ASSET PURCHASE AGREEMENT

WHEREAS , MTI Silicones and MTI Leewood Germany are wholly-owned subsidiaries of MTI;

WHEREAS , MTI Silicones and MTI Leewood Germany are each engaged in the development, manufacture and sale of certain products including, without limitation, silicone materials, at their Richmond, Virginia and Bremen, Germany facilities;

WHEREAS , Sellers and Buyer wish to enter into this Agreement to provide for (a) the acquisition by Buyer, and the sale, assignment and transfer by MTI and MTI Silicones, of the Richmond Business, and (b) the acquisition by Buyer, and the sale, assignment and transfer by MTI and MTI Leewood Germany, of the Leewood Business (as each such term is defined herein), and each Buyer has agreed to assume the Assumed Liabilities (as that term is defined herein) of the Richmond Business and/or the Leewood Business, as applicable, all for the consideration and upon the terms and subject to the conditions hereinafter set forth.

NOW, THEREFORE , the parties hereto, in consideration of the mutual promises and other consideration set forth below, the receipt and adequacy of which hereby is acknowledged, and intending to be legally bound hereby, do represent, warrant, covenant and agree as follows:

The terms used herein and listed below shall be defined as follows:

1.02.   “ Acquired Assets ” shall have the meaning set forth in Section 2.01.

1.03.   “ Acquired Employees ” shall have the meaning set forth in Section 10.02(a).

1.05.        “ Assumed Contracts ” shall have the meaning set forth in Section 2.01(b).

1.06.   “ Assumed Liabilities ” shall have the meaning set forth in Section 4.02.

1.07.   “ Basket ” shall have the meaning set forth in Section 8.02(b).

1.10.   “ Business Day ” means a day other than a Saturday or Sunday, on which commercial banks in Toronto, Ontario, Boston Massachusetts and Bremen, Germany are open for general transaction of business.

1.11.   “ Business Records ” shall have the meaning set forth in Section 2.01(d).

1.12.   “ Buyer ” shall have the meaning set forth in the preamble.

1.13.   “ Buyer Indemnified Parties ” shall have the meaning set forth in Section 8.02(a).

1.14.   “ Buyer Plans ” shall have the meaning set forth in Section 10.02(b).

1.15.   “ Canadian Authorities ” shall have the meaning set forth in Section 6.16(a).

1.17.   “ Closing ” and “ Closing Date ” shall have the respective meanings assigned to them in Section 5.01 hereof.

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

1.19.        “ Commercial Software Rights ” shall mean commercial computer software programs generally available to the public by sale, lease or other forms of distribution, in any case that are used in the Business.

1.20.   “ Compensation Agreement ” shall have the meaning set forth in Section 4.02(g).

1.21.   “ Confidentiality Agreement ” means that certain Confidentiality Agreement, dated July 7, 2008, by and between MTI and the Buyer.

1.22.   “ Consolidated Financial Statements ” shall have the meaning set forth in Section 6.16(c).

1.23.   “ Contract ” means any legally binding agreement, obligation, undertaking, lease, evidence of Indebtedness, mortgage, indenture, security agreement or other contract (whether written or oral and whether expressed or implied).

1.24.   “ Divisional Financial Statements ” shall have the meaning set forth in Section 6.16(b).

1.25.        “ Environment ” means all air, surface water, groundwater, or land, including land surface or subsurface, including all fish, wildlife, biota and all other natural resources.

1.30.   “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, or any successor Law, and the rules and regulations promulgated thereunder.

1.31.   “ Escrowed Amount ” shall have the meaning set forth in Section 8.03.

1.32.   “ Excluded Assets ” shall have the meaning set forth in Section 2.02.

1.33.        “ Excluded Employee ” shall have the meaning set forth in Section 10.02(a).

1.34.      “ Excluded Liabilities ” shall have the meaning set forth in Section 4.03.

1.35.   “ Financial Statements ” shall have the meaning set forth in Section 6.16(c).

1.36.   “ Fixed Assets ” shall have the meaning set forth in Section 2.01(a).

1.38.   “ General Intangibles ” shall have the meaning set forth in Section 2.01(c).

1.40.   [*]

1.41.   [*]

1.42.   [*]

_________________________

[*] CONFIDENTIAL TREATMENT REQUESTED

1.45.   “ Indemnified Party ” shall have the meaning set forth in Section 8.02(d).

1.46.   “ Indemnifying Party ” shall have the meaning set forth in Section 8.02(d).

1.47.   “ Indemnity Cap ” shall have the meaning set forth in Section 8.02(b).

1.49.   “ Key Employees ” shall mean [*].

1.52.   “ Lease ” and “ Leased Premises ” shall have the meanings set forth in Section 6.12.

1.60.   “ Net Leewood Receivables “ shall have the meaning set forth in Section 2.01(g).

1.62.   “ OSHA ” means the United States Occupational Safety and Health Act, as amended and in effect as of the Closing Date.

1.63.   “ Other Party ” shall have the meaning set forth in Section 6.20(g).

1.64.   “ Permits ” shall have the meaning set forth in Section 6.03.

1.69.   “ Purchase Price ” shall have the meaning set forth in Section 3.01.

1.72.   “ Retained Business ” shall have the meaning set forth in Section 2.02(a).

1.74.        “ Securities Filings ” shall have the meaning set forth in Section 6.16(a).

1.75.   “ Seller ” and “ Sellers ” shall have the meanings set forth in the preamble.

1.76.   “ Seller 401(k) Plan ” shall have the meaning set forth in Section 10.02(d).

1.77.   “ Seller Indemnified Parties ” shall have the meaning set forth in Section 8.02(c).

1.83.   “ Tax Return ” means any return, report or statement (including any information return) required to be filed for purposes of a particular Tax.

1.84.   “ Third Party ” shall mean any Person who is not a party to this Agreement, nor is an Affiliate of any party to this Agreement.

1.85.   “ Trust Agreement ” shall have the meaning set forth in Section 4.02(g).

1.86.   “ WARN ” shall have the meaning set forth in Section 4.02(f).

2.01.       Purchase and Sale .  Upon the terms and subject to the conditions set forth in this Agreement, and in reliance on the representations and warranties of Sellers contained herein, at the Closing (as herein defined), Sellers each shall sell, convey, transfer, assign and deliver, and shall cause their respective Affiliates to sell, transfer, assign and deliver to Buyer, and Buyer shall purchase and assume from Sellers and such Affiliates of any of them (in each case except as set forth in Section 2.02 below), for the consideration hereinafter set forth herein and free and clear of all Liens and Third Party Claims (whether private, governmental or otherwise) whatsoever, other than Permitted Exceptions, good and marketable title to all tangible fixed assets and intangible assets which are either are used in, are necessary for, or as of December 31, 2008 were located at the facilities and/or offices of, the Business  (including any off-site locations such as temporary storage sites, including without limitation the assets held in the facility of [*] in Richmond, Virginia), other than Excluded Assets (collectively, the “ Acquired Assets ”); including, without limitation, the following:

(a)          Those fixed assets of the Business  (the “ Fixed Assets ”), including without limitation the machinery and equipment, testing devices, computer equipment (hardware, software, peripherals, laptops, PDAs, etc.), furniture, fixtures, any tooling, office equipment, signage, company owned vehicles and any other types of fixed assets  including, but not limited to, those items listed and described on Schedule 2.01(a) hereto, which Schedule shall be revised by the Sellers as of the Closing Date to correctly note any additions to and deletions from the Fixed Assets, if any, which may have occurred between the date hereof and the Closing Date, and to describe any material impact upon the operations of the Business caused thereby (provided that Sellers’ Liability therefor, to the extent provided in this Agreement, shall not be diminished by the fact that such changes have been disclosed).

(b)          All of Sellers’ rights, title and interest in, to and under all Contracts of or relating to the Business, as well as works in process and bids and proposals of Sellers that are related to the conduct of the Business including, without limitation, any and all deposits or prepayments thereunder, together with all necessary consents to assignment; provided that with respect to the contracts contemplating future work thereunder, Buyer may either accept the necessary consents thereto or separately negotiate an agreement with the other party or parties thereto prior to Closing. Such assigned or separately negotiated contracts are referred to collectively hereunder as the “ Assumed Contracts ”. Notwithstanding the foregoing sentence, however, Buyer’s acquisition of any rights, title or interest in any Contract, other than an Assumed Liability, shall not be deemed a consent or an agreement by Buyer to become a party thereto or otherwise to assume liability thereunder, unless such Contract is specified as an Assumed Contract on Schedule 6.19 hereto.

(c)          All Seller Intellectual Property including, without limitation, those assets set forth on Schedule 2.01(c) hereto, together with the goodwill and business appurtenant thereto and any licenses and sublicenses granted and obtained with respect thereto, rights thereunder, remedies against infringements thereof, and rights to protection of interests therein under the applicable Laws of all jurisdictions, customer lists, Sellers’ existing telephone and facsimile numbers (other than the three telephone numbers listed in Section 10.03, which shall revert to Sellers after the transition period set forth in Section 10.03), all rights in and to the trademarks and tradenames associated with any Product (except with respect to the tradenames [*]), along with all choses in action, permits, Licenses, approvals, variances and other intangible assets of the Business (in each case to the extent transferable) and all goodwill of the Business (other than corporate authorizations to transact business which are related to a Seller as a legal entity) (“ General Intangibles ”).

(d)          All books, records, files, catalogues, contracts, customer lists, prospect lists, dealer and distributor lists, lists of open customer purchase orders and sales leads, sales literature, sales records, engineering data, product design, drawings and information, operating records, certain research results and test records and other miscellaneous documentation that primarily relate to the Acquired Assets or to the Business, as well as copies of such documents and/or information to the extent they relate both to the Acquired Assets and/or to the Business as well as any Excluded Assets and/or the Retained Business, whether such materials and documents are in written or electronic form  (the “ Business Records ”).

(e)          All of Sellers’ inventory, raw materials, supplies, work in process, finished goods, packaging and other manufacturing supplies of any nature relating to the Business.

(f)          All of Sellers’ right, title and interest in all real property owned or leased by Sellers at the facility located in Richmond, Virginia, and all of Sellers’ right, title and interest as of the Closing Date in and to the real property leased at Bremen, Germany (other than the facility used for the Soft Furnishings Business and located at Walter-Geerdes-Straβe 10, D-28307, Bremen, Germany), including all structures and improvements thereon and all interests therein used in the Business.  

(g)          The Accounts Receivable, less any accounts payable, of MTI Leewood Germany, other than those relating to the Retained Businesses or owing by Affiliates of MTI Leewood Germany (the “ Net Leewood Receivables ”), up to a maximum of US$400,000, computed as of the first yearly anniversary of the Closing Date.  If as of such anniversary the Net Leewood Receivables exceed US$400,000, the Buyer shall pay to MTI Leewood Germany or its lawful successors and assigns the balance thereof, and if the Net Leewood Receivables then are less than US$400,000, the Buyer shall be entitled to receive the deficiency thereof from the Sellers (which Buyer shall first take from the Escrowed Amount, to the extent then available and not subject to any asserted Claim, and for which Sellers shall not be obligated to replenish the Escrowed Amount).

(h)         All the Sellers’ right, title and interest as of the Closing Date in, to and under all other assets of every kind and nature used or intended to be used in or necessary to the operation of the Business, including, without limitation, any other data wherever found or of whatever kind of Sellers not described above reasonably required to conduct the Business.

As of the Closing Date, the Acquired Assets shall be transferred or otherwise conveyed to Buyer free and clear of all Liens and Liabilities, excepting only Permitted Exceptions and the Assumed Liabilities listed in Section 4.02.

The parties hereby waive compliance with the bulk transfer or bulk sales provisions of the applicable state Uniform Commercial Code provisions or any other similar Law, if any; provided, however, that such waiver shall not constitute a limitation of the rights of Buyer and Sellers hereunder.

2.02.       Excluded Assets .  The following assets of Sellers (collectively, the “ Excluded Assets ”) are not part of the sale and purchase contemplated hereunder, are excluded from the Acquired Assets and shall remain the property of Sellers after the Closing:

(b)           Any contract rights relating to (i) employees of, or consultants to, Sellers who are not being hired by or offered employment with Buyer as of the Closing, and (ii) any customers and suppliers of Sellers exclusively with respect to the Retained Business.

(c)           All books, records, files, catalogues, contracts, customer lists, prospect lists, dealer and distributor lists, lists of open customer purchase orders and sales leads, sales literature, sales records, engineering data, product design, drawings and information, operating records, certain research results and test records and other miscellaneous documentation that exclusively pertain to the Retained Business.

(d)           All minute books, records and seals.

(e)           All personnel records and other records that Sellers are required by Law to retain in their respective possession (provided that accurate and complete copies are given or made available to Buyer at or prior to the Closing, to the extent that they relate to personnel continuing their employment with Buyer after the Closing).

(f)           All Claims for refund of Taxes and other governmental charges of whatever nature for which Sellers would otherwise be entitled to under this Agreement, prorated to reflect the portion attributed to pre-Closing or post-Closing business activity.  Sellers agree to provide Buyer with reasonable cooperation in connection with any audit or assessment of Taxes, interest or other charges with respect to any period prior to Closing..

(g)           All rights of Sellers under this Agreement and the Operative Documents.

(h)           All agreements regarding the purchase and sale of, or governing the rights of, the capital stock of Sellers.

(i)           All Accounts Receivable (other than Net Leewood Receivables), intercompany receivables for loans and other financial arrangements, prepaid items, deposits and capitalized development costs for future recovery, except to the extent they relate to the Assumed Liabilities.

(j)           Any interest in real property owned or leased by Sellers and not included in the Acquired Assets.

2.03           [*]:

(b)               [*]

(c)               [*]

(d)               [*]

3.01.      Amount and Payment of the Purchase Price .  In consideration for the Acquired Assets, Rogers shall pay to the Sellers the aggregate amount of Seven Million Four Hundred Thousand Dollars (US$7,400,000.00) (the “ Purchase Price ”), payable in lawful currency of the United States as follows:

(a)           Three Million Five Hundred Thousand Dollars (US$3,500,000.00) with respect to the Richmond Business, which shall be paid by wire transfer to MTI Silicones on the Closing Date to the account(s) specified by MTI Silicones in writing;

(b)           Three Million Nine Hundred Thousand Dollars (US$3,900,000.00) with respect to the Leewood Business, which shall be paid by wire transfer to MTI Leewood Germany on the Closing Date to the account(s) specified by MTI Leewood Germany in writing; and

(c)           Six Hundred Fifty Thousand Dollars (US$650,000.00), which shall be paid over to an escrow agent to be held as provided for in Section 8.03 below.

3.02        Allocation of Purchase Price .  The parties hereto agree and acknowledge that the determination of the price for each of the Acquired Assets being sold by Sellers to Buyer, as set forth in this Agreement, is the result of arm’s-length negotiations between the parties. The Purchase Price shall be preliminarily allocated amongst the Acquired Assets by the Buyer in the manner set forth in Schedule 3.02 (to be supplied by Buyer prior to Closing). Buyer then shall provide to Sellers the report of buyer's independent appraiser within ninety (90) days after the Closing, which shall be prepared in accordance with United States Generally Accepted Accounting Principles then in effect. If after discussion with Buyer and/or its appraiser, Sellers' appraiser disagrees with the conclusions of that report, then each Party may file its tax returns in reliance upon the characterization and allocated prices of the various assets determined by that Party's independent appraiser in good faith.

4.01.       Nonassumption of Liabilities and Indemnification . Buyer shall not assume any Liabilities of Sellers whatsoever except as specifically set forth in Section 4.02 below. The parties intend that Buyer shall acquire ownership of the Acquired Assets free and clear of all Liens and Third Party Claims (whether private, governmental or otherwise) whatsoever, other than Permitted Exceptions, and each Seller represents and warrants that such sale shall be accomplished without expense or Liability for any such Third Party Claims to Buyer.

4.02.       Assumed Liabilities .  At Closing, Buyer shall assume the following Liabilities, and shall be responsible for all such Liabilities from and after the Closing Date (collectively, the “ Assumed Liabilities ”):

(a)          The purchase orders as of the Closing Date from each Seller’s customers regarding the Products, accepted in the ordinary course of the Business as conducted by a Seller (all of which, as of the Closing Date, are annexed as Schedule 4.02(a) hereto).

(b)          The purchase orders of each Seller as of the Closing Date to such Seller’s suppliers regarding the Business; provided, that such purchase orders were accepted in the ordinary course of the Business as conducted by such Seller consistent with past practices and contain pricing and other terms which are usual and ordinary in the normal course of the Business; and provided, further that any payments under such purchase orders were not, by their terms, due and payable by a Seller as of a date prior to the Closing Date. All such purchase orders as of the date hereof are annexed as Schedule 4.02(b) attached hereto (aside from those not available as of the date hereof, which shall be included in a Class A Schedule Update, as defined in Section 5.06(c)(i), and delivered to Buyer prior to Closing), and these shall be supplemented, as a Class B Schedule Update (as defined in Section 5.06(c)(i)) as of the Closing by those additional purchase orders issued between the date hereof and the Closing. As of the Closing or promptly upon request of a Seller after the Closing, Buyer shall reimburse such Seller for any advance payments made by such Seller prior to the Closing for any such outstanding purchase orders.

(c)          All Liabilities of Sellers under all of the Assumed Contracts as provided in the Assignment and Assumption Agreement attached hereto as Exhibit D ; provided that the assumption of such obligations by Buyer hereunder shall not be deemed to diminish any liability of Sellers for a breach of a representation or warranty concerning such obligations.

(d)          All warranties and service obligations with respect to any Products sold by Sellers prior to the Closing Date; provided, that the assumption of such obligations by Buyer hereunder shall not be deemed to diminish any liability of Sellers for a breach of a representation or warranty concerning such obligations; and provided, further that Buyer shall not be responsible for any other Liabilities, in connection with Products shipped from inventory of a Seller, existing as of the Closing Date, which Liabilities shall remain with the applicable Seller.

(e)          Liabilities for Taxes based or imposed upon, arising out of, or resulting from the purchase of the Business and the Acquired Assets, in each case relating to periods (or portions thereof) after the Closing Date, but in no event including any Liabilities for Taxes assessed or accrued for a period (or portion thereof) prior to or including the Closing Date, or arising out of or resulting from the ownership, holding or use of any Acquired Asset prior to the Closing Date, or relating to any transaction consummated prior to the Closing Date.

(f)          All Liabilities and obligations (including, for the avoidance of doubt, all severance or termination liabilities, if any) in respect of employees of the Business (other than Excluded Employees) who are employees of the Business immediately prior to the Closing, and beneficiaries of such employees, including liabilities and obligations under or relating to the Worker Adjustment Retraining and Notification Act, as amended (“ WARN ”), or any similar state or local law, but solely to the extent relating to or arising out of the sale of the Acquired Assets or any actions taken by Buyer on or after the Closing Date.

(g)          Obligations of Sellers to pay royalties pursuant to [*].

(h)         All other trade payables of the Leewood Business incurred consistently with past practice of the Sellers and in the ordinary course of business or other trade payables owing from Affiliates of MTI Leewood Germany.

4.03        Excluded Liabilities .  Notwithstanding the foregoing, and except as expressly set forth in this Agreement with respect to the Assumed Liabilities, Buyer shall not assume nor become liable for, nor shall, by execution or performance of this Agreement, purchase of the Acquired Assets or otherwise, become responsible for, be liable with respect to or otherwise be obligated to pay, perform, discharge or guarantee, any Liability of Sellers (whether known, unknown, direct, indirect or otherwise) to the extent arising or relating to the conduct of the Business prior to the Closing Date (collectively, the “ Excluded Liabilities ”). Sellers agree to promptly pay or discharge all Excluded Liabilities, and to indemnify Buyer from any failure to do so on a timely basis. Without limitation, Excluded Liabilities shall include the following:

(a)          Liabilities for Taxes based or imposed upon, arising out of, or resulting from the Business and the Acquired Assets, in both cases for periods (or portions thereof) on or before the Closing Date.

(b)          Any claims, acts, errors, omissions, Losses, costs or Liabilities with respect to any Seller, the Acquired Assets, such Seller’s trade practices or the Business as conducted by such Seller arising or accruing or based on the operation of the Business prior to the Closing Date or otherwise based on any acts or omissions of a Seller made at any time thereafter including, but not limited to, unpaid salary, products liability, environmental, tort, antitrust, workers’ compensation liability, employment practices liability, unfair competition, business practices liability and similar claims.

(c)          Any legal, accounting or other expenses of a Seller in connection with this Agreement.

(d)          Any Liabilities arising out of, incurred in connection with or related to the ownership of the Excluded Assets.

(e)          Any Liabilities arising out of or in connection with any Indebtedness of a Seller for borrowed money (including, without limitation, the outstanding operating and term loan facilities with SEB, Sparkasse and Bank of America).

(f)          Any inter-company accounts payable, other than for goods (if any) received in an arm’s length transaction in the ordinary course of business.

(g)          Any Liabilities to employees or former employees of a Seller, arising out of actions taken or omitted prior to the Closing Date (including Liability for accrued but unpaid vacation time as described in Section 10.02(e)), or otherwise exclusively related to the Retained Business; including without limitation the pending or threatened Claims of four former employees of MTI Leewood Germany which are described in Sections 6.08 and 6.22 of the Disclosure Schedule.

(h)         Any brokerage fees, commissions, finders or similar fees incurred by a Seller in connection with the transactions contemplated by this Agreement.

(i)          Any obligations under [*] not included as an Assumed Liability.

5.01.       Closing .  The closing of the transactions contemplated herein (the “ Closing ”) shall be held at the offices of Burns & Levinson LLP, counsel for Buyer, remotely via the exchange of documents and signatures or at such other time and place as the parties mutually may agree, on the third Business Day following the day on which the conditions set forth in this Section 5 have been satisfied or waived (other than those conditions that are intended to be satisfied at the Closing), or such other date upon which the parties mutually may agree, but in no event later than May 15, 2009 (the “ Closing Date ”).

5.02.       Deliveries of Sellers .  Each Seller, as applicable, shall deliver or cause to be delivered to Buyer at the Closing:

(b)          Any and all documents of title necessary to transfer ownership to Buyer of the Acquired Assets, duly executed by each Seller and any other parties thereto.

(c)          An Assignment of Intellectual Property in substantially the form attached as Exhibit C hereto, executed by each Seller.

(d)          An Assignment and Assumption Agreement in substantially the form attached as Exhibit D hereto, executed by each Seller.

(e)          A Non-Competition and Non-Solicitation Agreement in substantially the form attached as Exhibit E hereto, executed by each Seller. [*]

(f)          An Escrow Agreement in substantially the form attached as Exhibit F hereto, executed by each Seller.

(g)          Transitional Services Agreements, without any additional consideration, to be mutually agreed by the Buyer and Sellers prior to Closing.

(h)          All documents necessary to transfer any other General Intangibles being purchased by Buyer hereunder, executed by each Seller and any other parties.

(i)           A certificate executed on behalf of each Seller by its President or Chief Executive Officer, certifying as to such Seller’s satisfaction of the conditions set forth in Section 5.04(a) and (b).

(j)           All such other deeds, endorsements, assignments and other instruments as, in the opinion of Buyer’ counsel, are necessary or desirable to vest in Buyer good, valid and marketable title to and ownership of the Acquired Assets.

(k)          A certified copy of resolutions, duly adopted by the Boards of Directors and stockholders of each Seller, authorizing the transactions contemplated hereby, and a certificate of incumbency as to the authority of the individuals of each Seller to execute this Agreement, the Operative Documents to which such Seller is a party and the various other documents and instruments contemplated herein or therein.

(l)           Such certificates issued by the appropriate governmental authorities as required to evidence the legal existence and good standing of each Seller in each jurisdiction in which it is qualified to do business.

(m)         Evidence, reasonably satisfactory to Buyer, that all work-in-process and finished goods inventory of MTI Leewood Sweden has been transferred and delivered to the premises of MTI Leewood Germany located in Bremen, Germany (unless prior to the Closing Buyer requests of Sellers that some or all of such work-in-process and/or finished goods inventory not be transferred, in which case such inventory shall remain the property of Sellers). As of the Closing or promptly thereafter at the request of MTI Leewood Germany, Buyer shall reimburse MTI Leewood Germany for all reasonable costs directly associated with such delivery and certain other costs related to the closure of MTI Leewood Sweden, as and to the extent set forth in a Transition Services Agreement substantially in the form annexed hereto as Exhibit G hereto.

(o)          A signed opinion of Sellers’ counsel in substantially the form attached as Exhibit H hereto.

(p)          [*]

(q)          Copies of the Amendment, Confirmation and Consent substantially as set forth on Exhibit K hereto, [*].

(r)          [*]

(s)          Such other closing documents and instruments as Buyer reasonably may require.

5.03.       Deliveries of Buyer .  Buyer shall deliver or cause to be delivered to Sellers at the Closing:

(a)          The sum of Six Million Seven Hundred Fifty Thousand Dollars (US$6,750,000.00), in immediately available funds via wire transfer  to the accounts of the Sellers as designated by them at least two (2) Business Days prior to the Closing Date and in accordance with Section 3.01;

(b)          An Assignment and Assumption Agreement in substantially the form attached as Exhibit D hereto, executed by Buyer.

(c)          A Non-Competition and Non-Solicitation Agreement in substantially the form attached as Exhibit E hereto, executed by Buyer.

(d)          An Escrow Agreement in substantially the form attached as Exhibit F hereto, executed by Buyer, along with the deposit of Six Hundred Fifty Thousand Dollars (US$650,000.00) into the escrow account designated therein.

(e)          A Transitional Services Agreement in substantially the form attached as Exhibit G hereto, executed by Buyer.

(f)          A certified copy of votes, duly adopted by the Board of Directors of Buyer, authorizing the transactions contemplated hereby, and a certificate of incumbency as to the authority of the individuals of Buyer to execute this Agreement, the Operative Documents to which Buyer is a party and the various other documents and instruments contemplated herein or therein.

(g)          A certificate executed on behalf of Buyer by its President or a Vice President, certifying as to Buyer’s satisfaction of the conditions set forth in Section 5.05(a) and (b).

(h)          A copy of an undertaking executed by Rogers in favor of the Trustee and the Sellers, pursuant to which Rogers agrees to pay royalties, at current rates, pursuant to and in accordance with the Compensation Agreement, to the extent modified by the Amendment, Confirmation and Consent set forth as Exhibit K hereto.

5.04.       Conditions to Buyer’s Obligations .  The obligation of Buyer to consummate the transactions to be performed by it in connection with the Closing will be subject to the satisfaction (or waiver by Rogers, in whole or in part, in writing) of the following conditions as of the time of the Closing:

(a)          No breach of any representations or warranties of Sellers set forth in Section 6,  nor any updates (Class A or B) to the Disclosure Schedule provided for in Section 5.06(c) hereof, individually or in the aggregate, will have or reasonably could be expected to have a Material Adverse Effect upon the Business. For the avoidance of doubt, any violations of Laws which concern the export of products or technical information from the United States of America and which may be imposed from time to time by the government of the United States of America (including, without limitation, the Foreign Corrupt Practices Act of 1977, Export Administration Act of 1979, U.S. Arms Export Control Act and the International Traffic in Arms Regulations, and similar Laws which has had or, in Buyer’s sole but reasonable judgment, may have a reasonable likelihood of impairing the conduct of any portion of the Buyer’s business (including but not limited to the Business) after the Closing, shall constitute a Material Adverse Effect.

(b)          Sellers shall have performed and complied in all material respects with each of the covenants and agreements required to be performed by the Sellers under this Agreement or any Operative Document at or prior to the Closing.

(c)          There shall be no proceeding commenced or threatened against Buyer or any Seller involving this Agreement or the transactions contemplated herein or any judgment, decree, injunction or order which prohibits the consummation of the transactions contemplated by this Agreement.

(d)          Sellers shall have tendered delivery of the Acquired Assets to Buyer, free and clear of all Liens, other than Permitted Exceptions.

(e)         There shall have occurred no Material Adverse Effect upon the Business between the date hereof and the Closing.

(f)          Buyer shall have received written acceptance of employment from each Key Employee in accordance with Sections 10.01 and 10.02.

(g)         Each Seller shall have delivered to Buyer the items set forth in Section 5.02.

(h)          [*] shall have agreed to amend the [*] (as each such capitalized term is defined in Section 6.19) upon terms and conditions reasonably acceptable to Buyer (which terms and conditions shall not include any further liability for Sellers beyond whatever may have been incurred in the prior agreement between Sellers and [*]).

(i)           [*] shall have executed and delivered an original copy of same to Buyer an Amendment, Confirmation and Consent substantially in the form set forth as Exhibit K hereto, and the other parties thereto likewise shall have executed same and delivered an original copy of same to Buyer.

(j)           The consents listed on Exhibit I hereto, sufficient for the assignment of the Assumed Contracts referenced therein to Buyer, shall have been obtained.

(k)          The parties to the Assumed Contracts which are listed on Exhibit J hereto shall have agreed to terms and conditions satisfactory to Buyer.

5.05.       Conditions to the Sellers’ Obligations .  The obligation of each Seller to consummate the transactions to be performed by it in connection with the Closing is subject to the satisfaction (or waiver by Sellers in writing) of the following conditions as of the Closing Date:

(a)          No breach of any representations or warranties of Buyer set forth in Section 7 will preclude, or reasonably could be expected to preclude, Buyer’s ability to substantially fulfill its obligations hereunder.

(b)          Buyer will have performed and complied in all material respects with all of the covenants and agreements required to be performed by Buyer under this Agreement at or prior to the Closing.

(c)          There shall be no proceeding commenced or threatened against Buyer or any Seller involving this Agreement or the transactions contemplated herein or any judgment, decree, injunction or order which prohibits the consummation of the transactions contemplated by this Agreement.

(d)          Buyer shall have delivered to Sellers the items set forth in Section 5.03.

(e)          No proposed adjustment by Buyer pursuant to Section 5.06(c)(iv) shall result in a reduction of the aggregate Purchase Price of more than [*].

(f)          Buyer and Sellers shall have reached agreement on the form of the draft Non-Competition and Non-Solicitation which will be annexed as Exhibit E hereto.

5.06.       Pre-Closing Covenants and Adjustments .

(a)           Operations and Maintenance of the Business .  From and after the date hereof and prior to the Closing, unless Rogers otherwise consents in writing or except as set forth expressly herein, each Seller will conduct the Business only in the ordinary course of the Business as conducted by such Seller and consistent with past practice.  Furthermore, except as may otherwise be required under this Agreement or as set forth on Schedule 5.06 , no Seller shall do any of the following, without the prior written consent of Rogers:

(i)           enter into any Contract, or incur or permit to be incurred, any obligation or other Liabilities, with respect to or materially affecting the Business or the Acquired Assets, other than in the ordinary course of the Business as conducted by such Seller and in accordance with past practice; including, without limiting the generality of the foregoing, (i) enter into any agreement relating to capital leases of the Business or borrowed money on behalf of the Business greater than US$10,000 individually or US$50,000 in the aggregate, or (ii) make any loans to any Person with respect to or materially affecting the Business or the Acquired Assets (other than advances in the ordinary course of the Business as conducted by such Seller and consistent with past practice);

(ii)          remove any of its assets (other than cash and cash equivalents) used in the Business by way of dividend, distribution, withdrawal or any other means without prior written notice to Rogers;

(iii)         voluntarily permit to be incurred any Lien on any of its assets used in the Business;

(iv)         increase the compensation payable or to become payable to any of its employees, or otherwise enter into or alter any employment or consulting agreement, outside the ordinary course of the Business as conducted by such Seller;

(v)          commence, enter into, or alter any profit sharing, deferred compensation, bonus, option or purchase Plan for its interests or other equity securities, pension, retirement or incentive Plan or any fringe Benefit Plan for its employees retained in connection with the Business outside the ordinary course of the Business as currently conducted by such Seller;

(vi)         sever or terminate the employment of any of its employees retained in connection with the Business, other than Excluded Employees, or engage any employees or consultants in connection with the Business except in the ordinary course of the Business as conducted by such Seller;

(vii)        make or commit to any individual capital expenditure with respect to or materially affecting the Business or the Acquired Assets in excess of US$10,000;

(viii)       cancel or waive any claims or rights of any Seller, with respect to or materially affecting the Business or the Acquired Assets, outside the ordinary course of the Business as conducted by such Seller and consistent with past practice;

(ix)         change any accounting methods used by such Seller in connection with the Business, except and solely to the extent required by GAAP or Law;

(x)          pay or incur any obligation or Liability, absolute or contingent with respect to or materially affecting the Business or the Acquired Assets, other than obligations or Liabilities incurred in the ordinary course of the Business as conducted by such Seller and consistent with past practice or purchase any asset other than in the ordinary course of the Business as conducted by such Seller;

(xi)         make any Tax election or settle or compromise any Tax Liability which could reasonably be expected to have an adverse impact on Taxes payable by Buyer with respect to the Business or the Acquired Assets;

(xii)        enter into any joint venture, partnership or other similar arrangement or form any other material arrangement for the operation of the Business as conducted by such Seller;

(xiii)       cancel or terminate any of the insurance policies covering the Acquired Assets or permit any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies providing coverage equal to or greater than the coverage under such cancelled, terminated or lapsed insurance policies are in full force and effect; or

(xiv)       enter into any binding commitment to do any of the foregoing.

(b)            Information .  Subject to the attorney-client privilege and any other applicable privileges with respect to its legal counsel, from time to time at Buyer’s request, upon reasonable prior notice and at reasonable times during normal business hours, subject to requirements of Law, Sellers will provide to representatives of Buyer and its agents, employees and accounting, tax, legal and other advisors (collectively, including Buyer, the “ Investigating Parties ”):

(i)           access to the information regarding the assets, the Liabilities and operations of the Business;

(ii)           access to all accounts, insurance policies, Tax Returns, Contracts, and other books and records concerning the operations and properties of Seller in connection with the Business, the Acquired Assets and such other relevant information and materials as may be reasonably requested (including the right to make copies and abstracts thereof) including, without limitation, financial statements (including the Financial Statements), review of books and records of the Business for the last five (5) years through the Closing Date and review of assets, Liabilities, Products, services, inventory, compliance with Laws, methods of accounting, margins and financial and other Business Records, investigation of the Business’ customers and providers, and inspection and examination of each Seller’s facilities and assets relating to the Business, including such Seller’s ownership of such facilities and assets;

(iii)           opportunity to meet with customers, converters or other value-added resellers (or Persons acting in a similar capacity), prospective customers and key suppliers of the Business (including without limitation the Top 20 Customers, Top 10 Suppliers, and Manufacturers Representatives, each as defined in Section 6.02(a)), and to discuss the affairs, finances and accounts of the Business with those partners, directors, officers or managers (or equivalent officials), senior management and other employees, sales representatives and independent accountants of such Seller reasonably requested by Buyer who would reasonably be presumed to have information which would be relevant for the purposes of conducting the Investigating Parties’ business, accounting, financial, environmental, legal and other due diligence review regarding such Seller and the Acquired Assets and preparing for the consummation of the transactions contemplated hereby, in each case so long as such access does not unreasonably interfere with the business and operations of such Seller; and

(iv)           opportunity to meet with distributors to the Business, for the purposes of conducting the Investigating Parties’ business, accounting, financial, environmental, legal and other due diligence review regarding such Seller and the Acquired Assets, for the consummation of the transactions contemplated hereby and for the purpose of establishing the terms and conditions, if any, for future business arrangements, in each case so long as such access does not unreasonably interfere with the business and operations of such Seller.

Notwithstanding the foregoing, in no event shall Buyer or any other Investigating Party contact any customer, prospective customer or supplier of any Seller in connection with the Business without the prior written consent of such Seller, which consent shall not be unreasonably withheld, delayed or conditioned.  All information obtained by the Investigating Parties pursuant to the provisions of this Section 5.06(b) shall be subject to the provisions of the Confidentiality Agreement, which shall be deemed to apply as well to each Seller; provided, however, that in the event the terms and conditions of this Agreement conflict with those set forth in such Confidentiality Agreement, this Agreement shall prevail.  Buyer shall not use any information obtained pursuant to this Section 5.06(b) for any purpose unrelated to the consummation of the transactions contemplated by this Agreement and, if such transactions are not consummated, it will treat all information and documents obtained pursuant to this Section 5.06(b) in the manner provided by the Confidentiality Agreement.

(c)            Schedules Supplement, Pre-Closing Adjustments, and Cooperation Generally .

(i)            Updating of Disclosure Schedule .  From the date of this Agreement through the earlier to occur of (x) the Closing Date, and (y) the date on which this Agreement is terminated pursuant to the terms hereof, each Seller agrees that it will promptly notify Buyer of (A) any and all information, facts, events, circumstances, issues or other matters that existed as of the date of this Agreement that should have been set forth or described in the Disclosure Schedule as of the date of this Agreement, or otherwise imply a breach of a representation or warranty of a Seller hereunder (the “ Class A Schedule Updates ”), and (B) any and all information, facts, events, circumstances, issues or other matters arising after the date of this Agreement which, if existing on the date of this Agreement, would have been required to be set forth or described in the Disclosure Schedule, or otherwise imply a breach of a representation or warranty of a Seller hereunder (the “ Class B Schedule Updates ”), in each case by delivery of appropriate updates to the Disclosure Schedule setting forth such information, facts, events, circumstances, issues or other matters on or prior to the Closing Date.

(iii)            Effect of Class A Schedule Updates .  In the event that the Sellers deliver any Class A Schedule Updates pursuant to Section 5.06(c)(i)(A), then (A) such Class A Schedule Updates shall not be deemed to be attached to the Disclosure Schedule or become a part of the Disclosure Schedule, (B) all references to the Disclosure Schedule shall refer to the original Disclosure Schedule, without reference to such Class A Schedule Updates, and (C) such Class A Schedule Updates shall not be given effect for determining whether the conditions to Closing set forth in Section 5.04 have been satisfied.  No Class A Schedule Update made after execution hereof by a Seller pursuant to this section shall be deemed to cure any breach of any representation or warranty made pursuant to this Agreement.

(iv)            Pre-Closing Adjustments .  In the event of (A) any breach of a representation or warranty given by any Seller which is discovered (whether by disclosure by a Seller or by Buyer) prior to Closing, or (B) the delivery by a Seller of any Class A Schedule Updates pursuant to Section 5.06(c)(i)(A), Buyer shall be entitled to an adjustment to the Purchase Price in the amount of the Loss incurred by Buyer on account thereof, including in such Loss the diminution in the value of the Acquired Assets as a result of such breach. Such adjustment shall not be reduced by the Basket, nor shall reduce the Basket. In the event that the parties do not agree on the amount of such adjustment, then the Closing nevertheless shall be consummated, and the disputed portion of such adjustment shall be submitted to arbitration pursuant to Section 12.  Any such adjustment pursuant to clauses (A) or (B) above shall, however, reduce the available Escrowed Amount on a dollar-for-dollar basis, as of the time when such adjustments are either agreed to by both parties or are resolved by arbitration pursuant to Section 12.

(v)            Satisfaction of Conditions to Closing .  Each party acting in good faith shall cause the conditions to Buyer’s and each Seller’s respective obligations to consummate the transactions contemplated by this Agreement to be satisfied to the extent within its power and control, and shall use its commercial best efforts to satisfy such conditions to the extent not within its power and control; including, without limitation, the preparation, execution and delivery of all agreements and instruments contemplated hereunder to be executed and delivered by such party in connection with or prior to the Closing.

5.07.       Transfer of Inventory .  MTI and MTI Leewood Germany, as applicable, shall, prior to Closing, cause all work-in-process and finished goods inventory currently held by MTI Leewood Sweden at its Skogas, Sweden facility to be transferred to MTI Leewood Germany’s facility in Bremen, Germany to the extent provided in Section 5.02(m) hereof, and for the reimbursement there provided.

5.08.       Transfer of Assumed Contracts .  Each of MTI, MTI Silicones and MTI Leewood Germany, as necessary, shall cause the transfer of their respective rights, obligations and benefits under all of the Assumed Contracts to Buyer (and MTI shall cause MTI Leewood Sweden, if necessary, to do so), effective as of the Closing Date, subject to the receipt of all required third party consents.

5.09       [*].  If Buyer does not agree to assume the [*] contracts between MTI Leewood Germany and [*], pursuant to Section 2.01 (b), then the parties will work in good faith to reach an agreement prior to close regarding a Purchase Price adjustment that reflects the change in value of the acquired assets, and if the parties fail to reach agreement on such adjustment, Buyers shall place into escrow an additional amount comprising its good faith estimate of the value of such products (and reduce the purchase price paid at Closing by such escrowed amount), and the actual value shall be determined as provided in Section 12.01.

MTI hereby jointly and severally represents and warrants, and each of MTI Silicones, and MTI Leewood Germany