ASSET PURCHASE AGREEMENT

Exhibit 2.1

ASSET PURCHASE AGREEMENT

AMONG

GUNDERSON RAIL SERVICES LLC

(“BUYER”)

AND

AMERICAN ALLIED RAILWAY EQUIPMENT CO., INC.,
AMERICAN ALLIED FREIGHT CAR CO., INC., AND
AMERICAN ALLIED RAILWAY EQUIPMENT CO. — SOUTH, L.L.C.

(“SELLERS”)

AND

JACK A. WIDMER

(“STOCKHOLDER”)

January 24, 2008

TABLE OF CONTENTS

						Page
1.		DEFINITIONS					1
2.		BASIC TRANSACTION					10
		(a)		Purchase and Sale of Assets			10
		(b)		Assumption of Liabilities			10
		(c)		Purchase Price			10
		(d)		The Closing			11
		(e)		Deliveries at the Closing			12
3.		SELLERS’ REPRESENTATIONS AND WARRANTIES					14
		(a)		Organization of Sellers			14
		(b)		Authorization of Transaction			15
		(c)		Non-contravention			15
		(d)		Brokers’ Fees			15
		(e)		Title to Assets			15
		(f)		Subsidiaries			15
		(g)		Financial Statements			15
		(h)		Events Subsequent to Most Recent Fiscal Year End			16
		(i)		Legal Compliance			17
		(j)		Tax Matters			18
		(k)		Real Property			19
		(l)		Intellectual Property			21
		(m)		Tangible Assets			22
		(n)		Inventory			22
		(o)		Contracts			23
		(p)		Notes and Accounts			24
		(q)		Powers of Attorney			24
		(r)		Insurance			24
		(s)		Litigation			24
		(t)		Product Warranty			24
		(u)		Product Liability			24
		(v)		Employees			24
		(w)		Employee Benefits			25
		(x)		Guaranties			26
		(y)		Environmental, Health, and Safety Matters			26
		(z)		Business Continuity			27
		(aa)		Customers and Suppliers			27
		(bb)		Estimated Closing Balance Sheet			28
		(cc)		Business Relationships with Affiliates			28

						Page
4.		BUYER’S REPRESENTATIONS AND WARRANTIES					28
		(a)		Organization of Buyer			28
		(b)		Authorization of Transaction			28
		(c)		Non-contravention			28
		(d)		Brokers’ Fees			29
		(e)		Sources of Funds			29
5.		STOCKHOLDER REPRESENTATIONS					29
		(a)		Power and Authority			29
		(b)		Non-contravention			29
		(c)		Ownership of Sellers’ Stock			29
		(d)		Brokers’ Fees			29
6.		PRE-CLOSING COVENANTS					30
		(a)		General			30
		(b)		Notices and Consents			30
		(c)		HSR Act Filing			30
		(d)		Operation of Business			32
		(e)		Preservation of Business			32
		(f)		Full Access			32
		(g)		Notice of Developments			32
		(h)		Exclusivity			32
		(i)		Maintenance of Real Property			33
		(j)		Leases			33
7.		POST-CLOSING COVENANTS					33
		(a)		General			33
		(b)		Litigation Support			33
		(c)		Transition			34
		(d)		Confidentiality			34
		(e)		Covenant Not to Compete			34
		(f)		Tax Matters; Prorations			36
		(g)		Receipts and Payments			36
		(h)		Name Changes			36
8.		CONDITIONS TO OBLIGATION TO CLOSE					36
		(a)		Conditions to Buyer’s Obligation			36
		(b)		Conditions to Sellers’ Obligation			38
9.		REMEDIES FOR BREACHES OF THIS AGREEMENT					39
		(a)		Survival of Representations and Warranties			39
		(b)		Indemnification Provisions for Buyer’s Benefit			40
		(c)		Indemnification Provisions for Sellers and Stockholder’s Benefit			40
		(d)		General Indemnification by the Stockholder			41
		(e)		Matters Involving Third Parties			41
		(f)		Determination of Adverse Consequences			42
		(g)		Recoupment Against Escrow Account			42
		(h)		Other Indemnification Provisions			42
		(i)		Materiality Exclusion			42
		(j)		Exclusive Remedy			43

						Page
10.		TERMINATION					43
		(a)		Termination of Agreement			43
		(b)		Effect of Termination			45
11.		MISCELLANEOUS					45
		(a)		Press Releases and Public Announcements			45
		(b)		No Third-Party Beneficiaries			46
		(c)		Entire Agreement			46
		(d)		Succession and Assignment			46
		(e)		Counterparts			46
		(f)		Headings			46
		(g)		Notices			46
		(h)		Governing Law			47
		(i)		Amendments and Waivers			47
		(j)		Severability			47
		(k)		Expenses			48
		(l)		Construction			48
		(m)		Incorporation of Exhibits and Schedules			48
		(n)		[intentionally omitted]			48
		(o)		Employee Benefits Matters			48
		(p)		Bulk Transfer Laws			49
		(q)		Governing Language			49
		(r)		Specific Performance			49
		(s)		Submission to Jurisdiction			49
		(t)		Waiver of Jury Trial			49

Exhibit A — Escrow Agreement
Exhibit B — Assignment and Assumption Agreement and Bill of Sale
Exhibit C — Assignment of Intellectual Property
Exhibit D — Listing of Assets Included in Acquired Assets
Exhibit E — Financial Statements
Exhibit F — Excluded Assets
Exhibit G — Commercial Lease

ASSET PURCHASE AGREEMENT

     This Asset Purchase Agreement (this “ Agreement ”) is entered into as of January 24, 2008, by and among GUNDERSON RAIL SERVICES LLC, an Oregon limited liability company (“ Buyer ”), and AMERICAN ALLIED RAILWAY EQUIPMENT CO., INC., an Illinois corporation (“AARE”), AMERICAN ALLIED FREIGHT CAR CO., INC., an Illinois corporation (“AAFC”), and AMERICAN ALLIED RAILWAY EQUIPMENT CO. — SOUTH, L.L.C., a Georgia limited liability company (“AALLC”) (AARE, AAFC and AALLC are collectively referred to herein as the “ Sellers ”) and JACK A. WIDMER (“ Stockholder ”). Buyer, Sellers and Stockholder are referred to collectively herein as the “ Parties .”

     Sellers refurbish, repair and assemble new and used railroad car wheelsets and other rail parts, namely, couplers, yokes, side frames and bolsters (the “Business”).

     This Agreement contemplates a transaction in which the Buyer will purchase substantially all of the assets of Sellers included in, or related to, the Business.

     Now, therefore, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows.

1. Definitions .

     “ Acquired Assets ” means all right, title, and interest in and to all of the assets of Sellers relating exclusively to the Business, including, without limitation, any of the following assets to the extent they are so related: (a) business concepts, business plans and methods of doing business, including trade names, trademarks and service marks, (b) products and services, including software programs (including source code and object code and all enhancements and improvements), (c) rights with respect to tangible property, including real property (such as Leasehold Improvements) and personal property (such as machinery, equipment, inventories of raw materials and supplies, manufactured and purchased parts, goods in process and finished goods, furniture, automobiles, trucks, tractors, trailers, tools, jigs, and dies), and leases, subleases, and rights with respect thereto, (d) Intellectual Property, including copyrights, patents and licenses and sublicenses (both granted and obtained), technology, know-how and other rights (such as remedies against infringements and rights to protection of interests under the laws of all jurisdictions), (e) agreements, contracts, indentures, mortgages, instruments, Liens, guaranties, other similar arrangements, and rights, (f) trade receivables, (g) claims, deposits, prepayments, refunds, causes of action, choses in action, rights of recovery, rights of set-off, and rights of recoupment (including any such item relating to the payment of Taxes) to the extent such items are included in current assets which are part of Net Working Capital or for which Sellers received credit as a pro ration at Closing, (h) franchises, approvals, permits, licenses, orders, registrations, certificates, variances, and similar rights obtained from Governmental Authorities, (i) books, records, ledgers, files, documents, correspondence, lists, plats, architectural plans, drawings, and specifications, creative materials, advertising and promotional materials, end-user materials, studies, reports, and other printed or written materials, and (j) goodwill and going concern value, including customer, supplier and other business relationships and customer lists; provided , however , that the Acquired Assets shall not include (i) the corporate charter,

qualifications to conduct business as a foreign business enterprise, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, seals, minute books, stock transfer books, blank stock certificates, and other documents relating to the organization, maintenance, and existence of Sellers as an organization or (ii) any of the rights of Sellers under this Agreement (or under any side agreement between Sellers on the one hand and Buyer on the other hand entered into on or after the date of this Agreement); or (iii) Excluded Assets. For the avoidance of doubt, the Acquired Assets shall include, without limitation, the assets identified on Exhibit D .

     “ Acquired Business ” means the business carried on by Sellers with the Acquired Assets.

     “ Adverse Consequences ” means all actions, suits, proceedings, hearings, causes of action, lawsuits, administrative proceedings (including informal proceedings), audits, demands, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, lost profits, diminution in value, dues, penalties, fines, costs, assessments, adjustments, deficiencies, interest, reasonable amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses, costs, expenses, and fees, including court costs and reasonable attorneys’ fees and expenses (whether arising in disputes with third parties or in disputes between the parties).

     “ Affiliate ” has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act of 1934.

     “ Affiliated Group ” means any affiliated group within the meaning of Code §1504(a) or any similar group defined under a similar provision of state, local, or foreign law.

     “ Another Transaction ” means the direct or indirect sale (whether by sale of stock or membership interests, merger, consolidation, recapitalization or other disposition) of all or any part of Sellers or any material portion of their assets, in whole or in part, or issued or unissued capital stock or other interests.

     “ Applicable Rate ” means the corporate base rate of interest publicly announced from time to time by JP Morgan Chase Bank, N.A.

     “ Asbestos Liabilities ” shall mean any Liabilities arising from, relating to, or based on the presence or alleged presence of asbestos or asbestos-containing materials in any product or item designed, manufactured, sold, marketed, installed, stored, transported, handled, or distributed at any time, or otherwise based on the presence or alleged presence of asbestos or asbestos-containing materials at any property or facility or in any structure, including without limitation, any Liabilities arising from, relating to or based on any personal or bodily injury or illness.

     “ Assumed Liabilities ” means (a) those accounts payable of Sellers relating to the Acquired Business and those accrued expenses of Sellers relating to the Acquired Business, to the extent such accounts payable and accrued expenses arose in the Ordinary Course of Business and are recorded on the Most Recent Balance Sheet (rather than in any notes thereto) and remain unpaid at Closing (provided, that such accounts payable are not past due), or have arisen in the Ordinary Course of Business consistent with past practice since the date of the Most Recent Balance Sheet (other than any Liability resulting from, arising out of, relating to, in the nature of,

or caused by any breach of contract, breach of warranty, tort, infringement, violation of law, Asbestos Liability, or environmental matter, including without limitation those arising under Environmental, Health, and Safety Requirements), and (b) all obligations of Sellers relating exclusively to the Acquired Business under the agreements, contracts, leases, licenses, and other arrangements referred to in the definition of Acquired Assets either (i) to furnish goods, services, and other non-Cash benefits to another party after the Closing or (ii) to pay for goods, services, and other non-Cash benefits that another party will furnish to it after the Closing (but in the case of (i) and (ii), not including any obligation or liability (A) to the extent arising out of or in connection with any breach of any such agreement, contract, lease, license or other arrangement occurring as of or prior to the Closing or (B) without Buyer’s written consent, arising out of or in connection with any such agreement, contract, lease, license or other arrangement that was required to be listed on §3(o) of the Disclosure Schedules but was not listed), provided , however , that, notwithstanding the above, the Assumed Liabilities shall not include (i) any Liability of Sellers for Income Taxes, (ii) any Liability of Sellers for transfer, sales, use, and other Taxes arising in connection with the consummation of the transactions contemplated hereby, (iii) any Liability of Sellers for Taxes arising with respect to periods through the Closing Date, (iv) any Liability of Sellers for the unpaid Taxes of any Person under Reg. §1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise, (v) any obligation of Sellers to indemnify any Person (including Stockholder) by reason of the fact that such Person was a director, officer, employee, or agent of Sellers or was serving at the request of Sellers as a partner, trustee, director, officer, employee, or agent of another entity (whether such indemnification is for judgments, damages, penalties, fines, costs, amounts paid in settlement, losses, expenses, or otherwise and whether such indemnification is pursuant to any statute, charter document, bylaw, agreement, or otherwise), (vi) any Liability of Sellers for costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby, (vii) any Liability to the extent arising by reason of any violation or alleged violation of any Law or any requirement of any Governmental Authority, (viii) any Liability to the extent arising under any Environmental, Health and Safety Requirements, including, without limitation, those with respect to Asbestos Liability or the ownership or operation by Sellers or Stockholder, or any predecessor of the Sellers or Stockholder, or any Person whose Liability the Sellers, the Stockholder or the Acquired Business has retained or assumed, either contractually or by operation of Law, or any other Person at any time on or prior to the Closing of the Acquired Business or the assets and properties of the Acquired Business (including, without limitation, any properties previously owned, leased or occupied by Sellers or Stockholder), (ix) any Liabilities relating to any Employee Benefit Plan of Sellers, (x) any Liability accruing, arising out of, or relating to, the Excluded Assets, (xi) any Liability for intercompany payables owed by any Seller or any Affiliate of any Seller to any Affiliate, (xii) any Liability of the Sellers arising out of or related to any action, claim, suit, litigation, proceeding, labor dispute, arbitral action, governmental audit, inquiry, criminal prosecution, investigation or unfair labor practice charge or complaint (“Action”) against the Sellers or any Action which is likely to result in a Material Adverse Effect and which shall have been asserted on or prior to the Closing Date, (xiii) any Liability arising out of any injury to individuals or property as a result of the ownership, possession, or use of any product manufactured, sold, leased, or delivered by any Seller on or prior to the Closing Date, (xiv) any Liability for express or implied warranties or for replacement or repair thereof or other damages in connection with products sold, manufactured, leased or delivered by Sellers on or prior to the Closing Date, (xv) any Liability associated with the

Employment Obligations or (xvi) any Liability or obligation of Sellers under this Agreement (or under any side agreement between Sellers on the one hand and Buyer on the other hand entered into on or after the date of this Agreement). Anything expressly excluded from this definition of Assumed Liabilities and any other Liability not expressly assumed by Buyer under the definition of Assumed Liabilities shall be defined as the “Excluded Liabilities.”

     “ Balance Sheet ” means the compiled balance sheet of Sellers as of December 31, 2006.

     “ Basis ” means any past or present fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction that forms or could form the basis for any specified consequence.

     “ Business ” has the meaning set forth in the preface above.

     “ Buyer ” has the meaning set forth in the preface above.

     “ Buyer Group ” has the meaning set forth in §9(b) .

     “ Cash ” means cash and cash equivalents (including marketable securities and short-term investments) calculated in accordance with GAAP applied on a basis consistent with the preparation of the Financial Statements.

     “ CERCLA ” has the meaning set forth in §3(y)(v) .

     “ Closing ” has the meaning set forth in §2(d) .

     “ Closing Date ” has the meaning set forth in §2(d) .

     “ Closing Purchase Price ” has the meaning set forth in §2(c)(i) .

     “ COBRA ” means the requirements of Part 6 of Subtitle B of Title I of ERISA and Code §4980B and of any similar state law.

     “ Code ” means the Internal Revenue Code of 1986, as amended.

     “ Confidential Information ” means any information concerning the business and affairs of Sellers that is not already generally available to the public.

     “ Disclosure Schedule ” has the meaning set forth in §3 .

     “ Employee Benefit Plan ” means any “employee benefit plan” (as such term is defined in ERISA §3(3)) and any other material employee benefit plan, program or arrangement of any kind, including without limitation any benefit arrangement, obligation, custom, or practice, whether or not legally enforceable, to provide benefits as compensation for services rendered, to present or former directors, officers, employees, agents, or independent contractors, including employment or consulting agreements, severance agreements or pay policies, stay or retention bonuses or compensation, executive or incentive compensation programs or arrangements, sick leave, vacation pay, plant closing benefits, patent award programs, salary continuation for

disability, workers’ compensation, retirement, deferred compensation, bonus, stock option or purchase plans or programs, tuition reimbursement or scholarship programs, employee discount programs, meals, travel, or vehicle allowances, any plans subject to Section 125 of the Code and any plans providing benefits or payments in the event of a change of control, change in ownership or effective control, or sale of a substantial portion (including all or substantially all) of the assets of any business or portion thereof, in each case with respect to any present or former employees, directors, independent contractors, or agents.

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

     “ Employee Welfare Benefit Plan ” has the meaning set forth in ERISA §3(1).

     “ Environmental, Health, and Safety Requirements ” shall mean, as amended and as now and hereafter in effect, all federal, state, local, and foreign statutes, regulations, ordinances, and similar provisions having the force or effect of law, all judicial and administrative orders and determinations, and all common law concerning public health and safety, worker health and safety, pollution, or protection of the environment, including without limitation all those relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release, threatened release, control, or cleanup of any hazardous materials, substances, or wastes, chemical substances, or mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum products or byproducts, asbestos, polychlorinated biphenyls, noise, or radiation.

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

     “ ERISA Affiliate ” means each entity that is treated as a single employer with Sellers for purposes of Code §414.

     “ Escrow Agent ” has the meaning set forth in §2(c)(iii) .

     “ Escrow Agreement ” means the Escrow Agreement, dated on or prior to the Closing Date, by and among Buyer and Sellers, substantially in the form of Exhibit A attached hereto providing for a twenty four month escrow with release of $2.0 million of the Indemnification Escrow Amount after the first twelve months.

     “ Excluded Assets ” means all assets owned by the Sellers, other than those included in Acquired Assets. Without limiting the generality of the foregoing, Excluded Assets include the lands and buildings occupied by Sellers which are owned by an Affiliate of Sellers, all assets which are part of the operations in El Paso, Illinois; all Cash; all rights and assets owned by or associated with any qualified profit-sharing or other retirement or employee benefit plan which is maintained or contributed to by the Sellers; Sellers’ intercompany transactions; the capital stock of AAFC and membership interests of AALLC; those personnel records which the Sellers are required by law to retain in their possession; the Sellers’ corporate franchise, stock record books, corporate minute books and other records which have to do exclusively with the Sellers’ organization or stock capitalization; Sellers’ rights under this Agreement and the other agreements delivered in conjunction herewith; and those other assets, if any, listed specifically on Exhibit F as Excluded Assets.

     “ Exclusivity Period ” has the meaning set forth in §6(h) .

     “ Fiduciary ” has the meaning set forth in ERISA §3(21).

     “ Financial Statements ” has the meaning set forth in §3(g)(i) .

     “ FIRPTA Affidavit ” has the meaning set forth in §8(a)(ix) .

     “ GAAP ” means United States generally accepted accounting principles as in effect from time to time, consistently applied.

     “ Governmental Authority ” means any government, court, administrative agency or commission or other governmental authority, agency or instrumentality, domestic or foreign, international, provincial, federal, state, county or local.

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

     “ Improvements ” has the meaning set forth in §3(k)(iii) .

     “ Income Tax ” means any federal, state, local, or foreign income tax, including any interest, penalty, or addition thereto, whether disputed or not.

     “ Income Tax Return ” means any return, declaration, report, claim for refund, or information return or statement relating to Income Taxes, including any schedule or attachment thereto, and including any amendment thereof.

     “ Indemnification Escrow Amount ” means $5,000,000.

     “ Indemnified Party ” has the meaning set forth in §9(e)(i) .

     “ Indemnifying Party ” has the meaning set forth in §9(e)(i) .

     “ Intellectual Property ” means all of the following in any jurisdiction throughout the world: (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof, (b) 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, (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all mask works and all applications, registrations, and renewals in connection therewith, (e) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), (f) all computer software (including source code, executable code, data, databases, and related

documentation), (g) all material advertising and promotional materials, (h) all other proprietary rights (including proprietary electronic content and art work), and (i) all copies and tangible embodiments thereof (in whatever form or medium).

     “ Knowledge ” means actual knowledge after reasonable investigation of Jack A. Widmer, Robert Coup, Gary Schoenfeldt, Kevin P. Deany, Rick Bess, Dave Thomas, and John Widmer.

     “ Law ” means any constitution, law, statute, common law, treaty, rule, directive, requirement, regulation, Order or other restriction of any Governmental Authority, including any laws, rules or regulations relating to import-export and customs services rules or regulations.

     “ Lease Consents ” has the meaning set forth in §8(a)(vi) .

     “ Leased Personal Property ” has the meaning set forth in §3(m) .

     “ Leased Real Property ” means all leasehold or subleasehold estates and other rights to use or occupy any land, buildings, structures, improvements, fixtures or other interest in real property held by Sellers.

     “ Leases ” means all leases, subleases, licenses, concessions and other agreements (written or oral), including all amendments, extensions, renewals, guaranties and other agreements with respect thereto, pursuant to which Sellers hold any Leased Real Property.

     “ Liability ” means any liability or obligation of any kind, character or description (including, but not limited to, direct or indirect liability, indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense, obligation or responsibility), whether accrued or unaccrued, absolute or contingent, mature or unmature, due or to become due, asserted or unasserted, known or unknown, fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or unsecured, disputed or undisputed, joint or several, vested or unvested, determined, determinable or otherwise, and whether or not the same is required to be accrued on the financial statements.

     “ Lien ” means any mortgage, pledge, lien, encumbrance, charge, or other security interest other than (a) mechanics’, materialmen’s, and similar liens arising in the Ordinary Course of Business securing amounts that are not delinquent, and (b) liens for Taxes (other than income Taxes) not yet due and payable or for Taxes that the taxpayer is contesting in good faith through appropriate proceedings and for which there are adequate reserves on the books not incurred in connection with the borrowing of money.

     “ Material Adverse Effect ” or “ Material Adverse Change ” means any effect or change that would be materially adverse to the business, assets, condition (financial or otherwise), operating results, operations, or business prospects of Sellers, or to the ability of any Party to consummate timely the transactions contemplated hereby; provided, however, that, if a second request shall have been issued under the HSR Act, and if Buyer shall determine pursuant to Section 6(c)(ii) to continue to seek HSR approval by responding to such second request, in such event, no effect or change shall be considered a Material Adverse Effect or a Material Adverse Change of Sellers unless such effect or change either (a) results from an act of God or of the public enemy, fire, flood, epidemic, or quarantine restriction which materially impairs the ability to operate the

Business, or (b) either individually or, together with other effects or changes applicable to Sellers, would be reasonably expected to reduce Sellers’ consolidated earnings before income taxes, depreciation and amortization (“EBITDA”) for calendar year 2008 to less than $9 million.

     “ Most Recent Balance Sheet ” means the balance sheet contained within the Most Recent Financial Statements.

     “ Most Recent Financial Statements ” has the meaning set forth in §3(g)(i) below.

     “ Most Recent Fiscal Month End ” has the meaning set forth in §3(g)(i) .

     “ Most Recent Fiscal Year End ” has the meaning set forth in §3(g)(i) below.

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

     “ Net Working Capital ” means current assets conveyed by Sellers to Buyer at the Closing (consisting, for purposes of this definition, of only trade receivables net of allowances for doubtful accounts, inventory net of allowances for damaged, defective, excess, slow-moving or obsolete inventory and prepaid expenses identified on Schedule A attached hereto (excluding prepaid rent, prepaid insurance and prepaid property taxes and any other prepaid expenses that are prorated as of Closing) minus current liabilities assumed by Buyer consisting, for purposes of this definition, of only trade payable and accrued expenses identified on Schedule B attached hereto all on a consolidated basis. In no event shall intercompany transactions be considered in the calculation of Net Working Capital.

     “ Non-Compete Period ” means the three year period beginning on the Closing Date, as automatically extended for the period of any non-compliance with §7(e) .

     “ Orders ” means judgments, writs, decrees, compliance agreements, rulings, charges, injunctions or orders of and Governmental Authority or arbitrator.

     “ Ordinary Course of Business ” means the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency).

     “ Parties ” has the meaning set forth in the preface above.

     “ Permits ” has the meaning set forth in §3(i)(ii) .

     “ Permitted Encumbrances ” means with respect to each parcel of Real Property: (a) real estate taxes, assessments and other governmental levies, fees, or charges imposed with respect to such Real Property that are (i) not due and payable as of the Closing Date or (ii) being contested in good faith, for which adequate reserves have been established in accordance with GAAP and which reserves are included in the Acquired Assets; (b) mechanics’ liens and similar liens for labor, materials, or supplies provided with respect to such Real Property incurred in the Ordinary Course of Business for amounts that are (i) not due and payable as of the Closing Date or (ii) being contested in good faith that would not, individually or in the aggregate, materially impair the use or occupancy of the Real Property or the operation of the business of Sellers as currently conducted on such Real Property; (c) zoning, building codes, and other land use laws

regulating the use or occupancy of such Real Property or the activities conducted thereon that are imposed by any governmental authority having jurisdiction over such Real Property that are not violated by the current use or occupancy of such Real Property or the operation of the business of Sellers as currently conducted thereon; and (d) easements, covenants, conditions, restrictions, and other similar matters of record affecting title to such Real Property that do not or would not materially impair the use or occupancy of such Real Property in the operation of the business of Sellers as currently conducted thereon.

     “ Person ” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, any other business entity or a governmental entity (or any department, agency, or political subdivision thereof).

     “ Personal Property Lease ” has the meaning set forth in §3(m) .

     “ Prohibited Transaction ” has the meaning set forth in ERISA §406 and Code §4975.

     “ Purchase Price ” has the meaning set forth in §2(c) .

     “ Qualified Plan ” has the meaning set forth in §3(w)(i)(D) .

     “ Real Property ” has the meaning set forth in §3(k)(ii) .

     “ Real Property Laws ” has the meaning set forth in §3(k)(v) .

     “ Required Working Capital ” means an amount equal to $18,500,000.

     “ Sellers ” has the meaning set forth in the preface above.

     “ Seller Core Representations ” has the meaning set forth in §9(a) .

     “ Statement of Allocation ” has the meaning set forth in §2(g) .

     “ Stockholder ” has the meaning set forth in the preface above.

     “ Subsidiary ” means, with respect to any Person, any corporation, limited liability company, partnership, 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, managers, 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 limited liability company, partnership, association, or other business entity (other than a corporation), a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof and for this purpose, a Person or Persons own a majority ownership interest in such a business entity (other than a corporation) if such Person or Persons shall be allocated a majority of such business entity’s gains or losses or shall be or control any managing director or general

partner of such business entity (other than a corporation). The term “Subsidiary” shall include all Subsidiaries of such Subsidiary.

     “ Systems ” has the meaning set forth in §3(z) .

     “ Tax ” or “ Taxes ” means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code §59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, whether computed on a separate or consolidated, unitary or combined basis or in any other manner, including any interest, penalty, or addition thereto, whether disputed or not.

     “ Tax Benefit ” has the meaning set forth in §9(f) .

     “ Tax Return ” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

     “ Third Party Claim ” has the meaning set forth in §9(e)(i) .

     “ WARN Act ” has the meaning set forth in §3(v) .

     “ Working Capital Escrow Amount ” means $1,000,000 plus any Closing Date Working Capital Increase Amount.

2. Basic Transaction .

          (a) Purchase and Sale of Assets . On and subject to the terms and conditions of this Agreement, Buyer agrees to purchase from Sellers, and Sellers agree to sell, transfer, convey, and deliver to Buyer, all of the Acquired Assets free and clear of all Liens at the Closing for the consideration specified below in this §2 .

          (b) Assumption of Liabilities . On and subject to the terms and conditions of this Agreement, Buyer agrees to assume and become responsible for all of the Assumed Liabilities at the Closing. Buyer will not assume or have any responsibility, however, with respect to any other obligation or Liability of Sellers not included within the definition of Assumed Liabilities.

          (c) Purchase Price .

               (i) Buyer agrees to deliver to Sellers at the Closing $83,000,000 (the “ Purchase Price ”), subject to adjustment as provided in § 2(c)(ii) , minus the Indemnification Escrow Amount and further minus $1,000,000 (the net amount, the “ Closing Purchase Price ”) payable by wire transfer or delivery of other immediately available funds.

               (ii) Sellers shall prepare and deliver to Buyer at least five days prior to the Closing Date an estimated consolidated balance sheet of AARE, AAFC and AALLC prepared as of the Closing Date on a basis consistent with that of the Most Recent Financial Statements (the “ Estimated Closing Balance Sheet ”) and a detailed calculation of the Seller’s estimated Net Working Capital based on the Estimated Closing Balance Sheet (the “ Estimated Closing Working Capital ”) in order for Buyer to review the calculation of the Estimated Closing Working Capital. If the Estimated Closing Working Capital is less than the Required Working Capital, then the Purchase Price paid at the Closing shall be decreased by the amount by which the Required Working Capital exceeds the Estimated Closing Working Capital on a dollar for dollar basis. If the Estimated Closing Working Capital is greater than $1,000,000 in excess of the Required Working Capital (such amount in excess of $19,500,000, if any, on a dollar for dollar basis, the “Closing Date Working Capital Increase Amount”), then the Closing Date Working Capital Increase Amount shall be delivered to the Escrow Agent as provided in subsection (iv) below. The decrease or increase, as the case may be, of the Purchase Price at Closing is referred to herein as the “At-Closing Capital Adjustment Amount.”

               (iii) Buyer agrees to deliver to U.S. Bank National Association, as escrow agent (the “ Escrow Agent ”), at the Closing the Indemnification Escrow Amount in cash payable by wire transfer or delivery of other immediately available funds for deposit into the escrow account. The Indemnification Escrow Amount plus any interest accrued thereon will be available to satisfy any amounts owed by Sellers to Buyer under §9 of this Agreement in accordance with the terms hereof. Any amounts released from escrow to the Sellers shall be treated as part of the Purchase Price. Any amounts deposited by Buyer pursuant to Sections 6(c)(i) and 6(c)(ii) shall be deposited with the Escrow Agent as a separate fund to be held by the Escrow Agent and disbursed pursuant to Section 10(b) if the transaction contemplated by this Agreement does not close.

               (iv) Buyer agrees to deliver to the Escrow Agent at the Closing the Working Capital Escrow Amount in cash payable by wire transfer or delivery of other immediately available funds for deposit into an escrow account for that purpose. The Working Capital Escrow Amount plus any interest accrued thereon will be available to satisfy any amounts owed by Sellers to Buyer under §2(f) of this Agreement in accordance with the terms hereof. Any amounts released from escrow to the Sellers will be treated as part of the Purchase Price.

     (d)  The Closing . The closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at the offices of counsel to Buyer (or, if requested, at the offices of counsel to any lender to Buyer) commencing at 9:00 a.m. Pacific time on the second Friday following the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the transactions contemplated hereby (other than conditions with respect to actions the respective Parties will take at the Closing itself); provided , that, if such second Friday occurs within 17 days prior to the end of any fiscal quarter of The Greenbrier Companies, Inc., the Closing shall be on the first Friday following such fiscal quarter end, or on such other date as the Parties may mutually determine (the “ Closing Date ”). Within five days before or after the Closing Date, Buyer, Buyer’s accountants and Sellers will conduct a physical count of Sellers’ inventory.

     (e)  Deliveries at the Closing . At the Closing, (i) Sellers will deliver to Buyer the various certificates, instruments, and documents referred to in §8(a) below; (ii) Buyer will deliver to Sellers the various certificates, instruments, and documents referred to in §8(b) below; (iii) Sellers will execute, acknowledge (if appropriate), and deliver to Buyer (A) the Assignment, Assumption and Bill of Sale and Assignment of Intellectual Property in the forms attached hereto as Exhibits B and C , respectively and (B) such other instruments of sale, transfer, conveyance, and assignment (including other intellectual property assignments) as Buyer and its counsel may reasonably request; (iv) Buyer will execute, acknowledge (if appropriate), and deliver to Sellers (A) the Assignment, Assumption and Bill of Sale and Assignment of Intellectual Property in the forms attached hereto as Exhibits B and C , respectively and (B) such other instruments of assumption as Sellers and its counsel may reasonably request; and (v) Buyer will deliver to Sellers and the Escrow Agent the consideration specified in §2(c) above.

     (f)  Post-Closing Working Capital Adjustment to Purchase Price . As promptly as practicable after the Closing Date, but in no event later than 180 days following the Closing, Buyer shall prepare and deliver to Sellers an unaudited consolidated balance sheet of AARE, AAFC and AALLC and an updated statement of the Seller’s Net Working Capital as of the Closing Date (the “Closing Net Working Capital”). The Net Working Capital Schedule shall be prepared in accordance with GAAP and, to the extent in compliance with GAAP, in a manner consistent with the preparation of the Most Recent Financial Statements. If the Closing Net Working Capital is less than the Estimated Closing Working Capital, the Purchase Price shall be reduced dollar for dollar for the shortfall to the extent, and only to the extent it falls below the Required Working Capital. In the event the Closing Net Working Capital is more than the Estimated Closing Working Capital, to the extent, and only to the extent that it exceeds the sum of the Required Working Capital plus $1,000,000, the Purchase Price shall be increased on a dollar for dollar basis for the excess.

     If the Sellers shall disagree with the Net Working Capital Schedule, Sellers shall notify Buyer on or before thirty (30) days after the date on which Buyer delivers to the Sellers such statement of the Net Working Capital Schedule. Sellers and Buyer shall attempt to resolve any such disagreements. If Sellers and Buyer are unable to resolve all such disagreements on or before the date fifteen (15) days following notification by the Buyer of any such disagreements, Sellers and Buyer shall retain the firm of KPMG, LLP, or if KPMG, LLP is not willing to serve as the Final Accounting Firm, then such other nationally recognized independent public accounting firm upon whom Sellers and Buyer shall mutually agree, or if no such other accounting firm is willing to serve as the Final Accounting Firm, then such other qualified Person upon whom the Sellers and Buyer shall mutually agree (such accounting firm or other Person being referred to as the “Final Accounting Firm”), to resolve all such disagreements, who shall adjudicate the dispute with respect to the Net Working Capital Schedule and the calculation of the Closing Net Working Capital. Sellers and Buyer agree to execute, if requested by the Final Accounting Firm, an engagement letter containing reasonable and customary terms, including an indemnification against claims asserted by the respective parties. If Sellers and Buyer are unable to agree on the choice of an accounting firm, then Sellers and Buyer shall select a nationally or regionally recognized accounting firm by lot (after each submits a list of five (5) names, excluding their respective regular outside accounting firms), which firm shall be the Final Accounting Firm. A determination by the Final Accounting Firm shall be binding and conclusive upon the parties to this Agreement.

     The Final Accounting Firm shall offer Sellers and Buyer the opportunity to provide written submissions regarding their positions on the dispute matters, which written submissions shall be provided to the Final Accounting Firm, if at all, no later than ten (10) days after the date of referral of the dispute matters to the Final Accounting Firm. The determination of the Final Accounting Firm shall be based on an independent review. The Final Accounting Firm shall deliver a written report resolving only the disputed matters and setting forth the basis for such resolution as promptly as possible after submission of the dispute, but in any event no later than sixty (60) days after submission of the dispute. The determination of the Final Accounting Firm with respect to the correctness of each matter in dispute shall be final and binding on the parties. The fees, costs and expenses of the Final Accounting Firm shall be allocated to be paid by Buyer, on the one hand, and the Sellers, jointly and severally, on the other hand, based upon the percentage which the portion of the disputed amount not awarded to each party bears to the amount actually contested by such party, as determined by the Final Accounting Firm. The parties hereto agree that judgment may be entered upon the determination of the Final Accounting Firm in any court having jurisdiction over the party against which such determination is to be enforced.

     If the Purchase Price is reduced as a result of the determination of Closing Net Working Capital pursuant to this §2(f) , then within three (3) business days from the date on which the Closing Net Working Capital is finally determined, Buyer and Sellers shall deliver a joint written authorization to the Escrow Agent authorizing the Escrow Agent to (i) release to Buyer an amount of cash from the Working Capital Escrow Amount equal to the adjustment plus any proceeds earned on such portion of the Working Capital Escrow Amount, and (ii) release to Sellers the remainder of the Working Capital Escrow Amount, if any, plus any proceeds earned thereon. If the amount of the Purchase Price decrease adjustment exceeds the Working Capital Escrow Amount, then within three (3) business days from such date on which the Closing Net Working Capital is finally determined, pursuant to this §2(f) , Sellers shall pay to Buyer an amount equal to the balance thereof.

     If the Purchase Price is increased as a result of the determination of the Closing Net Working Capital pursuant to this §2(f) , then within three (3) business days from the date on which the Closing Net Working Capital is finally determined, Buyer shall deliver to Sellers the increased amount of the Purchase Price.

     (g)  Allocation . For Federal income Tax purposes, Buyer shall be deemed to have delivered cash in the amount of the Purchase Price for the Acquired Assets and the noncompetition covenants set forth in §7(e) and to have assumed liabilities in the amount established pursuant to §2(b) . The Purchase Price shall be allocated among the Acquired Assets, the noncompetition covenants, and the Assumed Liabilities in accordance with the principles set forth in Section 1060 of the Code in a statement (the “ Statement of Allocation ”) prepared by the Buyer. Of such amounts, the sum of $300,000 represents consideration for the noncompetition covenants set forth in §7(e) . Buyer shall deliver the Statement of Allocation to Seller’s within 240 days of the Closing. Sellers shall complete and execute a Form 8594 promptly upon receipt of such allocation, in a manner consistent with the allocation, deliver a copy of such form to Buyer and file a copy of such form with Sellers’ Tax Returns for the period that includes the

Closing Date. None of the Parties shall take any action inconsistent unless Sellers notify Buyer, within 30 days that Sellers have a bona fide , reasonable objection that the Statement of Allocation was not prepared in a manner consistent with this §2(g) , in which case the parties shall negotiate in good faith to resolve such dispute.

          (h)  Casualty Loss . If between the date hereof and the Closing Date, there is any loss, destruction or other physical damage to any Acquired Assets resulting from theft, fire, accident or any other casualty, whether or not insured, or any Lien exists or is placed on any Acquired Asset and is not removed or released on or prior to the Closing Date (collectively, a “ Casualty Loss ”), then the Sellers shall promptly give notice to Buyer of such Casualty Loss and the amount of insurance, if any, payable to Sellers with respect thereto. If such Casualty Loss does not prevent the fulfillment of a condition to Buyer’s obligations to consummate the transactions contemplated by this Agreement or does not prevent the operation of the Acquired Business in the ordinary course consistent with past practices, or if it does and Buyer waives such condition in writing, Buyer shall accept the Acquired Assets with the affected Acquired Asset in its damaged condition (or without the affected Acquired Asset in the case of theft, destruction, or Liens) in which event any Insurance Proceeds payable to Sellers with respect to such Acquired Asset (together with a payment by Sellers at Closing of an amount equal to the deductible or retained amount with respect to such Casualty Loss and an amount equal to the difference between the Insurance Proceeds and the full replacement value of , or cost to repair, the affected Acquired Asset, as applicable) shall be assigned and/or paid to Buyer. “ Insurance Proceeds ” include the insurance recoveries that the Sellers in fact receive as a direct consequence of the Casualty Loss, excluding any amounts which are in effect self-insured whether through retention amounts or otherwise.

          (i)  Transfer of Title . Title to all of the Acquired Assets and risk of loss shall pass to Buyer at the Closing. The Sellers shall present Buyer with a bill of sale and assignment and such other instruments of title at the Closing that are reasonably appropriate to convey and assign all of the Acquired Assets to Buyer. From and after Closing, the Sellers and the Stockholder shall cooperate with Buyer and execute, deliver and record such instruments of title and other documents reasonably requested by Buyer in order to more fully perfect Buyer’s right, title and interest thereto and therein.

3. Sellers’ Representations and Warranties . Each Seller and the Stockholder, jointly and severally, represent and warrant to Buyer that the statements contained in this §3 are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this §3 ), except as set forth in the Disclosure Schedule accompanying this Agreement (the “Disclosure Schedule”). The Disclosure Schedule will be arranged in paragraphs corresponding to the lettered and numbered paragraphs contained in this §3 . If an item is disclosed in one section of the Disclosure Schedule, it shall not be deemed to have been disclosed in any other section of the Disclosure Schedule unless the relevance of such disclosure to the other section is reasonably apparent on its face.

          (a)  Organization of Sellers . Each Seller is duly organized, validly existing, and in good standing under the laws of its domicile disclosed in §3(a) of the Disclosure Schedule.

          (b)  Authorization of Transaction . Each Seller has full power and authority (including full corporate power and authority) to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the legal, valid and binding obligation of each Seller, enforceable in accordance with its terms and conditions.

          (c)  Non-contravention . Except as disclosed in §3(c) of the Disclosure Schedule, neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in §2 above), will (i) violate any Law to which any Seller is subject or any provision of the charter or bylaws of Sellers or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which any Seller is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Lien upon any of its assets). Except as disclosed in §3(c) of the Disclosure Schedule, Sellers are not required to give any notice to, make any filing with, or obtain any authorization, consent, or approval of, any Government Authority or any third party in order for the Parties to consummate the transactions contemplated by this Agreement (including the assignments and assumptions referred to in §2 above).

          (d)  Brokers’ Fees . Except as disclosed in §3(d) of the Disclosure Schedule (which fees shall be paid by Sellers at Closing), Sellers have no Liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which Buyer could become liable or obligated.

          (e)  Title to Assets . Sellers have good and marketable title to, or a valid leasehold interest in, the properties and assets used by them, located on their premises, or shown on the Most Recent Balance Sheet or acquired after the date thereof, free and clear of all Liens, except for properties and assets disposed of in the Ordinary Course of Business since the date of the Most Recent Balance Sheet. Without limiting the generality of the foregoing, Sellers have good and marketable title to all of the Acquired Assets, free and clear of any Liens or restriction on transfer. The Acquired Assets constitute all of the assets which are used in, useful to or necessary for the Business.

          (f)  Subsidiaries . Except as disclosed in §3(f) of the Disclosure Schedule, Sellers do not own or have any right to acquire, directly or indirectly, any outstanding capital stock of, or other equity interests in, any Person.

          (g)  Financial Statements .

               (i) Attached hereto as Exhibit E are the following financial statements (collectively, the “ Financial Statements ”): (A) compiled consolidated balance sheets and statements of income, and changes in stockholders’ equity as of and for the fiscal years ended December 31, 2004, December 31, 2005, December 31, 2006 (the “ Most Recent Fiscal Year End ”) for Sellers; and (B) unaudited consolidated balance sheets and statements of income, and changes in stockholders’ equity (the “ Most Recent Financial Statements ”) as of and for the nine (9) months ended [September 30, 2007] (the “ Most Recent Fiscal Month End ”) for Sellers.

               (ii) Except as specifically identified with particularity on the cover sheet to Exhibit E , each of the Financial Statements (including the notes thereto) (A) has been prepared in accordance with the books and records of Sellers (which are true and correct in all material respects), (B) is true, correct and complete in all material respects, (C) fairly and accurately presents the financial condition, results of operations, retained earnings and changes in cash flow which it purports to present as of the dates thereof and for the periods indicated thereon and (D) has been prepared in accordance with GAAP consistently applied throughout the periods covered thereby, subject, in the case of the Most Recent Balance Sheet, to the lack of footnotes and other presentation items and normal recurring year-end adjustments (which will not be material individually or in the aggregate). Since December 31, 2003, except as required by applicable law or GAAP, there has been no change in any accounting principle, procedure or practice followed by Sellers or in the method of applying any such principle, procedure or practice.

               (iii) Each Seller maintains a system of internal accounting controls sufficient to provide reasonable assurance that (A) transactions are executed in accordance with management’s general or specific authorizations, (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (C) access to assets is permitted only in accordance with management’s general or specific authorization and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Sellers have established disclosure controls and procedures and designed such disclosure controls and procedures to ensure that material information relating to Sellers is made known to the Chief Executive Officer and Chief Financial Officer of Sellers by others within Sellers. Since December 31, 2003, there have been no significant changes in the internal controls of Sellers over financial reporting or, to the Knowledge of Sellers, in other factors that would reasonably be expected to significantly affect the internal controls of Sellers over financial reporting.

          (h)  Events Subsequent to Most Recent Fiscal Year End . Except as otherwise disclosed in §3(h) of the Disclosure Schedule, since the Most Recent Fiscal Year End:

               (i) Sellers have not sold, leased, transferred, or assigned any material assets, tangible or intangible, outside the Ordinary Course of Business;

               (ii) Sellers have not entered into any material agreement, contract, lease, or license outside the Ordinary Course of Business;

               (iii) no party (including Sellers) has accelerated, terminated, made material modifications to, or cancelled any material agreement, contract, lease, or license to which any Seller is a party or by which it is bound;

               (iv) Sellers have not imposed or suffered any Lien, which Lien results in a Material Adverse Change upon any of their assets, tangible or intangible;

               (v) Sellers have not made any capital expenditures outside the Ordinary Course of Business;

               (vi) Sellers have not made any capital investment in, or any loan to, any other Person outside the Ordinary Course of Business;

               (vii) Sellers have not transferred, assigned, or granted any license or sublicense of any rights under or with respect to any Intellectual Property;

               (viii) Sellers have not experienced any material damage, destruction, or loss (whether or not covered by insurance) to their Business or Acquired Assets;

               (ix) No Seller has entered into or terminated any employment contract or collective bargaining agreement, written or oral, or modified the terms of any existing such contract or agreement;

               (x) No Seller has granted any increase in the base compensation of any of its directors, officers, and employees outside the Ordinary Course of Business;

               (xi) No Seller has adopted, amended, modified, or terminated any bonus, profit sharing, incentive, severance, or other plan, contract, or commitment for the benefit of any of its directors, officers, and employees (or taken any such action with respect to any other Employee Benefit Plan); and

               (xii) Sellers have not committed to any of the foregoing.

          (i) Legal Compliance .

               (i) Sellers have complied with all applicable laws (including rules, regulations, codes, ordinances, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder and including the Foreign Corrupt Practices Act, 15 U.S.C. 78dd-1, et seq.) of federal, state, local, and foreign governments (and all agencies thereof), and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or notice has been filed or commenced against any Seller alleging any failure so to comply.

               (ii) Sellers possess, and are in compliance with, the terms and conditions of, all franchises, consents, approvals, licenses, permits, certificates and other authorizations (“ Permits ”) from any Governmental Authority that are necessary for the ownership of the Acquired Assets and the conduct of the Acquired Business as presently conducted in the Ordinary Course of Business. With respect to each such Permit: (A) the Permit is in full force and effect; and (B) Sellers are not in breach or default, and, no event has occurred which, with notice or lapse of time, or both, would constitute a breach or default, or permit termination or modification of the Permit.

          (j) Tax Matters .

               (i) AARE (and any predecessor of AARE) has been a validly electing S corporation within the meaning of Code §1361 and §1362 at all times since July 1, 1997, and AARE will be an S corporation up to and including the Closing Date.

               (ii) AAFC (and any predecessor of AAFC) has been a “qualified subchapter S subsidiary” within the meaning of Code §1361(b)(3)(B) at all times since July 1, 1997, and AAFC will be a qualified subchapter S subsidiary up to and including the Closing Date.

               (iii) Each Seller has filed all material Tax Returns that it was required to file. All such Tax Returns as so filed disclose all Taxes required to be paid for the periods covered thereby. All material Taxes due and owing by each Seller (whether or not shown on any Tax Return) have been paid. None of Sellers currently is the beneficiary of any extension of time within which to file any Tax Return. There are no Liens for Taxes (other than Taxes not yet due and payable) upon any of the assets of any of Sellers. Each Seller has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party, and all Forms W-2 and 1099 required with respect thereto have been properly completed and timely filed.

               (iv) There is no material dispute or claim concerning any Tax liability of any Seller either (A) claimed or raised by any authority in writing or (B) as to which Sellers have Knowledge based upon personal contact with any agent of such authority. No claim has been made since December 31, 2000 by an authority in a jurisdiction where any of Sellers does not file Tax Returns that such Seller is or may be subject to taxation by that jurisdiction.

               (v) §3(j)(v) of the Disclosure Schedule lists all federal, state, local, and foreign Income Tax Returns filed with respect to each Seller for taxable periods ended on or after December 31, 2000, indicates those Income Tax Returns that have been audited, and indicates those Income Tax Returns that currently are the subject of audit. Each Seller has delivered to Buyer correct and complete copies of all federal, state, local and foreign Income Tax Returns, examination reports, and statements of deficiencies assessed against or agreed to by any Seller filed or received since December 31, 2003. None of Sellers has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency (except for any such waiver or extension that expired on or before December 31, 2000).

               (vi) None of Sellers has made any material payments, is obligated to make any material payments, or is a party to any agreement that under certain circumstances could obligate it to make any material payments that will not be deductible under Code §280G. None of Sellers is a party to any Tax allocation or sharing agreement. None of Sellers (A) has been a member of an Affiliated Group filing a consolidated federal Income Tax Return or (B) has any liability for the Taxes of any Person (other than any of Sellers) under Reg. §1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise.

               (vii) The unpaid Taxes of Sellers (A) did not, as of the Most Recent Fiscal Month End, exceed the reserve for Tax liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the Most Recent Balance Sheet (rather than in any notes thereto) and (B) will not exceed that reserve as adjusted for operations and transactions through the Closing Date in accordance with the past custom and practice of Sellers in filing their Tax Returns.

               (viii) None of Sellers will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any:

                    (A) change in method of accounting for a taxable period (or portion thereof) ending on or prior to the Closing Date,

                    (B) “closing agreement,” as described in Code §7121 (or any corresponding provision of state, local or foreign income Tax law),

                    (C) installment sale or open transaction made on or prior to the Closing Date, or

                    (D) prepaid amount received on or prior to the Closing Date.

               (ix) None of Sellers has distributed stock of another Person, or has had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Code §355 or Code §361.

          (k) Real Property .

               (i) The Sellers do not own any Real Property. §3(k)(i) of the Disclosure Schedule sets forth the address of each parcel of Leased Real Property, and a true and complete list of all Leases for each such Leased Real Property (including the date and name of the parties to such Lease document). Sellers have delivered to Buyer a true and complete copy of each such Lease document, and in the case of any oral Lease, a written summary of the material terms of such Lease. Except as set forth in §3(k)(i) of the Disclosure Schedule, with respect to each of the Leases:

                    (A) such Lease is legal, valid, binding, enforceable and in full force and effect;

                    (B) except for those Leases for which Lease Consents are obtained, the transactions contemplated by this Agreement do not require the consent of any other party to such Lease, will not result in a breach of or default under such Lease, and will not otherwise cause such Lease to cease to be legal, valid, binding, enforceable and in full force and effect on identical terms following the Closing;

                    (C) Each Seller’s possession and quiet enjoyment of the Leased Real Property under such Lease has not been disturbed and, there are no disputes with respect to such Lease;

                    (D) neither any Seller nor any other party to the Lease is in breach of or default under such Lease, and no event has occurred or circumstance exists that, with the delivery of notice, the passage of time or both, would constitute such a breach or default, or permit the termination, modification or acceleration of rent under such Lease;

     &