STOCK PURCHASE AGREEMENT

Exhibit 2.1

STOCK PURCHASE AGREEMENT

BY AND BETWEEN

RENTECH DEVELOPMENT CORPORATION

AND

ROYSTER-CLARK, INC.

DATED AS OF NOVEMBER 5, 2005

 

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STOCK PURCHASE AGREEMENT

          STOCK PURCHASE AGREEMENT, dated as of November 5, 2005 (this “ Agreement ”), by and between RENTECH DEVELOPMENT CORPORATION, a Colorado corporation (“ Buyer ”), and ROYSTER-CLARK, INC., a Delaware corporation (“ Seller ”).

RECITALS:

          WHEREAS, Seller is the record and beneficial owner of all of the issued and outstanding shares of capital stock (the “ Shares ”), of Royster-Clark Nitrogen, Inc., a Delaware corporation (the “ Company ”);

          WHEREAS, Seller desires to sell the Shares to Buyer, and Buyer desires to purchase the Shares from Seller, upon the terms and subject to the conditions set forth in this Agreement;

          WHEREAS, Buyer and Seller desire to make certain representations, covenants and agreements in connection with the transactions contemplated by this Agreement.

          NOW, THEREFORE, in consideration of and premised upon the various representations, warranties, covenants and other agreements and undertakings of the parties contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I

DEFINITIONS

          Section 1.1.      Definitions .

                       (a)       For all purposes in this Agreement, the following terms shall have the respective meanings set forth in this Section 1.1 :

          “ Acquisition ” means the purchase and sale of the Shares referred to in this Agreement.

          “ Affiliate ” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, such Person.  For the purposes of this definition, “ control ,” when used with respect to any specified Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of Equity Interests, by Contract or otherwise; and the terms “ controlling ” and “ controlled ” have correlative meanings to the foregoing.  For purposes of the definition of “ control ,” a general partner or managing member of a Person shall always be considered to control such Person.

          “ Applicable Accounting Principles ” means (i) the same accounting methods, policies, practices and procedures, with consistent classification, judgments and estimation methodology, as were used by the Company in preparing the Financial Information but (ii) not taking into account any changes in circumstances or events occurring after the closing of business on the Closing Date, except to the extent such changes provide indications of conditions on the Closing Date; provided , however , that inventory shall include, without limitation, supplies, parts, unamortized catalyst expenditures and recovered precious metals.

 

          “ Applicable Law ” means any statute, law (including common law), ordinance, rule, code, public administrative interpretation, published policy statement, regulation, judgment, order, writ, injunction, directive, judgment, decree or other requirement of any Governmental Authority applicable to the Person or Persons referenced.

          “ Business Day ” means any day of the year on which national banking institutions in New York, New York are open to the public for conducting business and are not required or authorized to close.

          “ Buyer Material Adverse Effect ” means any change, effect, event, occurrence, state of facts or development that would reasonably be expected to cause Buyer to be unable to consummate the transactions contemplated hereby on or before the Drop Dead Date.

          “ CERCLA ” shall mean the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601, et seq.), as amended, and rules and regulations thereunder.

          “ Charter Documents ” means, with respect to any entity, the certificate of incorporation, the articles of incorporation, by-laws, articles of organization, limited liability company agreement, partnership agreement, formation agreement, joint venture agreement or other similar organizational documents of such entity (in each case, as amended).

          “ Closing ” means the completion of the transactions contemplated by this Agreement.

          “ Closing Date ” means the date of the Closing.

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

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

          “ Company Disclosure Schedule ” means the disclosure schedule being delivered by Seller to Buyer on the date hereof.

          “ Company Material Adverse Effect ” means any change, effect, event, occurrence, state of facts or development that is materially adverse to the business, financial condition, results of operations of the Company, or on the ability of Seller to consummate the transactions contemplated hereby on or before the Drop Dead Date, provided , however , that none of the following shall be deemed in themselves, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been or will be, a Company Material Adverse Effect:  any adverse change, effect, event, occurrence, state of facts or development to the extent attributable to, resulting from or relating to (i) the announcement or pendency of the transactions contemplated by this Agreement; (ii) any adverse conditions affecting the industry generally, declines in any securities market or segment thereof, general national, international or regional economic or financial conditions, or any outbreaks of hostilities or terrorism or escalation thereof or other calamity or crisis; (iii) compliance with the terms of, or the taking of any action required by or consented to by Buyer pursuant to, this Agreement; or (d) actions required to be taken under applicable laws, rules or regulations.

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          “ Company Proxy Materials ” means the SEC Audited Financials, the SEC Unaudited Financials, a description of the Company’s business, a management’s discussion and analysis of the financial condition and results of operations for the Company and risk factors for the Company all in a form that Rentech, Inc. can reasonably include in the Proxy Statement.

          “ Contract ” means with respect to any Person, any agreement, indenture, debt instrument, contract, guarantee, loan, note, mortgage, license, lease, purchase order, delivery order or commitment, whether written or oral, including all amendments, modifications and options thereunder or relating thereto, to which such Person is a party, by which it is bound, to which any of its assets or properties is subject.

          “ Credit Agreement ” means the Second Amended and Restated Revolving Credit Agreement, dated as of July 22, 2005, by and among Seller, the Company and certain other Subsidiaries of the Seller as the co-borrowers, various financial institutions as lenders, U.S. Bank National Association, as the administrative agent, collateral agent and lead arranger and the CIT Group/Business Credit, Inc., as a collateral agent, providing for up to $250,000,000 of revolving credit borrowings, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection with the agreement, and in each case as amended, modified, renewed, refunded, replaced or refinanced from time to time.

          “ Distribution Agreement ” means the Distribution Agreement by and among Buyer and Seller, in the form attached to this Agreement as Exhibit A .

          “ Dollar ” or “ Dollars ” or “ $ ” means United States dollar currency in all cases, unless otherwise specified.

          “ East Dubuque Facility ” means the Owned Property in East Dubuque, Jo Daviess County, Illinois described in the Title Insurance Policy and the Survey.

          “ Employee Benefit Plan ” means each “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) and each other employee benefit plan, program, agreement, arrangement or payroll practice, including, without limitation, employment, consulting or other compensation agreements, equity or equity-based compensation, bonus or other incentive compensation or deferred compensation arrangements, retention, change in control, termination or severance plans or arrangements, employee loans, executive perquisites, vacation pay and educational assistance plans and programs for which the Company has or could reasonably expect to have any Liability (other than any liability arising solely as a result of the Company and any of the Subsidiaries being treated as a single employer with, or under common control with, Seller or any trade or business controlled by or under common control with Seller under Section 414 of the Code and the regulations thereunder).

          “ Encumbrance ” means any lien, pledge, security interest, charge, encumbrance, mortgage or adverse claims of any kind, except for restrictions imposed by applicable Securities Laws.

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          “ Environmental Laws ” means federal, state and local Applicable Laws imposing standards of conduct or otherwise relating to pollution or protection of the environment and the Management of Hazardous Substances including, without limitation, CERCLA; RCRA; the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the Pollution Control Act of 1990; and comparable state and local Applicable Laws, each as in effect on the date hereof.

          “ Environmental Liabilities ” has the meaning set forth in Section 3.17(b).

          “ Equity Interests ” means: (i) capital stock, partnership interests, membership interests, beneficial interests or any other equity or ownership interests in the Person referenced; (ii) any instruments or securities convertible into or exchangeable for, or whose value is determined by reference to, any such interests; or (iii) any other rights (including Contracts), warrants or options to acquire or dispose of any of the foregoing.

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

          “ ERISA Affiliate ” means any entity that is considered a single employer with, or under common control with, the Company under Section 414 of the Code.

          “ Escrow Agreement ” means that certain Escrow Agreement by and among Buyer, Seller and an escrow agent to be determined in substantially the form attached hereto as Exhibit B , including such changes as the escrow agent may require, which changes shall be subject to the reasonable approval of Buyer and Seller.

          “ Exchange Act ” means the United States Securities Exchange Act of 1934, as amended.

          “ Extension Fee ” means the $7,500 per calendar day fee payable by Buyer to Seller for the extension of the Drop Dead Date permitted by Section 8.1(a)(4), which fees shall accrue and be payable by Buyer to Seller within two (2) Business Days after the earlier of (i) the Closing or (ii) the termination of this Agreement pursuant to Sections 8.1(a)(2)-(4) , provided that Seller shall not have been in material breach of any of its obligations or representations or warranties under this Agreement at the time of such termination.

          “ Financial Releases ” means the releases necessary to release the Company and its Subsidiaries from the liens and guarantees created as a result of the Credit Agreement and the Indenture.

          “ Financing Arrangements ” means financing arrangements for the Buyer (including the proceeds from debt and/or equity offerings) which will provide sufficient financing for the consummation of the transactions contemplated herein.

          “ GAAP ” means generally accepted accounting principles as used in the United States of America.

          “ Governmental Authority ” means any domestic or foreign nation, union of nations, state, territory, province, county, city or other local government or other unit or subdivision thereof or any entity, commission, authority, tribunal, official, agency, department, board, commission, instrumentality, court, arbitrator, any other body legally authorized to exercise legislative, executive, judicial, regulatory, taxing, or administrative functions of or pertaining to government, and any governmental or non-governmental self-regulatory organization.

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          “ Hazardous Substances ” shall include any substance defined as a “hazardous substance,” “hazardous material,” “hazardous waste,” “toxic substance,” or any similar term under any Environmental Law including without limitation any petroleum product or a fraction thereof or byproduct, radioactive material, asbestos and polychlorinated biphenyls (“ PCBs ”).

          “ Indebtedness ” of any Person means, without duplication, (i) the principal of and premium (if any) in respect of (A) indebtedness of such Person for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable; (ii) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding trade accounts payable and other accrued current liabilities arising in the Ordinary Course of Business); (iii) all obligations of such Person under leases required to be capitalized in accordance with GAAP; (iv) all obligations of such Person for the reimbursement of any obligor on any banker’s acceptance or similar credit transaction; (v) the liquidation value of all redeemable preferred stock of such Person; (vi) the face amount of all accounts receivable sold to third parties under any factoring or similar arrangement; (vii) all obligations of the type referred to in clauses (i) through (vi) of any other Persons for the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, including guarantees of such obligations; and (viii) all obligations of the type referred to in clauses (i) through (vii) of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person).

          “ Indemnified Party ” shall mean the party entitled to indemnification pursuant to Article VII.

          “ Indemnifying Party ” shall mean the party required to indemnify the other party pursuant to Article VII.

          “ Indenture ” shall mean the Indenture dated as of July 22, 2005 by and among Seller, Royster-Clark ULC, the Company and the other guarantors set forth therein, and Computershare Trust Company of Canada, as Trustee, as amended, modified, renewed, refunded, replaced or refinanced from time to time.

          “ Intellectual Property ” means: (i) inventions, trade secrets, designs, technology, know how and other confidential or proprietary information and materials; (ii) trade marks and service marks (whether or not registered), applications for trade marks and service marks, trade names, logos, trade dress and all goodwill associated therewith; (iii) mask works and all works of authorship, whether or not protected by copyright; (iv) internet domain names; and (v) all letters patent, patent applications, provisional patents, design patents, and all applications, registrations, issuances, divisions, continuations, renewals, reissuances and extensions of the foregoing.

          “ IRS ” means the Internal Revenue Service of the United States.

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          “ Knowledge of Buyer ” or similar phrasing means the actual knowledge of each of the individuals set forth on Section 1.1 of the Company Disclosure Schedule after due inquiry.

          “ Knowledge of Seller ” or “ Seller’s Knowledge ” or similar phrasing means the actual knowledge of each of the individuals set forth on Section 1.1 of the Company Disclosure Schedule after due inquiry.

          “ Legal Proceeding ” means any judicial, administrative or arbitral action, suit, proceeding (public, private or self-regulatory), investigation, claim or assertion of liability or responsibility by or before any Governmental Authority.

          “ Liability ” means any Indebtedness, loss, damage, adverse claim, liability or obligation (whether direct or indirect, known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due, and whether in contract, tort, strict liability or otherwise), and including all costs and expenses relating thereto.

          “ Lien ” means any lien, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement, servitude, proxy, voting trust or agreement, transfer restriction under any shareholder or similar agreement, encumbrance or any other restriction or limitation whatsoever.

          “ Manage ” and “ Management ” shall mean generation, production, handling, distribution, processing, use, storage, treatment, operation, transportation, recycling, reuse and/or disposal of Hazardous Substances.

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

          “ Newt Contract ” means the Agreement to Exchange Like Kind Property between the Company and Gary Newt and Dubuque Barge and Fleeting Service Company dated November 24, 1999 and recorded February 6, 2003 as Document No. 298324 in the Recorder’s Office of Jo Daviess County Illinois, with respect to the East Dubuque Facility and certain adjacent land, together with all amendments and modifications thereof as reflected in correspondence relating to said agreement.

          “ Order ” means any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award of a Governmental Authority.

          “ Ordinary Course of Business ” means the ordinary and usual course of day-to-day operations of the business of the Company through the date hereof consistent with past practice.

          “ Permits ” means all licenses, permits, certificates of authority, authorizations, approvals, registrations, franchises and similar consents in each case granted or issued by any Governmental Authority or pursuant to any Applicable Law.

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          “ Permitted Exceptions ” means (i) statutory liens for current Taxes, assessments or other governmental charges not yet delinquent or the amount or validity of which is being contested in good faith by appropriate proceedings, provided an appropriate reserve is established therefor; (ii) mechanics’, carriers’, workers’, repairers’ and similar Liens arising or incurred in the Ordinary Course of Business that are not material to the business, operations and financial condition of the Company Properties so encumbered and that are not resulting from a breach, default or violation by the Company of any Contract or Applicable Law; (iii) zoning, entitlement and other land use requirements and Environmental Laws, provided that such requirements and Environmental Laws have not been violated so as to materially detract from the value of or materially interfere with the present use of any Company Properties; (iv) with respect to the East Dubuque Facility, all matters shown in Schedule B to Chicago Title Insurance Company Commitment for Title Insurance No. 11065 dated May 10, 2004 (excluding Nos. 28-30 of said Schedule B) (the “ Title Commitment ”), (v) all matters shown on a survey of the East Dubuque Facility, dated August 10, 1989, prepared by Paul C. Bradshaw (the “ Survey ”) and (vi) such other imperfections in title, charges, easements, restrictions and encumbrances of record which, individually or in the aggregate, do not materially detract from the value of or materially interfere with the present use of any Company Properties subject thereto or affected thereby.

          “ Person ” means any natural person, corporation, company, limited liability company, partnership (limited or general), joint venture, association, trust, unincorporated organization, Governmental Authority or other entity.

          “ RCRA ” shall mean the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), as amended as of the date hereof, and all rules, regulations, standards, guidelines, and publications issued thereunder.

          “ Release ” means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, depositing, or disposing into the environment of any Hazardous Substance.

          “ Remediation ” means investigations, monitoring, clean-up and other response actions required under Environmental Laws.

          “ SEC ” means the United States Securities and Exchange Commission.

          “ Securities Act ” means the United States Securities Act of 1933, as amended.

          “ Securities Laws ” means the Securities Act; the Exchange Act; the published rules and regulations of the SEC promulgated thereunder; the securities or “blue sky” laws of any state or territory of the United States and the comparable laws, rules and regulations in effect in any other country.

          “ Seller Material Adverse Effect ” means any change, effect, event, occurrence, state of facts or development that would reasonably be expected to cause Buyer to be unable to consummate the transactions contemplated hereby on or before the Drop Dead Date.

          “ Subsidiary ” means any entity of which more than 50% of the effective voting power or Equity Interests or such entity are directly or indirectly owned or controlled by the Company.

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           “ Tax ” or “ Taxes ” means (i) any and all taxes, assessments, fees, levies, imposts, duties and other governmental assessments or charges imposed by any Governmental Authority (including without limitation income, profits, gross receipts, net proceeds, alternative or add-on minimum, ad valorem, value added, turnover, sales, use, property, personal property (tangible and intangible), environmental, stamp, leasing, lease, user, excise, duty, franchise, capital, capital stock, transfer, registration, license, withholding, social security (or similar), unemployment, disability, payroll, employment, fuel, excess profits, occupational, premium, windfall profit, severance, estimated, or other charge of any kind whatsoever) and (ii) any interest and any penalties, additions to tax or additional amounts imposed by any Governmental Authority in connection with (A) any item described in clause (i) or (B) any Liability for failure to comply with any requirement imposed with respect to any Tax Return.

          “ Tax Returns ” means returns, reports, declarations and forms required to be filed with any Governmental Authority, including any schedules thereto and any amendments thereof, by the Code or by applicable state, local or foreign Tax laws (including any consolidated, combined or unitary Tax Return in which the Company or any of its Subsidiaries is or was required to have been included).

          “ Title Commitment ” means Chicago Title Insurance Company Commitment for Title Insurance No. 11065 dated May 10, 2004.

          “ Title Insurance Policy ” means Chicago Title Insurance Company Title Insurance Policy No. 14-0213-106-00000573 dated December 1, 1999.

          “ Tolling Days ” means the sum of (i) the number of calendar days after December 1, 2005 to and including the day that Seller delivers to Buyer the Company Proxy Materials plus (ii) the number of calendar days after the date that updated SEC Audited Financials and/or updated SEC Unaudited Financials are required by Regulation S-X for inclusion in the Proxy Statement to and including the day that Seller delivers such updated financial statements to Buyer.

          “ UST ” shall mean an underground storage tank, including as that term is defined, construed and otherwise used in RCRA and in rules, regulations, standards, guidelines and publications issued pursuant to RCRA and comparable state and local laws.

                       (b)       The following terms shall have the meaning specified on the indicated page of this Agreement:

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ARTICLE II

PURCHASE AND SALE OF SHARES; CLOSING; RELATED MATTERS

          Section 2.1.      Purchase and Sale of the Shares .  Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Seller shall sell, convey, transfer and deliver to Buyer, and Buyer shall purchase, acquire and accept from Seller, all right, title and interest in and to the Shares, free and clear of any Encumbrances.  The consideration to be paid by Buyer for the Shares is set forth in Section 2.4 hereof.

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          Section 2.2.      Closing; Delivery of the Shares .  The Closing shall take place (a) at the offices of Latham & Watkins LLP, 633 West Fifth Street, Suite 4000, Los Angeles, CA 90071 at 10:00 a.m. on the third Business Day following the date on which the last of the conditions set forth in Article VI that are capable of being satisfied before Closing are fulfilled or waived in accordance with this Agreement or (b) at such other place, time or date as Buyer and Seller may agree.  At the Closing, Seller will deliver to Buyer one or more certificates representing all of the Shares, duly endorsed in blank or accompanied by stock powers or other instruments of transfer duly executed in blank.

          Section 2.3.      Payment .  In consideration of the sale of the Shares to Buyer in accordance with this Agreement, Buyer shall pay to Seller at the Closing, by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer prior to the Closing, Aggregate Cash Consideration.

          Section 2.4.      Purchase Consideration .  The aggregate amount payable by Buyer to Seller in respect of the Shares (the “ Purchase Consideration ”) shall consist of cash (the “ Aggregate Cash Consideration ”) in an aggregate amount equal to the sum of (a) $50,000,000, plus (b) the Estimated Working Capital subject to adjustment as provided in Section 2.6 .

          Section 2.5.      Deposit .  Buyer shall engage an escrow agent and Buyer and Seller shall enter into the Escrow Agreement as soon as practicable after the date of this Agreement (and in any case no later than November 11, 2005).  Buyer shall deposit $2,500,000 (the “ Deposit ”) in immediately available funds with the escrow agent within two (2) Business Days after the date the Escrow Agreement is fully executed.  The Deposit will be held pursuant to the terms of the Escrow Agreement, such Deposit to be applied towards the Aggregate Cash Consideration or otherwise applied or paid in the manner provided for by Article VIII.

          Section 2.6.      Adjustment of Aggregate Cash Consideration . 

                    (a)          Not later than 10 Business Days before the Closing Date, Seller will provide Buyer with Seller’s good faith estimate of the Company’s Closing Working Capital, based upon the accounting books and records of the Company (the “ Estimated Working Capital ”), and all underlying documentation supporting the Estimated Working Capital.  The determination of the Estimated Working Capital will be binding on Seller and Buyer for purposes of this Section 2.6(a) and will be used to determine the amount of the Aggregate Cash Consideration payable to Seller at the Closing.  The Estimated Working Capital Amount must be equal to or greater than zero.  In the event that the Estimated Working Capital Amount is less than zero, Seller shall contribute an amount of cash to the Company necessary to cause the Estimated Working Capital Amount to equal zero.

                    (b)          As promptly as practicable, but no later than 45 days after the Closing Date, Seller shall cause to be prepared and delivered to Buyer the Closing Statement (as defined below) and a certificate based on such Closing Statement setting forth Seller’s calculation of Closing Working Capital.  The closing statement (the “ Closing Statement ”) shall present the Net Working Capital as of the end of business on the Closing Date (“ Closing Working Capital ”). 

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“ Net Working Capital ” means the amount equal to the Company’s cash, plus inventory (including, without limitation, supplies, parts, unamortized catalyst expenditures and recovered precious metals), plus trade receivables (other than trade receivables owing from Seller or its Affiliates), minus the accounts payable minus accrued liabilities (excluding all current and deferred Taxes based on the Company’s income) of the Company, in each case as determined in accordance with the Applicable Accounting Principles.  A sample calculation of Net Working Capital is attached hereto as Annex A .

                    (c)          If Buyer disagrees with Seller’s calculation of Closing Working Capital delivered pursuant to Section 2.6(b) , Buyer may, within 30 days after delivery of the Closing Statement, deliver a notice to Seller disagreeing with such calculation and setting forth Buyer’s calculation of such amount.  Any such notice of disagreement shall (i) specify those items or amounts as to which Buyer disagrees, and Buyer shall be deemed to have agreed with all other items and amounts contained in the Closing Statement and the calculation of Closing Working Capital delivered pursuant to Section 2.6(b) and (ii) only include disagreements based on mathematical errors or Seller’s failure to follow Applicable Accounting Principles in its calculation of Closing Working Capital.

                    (d)          If a notice of disagreement shall be duly delivered pursuant to Section 2.6(c) , Buyer and Seller shall, during the 15 days following such delivery, use their commercially reasonable efforts to reach agreement on the disputed items or amounts in order to determine the amount of Closing Working Capital, which amount shall not be less than the amount thereof shown in Seller’s calculation delivered pursuant to Section 2.6(b) nor more than the amount thereof shown in Buyer’s calculation delivered pursuant to Section 2.6(c) .  If during such period, Buyer and Seller are unable to reach such agreement, they shall promptly thereafter cause PricewaterhouseCoopers (the “ Accounting Referee ”) to review this Agreement and the disputed items or amounts for the purpose of calculating Closing Working Capital.  In making such calculation, the Accounting Referee shall consider only (i) those items or amounts in the Closing Statement and Buyer’s calculation of Closing Working Capital as to which Buyer has disagreed and (ii) disagreements based on mathematical errors or Seller’s failure to follow Applicable Accounting Principles in its calculation of Closing Working Capital.  The Accounting Referee shall deliver to Buyer and Seller, as promptly as practicable (but in any case no later than 30 days from the date of engagement of the Accounting Referee), a report setting forth such calculation.  Such report shall be final and binding upon Buyer and Seller.  The cost of such review and report shall be borne equally by Buyer and Seller.

                    (e)          Buyer and Seller shall, and shall cause their respective representatives, and Buyer shall cause the Company, to cooperate and assist in the preparation of the Closing Statement and the calculation of Closing Working Capital and in the conduct of the review referred to in this Section 2.6 , including, without limitation, the making available to the extent necessary of books, records, work papers and personnel.

                    (f)          If Final Working Capital exceeds Estimated Working Capital, Buyer shall pay to Seller, in the manner as provided in Section 2.6(g) , the amount by which Final Working Capital so exceeds Estimated Working Capital as an adjustment to the Purchase Consideration and, if Estimated Working Capital exceeds Final Working Capital, Seller shall pay to Buyer the amount by which Estimated Working Capital so exceeds Final Working Capital as an adjustment to the Purchase Consideration.

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“ Final Working Capital ” means Closing Working Capital (i) as shown in Buyer’s calculation delivered pursuant to Section 2.6(b) if no notice of disagreement with respect thereto is duly delivered pursuant to Section 2.6(c) ; or (ii) if such a notice of disagreement is delivered, (A) as agreed by Buyer and Seller pursuant to Section 2.6(d) or (B) in the absence of such agreement, as shown in the Accounting Referee’s calculation delivered pursuant to Section 2.6(d) .

                    (g)          Any payment pursuant to Section 2.6(f) shall be made at a mutually convenient time and place within 3 Business Days after Final Working Capital has been determined by wire transfer by Buyer or Seller, as the case may be, of immediately available funds to the account of such other party as may be designated in writing by such other party. 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

          Seller represents and warrants to Buyer as follows:

          Section 3.1.      Organization .

                    (a)          The Company is a corporation duly organized, validly existing and in good standing under the laws of Delaware.  The Company has all requisite power and authority to carry on its business as it is now conducted and to own, lease and operate all of its properties and assets, and is duly licensed or qualified to do business as a foreign corporation in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned, leased or operated by it makes such qualification or licensing necessary, except where the failure to be so licensed or qualified would not have a Company Material Adverse Effect.  Section 3.1 of the Company Disclosure Schedule contains a complete and accurate list of each jurisdiction in which the Company is qualified to do business.

                    (b)          Neither Seller nor the Company is in default under its Charter Documents.  The Charter Documents of the Company in the forms attached to the Company Disclosure Schedule are the Charter Documents of the Company as in effect on the date of this Agreement.

          Section 3.2.      Authority .  Seller is a corporation duly organized, validly existing and in good standing under the laws of Delaware.  Seller has all requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby.  This Agreement has been duly and validly executed and delivered by Seller.  Assuming the due authorization, execution and delivery of this Agreement by the Buyer, this Agreement constitutes the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). 

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          Section 3.3.      Organization and Related Matters .

                    (a)          The Company does not have any Subsidiaries and does not directly or indirectly own any Equity Interests.

                    (b)          The authorized capital stock of the Company consists of 1,000 shares of Common Stock, no par value per share and 150,000 shares of Preferred Stock, par value $100 per share.  All of the Shares are duly authorized, validly issued, fully paid and nonassessable and are owned of record and beneficially by Seller free and clear of all Encumbrances, except as set forth on Schedule 3.3(b) of the Company Disclosure Schedule.  Upon transfer of the Shares to Buyer in accordance with the terms of Article II, Buyer will receive valid title to the Shares, free and clear of all Encumbrances.  All of the Shares were issued in compliance with Applicable Laws.  None of the Shares was issued in violation of any Contract to which Seller or the Company is a party or is subject.  Other than the Shares, the Company does not have outstanding any Equity Interests or any other securities.  The Company is not a party or subject to any Contract obligating the Company to issue any Equity Interests or any other securities.  The Company does not have outstanding or authorized any stock appreciation, phantom stock, profit participation, or similar rights involving any Equity Interests of the Company.  Neither Seller nor the Company is a party or subject to any stockholder agreement, voting agreement, voting trust or any other similar arrangement which has the effect of restricting or limiting the transfer, voting or other rights associated with the Shares, except as set forth on Schedule 3.3(b) of the Company Disclosure Schedule.  There are no obligations, contingent or otherwise, of the Company to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any Person.

          Section 3.4.      Authority; No Violation; Consents .

                    (a)          Neither the execution and delivery of this Agreement by Seller, nor the consummation of the transactions contemplated hereby and the performance of this Agreement by Seller, assuming that the Governmental Consents have been obtained prior to the Closing, will (i) violate, conflict with, or result in a breach of any provision of the charter, by-laws or other organizational documents of Seller or the Company, (ii) require consent under, violate, conflict with, or result in a breach, in any material respect, of any provision of, or constitute a default (or an event that, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance or payment required by, or result in a right of termination or acceleration under, or result in the creation of any Encumbrance upon any of the properties or assets of the Company under any of the terms, conditions or provisions of any Contract to which the Company is a party or to which its properties or assets may be subject, except as set forth on Section 3.4(a) of the Company Disclosure Schedule (the “ Third Party Consents ”), or (iii) violate any Applicable Law applicable to Seller or the Company or any of their respective properties or assets, except, with respect to clauses (ii) and (iii), for such violations which would not have a Seller Material Adverse Effect or a Company Material Adverse Effect.

                    (b)          Except as set forth on Section 3.4(b) of the Company Disclosure Schedule (the “ Governmental Consents ”), and for such filings as may be required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and regulations thereunder (the “ HSR Act ”) and applicable federal and state securities laws, no notice to, filing with, authorization of, exemption by, or consent or approval of, any Governmental Authority is necessary or required to be obtained by Seller or the Company for the sale of the Shares and the consummation of the other transitions contemplated hereby.

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          Section 3.5.      Financial Statements .  Section 3.5 of the Company Disclosure Schedule sets forth the following financial statements of the Company’s (i) audited financial statements consisting of the balance sheet of the Company as at December 31 in each of the years 2002 and 2003 and the related statements of income and retained earnings, stockholders’ equity and cash flow, for the years then ended, (ii) unaudited financial statements consisting of the balance sheet of the Company as at December 31, 2004 and the related statements of income and retained earnings, stockholders’ equity and cash flow, for the year then ended and (iii) the unaudited financial statements consisting of the balance sheet of the Company as at September 30, 2005 (the “ Current Balance Sheet ”) and the related statements of income and retained earnings, stockholders’ equity and cash flow for the nine month period then ended (the “ Current Financial Statements ”, together with the information described at clauses (i), (ii) and (iii), the “ Financial Information ”).  Except as set forth in Section 3.5 of the Company Disclosure Schedule, the Financial Information was derived from the internal books and records of the Company, has been prepared in accordance with GAAP consistently applied by Seller and the Company through the periods presented and fairly presents in all material respect the consolidated financial position, results of operations and cash flows of the Company as of the dates and the periods indicated therein, subject to the absence of footnotes and normal recurring year-end adjustments in the case of the Current Financial Statements.

          Section 3.6.      Absence of Undisclosed Liabilities .  There exists no Indebtedness or Liabilities of the Company, whether accrued, absolute, contingent or threatened of the nature that would be required to be reflected on the Company’s balance sheet under GAAP except (i) as disclosed, reflected or reserved against in the Current Financial Statements, (ii) for items disclosed as Liabilities in Section 3.6 of the Company Disclosure Schedule, (iii) for Liabilities incurred in the Ordinary Course of Business since the date of the Current Balance Sheet, (iv) Liabilities under Contracts and Permits of the Company and (v) for Liabilities that would not have a Company Material Adverse Effect.  Section 3.6 of the Company Disclosure Schedule set forth all outstanding Indebtedness of the Company as of the date hereof.

          Section 3.7.      Compliance with Applicable Laws .  Except as set forth in Section 3.7 of the Company Disclosure Schedule, the business of the Company is being conducted in compliance with all Applicable Laws applicable to Seller or the Company, except for possible violations which would not have a Company Material Adverse Effect.  Except as set forth in Section 3.7 of the Company Disclosure Schedule, all Permits required to conduct the business of the Company have been obtained and are in full force and effect and are being complied with in all respects, except for such failures to obtain, maintain or comply with Permits which would not have a Company Material Adverse Effect.  Except as set forth in Section 3.7 of the Company Disclosure Schedule, the individuals set forth in Section 1.1 of the Company Disclosure Schedule have not received written notice regarding violation of, conflict with, or failure to comply with any Applicable Law or Permit.

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          Section 3.8.      Real Property and Tangible Personal Property .

                    (a)           Section 3.8(a) of the Company Disclosure Schedule sets forth a complete list of all real property and interests in real property owned in fee by the Company (individually, an “ Owned Property ” and collectively, the “ Owned Properties ”).  The Company has good and marketable fee title to all Owned Properties, free and clear of all Liens of any nature whatsoever except (A) Liens set forth in Section 3.8(a) of the Company Disclosure Schedule and (B) Permitted Exceptions.  Section 3.8(a) of the Company Disclosure Schedule also sets forth a complete list of all appurtenant easements as described in the Title Insurance Policy (the “ Appurtenant Easements ”).  The Company has valid and enforceable rights in and to the Appurtenant Easements, free and clear of all Liens of any nature whatsoever except (A) Liens set forth in Section 3.8(a) of the Company Disclosure Schedule and (B) Permitted Exceptions.  The Owned Properties and the Appurtenant Easements are referred to collectively herein as the “ Company Properties .”

                    (b)          The Company has no leasehold interests in real property.

                    (c)          There does not exist, to the Knowledge of Seller, threatened or contemplated condemnation or eminent domain proceedings that materially adversely affect any Company Properties or any part thereof, and Seller has no Knowledge of the intention of any Governmental Authority to take or use all or any part thereof.  To the Knowledge of Seller, it has not received any written notice of pending, and there are no threatened, condemnation, fire, health, safety, building, zoning, land use or other regulatory proceedings, lawsuits or administrative actions relating to any portion of the Company Properties which do or may adversely affect the current use, occupancy or value thereof.  To the Knowledge of Seller, it has not received written notice of any pending or threatened special assessment proceedings affecting any portion of the Company Properties.

                    (d)          Except as set forth in Section 3.8(d) of the Company Disclosure Schedule, with respect to the Newt Contract, the Company does not own or hold, and is not obligated under or a party to, any option, right of first refusal or other Contractual right to purchase, acquire, sell, assign or dispose of any material real estate or any material portion thereof or interest therein.  No Person other than the Company is in possession of any of the Company Properties or any portion thereof except, with respect to the Appurtenant Easements, in accordance with the terms of said Appurtenant Easements, and except for Permitted Exceptions there are no leases, subleases, licenses, concessions or other agreements, written or oral, under which the Company has granted to any Person other than the Company the right of use or occupancy of the Company Properties or any portion thereof.

                    (e)          To the Knowledge of Seller, it has not received any written notice from any Governmental Authority or other Person that the Company Properties and their current use do not comply in any material respect with all applicable building and zoning codes, deed restrictions, ordinances and rules.

                    (f)          To the Knowledge of Seller, it has not received written notice that any of the Company Properties or the present uses and operations of the Company Properties do not comply in all material respects with all Laws, covenants, conditions, restrictions, easements, disposition agreements and similar matters affecting the Company Properties. 

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                    (g)          The Company Properties are in suitable condition for the Company’s business as currently conducted.  The portion of the Company Properties identified as Parcel 3 in the Title Insurance Policy is contiguous to the public street systems.

                    (h)          The Company has good and marketable title to all of the items of tangible personal property reflected as owned on the Current Balance Sheet (except as sold or disposed of subsequent to the date thereof in the Ordinary Course of Business), free and clear of any and all Liens, other than the Permitted Exceptions.

                    (i)          Except as set forth in Section 3.8(i) of the Company Disclosure Schedule, the Company Properties and the tangible personal property owned or leased by the Company constitute all the real and personal property necessary for the continued operation of their businesses as currently conducted.

                    (j)           Section 3.8(j) of the Company Disclosure Schedule sets forth all leases of personal property (“ Personal Property Leases ”) involving annual payments in excess of $100,000 relating to personal property used in the business of the Company or to which the Company is a party or by which the properties or assets of the Company is bound.  The Company has delivered or otherwise made available to Buyer true, correct and complete copies of the Personal Property Leases, together with all amendments, modifications or supplements thereto.

                    (k)          The Company has a valid leasehold interest under each of the Personal Property Leases under which it is a lessee, enforceable against the Company that is a party thereto and, to the Knowledge of Seller, against the other party thereto, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).  Each of the Personal Property Leases is in full force and effect.  No party to any of the Personal Property Leases has exercised any termination rights with respect thereto.

                    (l)          Water, sewer, gas, electric, telephone and drainage facilities existing at the Company Properties are adequate to service the Company Properties in the operation of the business and to permit compliance in all material respects with the requirements of all Laws in the operation thereof.  To the Knowledge of Seller, it has not received written notice of any existing fact or condition likely to result in the termination or material reduction of the current access from the Company Properties to existing roads or to sewer or other utility services presently serving the Company Properties.

                    (m)          To the Knowledge of Seller, it has not received written notice from either (i) any party to the Newt Contract or (ii) the owner of the Burlington Northern RR line relating to an attempt to stop the Company from using the rail spur track described in the Newt Contract or the main line tracks to which such rail spur track connects.

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          Section 3.9.     Inventory .  As of the Closing Date, and as except as would not reasonably be expected to have a Company Material Adverse Effect, (a) all of the Company’s inventory of anhydrous ammonia, granular urea, UAN solutions and nitric acid (the “ Products” ) is of a quality, quantity and condition useable or saleable in the ordinary course of business, (b) none of the Products are obsolete and no write-down of the Products has been made or should have been made in the period since September 30, 2005, (c) the quantities of each item of Product are not excessive and are reasonable in the present circumstances of the Company and (d) all of the Products are located at the facilities of the Acquired Company and no Products are held on a consignment basis.

          Section 3.10.    Condition of Assets .  Except as set forth in Section 3.10 of the Company Disclosure Schedule, the buildings, machinery, equipment, tools, furniture, improvements and other tangible assets which are owned, leased or used by the Company are in good operating condition and fit for the purposes for which they are used, subject to normal maintenance requirements and normal wear and tear reasonably expected in the ordinary course of business.  Except for the representations, warranties and covenants set forth in this Agreement, all of such assets will be conveyed by Seller to Buyer at the Closing Date “As Is, Where Is.”

          Section 3.11.    Contracts .  Section 3.11 of the Company Disclosure Schedule sets forth a complete and correct list as of the date of this Agreement of all of the following Contracts to which the Company is a party:

                    (a)          any Contract with any current or former director, officer or employee of the Company;

                    (b)          each real estate lease or sublease with respect to each of the Company Properties;

                    (c)          any Contract with a labor union or association (including any collective bargaining agreement);

                    (d)          any Contract (other than Employee Benefit Plans) not otherwise disclosed pursuant to this Section 3.11 calling for annual payments aggregating more than $100,000, whether payable by or to the Company;

                    (e)          any partnership, joint venture or other similar contract;

                    (f)          any Contract relating to the incurrence, assumption or guarantee of any Indebtedness in an amount in excess of $100,000 or imposing a Lien in an amount in excess of $100,000 on any of its assets (other than Permitted Exceptions);

                    (g)          any Contract involving the Company pursuant to which any party is required to purchase or sell a stated portion of its requirements or output from or to another party and requiring annual payments aggregating more than $100,000;

                    (h)          any Contract for the sale of assets of the Company requiring payments in excess of $100,000 other than in the Ordinary Course of Business or for the grant to any person of any preferential rights to purchase any of such assets;

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                    (i)          any Contract containing covenants of the Company not to compete in any business or solicit with any person in any geographical area or covenants of any other person not to compete with the Company in any line of business or in any geographical area;

                    (j)          any Contract relating to the acquisition or disposition of any material business (whether by merger, sale of stock, sale of assets or otherwise);

                    (k)          any Contract under which the Company has made advances or loans to any other Person (other than to employees in the Ordinary Course of Business); or

                    (l)          any Contract providing for severance, retention, change in control or other similar payments in excess of $100,000;

                    (m)          any Contract for consulting services providing annual compensation in excess of $100,000;

                    (n)          any outstanding Contacts of guaranty or surety, direct or indirect, by the Company;

                    (o)          any outstanding Contracts of indemnification, other than in the Ordinary Course of Business;

                    (p)          any Contract (or group of related Contracts) which involve the expenditure of more than $100,000 annually or $100,000 in the aggregate or require performance by the Company more than six months from the date hereof;

                    (q)          any distribution, dealer, representative or sales agency Contract;

                    (r)          with any Governmental Authority; and

                    (s)          any Contract that is otherwise material to the Company and not in the Ordinary Course of Business, including the Newt Contract.

          All of the foregoing are collectively referred to in this Agreement as the “ Material Contracts .”  Except as set forth in Section 3.11 of the Company Disclosure Schedule, each Material Contract is in full force and effect and enforceable against the Company, and, to the Knowledge of Seller, each other party thereto, in accordance with its terms.  Except as set forth in Section 3.11 of the Company Disclosure Schedule, there does not exist under any Material Contract any default or condition or event that, after notice or lapse of time or both, would constitute a default on the part of the Company or, to the Knowledge of Seller, on the part of any other parties to such Material Contracts, except for such defaults, conditions or events that would not have a Company Material Adverse Effect.  No party to any of the Material Contracts has exercised any termination rights with respect thereto.  The Company has delivered or otherwise made available to Buyer, true, correct and complete copies of all the Material Contracts, together with all amendments, modifications or supplements thereto.

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          Section 3.12.    Accounts Receivable .  All of the accounts and notes receivable of the Company represent amounts receivable for products actually delivered or services actually provided (or, in the case of non-trade accounts or notes represent amounts receivable in respect of other bona-fide business transactions), have arisen from bona-fide transactions in the ordinary course of business, are not subject to any defenses, counterclaims or offsets, have been billed and are due within 30 days after such billing, subject to reserves which are adequate under GAAP.

          Section 3.13.    Intellectual Property .  Except as set forth in Schedule 3.13 of the Company Disclosure Schedule, the Company owns all right, title and interest in and to, or has a valid and enforceable license or other right to use, all of the Intellectual Property used by it in connection with its business, which constitutes all intellectual property rights (the “ Company Intellectual Property ”) necessary for it to conduct its business as presently conducted, and no Person is challenging or, to Seller’s Knowledge, infringing or otherwise violating any Company Intellectual Property owned by the Company.  To the Seller’s Knowledge, the conduct of the businesses of the Company does not infringe upon or violate the Intellectual Property of any other Person, and neither Seller nor the Company has received any notice of any claim of any such infringement or violation within the three (3) years preceding the date hereof.

          Section 3.14.    Legal Proceedings .  Except as set forth in Section 3.14 of the Company Disclosure Schedule, there is no Legal Proceeding pending or, to the Knowledge of Seller, threatened against the Company, at law, in equity or otherwise, in, before, or by, any court or Governmental Authority other than that which would not, individually or in the aggregate, have a Company Material Adverse Effect.  There is no Legal Proceeding pending or, to the Knowledge of the Seller, threatened against any former director or employee of the Company with respect to which the Company has or is reasonably likely to have an indemnification obligation.  Except as set forth in Section 3.14 of the Company Disclosure Schedule, there are no unsatisfied judgments or outstanding orders, injunctions, decrees, stipulations or awards (whether rendered by a court, an administrative agency or by an arbitrator) against the Company other than that which would not have a Company Material Adverse Effect.

          Section 3.15.    Tax Matters . 

                    (a)          Except as disclosed in Section 3.15 of the Company Disclosure Schedule, Seller has filed or caused to be filed in a timely manner (within any applicable extension periods) all material Tax Returns required to be filed with respect to the Company and has paid or caused to be paid all Taxes shown to be due on such Tax Returns.  Such Tax Returns are accurate and complete in all material respects.  Except as set forth in Schedule 3.15 , the Company does not have any agreement with any Person regarding the filing of Tax Returns or relating to the sharing of Tax benefits or liabilities with such Persons.  The Group has filed or caused to be filed within any applicable extension periods all material Tax Returns required to be filed with respect to the Group and paid all material Taxes shown to be due on such Tax Returns.  Such Tax Returns are accurate and complete in all material respects.

                    (b)          There is no action or audit now proposed, in writing or pending against, or with respect to, the Company in respect of any Taxes.  The Company is not currently the beneficiary of any extension of time within which to file any Tax Return, nor has the Company made (or had made on their behalf) any requests for such extensions that are currently outstanding.  No claim has ever been made in writing by an authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction or that it must file Tax Returns.  There are no Encumbrances on any of the stock or assets of the Company with respect to Taxes other than with respect to Taxes not yet due or payable.

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                    (c)          The Company has withheld and timely paid all Taxes required to have been withheld and paid and has complied with all information reporting and backup withholding requirements, including maintenance of required records with respect thereto.

                    (d)          The Company Disclosure Schedule (i) lists all federal, state, local, and foreign income Tax Returns filed with respect to Company for taxable periods ended on or after December 31, 2000, (ii) indicates those Tax Returns that have been audited, and (iii) indicates those Tax Returns that currently are the subject of audit.  The Company has not waived (nor is subject to a waiver of) any statute of limitations in respect of Taxes that is currently pending or has agreed to (nor is subject to) any extension of time with respect to a Tax assessment or deficiency that is currently pending.

                    (e)          Seller is not a “foreign person” within the meaning of Section 1445 of the Code.  The Company has not participated in or cooperated with an international boycott as defined in Section 999 of the Code.

                    (f)          The Company has not received (nor is subject to) any ruling from any Taxing Authority which would have continuing effect or has entered into (nor is subject to) any agreement with a Taxing Authority which would have continuing effect. 

                    (g)          The Company is not a party to any Tax allocation or sharing agreement.  The Company does not have any liability for the Taxes of any Person, other than under Section 1.1502-6 of the Treasury regulations (or any similar provision of state, local, or foreign law) with respect to any Group of which the Company currently is a member, (i) as a transferee or successor, (ii) by contract, (iii) under Section 1.1502-6 of the Treasury regulations (or any similar provision of state, local or foreign law), or (iv) otherwise.  The Company is not a party to any joint venture, partnership or other arrangement that is treated as a partnership for federal income tax purposes. 

                    (h)          Seller is eligible to join with Buyer in making the Section 338(h)(10) Election with respect to the acquisition by Buyer of the Company.

                    (i)          The unpaid Taxes of the Company for tax periods ending on or before the date of the Current Balance Sheet did not, as of the date of the Current Balance Sheet, exceed the reserve for tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the Current Balance Sheet (rather than in any notes thereto).

          Section 3.16.    Insurance .  The Company is covered by policies of insurance obtained by Seller with reputable insurance companies or associations in amounts and with retentions and deductibles and covering such risks as are in accordance with reasonable business practices and requirements of Applicable Law in all material respects and will continue in force to the Closing Date policies of insurance of substantially the same character and coverage.  Section 3.16 of the Company Disclosure Schedule lists all current claims of any kind pending under such policies.  All premiums due under such policies have been accrued or paid in full.  As of the date of this

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Agreement, the Company has not received any written notice of cancellation of any insurance policy maintained in favor of the Company or been denied insurance coverage, which, in either case, would have a Company Material Adverse Effect.  Excluding insurance policies that have expired and been replaced in the Ordinary Course of Business, no insurance policy has been cancelled within the last 2 years and, to the Knowledge of Seller, no written threat has been made to cancel any insurance policy of the Company during such period.

          Section 3.17.    Benefit Plans .

                    (a)           Section 3.17(a) of the Company Disclosure Schedule lists all Employee Benefit Plans.

                    (b)          Except as set forth in Section 3.17(b) of the Company Disclosure Schedule no Employee Benefit Plan is a Multiemployer Plan or a plan that is subject to Title IV of ERISA, and no Employee Benefit Plan provides health or other welfare benefits to former employees of the Company or any of the Subsidiaries other than as required by COBRA.  The Company has not withdrawn in a complete or partial withdrawal from any Multiemployer Plan prior to the Closing Date, nor has incurred any liability due to the termination or reorganization of a Multiemployer Plan.

                    (c)          Except as set forth in Section 3.17(c) of the Company Disclosure Schedule, each Employee Benefit Plan is maintained and administered in compliance in all material respects with the applicable requirements of ERISA, the Code and any other applicable laws.  Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code has received a determination from the Internal Revenue Service that it is so qualified and, to Seller’s Knowledge, there are no facts or circumstances that would be reasonably likely to adversely affect the qualified status of any such Employee Benefit Plan.

                    (d)          No liability under Title IV of ERISA has been, or to Seller’s Knowledge is expected to be incurred by any ERISA Affiliate that could reasonably be expected to become a liability of the Company.

                    (e)          The Company and the ERISA Affiliates have complied, in all material respects, with the requirements of COBRA.

                    (f)          None of the Company or, to Seller’s Knowledge, any other Person has engaged in any transaction with respect to any Employee Benefit Plan that would be reasonably likely to subject the Company to any material tax or penalty (civil or otherwise) imposed by ERISA, the Code or other applicable law.  No action is pending or, to Seller’s Knowledge, threatened with respect to any Employee Benefit Plan (other than claims in the Ordinary Course of Business) and, to Seller’s Knowledge, no fact or event exists that could give rise to any such action.

                    (g)          With respect to each Employee Benefit Plan, Seller has delivered to Buyer true, complete and correct copies, to the extent applicable, of (i) the plan and trust documents and any amendments thereto and the most recent summary plan description and any summary of material modifications thereto, (ii) the annual reports (Form 5500 series) and all attachments thereto filed during the prior three years, (iii) the financial statements and actuarial reports prepared during the prior three years, and, (iv) all current Internal Revenue Service determination letters.

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                    (h)          Except as set forth in Section 3.17(h) of the Company Disclosure Schedule, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) result in any payment becoming due to any employee (current, former or retired) of the Company, (ii) increase any benefits otherwise payable under any Employee Benefit Plan or (iii) result in the acceleration of the time of payment or vesting of any such benefits under any Employee Benefit Plan.

                    (i)          All contributions required to have been made under any of the Employee Benefit Plans or by law (without regard to any waivers granted under Section 412 of the Code) have been timely made, and all contributions for any period ending on or before the Closing Date which are not yet due will have been paid or accrued as current liabilities on the Closing Statement on or prior to the Closing Date.

 &