyer all of the Purchased Assets (other than the assets conveyed pursuant to the bill of sale, deed, certificate of title or Intellectual Property instruments of assignment), along with the original instruments (if any) representing, evidencing or constituting such Purchased Assets, free and clear of all Liens other than Permitted Liens duly executed in the form of Exhibit D attached hereto dated as of the Closing Date;

          (h) An assignment and assumption agreement pursuant to which Seller assigns all of the Assumed Liabilities to Seller duly executed in the form of Exhibit E attached hereto dated as of the Closing Date;

          (i) A general warranty deed (subject only to Permitted Liens), an affidavit of title, a certificate in compliance with the Foreign Investment in Real Property Tax Act (“ FIRPTA ”) certifying that Seller is not a Person subject to withholding under FIRPTA certifying that Seller is not a Person subject to withholding under FIRPTA, an ALTA statement and all other documents required by the title insurance company issuing the policies with respect to each parcel of Owned Real Property, together with any necessary transfer declarations;

          (j) Surveys of the Owned Real Property, prepared by a licensed surveyor;

          (k) Certificates of title or origin (or like documents) with respect to all vehicles included in the Purchased Assets and other Equipment for which a certificate of title or origin is required in order for title thereto to be transferred to Buyer;

          (l) One or more duly executed instruments of assignment conveying all of the Intellectual Property included in the Purchased Assets, which, to the extent necessary to assign such rights, shall be in recordable form;

          (m) A transition services agreement duly executed in the form of Exhibit F attached hereto dated as of the Closing Date; and

          (n) Evidence that Buyer is named as an additional insured, as its interest may appear, on Parent’s product liability insurance policy, effective as of the Closing, for occurrences arising prior to the Closing with respect to products manufactured and sold by Seller prior to the Closing.

     5.2 Conditions to the Obligations of Parent and Seller . The obligation of Parent and Seller to consummate the transactions contemplated by this Agreement is subject to the delivery as of the Closing Date of the following by Buyer:

          (a) A certificate duly executed by an authorized officer of Buyer to the effect that, to his knowledge: (i) the representations and warranties set forth in Article VII are true and correct in all material respects as of the Closing Date and (ii) no suit, action or other proceeding is pending before any court or governmental or regulatory official, body or authority or any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling or charge would reasonably be expected to prevent the consummation of any of the transactions contemplated hereby or cause any of the transactions contemplated by this Agreement to be rescinded following consummation;

          (b) (i) an officer’s certificate of Buyer in the form of Exhibit G attached hereto dated as of the Closing and (ii) a good standing certificate for Buyer from the Secretary of State of the State of Delaware dated as of a recent date prior to the Closing Date;

          (c) An assignment and assumption agreement pursuant to which Buyer assumes all of the Assumed Liabilities in the form of Exhibit E attached hereto duly executed and dated as of the Closing; and

          (d) Evidence that Parent is named as an additional insured, as its interest may appear, on Buyer’s product liability insurance policy, effective as of the Closing, for occurrences arising after the Closing with respect to products manufactured by Seller prior to the Closing but sold by Buyer after the Closing.

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND SELLER

          Seller and Parent hereby jointly and severally represent and warrant to Buyer as of the date hereof as follows:

     6.1 Organization and Power . Seller is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Pennsylvania and is duly qualified to do business in each jurisdiction in which the failure to so qualify would reasonably be expected to have a Material Adverse Effect. Seller has all requisite right, capacity, power and authority to own and operate its properties, to carry on its business as now conducted, to execute and deliver this Agreement and all of the Transaction Documents and to perform its obligations hereunder and thereunder. Seller has furnished to Buyer true, accurate and complete copies of its certificate of incorporation and by-laws. Parent is a corporation, duly incorporated, validly existing and in good standing under the laws of Delaware. Parent has all requisite right, capacity, power and authority to execute and deliver this Agreement and all of the Transaction Documents and to perform its obligations hereunder and thereunder.

     6.2 Authorization; No Breach .

          (a) The execution and delivery of this Agreement and all of the Transaction Documents by Parent and Seller, and the performance by each of Parent and Seller of its respective obligations hereunder and thereunder, have been duly authorized by Parent and Seller and their respective directors and Seller’s shareholder. This Agreement and all of the Transaction Documents (upon execution and delivery thereof by each party thereto) each constitute, or will constitute as of the Closing, a valid and binding obligation of each of Parent and Seller, enforceable in accordance with its terms, except as such enforceability may be limited by: (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws in effect that limit creditors’ rights generally; (ii) equitable limitations on the availability of specific remedies; and (iii) principles of equity.

          (b) The execution and delivery by each of Parent and Seller of this Agreement and all of the Transaction Documents, and the fulfillment of, and compliance with, the respective terms hereof and thereof by Parent and Seller, do not and will not conflict with, or result in a