MEMBERSHIP PURCHASE AGREEMENT

LLC Membership Agreement

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This LLC Membership Agreement involves

ASAP INVESTORS, LLC | CAROLINA INVESTMENT COMPANY, LLC | CRG INVESTORS, LLC | DD&F, Inc | Deschenes Group, Inc | Hilltop Holdings, Inc | MSUM, Inc | Recycle South, LLC | SDM, Inc | SNA Enterprises, Inc | St Andrews Enterprises, Inc | STEEL DYNAMICS, INC

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Title: MEMBERSHIP PURCHASE AGREEMENT
Governing Law: Indiana Date: 6/16/2008
Industry: Iron and Steel Sector: Basic Materials

MEMBERSHIP PURCHASE AGREEMENT, Parties: asap investors llc , carolina investment company llc , crg investors llc , dd&f inc , deschenes group inc , hilltop holdings inc , msum inc , recycle south llc , sdm inc , sna enterprises inc , st andrews enterprises inc , steel dynamics inc

Exhibit 10.8

[EXECUTION COPY]

MEMBERSHIP PURCHASE AGREEMENT

BY AND AMONG

CAROLINA INVESTMENT COMPANY, LLC,

STEEL DYNAMICS, INC.,

ASAP INVESTORS, LLC,

CRG INVESTORS, LLC,

RECYCLE SOUTH, LLC

THE SELLER MEMBERS ON EXHIBIT A AND

THE INDIVIDUAL OWNERS ON EXHIBIT B

Table of Contents

Article I – Definitions			1
	1.1	Defined Terms	1

Article II – Purchase and Sale			12
	2.1	Membership Interest Purchase	12
	2.2	Purchase Price	12
	2.3	Payment of Purchase Price	12

Article III – Representations and Warranties of the Sellers and Equity Owners			12
	3.1	Organization and Good Standing	12
	3.2	No Conflict	13
	3.3	Capitalization	14
	3.4	Financial Statements	14
	3.5	Books and Records	15
	3.6	Owned Property	15
	3.7	Leased Property	16
	3.8	Condition and Sufficiency of Assets	17
	3.9	Accounts Receivable	17
	3.10	Inventories	17
	3.11	Liabilities	17
	3.12	Taxes	18
	3.13	Customers and Suppliers	19
	3.14	Employee Benefit Plans	19
	3.15	Compliance with Legal Requirements; Governmental Authorizations	23
	3.16	Legal Proceedings; Orders	24
	3.17	Absence of Certain Changes and Events	25
	3.18	Applicable Contracts; No Defaults	26
	3.19	Insurance	28
	3.20	Environmental Matters	28
	3.21	Employees	31
	3.22	Labor Relations; Compliance	31
	3.23	Intellectual Property	31
	3.24	Relationships with Affiliates	33
	3.25	Brokers or Finders	33
	3.26	Recently Acquired Assets	33
	3.27	Disclosure	33

Article IVA – Representations and Warranties of ASAP Investors and Its
	Equity Owners		33
	4A.1	Status and Authority	33
	4A.2	Validity	34

	4A.3	Violations and Approvals	34
	4A.4	Ownership of ASAP Investors	34

Article IVB – Representations and Warranties of CRG Investors and Its
	Equity Owners		34
	4B.1	Status and Authority	34
	4B.2	Validity	35
	4B.3	Violations and Approvals	35
	4B.4	Ownership of CRG Investors	35

Article IVC – Representations and Warranties of Each Equity Owner			35
	4C.1	Status and Authority	35
	4C.2	Validity	36
	4C.3	Violations and Approvals	36

Article V – Representations and Warranties of Buyer and Parent			36
	5.1	Status and Authority	36
	5.2	Validity	37
	5.3	Violations and Approvals	37
	5.4	Parent Common Stock	37
	5.5	Parent SEC Reports; Financial Statements	38
	5.6	Subsequent Events	38
	5.7	Availability of Funds	38

Article VI – Additional Agreements			38
	6.1	General	38
	6.2	Conduct of Business Pending the Closing	38
	6.3	Notices and Consents; Hart-Scott-Rodino Compliance	40
	6.4	Access	40
	6.5	Notice of Developments	41
	6.6	Exclusivity	41
	6.7	Reserved	41
	6.8	Leases	41
	6.9	Title Insurance and Surveys	41
	6.10	Confidentiality; Publicity	43
	6.11	Appointment of Representatives	43
	6.12	Interim Financial Statements	44
	6.13	Release	45
	6.14	Financing Cooperation	47
	6.15	Directors and Officers’ Indemnification and Insurance	47
	6.16	Cooperation of Buyer	48

Article VII – Post-Closing Covenants			48
	7.1	General	48
	7.2	Litigation Support	48
	7.3	Closing Date Audit; Allocations; Distributions	48
	7.4	Non-Disclosure, Non-Solicitation, Non-Competition and Other Covenants	49
	7.5	Performance Bonuses	53

Article VIII – Conditions to Obligation to Close			54
	8.1	Conditions to Buyer’s and Parent’s Obligation	54
	8.2	Conditions to the Sellers’ and the Equity Owners’ Obligations	56

Article IX – Closing			57
	9.1	Closing	57
	9.2	Deliveries at Closing by Buyer	57
	9.3	Deliveries at Closing by the Sellers	58
	9.4	Closing Agreements	58

Article X – Remedies for Breaches of this Agreement			58
	10.1	Agreement to Indemnify	58
	10.2	Survival	61
	10.3	Defense of Third Party Claims	61
	10.4	Payment of Indemnification Claims against Sellers and Equity Owners	62
	10.5	Third Party Indemnification; Subrogation	62
	10.6	Indemnification Accounted for in Distributions	63
	10.7	Exclusive Remedy	63

Article XI – Tax Matters			64
	11.1	Tax Indemnification	64
	11.2	Tax Periods Ending on or Before Closing Date	64
	11.3	Cooperation on Tax Matters	64
	11.4	Tax-Sharing Agreements	64
	11.5	Certain Taxes	65
	11.6	Purchase Price Allocation	65
	11.7	Amended Returns, etc.	65

Article XII – Termination			65
	12.1	Termination	65
	12.2	Effect of Termination	66

Article XIII – Miscellaneous			67
	13.1	No Third-Party Beneficiaries	67
	13.2	Entire Agreement	67
	13.3	Succession and Assignment	67
	13.4	Counterparts	67

iii

13.5	Headings	67
13.6	Notices	67
13.7	Governing Law	68
13.8	Amendments and Waivers	68
13.9	Severability	68
13.10	Expenses	68
13.11	Construction	69
13.12	Incorporation of Exhibits and Schedules	69
13.13	Specific Performance	69
13.14	Submission to Jurisdiction	69
13.15	Arm’s Length Negotiations; Drafting	69

	SCHEDULES
	2.2		Allocation of Purchase Price
	3.1		Foreign Qualifications
	3.2(a)		No Conflicts
	3.2(b)		Consents Required from Third Parties
	3.4		Financial Statements
	3.6(a)		Owned Real Property
	3.6(b)		Facilities Access, Utilities, Zoning
	3.7(a)		Company Real Estate Leases
	3.7(b)		Personal Property Leases
	3.8		Condition and Sufficiency of Assets
	3.9		Company Accounts Receivable
	3.10		Inventories
	3.11		Liabilities
	3.12(a)		Extensions of Time to File Tax Returns
	3.12(b)		Extensions, Waivers of Statutes of Limitations Regarding Tax Returns
	3.12(c)		Other Tax Matters
	3.13(a)		Company Customers
	3.13(b)		Company Suppliers
	3.14(c)		Identification of Company Benefit Plans
	3.14(d)		Compliance with All Statutes, Orders and Rules
	3.14(e)		MEPPA & Title IV Liability/Post Retirement Medical Benefits
	3.14(f)		Documents Regarding Company Benefit Plans
	3.14(g)		Administrative Compliance
	3.14(h)		Legal Actions Regarding Company Benefit Plans
	3.14(i)		Funding of Company Benefit Plans
	3.14(j)		Liabilities Regarding Benefit Plans
	3.14(k)		No Acceleration of Liability under Benefit Plans
	3.14(l)		COBRA Continuees
	3.14(m)		Amendment and Termination of Company Benefit Plans

	3.14(n)		Deferred Compensation Plans Subject to Code §409A
	3.15(a)		Compliance with Legal Requirements
	3.15(b)		Governmental Authorizations
	3.16(a)		Litigation
	3.16(b)		Orders
	3.17		Absence of Changes Regarding the Business
	3.18(a)		Applicable Contracts
	3.18(b)		Enforceability of Material Company Contracts
	3.18(c)		Exceptions to Compliance with Applicable Contracts
	3.18(d)		Renegotiations of Applicable Contracts
	3.19		Insurance Policies
	3.20		Environmental Matters
	3.21(a)		Employment Contracts
	3.22		Labor Relations; Compliance
	3.23(b)		Contracts Regarding Company Intellectual Property Assets
	3.23(e)		Company Marks
	3.24		Relationships with Affiliates
	3.26		Recently Acquired Assets
	4A.4		Ownership of ASAP Investors
	4B.4		Ownership of CRG Investors
	6.2		Conduct of Business Pending Closing

	EXHIBITS

	A		Members of the Sellers
	B		Individual Owners
	C		Exceptions to Noncompetition and Nonsolicitation
	D		Seller’s Legal Opinion
	E		Buyer’s Legal Opinion
	F		Escrow Agreement
	G		Real Estate Purchase Agreements
	H		Shareholders Agreement

MEMBERSHIP PURCHASE AGREEMENT

This Membership Purchase Agreement ( “Agreement” ) is made and entered into as of May 8, 2008, by and among ASAP Investors, LLC ( “ASAP Investors” ), CRG Investors, LLC ( “CRG Investors” ) (ASAP Investors and CRG Investors may individually be referred to as a “Seller” and collectively as the “Sellers” ), the Persons listed on Exhibit A and identified as the members of each of the Sellers (individually, a “Seller Member,” and collectively, the “Seller Members” ), the individuals or estates listed on Exhibit B and identified as the shareholders or equity owners of the Seller Members (individually, an “Individual Owner,” and collectively, the “Individual Owners” ) (the Seller Members and the Individual Owners may individually be referred to as an “Equity Owner” and collectively as the “Equity Owners” ), Carolina Investment Company, LLC ( “Buyer” ), Steel Dynamics, Inc. ( “Parent” ), and Recycle South, LLC (the “Company” ).

This Agreement is entered into under the following circumstances:

a. The Sellers and Buyer are the members of the Company and own 100% of the issued and outstanding equity and membership interest in the Company.

b. Sellers have agreed to sell and Buyer has agreed to purchase all the Sellers’ equity and membership interest in the Company.

c. The Equity Owners acknowledge and agree that (i) the Equity Owners will benefit by the sale and purchase of the Sellers’ equity and membership interest in the Company, (ii) the Equity Owners will receive the sale proceeds of such sale directly or indirectly, (iii) the Equity Owners will receive consideration to support their covenants and other obligations under this Agreement, (iv) Buyer would not have entered into this Agreement if the Equity Owners do not become parties hereto, and (v) the Equity Owners’ obligations and covenants with respect to non-competition will be incurred in connection with the sale of a business of which they are direct or indirect owners.

NOW, THEREFORE, in mutual consideration of the promises contained herein, the Parties agree as follows:

ARTICLE I – DEFINITIONS

1.1 Defined Terms. The following terms when used in this Agreement (including the Exhibits and the Schedules ) have the meaning set forth below:

“2004 Prior Agreement” means the Membership Purchase Agreement by and among Industrial Acquisition Corporation, Spartan Iron and Metal Corporation of Spartanburg, S.C., Spartan Iron and Metal Corporation of Wellford, S.C., K&W Recycling, Inc., Carolina Scrap Processors, Inc., James W. Knight, Jr., Thomas E. Davis, Larry E. Seay, Michael E. Munafo, Carolina Investment Company, LLC, and Carolinas Recycling Group, LLC, dated June 18, 2004.

“2007 Prior Agreement” means the Consolidation Agreement and Plan of Merger by and among Atlantic Scrap & Processing, LLC, Carolinas Recycling Group, LLC, Carolina Investment Company, LLC, CRG Investors, LLC, ASAP Investors, LLC, the ASAP Investors described therein, the CRG Investors described therein, and South Atlantic Recycling Group, LLC, dated August 31, 2007.

“Acquired Companies” means Recycle South, LLC, Carolinas Recycling Group, LLC, and ASAP-Wilmington, LLC.

“Affiliate” of a Person means any other Person who directly or indirectly controls, is controlled by, or is under common control with, the specified Person. For purposes of the preceding sentence, “control” of a Person means possession, directly or indirectly (through one or more intermediaries or other means), of the power to direct or cause the direction of management and policies of that Person through the ownership of voting securities (or any other interest or interests), contract or other means.

“Agreement” means this Agreement and all Exhibits and Schedules hereto, as the same may be amended or modified in accordance with the terms hereof.

“Applicable Contract” means any contract to which an Acquired Company is a party.

“Applicable Term” means, for purposes of Section 7.4, (i) as it applies to each Seller and all the Equity Owners other than the Griffin and Gordon Individual Owners, the period of time beginning on the Closing Date and ending five (5) years thereafter, and (ii) as it applies to the Griffin and Gordon Individual Owners, the period of time beginning on the Closing Date and ending four (4) years thereafter.

“ASAP Investors” is defined in the preamble to this Agreement.

“ASAP Representative” has the meaning set forth in Section 6.11.

“ASAP–Wilmington” means Atlantic Scrap and Processing—Wilmington, LLC, a wholly owned Subsidiary of the Company.

“Business” means the business engaged in by the Acquired Companies of buying, selling, brokering, processing and transporting ferrous and non-ferrous scrap metals.

“Buyer” is defined in the preamble to this Agreement.

“Buyer Affiliated Leases” means (i) the Lease Agreement effective as of June 1, 2004 between OmniSource Athens Division, LLC and CRG, (ii) the Lease Agreement effective as of June 1, 2004 between Jackson Iron & Metal Company, Inc. and CRG, and (iii) the Sublease Agreement effective as of June 1, 2004 between OmniSource Corporation and CRG.

“Buyer’s Article VIII Certificate” has the meaning set forth in Section 8.2.

“Buyer’s Closing Certificate” has the meaning set forth in Section 9.2.

“Buyer Indemnified Parties” has the meaning set forth in Section 10.1.

“Buyer’s Legal Opinion” has the meaning set forth in Section 8.2.

“Buyer’s Resolutions Certificates” has the meaning set forth in Section 8.2.

“Cash Amount” has the meaning set forth in Section 2.2.

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601, et seq., as amended and reauthorized.

“Cleanup” has the meaning set forth in the definition of Environmental, Health, and Safety Liabilities.

“Closing” has the meaning set forth in Section 9.1.

“Closing Date” has the meaning set forth in Section 9.1.

“Closing Shares” has the meaning set forth in Section 2.2.

“Code” means the Internal Revenue Code of 1986, as amended (all citations to the Code, or to the Treasury Regulations promulgated thereunder, shall include any amendments or any substitute or successor provisions thereto).

“Company” is defined in the preamble to this Agreement.

“Company Accounts Receivable” has the meaning set forth in Section 3.9.

“Company Balance Sheet” has the meaning set forth in Section 3.4.

“Company Benefit Plan” has the meaning set forth in Section 3.14.

“Company Copyrights” has the meaning set forth in Section 3.23.

“Company Debt for Borrowed Money” has the meaning set forth in Section 3.11.

“Company ERISA Affiliate” has the meaning set forth in Section 3.14.

“Company Facilities” has the meaning set forth in Section 3.6

“Company Financial Statements” has the meaning set forth in Section 3.4.

“Company Intellectual Property Assets” has the meaning set forth in Section 3.23.

“Company Interim Balance Sheet” has the meaning set forth in Section 3.4.

“Company Leased Personal Property” has the meaning set forth in Section 3.7.

“Company Leased Real Property” has the meaning set forth in Section 3.7.

“Company Marks” has the meaning set forth in Section 3.23.

“Company Owned Real Property” has the meaning set forth in Section 3.6.

“Company Personal Property Leases” has the meaning set forth in Section 3.7

“Company Real Estate Leases” has the meaning set forth in Section 3.7.

“Company Responsible Person” means a Person such as an employee, independent contractor, landlord or agent of the Acquired Companies or the Equity Owners and for whose conduct an Acquired Company is or may be held responsible with respect to the Environmental Laws. For purposes of this Agreement, each Equity Owner shall also be deemed a Company Responsible Person.

“Company’s Customers” has the meaning set forth in Section 3.13.

“Company’s Suppliers” has the meaning set forth in Section 3.13.

“Company Trade Secrets” has the meaning set forth in Section 3.23.

“Confidential Information” shall mean any and all information concerning the Protected Business of any Acquired Company that is not readily available to the public, including but not limited to any information related to past, present or targeted suppliers and customers, methods of obtaining business, prices, expenses, profits, procedures, processes or applications developed in, by, or for the Protected Business of any Acquired Company, including projects, goals, activities or business strategies relating to the Protected Business of any Acquired Company, and the identities or addresses of any Acquired Company’s employees. Confidential Information includes, but is not limited to, trade secrets of the Acquired Companies. If any Confidential Information becomes publicly known or readily accessible through a breach of this Agreement, then for purposes of this Agreement, such Confidential Information shall continue to be treated as Confidential Information notwithstanding such disclosure.

“Containers” means barrels, drums, above-ground and under-ground storage tanks, vessels and related equipment and containers.

“Credit Agreement” means that certain Credit Agreement dated as of September 4, 2007 among the Company, the Guarantors, the Lenders, the Administrative Agent, the Co-Syndication Agents and the Sole Lead Arranger, each as described therein.

“CRG” means Carolinas Recycling Group, LLC.

“CRG Representative” has the meaning set forth in Section 6.11.

“Deductible Amount” has the meaning set forth in Section 10.1.

“Employment Agreements” has the meaning set forth in Section 8.1.

“Encumbrance” means any charge, claim, community property interest, lien, option (other than an option included within the Operating Agreement), pledge, security interest, mortgage, or right of first refusal.

“Environment” means soil, land surface or subsurface strata, surface waters (including navigable waters, ocean waters, streams, ponds, drainage basins and wetlands), groundwaters, drinking water supply, stream sediments, ambient air, plant and animal life, and any other environmental medium or natural resource.

“Environmental, Health and Safety Liabilities” means any cost, damages, expense, liability, obligation, or other responsibility arising from or under Environmental Laws or under the Occupational Safety & Health Act (29 U.S.C §651 et seq.) ( “OSHA” ) and consisting of or relating to:

a. any environmental, health, or safety matters or conditions (including on-site or off-site contamination, occupational safety and health, and regulation of chemical substances or products);

b. fines, penalties, judgments, awards, settlements, legal or administrative proceedings, damages, losses, claims, demands and response, investigative, remedial, or inspection costs and expenses arising under Environmental Laws or OSHA;

c. financial responsibility under Environmental Laws or OSHA for cleanup costs or corrective action, including any investigation, permitting, monitoring, cleanup, removal, containment, or other remediation or response actions ( “Cleanup” ) required by applicable Environmental Laws or OSHA (whether or not such Cleanup has been required or requested by any Governmental Body or any other Person) and for any natural resource damages; or

d. any other compliance, corrective, investigative, or remedial measures required under Environmental Laws or OSHA.

The terms “removal,” “remedial,” and “response action” include the types of activities covered by CERCLA.

“Environmental Laws” means all federal, state and local statutes, regulations, ordinances, and policies, all court orders and decrees and arbitration awards, and the common law, which pertain to environmental matters or contamination of any type whatsoever. Environmental Laws include those relating to: manufacture, processing, use, distribution, treatment, storage, disposal, generation or transportation of Hazardous Materials; air, surface or ground water or noise pollution; Releases; protection of wildlife, endangered species, wetlands or natural resources; Containers; health and safety of employees and other Persons; and notification requirements relating to the foregoing.

“Environmental Permits” means every license, permit, registration, governmental approval, agreement and consent applied for, pending by, issued or given to an Acquired Company, and every agreement with governmental authorities (federal, state, local or foreign)

entered into by an Acquired Company, as the case may be, which is in effect or has been applied for or is pending in each case which are required under or are issued pursuant to Environmental Laws.

“Equity Owner” is defined in the preamble to this Agreement.

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

“Escrow Agreement” means the Escrow Agreement to be entered into by the Sellers and Buyer substantially in the form of Exhibit F .

“Escrow Shares” has the meaning set forth in Section 9.2.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Excluded Representations” has the meaning set forth in Section 10.1.

“GAAP” means generally accepted accounting principles consistently applied.

“Governmental Authorization” means any approval, consent, license permit, waiver, or other authorization issued, granted, given, or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement.

“Governmental Body” means any:

a. nation, state, county, city, town, village, district, or other jurisdiction of any nature;

b. federal, state, local or municipal government; or

c. governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal).

“Griffin and Gordon Individual Owners” means those individuals identified in Exhibit B as “Griffin Individual Owners” or “Gordon Individual Owners.”

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

“Hazardous Activity” means the distribution, generation, handling, importing, management, manufacturing, processing, production, refinement, Release, storage, transfer, transportation, treatment, or use (including any withdrawal or other use of groundwater) of Hazardous Materials in, on, under, about, or from the Company Facilities, or any part thereof into the Environment.

“Hazardous Materials” means:

a. pollutants, contaminants, pesticides, radioactive substances or hazardous or extremely hazardous, special, dangerous or toxic wastes, substances, chemicals or materials within the meaning of any Environmental Law, specifically including petroleum and all derivatives thereof, polychlorinated biphenyls, and asbestos and any (i) “hazardous substance” as defined in CERCLA, and (ii) any “hazardous waste” as defined in RCRA; and

b. even if not prohibited, limited or regulated by Environmental Laws, all pollutants, contaminants, hazardous, dangerous or toxic chemical materials, wastes or any other substances, including any industrial process or pollution control waste (whether or not hazardous within the meaning of RCRA) which could pose a hazard to the environment or the health and safety of any Person).

“Indemnified Party” has the meaning set forth in Section 10.3.

“Indemnifying Party” has the meaning set forth in Section 10.3.

“Individual Owner” is defined in the preamble to this Agreement.

“Insurance Policies” has the meaning set forth in Section 6.9.

“Interest” has the meaning set forth in the Operating Agreement.

“Knowledge of the Company” and similar phrases means the actual knowledge of Frank Brenner, William Perry, Keith Rosen, Marvin Siegel, Ken Siegel, Steve Siegel, Paul Siegel, Jeff Kennedy, Kym Cleveland, and Mike Munafo.

“Legal Requirement” means any federal, state, local, foreign, municipal government or other administrative order, constitution, law, ordinance, principle of common law, regulation, statute, or treaty.

“Losses” has the meaning set forth in Section 10.1.

“Material Adverse Effect” means any effect or change that would be materially adverse to (a) the Business of the Acquired Companies taken as a whole, with respect to the Acquired Companies, and (b) Parent and its direct and indirect subsidiaries taken as a whole, with respect to Parent; provided that none of the following shall be deemed to constitute, and none of the following shall be taken into account in determining whether there has been, a Material Adverse Effect: any adverse change, event, development or effect arising from or relating to (i) general business or economic conditions, including conditions related to the scrap metal industry (or with respect to Parent, the steel industry), (ii) national or international political or social conditions, including the engagement by the United States in hostilities, or the occurrence of any military or terrorist attack upon the United States or its agencies or personnel, (iii) financial, banking or securities markets (including any disruption thereof), or (iv) the taking of any action contemplated by this Agreement or the agreements to be executed in connection herewith.

“Material Company Contract” has the meaning set forth in Section 3.18.

“Membership Interest” means all the Interest, as defined in the Operating Agreement, of the Sellers in the Company.

“Off-Site Facility” has the meaning set forth in Section 3.20(h).

“Operating Agreement” means that certain Amended and Restated Limited Liability Company Agreement of the Company dated August 31, 2007.

“Order” means any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any court, administrative agency, or other Governmental Body or by any arbitrator.

“Ordinary Course of Business” or “Ordinary Course” means an action taken by a Person will be deemed to have been taken in the “Ordinary Course of Business” only if such action is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person.

“Organizational Documents” means (a) the articles of incorporation and the bylaws of a corporation; (b) the articles of organization or similar document adopted or filed in connection with the creation, formation, or organization of a limited liability company and the operating agreement or limited liability company agreement of a limited liability company; and (c) any amendment to any of the foregoing.

“OSHA” has the meaning set forth in the definition of Environmental, Health and Safety Liabilities.

“Party” means those Persons signing this Agreement.

“Payoff Letter” has the meaning set forth in Section 8.1.

“Parent” is defined in the preamble to this Agreement.

“Parent Common Stock” has the meaning set forth in Section 2.2.

“Parent SEC Reports” means the Parent’s most recent Form 10-K and all subsequent filings by the Parent with the SEC.

“Patents” has the meaning set forth in Section 3.23.

“PBGC” has the meaning set forth in Section 3.14.

“Permits” means every license, permit, registration, governmental approval, agreement and consent applied for, pending by, issued or given to an Acquired Company and every agreement with governmental authorities (federal, state, or local or foreign) entered into by an Acquired Company which is in effect or has been applied for or is pending, exclusive of Environmental Permits.

“Permitted Encumbrances” means (a) Encumbrances for Taxes not yet due and payable, (b) Encumbrances of landlords, carriers, warehousemen, mechanics and materialmen arising in the Ordinary Course of Business securing amounts that are not delinquent or past due, (c) Encumbrances arising from governmental restrictions on use, including those arising under the securities laws, (d) immaterial easements relating to Company Facilities that do not unreasonably interfere with the use of such real estate, and (e) Encumbrances arising from or related to a Material Company Contract listed on Schedule 3.18(a) .

“Person” means an individual or a corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, or other entity of any kind.

“Pre-Closing Tax Period” has the meaning set forth in Section 11.1.

“Proceeding” means any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Body or arbitrator.

“Protected Business” shall mean (i) the business of purchasing, collecting, processing, marketing and selling ferrous and non-ferrous scrap metals, and (ii) providing consulting services with respect to any of the foregoing activities.

“Protected Parties” has the meaning set forth in Section 7.3.

“RCRA” means the Resource Conservation and Recovery Act, 42 U.S.C. Sec. 6901 et seq., as amended and reauthorized.

“Real Estate Purchase Agreements” means the “Real Estate Purchase and Sale Agreements” executed contemporaneously with, or to be executed promptly following, the execution of this Agreement, unexecuted copies of which are attached hereto and marked as Exhibit G .

“Related Person” means (a) with respect to a specified natural person, any member of that individual’s immediate family and any Affiliate of that individual or Affiliate of any member of that individual’s immediate family, and (b) with respect to an entity, any Affiliate of that entity and any member of the immediate family of any of those Affiliates who are individuals. For purposes of this definition, the “immediate family” of a specified individual means that individual’s spouse, parent, child, sibling, or spouse of a sibling (by blood or adoption), and any other individual who resides with that individual.

“Release” means any spill, discharge, leak, emission, escape, leaching, disposing, emptying, pouring, pumping, injection, dumping, or other release or threatened release of any Hazardous Materials into the environment, whether or not notification or reporting to any governmental agency was or is required, including any Release which is subject to CERCLA.

“Released Parties” has the meaning set forth in Section 6.13.

“Released Claims” has the meaning set forth in Section 6.13.

“Releasing Parties” has the meaning set forth in Section 6.13.

“Representative” has the meaning set forth in Section 6.11.

“Representatives’ Certificates” means the Sellers’ and Equity Owners’ Article VIII Certificates and the Sellers’ and Equity Owners’ Closing Certificates.

“Resignations” has the meaning set forth in Section 8.1.

“Restrictions” means any restriction on the exercise of any rights related to the Membership Interest, including without limitation, proxies, voting agreements, transfer restrictions, agreements to sell or purchase and similar items, but excluding any restrictions generally applicable to membership interests in Delaware limited liability companies, including (without limitation) those arising under the federal and state securities laws and those arising under the Delaware Limited Liability Company Act.

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Seller” is defined in the preamble to this Agreement.

“Seller Member” is defined in the preamble to this Agreement.

“Sellers’ and Equity Owners’ Article VIII Certificates” has the meaning set forth in Section 8.1.

“Sellers’ and Equity Owners Closing Certificates” has the meaning set forth in Section 9.3.

“Seller’s Legal Opinion” has the meaning set forth in Section 8.1.

“Sellers’ Resolutions Certificates” has the meaning set forth in Section 8.1.

“Shareholders Agreement” means the Shareholders Agreement to be entered into by the Sellers and Parent substantially in the form of Exhibit H .

“Subsidiary” means with respect to each Acquired Company, any corporation or other Person whose securities or other interests having the power to elect a majority of that corporation’s or other Person’s board of directors or similar governing body, or otherwise having the power to direct the business and policies of that corporation or other Person, are held by an Acquired Company.

“Super Board Approval” has the meaning set forth in the Operating Agreement.

“Survey” has the meaning set forth in Section 6.9.

“Taxes” means all federal, state, local, foreign and other net income, gross income, gross receipts, sales, use ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto, and the term “Tax” means any one of the foregoing Taxes.

“Tax Return” means any return (including any information return), report, statement, schedule, notice, form, or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection, or payment of any Tax of any Acquired Company or in connection with the administration, implementation, or enforcement of or compliance with any Legal Requirement relating to any Tax of an Acquired Company and required to be filed by an Acquired Company.

“Term” has the meaning set forth in Section 7.3.

“Territory” shall mean the State of North Carolina, the State of South Carolina, and the State of Georgia.

“Third Party Claim” has the meaning set forth in Section 10.3.

“Third Party Consent” has the meaning set forth in Section 3.2.

“Threatened” means, with respect to a claim, Proceeding, dispute, action, or other matter, that (i) a written demand or written notice of intent to commence a Proceeding has been made or delivered to an Acquired Company, and (ii) an individual listed in the definition of “Knowledge of the Company” has received, within the three (3) month time period prior to the Closing Date, an oral demand or oral notice of intent to commence a Proceeding.

“Threat of Release” means a substantial likelihood of a Release that may require action to prevent or mitigate damage to the Environment that may result from such Release.

“Title Commitments” has the meaning set forth in Section 6.9.

“Title Company” has the meaning set forth in Section 6.9.

“Title Policies” has the meaning set forth in Section 6.9.

“Transaction Expenses” means all legal, accounting, tax, financial advisory, brokers, finders and other professional or transaction expenses incurred by the Sellers and the Equity Owners in connection with the transactions contemplated by this Agreement, together with premiums for title insurance (including endorsements) obtained for the benefit of Recycle South or CRG in connection with the transactions contemplated by this Agreement; provided however, “Transaction Expenses” do not include the costs of surveys, filing fees under the Hart-Scott-Rodino Act, and environmental reports ordered by Buyer, or premiums for title insurance (including endorsements) obtained for the benefit of CRG in connection with the Real Estate Purchase Agreements, which premiums will be paid by the sellers as contemplated therein.

ARTICLE II – PURCHASE AND SALE

2.1 Membership Interest Purchase. Subject to the terms and conditions of this Agreement, at the Closing, the Sellers shall sell and Buyer shall purchase and acquire good and valid title to all the Sellers’ Membership Interest free and clear of all Encumbrances (including Permitted Encumbrances) and Restrictions.

2.2 Purchase Price. The purchase price for the Membership Interest is as follows:

a. Two Hundred Thirty-Two Million Dollars ($232,000,000.00) ( “Cash Amount” ), and

b. Three Million Nine Hundred Thirty-Eight Thousand (3,938,000) shares ( “Closing Shares” ) of the Parent’s common stock ( “Parent Common Stock” ). In the event Parent fixes a record date prior to the Closing for any stock dividend or stock split into a larger or smaller number of shares, whether by reclassification of shares, recapitalization of Parent or otherwise, with respect to shares of Parent Common Stock, the number of Closing Shares shall be adjusted accordingly.

c. The purchase price shall be allocated among and paid to the Sellers in the manner as set forth in Schedule 2.2 , which is consistent with the terms and conditions of Section 9A.12 of the Operating Agreement. Pursuant to Sections 9A.2(b) and 9A.12 of the Operating Agreement, at the Closing, the Adjusted Priority Capital Interest (as defined in the Operating Agreement) will be redeemed. The Sellers and their respective Seller Members agree that the certificates representing the Closing Shares payable to the Sellers at the Closing shall be issued in the names of the Individual Owners.

2.3 Payment of Purchase Price. The purchase price shall be paid as provided in Article IX below.

ARTICLE III – REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND EQUITY OWNERS

Each Seller and each Equity Owner jointly and severally represents and warrants to Buyer, Parent, and the Acquired Companies, as of the date hereof, as follows:

3.1 Organization and Good Standing. The Acquired Companies are limited liability companies duly organized and validly existing under the laws of the state of their respective organization, with full limited liability company power and authority to conduct the Business as it is now being conducted, to own or use the properties and assets that each purports to own or use, and to perform all their obligations under the Applicable Contracts. The Company has provided Buyer with true and complete copies of the Organizational Documents of the Acquired Companies as currently in effect. Each Acquired Company is duly qualified to do business as a foreign limited liability company and is in good standing under the laws of each state or other jurisdiction in which either the ownership or use of the properties owned or used by

them, or the nature of the activities conducted by them, requires such qualification, except where the failure to qualify or be in good standing would not have a Material Adverse Effect. Schedule 3.1 contains a complete and accurate list of the jurisdictions outside their respective state of organization in which an Acquired Company has been formally authorized to do business.

3.2 No Conflict.

a. No Conflict. Except as set forth on Schedule 3.2(a) , neither the execution and delivery of this Agreement nor the consummation or performance of any of the transactions contemplated by this Agreement will, directly or indirectly (with or without notice or lapse of time):

i. contravene, conflict with, or result in a violation of (1) any provision of the Organizational Documents of an Acquired Company, or (2) any resolution adopted by the managers or members, or any committee thereof;

ii. contravene, conflict with, or result in a violation of any Legal Requirement or any Order to which an Acquired Company, or any of the assets owned or used by an Acquired Company, may be subject;

iii. contravene, conflict with, or result in a violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate, or modify, any Governmental Authorization that is held by an Acquired Company or that otherwise relates to the Business of, or any of the assets owned or used by, an Acquired Company;

iv. contravene, conflict with, or result in a violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate, or modify, any Applicable Contract; or

v. result in the imposition or creation of any Encumbrance upon or with respect to any of the assets or rights owned or used by an Acquired Company.

b. Required Consents. Except for the consents with respect to the Hart-Scott-Rodino Act, and except for the consents set forth in Schedule 3.2(b) ( such consents, excluding any under the Hart-Scott-Rodino Act, “Third Party Consents”) , the Acquired Companies are not required to give any notice to or obtain any consent, approval, waiver, or other authorization (including any Governmental Authorization) from any Person in connection with the execution and delivery of this Agreement or the consummation or performance by it of any of the transactions contemplated by this Agreement.

3.3 Capitalization.

a. Company. The only members or other holders of an equity interest in the Company prior to the transactions contemplated by this Agreement are the Sellers and Buyer. Except for the preferred interest in the Company held by ASAP Investors, each Acquired Company has only a single class of equity or membership interests authorized and issued and outstanding. No legend or other reference to any purported Encumbrance appears upon any certificate representing the Membership Interest of the Sellers. There are no authorized or outstanding options, warrants, preemptive rights, purchase rights, subscription, conversion, phantom rights, profit participation, or exchange rights, or any other contracts or commitments relating to the issuance, sale, or transfer by an Acquired Company of membership interests or any other equity interests or other securities of an Acquired Company, except for those described in the Organizational Documents of an Acquired Company.

b. No Subsidiaries or Other Businesses. Except for CRG and ASAP-Wilmington, the Company does not own any Subsidiaries. CRG and ASAP-Wilmington do not have any Subsidiaries. The Acquired Companies do not own or have any contract to acquire any equity securities or other ownership interests in any other Person or any direct or indirect equity or ownership interest in any other business, other than investments in “money market” or similar short-term investment funds.

3.4 Financial Statements.

a. Schedule 3.4 contains complete and accurate copies of the following:

i. an audited consolidated balance sheet of the Acquired Companies (the “Company Balance Sheet” ) and statements of income, changes in members’ capital accounts, and cash flows, including the notes thereto, for the fiscal year ended December 31, 2007, and

ii. an unaudited consolidated balance sheet of the Acquired Companies (the “Company Interim Balance Sheet” ) and statement of income for the three months ended March 31, 2008 (the foregoing financial statements described in Section 3.4(a)(i) above and this 3.4(a)(ii) may collectively be referred to as the “Company Financial Statements” ).

b. The Company Financial Statements:

i. fairly present in all material respects the financial condition and the results of operations, and with respect to the financial statements described in Section 3.4(a)(i), changes in members’ capital accounts, and cash flows of the Acquired Companies as of the respective dates of and for the periods referred to therein; provided, however, that the results of operations for only a portion of the fiscal year of Atlantic Scrap & Processing, LLC are included in the financial statements described in Section 3.4(a)(i), as further described in the footnotes thereto, and

ii. have been prepared in accordance with GAAP consistently applied throughout the periods indicated, except that the Company Financial Statements described in Section 3.4(a)(ii) are subject to normal year-end adjustments and lack complete footnotes and other presentation items.

c. No financial statements of any Person other than the Acquired Companies are required by GAAP to be included in the Company Financial Statements.

3.5 Books and Records. The financial and other books and records of the Acquired Companies made available to Buyer are complete and correct in all material respects and have been maintained in accordance with sound business practices. The minute books and records of proceedings, as reviewed and made available to Buyer, contain all the written minutes that exist for meetings of the Acquired Companies’ managers, board members, or members, or any committee thereof, for the period since August 31, 2007. Since the date of formation, with respect to any action taken by each Acquired Company, which under applicable law required the approval of the members or managers, the members or the managers (or a duly authorized committee thereof) have approved of or ratified all such actions. The record books with respect to the transfer of membership interests are true, correct and complete, and record all issuances, transfers, and cancellations of members’ equity interests in the Acquired Companies.

3.6 Owned Property.

a. The parcels of property described on Schedule 3.6(a) are the only real estate owned by the Acquired Companies ( “Company Owned Real Property” ). The Acquired Companies own good and marketable fee simple title to the Company Owned Real Property and to all of the buildings, fixtures and other improvements located on the Company Owned Real Property, free and clear of any Encumbrances except Permitted Encumbrances.

b. The Company Owned Real Property and the Company Leased Real Property (as defined below) constitute all of the real property owned or used by the Acquired Companies in the Business (such real property collectively referred to as the “Company Facilities” ). Except as set forth on Schedule 3.6(b) , with respect to each Company Facility:

i. Each of the Company Facilities (1) has access to public roads, such access being sufficient to satisfy the current and reasonably anticipated normal transportation requirements of the Business as presently conducted at such Company Facility, (2) is served by all utilities in such quantity and quality as are sufficient to satisfy the current normal business activities as conducted at such Company Facility, and (3) is zoned under a zoning classification so as to permit the Acquired Companies to continue its present use; and

ii. The Acquired Companies have not received notice of (1) any condemnation proceeding with respect to any portion of any Company Facility or any access thereto, and to the Knowledge of the Company, no

such proceeding is contemplated by any Governmental Body; or (2) any special assessment which may affect any of the Company Facilities.

c.		The Acquired Companies own and have good title to (free and clear of any Encumbrances except Permitted Encumbrances) all the properties and assets (whether personal, fixtures or mixed and whether tangible or intangible) that they purport to own and which are located at the Company Facilities (other than the Company Owned Real Property, which is addressed in Section 3.6(b) above) or at customer facilities, or that are reflected in the books and records of the Acquired Companies, including all of the properties and assets reflected in the Company Interim Balance Sheet (except for personal property or fixtures sold since the date of the Company Interim Balance Sheet in the Ordinary Course of Business), and including all the properties and assets purchased or otherwise acquired by an Acquired Company since the date of the Company Interim Balance Sheet (except for personal property or fixtures acquired and sold since the date of the Company Interim Balance Sheet in the Ordinary Course of Business and consistent with past practice).

3.7		Leased Property.

a.		Schedule 3.7(a) sets forth a list of all leases and material licenses or similar agreements ( “Company Real Estate Leases” ) to which an Acquired Company is a party and that relate to real property leased to an Acquired Company. The Acquired Companies have a valid leasehold interest in each parcel of real property which is the subject of a Company Real Estate Lease ( “Company Leased Real Property” ), free and clear of any Encumbrances except Permitted Encumbrances. Except as set forth in Schedule 3.7(a) , the Company Real Estate Leases are in full force and effect, have not been further amended, and to the Knowledge of the Company, no party thereto is in default or breach under any such Company Real Estate Lease. To the Knowledge of the Company, no event has occurred which, with the passage of time or the giving of notice or both, would cause a material breach of or default under any of such Company Real Estate Leases.

b.		Schedule 3.7(b) sets forth a list of all leases, licenses or similar agreements (the “Company Personal Property Leases” ) to which an Acquired Company is a party that relate to personal property leased to an Acquired Company (whether under an operating lease or a capital lease) and which has a value in excess of $50,000.00 ( “Company Leased Personal Property” ). Except as set forth in Schedule 3.7(b) , the Company Personal Property Leases are in full force and effect, have not been further amended, and, to the Knowledge of the Company, no party thereto is in default or breach under any such Company Personal Property Lease. To the Knowledge of the Company, no event has occurred which, with the passage of time or the giving of notice or both, would cause a material breach of or default under any of such Company Personal Property Leases.

16 c.

Notwithstanding anything in this Section 3.7 to the contrary, no representations or warranties are made with respect to any Company Real Estate Lease to which Buyer or any of its Affiliates are a party.

3.8 Condition and Sufficiency of Assets. Except as disclosed on Schedule 3.8 , to the Knowledge of the Company, the improvements on the Company Facilities, the machinery and equipment (both owned and leased), the vehicles (both owned and leased) and other assets currently in use or necessary for the Business, including, without limitation, the Company Leased Personal Property, are structurally sound, in good operating condition, normal wear and tear excepted, and have been maintained in accordance with sound industry practices, and are sufficient for the continued conduct of the Business by the Acquired Companies immediately after the Closing Date.

3.9 Accounts Receivable. All accounts receivable of the Acquired Companies that are reflected in the Company Interim Balance Sheet or that will be reflected in the accounting records of an Acquired Company as of the Closing Date (collectively, the “Company Accounts Receivable” ) represent or will represent valid obligations arising from sales actually made or services actually performed. All of the Company Accounts Receivable are and will be good and collectible and will be collected in full in any event within 120 days following the Closing Date, without set-off or counterclaim, subject to the allowance for doubtful accounts set forth in the Company Interim Balance Sheet, as adjusted for the passage of time through the Closing Date. Except as disclosed in Schedule 3.9 , there is no contest, claim, or right of set-off, under any contract with any obligor of a Company Accounts Receivable relating to the amount or validity of such Company Accounts Receivable. Schedule 3.9 contains a complete and accurate list of all Company Accounts Receivable as of May 5, 2008, which list sets forth the aging of such Company Accounts Receivable. Notwithstanding anything in this Section 3.9 to the contrary, no representations or warranties are made with respect to any Company Accounts Receivable to which Buyer or any of its Affiliates is an obligor.

3.10 Inventories. All scrap and other inventories (including raw materials and work in process) that are owned by the Acquired Companies are physically located at the Company Facilities, except for inventories already shipped but not yet invoiced, in transit to an Acquired Company or as otherwise disclosed on Schedule 3.10 . All inventory of the Acquired Companies, whether or not reflected in the Company Interim Balance Sheet, consists of a quality and quantity usable and salable in the Ordinary Course of Business, except for obsolete items and items of below-standard quality, all of which have been written off or written down to lower of cost or market in the Company Interim Balance Sheet. Except as set forth on Schedule 3.10 , the quantities of each item of inventory (whether raw materials, work-in-process, or finished goods) are not excessive, but are reasonable in the present circumstances of the Acquired Companies.

3.11 Liabilities. Except as set forth on Schedule 3.11 , the Acquired Companies have no liabilities or obligations, whether accrued, absolute, known, contingent or otherwise, that are required under GAAP to be listed on a balance sheet, except (i) to the extent set forth in the Company Interim Balance Sheet, and (ii) liabilities incurred in the Ordinary Course of Business after the date of the Company Interim Balance Sheet. All indebtedness for borrowed money of the Acquired Companies, whether owed to a bank or any other Person, including capitalized leases and guarantees of indebtedness for the benefit of a Person other than an Acquired

Company, but excluding accrued distributions to Sellers and Buyer under the Operating Agreement (collectively, “Company Debt for Borrowed Money” ) does not exceed $135,000,000.00 as of the date of this Agreement.

3.12		Taxes.

a.		The Acquired Companies have filed or caused to be filed on a timely basis all Tax Returns or valid extensions thereof that are or were required to be filed by or with respect to an Acquired Company pursuant to applicable Legal Requirements, except for Tax Returns that are not yet due, and no claim has ever been made by any Governmental Body in a jurisdiction where an Acquired Company does not file Tax Returns that it is or may be subject to taxation in that jurisdiction. All such Tax Returns were correct and complete in all respects. Each Acquired Company has always been taxed as a partnership under Subchapter K of the Code; provided however, effective as of August 31, 2007, CRG has been treated as a disregarded entity for tax purposes, and effective as of February 2, 2005, ASAP-Wilmington has been treated as a disregarded entity. The Acquired Companies have paid all Taxes, if any, that have or may have become due and payable with respect to each Acquired Company pursuant to any assessment received by the Acquired Companies and without limiting the foregoing, all Taxes of any Person with respect to Acquired Companies (whether or not shown on any Tax Return), if any, have been paid or will be paid on a timely basis. Except as described in Schedule 3.12(a) , none of the Acquired Companies are currently the beneficiary of any extension of time within which to file any Tax Return. The Company has allowed Buyer to participate in the preparation of the proposed Tax Returns for the Company’s taxable year ending September 30, 2007 and short taxable year ending December 31, 2007. There are no additional Taxes for any periods for which Tax Returns have been filed that have been asserted or claimed to be owing or that have been Threatened to be assessed.

b.		None of the Tax Returns of the Acquired Companies are currently subject to an audit. Except as described in Schedule 3.12(b) , the Acquired Companies have not given or been requested to give waivers or extensions (or are or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the payment of Taxes that are still in effect.

c.		The charges, accruals, and reserves with respect to Taxes, if any, on the Company Interim Balance Sheet are adequate and are at least equal to the Acquired Companies’ liability, if any, for unpaid Taxes. To the Knowledge of the Company, there exists no proposed Tax assessment against an Acquired Company except as disclosed in the Company Interim Balance Sheet or Schedule 3.12(c) . All Taxes that an Acquired Company is or was required by Legal Requirements to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Body or other Person.

d.		No authority will assess any additional Taxes for any period for which Tax Returns have been filed. No foreign, federal, state, or local tax audits or

18

		administrative or judicial Tax proceedings are pending or being conducted with respect to an Acquired Company. None of the Acquired Companies have received from any foreign, federal, state, or local taxing authority (including jurisdictions where the Acquired Companies have not filed Tax Returns) any pending or active (i) notice indicating an intent to open an audit or other review, (ii) request for information related to Tax matters, or (iii) notice of deficiency or proposed adjustment for any amount of Tax proposed, asserted, or assessed by any taxing authority against an Acquired Company.

e.		The Acquired Companies have disclosed on their federal income Tax Returns all positions taken thereon that could give rise to a substantial understatement of federal income Tax within the meaning of Code §6662. The Equity Owners have disclosed on their federal income tax returns all positions taken thereon with respect to an Acquired Company that could give rise to a substantial understatement of federal income Tax within the meaning of Code §6662. The Acquired Companies are not a party to or bound by any Tax allocation or sharing agreement. The Acquired Companies do not have any liability for the Taxes of any Person (other than the Acquired Companies) under transferee or successor liability rules, by contract, or otherwise.

3.13		Customers and Suppliers.

a.		Except as disclosed in Schedule 3.13(a) , to the Knowledge of the Company, none of the Company’s Customers will stop buying products or services from an Acquired Company, or materially decrease the amount of purchases of products or services from an Acquired Company. As used herein, the “Company’s Customers” means customers of the Acquired Companies who purchased products or services from an Acquired Company during 2007 in an amount exceeding $600,000.

b.		Except as disclosed in Schedule 3.13(b) , to the Knowledge of the Company, none of the Company’s Suppliers will stop selling products or services to an Acquired Company, or materially decrease the amount of sales of products or services to an Acquired Company. As used herein, the “Company’s Suppliers” means suppliers of the Acquired Companies who sold products or services to an Acquired Company during 2007 in an amount exceeding $300,000.

3.14		Employee Benefit Plans.

a.		Definition of Benefit Plans. For purposes of this Section 3.14, the term “Company Benefit Plan” means any plan, program, arrangement, fund, policy, practice or contract which, through which or under which an Acquired Company or any Company ERISA Affiliate (as hereinafter defined) provides benefits or compensation to or on behalf of an employee or employees or former employees of an Acquired Company or any Company ERISA Affiliate, whether formal or informal, whether or not written, including but not limited to the following:

i.		Arrangements. Any bonus, incentive compensation, membership option, deferred compensation, commission, severance pay, golden parachute or other compensation plan or rabbi trust;

ii.		ERISA Plans. Any “employee benefit plan” as defined in Section 3(3) of ERISA, including, but not limited to, any multiemployer plan (as defined in Section 3(37) and Section 4001(a)(3) of ERISA), employee welfare benefit plans (as defined in Section 3(1) of ERISA), employee pension benefit plan (as defined in Section 3.(2) of ERISA), defined benefit plan, profit sharing plan, money purchase pension plan, 401(k) plan, savings or thrift plan, deferred compensation plan, or any plan, fund, program, arrangement or practice providing for medical (including post-retirement medical), hospitalization, accident, sickness, disability, or life insurance benefits; and

iii.		Other Employee Fringe Benefits. Any stock purchase, vacation, scholarship, day care, prepaid legal services, dependent care or other fringe benefits plans, programs, arrangements, contracts or practices.

b.		Company ERISA Affiliate. For purposes of this Section 3.14, the term “Company ERISA Affiliate” means each trade or business (whether or not incorporated) which together with an Acquired Company is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.

c.		Identification of Company Benefits Plans. Except as disclosed in Schedule 3.14(c) , and except for Company Benefit Plans which have been terminated and with respect to which none of the Acquired Companies nor any Company ERISA Affiliate has any actual or potential financial, administrative or other liability, obligation or responsibility, none of the Acquired Companies nor any Company ERISA Affiliate maintains, or has at any time established or maintained, or has at any time been obligated to make, or otherwise made, contributions to or under or otherwise participated in any Company Benefit Plan.

d.		Compliance with All Statutes, Orders and Rules. Except as disclosed in Schedule 3.14(d) , the Acquired Companies and each Company ERISA Affiliate are in compliance in all material respects with the requirements prescribed by any and all statutes, orders and governmental rules and regulations applicable to Company Benefit Plans and has operated each Company Benefit Plan in all material respects in compliance with the written terms of the plan, and all reports and disclosures relating to Company Benefit Plans required to be filed with or furnished to any governmental entity, participants or beneficiaries prior to the Closing Date have been or will be filed or furnished in a timely manner and in accordance with applicable laws.

e.		MEPPA & Title IV Liability/Post Retirement Medical Benefits. Except as disclosed in Schedule 3.14(e) , neither the Acquired Companies nor any Company ERISA Affiliate maintains, or has at any time established or maintained, or has at

		any time been obligated to make, or made, contributions to or under any multiemployer plan (as defined in Section 3(37) and Section 4001(a)(3) of ERISA) or any plan subject to Title IV of ERISA. Except as disclosed in Schedule 3.14(e) , the Acquired Companies do not maintain, nor have at any time established or maintained, nor have they at any time been obligated to make, or made, contributions to or under any plan, which provides post-retirement medical or health benefits with respect to employees of the Acquired Companies or any Company ERISA Affiliate (other than COBRA continuation coverage as required by ERISA and the Code). There is no lien upon any property of the Acquired Companies or any Company ERISA Affiliate outstanding pursuant to Section 412(n) of the Code in favor of any Company Benefit Plan. No assets of the Acquired Companies or any Company ERISA Affiliate have been provided as security for any Company Benefit Plan pursuant to Section 401(a)(29) of the Code.

f.		Documentation. Except as disclosed in Schedule 3.14(f) , the Company has provided Buyer with a true and complete copy of the following documents, if applicable, with respect to each Company Benefit Plan: (1) all documents, including any insurance contracts and trust agreements, setting forth the terms of any Company Benefit Plan, or if there are no such documents evidencing a Company Benefit Plan, a full description of such Company Benefit Plan, (2) the ERISA summary plan description and any other summary of plan provisions provided to participants or beneficiaries for each such Company Benefit Plan, (3) the annual reports filed for the most recent three plan years and most recent financial statements or periodic accounting or related plan assets with respect to each Company Benefit Plan, (4) each favorable determination letter, opinion or ruling from the Internal Revenue Service for each Company Benefit Plan, the assets of which are held in trust, to the effect that the form of Company Benefit Plan meets the requirements of Section 401(a) of the Code, including any outstanding request for a determination letter and (5) each opinion or ruling from the Department of Labor or the Pension Benefit Guaranty Corporation ( “PBGC” ) with respect to such Company Benefit Plans.

g.		Administrative Compliance. Except as disclosed in Schedule 3.14(g) , each Company Benefit Plan that is funded through a trust or insurance contract has at all times satisfied in all material respects, by its terms and in its operation, all applicable requirements for an exemption from federal income taxation under Section 501(a) of the Code. Except as disclosed in Schedule 3.14(g) , neither the Acquired Companies nor any Company ERISA Affiliate maintains or previously maintained a Company Benefit Plan which meets or was intended to meet the requirements of Section 401(a) of the Code. With respect to each qualified retirement plan disclosed on Schedule 3.14(c) , any determination letter issued by the Internal Revenue Service to the effect that the form of such plan qualifies under Section 401(a) of the Code is current and has not been revoked; such plan currently complies in form with the requirements under Section 401(a) of the Code, other than changes required by statutes, regulations or rulings for which amendments are not yet required; such plan has been administered according to its

		terms (except for those terms which are inconsistent with the changes required by statutes, regulations, and rulings for which changes are not yet required to be made, in which case such plan has been administered in accordance with the provisions of those statutes, regulations and rulings) and in accordance with the requirements of Section 401(a) of the Code; and such plan has been tested for compliance with (to the extent that the form of the plan does not automatically ensure compliance with), and has satisfied the requirements of, all applicable coverage, discrimination, and contribution limitation requirements imposed under the Code for each plan year ending prior to the Closing Date.

h.		Legal Actions. Except as disclosed in Schedule 3.14(h) , there are no actions, audits, suits, claims, or appeals which are pending or, to the Knowledge of the Company, Threatened against any Company Benefit Plan or any fiduciary of any of Company Benefit Plans or against the assets of any of Company Benefit Plans, including a demand or request for payment or reconsideration of any prior administrative action on behalf of a Company Benefit Plan or a fiduciary of a Company Benefit Plan, other than routine requests for distributions or payment/reimbursement of eligible expenses under such plans. Additionally, except as disclosed in Schedule 3.14(h) , there are no pending or Threatened audits of any Company Benefit Plan by the Internal Revenue Service, Pension Benefit Guaranty Corporation, Department of Labor, Equal Employment Opportunity Commission or any other state or federal agency or instrumentality.

i.		Funding. Except as disclosed in Schedule 3.14(i) , the Acquired Companies and each Company ERISA Affiliate have made full and timely payment of all amounts required to be contributed under the terms of each Company Benefit Plan and applicable law or required to be paid as expenses under such Company Benefit Plan and no excise taxes or other fines or penalties are assessable as a result of any nondeductible or other contributions made or not made to a Company Benefit Plan. The assets of all Company Benefit Plans which are required under applicable laws to be held in trust are in fact held in trust, and the assets of each such Company Benefit Plan equal or exceed the liabilities of each such plan. The liabilities of each other plan are a properly and accurately reported on the financial statements and records of the Acquired Companies. The assets of each Company Benefit Plan are reported at their fair market value on the books and records of each plan.

j.		Liabilities. Except as disclosed in Schedule 3.14(j) , neither the Acquired Companies nor any Company ERISA Affiliate is subject to any liability, tax or penalty whatsoever to any person whomsoever including the obligation to pay separation, severance, termination or similar benefits as a result of the Company’s or any Company ERISA Affiliate’s engaging in a prohibited transaction under ERISA or the Code.

k.		No Acceleration of Liability Under Benefit Plans. Except as disclosed in Schedule 3.14(k) , the consummation of the transactions contemplated by this Agreement will not (as to any benefit to become vested) accelerate vesting, result

		in any payment of benefits or create or increase any liability under any Company Benefit Plan. No payment that is owed or may become due to any director, manager, officer or employee of any Acquired Company or any Company ERISA Affiliate will be non-deductible or subject to tax under Code Section 280G or Code Section 4999; nor will the Company or any Company ERISA Affiliate be required to “gross up” or otherwise compensate any such person because of the imposition of any excise tax on a payment to such person.

l.		COBRA Continuees. Schedule 3.14(1) lists all individuals (both employees and dependents) as of April 30, 2008 who have elected to continue (or who have an option to elect to continue) their group health coverage (or are eligible to elect coverage) under the Acquired Companies’ health or medical plans, together with the date of each such election and the date continued coverage expires.

m.		Amendment and Termination. Except as provided in Schedule 3.14(m) , each Company Benefit Plan can be terminated within thirty days, without payment of any additional contribution or amount and without the vesting or acceleration of any benefits promised by such plan, and each Company Benefit Plan can be amended at any time to the fullest extent permitted under applicable law.

n.		409A Plans. Except as listed in Schedule 3.14(n) , the Acquired Companies do not and have never maintained, established or sponsored any deferred compensation plan subject to Code §409A. With respect to any such deferred compensation plan listed in Schedule 3.14(n) , (i) all such plans have been operated in good faith compliance with Code §409A, (ii) Schedule 3.14(n) describes any changes or amendments that are required to be made to such plans under the applicable Code §409A regulations, and (iii) the transaction contemplated by this Agreement will not result in Code §409A imposing any tax consequences to the participants in such plan (including the inclusion in income of deferred amounts, or any additional tax pursuant to Code §409A(a)(1)(B)).

3.15		Compliance with Legal Requirements; Governmental Authorizations.

a.		Except as set forth in Schedule 3.15(a) :

i.		the Acquired Companies are, and at all times have been, in substantial compliance with each Legal Requirement that is or was applicable to it or to the conduct or operation of its Business or the ownership or use of any of its assets; and

ii.		the Acquired Companies have not received any notice or other written communication from any Governmental Body or any other Person regarding any actual, alleged, possible, or potential violation of, or failure to comply with, any Legal Requirement.

b.

Schedule 3.15(b) contains a complete and accurate list of each material Governmental Authorization that is held by each Acquired Company. Each such

		Governmental Authorization listed or required to be listed in Schedule 3.15(b) is valid and in full force and effect. Except as set forth in Schedule 3.15(b) :

		i.		To the Knowledge of the Company, the Acquired Companies are, and at all times have been, in substantial compliance with all of the terms and requirements of each Governmental Authorization identified or required to be identified in Schedule 3.15(b) ;

		ii.		None of the Acquired Companies has received any notice or other written communication from any Governmental Body or any other Person regarding (1) any actual, alleged, possible, or potential violation of or failure to comply with any term or requirement of any Governmental Authorization, or (2) any actual, proposed, possible, or potential revocation, withdrawal, suspension, cancellation, termination of, or modification to any Governmental Authorization; and

		iii.		all applications required to have been filed for the renewal of the Governmental Authorizations listed or required to be listed in Schedule 3.15(b) have been duly filed on a timely basis with the appropriate Governmental Bodies, and all other filings required to have been made with respect to such Governmental Authorizations have been duly made on a timely basis with the appropriate Governmental Bodies.

The Governmental Authorizations listed in Schedule 3.15(b) collectively constitute all of the material Governmental Authorizations necessary to permit the Acquired Companies to lawfully conduct and operate the Business in the manner currently conducted and operated and to permit the Acquired Companies to own and use their assets in the manner in which they currently own and use such assets.

3.16		Legal Proceedings; Orders.

a.		Except as set forth in Schedule 3.16(a) , there is no pending Proceeding or, to the Knowledge of the Company, Threatened Proceeding that:

	i.		has been commenced by or against the Acquired Companies;

	ii.		to the Knowledge of the Company would have a Material Adverse Effect; or

	iii.		challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the transactions contemplated by this Agreement.

	Except as otherwise provided in Schedule 3.16(a) (where Schedule 3.16(a) identifies the Proceedings in which such copies have not been provided), the Company has delivered to Buyer copies of all pleadings, and if a Proceeding is Threatened, correspondence, relating to each Proceeding listed in Schedule 3.16(a) .

b.	Except as set forth in Schedule 3.16(b) :

	i.	there is no Order to which the Acquired Companies, or any of the assets owned or used by the Acquired Companies, are subject;

	ii.	the Acquired Companies are in substantial compliance with all of the terms and requirements of each Order to which they, or any of the assets owned or used by them, is or has been subject; and

	iii.	the Acquired Companies have not received any notice or other written communication from any Governmental Body or any other Person regarding any actual, alleged, possible, or potential violation of, or failure to comply with, any term or requirement of any Order to which the Acquired Companies, or any of the assets owned or used by them, is or has been subject.

3.17 Absence of Certain Changes and Events. Except as set forth in Schedule 3.17 , since the date of the Company Balance Sheet, the Acquired Companies have conducted the Business only in the Ordinary Course of Business, and there has not been any:

a.		change in the authorized or issued equity interests of the Acquired Companies; grant by any Acquired Company of any option or right to purchase an equity interest of an Acquired Company; purchase, redemption, retirement, or other acquisition by any Acquired Company of any equity interest;

b.		distributions or payments, whether in the form of property or otherwise, to the Sellers, except to the extent permitted by the Operating Agreement;

c.		amendment to the Organizational Documents of any Acquired Company;

d.		payment of any bonuses or an increase in the salaries, or other compensation to any officer, Equity Owner or, except in the Ordinary Course of Business, any other employee,

e.		entry into any employment, severance, or similar contract with any officer, Equity Owner or, except in the Ordinary Course of Business, any other employee;

f.		adoption of, or increase in the payments to or benefits under, any profit sharing, bonus, deferred compensation, savings, insurance, pension, retirement, or other employee benefit plan for or with any employees of an Acquired Company;

g.		damage to or destruction or loss of the assets or properties of any Acquired Companies, in the aggregate, in excess of $250,000, whether or not covered by insurance;

h.		other than in the Ordinary Course of Business, entry into, termination of, or receipt of notice of termination of any Material Company Contract or transaction;

i.	sale (other than sales of inventory in the Ordinary Course of Business), lease, or other disposition of any material asset or property of an Acquired Company or mortgage, pledge, or imposition of any Encumbrance on any material asset, property, or rights of an Acquired Company, other than Permitted Encumbrances;

j.	material change in the accounting methods used by an Acquired Company;

k.	material change in the manner in which the Business has been operated; or

l.	agreement, whether oral or written, by an Acquired Company to do any of the foregoing.

3.18	Applicable Contracts; No Defaults.

a.	Schedule 3.18(a) contains a complete and accurate list of:

	i.	each Applicable Contract that involves performance of services or delivery of goods or materials by an Acquired Company of an amount or value in excess of Three Hundred Thousand Dollars ($300,000.00) and that cannot be completed or canceled without penalty by an Acquired Company within 60 days from the date of this Agreement;

	ii.	each Applicable Contract that involves the purchase by an Acquired Company of services or goods or materials of an amount or value in excess of Three Hundred Thousand Dollars ($300,000.00) and that cannot be completed or canceled without penalty by the Acquired Company within 60 days from the date of this Agreement;

	iii.	each agreement under which an Acquired Company has (1) incurred, assumed or guaranteed any indebtedness for borrowed money, or any capitalized leases, or (2) granted a lien, security interest, or mortgage, other than a purchase money security interest in the Ordinary Course of Business;

	iv.	each employment agreement to which an Acquired Company is a party;

	v.	each lease, rental or occupancy agreement, license, installment and conditional sale agreement, and other Applicable Contract affecting the ownership of, leasing of, title to, use of, or any leasehold or other interest in, any real property or personal property whose value exceeds Fifty Thousand Dollars ($50,000.00);

	vi.	each licensing agreement or other Applicable Contract with respect to patents, trademarks, copyrights, or other intellectual property, including agreements with current or former employees, consultants, or contractors regarding the appropriation or the non-disclosure of any of the Company Intellectual Property Assets;

	vii.	each collective bargaining agreement and other Applicable Contract to or with any labor union or other employee representative of a group of employees, if any;

	viii.	each joint venture, partnership, and other Applicable Contract (however named) involving a sharing of profits, losses, costs, or liabilities by an Acquired Company with any other Person (other than the Operating Agreement);

	ix.	each Applicable Contract containing covenants that in any way purport to restrict the business activity of an Acquired Company or limit the freedom of an Acquired Company to engage in any line of business or to compete with any Person;

	x.	each power of attorney of the Acquired Companies that is currently effective and outstanding;

	xi.	each Applicable Contract entered into other than in the Ordinary Course of Business;

	xii.	each Applicable Contract for capital expenditures in excess of Twenty Thousand Dollars ($20,000.00);

	xiii.	each written warranty form, guaranty form, purchase order form, and sales order form presently used by the Acquired Companies; and

	xiv.	each written amendment, supplement, and modification in respect of any of the foregoing.

b.	Except as set forth in Schedule 3.18(b) , each Applicable Contract identified or required to be identified in Schedule 3.18(a) ( “Material Company Contract” ) is in full force and effect and is valid and enforceable in accordance with its terms, except as enforceability may be limited by applicable equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws from time to time in effect affecting the enforcement of creditor’s rights generally.

c.	Except as set forth in Schedule 3.18(c) :

	i.	The Acquired Companies are in substantial compliance with all applicable terms and requirements of each Applicable Contract under which an Acquired Company has or had any obligation or liability or by which an Acquired Company or any of the assets owned or used by an Acquired Company is or was bound; and

	ii.	to the Knowledge of the Company, each other Person that has any obligation or liability under any Applicable Contract under which an Ac