STOCK PURCHASE AGREEMENT

EXHIBIT 99

Execution Copy

STOCK PURCHASE AGREEMENT

among

KAYDON CORPORATION

(“ Buyer ”),

SHAREHOLDERS

OF

AVON BEARINGS CORPORATION

(“ Sellers ”)

and

PATRICK WALSH

(“ Sellers’ Representative ”)

OCTOBER 26, 2007

TABLE OF CONTENTS

				Page
ARTICLE 1 DEFINITIONS					1
1.1		Definitions			1
1.2		Accounting Terms			1
ARTICLE 2 PURCHASE AND SALE OF SHARES					1
2.1		Purchase and Sale			1
2.2		Purchase Price			1
2.3		Certain Definitions			1
2.4		Estimated Purchase Price			2
2.5		Payments			2
2.6		Post-Closing Adjustment			3
2.7		Certain Tax Matters			4
2.8		Allocation to Sellers of Purchase Price			5
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLERS REGARDING THE TRANSACTION					6
3.1		Authority and Capacity			6
3.2		Ownership of Shares			6
3.3		Execution and Delivery; Enforceability			6
3.4		Noncontravention			6
3.5		Litigation			6
3.6		Taxes			6
3.7		Competing Business; Related Transactions			7
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLERS REGARDING THE COMPANY					7
4.1		Organization and Good Standing			7
4.2		Capital Stock			7
4.3		Noncontravention			8
4.4		Financial Statements			8
4.5		No Undisclosed Liabilities			8
4.6		Absence of Certain Changes or Events			8
4.7		Taxes			9
4.8		Employees			9
4.9		Employee Benefit Plans			10
4.10		Environmental Matters			11
4.11		Compliance with Laws			12
4.12		Real Property			12
4.13		Personal Property			12
4.14		Accounts Receivable; Inventory			12
4.15		Intellectual Property			13
4.16		Contracts			13
4.17		Litigation			15
4.18		Product Warranty/Product Liability			15
4.19		Brokerage			15
4.20		Material Customers and Suppliers			15
4.21		Insurance			15
4.22		Indebtedness			15

				Page
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER					15
5.1		Organization; Authorization			16
5.2		Execution and Delivery; Enforceability			16
5.3		Noncontravention			16
5.4		Brokerage			16
5.5		Investment Intent			16
5.6		Disclosure			16
ARTICLE 6 THE CLOSING					16
ARTICLE 7 CLOSING DELIVERIES					17
7.1		Deliveries by Sellers			17
7.2		Deliveries by Buyer			17
ARTICLE 8 ADDITIONAL COVENANTS AND AGREEMENTS					18
8.1		Expenses			18
8.2		No Assignments			18
8.3		Covenant Not to Compete; Nondisparagement			18
8.4		General Release of Claims			19
8.5		Access by Sellers			20
8.6		Continuation of Indemnification			20
8.7		Sellers’ Representative			20
8.8		Acknowledgements			21
8.9		Tax Matters			21
8.10		Non Disclosure of Confidential Information			25
ARTICLE 9 INDEMNIFICATION					26
9.1		Indemnification of Buyer			26
9.2		Limitations on Indemnification of Buyer			26
9.3		Indemnification of Sellers			27
9.4		Limitations on Indemnification of Sellers			27
9.5		Procedures Relating to Indemnification			27
9.6		Use and Disbursement of Escrow Funds			29
9.7		Arbitration			30
9.8		Limitation of Remedies			30
ARTICLE 10 CERTAIN DEFINITIONS					30
ARTICLE 11 MISCELLANEOUS PROVISIONS					36
11.1		Notices			36
11.2		Entire Agreement			37
11.3		Modification			37
11.4		Jurisdiction and Venue			37
11.5		Binding Effect			37
11.6		Interpretation			37
11.7		Counterparts			38
11.8		Third Parties			38
11.9		Schedules and Exhibits			38
11.10		Time Periods			38
11.11		Governing Law			38

Schedules
Disclosure Schedule
     Schedule 3.4             Noncontravention
     Schedule 4.1             Organization and Good Standing
     Schedule 4.2             Capital Stock
     Schedule 4.3             Noncontravention
     Schedule 4.4             Financial Statements
     Schedule 4.6             Absence of Certain Changes or Events
     Schedule 4.8             Employees
     Schedule 4.9             Employee Benefit Plans
     Schedule 4.10           Environmental Matters
     Schedule 4.12           Real Property
     Schedule 4.13           Personal Property
     Schedule 4.15           Intellectual Property
     Schedule 4.16           Contracts
     Schedule 4.17           Litigation
     Schedule 4.21           Insurance
     Schedule 4.22           Indebtedness
Schedule 2.3.1      Working Capital Analysis
Schedule 2.8         Sellers’ Allocation

Exhibits
Exhibit 2.5.2          Escrow Agreement

THE REGISTRANT AGREES TO FURNISH SUPPLEMENTALLY A COPY OF ANY OMITTED EXHIBIT OR SCHEDULE TO THE COMMISSION UPON REQUEST.

STOCK PURCHASE AGREEMENT

     This Stock Purchase Agreement (“ Agreement ”) is entered into as of October 26, 2007, among Kaydon Corporation, a Delaware corporation (“ Buyer ”), and each of the shareholders of the Company listed on the signature pages hereto (each, a “ Seller ,” and collectively, “ Sellers ”) and Patrick Walsh, in his capacity as Sellers’ Representative (“ Sellers’ Representative ”).

Recitals :

     Sellers own all of the issued and outstanding shares of capital stock (the “ Shares ”) of Avon Bearings Corporation, an Ohio corporation (the “ Company ”).

     Buyer wishes to buy, and Sellers wish to sell, the Shares on the terms and conditions set forth herein.

     Now, therefore, the parties agree as follows:

ARTICLE 1
DEFINITIONS

     1.1 Definitions . Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Article 10.

     1.2 Accounting Terms . Accounting terms not otherwise defined in this Agreement shall have the meanings attributed to them under GAAP.

ARTICLE 2
PURCHASE AND SALE OF SHARES

     2.1 Purchase and Sale . At the Closing, each Seller shall sell to Buyer, free and clear of all Liens, and Buyer shall purchase from each Seller, all of such Seller’s right, title and interest in and to all of the Shares owned by such Seller, as more specifically identified on the signature page hereto (as to each Seller, respectively, the “ Seller’s Respective Shares ”).

     2.2 Purchase Price . The aggregate purchase price for all of the Shares (the “ Purchase Price ”) shall be an amount equal to:

     (a) $55,000,000;

     (b) plus an amount equal to the Closing Cash;

     (c) minus an amount equal to any Indebtedness that is not paid by Sellers under Section 2.5.3 (“ Unpaid Indebtedness ”); and

     (d) plus the amount, if any, by which the Closing Working Capital exceeds the Working Capital Target, or minus the amount, if any, by which the Working Capital Target exceeds the Closing Working Capital.

For tax purposes, any payment by Buyer or Sellers pursuant to Sections 2.6.5 or Article 9 shall be treated as an adjustment to the Purchase Price.

     2.3 Certain Definitions .

     2.3.1 Working Capital . “ Working Capital ” of the Company means (a) the sum of (i) accounts receivable (less allowance for doubtful accounts), (ii) inventories (less allowance for excess and obsolete inventory and the LIFO reserve), and (iii) prepaid expenses and other current assets, less (b) the sum of (i) accounts payable, (ii) accrued salaries, wages, commissions, and profit sharing, (iii) accrued and withheld taxes, (iv) accrued workers’ compensation premiums and (v) accrued expenses. The parties acknowledge and agree that (A) no cash or cash equivalents shall be taken into account in calculating Working Capital (as such amounts are addressed in Section 2.2(b)), and (B) no amounts included in the calculation of Indebtedness shall be taken into account in calculating Working Capital (as such amount shall be paid in full at Closing). Working Capital shall be calculated as set forth on Schedule 2.3.1.

     2.3.2 Closing Working Capital . “ Closing Working Capital ” means the Working Capital of the Company as reflected on the Final Adjustment Statement.

     2.3.3 Working Capital Target . “ Working Capital Target ” means $5,100,000.

     2.4 Estimated Purchase Price . On the day before the Closing, Sellers’ Representative, on behalf of all Sellers, shall cause the Company to estimate in good faith the amount of the Closing Cash, the Unpaid Indebtedness and the Closing Working Capital, respectively, in accordance with Section 2.6.1, and to deliver to Buyer and Sellers’ Representative, on behalf of all Sellers, a certificate signed by an officer of the Company setting forth such estimates (the “ Closing Certificate ”). As used herein, “ Estimated Closing Cash ,” “ Estimated Unpaid Indebtedness ” and “ Estimated Closing Working Capital ,” mean the estimates of the Closing Cash, the Unpaid Indebtedness and the Closing Working Capital, respectively, set forth in the Closing Certificate, and “ Estimated Purchase Price ” means an amount equal to the Purchase Price calculated as set forth in Section 2.2, assuming for purposes of such calculation that the Closing Cash is equal to the Estimated Closing Cash, that the Unpaid Indebtedness is equal to the Estimated Unpaid Indebtedness and that the Closing Working Capital is equal to the Estimated Closing Working Capital. The Closing Certificate shall also set forth the Selling Expenses that are unpaid at Closing.

     2.5 Payments .

     2.5.1 Closing Payment . At the Closing, Buyer shall pay and deliver the Closing Payment to Sellers by means of a wire transfer of immediately available cash funds to an account designated by Sellers’ Representative (the “Sellers’ Account ”). The term “ Closing Payment ” shall mean an amount equal to the Estimated Purchase Price minus the Escrow Account and minus the Selling Expenses that are unpaid at Closing.

     2.5.2 Other Closing Payments . At the Closing, Buyer shall pay and deliver by means of a wire transfer of immediately available cash funds:

     (a) the Escrow Amount to Keybank NA (the “ Escrow Agent ”) who shall hold the Escrow Amount in a separate account (the “ Escrow Account ”) pursuant to the terms of an escrow agreement, in the form attached hereto as Exhibit 2.5.2 (the “ Escrow Agreement ”) to be executed on the Closing Date by Sellers’ Representative, Buyer and the Escrow Agent, which account shall be maintained and distributed in accordance with the terms of the Escrow Agreement; and

     (b) all of the Selling Expenses that are unpaid at Closing to the Persons entitled thereto in accordance with the Closing Certificate.

     2.5.3 Payment of Funded Debt . At the Closing, Sellers will pay, or cause to be paid, in full, the Funded Debt. In order to facilitate such payment, as soon as practicable before the Closing, Sellers’ Representative shall cause the Company to obtain payoff letters for the Funded Debt, which payoff letters will be in a commercially reasonable form and will indicate that such lenders have agreed to release immediately all Liens relating to the assets and properties of the Company upon receipt of the amounts indicated in such payoff letters (the “ Payoff Letters ”).

     2.6 Post-Closing Adjustment .

     2.6.1 Adjustment Statement Preparation . Within 45 days after the Closing Date, Buyer shall prepare and deliver to Sellers’ Representative an adjustment statement setting forth the amount of the Closing Cash, the Unpaid Indebtedness and the Closing Working Capital and, based on the Closing Cash, the Unpaid Indebtedness and the Closing Working Capital as derived therefrom, Buyer’s written calculation of the Purchase Price, and the adjustment necessary to reconcile the Estimated Purchase Price to the Purchase Price (“ Preliminary Adjustment Statement ”). The Preliminary Adjustment Statement shall be prepared as of the Closing Date consistent with Schedule 2.3.1 and calculating the reserve for LIFO inventory as if the Closing Date were an interim month end, except that the Preliminary Adjustment Statement shall only reflect those assets, liabilities and information of the Company necessary to calculate the Closing Cash, the Unpaid Indebtedness and Closing Working Capital. In preparing the Preliminary Adjustment Statement: (a) any and all effects on the assets or liabilities of the Company of any financing arrangements entered into by Buyer on or after the Closing Date shall not be taken into account; (b) it shall be assumed that the Company shall be continued as a going concern; and (c) there shall not be taken into account any changes that Buyer intends to make on or after the Closing Date with respect to the Company, or any facts or circumstances that are unique or particular to Buyer, or any obligation for the payment of the Purchase Price. Buyer shall cooperate fully with Sellers’ Representative in his review of the Preliminary Adjustment Statement. Buyer shall cause the books and records of the Company to be made available during normal business hours to Sellers’ Representative, and shall cause the personnel of the Company to assist Sellers’ Representative in his review of the Preliminary Adjustment Statement.

     2.6.2 Adjustment Statement Review . If Sellers’ Representative reasonably believes that the Preliminary Adjustment Statement was not prepared in accordance with Section 2.6.1, Sellers’ Representative shall so notify Buyer no later than 30 days after his receipt thereof, setting forth in such notice his objections to the Preliminary Adjustment Statement with particularity and the specific changes which Sellers’ Representative claims are required to be made in order to conform it to the terms of Section 2.6.1. In the event of such notification of a dispute, Buyer and Sellers’ Representative shall negotiate in good faith to resolve such dispute, which shall include each side exchanging in writing their positions concerning the matter or matters in dispute and a meeting to discuss their respective positions.

     2.6.3 Adjustment Statement Dispute Resolution . If Sellers’ Representative timely notifies Buyer in accordance with Section 2.6.2 of an objection by Sellers’ Representative to the Preliminary Adjustment Statement, and if Buyer and Sellers’ Representative are unable to resolve such dispute through good faith negotiations within 30 days after Sellers’ Representative’s delivery of such notice of objection, then the parties shall mutually engage and submit such dispute to, and the same shall be finally resolved in accordance with the provisions of this Agreement by PricewaterhouseCoopers or such other accounting firm of national reputation as shall be mutually acceptable (the “ Independent Accountants ”). The Independent Accountants shall determine and report in writing to Buyer and Sellers’ Representative as to the resolution of all disputed matters and the effect of such determinations on the Preliminary Adjustment

Statement within 20 days after such submission or such longer period as the Independent Accountants may reasonably require, and such determinations shall be final, binding and conclusive; provided, however, that, with respect to each disputed item comprising the Preliminary Adjustment Statement ( i.e ., the Closing Cash, the Unpaid Indebtedness and the Closing Working Capital, as the case may be), such determinations shall not be (a) greater in amount than the highest amount claimed by Buyer or Sellers with respect to such item, or (b) lesser in amount than the lowest amount claimed by Buyer or Sellers with respect to such item. Buyer, on the one hand, and Sellers, collectively, on the other hand, shall each bear one-half of the fees and expenses of the Independent Accountants.

     2.6.4 Final Adjustment Statement . The Preliminary Adjustment Statement shall become the “ Final Adjustment Statement ,” and as such shall become final, binding and conclusive for all purposes of this Agreement, upon the earliest to occur of the following:

     (a) the mutual acceptance by Buyer and Sellers’ Representative of the Preliminary Adjustment Statement, with such changes thereto, if any, as may be proposed by Sellers’ Representative and consented to by Buyer;

     (b) the expiration of 30 days after Sellers’ Representative’s receipt of the Preliminary Adjustment Statement, without timely written objection by Seller Representative in accordance with Section 2.6.2; or

     (c) the delivery to Buyer and Sellers’ Representative by the Independent Accountants of the report of their determination of all disputed matters submitted to them pursuant to Section 2.6.3.

     2.6.5 Adjustment of Purchase Price . If the Purchase Price, as determined in accordance with Section 2.6.4, is greater than the Estimated Purchase Price, then Buyer shall pay the amount of such difference to Sellers’ Representative for the benefit of Sellers by means of a wire transfer of immediately available funds to the Sellers’ Account. If the Purchase Price, as determined in accordance with Section 2.6.4, is less than the Estimated Purchase Price, Sellers’ Representative, on behalf of Sellers, shall pay the amount of such difference to Buyer by means of a wire transfer of immediately available funds to an account designated by Buyer. Any such amount shall be due and payable no later than five business days after the Preliminary Adjustment Statement becomes the Final Adjustment Statement.

     2.7 Certain Tax Matters .

     2.7.1 Tax Election . At the option of Buyer, Sellers and the Company shall join Buyer to make a timely, effective and irrevocable election under Section 338(h)(10) of the Code and under any comparable statutes in any other jurisdiction with respect to the Company as designated by Buyer (the “ Tax Election ”), and file such Tax Election in accordance with applicable regulations, thereby enabling Buyer to treat the Transaction as an asset purchase for certain Tax and accounting purposes. Sellers and Buyer shall cooperate (and cause their respective Affiliates to cooperate) in all respects for the purpose of effectuating a timely and effective Tax Election and the execution and filing of any forms or returns, including IRS Form 8023 and all schedules thereto in accordance with the instructions to such form. Any information on IRS Form 8023 allocating the Purchase Price and the liabilities of the Company to separately identifiable assets and categories thereof shall be consistent with Sections 338 and 1060 of the Code. Upon the making of the Tax Election, Sellers covenant and agree that, with respect to the preparation and filing of any federal, state, local or foreign income Tax Return,

Sellers shall prepare and file all such Tax Returns on a basis consistent with the principles illustrated in Treasury Regulations Section 1.338(h)(10)-1.

     2.7.2 Allocation Statement . Within 90 days after determination of the Final Adjustment Statement, Buyer shall deliver to Sellers’ Representative a statement (the “ Allocation Statement ”) calculating and allocating the ADSP (as such term is used in Treasury Regulations Section 1.338(h)(10)-1) among the assets of the Company in accordance with Treasury Regulations promulgated under Section 338(h)(10) of the Code. If Sellers’ Representative believes that the calculation and/or allocation of one or more items reflected in the Allocation Statement is not reasonable, Sellers’ Representative shall so notify Buyer no later than 30 days after Sellers’ Representative’s receipt thereof. In the event of such notification of a dispute, Buyer and Sellers’ Representative shall negotiate in good faith to resolve such dispute, which shall include each side exchanging in writing their positions concerning the matter or matters in dispute and a meeting to discuss their respective positions. If Buyer and Sellers’ Representative fail to resolve such dispute within 30 days, the matter shall be submitted to the Independent Accountants in accordance with the procedures set forth in Section 2.6.3 to determine whether the calculation and/or allocation of the ADSP was reasonable and, if not reasonable, shall appropriately revise the Allocation Statement. Buyer, on the one hand, and Sellers, collectively, on the other hand, shall each bear one-half of the fees and expenses of the Independent Accountants.

     2.7.3 Final Price Allocation . The allocation reflected on the Allocation Statement shall be the “ Final Price Allocation ” and, as such, shall become final, binding and conclusive for all purposes of this Agreement upon the earliest to occur of the following:

     (a) the mutual acceptance by Buyer and Sellers’ Representative of the Allocation Statement, with such changes thereto, if any, as may be proposed by Sellers’ Representative and consented to by Buyer;

     (b) the expiration of 30 days after the receipt by Sellers’ Representative of the Allocation Statement, without timely written objection by Sellers’ Representative in accordance with Section 2.7.2; or

     (c) the delivery to Buyer and Sellers’ Representative by the Independent Accountants of the report of their determination of the revised Allocation Statement pursuant to Section 2.7.2.

     2.8 Allocation to Sellers of Purchase Price . The payment by Buyer of the Purchase Price (including any additional amount required pursuant to Sections 2.6.5) into the Sellers’ Account shall constitute payment by Buyer to each Seller and satisfaction of Buyer’s obligation to pay such amount hereunder. Once Buyer completes the payment of the Purchase Price into Sellers’ Account, Buyer shall have no liability relating to the allocation or distribution of funds from such Sellers’ Account. The Purchase Price and any collective obligations of Sellers that have not been satisfied at or prior to the Closing, including any Transaction fees and expenses incurred on behalf of Sellers, shall be allocated among Sellers in accordance with Schedule 2.8. The portion of the Purchase Price allocated to each Seller (net of any such collective obligations and any reserves or holdbacks for indemnification obligations or otherwise established pursuant to this Agreement or by Sellers’ Representative in his sole discretion) shall be paid and distributed to such Seller by means of a wire transfer of immediately available funds to an account designated by such Seller to Sellers’ Representative prior to or at the Closing. At the Closing, Sellers’ Representative may withhold from the proceeds otherwise distributable to each Seller, and pay, such Seller’s pro-rata portion of any fees or expenses incurred by or on behalf of

Sellers in connection with the Transaction. Sellers’ Representative shall not assert claims against the proceeds otherwise distributable to each Seller except to the extent permitted by this Agreement.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS REGARDING THE TRANSACTION

     Each Seller severally represents and warrants to Buyer that the following statements contained in this Article 3 are true and correct at and as of the date of this Agreement with respect to such Seller, except as set forth in the Disclosure Schedule. No Seller makes any representation or warranty in this Article 3 with respect to any other Seller.

     3.1 Authority and Capacity . Seller has all requisite power and authority to execute, deliver and perform this Agreement and each Related Agreement to be executed and delivered by Seller, and to consummate the Transaction. If Seller is not a natural person, Seller is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization.

     3.2 Ownership of Shares . Seller is the beneficial and record owner and has good title to all of such Seller’s Respective Shares free and clear of all Liens and does not own any other share of any class of capital stock of the Company. Seller is not a party to any option, warrant, purchase right or other contract that could require such Seller to sell, transfer or otherwise dispose of such Seller’s Respective Shares and Seller is not a party to any voting trust, proxy or other contract with respect to the voting thereof. At the Closing, Buyer will acquire from Seller good and valid title to such Seller’s Respective Shares free and clear of all Liens.

     3.3 Execution and Delivery; Enforceability . This Agreement has been, and each Related Agreement to be executed and delivered by Seller will upon such delivery be, duly executed and delivered by Seller and constitutes, or will upon such delivery constitute, the legal, valid and binding obligation of Seller, enforceable in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights or by principles of equity.

     3.4 Noncontravention . Except as set forth in the Disclosure Schedule, neither the execution and delivery by Seller of this Agreement or any Related Agreement nor compliance by Seller with their terms:

     (a) will be a breach of or a default under (i) in the case of any Seller that is not a natural person, Seller’s Organizational Documents, (ii) any agreement or instrument to which Seller is a party; (iii) any Law applicable to Seller;

     (b) will result in the imposition of any Lien on such Seller’s Respective Share; or

     (c) will require a filing with or Permit from any Governmental Authority or any other notice to or consent of any Person.

     3.5 Litigation . There are no Actions pending or, to the knowledge of such Seller, threatened in writing against or affecting such Seller in which it is sought to restrain or prohibit or to obtain damages or other relief in connection with the Transaction.

     3.6 Taxes . Such Seller has not taken any action that could jeopardize the tax classification of the Company obtained pursuant to the S Corporation election under the Code.

     3.7 Competing Business; Related Transactions . Neither such Seller, nor any related person of such Seller, has any direct or indirect equity interest in any Person that competes with or conducts any business similar to that of the Company, or is otherwise engaged in competition with the Company with respect to any line of products or services of the Company. Neither such Seller, nor any related person of such Seller, is a party to any contract or other commitment to which the Company is a party or by which any of its properties or assets is bound.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLERS REGARDING THE COMPANY

     Each Seller severally represents and warrants to Buyer that the following statements contained in this Article 4 are true and correct at and as of the date of this Agreement, except as set forth in the Disclosure Schedule.

     4.1 Organization and Good Standing . The Company is duly incorporated, validly existing and in good standing under the laws of the State of Ohio. The Company has all requisite corporate power and authority to own and lease its assets and to operate its business as the same are now being owned, leased and operated. The Company is duly qualified or licensed to do business as a foreign corporation in, and is in good standing in, each jurisdiction in which the nature of its business or its ownership of its properties requires it to be so qualified or licensed, except where the failure to be so qualified or licensed would not reasonably be expected to have a Material Adverse Effect. The Disclosure Schedule sets forth a complete list of (a) all jurisdictions in which the Company is qualified or licensed to do business, (b) all directors and officers of the Company, (c) all bank, payroll and securities brokerage accounts of the Company and all authorized signers for each such account, and (d) all powers of attorney granted by the Company to any third party that are currently in effect. The Company has delivered or made available to Buyer a complete copy of the Organizational Documents of the Company, each of which Organizational Documents is in full force and effect, and Company is not in violation of any provision thereof. The Company does not presently own or control any capital stock of any other corporation or have an interest in any partnership, business trust, association, joint venture or other business entity.

     4.2 Capital Stock . The total number of shares of capital stock of all classes which the Company has the authority to issue is 13,500 of which 135 are voting common shares, without par value, and of which 13,365 are nonvoting common shares, without par value. The Disclosure Schedule sets forth the respective voting common shares and nonvoting common shares which are issued and outstanding and owned of record by Sellers and each Seller’s percentage ownership of the Company (“ Prorata Share ”). The Shares constitute all of the shares of capital stock which are issued and outstanding. All of the Shares have been duly authorized and validly issued, are fully paid and nonassessable, and were issued in compliance with all applicable federal and state securities laws and any preemptive rights or rights of first refusal of any Person. Except as set forth in the Disclosure Schedule, (a) there are no voting trusts, proxies, or other agreements or understandings with respect to the voting of any shares of capital stock of the Company, (b) there does not exist nor is there outstanding any right or security granted or issued to any Person to cause the Company to issue or sell any shares of capital stock to any Person (including any warrant, stock option, convertible debt obligation, subscription for stock or securities convertible into stock of the Company, or any other similar right, security, instrument or agreement), and (c) there is no obligation of the Company to (i) repurchase, redeem or otherwise acquire any share of the capital stock or other equity interests of the Company or (ii) loan to, invest in, or provide any guarantee with respect to the obligations of, any Person. The Company is not obligated to pay any dividend, distribution or payment to any current or former holder of the Company’s capital stock. There are no preemptive rights or rights of first refusal with respect to the issuance of any of the Company’s capital stock.

     4.3 Noncontravention . Except as set forth on the Disclosure Schedule, neither the execution and delivery of this Agreement or any Related Agreement nor compliance with their terms will (x) be a breach of or a default under (a) the Organizational Documents of the Company, (b) except as set forth in the Disclosure Schedule, any agreement or instrument to which the Company is a party, or (c) any Law applicable to the Company, or (y) require a filing with or Permit from any Governmental Authority or any other notice to or consent of any Person.

     4.4 Financial Statements . The Disclosure Schedule sets forth complete copies of the reviewed financial statements of the Company as of and for the fiscal years ended December 31, 2006, 2005 and 2004 (collectively, the “ Reviewed Financial Statements ”), and the internally prepared balance sheet and income statement of the Company as of and for the nine-month period ended September 30, 2007 (the “ Interim Financial Statements ”). The Reviewed Financial Statements (i) are correct and complete, (ii) are consistent with the books and records of the Company, (iii) except as set forth on the Disclosure Schedule, have been prepared in accordance with GAAP, and (iv) present fairly, in all material respects, the financial position of the Company as of the dates indicated and the results of operations and cash flows for the periods then ended. The Interim Financial Statements (i) are correct and complete, (ii) are consistent with the books and records of the Company and (iii) except as set forth on the Disclosure Schedule, have been prepared in accordance with GAAP (except for the absence of disclosures normally made in footnotes) and (iv) present fairly, in all material respects, the financial position of the Company as of the date indicated and the results of operations for the period then ended, subject in each case to normal year end adjustments none of which will be material. The balance sheet as of September 30, 2007, which is included in the Interim Financial Statements, is referred to as the “ Acquisition Balance Sheet .” There are no Off Balance Sheet Arrangements effected by the Company.

     4.5 No Undisclosed Liabilities . The Company has no liability or obligation (whether direct or indirect, accrued, fixed, contingent or otherwise) of the nature which would have been required to be disclosed in the liabilities column of a balance sheet prepared in accordance with GAAP except for (i) liabilities, commitments or obligations reflected or reserved against in the Interim Financial Statements or the Reviewed Financial Statements and (ii) liabilities (including Taxes), commitments or obligations incurred in the Ordinary Course of Business since the date of the Interim Financial Statements.

     4.6 Absence of Certain Changes or Events . Except as set forth on the Disclosure Schedule, since the date of the Acquisition Balance Sheet or with respect to subsection (e), since December 31, 2006, the Company has been operated only in the Ordinary Course of Business, and:

     (a) there has not occurred any event or circumstance that constitutes, or is reasonably likely to result in, a Material Adverse Effect;

     (b) there has not been any material change in the Tax reporting or accounting policies or practices of the Company and the Company has not settled or compromised any Tax liability or made any Tax election;

     (c) the Company has not incurred any Indebtedness, or assumed, guaranteed or endorsed the Indebtedness of any other Person, or canceled any debt or released any claim except for the compromise of accounts receivable in the Ordinary Course of Business;

     (d) the Company has not suffered any theft, damage, destruction or loss of or to any tangible asset or assets having a value in excess of $50,000 individually or $100,000 in the aggregate;

     (e) the Company has not made, granted or committed to make or grant any bonus or any wage, salary or compensation increase to any director, officer, employee or consultant, other than salary increases and bonuses in the Ordinary Course of Business, or any increase of any benefit provided under any Employee Benefit Plan or arrangement, and the Company has not amended or terminated any existing Employee Benefit Plan or arrangement or adopted any new Employee Benefit Plan or arrangement;

     (f) other than distributions in the Ordinary Course of Business for purposes of funding the tax liability of Sellers, the Company has not declared or paid any dividend or made any other distribution to its equity holders on or in respect of, or repurchased, redeemed, retired or otherwise acquired any shares of, its capital stock or any options, warrants or other rights to purchase such stock or adjusted or reclassified its capital stock;

     (g) the Company has not sold, transferred or subjected to any Lien, or committed to sell, transfer or subject to any Lien, any tangible or intangible assets having a current book value in excess of $50,000 individually or $100,000 in the aggregate, except for sales of inventory in the Ordinary Course of Business and Permitted Liens;

     (h) the Company has not purchased or leased any asset for an amount in excess of $100,000 individually or $250,000 in the aggregate, except purchases of inventory and supplies in the Ordinary Course of Business; and

     (i) the Company has not authorized any capital expenditures or commitment for capital expenditures in an amount more than $100,000 individually or $250,000 in the aggregate.

     4.7 Taxes . All Tax Returns required to be filed by the Company have been duly and timely filed and are correct and complete in all material respects, and all Taxes shown to be payable by the Company on such Tax Returns have been or will be paid as of the Closing Date, other than Taxes which are not yet due or which, if due, are not delinquent or are being contested in good faith by appropriate proceedings or have not been finally determined. There are no Tax claims, audits or proceedings pending or, to Sellers’ Knowledge, since December 31, 2006, threatened in writing. There are not currently in force any waivers or agreements binding upon the Company for the extension of time for the assessment or payment of any Tax. The Company has properly withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any shareholder, employee, creditor, independent contractor, or other third party. The Company is not a party to or bound by any Tax allocation or Tax sharing agreement with any other Person and has no contractual obligation to indemnify any other Person with respect to Taxes. The Company has not been a member of an affiliated group filing a consolidated federal income Tax Return nor has any liability for the Taxes of any Person under Treas. Reg. § 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract, or otherwise. The Company has been a validly electing S-Corporation since January 1, 1988.

     4.8 Employees . Except as described in the Disclosure Schedule, there are no Actions by any employee or former employee pending or, to Sellers’ Knowledge, since December 31, 2006, threatened in writing against the Company. The Company is not a party to any collective bargaining agreement nor, to Sellers’ Knowledge, is there pending any union organizational activities or proceedings with respect to the Company. The Disclosure Schedule sets forth a complete list of all employees of the Company who, for the 2006 calendar year, received compensation of $50,000 or more. There is no labor strike, slowdown or stoppage pending or, to Sellers’ Knowledge, since December 31, 2006, threatened in writing against the Company. None of the Company’s key employees has notified the Company or been notified by the Company that he or she will cancel, has canceled, or otherwise will terminate such employee’s

relationship with the Company. The Disclosure Schedules lists each Company employee who is on short or long term disability, medical leave, family leave or otherwise not actively employed in the business.

     4.9 Employee Benefit Plans . The Disclosure Schedule sets forth a list of all Plans. With respect to Plan matters:

     (a) none of the Plans is a “multiemployer plan” (as defined in Title I or Title IV of ERISA) or a plan subject to Title IV of ERISA;

     (b) each of the Plans that is intended to be tax-qualified under Section 401(a) of the Code either (i) has received a favorable determination letter from the Internal Revenue Service as to its qualification and is so qualified in all material respects or (ii) is a prototype plan and the prototype has received a favorable determination letter from the Internal Revenue Service as to its qualification, except that no representation is made with respect to any formal qualification requirement with respect to which the remedial amendment period under Section 401(b) of the Code has not yet expired;

     (c) all of the Plans have been operated in material compliance with their respective terms and all Laws, and all contributions required under the terms of the Plans or applicable Law have been timely made;

     (d) there are no pending or, to Sellers’ Knowledge, since December 31, 2006, threatened claims in writing by or on behalf of any of the Plans, by any employee or beneficiary covered under any Plan or otherwise involving any Plan (other than routine claims for benefits);

     (e) no amounts payable under the Plans will fail to be deductible for federal income tax purposes by virtue of Section 280G of the Code as a result of the consummation of the Transaction;

     (f) neither any Plan nor any other person or entity has engaged in a “prohibited transaction” (as defined in ERISA Section 406 or Code Section 4975) with respect to a Plan for which no individual or class exemption exists;

     (g) each Plan that is a “group health plan” (as defined in Code Section 5000(b)(1)) has complied and will comply at all times (whether before, on, or after the Closing Date) in all respects with the applicable requirements of ERISA Section 601 and 602, Code Section 162(k) (through December 31, 1998) and Code Section 4980B (commencing on January 1, 1989);

     (h) no Plan is an “employee welfare benefit plan” (as defined in ERISA Section 3(1)) that provides benefits to or on behalf of any person following retirement or other termination of employment (except to the extent required by Code Section 4980B);

     (i) no Plan is subject to Code Section 409A or, if subject to 409A, has been in good faith compliance with Code Section 409A since January 1, 2005; and

     (j) neither the execution and delivery of this Agreement nor the consummation of the Transaction will (i) result in any material payment (including severance, unemployment compensation, golden parachute or otherwise) becoming due to any director, officer or any employee under any Plan or otherwise, (ii) materially increase any benefits otherwise payable under any Plan, or (iii) result in any acceleration of the time of payment or vesting of any such benefits to any material extent.

     4.10 Environmental Matters . Except as provided in the Disclosure Schedule:

     (a) there has been no Treatment or Storage of any Hazardous Material at, on, under or from any of the Real Property or on any other property on which the Company or any predecessor has conducted its business, except in accordance with applicable Environmental Laws, and in a manner that would not give rise to any Action, liability or obligations under Environmental Laws;

     (b) there has been no Release or threatened Release of any Hazardous Material at, on, under, from or, affecting, any of the Real Property or any other property on which the Company or any predecessor has conducted its business in violation of any applicable Environmental Laws, or in a manner that would give rise to any Action, liability or obligations under Environmental Laws;

     (c) there has been no Disposal of any Hazardous Materials at, on or under any of the Real Property or any other property on which the Company or any predecessor has conducted its business in violation of any applicable Environmental Laws, or in a manner that would give rise to any Action, liability or obligations under Environmental Laws;

     (d) the Company has not Disposed or arranged for the Disposal of any Hazardous Materials at any place, location or any property except in compliance with Environmental Laws and in a manner that would not give rise to any Action, liability or obligations under Environmental Laws;

     (e) the Company has not been named in any Action concerning, and none of them has received any written or oral notice or request for information from any third party with respect to, a Release or threatened Release of any Hazardous Material or of a violation or alleged violation of any Environmental Law and, to the Company’s Knowledge, no such notice or request is threatened;

     (f) there are no underground storage tanks or related piping nor any polychlorinated biphenyl or friable asbestos materials located on, under or at any of the Real Property, and the Company has not removed any such tank, piping polychlorinated biphenyls or friable asbestos materials from any Real Property;

     (g) the Company is in compliance with Environmental Laws and has made, timely and sufficient application to Governmental Authority to the extent required to ensure continued compliance with Environmental Laws;

     (h) to the Sellers’ Knowledge, there are no facts, circumstances, conditions or occurrences resulting from the Company’s or any predecessor’s conduct of the Business that could reasonably be anticipated (i) to form the basis of an Action arising under or relating to Environmental Laws, (ii) to interfere with or prevent the Company’s continued compliance with Environmental Laws, or (iii) to cause the Real Property or the Business to be subject to any restrictions on ownership, occupancy, use or transferability under any Environmental Laws; and

     (i) the Company has provided to Buyer true and complete copies of any environmental reports, correspondence to and from any Governmental Authority and other documents in its possession or control that relate to Actions under Environmental Laws, the Company’s compliance with Environmental Laws and Permits issued under Environmental Laws

and the Environmental Condition of the Real Property, which are listed on the Disclosure Schedule.

     4.11 Compliance with Laws . The Company is, and has been at all times since December 31, 2006, in compliance in all material respects with all applicable Laws and possesses all Permits which are required with respect to the operation of its business as currently conducted. Since December 31, 2006, the Company has not received any written notice from any Person alleging any material noncompliance with any applicable Law or Permit.

     4.12 Real Property . The Disclosure Schedule set forth a complete list of the real property relating to the business of the Company owned or leased by the Company (the “ Real Property ”), and specifies the Company’s ownership or leasehold interest therein. The Company has good, marketable and indefeasible fee simple title to, and the right to quiet enjoyment of, the Real Property owned by the Company, free and clear of all Liens, except Permitted Liens, and no leasehold or other interest of the Company in Real Property is subject or subordinate to any Lien, except Permitted Liens, whether a lien on the leasehold estate or fee estate. With respect to the Real Property owned by the Company, no Person other than the Company has any use, occupancy or leasehold rights with respect to such Real Property or any part thereof, and such Real Property is not subject to any leases or subleases, unrecorded easements, options to purchase, rights of first offer or refusal to purchase, or any other agreement or contract to use, lease or purchase such Real Property. Each use of the Real Property by the Company is and has been valid, permitted and conforming uses in accordance with the current zoning classification of the Real Property, and there are no outstanding variances or special use permits affecting the Real Property or its uses. Since December 31, 2006, the Company has not received written notice of any pending or threatened condemnations, planned public improvements, annexation, special assessments, zoning or subdivision changes, or other adverse claims affecting the Real Property nor any written notice of default of any covenant, condition, restriction or right of way or easement affecting the Real Property. The Real Property either is freely accessible directly from all public streets on which it abuts, or uses adjoining private land to access the same in accordance with valid public easements; to Sellers’ Knowledge, there is no condition which would result in the termination of such access. Water, sewer, drainage facilities, telephone and electrical service connections are readily available to the Real Property without assessment other than annual maintenance and use charges, and all such connections currently in place are operable and adequate for their present usage.

     4.13 Personal Property . The Company owns each of the items of tangible personal property reflected on the Acquisition Balance Sheet or acquired thereafter (except for assets that have been disposed of in the Ordinary Course of Business since the date of the Acquisition Balance Sheet), free and clear of all Liens, except for Permitted Liens. The condition of the tangible personal property is sufficient, in all material respects, for the operation of the business as currently conducted by the Company. No Person, other than the Company, owns or primarily utilizes any material equipment of the Company. Except as set forth on the Disclosure Schedule, all of the tangible personal property is located at the Real Property.

     4.14 Accounts Receivable; Inventory .

     (a) The accounts receivable reflected on the books and records of the Company represent valid obligations arising from sales actually made. The Company has not received written notice of any contest, claim or right of setoff with respect to its accounts receivable, other than returns and discounts in the Ordinary Course of Business.

     (b) The inventories of the Company are suitable, usable, not obsolete and, in the case of finished goods and products, saleable in the ordinary course of business at applicable prices,

except inventories that have been written down and subject to reserves for obsolete, slow-moving and excess inventories on the books and records of the Company. There is no consigned inventory. All the inventories of the Company are physically located at the Company’s facilities or, are in transit to the Company or to a customer, distributor or sales representative.

     4.15 Intellectual Property . The Disclosure Schedule set forth a complete and correct list of all patented or registered Intellectual Property and pending applications for registration of Intellectual Property, material unregistered trademarks, service marks, trade names, material unregistered copyrights, corporate names, logos and slogans, Internet domain names and material software included in the Company Intellectual Property. The Disclosure Schedule set forth all written material licenses for which the Company is a party either as a licensee or licensor and any other material agreements under which the Company grants or receives any rights to Intellectual Property. With respect to Intellectual Property matters:

     (a) the Company owns and possesses all right, title and interest in and to, or has a valid and enforceable right or license to use the Company Intellectual Property as currently being used;

     (b) the Company Intellectual Property is not subject to any Liens and is not subject to any restrictions or limitations regarding use or disclosure other than pursuant to written license agreements applicable thereto;

     (c) to Sellers’ Knowledge, the Company Intellectual Property owned by the Company and the Company Intellectual Property used by the Company are valid, subsisting, in full force and effect and have not been cancelled, expired or abandoned;

     (d) (i) to Sellers’ Knowledge, the Company has not infringed, misappropriated or otherwise conflicted with, any Intellectual Property of any third party; (ii) to Sellers’ Knowledge, the conduct of the business as currently conducted by the Company does not infringe upon any Intellectual Property owned or controlled by any third party; and (iii) the Company has not received any written notice regarding any of the foregoing (including any demands or offers to license any Intellectual Property from any third party);

     (e) to Sellers’ Knowledge, no third party has infringed, misappropriated or otherwise conflicted with any of the Company Intellectual Property;

     (f) no claims of infringement, misappropriation or other conflict with any of the Company Intellectual Property have been brought or, since December 31, 2006, to Seller’s Knowledge, threatened against any Person by the Company; and

     (g) (i) all licenses included in the Disclosure Schedule are in full force and effect and, to Sellers’ Knowledge, are enforceable by the Company in accordance with their respective terms, (ii) the Company has performed all material obligations required to be performed by it pursuant to the licenses and agreements included in the Disclosure Schedule, and (iii) there is no existing or, to Sellers’ Knowledge, since December 31, 2006, threatened default under or violation of any of the licenses or agreements included in the Disclosure Schedule by any other party thereto.

     4.16 Contracts . The Disclosure Schedule lists the following written agreements or binding oral agreements to which the Company is a party and which are currently in effect:

     (a) contracts or group of related contracts, including, purchase orders entered into in the Ordinary Course of Business which provide for the purchase of goods or services by the Company from any one Person under which the undelivered balance of such goods or services has a purchase price in excess of $50,000;

     (b) contracts or group of related contracts, including, sales orders entered into in the Ordinary Course of Business, which provide for the sale of goods or services by the Company and under which the undelivered balance of such goods or services has a sale price in excess of $50,000;

     (c) contracts relating to the borrowing of money by the Company, to the granting by the Company of a Lien on any of its assets, or any guaranty by the Company of any obligation in respect of borrowed money or otherwise;

     (d) contracts with dealers, distributors or sales representatives;

     (e) employment, confidentiality and non-competition agreements with any employee, officer, consultant or management advisor;

     (f) contracts which limit the freedom of the Company to (i) engage in any business. (ii) conduct business in any geographic region, or (iii) compete with any Person;

     (g) contracts pursuant to which the Company is a lessor or a lessee of any personal or real property, or holds or operates any tangible personal property owned by another Person, except for any such leases under which the aggregate annual lease payments do not exceed $50,000;

     (h) stock option contracts, warrants and convertible securities for the purchase or issuance of capital stock of the Company;

     (i) contracts restricting the transfer of capital stock of the Company, obligating the Company to issue or repurchase shares of its capital stock, or relating to the voting of stock or the election of directors of the Company;

     (j) contracts or commitments for the purchase or sale of capital assets in excess of $50,000;

     (k) contracts or commitments to any employee (other than any Plan), including any of the foregoing which provides for commission payments or severance or post-retirement benefits;

     (l) any Government Contract; and

     (m) material written contracts not otherwise described in this Section.

     The Company has made available to Buyer correct copies of each contract required to be identified as provided in this Section (collectively, the “ Material Contracts ”); provided, however, that the Disclosure Schedule may also include contracts that are not required to be identified as provided in this Section, and the identification of such contracts as provided in this Section is not an admission that such contracts are Material Contracts. All of the Material Contracts are in full force and effect and, to Seller’s Knowledge, are enforceable in accordance with their respective terms. The Company has performed in

all material respects all obligations required to be performed by it pursuant to such contracts, and there is no existing or, to Sellers’ Knowledge, since December 31, 2006, default or threatened default under or violation of any of such contracts by any other party thereto. With respect to the Government Contracts to which the Company is a party, the Company is in compliance in all material respects with all applicable Laws and contract provisions applicable to the obtaining, formation, pricing, performance, billing, administration and other aspects of its Government Contracts, including without limitation, the Truth in Negotiations Act, specialty metals laws (commonly known as the Berry Amendment) and other applicable Federal Acquisition Regulations and applicable provisions of the Defense Federal Acquisition Regulations Supplement and the Company maintains documentation appropriate to establish compliance with the foregoing. The cost accounting, pricing, estimating, property, and procurement systems relating to the Company’s Government Contracts are in compliance in all material respects with applicable laws, regulations and contract provisions, including without limitation, cost principles and cost accounting standards.

     4.17 Litigation . No actions are pending or threatened in writing against the Company that involve or, since December 31, 2004 have involved, more than $100,000 in damages individually. Except as set forth on the Disclosure Schedule, the Company is not the subject of any order, judgment or decree of any Governmental Authority.

     4.18 Product Warranty/Product Liability . No product warranty or liability claims are currently pending or, to Sellers’ Knowledge, since December 31, 2006, threatened against the Company which would exceed $50,000 individually or $100,000 in the aggregate.

     4.19 Brokerage . Except for Brown Gibbons Lang & Company Securities, Inc., whose fees and