ASSET PURCHASE AND SALE AGREEMENT

ASSET PURCHASE AND SALE AGREEMENT

among

Maxco, Inc.,

Atmosphere Annealing, Inc.

and

BCGW, Inc.

(as "Selling Parties")

and

Quanex Corporation

and

Quanex Technologies, Inc.

(as "Purchasing Parties")

Dated December 13, 2006

TABLE OF CONTENTS

TABLE OF CONTENTS

(CONTINUED)

ii

TABLE OF CONTENTS

(CONTINUED)

iii

EXHIBITS

INDEX TO DEFINITIONS

iv

v

vi

ASSET PURCHASE AND SALE AGREEMENT

This ASSET PURCHASE AND SALE AGREEMENT (this "Agreement") is made on December 13, 2006, by and among Maxco, Inc., a Michigan corporation ("Maxco"), Atmosphere Annealing, Inc., a Michigan corporation ("AAI"), BCGW, Inc., a Michigan corporation ("BCGW"), Quanex Corporation, a Delaware corporation ("Quanex"), and Quanex Technologies, Inc., a Delaware corporation (the "Purchaser").

WITNESSETH:

WHEREAS, the Purchaser wishes to purchase from each of AAI and BCGW (individually, a "Seller" and collectively, the "Sellers") and each of the Sellers wishes to sell to the Purchaser, substantially all of its assets on the terms and conditions set forth in this Agreement;

WHEREAS, the Purchaser is a wholly owned subsidiary of Quanex, AAI is a wholly owned subsidiary of Maxco, and BCGW is a wholly owned subsidiary of AAI;

NOW, THEREFORE, in consideration of the foregoing and the mutual warranties, representations, covenants and agreements contained in this Agreement, the Sellers and Maxco (together, the "Selling Parties") and the Purchaser and Quanex (together, the "Purchasing Parties") agree as follows:

ARTICLE I

PURCHASED ASSETS and assumed obligations

1.1   Purchased Assets . In reliance on the representations and warranties contained in this Agreement, and subject to the conditions and on the terms set forth in this Agreement, on the date (the "Closing Date") of the consummation of the transactions described in this Agreement in accordance with Article X (the "Closing"), but effective as of 12:01 a.m. Eastern Time on the Closing Date (the "Effective Time"), each of the Sellers shall sell, assign, convey, transfer and deliver to the Purchaser, and the Purchaser shall purchase, acquire and take assignment and delivery of, all of the right, title and interest of the Sellers in and to the assets, properties and rights described in Sections 1.1(a) through 1.1(n) below (but specifically excluding the Excluded Assets, as defined in Section 1.3), free and clear of Encumbrances (other than Permitted Encumbrances):

(a)   Tangible Assets . The tangible personal property set forth in Section 1.1(a) of the disclosure schedule document (the "Disclosure Document") that is being executed and delivered by the Selling Parties and the Purchasing Parties (the "Parties") concurrently with the execution and delivery of this Agreement, any replacements of that property acquired before the Effective Time and all other tangible personal property of every kind and description that is used in or useful to the operation of the businesses of the Sellers, including all machinery, equipment, fixed assets, furniture, tools, dies, automobiles, trucks, loaders, vehicles and other rolling stock, maintenance equipment and materials, (collectively, the "Tangible Assets");

1

(b)   Data Processing Hardware and Software . Those items listed in Section 1.1(b) of the Disclosure Document and all other data processing hardware and software that is used in the operation of the businesses of the Sellers;

(c)   Inventory . All supplies, materials (including raw materials), work-in-progress, semi-finished goods, finished goods, components, stores, goods in transit, spare parts, packaging materials, other consumables, and other inventories, including warehoused and consigned inventories (if any), inventories covered by purchase orders or held by distributors, used in the operation of the businesses of the Sellers (collectively, the "Inventory") as of the Effective Time;

(d)   Owned Real Property . The real property owned by either of the Sellers in Lansing, Michigan, Canton, Ohio and North Vernon, Indiana, as described in Section 1.1(d) of the Disclosure Document (the "Owned Real Property"), including all appurtenant easements related to the Owned Real Property and all buildings, structures, improvements, plants, offices, facilities, and fixtures located on the Owned Real Property (the "Facilities");

(e)   Intangibles . All Intellectual Property of the Sellers described in Section 1.1(e) of the Disclosure Document, all other Intellectual Property used in the businesses of the Sellers and all goodwill and going concern value relating to the businesses of the Sellers;

(f)   Other Current Assets . All prepaid expenses, credits, deposits, customer deposits, employee receivables, letters of credit supporting or in lieu of deposits, claims, prepayments, refunds, rebates, warranties, choses-in-action, accounts, rights to payment, existing and future instruments, chattel paper, documents of title, commodity contracts, rights under derivative, hedging and similar Contracts, and other similar items relating to or associated with the operation of the businesses of the Sellers;

(g)   Permits . All Permits and permit applications that are legally capable of being transferred;

(h)   Accounts Receivable . All trade and non-trade receivables of a Seller that are payable as a result of goods sold or services provided by a Seller, excluding any Tax refunds or credits and excluding any offset amounts under the Honda of America contra account for sleeves purchased by AAI ("Accounts Receivable") as of the Effective Time;

(i)   Books and Records . Copies or originals of all records related to the operation of the businesses of the Sellers, including specifications, service records, plans and designs of fixtures and equipment, monitoring and test records, customer lists and files, customer and supplier records, production records, quality control analyses, sales and warranty records, operating guides and manuals, financial and accounting records, studies, reports, correspondence and other similar documents and records ("Books and Records"); !

(j)   Assigned Contracts . The contracts, leases, easements, licenses, sales orders, purchase orders, supply agreements, plans and any other agreements, commitments or understandings, whether oral or written (the "Contracts") described in Section 1.1(j) of the Disclosure Document, which describes all Contracts (other than Permits and purchase orders entered into or accepted by a Seller in the ordinary course of business) to which a Seller is a party that relate to the businesses of the Sellers and that exist as of the date of this Agreement (the "Assigned Contracts"); all purchase orders entered into or accepted by a Seller in the ordinary course of business and that are in effect as of the Effective Time (the "Assigned Purchase Orders"); and all Contracts (other than purchase orders entered into or accepted by a Seller in the ordinary course of business) entered into by a Seller between the date of this Agreement and the Effective Time, which additional Contracts will be described on a document to be delivered by the Selling Parties to the Purchaser at the Closing (the "New Contracts");

2

(k)   Certain Insurance Claims . All of the Sellers’ insurance claims and rights to the extent that they pertain to the Assumed Obligations;

(l)   Certain Warranty and Indemnification Rights . Express or implied warranties from the Sellers’ suppliers related to their businesses and all rights of the Sellers to indemnification under any Contracts related to their businesses;

(m)   Name . The trade name "Atmosphere Annealing" and any and all variations thereof and any related goodwill, trademark applications and registrations, and internet domain names that consist of or incorporate the name "Atmosphere Annealing" and any and all variations thereof; and

(n)   Other Assets . Subject to the provisions of Section 1.3 of this Agreement, all other assets owned by either Seller as of the Effective Time, wherever located, even if not named or described in this Agreement, the AAI Financial Statements or the Disclosure Document, including tangible and intangible assets owned by either Seller.

All of the foregoing assets described in this Section 1.1 (excluding the Excluded Assets) are referred to collectively as the "Purchased Assets".

1.2   Procedures for Assets Not Transferable . The Purchasing Parties acknowledge the Sellers’ ability to assign their rights under the Permits and under the Contracts included within the Purchased Assets may be subject to receipt of Consent from individuals, corporations, business trusts, proprietorships, firms, partnerships, limited partnerships, limited liability partnerships, limited liability companies, trusts, associations, joint ventures, Governmental Authorities or other entities ("Persons"). The Selling Parties shall use all commercially reasonable efforts to obtain those Consents as soon as possible after the date of this Agreement. To the extent that any Consent is required, this Agreement and the Assignment and Assumption Agreement shall not constitute an agreement to assign a Permit or a Contract if an assignment or attempted assignment would constitute a breach of the Permit or Contract. If any Permit or Contract cannot, in the reasonable opinion of the Purchasing Parties’ counsel, be transferred effectively without the Consent of a Person other than a Selling Party, a Purchasing Party or any Affiliate of a Selling Party or a Purchasing Party (a "Third Party"), and the Selling Parties are unable to obtain that Consent even after using all of their commercially reasonable efforts to do so, the Selling Parties shall use its best efforts to provide the Purchaser the benefits of the Permit or Contract at their cost and expense. At the Closing, the Selling Parties shall execute and deliver to the Purchaser such documentation that assures the Purchaser of those benefits and under which the Selling Parties shall agree to enforce, at the request of the Purchaser and for the account of the Purchaser, any rights of the Selling Parties arising from any such Permit or Contract, including the right to elect to terminate in accordance with its terms on the advice of the Purchaser (to the extent legally permissible) and to cooperate in any commercially reasonable and lawful arrangement designed to provide the benefits of the Permit or Contract to the Purchaser.

3

1.3   Excluded Assets . The following assets (the "Excluded Assets") shall be retained by the Sellers or the other Persons owning them, and are not being sold, assigned, transferred or conveyed to the Purchaser under this Agreement:

(a)   Employee Benefits and Records . The assets described in Sections 7.4 and 7.5 of this Agreement;

(b)   Cash . Cash, investments and other cash equivalents of the Sellers;

(c)   Certain Corporate Records . The Sellers’ minute books and other corporate organizational documents, Tax Returns and financial and employment records;

(d)   BCGW Stock . All equity interests in BCGW;

(e)   Foreign Qualifications and Identification Numbers . All qualifications of the Sellers to transact business as a foreign corporation, arrangements with registered agents with respect to foreign qualifications of the Sellers, the Sellers’ taxpayer and other identification numbers;

(f)   Tax Benefits . Any of the Sellers’ Tax benefits and rights to refunds, including rights to any net operating losses;

(g)   Rights Under Debt Agreements . Any Contracts or rights of the Sellers relating to borrowed money, as to which either Seller is the debtor;

(h)   Related Party Receivables . Amounts reflected on the Sellers’ financial statements as of the Closing Date as receivables by a Seller from any stockholder, officer, director or Affiliate of a Seller;

(i)   Insurance . All of the Sellers’ insurance contracts and policies, insurance refunds from prepaid insurance, and insurance deposits, recoveries and rights under any current or prior insurance contracts or policies;

(j)   Benefit Plan Rights . Any assets, Contracts or rights relating to the AAI Benefit Plans; and

(k)   Loan Costs . The Sellers’ prepaid loan closing costs and related accumulated amortization.

1.4   Assumed Obligations . In reliance on the representations and warranties of the Selling Parties contained in this Agreement, and subject to the conditions and on the terms set forth in this Agreement, on the Closing Date, but effective as of the Effective Time, the Purchaser shall assume and agree to discharge, the following specified obligations of the Sellers, excluding the Excluded Obligations (the "Assumed Obligations"):

4

(a)   Contract Obligations . The obligations of each Seller to be performed after the Effective Time under the Assigned Contracts, the Assigned Purchase Orders and the New Contracts, excluding any obligation arising from or relating to a breach of, or default under, an Assigned Contract, Assigned Purchase Order or New Contract by either Seller;

(b)   Accounts Payable . All trade payables and accrued expenses of the Sellers that are payable as a result of goods sold to, or services provided for or to, a Seller, excluding any Taxes payable and excluding any accrued expenses for which a Seller retains the corresponding asset or liability pursuant to the terms of this Agreement ("Accounts Payable") as of the Effective Time;

(c)   Product Replacement . Subject to the provisions of Section 6.11, all warranty obligations to repurchase or replace products produced by a Seller in the ordinary course of business that are either in process at the Effective Time or that are produced by a Seller before the Effective Time and returned by the purchasers thereof after the Effective Time; and

(d)   Employee Accruals . All accruals shown on the Closing Date Financial Statements for the payment of compensation to the Transferred Employees, including vacation (after giving effect to Section 7.2), holiday pay, and bonuses, with respect to any Transferred Employee.

Notwithstanding the foregoing, nothing contained in this Section 1.4 shall affect the Selling Parties’ obligations under Section 12.2.

1.5   Excluded Obligations . The Purchaser shall not assume, and shall have no obligation with respect to, the following obligations (the "Excluded Obligations"), which shall be retained by the Selling Parties or the other Persons responsible for those obligations:

(a)   Excluded Assets . Any liabilities or obligations relating to the Excluded Assets;

(b)   Debt . Any debt or other obligations of any Selling Party related to borrowed money, including interest payable and prepayment or other penalties.

(c)   Taxes . Any liability or obligation for any Tax of any Selling Party, including any Tax liability or obligation (i) with respect to a Selling Party’s business operations on, before or after the Closing Date, (ii) with respect to the ownership, possession, purchase, lease, sale, disposition, use or operation of any of the Purchased Assets at any time on or before the Closing Date, (iii) that results from the sale of the Purchased Assets under this Agreement or otherwise results from the consummation of the transactions described in this Agreement or (iv) with respect to Taxes of any Person for which any Selling Party is or may be liable under applicable law as a transferee or successor, by contract or otherwise;

(d)   Employees and Seller Benefit Plans . Except as provided in Sections 1.4(d) and 7.2, all obligations with respect to the employment of the Persons employed by either Seller or by any Affiliate of a Seller with respect to a Seller’s business ("Business Employees") or the cessation of such employment (including unfair labor practice charges, employment discrimination charges, wrongful termination claims, workers’ compensation claims, and any employment-related tort claims); and any AAI Benefit Plan or other benefit liabilities of either Seller;

5

(e)   Fees and Expenses . Fees and expenses incurred in connection with the negotiation, execution, performance and delivery of this Agreement and the transactions described in this Agreement, including the fees and expenses of counsel, investment bankers, and brokers or finders fees, of any Person other than the Purchasing Parties;

(f)   Environmental Liabilities . Any Environmental Liabilities or other obligation or responsibility of a Seller or any Affiliate of a Seller relating to environmental matters or arising out of or relating to the operation of the businesses of the Sellers or the ownership or operation of the Purchased Assets before the Effective Time;

(g)   Certain Payables . Amounts reflected on AAI’s books and records as of the Effective Time as payables by a Seller to any stockholder, officer, director or Affiliate of a Seller;

(h)   Product Liability . Any liability relating to products produced or in-process by a Seller before the Effective Time (other than obligations to repurchase or replace products under Section 1.4(c));

(i)   Litigation . The Litigation described in Schedule 3.10;

(j)   General Obligations . Except to the extent specifically assumed under Section 1.4, obligations and liabilities relating to events occurring before the Effective Time or arising from ownership or use of the Purchased Assets before the Effective Time or the conduct of the business of the Sellers before the Effective Time; and

(k)   Other Liabilities . Any obligation or liability that is not specifically assumed by the Purchaser under Section 1.4.

ARTICLE II

PURCHASE PRICE AND PAYMENT

2.1   Pre-Closing Deliveries . At least two Business Days before the Closing Date, the Selling Parties shall deliver to the Purchasing Parties (a) an estimated statement of consolidated Working Capital of AAI as of the Closing Date (the "Preliminary Statement of Working Capital"), setting forth the Selling Parties' good faith estimate of each of the components making up, or expected to make up, the Working Capital as of the Closing Date and setting forth in reasonable detail the calculation of the Working Capital and (b) all necessary wire transfer account information necessary for the Purchasing Parties to pay the Closing Purchase Price pursuant to Section 2.2. For purposes of this Agreement, "Business Day" means any day of the year other than (y) any Saturday or Sunday; or (z) any other day on which banks located in Houston, Texas, are generally closed for business; and "Working Capital" means (i) Accounts Receivable, plus (ii) Inventory, minus (iii) Accounts Payable, minus (iv) accrued employee compensation payables, as such terms are used in the Closing Date Financial Statements. The consolidated Working Capital of AAI as of June 30, 2006, less $446,453.00, was $4,123,376.07 (the "Baseline Working Capital Amount"), and its calculation is set forth in Section 2.1 of the Disclosure Document. The Preliminary Statement of Working Capital shall be prepared using the same methodology as was used to prepare the calculation of the Baseline Working Capital Amount, except that the $446,453.00 will not be subtracted in determining Working Capital for purposes of the Preliminary Statement of Working Capital.

6

2.2     Determination of Purchase Price Payable at the Closing . If the Working Capital set forth in the Preliminary Statement of Working Capital exceeds the Baseline Working Capital Amount, then the Purchase Price payable at the Closing (the "Closing Purchase Price") shall be the sum of $58,000,000 and the amount of that excess. If the Working Capital set forth in the Preliminary Statement of Working Capital is less than the Baseline Working Capital Amount, then the Closing Purchase Price shall be $58,000,000 less the amount of that excess.

2.3   Payment of Purchase Price . On the Closing Date, in consideration for the sale, assignment, conveyance, transfer and delivery of the Purchased Assets to the Purchaser pursuant to the terms of this Agreement, the Purchaser shall assume the Assumed Obligations and shall pay the Sellers the Closing Purchase Price, subject to the post-Closing adjustments described in Section 2.4. The Closing Purchase Price shall be paid as follows: The Purchaser shall pay $5,000,000.00 of the Closing Purchase Price by wire transfer of immediately available funds to the escrow account under the terms of the escrow agreement to be executed by the Parties and U.S. Bank, National Association, on the Closing Date, substantially in the form of Exhibit A (the "Escrow Agreement"); and the Purchaser shall pay BCGW $3,025,000.00 and AAI the remaining amount of the Closing Purchase Price, in each case by wire transfer of immediately available funds to the accounts specified by the Selling Parties pursuant to Section 2.1.

2.4   Purchase Price Adjustment .

(a)   As soon as practicable, but not later than 30 days after the Closing Date, the Selling Parties shall provide the Purchasing Parties with (i) unaudited consolidated financial statements of AAI as of the Closing Date (the "Closing Date Financial Statements"), (ii) a statement of consolidated Working Capital of AAI as of the Closing Date (the "Statement of Working Capital"), setting forth a true, correct and complete description of each of the components making up the Working Capital as of the Closing Date and setting forth in reasonable detail the calculation of the Working Capital and (iii) a statement of earnings before income taxes, depreciation and amortization ("EBITDA") of AAI, on a consolidated basis, for the 12-month period ending December 31, 2006 (the "EBITDA Statement"), setting forth a true, correct and complete description of each of the components making up EBITDA as of December 31, 2006 and setting forth in reasonable detail the calculation of EBITDA as of December 31, 2006. The Statement of Working Capital and the EBITDA Statement shall be based on a consolidated balance sheet of AAI prepared in accordance with generally accepted accounting principles applied in a consistent manner throughout the period specified ("GAAP") using the same methodology as was used to prepare the AAI Financial Statements, subject to the provisions of Section 7.2, and the Preliminary Statement of Working Capital   (including with respect to the $446,453.00) without regard to any effects of the transactions related to the Closing. The Purchasing Parties and their independent auditors and other representatives shall have the right to review and to verify the Statement of Working Capital and the EBITDA Statement when received, and the Selling Parties shall provide the Purchasing Parties with access to all related working papers.

7

(b)   The Purchasing Parties shall have 30 days following receipt by them of the Statement of Working Capital and the EBITDA Statement during which to dispute the Statement of Working Capital and the EBITDA Statement. The Purchasing Parties shall notify the Selling Parties of any dispute regarding those statements by delivering written notice to the Selling Parties, which shall specifically describe each line item of the Statement of Working Capital and the EBITDA Statement in dispute and the reasons for the dispute. If the Purchasing Parties fail to notify the Selling Parties in writing of any such dispute within that 30-day period, the Statement of Working Capital and the EBITDA Statement shall be final and binding on both the Purchasing Parties and the Selling Parties and shall be the "Final Statement". If the Purchasing Parties timely notify the Selling Parties of a dispute, and the Selling Parties and the Purchasing Parties cannot resolve the dispute within 20 days after receipt by the Selling Parties of the notice, the dispute shall be resolved by an independent accounting firm mutually agreed to by Maxco and Quanex (the "Independent Accounting Firm"). Maxco and Quanex shall cause the Independent Accounting Firm to make its determination as promptly as practicable and in any event within 45 days after the submission of the dispute to the Independent Accounting Firm. The determination of the Independent Accounting Firm shall be limited only to the matters in dispute and shall be final and binding on all Parties. The fees and expenses of the Independent Accounting Firm shall be shared equally by the Purchasing Parties, on the one hand, and the Selling Parties, on the other hand. In the event of a dispute, the Statement of Working Capital and the EBITDA Statement, as modified in writing by the Purchasing Parties and the Selling Parties, or by the Independent Accounting Firm, shall be the "Final Statement".

(c)   If the Working Capital as of the Closing Date, as set forth in the Final Statement, exceeds the Working Capital set forth in the Preliminary Statement of Working Capital, then the Closing Purchase Price, as adjusted pursuant to this Section 2.4(b) (the "Adjusted Purchase Price") shall be increased by that excess. If the Working Capital, as set forth in the Final Statement, is less than the Working Capital set forth in the Preliminary Statement of Working Capital, then the Adjusted Purchase Price shall be decreased by that deficit. Furthermore, if the EBITDA as of December 31, 2006, as set forth in the EBITDA Statement, is less than $9,600,000 (after adding back any adjustment included in the Final Statement related to the vacation policy amendment by AAI described in Section 7.2), then the Purchase Price shall be decreased by that deficit, but there shall be no further adjustment to the Adjusted Purchase Price if the EBITDA exceeds $9,600,000. After the adjustments described in this Section 2.4(c), if the Adjusted Purchase Price exceeds the Closing Purchase Price, then the Purchasing Parties shall pay the Sellers an amount equal to that excess, and if the Adjusted Purchase Price is less than the Closing Purchase Price, then the Selling Parties shall pay the Purchaser an amount equal to that deficit.

(d)   Any payment to be made pursuant to Section 2.4(c) shall be made by wire transfer of immediately available funds within five Business Days after the date on which the Statement of Working Capital and the EBITDA Statement become the Final Statement (either upon expiration of the 30-day period referred to in Section 2.4(b) or resolution of any dispute with respect to the Statement of Working Capital or the EBITDA Statement), in an amount determined pursuant to Section 2.4(c), together with interest on that amount from the Closing Date through the date the payment is made, at the average prime lending rate for the 30-day period before the date of the payment as announced by Citibank, N.A.

8

(e)   From and after the Closing Date, the Purchaser will cooperate with the Selling Parties in the preparation of the Closing Date Financial Statements and the Statement of Working Capital and will permit Transferred Employees having primary responsibility for the preparation of financial statements to assist the Selling Parties in the preparation of the Closing Date Financial Statements and the Statement of Working Capital. The Selling Parties shall be responsible for the costs and expenses of the preparation of the Closing Date Financial Statements and Statement of Working Capital and shall reimburse the Purchasers for any costs or expenses incurred by the Purchasing Parties in connection with their obligations under this Section 2.4(e), including reimbursement for overhead expenses allocable to those obligations. For purposes of the foregoing sentence, overhead expenses shall include compensation paid or payable to a Purchasing Party’s employees (including employee benefits).

2.5   Allocation of Purchase Price . The Adjusted Purchase Price and the Assumed Obligations shall be allocated among the Purchased Assets as set forth in Section 2.5 of the Disclosure Document for all Tax purposes. This allocation shall be appropriately adjusted to reflect any increase or decrease in the Purchase Price under Section 2.5. The Parties shall use this allocation for all Tax purposes. Each of the Parties shall file Internal Revenue Service Form 8594 with its applicable federal income Tax Return (or the federal income Tax Return of the consolidated group) as required by Law. Each of the Selling Parties, on the one hand, and the Purchasing Parties, on the other hand, shall provide the other with such assistance as is reasonably necessary to satisfy its reporting obligations under Section 1060 of the Internal Revenue Code of 1986, as amended through the date of this Agreement, and the related Treasury Regulations (the "Code"), including as a result of adjustments to the Closing Purchase Price under Section 2.4. For purposes of this Agreement, "Treasury Regulations" means the income tax regulations, including temporary regulations, promulgated under the Code. If any Party receives a notice from a Governmental Authority disputing its allocation of the Adjusted Purchase Price and the Assumed Obligations, the Party receiving the notice shall promptly notify the other Parties and forward to the other Parties copies of all correspondence with the Governmental Authority in respect of the disputed allocation.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SELLING PARTIES

Each of the Selling Parties represents and warrants to the Purchasing Parties as set forth below in this Article III, as of the date of this Agreement and as of the Closing Date. For purposes of this Section III, "Knowledge" of the Selling Parties means the actual knowledge of each Person listed in Section 3 of the Disclosure Document and such facts and other matters as any of those Persons should reasonably be aware of in light of that Person’s position with a Selling Party and upon reasonable inquiry of the personnel of the Selling Parties.

9

3.1   Existence and Good Standing . Each of the Selling Parties is a corporation duly organized, validly existing and in good standing under the laws of Michigan. Each of the Sellers has all requisite corporate power and authority to own, lease and operate its assets and to conduct its business as it is currently conducted, and is duly qualified to transact business as a foreign corporation and is in good standing in each jurisdiction in which its assets are owned, leased or operated by it or the nature of the operation of its business requires it to qualify to transact business as a foreign corporation. The jurisdictions in which each Seller is so qualified are set forth in Section 3.1 of the Disclosure Document.

3.2   Due Authorization . Each of the Selling Parties has all requisite corporate power and authority to execute, deliver and perform this Agreement and the Ancillary Agreements to which it is a party and to consummate the transactions described in this Agreement and the Ancillary Agreements. For purposes of this Agreement, "Ancillary Agreements" shall mean the Assignment and Assumption Agreement, the Bill of Sale, the General Warranty Deeds, the Escrow Agreement and all other documents to be delivered pursuant to the terms of this Agreement or the terms of any of the aforementioned agreements. Except for approval by the stockholders of Maxco (the "Stockholder Approval"), the execution, delivery and performance by each of the Selling Parties of this Agreement and the Ancillary Agreements to which it is a party and the consummation by each of the Selling Parties of the transactions described in this Agreement and the Ancillary Agreements have been duly and validly authorized by all necessary corporate action on the part of the Selling Parties and no other corporate actions or proceedings on the part of any Selling Party are necessary to authorize the execution, delivery and performance by each of the Selling Parties of this Agreement and the Ancillary Agreements to which it is a party or the transactions described in this Agreement and the Ancillary Agreements. Each of the Selling Parties has duly and validly executed and delivered this Agreement and has duly and validly executed and delivered (or before or at the Closing shall duly and validly execute and deliver) the Ancillary Agreements to which it is a party. This Agreement constitutes, and upon execution and delivery (assuming due execution and delivery by all other applicable Parties), the Ancillary Agreements to which each Selling Party is a party shall constitute, legal, valid and binding obligations of that Selling Party, enforceable against it in accordance with their terms, except as may be limited by (a) applicable bankruptcy, insolvency, moratorium, reorganization or similar Laws in effect that affect creditors’ rights generally; or (b) principles of equity, including legal or equitable limitations on the availability of specific remedies.

3.3   Corporate Organization . Maxco owns all of the outstanding capital stock of AAI. AAI owns all of the outstanding capital stock of BCGW. AAI’s only subsidiary is BCGW, and AAI is not a partner, member or holder of any equity interest of any other Person. BCGW has no subsidiaries and is not a partner, member or holder of any equity interest of any other Person.

3.4   Consents . Except for the Stockholder Approval, the Consents described in Section 3.4 of the Disclosure Document or as set forth in Section 4.3 of the Disclosure Document, no consent, authorization, order or approval of, or filing or registration with, or notification to any Person ("Consent") is required in connection with the execution, delivery and performance of this Agreement and the Ancillary Agreements by the Selling Parties, the consummation of the transactions described in this Agreement or the Ancillary Agreements or the conduct of the businesses of the Sellers after the Closing in substantially the same manner presently conducted.

10

3.5   Absence of Conflicts . Neither the execution and delivery of this Agreement or any of the Ancillary Agreements to which a Selling Party is a party, nor the consummation of the transactions (subject to obtaining Consents described in Section 3.4) described in this Agreement or the Ancillary Agreements, will result in the creation of, or adverse change in, any Encumbrance on any of the Purchased Assets or violate, conflict with or result in the breach of (a) the charter, bylaws or other organizational documents of a Selling Party; or (b) any judgment, decree or order of any Governmental Authority to which a Selling Party is subject or by which a Selling Party or the business or assets of a Selling Party are bound; (c) any requirements of Laws applicable to a Selling Party or to the business or the assets of a Selling Party; (d) any Contracts to which a Selling Party is a party or by which the business or assets of a Selling Party are bound or (e) any Permit or AAI Benefit Plan. For purposes of this Agreement, "Governmental Authority" means the government of the United States or any other country, or any state, provincial, county, city, township or other political subdivision of the United States or any other country, and any entity, body, court or other authority exercising executive, legislative, judicial, regulatory, taxing or administrative functions of, or pertaining to, government; "Law" means any law, statute, code (including the Code), regulation, ordinance, or rule enacted or promulgated by any Governmental Authority and shall include the prevailing judicial or administrative interpretation of any of the foregoing; and "Permits" means permits, tariffs, authorizations, licenses, certificates, variances, consents, interim permits, approvals, franchises and rights under any Law or otherwise issued or required by any Governmental Authority and any applications for any of the foregoing that are required by Law for the Sellers to engage in their businesses.

3.6   Financial Statements . Section 3.6 of the Disclosure Document sets forth true, complete and correct copies of (a) the audited consolidated balance sheet of AAI as of March 31, 2006, and the related statements of income and cash flow for the year ended March 31, 2006, and (b) the unaudited consolidated balance sheet of AAI as of October 31, 2006, and the related statements of income and cash flow for the seven months ended October 31, 2006 (the "AAI Financial Statements"). The Baseline Working Capital Amount and the AAI Financial Statements have been prepared in accordance with GAAP and fairly present the financial position of the Sellers as of their dates and the results of operations for the periods covered by them. The unaudited financial statements referred to in the first sentence of this Section 3.6 and the Baseline Working Capital Amount have been prepared on a basis consistent with the audited financial statements referred to in that sentence and the audited financial statements of Maxco contained in its Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on July 14, 2006. Since March 31, 2006, there has been no material adverse change to the financial condition, results of operations, business, properties, assets or liabilities of either Seller or the business of either Seller.

3.7   Title to Assets .

(a)   Except as set forth in Section 3.7(a) of the Disclosure Document and other than the Owned Real Property, which is addressed in Section 3.7(b), AAI or BCGW (as applicable) has, and as of the Effective Time the Purchaser shall have, good, valid and marketable title to all of the Purchased Assets free and clear of all Encumbrances, other than Permitted Encumbrances. For purposes of this Agreement, "Encumbrance" means any charge, claim, condition, equitable interest, lien, option, pledge, security interest, mortgage, judgment, attachment, restriction on transfer, right of way, easement, encroachment, servitude, right of first option, right of first refusal, or similar restriction or encumbrance, and "Permitted Encumbrance" means (i) liens of mechanics, carriers, workmen or repairmen or other like liens arising or incurred in the ordinary course of business that have not yet become due and payable; (ii) liens for Taxes, assessments and other governmental charges that are not due and payable or that may be paid without penalty; (iii) other ordinary imperfections of title that do not have a material adverse effect on the assets as to which the imperfection of title applies; and (iv) those Encumbrances specifically identified in Section 3.7(a) of the Disclosure Document as permitted encumbrances.

11

(b)   Except as set forth in Section 3.7(b) of the Disclosure Document, the only real property now or in the past owned or leased (as lessor or as lessee) by AAI, or now or within the last nine years owned or leased (as lessor or lessee) by BCGW, is the Owned Real Property. Either AAI or BCGW (as applicable) has good, valid and marketable fee title to the Owned Real Property, free and clear of all Encumbrances, other than Permitted Encumbrances. Except for AAI or BCGW, as applicable, there are no persons in possession or occupancy of any part of the Owned Real Property or the Facilities, or who have possessory rights with respect to any part of the Owned Real Property or the Facilities. None of the Selling Parties has received any notice of any alleged violations of or liability under any applicable Law within the last nine years with respect to any part of the Owned Real Property or the Facilities or the operation of any part of the Owned Real Property or the Facilities, except as described in Section 3.16 of the Disclosure Document. There is no existing, pending or, to the Knowledge of the Selling Parties, threatened or anticipated, condemnation or other taking of all or any part of the Owned Real Property or the Facilities. Except for the lease agreements between AAI and BCGW as to the Owned Real Property, true and correct copies of which have been provided to the Purchasing Parties, neither Seller is a party to any lease or rental agreement with respect to any real property (whether as lessee or lessor) or any buildings, structures, improvements, plants, offices, facilities, or fixtures located on any real property.

(c)   There is no existing Contract with, option or right of, or commitment to any Person to acquire any of the Purchased Assets or any interest in any of the Purchased Assets other than Contracts entered into in the ordinary course of business consistent with past practices for the sale of Inventory.

3.8   Compliance with Laws; Permits . Section 3.8 of the Disclosure Document sets forth a list entitled Permits which contains a list of all Permits currently held by (a) a Seller or (b) any other Person with respect to the business of either Seller. Each Permit described in Section 3.8 of the Disclosure Document is valid and current. There has been no violation of any of the requirements pertaining to those Permits. Neither the execution and delivery of this Agreement nor, subject to either obtaining the Consents described in Section 3.4 for the transfer or reissuance of the Permits, the consummation of the transactions described in this Agreement will cause any of the Permits described in Section 3.8 of the Disclosure Document to terminate, to become null or void, or to be otherwise adversely affected. All Permits necessary to conduct the businesses of the Sellers have been acquired and are in full force and effect. Except as set forth in Section 3.8 of the Disclosure Document, to the Selling Parties’ Knowledge, the businesses of the Sellers are, and for the last nine years have been conducted in compliance with all applicable Laws. Except as set forth in Section 3.8 of the Disclosure Document, to the Selling Parties’ Knowledge, all required action to be in compliance with all applicable Laws has been completed to the extent that at any time in the past the businesses of the Seller have not been in compliance with all applicable Laws. No currently existing condition, circumstance or event reasonably could be expected to result in any future expenditure to maintain those businesses in compliance with requirements of Law.

12

3.9   Taxes .

(a)   All Taxes (whether or not shown on any Tax Return) relating to the Purchased Assets that are due and payable have been or will be paid in full on or before the Closing Date. Except for Permitted Encumbrances, (i) there are no Encumbrances for Taxes on any of the Purchased Assets and (ii) no claim for unpaid Taxes has been made by any Governmental Authority that could give rise to any such Encumbrance. For purposes of this Agreement, "Tax" (and, with correlative meaning, " Taxes " and " Taxable ") means (a) all federal, state, provincial, county, local or foreign taxes, charges, fees, duties (including customs duties), levies or other assessments, including income, gross receipts, net proceeds, ad valorem, turnover, real and personal property (tangible and intangible), sales, gains, use, franchise, excise, value added, alternative, add-on minimum, stamp, leasing, lease, user, transfer, fuel, excess profits, occupational, interest equalization, windfall profits, license, payroll, environmental, capital stock, disability, severance, employee’s income withholding, other withholding, unemployment and Social Security taxes, which are imposed by any Governmental Authority, including any interest, penalties, fines or additions to tax attributable to or associated with any of the foregoing (whether or not disputed); (b) any liability for the payment of any item described in clause (a) of this definition as a result of being a member of an affiliated, consolidated, combined or unitary group for any period, including pursuant to Treasury Regulations Section 1.1502-6 or any other analogous or similar law; (c) any liability for the payment of an item described in clause (a) or (b) of this definition as a result of any express or implied obligation to indemnify any Person as a result of any obligation under any agreements or arrangements with any Person with respect to such item; and (d) any successor liability for the payment of any item described in clause (a), (b) or (c) of this definition, including by reason of being a party to any merger, consolidation, conversion or otherwise; and "Tax Return" means any report, return (including any information return), statement, form, declaration, election certificate or other document or information filed with, submitted to, or required to be filed with or submitted to any Governmental Authority in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Law relating to any Tax.

(b)   The Selling Parties have withheld or collected and paid over to the appropriate Governmental Authority all Taxes required by applicable Law to be withheld or collected by them and have properly received and maintained any and all certificates, forms and other documents required by applicable Law for any exemption from withholding and remitting any Taxes.

(c)   Except as disclosed in Section 3.9 of the Disclosure Document, no Selling Party is under audit or examination by any Governmental Authority with respect to any Tax relating to the Purchased Assets, and no notice of such an audit or examination has been received, and the Selling Parties have no Knowledge of any threatened audits, investigations or claims for or relating to such Taxes.

13

(d)   None of the Assumed Obligations includes: (i) an obligation to make a payment to any Person under any Tax allocation or Tax-sharing agreement; (ii) an obligation to pay the Taxes of any Person as a transferee or successor, by Contract or otherwise, including an obligation under Treasury regulations Section 1.1502-6 (or any similar provision of state, local or foreign Law); (iii) an obligation under any record retention, transfer pricing, closing or other agreement or arrangement with any Governmental Authority that will survive the Closing or impose any liability on any Purchasing Party after the Closing; or (iv) an obligation under any Contract to indemnify, gross up or otherwise compensate any Person, in whole or in part, for any excise Tax under Section 4999 of the Code that is imposed on such Person or any other Person.

(e)   None of the Purchased Assets is property that is treated or will be required to be treated as being owned by another Person pursuant to the provisions of Section 168(f)(8) of the Code (as in effect before amendment by the Tax Reform Act of 1986) or is "tax-exempt use property" within the meaning of Section 168(h) of the Code.

(f)   None of the Purchased Assets includes any stock, partnership interests, limited liability company interests, legal or beneficial interests or any other equity interests in or of any Person, and none of the Purchased Assets is subject to any Tax partnership Contract or other Contract requiring a partnership income Tax Return to be filed under Subchapter K of Chapter 1 of Subtitle A of the Code.

(g)   No Selling Party is a "foreign person" within the meaning of Section 1445 of the Code.

3.10   Litigation . Except for those matters described in Section 3.10 of the Disclosure Document, there is no legal, administrative or arbitration proceeding, suit, action, claim, order, investigation, inquiry, judgment, writ, injunction, award, judgment or decree in, by or before any Governmental Authority ("Litigation") pending or, to the Knowledge of the Selling Parties, threatened or contemplated against a Selling Party with respect to the businesses of the Sellers. None of the Litigation described in Section 3.10 of the Disclosure Document could reasonably be expected to have an effect on the businesses of the Sellers or any of the Purchased Assets that could (a) enjoin, restrict or prohibit the transfer of any of the Purchased Assets, (b) prevent a Selling Party from fulfilling all of its obligations set out in this Agreement or arising under this Agreement or any Ancillary Agreement, or (c) reasonably be expected to result in a Material Adverse Effect. For purposes of this Agreement, "Material Adverse Effect" means any event, circumstance, change or effect that has a material and adverse effect on the business, operations or financial condition of the Sellers, taken as a whole.

3.11   Brokers . None of the Selling Parties nor any Affiliate of a Selling Party has used any broker or finder other than GBQ Consulting LLC, in connection with the transactions described in this Agreement. Neither of the Purchasing Parties nor any Affiliate of a Purchasing Party shall have any liability or otherwise suffer   or incur any Loss as a result of or in connection with any brokerage or finder’s fee or other commission of any Person retained by any of the Selling Parties or any Affiliate of a Selling Party in connection with any of the transactions described in this Agreement or any of the Ancillary Agreements. For purposes of this Agreement, "Affiliate" means, with respect to any specified Person, any other Person who, directly or indirectly, owns or controls, is under common ownership or control with, or is owned or controlled by, the specified Person. Without limiting the generality of the foregoing, a Person shall be deemed to "own" another Person if it owns, directly or indirectly, more than 50% of the capital stock or other equity interest of the other Person generally entitled to vote, without regard to specified contingencies, for the election of directors or equivalent governing body of the other Person.

14

3.12   Contracts .

(a)   All Material Contracts relating to the businesses conducted by the Sellers to which a Seller is a party are listed in Section 3.12 of the Disclosure Document. To the Knowledge of the Selling Parties, there are no Material Contracts to which neither Seller is a party but as to which either Seller is a third-party beneficiary. A "Material Contract" means a Contract (i) the term of which extends beyond the one-year anniversary date of this Agreement; (ii) that obligates either Seller to future expenditures of $50,000 or more (or assets having that value); (iii) that entitles either Seller to future receipts of $50,000 or more (or assets having that value); or (iv) the lack of which would have a Material Adverse Effect.

(b)   Each Material Contract is in full force and effect and is the valid and binding obligation of either Seller, as applicable, and, to the Knowledge of the Selling Parties, the other parties to it. Neither Seller, and, to the Knowledge of the Selling Parties, no other party to any Material Contract is in breach of any Material Contract and no default exists under any Material Contract. The Selling Parties have provided the Purchasing Parties with true, complete and correct copies of or access to all written Material Contracts and all extensions, amendments and schedules to them and a written description of all Material Contracts that are not in writing. Except for the AAI Benefit Plans, neither Seller has any Contract with any director, officer, employee or Affiliate of either Seller or of any Affiliate of either Seller. Neither Seller has affirmatively waived any right under any Material Contract. Each Seller is in substantial compliance with all purchase orders and sales orders to the extent it is obligated to perform under those orders. Neither Seller has, expressly or by operation of law, assumed or undertaken any liability of any other Person.

3.13   Employment Matters .

(a)   Section 3.13(a) of the Disclosure Document sets forth a true and correct list of each Business Employee, together with each Business Employee’s title or job description, work location and annual salary or hourly wage rate as of the date of this Agreement.

(b)   Except as set forth in Section 3.13(b) of the Disclosure Document:

(i)   Neither Seller is a party to any collective bargaining or similar agreement with respect to Business Employees.

(ii)   Each Seller and each Affiliate of a Seller is in substantial compliance with all Laws applicable to the businesses of the Sellers or the Business Employees with respect to employment and employment practices, terms and conditions of employment, wages and hours, and occupational safety and health, and is not engaged in any unfair labor or unfair employment practices.

15

(iii)   There is no unfair labor practice charge or complaint against either Seller or any Affiliate of either Seller involving or related to Business Employees pending (with service of process having been made, or written notice of investigation or inquiry having been served, on a Selling Party or any Affiliate of a Selling Party), or to the Knowledge of the Selling Parties threatened (or pending without service of process having been made, or written notice of investigation or inquiry having been served, on a Selling Party or any Affiliate of a Selling Party), before the National Labor Relations Board or any court.

(iv)   There is no labor strike, or other material dispute, slowdown or stoppage pending against either Seller or an Affiliate of a Seller involving or related to any Business Employee.

(v)   No union certification or decertification petition has been filed (with service of process having been made on either Seller or any Affiliate of a Seller), or to the Knowledge of the Selling Parties threatened (or pending without service of process having been made on either Seller or any Affiliate of a Seller), that relates to Business Employees, and no union authorization campaign has been conducted, in each case, within the past 24 months.

(vi)   No grievance proceeding or arbitration proceeding arising out of or under any collective bargaining agreement is pending (with service of process having been made on either Seller or any Affiliate of either Seller), or to the Knowledge of the Selling Parties threatened (or pending without service of process having been made on a Seller or any Affiliate of a Seller), against either Seller or any Affiliate of a Seller involving or related to any Business Employee.

(vii)   There are no charges, investigations, administrative proceedings or formal complaints of discrimination (including discrimination based on sex, sexual harassment, age, marital status, race, national origin, sexual preference, handicap, disability or veteran status) pending (with service of process having been made, or written notice of investigation or inquiry having been served, on either Seller or any Affiliate of a Seller), or to the Knowledge of the Selling Parties threatened (or pending without service of process having been made, or written notice of investigation or inquiry having been served, on a Seller or any Affiliate of a Seller), before the Equal Employment Opportunity Commission or any federal, state or local agency or court against a Seller or any Affiliate of a Seller involving or related to any Business Employee.

(viii)   There are no charges, investigations, administrative proceedings or formal complaints of overtime or minimum wage violations involving the business of either Seller pending (with service of process having been made, or written notice of investigation or inquiry having been served on either Seller or any Affiliate of a Seller), or to the Knowledge of the Selling Parties threatened (or pending without service of process having been made, or written notice of investigation or inquiry having been served, on either Seller or any Affiliate of a Seller), before the Department of Labor or any other Governmental Authority.

16

(ix)   There are no citations, investigations, administrative proceedings or formal complaints of violations of local, state or federal occupational safety and health laws pending (with service of process having been made, or written notice of investigation or inquiry having been served, on either Seller or any Affiliate of a Seller), or to the Knowledge of the Selling Parties pending without service of process having been made, or written notice of investigation or inquiry having been served, on either Seller or any Affiliate of a Seller before the Occupational Safety and Health Administration or any Governmental Authority against either Seller or any Affiliate of either Seller involving or related to the businesses of the Sellers.

(c)   The businesses of the Sellers have employees sufficient to operate those businesses in the ordinary course consistent with past practices. During the last year, other than changes in the ordinary course of operation of the business of each of the Sellers, consistent with past practices, no material changes have occurred in the work force of those businesses, including material employee terminations, employee transfers in or out, employee leasing arrangements, secondments, reallocations of duties and outsourcing of duties or functions.

3.14   Employee Benefit Matters .

(a)   Section 3.14 of the Disclosure Document sets forth a true, complete and accurate list of all AAI Benefit Plans. The Selling Parties have delivered to or made available for review by the Purchasing Parties, a complete and accurate copy of (i) each AAI Benefit Plan, (ii) the trust, group annuity Contract or other document that provides the funding for each AAI Benefit Plan, (iii) the three most recent annual Form 5500 reports for each AAI Benefit Plan, (iv) the most current summary plan description, booklet, or other descriptive written materials, and each summary of material modifications prepared after the last summary plan description for each AAI Benefit Plan, (v) the most recent IRS determination letter and all rulings or determinations requested from the IRS after the date of that determination letter with respect to each AAI Benefit Plan, (vi) the most recent statement filed with the Department of Labor pursuant to 29 U.S.C. § 2520.104-23 with respect to each AAI Benefit Plan, (vii) if applicable, a written summary of the legal basis for an exemption from the obligation to file annual Form 5500 reports with respect to each AAI Benefit Plan and (viii) all other correspondence from the Internal Revenue Service or the Department of Labor received by a Selling Party that relates to any AAI Benefit Plan with respect to any matter, audit or inquiry that is pending. For purposes of this Agreement, "AAI Benefit Plan" shall mean (a) any employee welfare benefit plan or employee pension benefit plan as defined in sections 3(1) and 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), including a plan that provides retirement income or results in deferrals of income by employees for periods extending to their terminations of employment or beyond, and a plan that provides medical, surgical or hospital care benefits or benefits in the event of sickness, accident, disability, death or unemployment and (b) any other employee benefit agreement or arrangement that is not an ERISA plan, including any deferred compensation plan, incentive plan, bonus plan or arrangement, stock option plan, stock purchase plan, stock award plan, golden parachute agreement, severance pay plan, dependent care plan, cafeteria plan, employee assistance program, scholarship program, employment contract, retention incentive agreement, noncompetition agreement, consulting agreement, confidentiality agreement, vacation policy, or other similar plan, agreement or arrangement that is maintained by a Seller, was maintained by a Seller within three years of the date of this Agreement or has been approved by a Seller but is not yet effective, for the benefit of one or more Business Employees or their beneficiaries. No Selling Party is required to file any 990 or 1041 reports with respect to any AAI Benefit Plan.

17

(b)   No Seller has any liability for any failure to operate and administer any AAI Benefit Plan in compliance with its provisions and applicable Law. There is no litigation, action, legal proceeding, investigation or claim asserted or, to the Knowledge of the Selling Parties, threatened or contemplated, with respect to any AAI Benefit Plan (other than the payment of benefits in the normal course).

(c)   All AAI Benefit Plans that are intended and required to qualify under Section 401(a) of the Code, as identified in Section 3.14 of the Disclosure Document, either (i) have been determined by the IRS to be qualified under Section 401(a) of the Code or (ii) have applicable remedial amendment periods that will not have ended before the Closing. No facts have occurred that if known by the Internal Revenue Service could reasonably be expected to result in the disqualification of any of those plans.

(d)   No pension benefit plan (as defined in Section 3(2) of ERISA) that is maintained or contributed to by a Seller or any ERISA Affiliate of a Seller or with respect to which a Seller or an ERISA Affiliate of a Seller may have any liability had an accumulated funding deficiency as defined in Section 302 of ERISA and Section 412 of the Code, whether or not waived, as of the last day of the most recent fiscal year of the plan ending on or before the Closing Date. For purposes of this Agreement, "ERISA Affiliate" means the Sellers and all other trades or businesses, whether or not incorporated, which together with the Sellers would be deemed a "single employer" within the meaning of Section 414(b), (c) or (m) of the Code.

(e)   Neither Seller nor any entity that was at any time during the last six years an ERISA Affiliate of a Seller has ever maintained, contributed to, had an obligation to contribute to, or incurred any liability with respect to a plan that is or was either (i) a pension benefit plan (as defined in Section 3(2) of ERISA) that is or was subject to Title IV of ERISA, or (ii) a multiemployer plan (as defined in Section 3(37) of ERISA).

(f)   No employee welfare benefit plan (as defined in Section 3(1) of ERISA) maintained by any of the Selling Parties provides medical, surgical, hospitalization or life insurance benefits (whether or not insured by a third party) for employees or former employees of either Seller for periods extending beyond their retirements or other terminations of service, other than coverage mandated by the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"); and neither Seller has made any commitment to provide retiree medical, surgical, hospitalization or life insurance coverage for any current or former employee or directors of either Seller (except as required by COBRA). To the extent applicable, all AAI Benefit Plans have been operated in compliance with COBRA, and the Selling Parties (or one of their ERISA Affiliates) intends to continue to maintain a group health plan as defined in Section 5000(b) of the Code other than a flexible spending account arrangement described in Section 125 of the Code and the Treasury Regulations ("Group Health Plan") after the Closing.

3.15   Intellectual Property .

18

(a)   Except as set forth in Section 3.15 of the Disclosure Document, each Seller owns, or possesses legally enforceable rights to use, free and clear of all Encumbrances, all Intellectual Property used in connection with its business ("AAI Intellectual Property"). For purposes of this Agreement, "Intellectual Property" shall mean intellectual property of every kind and nature, including all inventions, information, data, samples, formulae, specifications, plans, drawings, blueprints, compositions, processes, designs, technology, know-how, confidential information and trade secrets (whether or not patentable or reduced to practice), confidential or proprietary technical and business information, computer software, domain names, United States and foreign patents and petty patents (including continuations, continuations-in-part, divisions, reissues, re-examinations, extensions and renewals), patent applications, registered and unregistered trade names, brand names, trademarks, service names, service marks, logos and designs (and applications for registration of the same), all goodwill symbolized by or associated with any of them, copyrights and copyright registrations (and applications for the same), extensions, renewals of United States and foreign registrations and applications to register copyrights, technical manuals and documentation made or used in connection with any of the foregoing, and any and all rights associated therewith. Section 1.1(e) of the Disclosure Document sets forth an accurate and complete list of (i) all patents and patent applications and all registered and unregistered trademarks, trade names and service marks, registered copyrights and domain names owned by either Seller and used in the operation of its business ("Registered Intellectual Property"), (ii) all licenses, sublicenses and other agreements pursuant to which any Person is authorized to use any of the AAI Intellectual Property and (iii) all licenses, sublicenses and other agreements pursuant to which either Seller is authorized to use any Person’s Intellectual Property in its business (other than commercial software).

(b)   To the Knowledge of the Selling Parties, the operation of the businesses of the Sellers, including the design, d