ASSET PURCHASE AGREEMENT

Exhibit 10.1

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “ Agreement ”) is made and entered into as of February 27, 2008, by and among RathGibson, Inc., a Delaware corporation (the “ Purchaser ”), Mid-South Control Line, Inc., a Louisiana corporation (the “ Company ”), Richard E. Lore, Sr. (“ Lore ”), both individually and as Trustee of: (i) the REL Grantor Retainer Annuity Trust No. 1, a Louisiana trust (“ Lore Trust No. 1 ”); (ii) the REL Grantor Retainer Annuity Trust No. 2, a Louisiana trust (“ Lore Trust No. 2 ”); and (iii) the REL Grantor Retainer Annuity Trust No. 3, a Louisiana trust (“ Lore Trust No. 3 ” and, together with Lore Trust No. 1 and Lore Trust No. 2, the “ Lore Trusts ”), and Barry J. Hebert (“ Hebert ”).  Lore, the Lore Trusts and Hebert are sometimes referred to herein individually as a “ Stockholder ” and collectively as the “ Stockholders ”.

Recitals :

A.

The Company is engaged in the business of supplying stainless steel tubing, nickel alloy tubing and accessories to the United States and international oil and gas industry (the “ Business ”).

B.

The Stockholders collectively hold all of the issued and outstanding shares of the Company’s capital stock.

C.

Upon the terms and subject to the conditions set forth herein, the Company desires to sell to the Purchaser the Business as a going concern, and the Purchaser desires to purchase the Business from the Company as a going concern.

D.

In connection with the purchase and sale of the Business described above, the parties desire that, upon the terms and subject to the conditions set forth herein, the Purchaser purchase the Purchased Assets from the Company and assume from the Company the Assumed Liabilities (and no other Liabilities of the Company).

E.

Capitalized terms used herein have the respective meanings set forth in Article VIII .

Agreement :

NOW, THEREFORE , in consideration of the mutual agreements and covenants herein contained and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I
PURCHASE AND SALE

1.1

Purchase and Sale of Assets .  Upon the terms and subject to the conditions contained herein, at the Closing, the Company will sell, convey, transfer, assign and deliver to the Purchaser, and the Purchaser will purchase from the Company, all of the right, title and interest of the Company in and to all of the properties and assets used in, held for use in, developed for, or related to, the operation of the Business, other than the Excluded Assets (all such properties and assets other than the Excluded Assets are referred to herein as the “ Purchased Assets ”), free and clear of all Liens.  Without in any way limiting the generality of such term, the Purchased Assets include the following:

(a)

all bank accounts of the Company other than the Excluded Bank Account (collectively, the “ Assumed Bank Accounts ”);

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(b)

all machinery, equipment (both fixed and mobile, including computer equipment), replacement parts, maintenance stores, furniture, furnishings, fixtures, leasehold improvements, vehicles (other than any vehicles that are Excluded Assets) and other tangible personal property;

(c)

all computer software and systems (including data and related documentation), including maintenance agreements related thereto;

(d)

all items of inventory, including raw materials, work in process, finished goods, supplies, spare parts and other items of inventory and all shipping containers and other parts relating thereto, in each case whether located on the Company’s premises or located elsewhere;

(e)

all of the Material Contracts (other than those relating to the Senior Debt) and each other Contract to which the Company is a party that is set forth on Schedule 1.1(e) (collectively, the “ Assumed Contracts ”);

(f)

all accounts receivable, trade receivables, notes receivable and other receivables of the Company arising on or before the Closing Date (collectively, the “ Acquired Accounts Receivable ”);

(g)

all Company Permits, to the extent transferable;

(h)

all prepaid accounts, expenses and deposits;

(i)

all open purchase orders or invoices entered into by the Company that relate to products or services to be provided by the Company, or products, services or supplies to be delivered for the benefit of the Company;

(j)

all Business Confidential Information;

(k)

to the extent not included in the Business Confidential Information, all books, data, records, manuals, ledgers, files, documents, correspondence, forms, and other materials and databases (in any form or medium), including all books and records and materials maintained at the offices of the Company, advertising matter, stationery, forms, labels, shipping materials, catalogs, brochures, art work, product descriptions, price lists, regulatory files, correspondence, mailing lists, purchase orders, credit, collection and sales records, sales, advertising and promotional materials and records, purchasing materials and records, personnel records, market surveys and related materials, business procedures, accounting records, litigation files, correspondence files, studies, reports, lists, and the personnel and wage records of Hired Employees and materials maintained for the Business;

(l)

all choses-in-action, rights under guarantees and warranties, rights of set-off, rights of recoupment, rights to indemnification, prepaid accounts, expenses, deposits, rights to refunds, rights with respect to Proceedings, rights of recovery and similar rights in favor of the Company with respect to any of the Purchased Assets;

(m)

the insurance policies set forth on Schedule 1.1(m) and all assets associated therewith (collectively, the “ Assumed Insurance Policies ”);

(n)

all Intellectual Property Rights (collectively, the “ Business Intellectual Property ”);

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(o)

all rights to telephone and facsimile numbers, including all ten-digit “800”, “888” or similar numbers, as well as rights to receive mail and other communications addressed to the Company (including mail and communications from customers, advertisers, suppliers, distributors, agents and others and payments with respect to the Purchased Assets);

(p)

all rights with respect to unemployment, workers’ compensation and other similar insurance and related funded reserves, in each case, relating to Hired Employees;

(q)

the employee benefit plans of the Company listed on Schedule 1.1(q) and all assets associated therewith (collectively, the “ Assumed Company Benefit Plans ”);  

(r)

all rights under agreements with employees, consultants and independent contractors of the Company concerning non-competition, non-solicitation, confidentiality or ownership rights;

(s)

the goodwill generated by or associated with the Business; and

(t)

to the extent assignable by the Company to the Purchaser, all other assets of any nature whatsoever other than the Excluded Assets.

1.2

Excluded Assets .  The parties expressly acknowledge and agree that, notwithstanding anything to the contrary in this Agreement or any other Transaction Document, the Purchased Assets shall not include, and the Purchaser shall not purchase, the following assets, properties and rights of the Company (collectively, the “ Excluded Assets ”):

(a)

the assets set forth on Schedule 1.2(a) ;

(b)

the bank account established by the Company in connection with the transactions contemplated by this Agreement solely for use in connection with post-Closing obligations of the Company (the “ Excluded Bank Account ”);

(c)

the Non-Conforming Inventory Items (as defined below);

(d)

all cash and cash equivalents of the Company;

(e)

each Company Benefits Plan and all assets associated therewith, other than the Assumed Company Benefit Plans and the assets associated therewith;

(f)

each insurance policy of the Company and all assets associated therewith, other than the Assumed Company Insurance Policies and the assets associated therewith;

(g)

the rights of the Company under this Agreement and the other Transaction Documents;

(h)

all choses-in-action, rights under guarantees and warranties, rights of recoupment, rights to indemnification, prepaid accounts, expenses, deposits, rights to refunds, rights with respect to Proceedings, rights of recovery and similar rights in favor of the Company exclusively related to any Excluded Assets or Excluded Liabilities; and

(i)

all taxpayer and other identification numbers and corporate or other organizational minute books, corporate seal, stock ledger, tax returns and records, and other books and

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records pertaining exclusively to the Company’s organization, existence or capitalization.

1.3

Assumed Liabilities .  Subject to and upon the terms and conditions set forth in this Agreement, as partial consideration for the Purchased Assets, the Purchaser agrees to assume and pay, and discharge, perform or otherwise satisfy when due in accordance with the terms thereof, only the Liabilities of the Company referenced below in this Section 1.3 (collectively, the “ Assumed Liabilities ”), and no other Liabilities of the Company of any kind.  The Assumed Liabilities consist solely of:

(a)

the Acquired Accounts Payable and all other Current Liabilities of the Company, as of the Closing Date, in each case solely to the extent such Assumed Accounts Payable and other Current Liabilities are reflected in the Final Working Capital Statement; and

(b)

to the extent not included in Section 1.3(a) , all Liabilities of the Company  arising under the Assumed Contracts and other Purchased Assets, in each case solely to the extent relating to circumstances or events first occurring or existing after the Closing (and specifically excluding any Liabilities for any breach of any such Assumed Contract by the Company that occurred prior to the Closing or any violation of Law by the Company that occurred prior to the Closing) (the “ Assumed Contracts Liabilities ”).

For the avoidance of doubt, no right of any Purchaser Indemnified Party under this Agreement (including any right of any Purchaser Indemnified Party for indemnification or any other remedy for breach of any of the representations, warranties, contracts or agreements of the Company or the Stockholders set forth herein) shall be affected by the assumption by the Purchaser of the Assumed Liabilities.

1.4

Excluded Liabilities .  Notwithstanding anything else to the contrary contained in this Agreement or any other Transaction Document, the Purchaser is not assuming and will not otherwise be responsible or liable for any Liability of the Company or any of the Stockholders other than the Assumed Liabilities (all such Liabilities other than the Assumed Liabilities, the “ Excluded Liabilities ”).  Without in any way limiting the generality of such term, the Excluded Liabilities include:

(a)

any Liability of the Company for any Indebtedness, including any Liabilities relating to the Senior Debt;

(b)

any Liability of the Company or any of the Stockholders relating to any Taxes;

(c)

any Liability of the Company under any Environmental Law, including any Liability resulting from or arising out of any Hazardous Materials present at, on, under, or originating from any of the Purchased Assets or otherwise associated with the operation of the Business prior to the Closing, regardless of whether any such Liability or Hazardous Materials were known or unknown to the Purchaser at the time of the Closing;

(d)

any Liability with respect to any Contract of the Company other than Assumed Contracts Liabilities;

(e)

any Liability of the Company under any bulk sales or bulk transfer laws of any jurisdiction which may be applicable to the transactions contemplated by this Agreement;

(f)

any Liability resulting from or arising out of any operations of the Company: (i) outside of the ordinary course prior to the Closing; or (ii) from and after the Closing;

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(g)

any Liability resulting from or arising out of: (i) any employees of the Company that are not Offered Employees; or (ii) termination by the Company of its employment of the Offered Employees in connection with such persons becoming employees of the Purchaser in accordance with Section 5.3 , including any Proceedings and the resulting Liabilities relating to claims of wrongful termination, age, race or sex discrimination or other violation of Law;

(h)

any Liability under any Company Benefit Plan (whether such Liability is incurred before, on or after the Closing), other than Liabilities incurred after the Closing under the Assumed Company Benefit Plans (the parties specifically agree and acknowledge that, for the avoidance of doubt, the “Liabilities incurred after the Closing under the Assumed Company Benefit Plans” do not include any Liabilities resulting from or associated with termination by the Company of its employment of the Offered Employees in connection with such persons becoming employees of the Purchaser in accordance with Section 5.3 , including any employee benefits or entitlements such as severance pay, accrued vacation, sick or holiday pay and other paid time off, all of which are Excluded Liabilities);

(i)

any Liability of the Company under any insurance policy of the Company other than Liabilities incurred after the Closing under the Assumed Company Insurance Policies;

(j)

any Liability of the Company with respect to claims for indemnification, or reimbursement or advancement of expenses related to indemnification claims, by any of its officers, directors, employees or agents;

(k)

to the extent not reflected in any of the other subsections of this Section 1.4 , any Liability of the Company resulting from or arising out of any of the Excluded Assets;

(l)

any Liability of any of the Company or any of the Stockholders under this Agreement or any other Transaction Document;

(m)

without limiting the generality of Section 1.4(b) , any Liability resulting from or arising out of any claim or Proceeding by any Governmental Entity in any jurisdiction: (i) in which the Company does not file Tax Returns, that the Company or a Stockholder (with respect to the Company) is subject to Tax or required to file Tax Returns in that jurisdiction; (ii) where the Company or any Stockholder (with respect to the Company) files Tax Returns but does not compute its Tax on the basis of its net income attributable to such jurisdiction, that the Company or such Stockholder is subject to tax on the basis of its net income attributable to such jurisdiction; or (iii) in which the Company files Tax Returns but a Stockholder (with respect to the Company) does not file Tax Returns, that such Stockholder is subject to Tax or required to file Tax Returns with respect to the Company in that jurisdiction;

(n)

any Liability of the Company or any of the Stockholders for expenses, Taxes or fees incident to or arising out of the negotiation, preparation, approval or authorization of this Agreement, the other Transaction Documents or the consummation (or preparation for the consummation) of the transactions contemplated hereby (including all attorneys’ and accountants’ fees, and brokerage fees incurred by or imposed upon any of the Company or any of the Stockholders); and

(o)

any Liability incurred by the Purchaser resulting from or arising out of any sale by the Purchaser of any Non-Conforming Inventory Items to any Ultimate Buyer pursuant to Section 5.12 (including warranty and product return obligations and products liability claims), other than those arising solely from the fault of the Purchaser in connection with such sale.

Without acknowledging any liability to any Person (other than the Purchaser and the other Purchaser Indemnified Parties under this Agreement) with respect thereto, the Company and the

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Stockholders hereby agree and acknowledge that the Company is retaining all of the Excluded Liabilities and the Company shall (and the Stockholders shall cause the Company to) pay, discharge, perform or otherwise satisfy, when due in accordance with the terms thereof, all of the Excluded Liabilities.

1.5

Allocation of Consideration .  The Purchase Price and those Assumed Liabilities and other items included in “consideration” for purposes of Code section 1060 (the “ Section 1060 Consideration ”) shall be allocated among the Purchased Assets based on their fair market values, in compliance with Code section 1060 and the Treasury Regulations thereunder, in accordance with this Section 1.5 (such allocation, the “ Allocation ”).  For purposes of calculating the Section 1060 Consideration, the amounts, as of the Closing Date, of the accounts payable, accrued expenses and other liabilities included in the Assumed Liabilities shall equal the amounts thereof shown on the Final Post-Closing Net Working Capital Statement.  For purposes of the Allocation, the parties agree that, as of the Closing Date: (a) the aggregate fair market value of the Company’s property, plant and equipment is $250,000; (b) the aggregate fair market value of the items included in the Company’s Net Working Capital shall equal the aggregate amount thereof shown on the Final Post-Closing Net Working Capital Statement; and (c) the remainder of the Purchase Price shall be allocated to goodwill.  As soon as reasonably practicable after determination of the Final Post-Closing Net Working Capital Statement pursuant to Section 1.10(c) , the Purchaser shall prepare and deliver to the Company a proposed Allocation (the “ Draft Allocation ”).  The Company may notify the Purchaser in writing of any objections to the Draft Allocation within fifteen (15) days after receipt thereof, which notice shall include reasonable detail of the nature of each disputed item; provided, however, that the basis for dispute shall not include any objection to the methodology used to calculate the Section 1060 Consideration and the fair market values of the Company’s property, plant and equipment and items included in the Company’s Current Assets, as described above.  If the Company does not provide such notice within such fifteen (15) day period, the Draft Allocation shall conclusively be deemed the “ Final Allocation ”, which shall be final and binding upon all parties hereto and shall not be subject to dispute or review.  If the Company provides such notice within such fifteen (15) day period to the Draft Allocation, then for a period of up to fifteen (15) days after the Purchaser’s receipt of the objection notice, the Purchaser and the Company shall use good faith commercially reasonable efforts to resolve any dispute, and if all disputed items are so resolved, the Draft Allocation shall be revised to reflect such resolution and shall become the Final Allocation.  If the parties are unable to resolve all disputed items within such fifteen (15) day period, they shall submit only those disputed items that have not been resolved by the parties to the Independent Accountants (as defined below) for resolution.  The Independent Accountants’ determination as to each disputed item shall be final and binding upon all parties hereto, and the Draft Allocation shall be revised in accordance with the Independent Accountants’ determination and shall become the Final Allocation.  The fees and expenses of the Independent Accountants in performing their determination under this Section 1.5 shall be borne one-half (1/2) by the Purchaser and one-half (1/2) by the Company and the Stockholders, jointly and severally.  Within fifteen (15) days after the Draft Allocation becomes the Final Allocation, the Purchaser shall prepare and deliver to the Company IRS Form 8594 and any required exhibits thereto, and any similar forms required under applicable state, local or foreign Tax Law, which shall conform with the Final Allocation, and both the Company and the Purchaser shall timely file: (a) such Form 8594 with the IRS in accordance with the requirements of Code section 1060; and (b) such other forms with the applicable Governmental Entity in accordance with the requirements of the applicable Tax Law.  Any subsequent adjustment to the consideration paid for the Purchased Assets, including any adjustment to the Purchase Price described in Section 1.10 or Section 7.11 , shall be reflected in an amended Final Allocation and amended Form 8594 (and amended applicable state, local or foreign forms) that the Purchaser shall prepare and deliver to the Company.  The Company, the Stockholders and the Purchaser shall, and shall cause their respective Affiliates to, report, act and file Tax Returns in all respects and for all purposes consistent with the Final Allocation.  The Company, the Stockholders and the Purchasers shall not, and shall cause their respective Affiliates not to, take any

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position, whether on audit, in Tax Returns or otherwise, that is inconsistent with the Final Allocation unless required to do so by applicable Law.

1.6

The Closing .  The closing of the purchase and sale of the Purchased Assets  contemplated by this Agreement (the “ Closing ”) shall take place at the same time at which this Agreement is executed and delivered by the parties.  The date on which the Closing takes place is referred to herein as the “ Closing Date ”.  

1.7

Purchase Price; Payments at Closing .  The aggregate consideration being paid by the Purchaser to the Company for the Purchased Assets will consist of: (x) assumption by the Purchaser of the Assumed Liabilities on the terms and conditions set forth in this Agreement and (y) payment of the sum of $25,000,000 plus the Equalization Payment, as adjusted pursuant to Section 1.10 (the “ Purchase Price ”).  The Purchase Price shall be paid at the Closing as follows:

(a)

to the Senior Lender, on behalf of the Company, any amount necessary to pay off in full all Liabilities relating to the Senior Debt (the “ Senior Debt Payoff Amount ”);

(b)

to the Escrow Agent, $1,600,000 (the “ Indemnity Escrow Deposit ”), in accordance with Section 1.9(a) ;

(c)

to the Escrow Agent, $800,000 (the “ Net Working Capital Escrow Deposit ”), in accordance with Section 1.9(b) ;

(d)

to RG Tube Holdings, LLC, a Delaware limited liability company (“ RG Parent ”), $5,000,000 on behalf of Lore and $1,000,000 on behalf of Hebert, in satisfaction of their respective purchase price payment obligations with respect to units in RG Parent under the Subscription Agreement, of even date herewith, by and among RG Parent, Lore and Hebert (the “ Subscription Agreement ”), which amount shall offset the portions of the Remaining Purchase Price Amount (as defined below) that the Company would otherwise distribute to Lore and Hebert in its contemplated pro rata distribution to the Stockholders with respect to the Company after the Closing, in accordance with the Flow of Payments Letter Agreement (as defined below); and

(e)

the balance to the Company (the “ Remaining Purchase Price Amount ”).

In order to facilitate the payments contemplated by the foregoing subsections of this Section 1.7 , not less than one (1) Business Day nor more than five (5) Business Days prior to the Closing, the Company will prepare and deliver to Purchaser a memorandum setting forth its calculation of the Senior Debt Payoff Amount (if any) and the resulting Remaining Purchase Price Amount, along with wire transfer information for the Senior Lender and the Company.

1.8

Closing Deliveries .

(a)

Company and Stockholder Deliveries .  At the Closing, the Company and the Stockholders shall deliver or cause to be delivered to the Purchaser:

(i)

a bill of sale for all of the Purchased Assets that are tangible personal property in the form attached hereto as Exhibit A (the “ Bill of Sale ”), duly executed by the Company;

(ii)

an assignment of all of the Purchased Assets that are intangible personal property in the form attached hereto as Exhibit B , which assignment shall also contain the Purchaser’s

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assumption of the Assumed Liabilities (the “ Assignment and Assumption Agreement ”), duly executed by the Company;

(iii)

such other bills of sale, assignments, certificates of title, documents and other instruments of transfer and conveyance as may reasonably be requested by the Purchaser, each in form and substance satisfactory to the Purchaser, duly executed by the Company;

(iv)

evidence reasonably satisfactory to the Purchaser concerning satisfaction of the Senior Debt and release of any Liens associated with the Senior Debt, including payoff letters executed by the lenders of the Senior Debt stating the amount necessary to pay off the Senior Debt in full as of the Closing Date;

(v)

evidence reasonably satisfactory to the Purchaser concerning receipt by the Company of consents of counterparties to each of the Assumed Contracts listed on Schedule 1.8(a)(v) concerning the assignment of such Assumed Contract by the Company to the Purchaser as contemplated by this Agreement;

(vi)

articles of amendment to the Company’s articles of incorporation ready  to be filed with the State of Louisiana providing for change of the name of the Company to a name not including the words “Mid-South Control Line” or any variation thereof (the “ Name Change Documents ”);

(vii)

the Escrow Agreement, duly executed by the Company, Lore and Hebert;

(viii)

an employment agreement between the Purchaser and Lore, in the form attached hereto as Exhibit C (the “ Lore Employment Agreement ”), duly executed by Lore;

(ix)

an employment agreement between the Purchaser and Hebert, in the form attached hereto as Exhibit D (the “ Hebert Employment Agreement ”), duly executed by Hebert;  

(x)

an employment agreement between the Purchaser and George Plaisance, in the form attached hereto as Exhibit E (the “ Plaisance Employment Agreement ”), duly executed by George Plaisance;

(xi)

non-competition, non-solicitation and confidentiality agreements, each in the form attached hereto as Exhibit F (collectively, the “ Employee Agreements ”), duly executed by each of Ryan Lore, Richard Lore, Jr., Jessie Cochran and Blaise Cobert;

(xii)

the Subscription Agreement, the Letter Agreement, dated as of February 27, 2008, by and among RG Parent, Lore and Hebert (the “ RG Parent Units Letter Agreement ”), Joinder Agreements between RG Parent and each of Lore and Hebert, and any other documents required to effect the investments contemplated by the Subscription Agreement, each duly executed by Lore and Hebert;

(xiii)

the Letter Agreement, dated as of February 27, 2008, by and among RG Parent, the Purchaser, the Company and the Stockholders (the “ Flow of Payments Letter Agreement ”);

(xiv)

amended and restated lease agreements between the Company and Lobo Holdings, LLC, concerning the properties located at 5208 Taravella Road, Marrero, LA 70072 and 5216 Taravella Road, Marrero, LA 70072, each in a form reasonably satisfactory to the Purchaser, duly executed by the parties thereto;  

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(xv)

evidence reasonably satisfactory to the Purchaser stating the terms of the lease between the Company and Lore concerning the house located at 3 Dragon Hill, The Woodlands, TX 77381;

(xvi)

a secretary’s certificate, dated as of the Closing Date, duly executed by the Secretary of the Company, certifying: (A) the Organizational Documents of the Company, as in effect as of the Closing; (B) resolutions adopted by the board of directors of the Company approving the transactions contemplated by this Agreement; (C) resolutions adopted by the stockholders of the Company approving the transactions contemplated by this Agreement; and (D) the incumbent officers of the Company as of the Closing; and

(xvii)

a good standing certificate for the Company for its jurisdiction of organization and each jurisdiction in which the Company is registered as a foreign corporation, dated as of a date as near as reasonably practicable to the Closing Date.

(b)

Purchaser Deliveries to the Stockholders .  At the Closing, the Purchaser shall deliver or cause to be delivered to the Company or the Stockholders (as applicable):

(i)

the Remaining Purchase Price Amount, by wire transfer of immediately available funds to the Company’s account, pursuant to Section 1.7(e) ;

(ii)

the Bill of Sale, duly executed by the Purchaser;

(iii)

the Assignment and Assumption Agreement, duly executed by the Purchaser;

(iv)

the Escrow Agreement, duly executed by the Purchaser;

(v)

the Lore Employment Agreement, duly executed by the Purchaser;

(vi)

the Hebert Employment Agreement, duly executed by the Purchaser;

(vii)

the Plaisance Employment Agreement, duly executed by the Purchaser;

(viii)

the Subscription Agreement, the RG Parent Units Letter Agreement and any other documents required to effect the investments contemplated by the Subscription Agreement, each duly executed by RG Parent;

(ix)

a certificate of coverage with respect to the matters referenced in Section 5.11 that is reasonably satisfactory of the Company;

(x)

a secretary’s certificate, dated as of the Closing Date, duly executed by the Secretary of the Purchaser, certifying: (A) the Organizational Documents of the Purchaser as in effect as of the Closing; (B) resolutions adopted by the board of directors of the Purchaser approving the transactions contemplated by this Agreement; and (C) the incumbent officers of the Purchaser as of the Closing; and

(xi)

a good standing certificate for the Purchaser for its jurisdiction of organization, dated as of a date as near as reasonably practicable to the Closing Date.

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(c)

Purchaser Deliveries to the Escrow Agent .  At the Closing, the Purchaser shall deliver or cause to be delivered to the Escrow Agent, by wire transfer of immediately available funds: (i) the Indemnity Escrow Deposit to the Indemnity Escrow Account; and (ii) the Net Working Capital Escrow Deposit to the Net Working Capital Escrow Account.

(d)

Purchaser Delivery to the Senior Lender .  At the Closing, the Purchaser shall deliver or cause to be delivered to the Senior Lender, by wire transfer of immediately available funds, the Senior Debt Payoff Amount, if any.

(e)

RG Parent Payment .  At the Closing, the Purchaser shall pay or cause to be paid to RG Parent the $6,000,000 purchase price amount set forth in the Subscription Agreement.

1.9

Escrow .

(a)

Indemnity Escrow . At the Closing, pursuant to and in accordance with Section 1.8(c)(i) , the Purchaser will deposit the Indemnity Escrow Deposit into an escrow account (the “ Indemnity Escrow Account ”) established by the Purchaser and the Company with Capital One Bank, N.A. (the “ Escrow Agent ”) pursuant to an escrow agreement by and among the Purchaser, the Company and the Escrow Agent, in the form attached hereto as Exhibit G (the “ Escrow Agreement ”).  The Indemnity Escrow Deposit, together with any interest and other earnings thereon (collectively, the “ Indemnity Escrow Funds ”), will be held from and after the Closing until the date that is fifteen (15) months after the Closing Date (subject to extension for any then-pending claims of Purchaser Indemnified Parties under Article VII ) (as so extended, the “ Indemnity Escrow Period ”), to serve as a source of recovery for: (i) any indemnifiable Losses owed by the Stockholders to Purchaser Indemnified Parties pursuant to Article VII ; and (ii) if the Purchaser elects such method of satisfaction, any A/R Settlement Amount owed by the Company and the Stockholders to the Purchaser pursuant to Section 5.9 .  As soon as reasonably practicable after the date that is fifteen (15) months after the Closing Date (the “ Initial Indemnity Escrow Period End Date ”), the Escrow Agent shall release to the Company any Indemnity Escrow Funds remaining in the Indemnity Escrow Account as of the Initial Indemnity Escrow Period End Date that are not then subject to any then-pending claims of Purchaser Indemnified Parties under Article VII .  Any Indemnity Escrow Funds held in the Indemnity Escrow Account after the Initial Indemnity Escrow Period End Date because of the existence of then-pending claim(s) of Purchaser Indemnified Parties under Article VII shall be released from the Indemnity Escrow Account to the Purchaser or the Company (as applicable) upon resolution of the applicable claim(s), pursuant to the terms and conditions of the Escrow Agreement.  The Purchaser, the Company and the Stockholders each agree to promptly take all actions (including executing and delivering joint written instructions to the Escrow Agent) requested by any of the other parties to effect releases of Indemnity Escrow Funds in accordance with this Section 1.9(a) , Section 5.9 , Article VII and the Escrow Agreement.

(b)

Net Working Capital Escrow .  At the Closing, pursuant to and in accordance with Section 1.8(c)(ii) , the Purchaser will deposit the Net Working Capital Escrow Deposit into an escrow account (the “ Net Working Capital Escrow Account ”) established by the Purchaser and the Company with the Escrow Agent pursuant to the Escrow Agreement.  The Net Working Capital Escrow Deposit, together with any interest and other earnings thereon (collectively, the “ Net Working Capital Escrow Funds ”), will be held from and after the Closing until the Final Net Working Capital has been determined pursuant to Section 1.10(c) and, if applicable, the required amount of Net Working Capital Escrow Funds have been released to the Purchaser in connection with a Downward Net Working Capital Adjustment pursuant to Section 1.10(d) (the “ Net Working Capital Escrow Period ”).  As soon as reasonably practicable after the end of the Net Working Capital Escrow Period, the Escrow Agent shall release to the Company any Net Working Capital Escrow Funds remaining in the Net Working Capital Escrow Account after release of any Net Working Capital Escrow Funds required to be released to the Purchaser in

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connection with a Downward Net Working Capital Adjustment pursuant to Section 1.10(d) , to the extent applicable.  The Purchaser, the Company and the Stockholders shall each promptly take all actions (including executing and delivering joint written instructions to the Escrow Agent) requested by any of the other parties to effect the releases of Net Working Capital Escrow Funds in accordance with this Section 1.9(b) , Section 1.10(d) and the Escrow Agreement.

1.10

Net Working Capital Adjustment .

(a)

Joint Inventory .  On or before the Closing Date, the Purchaser and the Company shall jointly: (i) determine the Inventory items as of the Closing Date that are slow moving, obsolete or of below standard quality, which shall be set forth on Schedule 1.10(a) (collectively, the “ Non-Conforming Inventory Items ”); and (ii) determine the physical quantities of Inventory items as of the Closing Date, each of which determinations shall be final and binding on the parties (collectively, the “ Joint Inventory Determinations ”).

(b)

Adjustment at Closing .  The Company shall (and the Stockholders shall cause the Company to) prepare in consultation with the Purchaser and deliver to the Purchaser, not less than one  (1) Business Day prior to the Closing Date, a statement (the “ Preliminary Net Working Capital Statement ”) setting forth the Company’s good faith estimated calculation of the Net Working Capital as of the Closing, which shall be prepared: (i) consistent with the Company’s past practices (which shall, other than as described in Section 2.4(a)(ii) of the Company Disclosure Schedule, be in accordance with GAAP); and (ii) using the same methodology and manner of calculation as the example calculation set forth in Schedule 1.10(b) , and include reasonable support for the calculations made therein.  The Purchase Price paid at the Closing pursuant to Section 1.7 shall be adjusted, dollar for dollar, up or down, as appropriate, to the extent that the Net Working Capital set forth on the Preliminary Net Working Capital Statement (the “ Estimated Net Working Capital ”) is greater than or less than $4,850,000.

(c)

  Post-Closing Working Capital Statement .  As soon as reasonably practicable (and in any event within sixty (60) days) after the Closing Date, the Purchaser shall prepare and deliver to the Company and the Stockholders a statement (the “ Post-Closing Net Working Capital Statement ”) setting forth its calculation of the Net Working Capital as of the Closing, which statement shall be prepared: (i) using the Joint Inventory Determinations; (ii) as to the method of valuing Inventory, using the historical cost of each Inventory item on a first-in/first-out basis applied in the same manner as was used in preparation of the 2007 Financial Statements; (iii) consistent with the Company’s past practices (which shall, other than as described in Section 2.4(a)(ii) of the Company Disclosure Schedule, be in accordance with GAAP); and (iv) using the same methodology and manner of calculation as the example calculation set forth in Schedule 1.10(b) , and include reasonable support for the calculations made therein.  If the Company and the Stockholders disagree with the Post-Closing Net Working Capital Statement, the Company and the Stockholders may, within ten (10) Business Days after receipt thereof, notify the Purchaser in writing (the “ Net Working Capital Dispute Notice ”), which Net Working Capital Dispute Notice shall provide reasonable detail of the nature of each disputed item on the Post-Closing Net Working Capital Statement and provide reasonable support for each such position; provided , however , that the only bases for objection shall be: (i) non-compliance with the standards set forth in this Section 1.10(c) for the preparation of the Post-Closing Net Working Capital Statement or as set forth in the definition of Net Working Capital; and (ii) computational errors.  During such ten (10) Business Day period and any subsequent time period in which the Post-Closing Net Working Capital Statement is being disputed as provided in this Section 1.10(c) , the Purchaser shall provide the Company and the Stockholders and their representatives with reasonable access, upon reasonable notice and during times mutually and reasonably agreeable to the Purchaser, on the one hand, and the Company and the Stockholders, on the other hand, to the books, records and working papers of the Business related to the calculations underlying the Post-Closing Net Working Capital Statement.  Unless the Company and the

11

Stockholders deliver a Net Working Capital Dispute Notice within ten (10) Business Days after delivery of the Post-Closing Net Working Capital Statement, such Post-Closing Net Working Capital Statement shall be conclusively deemed the “ Final Post-Closing Net Working Capital Statement ,” shall be final and binding upon all parties, and shall not be subject to dispute or review.  Any items or calculations not disputed by the Company and the Stockholders in the Net Working Capital Dispute Notice shall be conclusively deemed to have been agreed upon by the Company and the Stockholders and shall be final and binding upon all parties and shall not be subject to dispute or review.  For a period of fifteen (15) days after receipt by the Purchaser of the Net Working Capital Dispute Notice, the Purchaser, on the one hand, and the Company and the Stockholders, on the other hand, shall use good faith commercially reasonable efforts to resolve the disputed items between themselves and, if the parties are able to resolve all of the disputed items during such time period, the Post-Closing Net Working Capital Statement shall be revised to the extent necessary to reflect such resolution, shall be conclusively deemed the “ Final Post-Closing Net Working Capital Statement ”, shall be final and binding upon all parties, and shall not be subject to dispute or review.  If the parties are unable to resolve all of the disputed items within such fifteen (15) day period, the parties shall jointly engage a nationally-recognized accounting firm reasonably acceptable to the Purchaser, on the one hand, and the Company and the Stockholders, on the other hand, with no relationship with any of the parties or any of their respective Affiliates (the “ Independent Accountants ”) and submit the disputed items to the Independent Accountants for resolution.  The Independent Accountants shall act as experts and not arbiters and shall determine only those items on the Post-Closing Net Working Capital Statement being disputed by the Purchaser, on the one hand, and the Company and the Stockholders, on the other hand, as of the time of engagement of the Independent Accountants.  The Purchaser, the Company and the Stockholders shall instruct the Independent Accountants to not assign a dollar amount to any item in dispute greater than the greatest dollar amount for such item assigned by the Purchaser, on the one hand, or the Company and the Stockholders, on the other hand (as applicable), or less than the dollar amount for such item assigned by the Purchaser, on the one hand, or the Company and the Stockholders, on the other hand (as applicable).  Promptly, but no later than thirty (30) days after engagement, the Independent Accountants shall deliver a written report to the Purchaser, the Company and the Stockholders as to the resolution of the disputed items, which shall state the resulting determination of the Final Net Working Capital.  The Post-Closing Net Working Capital Statement as determined by the Independent Accountants shall be conclusively deemed the “ Final Post-Closing Net Working Capital Statement ,” shall be final and binding upon all parties and shall not be subject to dispute or review.  The Net Working Capital as of the Closing set forth on the Final Post-Closing Net Working Capital Statement is referred to herein as the “ Final Net Working Capital .”  The fees and expenses of the Independent Accountants incurred in connection with the resolution of disputes pursuant to this Section 1.10(c) shall be borne jointly and severally by the Company and the Stockholders unless the Final Net Working Capital determined by the Independent Accountants is greater by more than one-half of one percent (0.5%) than the Net Working Capital proposed by the Purchaser in the Post-Closing Net Working Capital Statement, in which case the fees and expenses of the Independent Accountant incurred in connection with the resolution of disputes pursuant to this Section 1.10(c) shall be borne by the Purchaser.

(d)

Post-Closing Net Working Capital Adjustment .  In addition to the Purchase Price adjustment relating to Net Working Capital occurring at Closing pursuant to Section 1.10(b) , the Purchase Price shall be further adjusted, dollar for dollar, up or down, as appropriate, by an amount (the “ Net Working Capital Adjustment Amount ”) equal to the Final Net Working Capital minus the Estimated Net Working Capital, which amount may be positive or negative, subject to the following sentences of this Section 1.10(d) .  If the Net Working Capital Adjustment Amount is a negative number, there shall be a downward Net Working Capital adjustment equal in amount to the absolute value of the Net Working Capital Adjustment Amount (a “ Downward Net Working Capital Adjustment ”) and such Downward Net Working Capital Adjustment shall be satisfied, within five (5) Business Days after determination of the Final Net Working Capital, as follows: (i) first , by release to the Purchaser of Net Working Capital

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Escrow Funds; and (ii) second , to the extent that there are not sufficient Net Working Capital Escrow Funds in the Net Working Capital Escrow Account to satisfy such obligation in full, the Company and the Stockholders shall jointly and severally pay the unsatisfied amount to the Purchaser by wire transfer of immediately available funds.  If the Net Working Capital Adjustment Amount is a positive number, there shall be an upward Net Working Capital adjustment equal in amount to the absolute value of the Net Working Capital Adjustment Amount (an “ Upward Net Working Capital Adjustment ”) and such Upward Net Working Capital Adjustment shall be satisfied, within five (5) Business Days after determination of the Final Net Working Capital, by payment by the Purchaser to the Company of the Upward Working Capital Adjustment amount, by wire transfer of immediately available funds.  If any payment required under this Section 1.10(d) is not made in full within five (5) Business Days after determination of the Final Net Working Capital, such payment will thereafter bear simple interest at a rate equal to the prime rate in effect from time to time (as published in the Wall Street Journal) plus two (2) percentage points, until paid in full.

(e)

Definitions .  As used in this Section 1.10 : (i) “ Net Working Capital ” means the Current Assets minus Current Liabilities; (ii) “ Current Assets ” means, solely to the extent included in the Purchased Assets, any cash in the Assumed Bank Accounts as of the Closing, short-term investments, accounts receivable , accounts receivable accrued, inventory, deposits (including lease deposits), retainers, work in process, prepaid expenses and other current assets of the Company, in each case as determined consistent with the Company’s past practices (which shall, other than as described in Section 2.4(a)(ii) of the Company Disclosure Schedule, be in accordance with GAAP) (excluding: (A) any effects from purchase accounting; and (B) any receivables from the Stockholders or any other related parties); and (iii) “ Current Liabilities ” means, solely to the extent included in the Assumed Liabilities, all accounts payable, accrued expenses and other current liabilities of the Company, in each case as determined consistent with the Company’s past practices (which shall, other than as described in Section 2.4(a)(ii) of the Company Disclosure Schedule, be in accordance with GAAP) (excluding: (A) any effects from purchase accounting; and (B) any Liabilities of the Company that are satisfied in full at Closing pursuant to Section 1.7 ).

(e)

Clarification .  For the avoidance of doubt, the parties agree and acknowledge that any Net Working Capital adjustment pursuant to this Section 1.10 will not preclude the Purchaser Indemnified Parties from recovering any indemnifiable Losses in accordance with Article VII arising out of any breach of the Stockholders’ representations and warranties set forth in Section 2.4 , but the Purchaser shall not be entitled to recover twice for the same matter.

1.11

Bulk Sales Laws .  The Company, the Stockholders and the Purchaser hereby waive, to the fullest extent allowable under applicable law, compliance with the requirements of the bulk sales or bulk transfer laws of any jurisdiction which may be applicable to the transactions contemplated by this Agreement.

ARTICLE II
REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY

The Company and the Stockholders each hereby jointly and severally represent and warrant to the Purchaser as follows:

2.1

Existence; Good Standing; Authority; Enforceability .  The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Louisiana and has all required power and authority to own and operate its properties and to conduct its business, as presently conducted and presently planned by the Company to be conducted.  The Company is duly licensed or qualified to do business as a foreign corporation and is in good standing in each jurisdiction listed on

13

Section 2.1(a) of the Company Disclosure Schedule, which constitute all jurisdictions in which such license or qualification is necessary under the applicable Law as a result of the conduct of the Company’s Business by the Company, except where the failure to be so licensed or qualified or to be in good standing would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  The Company has the required corporate power and authority to execute and deliver this Agreement and the other documents contemplated hereby (collectively, the “ Transaction Documents ”), to perform its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement and the other Transaction Documents by the Company, the performance by the Company of its obligations hereunder and thereunder, and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all required corporate action on the part of the Company (including approval by the Company’s board of directors and stockholders), and no other corporate authorization or proceedings on the part of the Company (including approval by the Company’s board of directors and stockholders) are required therefor.  This Agreement and the other Transaction Documents to which the Company is a party, have each been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Agreement and such other Transaction Documents by the Purchaser and the Stockholders (as applicable), this Agreement and, except as set forth on Section 2.1(b) of the Company Disclosure Schedule,  such other Transaction Documents constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except for the Equitable Exceptions.  Correct and complete copies of the Company’s Organizational Documents and minutes reflecting all meetings and consents in lieu of meetings of the Company’s board of directors, any committees thereof, and the Company’s stockholders have been supplied by the Company to the Purchaser.  The books of account, stock records, minute books and other records of the Company are accurate, up to date and complete, and have been maintained in all material respects in accordance with prudent business practices and all applicable Laws.  The Company is not in default under or in violation of any provision of its Organizational Documents or any resolution adopted by the Company’s board of directors, any committee thereof, or its stockholders.

2.2

Capitalization; Subsidiaries .

(a)

The authorized capital stock of the Company consists of fifty thousand (50,000) shares of Common Stock, no par value per share, consisting of Class A Common Stock of the Company (“ Class A Common Stock ”) and Class B Common Stock of the Company (“ Class B Common Stock ”), of which: (i) the only issued and outstanding shares of Class A Common Stock are the ninety-eight (98) shares of Class A Common Stock held by Lore, both individually and as Trustee of the Lore Trusts; and (ii) the only issued and outstanding shares of Class B Common Stock are the eight (8) shares of Class B Common Stock held by Hebert.  All of the issued and outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, and none of them were issued in violation of any pre-emptive rights, rights of first offer or first refusal or similar rights, or in violation of the Securities Act or any other applicable securities Law.  There are no outstanding options, warrants, Contracts or other rights of any kind, whether written or oral, to acquire (including securities exercisable or exchangeable for or convertible into) any shares of any class of capital stock of the Company (or securities convertible into or exchangeable or exercisable for any such shares).  There are no Contracts to which the Company or any other Person is a party with respect to: (i) voting of any shares of capital stock of the Company (including any proxy or director nomination rights); or (ii) transfer of any shares of capital stock of the Company (including any right of first refusal, drag-along, tag-along and pre-emptive rights).  There are no stock option, stock incentive or other plans, programs, arrangements or Contracts (whether written or oral) providing for the issuance or grant of options to purchase or acquire shares of capital stock of the Company, restricted stock, stock appreciation rights, phantom stock or any other interest or right in respect of or concerning any capital stock of the Company.  The Company has no

14

obligation (contingent or otherwise) to purchase, redeem, retire, call or otherwise acquire any shares of its capital stock or any interest or right in respect of or concerning any capital stock of the Company.

(b)

The Company does not own or control, directly or indirectly, any capital stock or other equity interest in any other Person.  The Company is not a successor in interest to any other Person, whether by merger, consolidation or other business combination, reorganization, acquisition of assets or otherwise.

2.3

No Conflict; Consents and Approvals .

(a)

Neither the execution, delivery and performance by the Company and the Stockholders of this Agreement and the other Transaction Documents to which they are a party, nor the consummation by the Company and the Stockholders of the transactions contemplated hereby and thereby in accordance with the provisions hereof and thereof does or will: (i) conflict with, violate or result in a breach of any of the Organizational Documents of the Company; (ii) materially violate, materially conflict with, result in a material breach of any provision of, constitute a default (or an event which, with or without the giving of notice or lapse of time, or both, would constitute a default) under, result in a loss of any material right or material benefit under, require the consent of the other party or parties thereto under, result in the termination of, accelerate the performance required by, or (except as set forth in Section 2.3(b) of the Company Disclosure Schedule) result in the other party or parties thereto having a right of termination, amendment, modification, cancellation or acceleration under, any Contract to which the Company is a party or to which any of its property is subject; (iii) materially violate any Law or Order applicable to the Company or any of its assets or properties; (iv) result in the creation or imposition of any Lien upon any of the assets or properties of the Company or upon any of the shares of Company capital stock; (v) result in the vesting of, the payment of, or the creation of any obligation, whether absolute or contingent, to vest or pay, on behalf of the Company, any equity or equity-related grant, bonus, severance, termination, “golden parachute” or other similar payment (including any “double-trigger” rights), whether pursuant to a Contract or under applicable Law, with respect to any current or former employee, officer or director of the Company or any other Person; (vi) give any Governmental Entity the right to revoke, suspend, modify or terminate any Company Permit; or (vii) give any Governmental Entity or other Person the right to challenge any of the transactions contemplated by this Agreement.

(b)

Except as set forth on Section 2.3(b) of the Company Disclosure Schedule, the execution, delivery and performance by the Company and the Stockholders of this Agreement and the other Transaction Documents to which they are a party, and the consummation by the Company and the Stockholders of the transactions contemplated hereby and thereby in accordance with the provisions hereof and thereof will not: (i) require any consent, waiver, approval, authorization, order or permit of, declaration, filing or registration with, other action by, or notification to, any Governmental Entity; or (ii) require the consent, waiver, approval, authorization, notification or action of, by or to (as applicable) any other Person pursuant to any Contract to which the Company is a party or to which any of its property is subject.  The Company has, on or prior to the Closing, given all notices, made all filings and obtained all consents set forth on Schedule 1.8(a)(v) .

2.4

Financial Statements; Undisclosed Liabilities; Accounts Receivable; Inventory; Financial Controls .

(a)

Attached as Section 2.4(a)(i) of the Company Disclosure Schedule are correct and complete copies of: (i) the unaudited balance sheet of the Company as of December 31, 2006 and related unaudited statements of income, shareholders’ equity and cash flows for the year ended December 31, 2006  (the “ 2006 Financial Statements ”); and (ii) the unaudited balance sheet of the Company as of December 31, 2007 and the related unaudited statements of income, shareholders’ equity and cash flows

15

for the year ended December 31, 2007 (the “ 2007 Financial Statements ” and, collectively with the 2006 Financial Statements, the “ Financial Statements ”).  Except as set forth on Section 2.4(a)(ii) of the Company Disclosure Schedule, the Financial Statements have been prepared in accordance with GAAP consistently applied throughout the periods indicated therein, have been prepared in accordance with the books and records of the Company, and present fairly, in all material respects, the financial condition, results of operations and cash flows of the Company as of the respective dates and during the respective periods indicated therein.  The Company is not a party to, and it does not otherwise have any Liabilities under, any off-balance sheet arrangements.

(b)

Except for: (i) Liabilities set forth on the 2007 Financial Statements; (ii) Liabilities incurred after December 31, 2007 in the ordinary course of business (none of which results from or relates to any breach of contract, breach of warranty, tort, infringement or violation of Law), which are not material, either individually or in the aggregate; and (iii) Liabilities set forth on Section 2.4(b) of the Company Disclosure Schedule, the Company has no material Liabilities.

(c)

Except: (i) for trade payables incurred in the ordinary course of business and either set forth on the 2007 Financial Statements or incurred since the date of the 2007 Financial Statements (none of which results from or relates to any breach of contract, breach of warranty, tort, infringement or violation of law); and (ii) as set forth on Section 2.4(c) of the Company Disclosure Schedule, the Company has no Indebtedness.

(d)

All of the Acquired Accounts Receivable: (i) represent valid obligations of customers of the Company arising from bona fide transactions entered into in the ordinary course of business; and (ii) are current and collectible in full, without any counterclaim or set off, when due (and in no event later than ninety (90) days after the Closing Date), subject to any allowance for doubtful accounts set forth in the 2007 Financial Statements.  Except as set forth on Section 2.4(d)(i) of the Company Disclosure Schedule, no Person has any Lien on any of the Acquired Accounts Receivable or any part thereof, and no Contract concerning any deduction, free goods, discount or other deferred price or quantity adjustment has been made with respect to any such Acquired Accounts Receivable.  Except as set forth on Section 2.4(d)(ii) of the Company Disclosure Schedule, no accounts payable of the Company have been outstanding for more than ninety (90) days.

(e)

The Company has not modified the terms of, discounted, set off or accelerated the collection of any of the accounts receivable of the Company within the one (1) year period prior to the date of this Agreement.  Except as set forth on Section 2.4(e) of the Company Disclosure Schedule, the Company has not delayed any of the payment terms or otherwise paid any of the accounts payable of the Company outside the ordinary course of the Company’s business consistent with past practice within the one (1) year period prior to the date of this Agreement.

(f)

All of the inventory of the Company (“ Inventory ”) other than the Non-Conforming Inventory is of a quality and quantity usable and, with respect to finished goods, saleable in the ordinary course of business consistent with past practices, subject to reserves for slow moving, obsolete or below standard quality items that have been, except as set forth on Section 2.4(a)(ii) of the Company Disclosure Schedule, established in accordance with GAAP.  The aggregate value of the Inventory as reflected in the balance sheet included in the 2007 Financial Statements, as adjusted through the date of this Agreement, has been written down on the books of account of the Company to realizable market value or adequate reserves have been provided therein in accordance, except as set forth on Section 2.4(a)(ii) of the Company Disclosure Schedule, with GAAP.   Section 2.4(f)(i) of the Company Disclosure Schedule lists all of the Inventory as of the Closing Date and, with respect to Inventory owned by or held for the account of a customer, identifies such customer and Inventory in reasonable detail, and specifies the location of such Inventory.   Schedule 1.10(a) specifically identifies all items of Inventory

16

that are slow moving, obsolete or of below standard quality.  Except: (i) for Inventory in transit in the ordinary course of business consistent with past practices; and (ii) as set forth on Section 2.4(f)(iii) of the Company Disclosure Schedule, all Inventory is located at the Company’s Marrero, LA facility.

(g)

The Company maintains books and records that, in all material respects, accurately and completely reflect its assets and liabilities.  To the Company’s Knowledge, the Company maintains internal accounting controls that are sufficient to provide reasonable assurance that: (i) transactions are executed only in accordance with management’s authorization; (ii) except as set forth on Section 2.4(a)(ii) of the Company Disclosure Schedule, transactions are recorded as necessary to permit preparation of the financial statements of the Company in accordance with GAAP and to maintain accountability for the assets and liabilities of the Company; (iii) receipts and expenditures of the Company are executed only in accordance with management’s authorization; (iv) unauthorized acquisition, disposition or use of assets is prevented or timely detected; and (v) accounts, notes and other receivables are recorded accurately, and proper and adequate procedures are implemented to effect the collection thereof on a current and timely basis.  To the Company’s Knowledge, except as set forth on Section 2.4(g) of the Company Disclosure Schedule, there are no weaknesses in the design or operation of such internal accounting controls that could materially adversely affect the ability of the Company to initiate, record, process and report financial data.

2.5

Absence of Certain Changes .  Since December 31, 2007, there has not been any event or change in the Company’s Business which has had or could reasonably be expected to have a Material Adverse Effect.  Without limiting the generality of the foregoing, except as set forth in Section 2.5 of the Company Disclosure Schedule, since December 31, 2007, the Company has conducted its business and affairs only in the ordinary course of business consistent with past practice, and the Company has not:  

(a)

entered into, amended, modified, waived any rights under, or terminated any Material Contract;

(b)

made any capital expenditure(s) or entered into any commitment therefor that involve more than $25,000 individually or $50,000 in the aggregate;

(c)

issued any capital stock of the Company or any security that is convertible into or exercisable or exchangeable for any capital stock of the Company, redeemed or otherwise acquired any capital stock of the Company, declared or paid any dividend or made any distribution or payment in respect of any capital stock of the Company, split, combined or reclassified any capital stock of the Company, or amended any of its Organizational Documents;

(d)

except as set forth on Section 2.5(d) of the Company Disclosure Schedule, paid any bonus to, or changed any salary of, any of its employees, officers or directors;

(e)

entered into, amended, modified, waived or terminated any Company Benefit Plan or entered into any collective bargaining agreement;

(f)

made any loan or advance to any Person, other than: (i) the extension of trade credit to customers of the Company in the ordinary course of business consistent with past practice; and (ii) advances to employees, officers and directors of the Company to cover reimbursable travel and similar business expenses in the ordinary course of business consistent with past practice and not exceeding $5,000 with respect to any single Person and $10,000 in the aggregate;

(g)

entered into any transaction that would be required to be disclosed under Section 2.21 (Related Party Transactions);

17

(h)

sustained any material damage to or destruction or loss of any material property owned or used by the Company, whether or not covered by insurance, or waived or released any right of material value;

(i)

incurred any Indebtedness or redeemed, retired or prepaid any Indebtedness, in each case other than trade payables incurred and paid in the ordinary course of business consistent with past practice;

(j)

guaranteed any obligation of any other Person;

(k)

sold, encumbered or otherwise transferred any tangible or intangible assets outside the ordinary course of business consistent with past practice;

(l)

made any change in the accounting methods, practices or principles used by the Company (including methods for calculating any bad debt, contingency or other reserve for accounting, financial reporting or Tax purposes), other than changes that were required by GAAP or applicable Law;

(m)

acquired or agreed to acquire by merging or consolidating with, or by way of any other business combination, or by purchasing or exchanging any material portion of the capital stock, other equity interests or assets of, or by any other manner, any other Person;

(n)

commenced any Proceeding against any other Person or received written notice of the commencement of any Proceeding against the Company, or settled or compromised any Proceeding; or

(o)

committed or agreed to any of the foregoing.

2.6

Material Contracts .   Section 2.6 of the Company Disclosure Schedule sets forth a correct and complete list of all Contracts that are material to the Company’s Business, as it is presently conducted and proposed by the Company to be conducted (collectively, the “ Material Contracts ”).  Without in any way limiting the generality of such term, the Material Contracts include:

(a)

any Contract under which the Company: (i) sold or purchased products or services pursuant to which the aggregate of payments due to or from the Company, respectively, in the one (1) year period ending on the date of this Agreement, was equal to or exceeded $100,000; or (ii) anticipates selling or purchasing products or services during the one (1) year period after the date of this Agreement in which the aggregate payments due to or from the Company, respectively, for such products or services are expected to equal or exceed $100,000;

(b)

any Contract with any current or former employee, officer or director of, or consultant or independent contractor to, the Company, including Contracts concerning severance and similar matters;

(c)

any Contract under which the Company has agreed to indemnify any other Person or directly or indirectly guaranteed or otherwise agreed to be responsible for any Liabilities of any other Person;

(d)

any Contract that contains a covenant not to compete or any other Contract limiting or restricting the ability of the Company to enter into or engage in any market or line of business, to operate in any area or territory, or to solicit or hire employees or other Persons;

18

(e)

any Contract under which the Company is the beneficiary of any non-competition, non-solicitation or similar rights;

(f)

any Contract which cannot be terminated without penalty or payment within ninety (90) days by the Company;

(g)

any Contract involving or resulting in a commitment of Company to make a capital expenditure or to purchase a capital asset involving at least $25,000;

(h)

any lease or similar agreement pursuant to which: (i) the Company is the lessee of, or holds or uses, any machinery, equipment, vehicle or other tangible personal property owned by any third Person for annual rent or similar payments in excess of $25,000; or (ii) the Company is the lessee of, or holds or uses, any real property owned by any third Person;

(i)

any license agreement or other Contract relating to Business Intellectual Property;

(j)

any Contract establishing a partnership or joint venture or other cooperative undertaking;

(k)

any asset purchase agreements, stock purchase agreements, and other equity financing, acquisition or divestiture agreements and similar Contracts, including any Contracts relating to the sale, lease or disposal of any material properties or assets of the Company;

(l)

any Contract relating to Indebtedness;

(m)

any Contract which is not made in the ordinary course of business; and

(n)

all Contracts to enter into any of the foregoing.

Each of the Material Contracts has been duly authorized and executed by the Company and, to the Company’s Knowledge, the other party thereto, is in full force and effect and represents a legal, valid and binding obligation of the Company, enforceable in accordance with its terms against the Company and, to the Company’s Knowledge, the other parties thereto.  The Company is not in breach of, or default under, any Material Contract and, to the Company’s Knowledge, no other party to any Material Contract is in breach thereof or default thereunder.  No event has occurred or condition exists which, with or without the giving of notice or the lapse of time, or both, would constitute a breach or default by the Company or, to the Company’s Knowledge, the other parties thereto, under any Material Contract.  The Company has not received any notice alleging that it has breached or violated, or is in default under, any of the Material Contracts.  Correct and complete copies of each Material Contract have been supplied by the Company to the Purchaser.

2.7

Litigation .  There are no Proceedings pending or, to the Knowledge of the Company, threatened against the Company or any of its properties or any of its officers or directors (in their capacities as such) and, to the Knowledge of the Company, there are no existing facts or circumstances that could reasonably be expected to result in any such Proceeding.  The Company is not currently and has never been subject to any Order.  During the five (5) year period prior to the date of this Agreement, there has not been, and there are not currently, any internal investigations or inquiries conducted by or with respect to the Company or any of its employees, officers or directors, or any third-party or Governmental Entity at the request of any of the foregoing, concerning any financial, accounting, Tax,

19

conflict of interest, self-dealing, fraudulent or deceptive conduct or other misfeasance or malfeasance issues.

2.8

Taxes .

(a)

All Tax Returns required to be filed with any Governmental Entity by the Company or with respect to the Business or the Purchased Assets have been timely filed and were correct and complete in all material respects.  All Taxes due and payable by the Company or with respect to the Business or the Purchased Assets (whether or not shown on any Tax Return) have been timely paid in full.  The Company is not currently the beneficiary of, and has not applied for, any extension of time within which to file any Tax Return.  No claim has ever been made by any Governmental Entity in a jurisdiction: (i) in which the Company does not file Tax Returns that the Company or a Stockholder (with respect to the Company) is or may be subject to Tax or required to file Tax Returns in that jurisdiction; (ii) where the Company or any Stockholder (with respect to the Company) files Tax Returns but does not compute its Tax on the basis of its net income attributable to such jurisdiction, that it is or may be subject to tax on the basis of its net income attributable to such jurisdiction; or (iii) in which the Company files Tax Returns but a Stockholder (with respect to the Company) does not file Tax Returns that such Stockholder is or may be subject to Tax or required to file Tax Returns with respect to the Company in that jurisdiction, and, to the Company’s Knowledge, there is no valid basis on which a Governmental Entity could assert such a claim.  To the Company’s Knowledge, the Company does not conduct business in any jurisdiction in a manner that could reasonably result in a requirement to file a Tax Return in that jurisdiction of a type that the Company has not filed previously, or to pay Taxes to that jurisdiction on a basis different from the basis, if any, on which it previously paid Taxes to that jurisdiction.

(b)

The Company has withheld and paid all Taxes required to have been withheld and paid by the Company in connection with any amounts paid or owing, or any income or gain allocated, to any current or former employee, independent contractor, creditor, stockholder or other Person, and has timely and properly completed and filed the Forms W-2 and 1099, Schedules K-1 (or comparable schedules under state, local or foreign Tax Law) or other Returns or reports required with respect thereto.

(c)

No dispute concerning any Tax Liability of the Company or with respect to the Business or the Purchased Assets is pending or, to the Company’s Knowledge, threatened.  With respect to Taxes for which the statute of limitations remains open, the Company has not received from any Governmental Entity: (i) any notice indicating an intent to open a Tax audit or other review; (ii) any request for information related to Tax matters; or (iii) any notice of deficiency or proposed adjustment for any amount of Tax proposed, asserted or assessed against the Company or with respect to the Business or the assets or properties of the Company.  The Company has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency of a Tax.

(d)

The Company has supplied to the Purchaser: (i) a complete and correct list of all Tax Returns filed with respect to the Company for Taxable periods for which the statute of limitations remains open, indicating any of such Tax Returns that have been audited or are currently being audited; and (ii) complete and accurate copies of all material Tax Returns of the Company, and of all examination reports and statements of deficiencies payable by, assessed against or agreed to by the Company with respect to such Tax Returns, for all Tax periods as to which the statute of limitations remains open.

(e)

The Company has never obtained from a Governmental Entity any ruling with respect to Taxes.  There is no pending request by the Company for a ruling by a Governmental Entity with respect to Taxes.

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(f)

The Company has no Liability for the Taxes of any other Person, whether as a transferee or successor, under any provision of any Law, by Contract or otherwise.

(g)

None of the Assumed Liabilities, individually or in the aggregate, could obligate the Company to make a payment that would not be deductible by reason of Code section 280G or would be subject to Code section 4999.

(h)

There are no Liens on any of the Company’s assets that arose in connection with any failure (or alleged failure) to pay any Tax.

(i)

No Company Benefit Plan is, and the Company is not otherwise party to any   Contract or other plan or arrangement that is, a “nonqualified deferred compensation plan” subject to Code section 409A.  The Company has no actual or potential Liability to reimburse or otherwise “gross-up” any Person for any interest or additional tax imposed pursuant to Code section 409A(a)(1)(B).

2.9

Employee Benefit Plans .

(a)

Correct and complete copies of all documents comprising Company Benefit Plans, including all plan documents, trusts and summary plan descriptions, as applicable, and the most recent annual report on IRS Form 5500, if applicable, have been supplied by the Company to the Purchaser and are listed in Section 2.9(a) of the Company Disclosure Schedule.   

(b)

All Company Benefit Plans are valid and binding and in full force and effect and there are no material defaults thereunder.  Each Company Benefit Plan complies in all material respects with all applicable provisions of ERISA, the Code and other applicable Law.  Any “employee pension benefit plan” (within the meaning of Section 3(2) of ERISA) maintained by the Company which is intended to be qualified under Section 401(a) of the Code has, to the extent applicable, received a determination letter from the IRS evidencing such qualification, remains qualified under Code section 401(a), and no event has occurred that will or could give rise to disqualification or loss of tax-exempt status of any such plan or trust under Code sections 401(a) or 501(a).  The Company does not provide any retiree health and life benefits under any Company Benefit Plan, other than continuation coverage required under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.  There are no pending or, to the Knowledge of the Company, threatened Proceedings relating to any of the Company Benefit Plans.  The Company has not engaged in, or failed to engage in, a transaction with respect to any Company Benefit Plan that is reasonably likely to subject the Company to a tax or penalty imposed by either Section 4975 or 4980B of the Code or Section 502(i), 502(c), 502(1) and 601 through 608 of ERISA.

(c)

No Company Benefit Plan subject to Title IV of ERISA (including any “multiemployer plan” as defined in ERISA) has been sponsored or contributed to by the Company or any Person that is a member of a “controlled group of corporations” or is under “common control” with the Company (within the meaning of Section 414(b) or (c) of the Code) during the six (6) year period preceding the date of this Agreement.

(d)

All contributions required to be made, and claims to be paid, under the terms of any Company Benefit Plan have been timely made or reserves therefor on the Financial Statements have been established, which reserves are adequate in all material respects.

(e)

Except as set forth on Section 2.9(e) of the Company Disclosure Schedule, each Company Benefit Plan can be terminated by the Company within a period of thirty (30) days following

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the Closing Date, without any additional contribution to such Company Benefit Plan or the payment of any compensation or other amount or causing the vesting or acceleration of any benefits.

(f)

None of this Agreement, the transactions contemplated hereby, or any other agreement, plan (including any Company Benefit Plans), arrangement or other Contract covering any “disqualified person” with respect to the Company, will give rise directly or indirectly to the payment to a “disqualified person” with respect to the Company of any amount that would be a “parachute payment” (within the meaning of Section 280G(b) of the Code) when considered collectively with payments to such person under any other such agreements, plans, arrangements or other Contracts.  There is no written or unwritten agreement, plan, arrangement or other Contract by which the Company is bound to compensate any employee of the Company for excise taxes paid pursuant to Section 4999 of the Code.

2.10

Labor Matters .

(a)

The Company is in compliance, in all material respects, with all Laws governing the employment of labor, including all such Laws relating to wages, hours, collective bargaining, discrimination, civil rights, safety and health (including OSHA and comparable state and local Laws), workers’ compensation and the collection and payment of withholding and/or Social Security Taxes and similar Taxes (collectively, “ Labor Laws ”).  The Company has, during the five (5) year period prior to the date of this Agreement, conducted the Business in compliance, in all material respects, with all applicable Labor Laws.  No investigation, review or proceeding by any Governmental Entity with respect to the Company in relation to any actual or alleged violation of any Labor Law is pending or, to the Knowledge of the Company, threatened, nor has the Company received any notice from any Governmental Entity indicating an intention to conduct the same.

(b)

There are no collective bargaining or other labor union agreements to which the Company is a party or by which it is bound.  To the Knowledge of the Company, the Company has not encountered any labor union organizing activity, or had any actual or threatened employee strikes, work stoppages, slowdowns or lockouts.  There are no unfair labor practice charges, grievances or complaints pending or, to the Knowledge of the Company, threatened, by or on behalf of any employee or group of employees of the Company.  To the Company’s Knowledge, none of the Company’s employees plans to terminate his or her employment with the Company within one (1) year after the date of this Agreement or in connection with the transactions contemplated by this Agreement (except as provided in Section 5.3(a) ).  The Company is not involved in any Proceeding involving any allegation of violation of applicable Law by the Company in connection with the Company’s employment or termination of any current or former employee, officer, director or consultant, the Company has not received any notice from any current or former employee, officer, director or consultant (or any of their respective legal counsel or other representatives) alleging any such violation and, to the Company’s Knowledge, there is no basis for any such Proceeding.  The Company has not, within the five (5) year period prior to the date of this Agreement, entered into a settlement agreement or otherwise settled or compromised any Proceeding or threatened Proceeding involving any allegation of violation of applicable Law by the Company in connection with the Company’s employment or termination of any employee, officer, director or consultant.

(c)

The Company has not effectuated: (i) any “plant closing” (as defined in the WARN Act) affecting any site of employment or one or more facilities or operating units within any site of employment of the Company; or (ii) any “mass layoff” (as defined in the WARN Act) affecting any site of employment or facility of the Company and the transactions contemplated by this Agreement will not constitute a “plant closing” or “mass layoff”.

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(d)

Section 2.10(d)(i) of the Company Disclosure Schedule sets forth a correct and complete description of each Contract concerning payment of commissions or similar payments between the Company and any current or former employee, officer or director of, or consultant to, the Company.   Section 2.10(d)(ii) of the Company Disclosure Schedule sets forth a correct and complete list of each Contract relating to employment, change in control, severance, termination and similar matters between the Company and any current or former employee, officer or director of, or consultant to, the Company.  Correct and complete copies of each of the Contracts set forth on Section 2.10(d)(i) of the Company Disclosure Schedule and Section 2.10(d)(ii) of the Company Disclosure Schedule that are written have been supplied by the Company to the Purchaser.  Summaries describing in reasonable detail the terms and conditions of each of the Contracts set forth on Section 2.10(d)(i) of the Company Disclosure Schedule and Section 2.10(d)(ii) of the Company Disclosure Schedule that are oral have been supplied by the Company to the Purchaser.

2.11

Real Property and Tangible Assets .

(a)

The Company does not own any real property.   Section 2.11(a) of the Company Disclosure Schedule sets forth a correct and complete list of all real property leased by the Company (the “ Leased Real Property ”).  The Leased Real Property is sufficient for operation of the Company’s Business, as presently conducted and proposed by the Company to be conducted.  Correct and complete copies of all leases for Leased Real Property (“ Real Estate Leases ”) have been provided by the Company to the Purchaser.  With respect to each Real Estate Lease: (i) the Company has good, valid and enforceable leasehold interests to the leasehold estate in the Leased Real Property granted to it pursuant to the applicable Real Estate Lease, subject to the Equitable Exceptions; (ii) each of the Real Estate Leases has been duly authorized and executed by the Company and, to the Company’s Knowledge, the other party thereto, and is in full force and effect; and (iii) neither the Company nor, to the Company’s Knowledge, the other party thereto, is in material breach of any of the Real Estate Leases and no event has occurred or condition exists which, with or without the giving of notice or the lapse of time, or both, would constitute a material breach by the Company or, to the Company’s Knowledge, the other party thereto.  None of the Real Estate Leases is subject to or encumbered by any Lien or other restriction that impairs or restricts the use by the Company of the property as now conducted, except for mortgages, deeds of trust and similar Liens securing indebtedness of the applicable landlord.  The Company is current with the payment of rent on all Leased Real Properties.  The Company is not now, and has not during the five (5) year period preceding the date of this Agreement been, involved in any Proceeding or, to the Company’s Knowledge, threatened Proceeding with any of its landlords.  The landlord under each Real Estate Lease has performed, in all material respects, all maintenance obligations required under such Real Estate Lease.  All of the buildings, structures and improvements thereon pursuant to which the Company operates the Business are in good operating condition, reasonable wear and tear excepted, have been maintained in accordance with good industry practice, and, to the Company’s Knowledge, are suitable for the uses for which they are presently being used in the Business.

(b)

The Purchased Assets constitute all the assets necessary for the Purchaser to conduct the Business, as conducted and proposed to be conducted by the Company as of the Closing.  The Company owns or leases all tangible assets necessary for the conduct of the Business, as presently conducted and pro