10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2003

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 0-17988

Neogen Corporation

(Exact name of registrant as specified in its charter)

Michigan	38-2364843
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

620 Lesher Place

Lansing, Michigan 48912

(Address of principal executive offices including zip code)

(517) 372-9200

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12B – 2 of the Exchange Act). YES x NO ¨

As of January 2, 2004, there were 7,960,000 outstanding shares of Common Stock.

NEOGEN CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS

	Page No.
PART I. Financial Information
Item 1. Interim Consolidated Financial Statements (unaudited)
Consolidated Balance Sheets –	1
November 30, 2003 and May 31, 2003
Consolidated Statements of Income –	2
Three months and six months ended November 30, 2003 and 2002
Consolidated Statements of Stockholders’ Equity –	3
Six months ended November 30, 2003
Consolidated Statements of Cash Flows –	4
Six months ended November 30, 2003 and 2002
Notes to Interim Consolidated Financial Statements – November 30, 2003	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	8
Item 3. Quantitative and Qualitative Disclosures About Market Risk	10
Item 4. Controls and Procedures	11
PART II. Other Information
Item 1. Legal Proceedings	11
Item 2. Changes in Securities and Use of Proceeds	11
Item 3. Defaults Upon Senior Securities	11
Item 4. Submission of Matters to a Vote of Security Holders	11
Item 5. Other Information	11
Item 6. Exhibits and Reports on Forms 8-K	12
Signatures
CEO Certification
CFO Certification
Section 906 Certification

PART I – FINANCIAL INFORMATION

ITEM 1. Interim Consolidated Financial Statements (Unaudited)

NEOGEN CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	November 30, 2003		May 31, 2003
	(In thousands, except share and per share amounts)
ASSETS
CURRENT ASSETS
Cash	$	1,739	$	1,061
Marketable securities		306		7,836
Accounts receivable, less allowance of of $ 624 and $ 611		7,933		7,499
Inventories		12,005		9,840
Deferred income taxes		694		694
Prepaid expenses and other current assets		1,433		1,041
TOTAL CURRENT ASSETS		24,110		27,971
NET PROPERTY AND EQUIPMENT		7,596		4,640
OTHER ASSETS
Goodwill and other non amortizable intangible assets		19,787		13,665
Other non-current assets, net of accumulated amortization of $ 721 and $ 860		2,753		1,760
	$	54,246	$	48,036
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	2,030	$	3,273
Accruals		3,352		2,490
TOTAL CURRENT LIABILITIES		5,382		5,763
DEFERRED INCOME TAXES		405		405
BANK LINE OF CREDIT		3,100		—
OTHER LONG-TERM LIABILITIES		458		466
STOCKHOLDERS’ EQUITY
Preferred stock, $1.00 par value, 100,000 shares authorized, none issued and outstanding		—		—
Common stock, $.16 par value, 20,000,000 shares authorized, 6,359,115 shares issued and outstanding at November 30, 2003; 6,200,486 shares issued and outstanding at May 31, 2003		1,017		992
Additional paid-in capital		25,385		24,830
Accumulated other comprehensive income		77		3
Retained earnings		18,422		15,577
TOTAL STOCKHOLDERS’ EQUITY		44,901		41,402
	$	54,246	$	48,036

See notes to interim consolidated financial statements

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NEOGEN CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	Three Months Ended November 30,				Six Months Ended November 30,
	2003		2002		2003		2002
	(In thousands, except per share amounts)
Sales	$	13,246	$	12,592	$	25,479	$	23,755
Cost of goods sold		6,243		5,553		12,216		10,633
GROSS MARGIN		7,003		7,039		13,263		13,122
OPERATING EXPENSES
Sales and marketing		2,803		3,129		5,726		5,958
General and administrative		1,268		1,032		2,055		2,092
Research and development		652		842		1,328		1,497
		4,723		5,003		9,109		9,547
OPERATING INCOME		2,280		2,036		4,154		3,575
OTHER INCOME
Interest income		20		25		43		46
Other		44		96		129		203
		64		121		172		249
INCOME BEFORE INCOME TAXES		2,344		2,157		4,326		3,824
INCOME TAXES		801		756		1,481		1,348
NET INCOME	$	1,543	$	1,401	$	2,845	$	2,476
NET INCOME PER SHARE:
Basic	$	.20	$	.18	$	.36	$	.32
Diluted	$	.19	$	.18	$	.34	$	.31

See notes to interim consolidated financial statements

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NEOGEN CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income		Retained Earnings
	Shares	Amount								Total
	(In thousands)
Balance, June 1, 2003	6,200	$	992	$	24,830	$	3	$	15,577	$	41,402
Exercise of options and warrants	159		25		555						580
Comprehensive income:
Net income for the six months ended November 30, 2003									2,845		2,845
Foreign currency translation adjustments							74				74
Total comprehensive income											2,919
Balance, November 30, 2003	6,359	$	1,017	$	25,385	$	77	$	18,422	$	44,901

See notes to interim consolidated financial statements

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NEOGEN CORPORATION SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Six Months Ended November 30,
	2003			2002
	(In thousands)
OPERATING ACTIVITIES:
Net income	$	2,845		$	2,476
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		618			625
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		(312	)		(410	)
Inventories		(712	)		(364	)
Prepaid expenses and other current assets		(337	)		(51	)
Accounts payable		(1,243	)		(644	)
Accruals		(424	)		979
NET CASH PROVIDED BY OPERATING ACTIVITIES		435			2,611
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales of marketable securities		39,044			16,155
Purchases of marketable securities		(31,514	)		(17,686	)
Purchases of property and equipment and other assets		(933	)		(1,693	)
Acquisitions		(10,034	)		—
NET CASH USED IN INVESTING ACTIVITIES		(3,437	)		(3,224	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowing on line of credit		3,100			—
Net payments for repurchase of common stock		—			(485	)
Net proceeds from issuance of common stock		580			232
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		3,680			(253	)
INCREASE (DECREASE) IN CASH		678			(866	)
CASH AT BEGINNING OF PERIOD		1,061			2,012
CASH AT END OF PERIOD	$	1,739		$	1,146

See notes to interim consolidated financial statements

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NEOGEN CORPORATION AND SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENT (UNAUDITED)

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (generally accepted accounting principles) for interim financial information and with the instructions to Form 10-Q and Article 10 Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the three month period ended November 30, 2003 is not necessarily indicative of the results to be expected for the fiscal year ending May 31, 2004. For more complete financial information, these consolidated financial statements should be read in conjunction with the May 31, 2003 audited consolidated financial statements and the notes thereto included in the Company’s annual report on Form 10-K for the year ended May 31, 2003.

The Company previously classified shipping revenue as an offset to the related expense in sales and marketing in the consolidated statements of income. Beginning June 1, 2003, these amounts have been classified as revenue. Previously reported fiscal year 2003 revenue and sales and marketing expense balances have been reclassified to conform with fiscal year 2004 presentation.

2. INVENTORIES

Inventories are stated at the lower of cost, determined on the first-in, first-out method, or market. The components of inventories are as follows:

	November 30, 2003		May 31, 2003
	(In thousands)
Raw materials	$	4,010	$	3,231
Work-in-process		445		422
Finished goods		7,550		6,187
	$	12,005	$	9,840

3. NET INCOME PER SHARE

The following table presents the calculation of net income per share:

	Three Months Ended November 30				Six Months Ended November 30
	2003		2002		2003		2002
	(In thousands, except share and per share amounts)
Numerator for basic and diluted net income per share:
Net income	$	1,543	$	1,401	$	2,845	$	2,476
Denominator:
Denominator for basic net income per share-weighted average shares		7,879		7,648		7,828		7,647
Effect of dilutive stock options and Warrants		423		298		432		304
Denominator for diluted net income per share		8,302		7,946		8,260		7,951
Net income per share:
Basic	$	.20	$	.18	$	.36	$	.32
Diluted	$	.19	$	.18	$	.34	$	.31

On January 2, 2004 the Company paid a 5 for 4 stock split in the form of a stock dividend. All income per share amounts have been retroactively restated to reflect the split as if it took place at the beginning of all periods presented.

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4. STOCK REPURCHASE

The Company’s Board of Directors has authorized the purchase of up to 1,000,000 shares of the Company’s Common Stock. As of November 30, 2003, the Company has purchased 697,000 shares in negotiated and open market transactions. Shares purchased under this buy-back program were retired.

5. SEGMENT INFORMATION

The Company has two reportable segments: Food Safety and Animal Safety. The Food Safety segment produces and markets diagnostic test kits and related products used by food producers and processors to detect harmful natural toxins, drug residues, foodborne bacteria, food allergens, pesticide residues, disease infections and levels of general sanitation. The Animal Safety segment is primarily engaged in the production and marketing of products dedicated to animal health, including 250 different veterinary instruments and a complete line of consumable products marketed to veterinarians and animal health product distributors. Additionally the Animal Safety segment produces and markets a line of rodenticides to assist in the control of rats and mice in and around agricultural, food production and other facilities.

These segments are managed separately because they represent strategic business units that offer different products and require different marketing strategies. The Company evaluates performance based on total sales and operating income of the respective segments.

Segment information for the three months ended November 30, 2003 and 2002 was as follows:

	Food Safety		Animal Safety		Corporate and Eliminations(1)			Total
	(In thousands)
Fiscal 2004
Net sales to external customers	$	7,130	$	6,116	$	—		$	13,246
Operating income		1,673		880		(273	)		2,280
Fiscal 2003
Net sales to external customers	$	7,079	$	5,513	$	—		$	12,592
Operating income		1,523		682		(169	)		2,036
Segment information for the six months ended November 30, 2003 and 2002 was as follows:
	Food Safety		Animal Safety		Corporate and Eliminations(1)			Total
	(In thousands)
Fiscal 2004
Net sales to external customers	$	14,028	$	11,451	$	—		$	25,479
Operating income		2,807		1,484		(137	)		4,154
Total assets		22,846		30,371		1,029			54,246
Fiscal 2003
Net sales to external customers	$	13,150	$	10,605	$	—		$	23,755
Operating income		2,754		1,207		(386	)		3,575
Total assets		17,410		18,397		6,654			42,461

⁽¹⁾ Includes corporate assets, consisting principally of marketable securities, and overhead expenses not allocated to specific business segments. Also includes the elimination of intersegment transactions and minority interests.

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6. STOCK OPTIONS

The Company follows Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, in accounting for its stock option plan. Under Opinion No. 25, no compensation expense is recognized because the exercise price of the Company’s stock options equals the market price of underlying stock on the date of grant. Had compensation expense for the Company’s stock-based compensation plans been determined based on the fair value at the grant dates for awards under those plans consistent with Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, the Company’s net income and net income per share would have been as follows:

	Three Months Ended November 30,						Six Months Ended November 30,
	2003			2002			2003			2002
	(In thousands except per share amounts)
Net income:
As reported	$	1,543		$	1,401		$	2,845		$	2,467
Deduct-compensation expense based on fair value method		(214	)		(180	)		(394	)		(323	)
Pro forma	$	1,329		$	1,221		$	2,451		$	2,144
Basic net income per share:
As reported	$	.20		$	.18		$	.36		$	.32
Pro forma	$	.17		$	.16		$	.31		$	.28
Diluted net income per share:
As reported	$	.19		$	.18		$	.34		$	.31
Pro forma	$	.16		$	.15		$	.30		$	.26

7. LEGAL PROCEEDINGS

The Company is subject to certain legal proceedings in the normal course of business that, in the opinion of Management, will not have a material effect on its future results of operations or financial position.

8. SHIPPING EXPENSE

The Company classifies shipping expense with sales and marketing expense. Such expenses totaled $435,000 and $912,000 in the three and six month periods ended November 30, 2003, respectively, and $386,000 and $789,000 in the three and six month periods ended November 30, 2002, respectively.

9. BUSINESS ACQUISITIONS

As of February 28, 2003, the Company acquired, in a purchase business combination, the outstanding common stock of Adgen Ltd. of Ayr, Scotland, a company involved in the manufacture and sale of diagnostic test kits for the detection of plant diseases and the distribution of food safety diagnostic test kits. Consideration was net cash of $1,850,000 and 32,000 shares of common stock with a fair value of $341,000. Additionally, the Company is obligated to pay contingent consideration based on future annual revenue levels. As of November 30, 2003, no additional consideration has been paid as such required revenue levels have not been achieved. If all revenue and net income levels are achieved, the Company could pay $450,000 of additional consideration. As this acquisition is not material, no pro forma information is presented.

On November 21, 2003, Neogen Corporation purchased 100% of the common stock of HACCO, Inc. and of Hess & Clark, Inc. from United Agri Products, Inc. a then wholly owned subsidiary of ConAgra, Inc. HACCO has principal offices in Randolph Wisconsin and is a producer of rodenticide products. The Hess & Clark acquisition was principally a product line acquisition in which the Company acquired lines of disinfectants and antibacterials.

Consideration for the acquisitions, subject to certain post closing adjustments, was $10.0 million in cash plus the assumption of $1.0 million of liabilities. On a preliminary basis, allocation of the purchase price included current assets of $2,000,000, property plant and equipment of $2,400,000, goodwill and other assets of $6,600,000.

Unaudited pro forma financial information, as if the acquisitions of HACCO and Hess & Clark had taken place on June 1, 2002 is as follows:

	Three months ended November 30				Six months ended November 30
	2003		2002		2003		2002
	(In thousands except per share amounts)
Revenue	$	17,110	$	16,078	$	31,879	$	30,032
Net income		1,958		1,750		3,442		3,052
Diluted net income per share	$	.24	$	.22	$	.41	$	.38

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10. LINE OF CREDIT

On November 26, 2003, the Company entered into a new financing agreement with a bank providing for an unsecured revolving line of credit of $15,000,000, that replaced certain previously existing borrowing arrangements. Interest is at prime less 1.25% or Eurodollar prime equivalent, less 150 basis points at the Company’s option (rate elected was 2.50% at November 30, 2003). Financial covenants include maintaining current ratios and debt to earnings ratios (as defined) and specified levels of tangible net worth, all of which are complied with at the balance sheet date. The agreement matures September 1, 2005.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information in this Management’s Discussion and Analysis of Financial Condition and Results of Operations contains both historical financial information and forward-looking statements. Neogen does not provide forecasts of future performance. While management is optimistic about the Company’s long-term prospects, historical financial information may not be indicative of future financial performance.

Safe Harbor and Forward-Looking Statements

Forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, are made through out this Quarterly Report on Form 10-Q. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates,” and similar expressions are intended to identify forward-looking statements. There are a number of important factors, including competition, recruitment and dependence on key employees, impact of weather on agriculture and food production, identification and integration of acquisitions, research and development risks, patent and trade secret protection, government regulation and other risks detailed from time to time in the Company’s reports on file at the Securities and Exchange Commission, that could cause Neogen Corporation’s results to differ materially from those indicated by such forward-looking statements, including those detailed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

In addition, any forward-looking statements represent management’s views only as of the day this Quarterly Report on Form 10-Q was first filed with the Securities and Exchange Commission and should not be relied upon as representing management’s views as of any subsequent date. While management may elect to update forward-looking statements at some point in the future, it specifically disclaims any obligation to do so, even if its views change.

Critical Accounting Policies and Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in United States of America. The preparation of these financial statements requires management to make estimates and judgements that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Management believes the critical accounting policies and areas that require the most significant judgements and estimates to be used in the preparation of the consolidated financial statements are as follows:

Revenue Recognition

Revenue from sales of products is recognized at the time title of goods passes to the buyer and the buyer assumes the risks and rewards of ownership. This is generally at the time of shipment. Where right of return exists, allowances are made at the time of sale to reflect expected returns based on historical experience.

Allowance for Doubtful Accounts

Management attempts to minimize credit risk by reviewing customers’ credit history before extending credit and by monitoring credit exposure on a regular basis. An allowance for possible losses on accounts receivable is established based upon factors surrounding the credit risk of specific customers, historical trends and other information.

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Inventory

Obsolete inventory is written off as it is identified. Product obsolescence may be caused by shelf-life expiration, discontinuance of a product line, replacement products in the marketplace or other competitive situations.

Valuation of Intangible Assets and Goodwill

Management assesses goodwill and other non-amortizable intangible assets for possible impairment at least annually. In the event of changes in circumstances which indicate the carrying value of these assets may not be recoverable, this assessment may take place at any time. Factors that could cause an impairment review to take place would include:

• Significant underperformance relative to expected historical or projected future operating results.

• Significant changes in the use of acquired assets or strategy of the Company.

• Significant negative industry or economic trends.

When management determines that the carrying value of intangible assets may not be recoverable based on the existence of one or more of the above indicators of impairment, the carrying value is compared to a value determined based on projected discounted cash flows using a discount rate commensurate with the risk inherent in the Company’s current business model. Any impairment identified in this computation is given current recognition in any unissued financial statements.

Three and Six Months Ended November 30, 2003 Compared to Three and Six Months Ended November 30, 2002

Total revenues increased by $654,000 or 5% in the three-month period and $1,724,000 or 7% in the six-month period ended November 30, 2003 in comparison with the same periods in 2002. Revenues from the sales of products dedicated to Food Safety were up $51,000 or 1% in the three-month period and $878,000 or 7% in the six-month period. Revenues from the sales of Animal Safety products increased by $603,000 or 11% in the three-month period ended November 30, 2003 and $846,000 or 8% in the six-month period.

Within the Food Safety business segment sales of products related to detection of pathogens and general sanitation decreased by 5% and 3% in the three-month and six-month periods, respectively, as compared to the prior year. These decreases resulted from heavier levels of competition and decreased levels of testing for E.coli O157:H7. Other pathogen detection product sales, such as for Listeria and Salmonella, had increases in sales both in the quarter and the six month periods when compared the same periods of the prior year. Sales of products to detect natural toxins were down 21% in the quarter and 6% in the six-month period following a large weather related spike in sales of these products in the prior year. A significant portion of the U.S. corn and sorghum crops were contaminated with aflatoxin in 2002 and the Company’s products were widely used in the identification of infected commodities and thereby the protection of consumers from exposure to this carcinogen. The 2003 crop was largely free of aflatoxin. Sales of allergen detection products increased 36% in the three month period and 39% in the six-month period as the Company continues to enjoy rapid market acceptance of these products.

Animal Safety revenues benefited from sales of the Company’s new line of disposable needles and increased sales of D-3 needles that combined resulted in nearly a $250,000 increase in sales in this product category for the quarter and $500,000 for the six-month period. Revenues from the Company’s vaccine and p.acnes products were down $150,000 in comparison to the prior year primarily in the six-month period as the p.acnes product was used extensively to boost immunity in horses against West Nile virus in the first quarter of the 2002 year. Sales in the second quarter and the six-months were up $500,000 in comparison to the prior year from the sales of products for use as vascular dilators in horses and as antibiotics for the general animal market. The characteristics of the customers and the sales base of these products are such that similar revenues may not be present in any single future quarter.

Gross margins decreased from 55.9% to 52.9% in the three-month comparative period and decreased from 55.2% to 52.1% in the six-month period ended November 30, 2003 in comparison with the prior year. These decreases in margins resulted from changes in product mix and the effect of the new manufacturing facility in Lansing that came on line in the first quarter of the current year. This new facility will provide significantly expanded production capability for Food Safety diagnostic products.

Sales and marketing expenses decreased $326,000 in the three-month period and $232,000 in the six-month period. As a percentage of revenues these expenses decreased from 25% of sales to 21% of sales in the three-month period and

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decreased from 25% to 22% in the six-month period. Cost control measures were responsible for the percentage decreases from the prior year.

General and administrative expenses increased $236,000 in comparison with the prior year three-month period ended November 30, 2003 and decreased $37,000 when compared in the six-month period of the prior year. The increase in second quarter expenses arose primarily from the addition of subsidiary operations in Scotland and China, as well as expenses related to the increased levels of operations of the Company. During the six-month period, administrative expenses decreased due to reimbursements made by third parties to the Company for legal costs for legal costs that were previously expensed related to two disputes that were settled in the first quarter of fiscal 2004. As a percentage of revenue these expenses increased from 8% to 10% in the three-month period and decreased from 9% to 8% for the six-month period ended November 30, 2003.

Research and development expenses decreased by $190,000 for the three-month period ended November 30, 2003 as compared to the same period in the prior year and decreased $169,000 in the six-month period in comparison with the same period in the prior year. As a percentage of revenue these expenses decreased from 7% to 5% in the three-month period and from 6% to 5% for the six-month period ended November 30, 2003. Although on a quarter to quarter basis, some fluctuations of research and development expense will occur, management expects research and development expense to approximate 5% to 6% of revenues over time. These expenditures approximate 8% to 10% of revenues from products and product lines that are supported by research and development.

Other income was substantially unchanged when comparing the fiscal 2004 three-month and six-month periods with those of the prior year. Federal and state income tax rates used in the computation of income tax expense in the periods remained the same as those in the prior year.

Financial Condition and Liquidity

At November 30, 2003, the Company had $2,045,000 in cash and marketable securities, working capital of $18,728,000 and stockholders’ equity of $44,901,000. In addition, available bank lines totaled $11,900,000. Cash and marketable securities decreased by $6,852,000 from May 31, 2003 primarily due to the acquisition of HACCO Inc. and Hess & Clark, Inc. during the second quarter as described in Note 9 to the interim consolidated financial statements.

Accounts receivable were $434,000 higher than at May 31, 2003 with $122,000 of receivable balances acquired in the acquisitions. Days outstanding in account receivables decreased from 56 days at May 31, 2003 to 53 days as of November 30, 2003. Management believes that the recorded allowances are adequate to provide for accounts that may become uncollectable. Inventories at November 30, 2003 increased $2,165,000 with $1,750,000 resulting from the acquisitions and the remainder resulting from the continued policy of maintaining adequate inventories to meet customer needs. The decrease of $381,000 in current liabilities results from the timing of payments.

At November 30, 2003 the Company had material commitments for the purchase of two pieces of property. Subsequent to the quarter, the Company purchased a facility in Lexington, Kentucky for approximately $1,900,000 and a facility in Lansing, Michigan for approximately $802,000. These facilities are expected to replace certain leased facilities and also to be used in expanding the Company’s operations as the need arises. The purchases were financed by drawings under the bank line of credit.

Inflation and changing prices are not expected to have a material effect on operations.

Management believes that the Company’s existing cash and marketable securities as of November 30, 2003, along with its available bank line of credit and cash expected to be generated from future operations, will be sufficient to fund activities for the foreseeable future. However, existing cash and marketable securities may not be sufficient to meet the Company’s cash requirements to commercialize products currently under development or its plans to acquire other organizations, technologies or products that fit within the Company’s mission statement. Accordingly, the Company may be required to issue equity securities or enter into other financing arrangements for a portion of the Company’s future capital needs.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to market risk exposures of varying correlations and volatilities with regard to interest rate and foreign exchange rate risks.

The Company’s exposure to market risk for changes in interest rates relates to its portfolio of marketable securities. The Company has not had significant fixed rate borrowings. Interest rate risk is managed by investing in high-quality issuers and seeking to avoid principal loss of invested funds by limiting default risk and market risk. Default risk is managed by investing in only high-credit-quality securities and by responding appropriately to a significant reduction in credit rating of any

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investment issuer or guarantor. The portfolio includes only marketable securities with active secondary or resale markets to ensure portfolio liquidity.

Because the Company markets and sells its products throughout the world, it could be significantly affected by weak economic conditions in foreign markets that could reduce demand for its products.

The Company has assets, liabilities and operations outside of the United States that are located primarily in Ayr, Scotland where the functional currency is the British Pound. The Company’s investment is its foreign subsidiary is considered long-term. Accordingly, the Company does not hedge its net investment or engage in other foreign currency hedging activities due to the insignificance of the balances to the Company as a whole.

ITEM 4. CONTROLS AND PROCEDURES

Within the 90-day period preceding the date of this report, and evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures was carried out under the supervision and with the participation of the Company’s Chief Executive and Chief Financial Officers. Based on that evaluation, the certifying officers concluded that the Company’s management had the relevant information necessary to permit an assessment of the need to disclose material developments and risks pertaining to the Company’s business in its periodic filings with the Securities and Exchange Commission. There have been no significant changes to the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is subject to certain legal proceedings in the normal course of business that, in the opinion of the management, will not have effect on its future results of operations or financial position.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Annual Meetings of the Company were held on October 2, 2003 and October 9, 2002. The matters voted upon and the results of the vote follow:

THE MEETING HELD OCTOBER 2, 2003:

1)	Election of Directors	For
	Lon M. Bohannon	4,930,820
	Herbert D. Doan	5,386,567
	Gordon E. Guyer	5,254,969
THE MEETING HELD OCTOBER 9, 2002:
I)	Election of Directors	For
	James L. Herbert	5,251,079
	G. Bruce Papesh	5,432,029
	Thomas H. Reed	5,308,429
II)	Approval of 2002 Employee
	Stock Purchase Plan	5,272,340

Items 2, 3, and 5 are not applicable and have been omitted.

11

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibit Index

10.	(ac)Comerica Bank Loan Documents
10.	(ad)Stock Purchase Agreement between registrant and United Agri Products dated November 21, 2003. (HACCO, Inc.)
10.	(ae)Stock Purchase Agreement between registrant and United Agri Products dated November 21, 2003. (Hess & Clark, Inc.)
31.1	– Certification of Chief Executive Officer pursuant to Rule 13a – 14 (a).
31.2	– Certification of Chief Financial Officer pursuant to Rule 13 a – 14 (a).
32.	– Certification pursuant to 18 U.S.C. section 1350

(b) Reports on Form 8-K Filed in Quarterly Period Ended November 30, 2003.

Form 8-K dated September 25, 2003:

ITEM 12. Results of Operations and Financial Condition Press Release dated September 25, 2003.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NEOGEN CORPORATION (Registrant)
Dated: January 14, 2004
	By:	/s/    JAMES L. HERBERT
		James L. Herbert President and Chief Executive Officer
Dated: January 14, 2004
	By:	/s/    RICHARD R. CURRENT
		Richard R. Current Vice President and Chief Financial Officer

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EX-10.AC

Exhibit 10.(ac)

NEOGEN CORPORATION

CREDIT AGREEMENT

WITH

COMERICA BANK

NOVEMBER 26, 2003

TABLE OF CONTENTS

					Page
1.	DEFINITIONS				1
2.	THE INDEBTEDNESS				9
	2.1	Revolving Loan Commitment			9
		(a	)	Revolving Loan Note	9
	2.2	Types of Loans and Maturity			9
	2.3	Requests for Revolving Loan Advance			9
	2.4	Commitment and other Fees			10
	2.5	Purpose of Loans			10
	2.6	Prepayment and Readvances			10
	2.7	Letters of Credit			10
		(a)		Conditions to Issuance	10
		(b)		Letter of Credit Fees	11
		(c)		Issuance Fees	11
		(d)		Indemnification	11
		(e)		Fund Letter of Credit Obligations as Advances	11
	2.8	Support Letter of Credit			12
		(a)		Reimbursement Obligation / Drawing Fee	12
		(b)		Support Letter of Credit Fee	13
3.	INTEREST, FEE AND INTEREST CALCULATION, INTEREST PERIODS, CONVERSIONS, PREPAYMENTS				12
	3.1	Repayment			12
	3.2	Prime-based Rate			12
	3.3	Eurodollar-based Rate			12
	3.4	Interest Payments			12
	3.5	Interest Payments Upon Refundings and Conversions			12
	3.6	Maximum Rate			12
	3.7	Fees and Reimbursements			13
	3.8	Basis of Payments			13
	3.9	Receipt of Payments			13
	3.10	Default Interest			14

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TABLE OF CONTENTS

(continued)

				Page
	3.11	Conversion and Renewal of Loans		14
4.	SPECIAL PROVISIONS FOR LOANS			14
	4.1	Reimbursement of Prepayment Costs		14
	4.2	Eurodollar Lending Offices		14
	4.3	Circumstances Affecting Eurodollar-based Availability		14
	4.4	Laws Affecting Eurodollar-based Loan Availability		15
	4.5	Increased Costs		15
5.	PAYMENTS			16
	5.1	Payment Procedure		16
	5.2	Application of Proceeds		16
	5.3	Deposits and Accounts		16
6.	CONDITIONS			17
	6.1	Conditions Precedent To Initial Advance of the Revolving Loan and Closing Date		17
		(a)	Documents Executed and Filed	17
		(b)	Certified Resolutions	17
		(c)	Certified Articles of Incorporation	17
		(d)	Certified Bylaws	17
		(e)	Certificate of Good Standing	17
		(f)	Certificate of Incumbency	17
		(g)	Lien Search	18
		(h)	Liability and Casualty Insurance	17
		(i)	Opinion of Borrower’s Counsel	17
		(j)	Approval of Bank’s Counsel	17
		(k)	Bank Accounts	18
		(l)	Appraisal	18
		(m)	Environmental	19
		(n)	Accounts Audit	19
		(o)	Approvals	19
	6.2	Conditions Precedent to All Loans		18

-ii-

TABLE OF CONTENTS

(continued)

				Page
		(a)	Effectiveness	18
		(b)	No Default; Representations and Warranties	18
		(c)	Adverse Change, etc.	18
		(d)	Enforceability of Documents	18
7.	REPRESENTATIVE AND WARRANTIES			18
	7.1	Corporate Status		18
	7.2	Corporate Power and Authority; Business		18
	7.3	No Violation		19
	7.4	Litigation		19
	7.5	Use of Proceeds		19
	7.6	Governmental Approvals, etc.		19
	7.7	True and Complete Disclosure		19
	7.8	Financial Statements		19
	7.9	Security Interests		21
	7.10	Tax Returns and Payments		19
	7.11	Patents, etc.		19
	7.12	Compliance with Laws, etc.		20
	7.13	Collective Bargaining Agreements		20
	7.14	Indebtedness Outstanding		21
	7.15	Environmental Protection		21
	7.16	Employee Benefit Plans		21
	7.17	Survival of Representations and Warranties		21
8.	AFFIRMATIVE COVENANTS			22
	8.1	Reporting Requirements Covenants		22
	8.2	Maintenance of Existence and Status		23
	8.3	Insurance		23
	8.4	Books, Records and Inspections		23
	8.5	Payment of Taxes		23
	8.6	Compliance with Statutes, etc.		24
	8.7	Performance of Obligations		24

-iii-

TABLE OF CONTENTS

(continued)

			Page
	8.8	Environmental Events	24
	8.9	Compliance with Formula Amount	26
	8.10	Continuation of Business	24
	8.11	Maintenance of Property	24
9.	NEGATIVE COVENANTS		25
	9.1	Changes in Business	25
	9.2	Liens	25
	9.3	Indebtedness	25
	9.4	Financial Covenants	28
	9.5	Partner Loans, Advances	28
	9.6	Stock Acquisition	28
	9.7	Extension of Credit	28
	9.8	Guarantee Obligations	26
	9.9	Subordinate Indebtedness	26
	9.10	Property Transfer, Merger or Lease-Back	26
	9.11	Acquire Securities	26
	9.12	Use of Loan Proceeds	26
10.	DEFAULTS		26
	10.1	Failure to Pay Monies Due	26
	10.2	Misrepresentation	27
	10.3	Noncompliance with Agreement	27
	10.4	Other Defaults	27
	10.5	Judgments	27
	10.6	Business Suspension, Bankruptcy, Etc.	27
	10.7	Change of Control	30
	10.8	Repudiation, Revocation	27
	10.9	Inadequate Funding or Termination of Employee Benefit Plan(s)	27
	10.10	Occurrence of Certain Reportable Events	28
	10.11	Cross Default	28
	10.12	Support Letter of Credit	31

-iv-

TABLE OF CONTENTS

(continued)

			Page
	10.13	Exercise of Remedies	28
	10.14	Waiver of Defaults	28
11.	MISCELLANEOUS		28
	11.1	Law of Michigan; Submission to Jurisdiction	28
	11.2	Bank’s Costs and Expenses	29
	11.3	Notices	29
	11.4	Further Action	29
	11.5	Successors and Assigns	30
	11.6	Indulgence	30
	11.7	Counterparts	30
	11.8	Entire Agreement; Amendments; Waivers; Consents	30
	11.9	Confidentiality	30
	11.10	Interest	30
	11.11	Cross-Collateralization/Cross-Default	31
	11.12	JURY WAIVER	31
	11.13	Conflicts	31
	11.14	Effective Upon Execution	31

EXHIBITS

EXHIBIT “A” [FORM OF REQUEST FOR ADVANCE]

EXHIBIT “B” [FORM OF REVOLVING NOTE]

-v-

CREDIT AGREEMENT

THIS CREDIT AGREEMENT, made as of the 26^th day of November, 2003, between NEOGEN CORPORATION, a Michigan corporation (“Borrower”), and COMERICA BANK, a Michigan banking corporation (“Bank”).

WHEREAS, Borrower has requested the Bank to make certain loans and extensions of credit to Borrower, and

WHEREAS, Bank is willing to do so, but only on the terms and conditions of this Agreement;

NOW, THEREFORE, IT IS AGREED:

1. DEFINITIONS

For the purposes of this Agreement the following terms (when capitalized) will have the following meanings:

“Account(s)” shall mean, with respect to any Person, all accounts receivables, monies and book debts at any time owed to such Person, and all instruments, chattel paper and other documents evidencing or securing any such accounts receivable, monies or book debts.

“Advance” shall mean a borrowing under the Revolving Loan requested by Borrower and made by the Bank pursuant hereto.

“Affiliate” shall mean, when used with respect to any Person, any other Person which, directly or indirectly, controls or is controlled by or is under common control with such Person. For purposes of this definition, “control” (including the correlative meanings of the terms “controlled by” and “under common control with”), with respect to any Person, shall mean 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 voting securities or by contract or otherwise.

“Agreement” shall mean this Credit Agreement, as amended from time to time in accordance with the terms hereof.

“Applicable Interest Rate” shall mean either the Eurodollar-based Rate, Floating Rate or Prime-based Rate, as selected by Borrower from time to time or otherwise determined pursuant to the terms and conditions of this Agreement.

“Applicable Margin” shall mean:

(a) minus (i.e., negative) one and one-quarter percent (1.25%) per annum with respect to any Prime-based Loan; and

(b) one and one-half percent (1.50%) per annum with respect to any Floating Rate Loan or Eurodollar-based Loan.

“Business Day” shall mean any day on which commercial banks are open for domestic and international business in Detroit, Michigan and when used in reference to any Floating Rate Loan or Eurodollar-based Loan, also a day on which dealings are made in deposits in Dollars in the London interbank market.

“Capital Expenditures” shall mean, for any period of determination thereof, the aggregate gross expenditures during that period, in the property, plant or equipment reflected in the balance sheet of Borrower in conformity with GAAP.

“Closing Date” shall mean the date, on or before November 20, 2003, on which the conditions of Section 6.1 hereof have been satisfied.

“Closing Statement” shall mean that Closing Statement, in form and substance satisfactory to Bank, entered into by Borrower.

“Commitment Fees” shall mean the commitment fees payable to the Bank pursuant to Section 2.4 hereof.

“Current Assets” shall mean, as of any applicable date of determination, the current assets of Borrower determined in accordance with GAAP.

“Current Liabilities” shall mean, as of any applicable date of determination, all liabilities of a Person that should be classified as current in accordance with GAAP.

“Current Ratio” shall mean, as of any applicable date of determination, the ratio of Current Assets to Current Liabilities, each determined in accordance with GAAP.

“Default” shall mean an event, occurrence or circumstance which, with the giving of notice and/or passage of time, would constitute an Event of Default.

“Default Rate” shall mean a per annum rate of interest equal to the Applicable Interest Rate, plus three percent (3%).

“Documents” shall mean this Agreement, the Note, the Closing Statement, and all other documents, agreements and instruments delivered to Bank pursuant to this Agreement or any of the foregoing.

“Dollars” and the sign “$” shall mean lawful money of the United States of America.

2

“EBITDA” shall mean the Net Income of Borrower before interest, income taxes, depreciation and amortization.

“Eligible Accounts” shall mean an Account arising in the ordinary course of Borrower’s business which meets each of the following requirements:

(a) it is not owing more than one hundred twenty (120) days after the date of the original invoice or other writing evidencing such Account;

(b) it is not owing by an account debtor who has failed to pay twenty five percent (25%) or more of the aggregate amount of its accounts owing to the Borrower within one hundred twenty (120) days after the date of the original invoice or other writing evidencing such Account;

(c) it is not evidenced by any note, trade acceptance, draft or other negotiable instrument or by any chattel paper, unless such note or other document or instrument previously has been endorsed and delivered by the Borrower to the Bank;

(d) it arises from the sale or lease of goods and such goods have been shipped or delivered to the account debtor; or it arises from services rendered and such services have been performed;

(e) it is evidenced by an invoice, dated not later than the date of shipment or performance, rendered to such account debtor, or some other evidence of billing acceptable to the Bank;

(f) it is a valid, legally enforceable obligation of the account debtor thereunder, and is not subject to any offset, counterclaim or other defense on the part of such account debtor or to any claim on the part of such account debtor denying liability thereunder in whole or in part;

(g) it is not an Account billed in advance, payable on delivery, for consigned goods, for guaranteed sales, for unbilled sales, for progress billings, payable at a future date in accordance with its terms, subject to a retainage or holdback by the account debtor or insured by a surety company;

(h) it is not owing by a subsidiary or Affiliate of the Borrower;

(i) it is not owing by an account debtor which (i) does not maintain its chief executive office in the United States of America or Canada, (ii) is not organized under the laws of the United States of America or Canada, or any state or province thereof, as applicable, or (iii) is the government of any foreign country or sovereign state, or of any state, province, municipality or other instrumentality thereof;

(j) it is not an Account owing by the United States of America or any state or political subdivision thereof, or by any department, agency, public body corporate or other instrumentality of any of the foregoing, unless all necessary steps are taken to comply with the Federal Assignment of Claims Act of 1940, as amended, or with any comparable state law, if

3

applicable, and all other necessary steps are taken to perfect the Bank’s security interest in such Account;

(k) the Account has not arisen out of a written order or contract with or from an account debtor which by its nature or terms prevents, restricts, forbids or makes void or unenforceable the assignment to the Bank of such Account, or requires notice to, or the consent of, the account debtor;

(l) it is not owing by an account debtor for which the Borrower has received a notice of (i) the death of the account debtor or any partner of the account debtor, (ii) the dissolution, liquidation, termination of existence, insolvency or business failure of the account debtor, (iii) the appointment of a receiver for any part of the property of the account debtor, or (iv) an assignment for the benefit of creditors, the filing of a petition in bankruptcy, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against the account debtor; and

(m) it is not owing by any account debtor whose obligations the Bank, acting in its sole discretion, shall have notified the Borrower are not deemed to constitute Eligible Accounts.

An Account which is at any time an Eligible Account, but which subsequently fails to meet any of the foregoing requirements, shall forthwith cease to be an Eligible Account.

“Environmental Laws” shall mean the common law and all federal, state, local and foreign laws or regulations, codes, orders, decrees, judgments or injunctions issued, promulgated, approved or entered thereunder, now or hereafter in effect, relating to pollution or protection of public or employee health and safety or the environment, including, without limitation, laws relating to (i) emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous constituent substances or wastes, including, without limitation, petroleum, including crude oil or any fraction thereof, or any petroleum product (collectively referred to as “Hazardous Materials”), into the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata), (ii) the manufacture, processing, distribution, use, generation, treatment, storage, disposal, transport or handling of Hazardous Materials, and (iii) underground storage tanks, and related piping, and emissions, discharges, releases or threatened releases therefrom.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, or any successor act or code.

“Eurodollar-based Loan” shall mean a Loan which bears interest at a rate based on the Eurodollar-based Rate.

“Eurodollar-based Rate” shall mean a per annum interest rate equal to the Eurodollar Rate for the relevant Loan, plus the Applicable Margin for Eurodollar-based Loans.

“Eurodollar Lending Office” shall mean Bank’s office located at Grand Cayman, the British West Indies or such other branch of Bank, domestic or foreign, as it may hereafter designate as its Eurodollar Lending Office by notice to Borrower.

4

“Eurodollar Rate” shall mean:

(a) the per annum interest rate at which the Eurodollar Lending Office offers deposits in the relevant Eurodollar to prime banks in the Eurodollar market in an amount comparable to the relevant Eurodollar-based Loan and for a period equal to the relevant Interest Period at approximately 11:00 a.m. Detroit time two (2) Business Days prior to the first day of such Interest Period; divided by,

(b) a percentage (expressed as a decimal) equal to one hundred percent (100%) minus that percentage which is in effect on the date for an Advance of a Eurodollar-based Loan, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirements for a member bank of the Federal Reserve System with deposits exceeding five billion dollars in respect of “Eurodollar Liabilities” (or in respect of any other category of liabilities which includes deposits by reference to which the interest rate on Eurodollar-based Loans is determined or any category of extensions of credit or other assets which includes loans by a non-United States Eurodollar Lending Office of such a bank to United States residents).

“Event of Default” shall mean the Events of Default specified in Sections 10.1 through 10.12 hereof.

“Floating Rate” shall mean, as of any day:

(a) the per annum interest rate at which the Eurodollar Lending Office offers overnight deposits in the relevant Eurodollar to prime banks in the Eurodollar market in an amount comparable to the relevant Floating Rate Loan; divided by,

(b) a percentage (expressed as a decimal) equal to one hundred percent (100%) minus that percentage which is in effect on the date for an Advance of a Floating Rate Loan, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirements for a member bank of the Federal Reserve System with deposits exceeding five billion dollars in respect of “Eurodollar Liabilities” (or in respect of any other category of liabilities which includes deposits by reference to which the interest rate on Eurodollar-based Loans is determined or any category of extensions of credit or other assets which includes loans by a non-United States Eurodollar Lending Office of such a bank to United States residents); plus

(c) the Applicable Margin.

“Floating Rate Loan” shall mean a Loan which bears interest at the Floating Rate.

“Funded Debt” shall mean, as of any time of determination, the sum of all Indebtedness of Borrower, less accounts payable, accruals, deferred taxes, deferred compensation and loans payable to Affiliates.

“Funded Debt Ratio” shall mean the ratio of Borrower’s Funded Debt to EBITDA for the previous four (4) fiscal quarters of Borrower.

5

“GAAP” shall mean, at any time, accounting principles generally accepted in the United States applied in a manner consistent with the method of application utilized in the preparation of the financial statements mentioned in Section 7.8 hereof.

“Highest Lawful Rate” shall mean the maximum nonusurious interest rate that at any time or from time to time may be contracted for, taken, reserved, charged or received on its Note or other indebtedness under laws applicable to Bank which are in effect as of the date hereof or, to the extent allowed by law, under such laws applicable to Bank which may hereafter be in effect and which allow a higher maximum nonusurious interest rate than applicable laws allow as of the date hereof.

“Indebtedness” shall mean, with respect to any Person, without duplication, (i) all indebtedness of such Person for borrowed money, (ii) the deferred purchase price of assets or services which in accordance with GAAP would be shown on the liability side of the balance sheet of such Person, (iii) all obligations of any other Person secured by any lien on any property owned by such first Person, whether or not such obligations have been assumed by such first Person, (iv) all capitalized lease obligations of such Person, and (v) all obligations of such Person under interest rate hedge agreements or interest rate swap agreements.

“Interest Expense” shall mean, for the period of any calculation thereof, the amount of interest expense of the Borrower, determined in accordance with GAAP.

“Interest Period” shall mean:

(a) in the case of any Prime-based Loan or Floating Rate Loan, an initial period beginning on the date of the Advance thereof and ending on the first Business Day of the month following the month in which such Advance is made, and thereafter, successive Interest Periods ending on the first Business Day of each month thereafter; and

(b) in the case of any Loan which is a Eurodollar-based Loan, a period of thirty (30) days or any multiple thereof up to three hundred sixty (360) days.

provided however, that:

(i) any Interest Period which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day unless the next succeeding Business Day falls in another calendar month, in which case, such Interest Period shall end on the immediately preceding Business Day;

(ii) when an Interest Period for a Eurodollar-based Loan begins on a day which has no numerically corresponding day in another calendar month during which such Interest Period is to end, it shall end on the last Business Day of such other calendar month; and

(iii) no Interest Period for any Loan shall extend beyond the Maturity Date.

“Letter(s) of Credit” shall mean any letters of credit hereafter issued by Bank at the request of or for the account of Borrower pursuant to Section 2.7 hereof.

6

“Letter of Credit Agreement” shall mean in respect of each Letter of Credit issued pursuant to this Agreement, the application of Borrower requesting Bank to issue such Letter of Credit (including the terms and conditions on the reverse side thereof or otherwise therewith), in the form and substance acceptable to Bank.

“Letter of Credit Fees” shall mean the fees payable to Bank in connection with Letters of Credit issued by it pursuant to Section 2.7 hereof.

“Letter of Credit Maximum” shall mean One Million Dollars ($1,000,000).

“Letter of Credit Obligation” shall mean the obligation of Borrower under each Letter of Credit Agreement to reimburse the Bank for each payment made by Bank under the Letter of Credit issued pursuant to such Letter of Credit Agreement, together with all other sums, fees, charges and amounts which may be owing under such Letter of Credit Agreement.

“Letter of Credit Outstandings” shall mean, as of any date, the sum of:

(a) the face amounts of any Letters of Credit then issued and unexpired; plus

(b) the amounts of Letter of Credit Payments that have not yet been reimbursed to Bank.

“Letter of Credit Payment” shall mean any amount paid or required to be paid by Bank in its capacity as issuer of a Letter of Credit as a result of a draw against any Letter of Credit.

“Loan” shall mean the Revolving Loan(s).

“Material Adverse Effect” shall mean:

(a) any materially adverse effect with respect to the operations, business, properties, assets, nature of assets, liabilities (contingent or otherwise) or financial condition of Borrower or any other Person; or

(b) any facts or circumstances that create a reasonable likelihood that Borrower will be rendered unable to perform obligations under any of the Documents, or a reasonable likelihood that the Bank will be rendered unable to enforce in any material respect rights or remedies purported to be granted Bank under any of the Documents.

“Maturity Date” shall mean the earlier of an Event of Default or September 1, 2005;

“Net Income” shall mean net income (or loss) for any period, determined in accordance with GAAP.

“PBGC” shall mean the Pension Benefit Guaranty Corporation or any Person succeeding to the present powers and functions of the Pension Benefit Guaranty Corporation.

“Person” shall mean an individual, corporation, partnership, trust, incorporated or unincorporated organization, association, syndicate, joint venture, joint stock company, or a

7

government or any agent or political subdivision thereof or other entity of any kind, and pronouns have a similarly extended meaning.

“Prime Rate” shall mean the per annum interest rate established by Bank as its prime rate for its borrowers as such rate may vary from time to time, which rate is not necessarily the lowest rate on loans made by Bank at any such time.

“Prime-based Loan” shall mean a Loan which bears interest at a rate based on the Prime-based Rate.

“Prime-based Rate” shall mean, as of any day that rate of interest which is equal to the Prime Rate plus the Applicable Margin.

“Property” shall mean, with respect to any Person, any interest of such Person in any land or property or asset, wherever situated, whether real or immovable, personal, movable or mixed, tangible or corporeal, intangible or incorporeal, including capital stock in any other Person.

“Real Estate Purchase Agreements” shall mean (a) the                         , dated                 , between Borrower and                 , pursuant to which Borrower will purchase certain real estate located at 928 Nandino Blvd., Lexington, Kentucky from                          and (b) the                         , dated                         , between Borrower and                         , pursuant to which Borrower will purchase certain real estate located at 301 N. Hosmer, Lansing, Michigan from                         .

“Request for Loan” shall mean a request for an Advance under the Revolving Note issued by a Borrower under this Agreement in the form annexed hereto as Exhibit “A”.

“Revolving Loan” or “Revolving Loans” shall mean the revolving credit loans to be advanced and readvanced to Borrower pursuant to Section 2.1 hereof.

“Revolving Loan Commitment” shall mean Fifteen Million Dollars ($15,000,000).

“Revolving Note” shall mean the Note evidencing the Revolving Loans.

“Stock Purchase Agreements” shall mean (a) the Stock Purchase Agreement, dated on or about the date hereof, between HACCO and Borrower, pursuant to which Borrower will purchase 100% of the stock of HACCO, and (b) the Stock Purchase Agreement, dated on or about the date hereof, between Hess & Clark and Borrower, pursuant to which Borrower will purchase 100% of the stock of Hess & Clark.

“Tangible Effective Net Worth” shall mean, as of any applicable date of determination, the excess of (i) the net book value of all assets of a Person (other than patents, patent rights, trade marks, trade names, franchises, copyrights, licenses, goodwill, capitalized organization expense and similar intangible assets and also excluding any amounts due from loans, investments or advances from or to any joint venture, subsidiary or Affiliate of such Person) after all appropriate deductions in accordance with GAAP (including, without limitation, reserves for doubtful receivables, obsolescence, depreciation and amortization) and excluding Affiliate non-trade accounts receivable, less (ii) its Total Liabilities.

8

“Total Liabilities” shall mean, as of the date of any determination thereof, all liabilities and other obligations of Borrower, determined on in accordance with GAAP.

“UCC” shall mean Public Act 174 of 1962 of State of Michigan, as amended.

2. THE INDEBTEDNESS

2.1 Revolving Loan Commitment. Subject to the terms and conditions of this Agreement, Bank and Borrower agree that Borrower may request and, as to any such request Bank may in its discretion make, Revolving Loans to Borrower, at any time prior to the Maturity Date, in aggregate principal amount outstanding at any time which, when added to the Letter of Credit Outstandings, will not exceed the Revolving Loan Commitment.

2.2 Revolving Loan Note. The Revolving Loan shall be evidenced by a Revolving Note in the form attached as Exhibit “B” made to the Bank in the principal amount of the Revolving Loan Commitment.

2.3 Types of Loans and Maturity. The Revolving Note, and all principal and interest then outstanding thereunder, shall mature and become due and payable in full on the Maturity Date. Each Loan from time to time outstanding shall be either a Prime-based Loan, a Floating Rate Loan or a Eurodollar-based Loan as the Borrower may elect or as otherwise applicable pursuant to the provisions hereof. The amount and date of each Loan, its Applicable Interest Rate, its Interest Period, and the amount and date of any repayment shall be noted on Bank’s records, which records will be presumed correct absent manifest error.

2.4 Requests for Revolving Loan Advance. Borrower may request Advances by delivery to Bank of a Request for Loan form executed by an authorized officer of Borrower and subject to the following:

(a) each such Request for Loan shall set forth all information required on the Request for Loan form;

(b) in the case of a Floating Rate Loan, the Request for Loan form may be substituted by another form reasonably acceptable to Bank and Borrower, and such substitute form constitute a Request for Loan for all purposes hereunder;

(c) each such Request for Loan shall be delivered to Bank by 2:00 p.m. (Detroit time) on such proposed date;

(d) the principal amount of such Advance, plus the amount of any outstanding Advance under the same Note having the same Applicable Interest Rate and Interest Period shall be, in the case of a Eurodollar-based Loan, at least One Million Dollars ($1,000,000) or a greater integral multiple of Five Hundred Thousand Dollars ($500,000).

(e) a Request for Loan, once delivered to Bank, shall not be revocable by Borrower;

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(f) each Request for Loan shall constitute a certification by the Borrower as of the date thereof that all of the conditions set forth in Section 6.2 hereof are satisfied as of the date of such request and shall be satisfied as of the date such Advance is requested; and

(g) the principal amount requested, together with the principal amount of all other Advances (plus the Letter of Credit Outstandings), shall not exceed the Revolving Loan Commitment.

2.5 Commitment and other Fees.

(a) Borrower shall pay to Bank, with respect to the Revolving Loan, a $7,500 commitment fee payable on the Closing Date, which amount shall be deemed fully earned by Bank as of the Closing Date and shall not be refundable under any circumstance, together with all other fees of Bank and its counsel as set forth on the Closing Statement.

(b) Borrower shall pay to the Bank an unused facility fee for the period from the date of this Agreement to and including the Maturity Date, equal to one tenth of one percent (.10%) per annum on the average daily excess of the Revolving Loan Commitment over the aggregate principal balance of the Revolving Loans. Such unused facility fee shall be computed and paid quarterly in arrears by automatic deduction from Borrower’s deposit account with the Bank, on the first Business Day of the months of January, April, July and October, beginning January 1, 2004, and on the Maturity Date, for the immediately preceding three (3) month period.

2.6 Purpose of Loans. The Revolving Loan shall be available to and used by Borrower for working capital purposes, to fund the purchase prices to be paid by Borrower pursuant to the Stock Purchase Agreements, and to fund the purchase prices to be paid by Borrower in connection with the Real Estate Purchases.

2.7 Prepayment and Readvances. Subject to Section 4.1 of this Agreement, the Revolving Loans outstanding hereunder may be prepaid from time to time in accordance with the terms of this Agreement. Amounts so prepaid shall be available for readvance.

2.8 Letters of Credit. Subject to the terms and conditions of this Agreement, Bank shall, at the request of Borrower at any time and from time to time from the Closing Date until the third (3^rd) Business Day prior to the Maturity Date, issue Letters of Credit for the account of Borrower in an aggregate amount at any one time outstanding not to exceed the Letter of Credit Maximum. Each Letter of Credit shall provide an initial expiration date not later than the earlier of two (2) years from its date of issuance (subject to renewals) and three (3) Business Days prior to the Maturity Date.

(a) Conditions to Issuance. No Letter of Credit shall be issued unless, as of the date the issuance of such Letter of Credit is requested:

(i) the sum of all Revolving Loans outstanding and Letter of Credit Outstandings, upon the issuance of the Letter of Credit requested, will not exceed the Revolving Loan Commitment;

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(ii) the face amount of the Letter of Credit requested plus the Letter of Credit Outstandings will not exceed the Letter of Credit Maximum;

(iii) the execution of the Letter of Credit Agreement with respect to the Letter of Credit requested will not violate the terms and conditions of any contract, agreement or other borrowing of Borrower;

(iv) Borrower shall have delivered to Bank, prior to the requested date for issuance, the Letter of Credit Agreement related thereto, together with such other documents and materials as may be required pursuant to the terms thereof, and the terms of the proposed Letter of Credit shall be satisfactory to Bank;

(v) no order, judgment or decree of any court, arbitrator or governmental authority shall purport by its terms to enjoin or restrain Bank from issuing the Letter of Credit, and no law, rule, regulation, request or directive (whether or not having the force of law) of or from any governmental authority shall prohibit or request that Bank refrain from issuing the Letter of Credit requested or letters of credit generally; and

(vi) all of the conditions set forth herein, and in the related Letter of Credit Agreement, are satisfied as of the date of such request and shall be satisfied as of the date requested for issuance of such Letter of Credit.

(b) Letter of Credit Fees. Borrower shall pay to Bank letter of credit fees upon the date of issuance of each Letter of Credit in an amount to be agreed upon between Borrower and Bank.

(c) Issuance Fees. In connection with the Letters of Credit, Borrower will pay Bank’s letter of credit issuance fees and standard administration, payment drawing and cancellation charges assessed by Bank, at the times, in the amounts and on the terms customarily charged by Bank in connection with the administration of and transactions involving its letter of credit program.

(d) Indemnification. Borrower hereby indemnifies and holds Bank harmless from and against any and all claims, damages, losses, liabilities, costs or expenses whatsoever which any such party may incur (or which may be claimed against any such party by any Person) by reason of or in connection with the execution and delivery or transfer of, or payment or failure to pay under, any Letter of Credit; provided, however, that they shall not be required to indemnify Bank pursuant to this Section 2.7(d) for claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by the willful misconduct or gross negligence of Bank.

(e) Fund Letter of Credit Obligations as Advances. Borrower hereby irrevocably authorizes and directs Bank, in the event that any Letter of Credit Obligation is not paid when due, to make a Revolving Loan under the Revolving Note in the amount of such unpaid Letter of Credit Obligation and to apply the proceeds thereof toward satisfaction of such unpaid Letter of Credit Obligation.

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3. INTEREST, FEE AND INTEREST CALCULATION, INTEREST PERIODS, CONVERSIONS, PREPAYMENTS

3.1 Repayment. The Note, and all principal and interest outstanding thereunder, shall mature and become due and payable on the Maturity Date, and each Revolving Loan from time to time outstanding thereunder shall bear interest at its Applicable Interest Rate. The amount and date of each Revolving Loan, its Applicable Interest Rate, its Interest Period (if applicable) and the amount and date of any repayment shall be noted on Bank’s records, which records will be prima facie evidence thereof, absent manifest error; provided, however, any failure by Bank to record any such information shall not relieve Borrower of its obligations to repay the outstanding principal amount of the Revolving Loans, accrued interest thereon, and any other amounts payable by Borrower hereunder in accordance with the terms of this Agreement.

3.2 Prime-based Rate. Interest on the unpaid balance of all Prime-based Loans from time to time outstanding shall accrue from the date of such Revolving Loan until paid at a per annum rate equal to such Revolving Loan’s Prime-based Rate, and shall be computed on the basis of a 360 day year and shall be assessed for the actual number of days elapsed, and in such computation, effect shall be given to any change in the Prime-based Rate if resulting from a change in the Prime Rate, on the date of each such change in the Prime Rate.

3.3 Floating Rate. Interest on the unpaid balance of all Floating Rate Loans from time to time outstanding shall accrue from the date of such Revolving Loan until paid at a per annum rate equal to the Floating Rate, and shall be computed on the basis of a 360 day year and shall be assessed for the actual number of days elapsed, and in such computation, effect shall be given to any change in the Floating Rate on the date of each such change in the Floating Rate.

3.4 Eurodollar-based Rate. Interest on each Eurodollar-based Loan shall accrue at its Eurodollar-based Rate, and shall be computed on the basis of a 360 day year and shall be assessed for the actual number of days elapsed from the first day of the Interest Period applicable thereto to, but not including the last day thereof.

3.5 Interest Payments. Interest shall be due and payable:

(a) On all Revolving Loans outstanding as Floating Rate Loans or Prime-based Loans, on the first Business Day of each month beginning January 1, 2004; and

(b) On all Revolving Loans to the extent funded as a Eurodollar-based Loan, on the last day of the Interest Period applicable thereto.

3.6 Interest Payments Upon Refundings and Conversions. Notwithstanding anything to the contrary set forth herein, all accrued and unpaid interest on any Revolving Loan (or portion thereof) which is refunded or converted pursuant to Section 3.11 hereof shall be due and payable in full on the date of such refunding or conversion, together with any amounts payable under Section 3.10 hereof if such refunding or conversion occurs on any day other than the last day of the Interest Period applicable thereto.

3.7 Maximum Rate. At no time shall the rate of interest payable on the Note be deemed to exceed the Highest Lawful Rate. In the event any interest is charged or received by

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the Bank in excess of the Highest Lawful Rate, the Borrower acknowledges that any such excess interest shall be the result of an accidental and bona fide error, and such excess shall first be applied to reduce the principal then unpaid hereunder (in inverse order of their maturities if principal amounts are due in installments); second, applied to reduce any obligation for other indebtedness of the Borrower to the Bank; and third, any remaining excess returned to the Borrower.

3.8 Fees and Reimbursements. Simultaneously with the execution of this Agreement, the Borrower shall reimburse Bank for the amount of the expenses (including without limit reasonable attorneys’ fees, whether of inside or outside counsel, and disbursements) incurred by the Bank in connection with the preparation and closing of this Agreement and related instruments and/or making of advances hereunder.

3.9 Basis of Payments. All sums payable by the Borrower to the Bank under this Agreement or the other documents contemplated hereby shall be paid directly to the Bank at its principal office in United States funds, without set off, deduction or counterclaim. In its sole discretion, from and after the occurrence of an Event of Default, the Bank may charge any and all deposit or other accounts (including without limit an account evidenced by a certificate of deposit) of the Borrower with the Bank for all or a part of any indebtedness of Borrower to Bank then due; provided, however, that this authorization shall not affect the Borrower’s obligation to pay, when due, any indebtedness of Borrower to Bank whether or not account balances are sufficient to pay amounts due.

3.10 Receipt of Payments. Any payment of the indebtedness of Borrower to Bank made by mail will be deemed tendered and received only upon actual receipt by the Bank at the address designated for such payment, whether or not the Bank has authorized payment by mail or any other manner, and shall not be deemed to have been made in a timely manner unless received on the date due for such payment, time being of the essence. The Borrower expressly assumes all risks of loss or liability resulting from non-delivery or delay of delivery of any item of payment transmitted by mail or in any other manner. Acceptance by the Bank of any payment in an amount less than the amount then due shall be deemed an acceptance on account only, and the failure to pay the entire amount then due shall be and continue to be an Event of Default, and at any time thereafter and until the entire amount then due has been paid, the Bank shall be entitled to exercise any and all rights conferred upon it herein upon the occurrence of an Event of Default. The Borrower waives the right to direct the application of any and all payments at any time or times hereafter received by the Bank from or on behalf of the Borrower. The Borrower agrees that the Bank shall have the continuing exclusive right to apply and to reapply any and all payments received at any time or times hereafter against the indebtedness of Borrower to Bank in such manner as the Bank may deem advisable, notwithstanding any entry by the Bank upon any of its books and records. The Borrower expressly agrees that to the extent that the Bank receives any payment or benefit and such payment or benefit, or any part thereof, is subsequently invalidated, declared to be fraudulent or preferential, set aside or is required to be repaid to a trustee, receiver, or any other party under any bankruptcy act, state or federal law, common law or equitable cause, then to the extent of such payment or benefit, the indebtedness of Borrower to Bank or part thereof intended to be satisfied shall be revived and continued in full force and effect as if such payment or benefit had not been made and, further, any such repayment by the

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Bank, to the extent that the Bank did not directly receive a corresponding cash payment, shall be added to and be additional Indebtedness of Borrower to Bank payable upon demand by the Bank.

3.11 Default Interest. Notwithstanding anything herein to the contrary, in the event and so long as an Event of Default shall exist, all principal outstanding under the Note shall bear interest, payable on demand, from the date of such Event of Default or acceleration at a rate per annum equal to the Default Rate, provided, however, that in no event shall the Note or Loans bear interest at a rate greater than the Highest Lawful Rate.

3.12 Conversion and Renewal of Loans. Providing that no Event of Default shall have occurred, the Borrower may elect to renew or convert Applicable Interest Rates applicable to the Revolving Loan from the Prime-based Rate, Floating Rate or Eurodollar-based Rate to any other of said Rates; provided that the Borrower pays the prepayment costs required under Section 4.1 hereof, if applicable. Eurodollar-based Rates may be selected only for portions of the Revolving Loan which are in an amount of One Million Dollars ($1,000,000) or a greater integral multiple of Five Hundred Thousand Dollars ($500,000). The Borrower may select the Applicable Interest Rate and Interest Periods for such renewals and conversions by giving the Bank not less than three (3) Business Days’ prior notice in the manner provided in Section 2.3 hereof, specifying the date of such renewal or conversion, the Revolving Loans to be converted, the type of Revolving Loan elected and the duration of the Interest Period therefor. If with respect to any Revolving Loan outstanding at any time, the Bank does not receive notice of the election three (3) or more Business Days prior to the last day of the Interest Period therefor Borrower shall be deemed to have elected to convert such Revolving Loan to a Prime-based Loan at the end of the then current Interest Period.

4. SPECIAL PROVISIONS FOR LOANS

4.1 Reimbursement of Prepayment Costs. As to any Eurodollar-based Loan, if any prepayment thereof shall occur on any day other than the last day of an Interest Period (whether pursuant to this Article, or by acceleration, or otherwise), or if an Applicable Interest Rate shall be changed (other than as a result of a change in the Applicable Margin occurring pursuant to the terms hereof) during any Interest Period pursuant to this Article, or if Borrower shall fail to borrow any such Advance on the date requested therefor, Borrower hereby agrees to reimburse Bank on demand for any costs incurred by Bank as a result of the timing thereof including but not limited to any net costs incurred in liquidating or employing deposits from third parties. Upon the written request of Borrower, Bank shall deliver to Borrower a certificate setting forth the basis for determining such costs, which certificate shall be conclusively presumed correct, absent manifest error.

4.2 Eurodollar Lending Offices. For any Floating Rate Loan or Eurodollar-based Loan, if Bank shall designate a Eurodollar Lending Office which maintains books separate from those of the rest of Bank, Bank shall have the option of maintaining and carrying the relevant Revolving Loan on the books of such Eurodollar Lending Office.

4.3 Circumstances Affecting Eurodollar-based Availability. If with respect to any Floating Rate Loan or Eurodollar-based Loan, Bank determines that, by reason of circumstances affecting the foreign exchange and interbank markets generally, deposits in the relevant

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Eurodollar in the applicable amounts are not being offered to Bank for such Interest Period, then Bank shall give notice thereof to Borrower. Thereafter, the obligations of Bank to make Eurodollar-based Loans for such Interest Periods, the obligations of Bank to make Floating Rate Loans, and the right of Borrower to convert an Advance to or refund an Advance as a Eurodollar-based Loan for such Interest Period shall be suspended until Bank notifies Borrower that such circumstance no longer exists.

4.4 Laws Affecting Eurodollar-based Loan Availability. If, after the date hereof, the introduction of, or any change in, any applicable law, rule or regulation or in the interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof, or compliance by Bank (or its Eurodollar Lending Office) with any request or directive (whether or not having the force of law) of any such authority, shall make it unlawful or impossible for Bank (or its Eurodollar Lending Office) to honor its obligations hereunder to make or maintain any Loan or Advance with interest at the Floating Rate or the Eurodollar-based Rate, Bank shall give notice thereof to Borrower. Thereafter: (a) the obligations of Bank to make Floating Rate Loans and Eurodollar-based Loans and the right of Borrower to convert an Advance or refund an Advance as a Floating Rate Loan or a Eurodollar-based Loan shall be suspended; (b) if Bank may not lawfully continue to maintain a Eurodollar-based Loan to the end of the then current Interest Period, the Prime-based Rate shall be the Applicable Interest Rate for Bank’s Eurodollar-based Loans for the remainder of such Interest Period; and (c) if Bank may not lawfully continue to maintain a Floating Rate Loan, the Prime-based Rate shall be the Applicable Interest Rate for Bank’s Floating Rate Loans.

4.5 Increased Costs. In the event that any change after the date hereof in applicable law, treaty or governmental regulation, or in the interpretation or application thereof, or compliance by Bank with any request or directive (whether or not having the force of law) from any central bank or other financial, monetary or other authority:

(a) shall subject Bank (or its Eurodollar Lending Office) to any tax, duty or other charge with respect to any Loan or any Note or any Letter of Credit or shall change the basis of taxation of payments to Bank (or its Eurodollar Lending Office) of the principal of or interest on any Loan or any Note or any Letter of Credit or any other amounts due under this Agreement (except for changes in the rate of tax on the overall net income or gross receipts of Bank or its Eurodollar Lending Office imposed by the jurisdiction in which Bank’s principal executive office or Eurodollar Lending Office is located); or

(b) shall impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System but excluding with respect to any Floating Rate Loan or Eurodollar-based Loan any such requirement included in an applicable Eurodollar Reserve Requirement), risk-based capital requirement, liquidity ratio or special deposit, or similar requirement against assets of, deposits with or for the account of, or credit extended by Bank (or its Eurodollar Lending Office) or shall impose on Bank (or its Eurodollar Lending Office) or the foreign exchange and interbank markets or other condition affecting the Loan or the Note or any Letter of Credit or any commitment of Bank under this Agreement;

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and the result of any of the foregoing is to increase the costs to Bank of making, renewing or maintaining any part of the Loans, Letters of Credit or its commitments hereunder or to reduce the amount or rate of return on any sum received or receivable by, or the rate of return on the capital of, Bank under this Agreement, or under the Note, or with respect to Letters of Credit then Bank shall promptly notify Borrower of such fact and demand compensation therefor and, Borrower hereby agrees to pay to Bank such additional amount or amounts as will compensate Bank for such increased costs or reduced return within thirty (30) days of such notice. A certificate of Bank demanding such compensation setting forth in reasonable detail the basis for determining such additional amount or amounts necessary to compensate Bank shall be conclusively presumed to be correct save for manifest error.

5. PAYMENTS

5.1 Payment Procedure.

(a) All payments by Borrower of principal of, or interest on, the Note or of Commitment Fees, shall be made without setoff, deduction or counterclaim on the date specified for payment under this Agreement not later than 3:00 p.m. (Detroit time) in immediately available funds to Bank.

(b) Whenever any payment to be made shall otherwise be due on a day that is not a Business Day, such payment shall be made (except as specifically indicated to the contrary herein) on the next succeeding Business Day and such extension of time shall be included in computing interest, if any, in connection with such payment.

5.2 Application of Proceeds. Notwithstanding anything to the contrary in this Agreement, after an Event of Default the proceeds of any offsets, voluntary payments by Borrower or others and any other sums received or collected in respect of the indebtedness hereunder, shall be applied first to the costs and expenses of Bank in enforcement and collection and, second, to the indebtedness and obligations of Borrower hereunder in such order as Bank elects, and then, if there is any excess, to Borrower.

5.3 Deposits and Accounts. In addition to and not in limitation of any rights of Bank or other holder of any Note, Bank and each other such holder shall, in the event and so long as there exists an Event of Default and without notice or demand of any kind, have the right to liquidate and collect all property or assets of Borrower (including deposits and other credits), whether presently owned or hereafter acquired, in possession or control of (or owing by) Bank or other holder for any purpose, and to apply the proceeds of any such liquidations and collections and offset any amounts owing to Borrower against obligations hereunder and under the Note and the Documents.

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6. CONDITIONS

6.1 Conditions Precedent To Initial Advance of the Revolving Loan and Closing Date. The right of Borrower to request the initial advance of the Revolving Loan pursuant to this Agreement is subject to, and the Closing Date of this Agreement shall be, the date of satisfaction of the following conditions:

(a) Documents Executed and Filed. The Borrower shall have executed (or caused to be executed) and delivered to the Bank the following:

(i) This Agreement;

(ii) The Note; and

(iii) The Closing Statement.

(b) Certified Resolutions. The Borrower shall have furnished to the Bank a copy of resolutions of the Directors of the Borrower authorizing the execution, delivery and performance of this Agreement, the borrowing hereunder, the Note and the other Documents, which shall have been certified by an authorized officer of the Borrower as being complete, accurate and in effect.

(c) Certified Articles of Incorporation. The Borrower shall have furnished to the Bank a copy of the Articles of Incorporation including all amendments thereto and restatements thereof, and all other charter documents of the Borrower, all of which shall have been certified by the jurisdiction of incorporation.

(d) Certified Bylaws. The Borrower shall have furnished to the Bank a copy of the Bylaws of the Borrower, including all amendments thereto and restatements thereof, which shall have been certified by an authorized officer of the Borrower, as being complete, accurate and in effect.

(e) Certificate of Good Standing. To the extent such certificates are issued, a good standing or like certificate with respect to the Borrower issued by appropriate government officials of the jurisdiction of its incorporation and of each jurisdiction in which it carries on business.

(f) Certificate of Incumbency. The Borrower shall have furnished to the Bank a certificate of an authorized officer of the Borrower, as to the incumbency and signatures of the officer(s) of the Borrower signing Documents to which it is a party.

(g) Liability and Casualty Insurance. The Borrower shall have furnished to the Bank, in form, content and amounts and with companies satisfactory to the Bank, liability insurance with coverage acceptable to Bank, and casualty insurance policies relating to the assets and properties of the Borrower.

(h) Opinion of Borrower’s Counsel. Bank shall have received an opinion of counsel to the Borrower addressed to Bank and covering such matters as Bank shall require.

(i) Approval of Bank’s Counsel. All actions, proceedings, instruments and documents required to carry out the transactions contemplated by this Agreement or incidental thereto and all other related legal matters shall have been satisfactory to and approved by legal counsel for the Bank, and said counsel shall have been furnished with such certified copies of actions and proceedings and such other instruments and documents as they shall have reasonably requested.

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(j) Bank Accounts. Borrower shall have established with Bank deposit accounts for all of its transactional account(s), other than those accounts listed on Schedule 6.1(j) attached hereto, and such lock box, dominion of funds and other arrangements as required by Bank.

(k) Approvals. Bank shall have received true and correct copies of all governmental and third party approvals, if any, necessary for Borrower to enter into this Agreement and the Documents and the transactions contemplated by this Agreement and the Documents.

6.2 Conditions Precedent to All Loans. The obligation of Bank to make Advances and Loans shall be subject to the satisfaction of the following conditions:

(a) Effectiveness. This Agreement shall have become effective as provided in Section 6.1.

(b) No Default; Representations and Warranties. At the time of the making of such Loan or Advance and after giving effect thereto: (i) there shall exist no Event of Default or facts or circumstances, which with the passage of time, would constitute or give rise to an Event of Default; and (ii) all representations and warranties contained herein or in the other Documents shall be true and correct in all material respects.

(c) Adverse Change, etc. Since August 31, 2003, nothing shall have occurred or become known which the Bank shall have determined has a Materially Adverse Effect.

(d) Enforceability of Documents. Both before and after such Advance, the obligations of Borrower under the Documents shall be valid, binding and enforceable.

7. REPRESENTATIONS AND WARRANTIES

In order to induce the Bank to enter into this Agreement and to make Revolving Loans and Advances hereunder, Borrower represents and warrants to the Bank:

7.1 Corporate Status. Borrower and each subsidiary thereof is a duly incorporated and validly existing corporation, in good standing under the laws of the jurisdiction of its incorporation, has the organizational power and authority and has obtained all material requisite governmental licenses, authorizations, consents and approvals necessary to own and operate its property and assets and to transact the business in which it is engaged and presently proposes to engage, including, without limitation, those required by the Environmental Laws, and is duly qualified and authorized to do business in, and is in good standing in, all jurisdictions where by virtue of the nature of its activities or extent of its properties it is required to be so qualified and where the failure to be so qualified would have a Material Adverse Effect.

7.2 Corporate Power and Authority; Business. Borrower has the corporate power and authority to execute, deliver and carry out the terms and provisions of the Documents to which it is a party and has taken all necessary corporate action to authorize the execution, delivery and performance of the Documents to which it is a party and has duly executed and delivered each Document to which it is a party and each such Document constitutes the legal,

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valid and binding obligation of Borrower enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency or by equitable principles relating to enforceability, good faith and fair dealing.

7.3 No Violation. Neither the execution, delivery or performance by Borrower of the Documents, nor compliance with the terms and provisions thereof, nor the consummation of the transactions contemplated therein will result in a material contravention of any applicable provision of any relevant law, statute, rule, regulation, order, writ, injunction or decree of any court or governmental instrumentality, or will conflict or be inconsistent, in any material respect, with or result in any material breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien upon any of the property or assets of any of them pursuant to the terms of any indenture, mortgage, deed of trust, material agreement or other material instruments to which it is a party.

7.4 Litigation. There are no actions, judgments, suits or proceedings pending or, to the Borrower’s knowledge, threatened against Borrower that are likely to have a Material Adverse Effect.

7.5 Use of Proceeds. Neither the making of any Loan hereunder, nor the use of the proceeds thereof, will violate or be inconsistent with the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.

7.6 Governmental Approvals, etc. No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any third party or any foreign or domestic governmental or public body or authority, or by any subdivision thereof, is required to authorize or is required in connection with the execution, delivery and performance of any Document or the transactions contemplated therein, or the legality, validity, binding effect or enforceability of any Document.

7.7 True and Complete Disclosure. There is no fact known to Borrower which affects the business, operations, property, assets, nature of assets, liabilities, condition (financial or otherwise) or prospects of Borrower which would have a Material Adverse Effect and which has not been disclosed herein, or in such other documents, certificates, schedules, and written statements furnished.

7.8 Financial Statements. Borrower’s financial statements previously delivered to the Bank and most recent form 10-K and form 10-Q filed with the Securities and Exchange Commission were prepared in accordance with GAAP and fairly present in all material respects the financial position and results of the Borrower as of the dates thereof and for the periods covered thereby.

7.9 Tax Returns and Payments. Borrower has filed all tax returns required to be filed by it and has paid all taxes and assessments payable which have become due, other than those not yet delinquent and except for those contested in good faith and for which adequate reserves have been established to the extent required by GAAP.

7.10 Patents, etc. Borrower has all material patents, trademarks, servicemarks, trade names, copyrights, licenses and other rights, free from burdensome restrictions, that are

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necessary for the operation of its respective businesses as presently conducted and as proposed to be conducted.

7.11 Compliance with Laws, etc. Borrower is in compliance, in all material respects, with all applicable laws and regulations, including without limitation those relating to pollution and environmental control, equal employment opportunity and employee safety, in all jurisdictions in which it is presently doing business, and will comply, in all material respects, with all such laws and regulations which may be imposed in the future in jurisdictions in which it may then be doing business.

7.12 Collective Bargaining Agreements. Borrower is not a party or subject to any collective bargaining or similar agreement with any union, labor organization or other bargaining agent in respect of its employees.

7.13 Environmental Protection. Borrower represents and warrants that, except as disclosed to Borrower in either of the Stock Purchase Agreements:

(a) Borrower has all permits, licenses and other authorizations which are required with respect to the operation of its business under any Environmental Law and each such authorization is in full force and effect.

(b) Borrower is in compliance with all terms and conditions of the permits, licenses and authorizations specified in Subsection 7.13(a) above, and is also in compliance with all other limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules and timetables contained in any Environmental Laws applicable to it and its business, assets, operations and properties (including, without limitation, compliance with standards, schedules and timetables therein), including without limitation those arising under the Resource Conservation and Recovery Act of 1976, as amended, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986 (“CERCLA”), the Federal Water Pollution Control Act, the Federal Clean Air Act, and the Toxic Substances Control Act.

(c) There is no civil, criminal or administrative action, suit, demand, claim, hearing, notice of violation, investigation, proceeding, notice or demand letter or request for information pending or, to the knowledge of Borrower threatened against Borrower under any Environmental Laws.

(d) Borrower has not received notice that it has been identified as a potentially responsible party under CERCLA or any comparable state law nor has it received any notification that any hazardous substances or any pollutant or contaminant, as defined in CERCLA and its implementing regulations, or any toxic substance, hazardous waste, hazardous constituents, hazardous materials, asbestos or asbestos containing materials, petroleum, including crude oil and any fractions thereof, or other wastes, chemicals, substances or materials regulated by any Environmental Laws (collectively “Hazardous Materials”) that it or any of its predecessors in interest has used, generated, stored, tested, handled, transported or disposed of, has been found at any site at which any governmental agency or private party is conducting a remedial investigation or other action pursuant to any Environmental Law.

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(e) To the best knowledge of Borrower there have been no releases (i.e., any past or present releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, disposing or dumping) of Hazardous Materials by Borrower on, upon, into or from any of the real properties owned or operated by it at any time. To the best knowledge of Borrower there have been no such releases on, upon, under or into any such real property or in the vicinity of any of such real property that, through soil, surface water or groundwater migration or contamination, may be located on, in or under such real properties.

(f) To the best knowledge of Borrower, there is no friable asbestos in, on, or at the respective real properties or any facility or equipment of Borrower.

(g) To the best knowledge of Borrower, no real property owned or operated by the Borrower is: (i) listed or proposed for listing on the National Priorities List under CERCLA; or (ii) listed in the Comprehensive Environmental Response, Compensation, Liability Information System List promulgated pursuant to CERCLA, or on any comparable list maintained by any governmental authority.

(h) To the best of Borrower’s knowledge, there are no past or present events, conditions, circumstances, activities, practices, incidents, actions or plans which may interfere with or prevent compliance by Borrower with any Environmental Laws, or which may give rise to any common law or legal liability, including, without limitation, liability under CERCLA or similar state, local or foreign laws, or otherwise form the basis of any claim, action, demand, suit, proceeding, hearing or notice of violation, study or investigation, based on or related to the manufacture, processing, distribution, use, generation, treatment, storage, disposal, transport, shipping or handling, or the emission, discharge, release or threatened release into the environment, of any pollutant, contaminant, chemical or industrial, toxic or hazardous substance or waste.

7.14 Employee Benefit Plans. Borrower currently maintains a “pension benefit plan” (as such term is defined in Section 3 of ERISA) which is subject to the provisions of ERISA. Borrower is not an employer required to contribute to any multiemployer pension or benefit plan. The aggregate present value of all benefits vested under all pension plans of the Borrower did not exceed, as of the last annual valuation date, the value of the assets of the pension plans allocable to such vested benefits. Borrower is in compliance in all material respects with ERISA to the extent applicable to it and has received no notice to the contrary from the PBGC or any other governmental authority. No condition exists or event or transaction has occurred with respect to any pension plan which could reasonably be expected to result in the incurrence by Borrower of any material liability, fine or penalty. Borrower does not have any contingent liability with respect to any post-retirement benefits under a welfare plan, other than liability for continuation of coverage described in Part 6 of Title I of ERISA.

7.15 Survival of Representations and Warranties. All the representations and warranties of the Borrower contained in Section 7.1 through 7.14, inclusive, shall survive the execution and delivery of this Agreement and shall continue in full force and effect until all amounts owing hereunder have been repaid and the credit facilities made available hereunder have been terminated, notwithstanding any investigation made at any time by or on behalf of the Bank.

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8. AFFIRMATIVE COVENANTS

Borrower covenants and agrees that, for so long as this Agreement is in effect and until the Revolving Loan Commitment is fully terminated and the Loans together with interest, fees and all other obligations incurred hereunder or under the Documents are paid in full it will:

8.1 Reporting Requirements Covenants. Furnish or cause to be furnished to Bank:

(a) as soon as available and in any event within ninety (90) days after the close of each fiscal year of Borrower, on a consolidated and consolidating basis, the balance sheet of Borrower as at the end of such fiscal year and the related statements of operations, shareholder’s equity and cash flows for such fiscal year, setting forth comparative figures for the preceding fiscal year, audited by independent certified public accountants of recognized standing in accordance with GAAP;

(b) as soon as available and in any event within thirty (30) days after the end of each fiscal quarter of Borrower, commencing with the quarter ending November 30, 2003, financial statements on a consolidated and consolidating basis containing the balance sheet of Borrower as at the end of such quarterly period and the related statements of operations, of shareholder’s equity and of cash flows for such quarterly period and for the elapsed portion of the fiscal year ended with the last day of such quarterly period, and setting forth comparative figures for the related periods in the prior fiscal year, subject to normal year-end audit adjustments, in form and content satisfactory to Bank and certified by the chief financial officer, controller or chief accounting officer of Borrower;

(c) promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the shareholders of Borrower, and copies of all annual, regular, periodic and special reports and registration statements which Borrower may file or be required to file with the Securities and Exchange Commission under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to be delivered to the Administrative Agent pursuant hereto, including without limitation, form 10-Q within forty-five (45) days of each fiscal quarter end and form 10-K within 90 days of each fiscal year end;

(d) within thirty (30) days of the end of each fiscal quarter of Borrower, a compliance certificate in a form reasonably acceptable to the Bank setting forth the calculations required to establish whether Borrower was in compliance with the covenants in this Agreement as at the end of such period;

(e) at the time of the delivery of the compliance report provided for in Subsection 8.1(d), a certificate of the chief financial officer, controller or chief accounting officer of Borrower to the effect that no Default or Event of Default exists, or, if any Default or Event of Default does exist, specifying the nature and extent thereof; and

(f) promptly upon any officer of Borrower obtaining knowledge of any condition or event which constitutes a Default or Event of Default, or becoming aware that Bank has given any notice or taken any other action with respect to a claimed Default or Event of Default under this Agreement, an officers’ certificate specifying the nature and period of

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existence of any such condition or event, or specifying the nature of such claimed Default or Event of Default, and explaining the action Borrower has taken or proposes to take with respect thereto; and

(g) with reasonable promptness, such other information and data with respect to Borrower as from time to time may be reasonably requested by Bank.

8.2 Maintenance of Existence and Status. Except as otherwise expressly provided herein, (i) preserve its legal existence, (ii) preserve all its rights and licenses to the extent necessary or desirable in the operation of its business and affairs, and (iii) be qualified to do business and conduct its affairs in each jurisdiction where its ownership of Property or the conduct of its business or affairs requires such qualification.

8.3 Insurance. Keep its insurable properties adequately insured and maintain (a) insurance against fire and other risks customarily insured against under an “all-risk” policy and such additional risks customarily insured against by companies engaged in the same or a similar business to that of the Borrower, (b) necessary worker’s compensation insurance, (c) public liability and product liability insurance, and (d) such other insurance as may be required by law or as may be reasonably required in writing by the Bank, all of which insurance shall be in such amounts, containing such terms, in such form, for such purposes, prepaid for such time period, and written by such companies as shall be satisfactory to the Bank. All such policies shall contain a provision whereby they may not be canceled or amended except upon thirty (30) days’ prior written notice to the Bank. The Borrower will promptly deliver to the Bank, at the Bank’s request, evidence satisfactory to the Bank that such insurance has been so procured. If the Borrower fails to maintain satisfactory insurance as herein provided, the Bank shall have the option to do so, and the Borrower agrees to repay the Bank upon demand, with interest at the Default Rate then in effect for the Revolving Loan, all amounts so expended by the Bank.

8.4 Books, Records and Inspections. Borrower will keep true books of records and accounts of all its business transactions in accordance with GAAP or (with respect to activities and transactions in foreign jurisdictions) such other accounting principals as may be required in such foreign jurisdiction. Borrower will permit, upon reasonable prior notice by Bank to any authorized officer of Borrower, officers and designated representatives of the Bank to visit and inspect properties or assets of Borrower and to examine the books of account of Borrower and to discuss the affairs, finances and accounts of Borrower with its officers and independent accountants, all at such times and intervals as the Bank may request.

8.5 Payment of Taxes. Borrower will pay and discharge all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the date on which material penalties attach thereto, and all lawful claims which, if unpaid, might become a lien or charge upon any properties of Borrower or cause a failure or forfeiture of title thereto; provided that Borrower shall not be required to pay any such tax, assessment, charge, levy or claim that is being contested in good faith and by proper proceedings promptly instituted and diligently conducted if it has maintained adequate reserves with respect thereto in accordance with GAAP.

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8.6 Compliance with Statutes, etc. Borrower will comply with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property, including but not limited to ERISA and Environmental Laws.

8.7 Performance of Obligations. Borrower will perform in all material respects all of its obligations under the terms of each mortgage, indenture, security agreement, other debt instrument, trade obligations and material contracts by which it is bound or to which it is a party.

8.8 Environmental Events.

(a) The Borrower will promptly give notice to the Bank upon becoming aware of any of the following which would reasonably be expected to result in liability under any Environmental Laws: (i) violation by Borrower of any Environmental Laws; (ii) any inquiry, proceeding, investigation or other action, including a request for information or a notice of potential environmental liability from any foreign, federal, state or local environmental agency or board; or (iii) the discovery of the release of any Hazardous Materials at, on, under or from any of the real properties owned or operated by Borrower or any facility or equipment thereat in excess of reportable or allowable standards or levels under any Environmental Laws. Bank acknowledges that Borrower has notified Bank of the environmental liabilities disclosed to Borrower in the Stock Purchase Agreements to the extent said liabilities are described in the Stock Purchase Agreements.

(b) In the event of the presence of any Hazardous Materials on any of the real properties owned or operated by Borrower which is in violation of, or which could reasonably be expected to result in liability under, any Environmental Laws, upon discovery thereof, take all necessary steps to initiate and expeditiously complete all remedial, corrective and other action to mitigate and eliminate any such liability, and shall keep the Bank informed of its actions and the results.

8.9 Compliance with Revolving Loan Commitment . In the event that, at any time, the principal amount of the Revolving Loan (plus Letter of Credit Outstandings) exceeds the Revolving Loan Commitment, pay to Bank, for application to such Revolving Loans, an amount sufficient to eliminate such excess.

8.10 Continuation of Business. Borrower will continue to be principally engaged in those businesses in which it is engaged on the date hereof and will not make a change in its business or engage in any business, enterprise or activity which is different from or unrelated to the business in which it is engaged on the date of this Agreement.

8.11 Maintenance of Property. Maintain, preserve and keep its Property and the grounds and structure, improvements and equipment appurtenant thereto or used therewith, and each and every part and parcel thereof, in good repair and working order, reasonable wear and tear, obsolescence and insured casualties excepted, and in safe condition at all times.

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9. NEGATIVE COVENANTS

Borrower hereby covenants and agrees that so long as this Agreement is in effect and until the Revolving Loan Commitment is fully terminated and the Revolving Loan together with interest, fees and all other obligations incurred hereunder or under the Documents is paid in full, it will not:

9.1 Changes in Business. Alter the character of its primary businesses from, or enter into or acquire businesses different from its business as of the Closing Date.

9.2 Financial Covenants. Permit as of the end of each fiscal quarter, commencing with the fiscal quarter ending November 30, 2003:

(a) The Current Ratio to be less than 1.5:1.0

(b) The Tangible Effective Net Worth to be less than Twenty Million Dollars ($20,000,000).

(c) The Funded Debt Ratio to be greater than 2.0 to 1.0.

9.3 Liens. Create, incur, assume or suffer to exist any lien upon or with respect to any of its property or assets, whether now owned or hereafter acquired, or sell any such property or assets subject to an understanding or agreement, contingent or otherwise, to repurchase such property or assets or assign any right to receive income, or file or permit the filing of any financing statement under the UCC or any other similar notice of lien under any similar recording or notice statute, except:

(a) liens for taxes, assessments or other governmental charges incurred in the ordinary course of business and not yet past due;

(b) liens not delinquent created by statute in connection with worker’s compensation, unemployment insurance, social security and similar statutory obligations;

(c) mechanics’, materialmen’s, carriers’, warehousemen’s and similar liens and encumbrances arising in the ordinary course of business and securing obligations of such Person that are not overdue for a period of more than thirty (30) days;

(d) liens arising from the filing, for notice purposes only, of financing statements in respect of true leases.

9.4 Indebtedness. Incur, create, assume or permit to exist any Indebtedness direct or contingent, on book account or otherwise for borrowed money, or any other Indebtedness evidenced by notes, bonds, debentures or similar obligations, except for (a) Indebtedness which constitutes trade indebtedness incurred in the ordinary course of Borrower’s business, (b) Indebtedness to the Bank, (c) Indebtedness subordinated to the prior payment in full of Borrower’s Indebtedness to the Bank, upon terms and conditions approved in writing in advance by the Bank, and (d) Indebtedness which in the aggregate does not exceed Two Hundred Thousand Dollars ($200,000) per fiscal year.

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9.5 Extension of Credit. Make loans, advances or extensions of credit to any Person, except for sales on open account in the ordinary course of business.

9.6 Guarantee Obligations. Guarantee or otherwise be or become responsible for obligations of any other Person, whether by agreement to purchase the indebtedness of any other Person, agreement for the furnishing of funds, goods, supplies or services for the purpose of paying or discharging indebtedness of any other person, or otherwise, except for by endorsement of negotiable instruments in the ordinary course of business for deposit or collection.

9.7 Subordinate Indebtedness. Subordinate any indebtedness due to it from a Person to indebtedness of other creditors of such Person.

9.8 Property Transfer, Merger or Lease-Back. (a) Sell, lease, transfer or otherwise dispose of properties or assets, except for sales of Inventory in the ordinary course of business; (b) change its name, consolidate with or merge into any other corporation, permit another corporation to merge into it, acquire all or substantially all the properties or assets of any other person, enter into any reorganization or recapitalization or reclassify its capital stock; or (c) enter into any sale-leaseback transaction; provided, however, that Borrower may perform its obligations under and otherwise consummate the Stock Purchase Agreements and the Real Estate Purchase Agreements.

9.9 Acquire Securities. Purchase or hold beneficially any stock or other securities of, or make any investment or acquire any interest whatsoever in, any other Person except for:

(a) investments in obligations issued by the United States of America, or an instrumentality or agency of the United States of America, maturing within 365 days of the date of acquisition of such obligation, and guaranteed fully as to principal, premium, if any, and interest by the United States of America;

(b) investments in certificates of deposit issued or guaranteed by a bank or trust company organized under the laws of the United States of America or any state thereof or the District of Columbia having combined capital and surplus of not less than $100,000,000, maturing within 365 days of the date of purchase; and

(c) investments in commercial paper given the highest or second highest rating by two established national credit rating agencies in the United States of America and maturing not more than 90 days from the date of acquisition thereof.

9.10 Use of Loan Proceeds. Use, or permit the use of, the proceeds of Loans for purposes other than those permitted under this Agreement, or use or permit the use of any such Loan proceeds in violation of Regulation T, U, or X of the Board of Governors of the Federal Reserve System as now or hereafter in effect, or for any other purpose which violates provisions of regulations of the Board of Governors of the Federal Reserve System.

10. DEFAULTS. Each of the following shall be an Event of Default:

10.1 Failure to Pay Monies Due. If the Borrower shall fail to pay, when due, any principal, interest, or fee under any Note or this Agreement.

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10.2 Misrepresentation. If any warranty or representation of the Borrower in connection with or contained in this Agreement or any other Document, or if any financial data or other information now or hereafter furnished to the Bank or the Bank by or on behalf of the Borrower shall prove to be false or misleading in any material respect.

10.3 Noncompliance with Agreement. If the Borrower shall fail to perform any of its obligations and covenants under, or shall fail to comply with any of the provisions of, this Agreement or any of the other Documents.

10.4 Other Defaults. If the Borrower or any subsidiary shall default in the due payment of any of its indebtedness or in the observance or performance of any term, covenant or condition in any agreement or instrument evidencing, securing or relating to such indebtedness, and such default shall not be waived and shall be continued for a period sufficient to permit acceleration of the indebtedness thereunder.

10.5 Judgments. If there shall be rendered against the Borrower one or more judgments or decrees which has or have become non-appealable and shall remain undischarged, unsatisfied by insurance and unstayed for more than thirty (30) days, whether or not consecutive; or if a writ of attachment or garnishment against the property of the Borrower shall be issued and levied and not released or appealed and bonded in a manner reasonably satisfactory to the Bank.

10.6 Business Suspension, Bankruptcy, Etc. If the Borrower voluntarily suspends transaction of its business, makes an assignment for the benefit of creditors, files a petition in bankruptcy, is unable generally to pay its debts as they come due, is adjudicated insolvent or bankrupt or there is entered any order or decree granting relief in any involuntary case commenced against the Borrower under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or if the Borrower petitions or applies to any tribunal for any receiver, trustee, liquidator, assignee, custodian, sequestrator or other similar official for the Borrower or of any substantial part of its Property, or commences any proceeding in a court of law for a reorganization, readjustment of debt, dissolution, liquidation or other similar procedure under the law or statutes of any jurisdiction, whether now or hereafter in effect, or if there is commenced against the Borrower any such proceeding in a court of law which remains undismissed or shall not be discharged, vacated or stayed, or such jurisdiction shall not be relinquished within ninety (90) days after commencement, or the Borrower by any act, indicates its consent to, approval of, or acquiescence in any such proceeding in a court of law, or to an order for relief in an involuntary case commenced against the Borrower under any such law, or to the appointment of any receiver, trustee, liquidator, assignee, custodian, sequestrator or other similar official for the Borrower or a substantial part of its Property, or if the Borrower suffers any such receivership, trusteeship, liquidation, assignment, custodianship, sequestration or other similar procedure to continue undischarged for a period of ninety (90) days after commencement or if the Borrower takes any action for the purposes of effecting the foregoing.

10.7 Repudiation, Revocation. If there is any repudiation, termination, revocation or any attempt to repudiate, terminate or revoke any Document.

10.8 Inadequate Funding or Termination of Employee Benefit Plan(s). If the Borrower or any guarantor shall fail to meet its minimum funding requirements under ERISA

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with respect to any employee benefit plan established or maintained by it, or if any such plan shall be the subject of termination proceedings (whether voluntary or involuntary) and there shall result from such termination proceedings a liability of the Borrower or any guarantor to the PBGC which in the sole opinion of the Bank will have a Material Adverse Effect on the Borrower or any guarantor.

10.9 Occurrence of Certain Reportable Events. If there shall occur, with respect to any pension plan maintained by the Borrower or any guarantor any reportable event (within the meaning of Section 4043(b) of ERISA) which the Bank shall determine constitutes a ground for the termination of any such plan, and if such event continues for thirty (30) days after the Bank gives written notice to the Borrower or guarantor, provided that termination of such plan or appointment of such trustee would, in the opinion of the Bank, have a Material Adverse Effect on the Borrower or guarantor.

10.10 Cross-Default. If there shall occur an Event of Default under (and as defined in) any agreement between Borrower and Bank.

10.11 Exercise of Remedies. If an Event of Default has occurred hereunder:

(a) Bank’s commitment to make Advances shall immediately and automatically terminate;

(b) Bank may declare the entire unpaid balance of the indebtedness hereunder, including the Note, immediately due and payable, without presentment, notice or demand, all of which are hereby expressly waived by Borrower;

(c) immediately and automatically upon the occurrence of any Event of Default specified in Subsection 10.6 above, and notwithstanding the lack of any declaration by Bank under preceding clause (b), the entire unpaid principal of the Loans and other indebtedness hereunder, including the Note, shall become automatically due and payable; and

(d) Bank may exercise any remedy permitted by this Agreement, the other Documents or law.

10.12 Waiver of Defaults. No Event of Default shall be waived by Bank except in a writing made in accordance with Section 11.8 hereof. No single or partial exercise of any right, power or privilege hereunder, nor any delay in the exercise thereof, shall preclude other or further exercise of Bank’s rights. No waiver of any Event of Default shall extend to any other or future Event of Default. No forbearance any of Bank’s rights shall constitute a waiver of any of any such rights. Borrower expressly agrees that this Section may not be waived or modified by Bank by course of performance, estoppel or otherwise.

11. MISCELLANEOUS

11.1 Law of Michigan; Submission to Jurisdiction. This Agreement, the Note and Documents have been delivered at Lansing, Michigan, and shall be governed by and construed and enforced in accordance with the laws of the State of Michigan. Whenever possible each provision of this Agreement shall be interpreted in such manner as to be effective and valid

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under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

Any legal action or proceeding with respect to this Agreement or any other Document may be brought in the courts of the State of Michigan or of the United States District Court for the Eastern District of Michigan, and, by execution and delivery of this Agreement, each party hereto hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts. Borrower further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to its address for notices pursuant to Section 11.3 hereof, such service to become effective three (3) Business Days after such mailing. Nothing herein shall affect the rights of Bank to serve process in any other manner permitted by law.

Borrower hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any proceedings arising out of or in connection with this Agreement or any Document brought in the courts referred to above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

11.2 Bank’s Costs and Expenses. Borrower shall pay all costs and expenses, including, by way of description and not limitation, reasonable attorney fees and out-of-pocket expenses and fees incurred by Bank in connection with the commitment, consummation, and closing of the loans contemplated hereby and in the exercise and enforcement of its rights and prerogatives hereunder and under the Documents. All costs, including attorney fees, incurred by Bank in revising, protecting, exercising or enforcing any of its rights hereunder and under the Documents, or otherwise incurred by Bank in connection with an Event of Default or in connection with the enforcement hereof, including by way of description and not limitation, such charges in any court or bankruptcy proceedings or arising out of any claim or action by any person against Bank which would not have been asserted were it not for Bank’s relationship with Borrower hereunder or under the Documents, shall also be paid by Borrower.

11.3 Notices. Except as otherwise provided herein, all notices hereunder shall be sufficient if made in writing and delivered to the mailing and delivery address of the respective parties indicated on the signature pages to this Agreement, or transmitted to the facsimile or telex numbers set forth on their respective signature pages to this Agreement. All such notices shall be deemed received (i) two (2) Business Days after deposit thereof in the mails, if given by mail, (ii) one (1) Business Day after deposit with express courier service, or (iii) if by facsimile or telex transmission, the Business Day of transmission if transmitted during customary business hours of the addressee and, if not transmitted during such business hours, the following Business Day, provided, however, that notices to the Bank shall not be effective until actual receipt thereof.

11.4 Further Action. Borrower, from time to time, upon written request of Bank will make, execute, acknowledge and deliver or cause to be made, executed, acknowledged and

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delivered, all such further and additional instruments, and take all such further action as may be required to carry out the intent and purpose of this Agreement and the Documents, and to provide for Loans under and payment of the Note, according to the intent and purpose herein and therein expressed.

11.5 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of Borrower and Bank and their respective successors and assigns, provided that the foregoing shall not authorize any assignment by Borrower of its rights or duties hereunder. Borrower hereby acknowledges that Bank may (but is not obligated to) sell participations or make assignments of interests in the Loans and Bank’s other interests under the Documents to financial institutions to be selected in Bank’s discretion. Borrower hereby agrees to any such participation or assignment and further agrees to execute and deliver, at Bank’s request, any additional documentation reasonably deemed necessary by Bank in connection therewith.

11.6 Indulgence. No delay or failure of Bank in exercising any right, power or privilege hereunder shall affect such right, power or privilege nor shall any single or partial exercise thereof preclude any further exercise thereof, nor the exercise of any other right, power or privilege. The rights of Bank hereunder are cumulative and are not exclusive of any rights or remedies which Bank would otherwise have.

11.7 Counterparts. This Agreement may be executed in several counterparts, and each executed copy shall constitute an original instrument, but such counterparts shall together constitute but one and the same instrument.

11.8 Entire Agreement; Amendments; Waivers; Consents. This Agreement, the Note, the Documents, and any agreements, certificates, or other documents given pursuant to the foregoing, contain and will contain the entire agreement of the parties hereto, and none of the parties shall be bound by anything not expressed in writing, except that Borrower shall be bound by telephonic requests for Loans made hereunder. No amendment or waiver of any provision of this Agreement or any Document, nor consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Bank.

11.9 Confidentiality. Bank agrees that all documentation and other information made available by Borrower to Bank under the terms of this Agreement shall (except to the extent required by regulatory authority or legal or governmental process or otherwise by governmental authority or law, or if such documentation and other information is publicly available or hereafter becomes publicly available other than by action of Bank, or was theretofore known or hereafter becomes known to Bank independent of any disclosure thereto by Borrower) be held in the strictest confidence by Bank and used solely in administration and enforcement of Loans from time to time outstanding from Bank to Borrower and in the prosecution or defense of legal proceedings arising in connection herewith; provided that Bank may disclose such documentation and other information to any other bank or other Person to which Bank sells or proposes to sell a participation in its Loans hereunder if such other bank or Person, prior to such disclosure, agrees for the benefit of Borrower to comply with the provisions of this Section 11.9.

11.10 Interest. It is the intention of the parties hereto that Bank shall conform to usury laws applicable to it, if any. Accordingly, if the transactions with Bank contemplated hereby

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would be usurious under such applicable laws, then, notwithstanding anything to the contrary in the Note or Documents payable to Bank, this Agreement or any other agreement entered into in connection with or as security for or guaranteeing this Agreement or the Indebtedness, it is agreed as follows: (i) the aggregate of all consideration which constitutes interest under applicable law that is contracted for, taken, reserved, charged or received by Bank under the Note payable to Bank, this Agreement, the Documents or under any other agreement entered into in connection with or as security for or guaranteeing this Agreement or such Note or Documents shall under no circumstances exceed the Highest Lawful Rate and any excess shall be credited automatically, if theretofore paid, on the principal amount of Loans owed to Bank or, if it has no Loans outstanding, shall be refunded to Borrower by Bank; and (ii) in the event that the maturity of any such Note or other Indebtedness hereunder is accelerated or in the event of any required or permitted prepayment, then such consideration that constitutes interest under law applicable to Bank may never include more than the Highest Lawful Rate and excess interest, if any, to Bank shall be canceled automatically as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited by Bank on the principal amount of the Indebtedness owed to Bank by the Borrower or, if no such Indebtedness is then outstanding, shall be refunded to the Borrower.

11.11 Cross-Default. Any default by Borrower under the terms of any Indebtedness to the Bank shall also constitute an Event of Default under this Agreement and the Documents and any Event of Default under this Agreement or the Documents shall be a default under any Indebtedness of Borrower to the Bank.

11.12 JURY WAIVER. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

11.13 Conflicts. In the event of direct conflict between the provision of this Agreement and any term of any Document, the relevant term of this Agreement shall control.

11.14 Effective Upon Execution. This Agreement shall become effective upon the later of the execution hereof by Bank and Borrower and the Closing Date, and shall remain effective until all Loans and obligations hereunder have been repaid and discharged in full and no commitment to fund any Loan hereunder remains outstanding.

[SIGNATURES ON THE FOLLOWING PAGE]

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WITNESS the due execution hereof as of the day and year first above written.

NEOGEN CORPORATION
By:	/s/    RICHARD R. CURRENT
	Richard R. Current
Its:	Vice President and CFO
620 Lesher Place Lansing, Michigan 48912 Attn: Chief Financial Officer Telephone No. 517-372-9200 Facsimile No. 517-372-0108
COMERICA BANK
By:	/s/    DAVID G. GRANTHAM
	David G. Grantham
Its:	Vice President
101 North Washington Square Lansing, Michigan 48933 Telephone No. 517-342-5801 Facsimile No. 517-342-5905

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Schedule 6.1(j)

PERMITTED BANK ACCOUNTS

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EXHIBIT “A”

[FORM OF REQUEST FOR ADVANCE]

REQUEST FOR ADVANCE

The undersigned hereby requests COMERICA BANK (“Bank”) to make an advance to the undersigned on                         ,             , in the amount of $                     under the $15,000,000 Revolving Note dated as of November     , 2003, issued by the undersigned to Bank (herein called “Note”) under that Credit Agreement between Neogen Corporation and Bank dated November     , 2003.

The undersigned requests that the Applicable Interest Rate be:                             ¹ and that with respect to a Eurodollar-based Rate Loan, that the Interest Period be                             .²

The undersigned certifies that no Event of Default, or any condition or event which, with the giving of notice or the running of time, or both, would constitute an Event of Default has occurred, and none will exist upon the making of the Advance requested hereunder. The undersigned further certifies that upon advancing the sum requested hereunder, the aggregate principal amount outstanding under the Note will not exceed the face amount thereof.

The undersigned hereby authorizes said Bank to disburse the proceeds of this Request for Advance by crediting the account of the undersigned with Bank separately designated by the undersigned or as the undersigned may otherwise direct.

Dated this      day of                 , 20    .

NEOGEN CORPORATION

By:

Printed Name:

Its:

¹ Insert Prime-based Rate, Floating Rate or Eurodollar- based Rate

² Insert Interest Period – 30, 60, 90, 120, 150, 180, 210, 240, 270, 300, 330 or 360 days

Exhibit A-1

EXHIBIT “B”

[FORM OF REVOLVING NOTE]

REVOLVING NOTE

$15,000,000	Tax ID: 38-2367843
	Lansing, Michigan
	November 26, 2003

FOR VALUE RECEIVED, on or before the Maturity Date, NEOGEN CORPORATION, a Michigan corporation (herein called “Company”), promises to pay to the order of COMERICA BANK, a Michigan banking corporation (herein called “Bank”) at its office at 101 North Washington Square, Lansing, Michigan 48933, in lawful money of the United States of America, the indebtedness or so much of the sum of FIFTEEN MILLION AND 00/100 DOLLARS ($15,000,000) as may from time to time have been advanced and then be outstanding hereunder pursuant to the Credit Agreement of even date herewith, made by and between Company and Bank (herein called “Agreement”), together with interest thereon as hereinafter set forth.

Capitalized terms used herein and not defined to the contrary have meanings given them in the Agreement.

Interest shall accrue on the unpaid principal balance of this Note from time to time outstanding at the Applicable Interest Rate, as selected by Borrower or as otherwise applicable pursuant to the provisions of the Agreement; provided, however, that in the event, and so long as an Event of Default shall exist, interest shall accrue (subject to limitations thereon specifically described in the Agreement) at the per annum rate equal to the Default Rate.

Interest on the unpaid balance of all Loans shall accrue and be due and payable pursuant to the terms of the Agreement.

This Note is a note under which advances, repayments and re-advances may be made from time to time, subject to the terms and conditions of the Agreement. This Note evidences borrowing under, is subject to, may be prepaid in accordance with, and may be matured under the terms of the Agreement, to which reference is hereby made. This Note is secured by the Documents described in the Agreement, to which reference is made for, among other things, the conditions under which this Note may be accelerated. As additional security for this Note, Company grants Bank a lien on all property and assets, including deposits and other credits, of the Company, at any time in possession or control of or owing by Bank for any purpose.

All payments under this Note shall be in immediately available United States funds, without setoff or counterclaim.

The undersigned and all accommodation parties, guarantors and indorsers (i) waive presentment, demand, protest and notice of dishonor, (ii) agree that no extension or indulgence to the undersigned or release or non-enforcement of any security, whether with or without notice,

shall affect the obligations of any accommodation party, guarantor or indorser, and (iii) agree to reimburse the holder of this Note for any and all costs and expenses incurred in collecting or attempting to collect any and all principal and interest under this Note (including, but not limited to, court costs and reasonable attorney fees, whether such costs and expenses are incurred in formal or informal collection actions, federal bankruptcy proceedings, appellate proceedings, probate proceedings, or otherwise). Any transferees of, or endorser, guarantor or surety paying this Note in full shall succeed to all rights of Bank, and Bank shall be under no further responsibility for the exercise thereof or the loan evidenced hereby. Nothing herein shall limit any right granted Bank by other instrument or by law.

COMPANY AND THE BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED, AND, AFTER CONSULTING WITH COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVE ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED HERETO.

This Note shall be governed by and construed in accordance with the laws of the State of Michigan.

NEOGEN CORPORATION
By:
	Richard R. Current
Its:	Vice President and CFO

B

EX-10.AD

Exhibit 10.(ad)

STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT is made on November 21, 2003 between Neogen Corporation, a Michigan corporation whose address is 620 Lesher Place, Lansing, Michigan 48912 (“Buyer”), and United Agri Products, Inc., a Delaware corporation whose address is 7251 West 4^th Street, Greeley, Colorado 80634 (“Seller”) (“Agreement”).

RECITALS

A. Seller owns 1,000 shares of common stock (“Shares”) of HACCO, Inc., a Wisconsin corporation whose address is 110 Hopkins Drive, Randolph, Wisconsin 53956 (“Company”).

B. Company is engaged in the business of development, manufacture and marketing of rodenticides and rodent baits, and the production of certain insecticides (collectively, the “Business”).

C. Buyer and Seller are discussing the purchase and sale of all the stock of Hess & Clark, Inc. in a completely separate and distinct transaction no part of which shall have any applicability to this Agreement.

D. Buyer desires to purchase and Seller desires to sell, the Shares upon the terms, conditions and covenants contained in this Agreement.

The parties agree as follows:

1. Purchase and Sale. Based upon the representations, warranties and agreements contained in this Agreement and subject to the terms and conditions set forth in this Agreement, at the Closing Date, as defined in Paragraph 3, Seller agrees to sell, transfer and deliver to Buyer, and Buyer shall purchase and accept from Seller, the Shares.

2. Purchase Price and Method of Payments. Seller agrees to sell the Shares solely for the consideration provided in this Paragraph 2.

(a) Buyer shall pay Nine Million Four Hundred Thousand Dollars ($9,400,000) (“Tentative Price”) in immediately available funds to Seller at Closing (as defined below), subject to adjustment as provided in this Agreement.

(b) The Tentative Price shall be reduced by the amount of any liabilities to be paid by the Company after Closing that relate in any way to the operations of Company and which arose on or prior to the Closing Date (as defined in Paragraph 3) including but not limited to all taxes owed by the Company to any taxing authority but excluding

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any liabilities associated with the Randolph Environmental Condition (as defined in Paragraph 4.(z) (collectively, “Closing Liabilities”).

(c) The Tentative Price to be paid Seller shall be increased or decreased by the following:

(1) The Tentative Price shall be increased by the amount that the Company’s Customer Receivables (as defined in this Paragraph 2.(c)(1)) as of the Closing Date exceed the Customer Receivables as of February 23, 2003 of $132,000 (“Target Receivables”). Alternatively, the Tentative Price shall be decreased by the amount that the Target Receivables exceed the Company’s Customer Receivables as of the Closing Date. The term “Customer Receivables” shall mean the face amount of accounts receivable arising from the sale of inventory or services in the ordinary course of the Business as of Closing. A complete list of the Target Receivables is contained in Exhibit 2.(c)(1).

(2) The Tentative Price shall be increased by the amount that the Company’s Inventories (as defined in this Paragraph 2.(c)(2)) as of the Closing exceed the Inventories as of February 23, 2003 of $1,841,000 (“Target Inventories”). Alternatively, the Tentative Price shall be decreased by the amount that the Target Inventories exceed the Company’s Inventories as of Closing. Such Inventories shall be as defined and determined pursuant to Paragraph 4.(h) as of the Closing Date using a joint physical count at all locations where Inventories are located. A complete list of the Target Inventories is contained in Exhibit 2.(c)(2).

(3) The Tentative Price shall be increased by the amount that Company Prepaids (as defined in this paragraph 2(c)(3)) as of the Closing exceed the Prepaids as of February 23, 2003 of $164,000 (“Target Prepaids”). Alternatively, the Tentative Price shall be decreased by the amount that the Target Prepaids exceed Company Prepaids. The term “Prepaids” shall mean the face value of all prepaid registration fees, taxes and other such items as of Closing that were paid in the ordinary course of the Business. A complete list of the Target Prepaids is contained in Exhibit 2.(c)(3).

(4) The Tentative Price shall be reduced by the environmental reserve of $780,000 (the, “Reserve”). The Tentative Price was calculated by Buyer inclusive of the amounts for any reserves for doubtful accounts receivables and reserves for inventory obsolesence reflected on the Financial Statements as of February 23, 2003.

(d) Seller and Buyer agree to estimate the Closing Liabilities, Customer Receivables, Inventories and Prepaids as of the Closing Date (“Estimated Amounts”). Buyer agrees to pay Seller at Closing an amount equal to the Tentative Price plus or minus the net adjustment determined by using the Estimated Amounts, Target Receivables, Target Inventories, Target Prepaids and the Reserve (“Closing Payment”). As soon as practicable after Closing, but in no event more than forty five (45) days after Closing, the parties shall prepare a statement (“Settlement Statement”) which sets forth

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the appropriate increase or decrease in the Tentative Price using actual amounts (as adjusted, the “Purchase Price”).

(e) The settlement of the transactions and the final payment of the Purchase Price as provided in this Paragraph shall take place promptly following completion of the Settlement Statement. At such time Buyer shall remit to Seller by wire transfer the amount by which the Purchase Price exceeds the Closing Payment together with interest thereon at the rate of 5%. In the event the Closing Payment exceeds the Purchase Price, Seller shall refund the amount of such overpayment to Buyer by wire transfer together with interest thereon at the rate of 5%. Seller irrevocably appoints ConAgra Foods, Inc. as its lawful attorney-in-fact for purposes of conducting and completing all aspects relating to the settlement of the Purchase Price with Buyer (including the execution of the Settlement Statement), and for receiving (or paying) any proceeds that may be payable by (or to) Buyer in connection therewith, pursuant to the terms of this Agreement.

3. The Closing. The closing of the purchase and sale of the Shares as provided in this Agreement shall occur on the date hereof at the offices of Seller, or at such other place as may be fixed by mutual agreement of Buyer and Seller. The date and event of closing are respectively referred to in this Agreement as the “Closing Date” and “Closing.” At the Closing:

(a) Seller shall deliver to Buyer stock certificates representing all of the Shares, accompanied by stock powers (duly endorsed in blank) or other duly executed instruments of transfer approved by Buyer, as well as resignations of the current officers and directors of Company; and

(b) Buyer shall deliver to Seller the Closing Payment.

4. Representations and Warranties of Seller. In order to induce Buyer to enter into this Agreement, Seller makes the following representations and warranties, each of which shall be relied upon by Buyer:

(a) Organization and Qualification, Subsidiaries and Ownership.

(1) Company is validly existing and in good standing under the laws of the State of Wisconsin. No failure on the part of Company to be qualified as a foreign corporation in any jurisdiction materially and adversely affects the Business or financial position or results of the operation of the properties of Company by reason of any disability affecting its right to own property, collect receivables, enforce contracts or otherwise. Company has the requisite corporate power and authority to own or hold under lease or similar agreement all of its properties and to carry on the Business as it is now being conducted. Company is duly qualified to do business and is in good standing as a foreign corporation in the state and jurisdiction as a foreign corporation is required in connection with the conduct of its business as disclosed on Exhibit 4.(a), except for those jurisdictions in which the failure to so qualify would not have a material adverse effect on the Business. Seller has previously delivered to Buyer complete and

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correct copies of Company’s Articles of Incorporation and Bylaws and all amendments to them. Seller has delivered to Buyer a complete and accurate copy of the Company minute book in which there are accurate records of all meetings, and consents in lieu of meetings, of the Company’s board of directors and shareholders held or executed since the incorporation of Company. Exhibit 4.(a) sets forth the current officers and directors of Company. The stock books and ledgers of Company have been delivered to Buyer for its inspection, and such books and records are accurate and complete.

(2) Company has no subsidiaries or other divisions or operations and neither owns nor has a right or obligation to acquire any equity interest (or option) of any other entity. Company neither participates nor has an interest in any partnership, joint venture or similar ownership equity-participation arrangement.

(3) The Shares constitute all of the issued and outstanding shares of capital stock of, and other voting, equity or other ownership interest in, Company, all of which are held of record and beneficially by Seller. Other than Seller, no person or entity is or will be entitled to receive any payment from Buyer with respect to the transfer of the Shares to Buyer. The authorized capital stock of Company is 56,000 shares of voting common stock, par value $1.00. All Shares have been validly authorized and issued, are fully paid and non-assessable and have not been issued in violation of any preemptive right or of any securities laws. There is no security, option, warrant, right, call, subscription, agreement, commitment or understanding of any nature whatsoever, fixed or contingent, that directly or indirectly (i) calls for the issuance, sale, pledge, or other disposition of any shares of Company stock or any securities convertible into, or other rights to acquire, any Company shares; (ii) obligates Company or any other entity to grant, offer or enter into any of the forgoing; or (iii) relates to the voting or control of any such capital stock, securities or rights. Seller has, and shall transfer to Buyer at Closing, good, valid and marketable title to the Shares free and clear of any security interest, pledge, lien, charge, claim, option, equity, right, proxy, voting or other agreement, restriction on transfer or encumbrance of any nature.

(b) No Violation. The execution and delivery of this Agreement by Seller and the consummation of the transactions contemplated by it will not violate any provision of law, order, or regulation of any governmental authority applicable to Company or the corporate charter or by-laws of Company or constitute a default under any judgment, order or decree of any court of governmental agency or instrumentality, or conflict or constitute a breach or a default of a material nature under any agreement to which Company or Seller is a party or by which any of them is bound.

(c) Financial Information. Exhibit 4.(c) contains pro forma balance sheets and statements of earnings before income taxes, depreciation and amortization prepared by Seller for the (i) one-year periods ended February 24, 2002 and February 23, 2003, and (ii) six-month periods ended August 25, 2002 and August 24, 2003 (collectively, the “Financial Statements”) which have been previously provided to Buyer. The Financial Statements were prepared in accordance with the accounting principles and assumptions stated in Exhibit 4.(c), and based thereon present fairly, in

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all material respects, the pro forma financial position and earnings before income taxes, depreciation and amortization of Company and its affiliates had the Business been accounted for on a separate entity basis as of such dates and for such periods and years then ended.

(d) Title to Assets.

(1) Exhibit 4.(d)(1)(i) is a list of all of Company’s non-real estate assets used in the Business categorized in the following groups: machinery and equipment, Customer Receivables, vehicles, inventories, intangible property and other (“Assets”). Company owns and has corporate power to own, and has good and marketable title to the Assets free and clear of liens, security interests, mortgages, pledges, claims or encumbrances of any kind whatsoever, except as shown in Exhibit 4.(d)(1)(ii). Seller has delivered to Buyer true and complete copies of all written leases, contracts, agreements, options, purchase orders, instruments and commitments relating to Company or the Business and written summaries of all oral contracts binding on Company, which involve annual expenditures in excess of $5,000, as evidenced in Exhibit 4.(d)(1)(iii) (collectively, “Contracts”). All Contracts are legally valid and binding and in full force and effect in respect to Company, and there are no defaults or breaches by Company or counterclaims or defenses against it. Company has received no notice of any default, breach, counterclaim or offset by any other party to any of the Contracts, nor do Company or Seller have any knowledge thereof. To Seller’s knowledge, all written Contracts will continue in full force and effect on the same terms as currently exists, notwithstanding the consummation of the sale contemplated by this Agreement.

(2) Exhibit 4.(d)(2)(i) contains a complete and correct description of all real property, including buildings and other real property improvements, owned or leased by Company (“Real Property”). Company has the exclusive use of the Real Property. Seller has provided Buyer with an accurate survey. Seller has heretofore furnished Buyer with a Commitment for Owner’s Policy of Title Insurance dated effective August 1, 2003, issued by Lawyers Title Insurance Corporation (Case No. 205800). Company has good and marketable title to the Real Property, subject to any exceptions as may be noted in such Commitment. All the buildings and structures included in the Real Property currently have (A) all necessary or appropriate occupancy certificates and all other occupancy or other permits for the use for which they are or are intended to be used, (B) public roads or valid easements over private streets or private property for such ingress to and egress from all such plants, buildings and structures and (C) water supply, storm and sanitary sewer facilities, telephone, gas and electrical connections, fire protection, drainage and other public utilities, as reasonably necessary for the conduct of the Business as it is presently conducted. The Real Property and the current use of the Real Property complies in all material respects with all applicable zoning ordinances, building codes, health and safety laws and other laws and regulations. Company owns and has corporate power to own, and has good and marketable title to the Real Property it owns free and clear of liens, security interests, mortgages, pledges, claims or encumbrances of any kind whatsoever, except as shown in Exhibit 4.(d)(2)(ii). To Seller’s knowledge, there are no latent defects or conditions with respect to the Real Property.

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(3) Company has a valid leasehold interest as to all Real Property it leases (“Leased Property”). Seller has provided Buyer with a true and complete copy of the lease for the Leased Property (“Lease”). The Lease is legally valid and binding and in full force and effect, and there are no defaults or breaches by Company or counterclaims or defenses against it. Company has received no notice of any default, breach, counterclaim or offset by the landlord of the Leased Property, nor do Company or Seller have any knowledge thereof. The Lease will continue in full force and effect on the same terms as currently exists, notwithstanding the consummation of the sale contemplated by this Agreement.

(4) Subject to Exhibit 4.(d)(4), there are no assets of a material nature that are owned by Company other than those that are used in the Business. Subject to Exhibit 4.(d)(4), all customer lists, customer records, billing history, vendor records, regulatory records, employee records, payroll records, intellectual property rights records, environmental records, EPA registrations and sub registrations and related records, licenses, permits, software agreements, Contracts, real estate records, and manufacturing records related to the Business are located at the Randolph Facility (as defined in Paragraph 4.(z)).

(e) Condition of Assets. To Seller’s knowledge and except as disclosed in Exhibit 4.(e), all properties utilized in the Business conform in all material respects with all health and safety rules and other rules and regulations. To Seller’s knowledge, all properties utilized in the Business, including all their components and parts, are ready for operation, and, taking into account their ages, are in normal operating condition and good order and repair. There are no conditions or events, except for normal wear and tear, proper use and the age of the properties, which would, to Seller’s knowledge, prevent their continued normal operation or would otherwise materially and adversely affect their operation or use by Buyer after the Closing as currently used by Company. The above notwithstanding, all representations and warranties of Seller in respect to environmental matters are limited exclusively to Section 4.(z).

(f) Intellectual Property. Company owns, or is licensed to use, or otherwise has the right to use all patents, trademarks, service marks, trade names, trade secrets, franchises, registrations, sub registrations and copyrights, and all applications for any of the foregoing, and all technology, know-how and processes necessary for the conduct of the Business as now conducted (collectively, “Proprietary Rights”). With respect to Company’s Proprietary Rights:

(1) All license, registration and sub registration arrangements relating in any manner to any of the Proprietary Rights (whether or not in writing) are set forth on Exhibit 4.(f)(1). Except as disclosed in Exhibit 4.(f)(1), Company is in compliance with and is not in default under any of such license, registration and sub registration agreements, and all other parties to any of such agreements are, to Seller’s knowledge, in material compliance with and are not in default under any of such agreements.

(2) Exhibit 4.(f)(2) sets forth a complete list of all patents, trademarks, service marks, and copyrights used by Company in the conduct of the Business that are

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currently registered in any jurisdiction. To Seller’s knowledge, Company has good and marketable title to all such assets free and clear of all liens, charges and encumbrances (except for such license agreements listed in Exhibit 4.(f)(1). All filing or maintenance fees that are required to maintain such registrations that are due and payable as of the date of this Agreement have been paid and all associated maintenance filings have been made.

(3) Exhibit 4.(f)(3) sets forth a complete list of all unregistered trademarks, service marks, and trade names used by Company in the conduct of the Business. To Seller’s knowledge, Company has good and marketable title to all such assets free and clear of all liens, charges and encumbrances (except for such license agreements listed in Exhibit 4.(f)(1)).

(4) [Intentionally omitted.]

(5) Exhibit 4.(f)(5) sets forth a complete list of all software that Company has had written or developed by any person or entity not an employee of Company, lists the current owner of the copyright interest in such software, and if Company is the current owner, lists the date of the written assignment of the copyright interest to Company. Exhibit 4.(f)(5) sets forth a complete list of all other software used in the Business, but excluding “shrink wrapped software”;

(6) Company, except as disclosed in Exhibit 4.(f)(6), has not intentionally infringed, misappropriated, or otherwise used in an unauthorized manner the proprietary rights (including but not limited to the patent, trade secret, trademark, trade dress, or copyright rights) of any third party.

(7) Company has not granted or committed to grant any rights in Company’s Proprietary Rights of any nature whatsoever to any third party except as disclosed in Exhibit 4.(f)(7);

(8) Except as disclosed in Exhibit 4.(f)(8), no claim has been asserted against Company by any person or entity (i) to the effect that any action by Company infringes on the intangible or intellectual property rights of any other person or entity; or (ii) that challenges or questions the right of Company to use any of the Proprietary Rights being used by it; or (iii) which asserts the right of any third party to use such Proprietary Rights.

(9) Except as disclosed on Exhibit 4.(f)(9) and to Seller’s knowledge, there is no basis for any claim against Company that any of its operations, activities, products, or publications infringes on any patent, trademark, service mark, trade name, copyright, or other proprietary right of a third party, or that Company is illegally or in any unauthorized manner using the trade secrets or any proprietary rights of others.

(10) To Seller’s knowledge, no person or entity is infringing upon or has misappropriated any of Company’s Proprietary Rights. To Seller’s knowledge and except in respect to rights arising from commercially-available software and other such

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licensed rights, no person or entity other than Company has any right to use any Proprietary Rights.

(g) Customer Receivables. All Customer Receivables arose from the arms’ length sale of inventory and services in the ordinary course of business.

(h) Inventories. All inventories, including but not limited to merchandise, materials, component parts, manufacturing supplies, packaging, work in process and finished goods related to the Business (collectively, “Inventories”) listed in the Financial Statements and those on hand on the Closing Date are accurately and consistently valued at prices determined in accordance with the policy attached as Exhibit 4.(h). No Inventories have been consigned to others.

(i) Contracts. Exhibit 4.(d)(1)(iii) describes all Contracts to which Company is a party or to which it is bound and which arose out of, or relate to, the Business that extend beyond the Closing Date. Sellers have delivered true and correct copies of all such documents evidencing all written Contracts to Buyer. All such Contracts shall remain vested with Company without change or the occurrence of any default following the consummation of the transactions contemplated by this Agreement, except as described on Exhibit 4.(d)(1)(ii).

(j) Litigation. Except as disclosed in Exhibit 4.(j), there are no actions, suits, proceedings or investigations pending or threatened against Company at law or in equity, or before any federal, state or municipal or other governmental department, commission, board, agency or instrumentality, domestic or foreign, which involves a demand for any judgment or liability and which could materially affect the Business or the transactions contemplated by this Agreement. Company is not in default with respect to any order, writ, injunction or decree of any court of federal, state, or municipal or other governmental department, commission, board, agency or instrumentality, domestic or foreign, and that there are no such orders, decrees, injunctions or regulations issued specifically against Company which may affect, limit or control the method or manner of the Business or any transactions contemplated by this Agreement.

(k) Compliance with Law. Company and Seller have, in all material respects, complied with all applicable laws, orders and regulations of any federal, state or municipal or other governmental department, commission, board, agency or instrumentality, domestic or foreign, having jurisdiction, including, but not limited to, laws, orders and regulations thereof relating to antitrust, wage, hours, collective bargaining, employee safety, or legislation pertaining to illegal bribes or kickbacks. The above notwithstanding, all representations and warranties of Seller in respect to environmental matters are limited exclusively to Section 4.(z).

(l) Taxes.

(1) Other than those Taxes (as defined below) specifically listed in Exhibit 4.(l), to Seller’s knowledge, Company has duly and timely filed all required declarations, returns, and reports with foreign, federal, state and local taxing authorities

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for which Company may be liable which are due and required to be filed by any applicable Tax law (“Returns”). To Seller’s knowledge, all Taxes, interest and penalties shown to be due and payable on the Returns have been paid or adequate provision for the payment thereof has been made. To the knowledge of Seller, there is no Tax audit or examination now pending or threatened with respect to Company.

(2) Company is a member of a consolidated tax group of which Seller is a member for federal income Tax purposes, and has filed income Tax Returns as a member of such tax group since October 1988.

(3) Except as set forth in Exhibit 4.(l), Company has not waived any statute of limitations in respect of any Taxes or agreed to any extension of time with respect to any tax assessment or deficiency. Company is not the beneficiary of any extension of time within which to file any Returns.

(4) No Company property is subject to a tax benefit transfer lease subject to the provisions of former Section 168(f)(8) of the Internal Revenue Code of 1986, as amended (“Code”), and no Company property is “tax-exempt use property” within the meaning of Section 168(h) of the Code.

(5) Neither Company nor Seller is a foreign person subject to withholding under Section 1445 of the Code and the regulations promulgated thereunder, and certification to that effect will be delivered to Buyer at the Closing.

(6) To Seller’s knowledge, Company has complied in all material respects with all applicable laws, rules and regulations relating to information reporting with respect to payments made to third parties and the withholding of and payment of withheld Taxes and has timely withheld from employee wages and other payments and paid over to the proper taxing authorities all amounts required to be so withheld and paid over for all periods under all applicable laws.

(7) Except as set forth in Exhibit 4.(l), there are no pending audits, judicial proceedings, or assessments or deficiencies asserted with respect to Taxes of Company. There is no material pending claim by any taxing authority in any jurisdiction in which Company does not pay Taxes or file Returns that Company is required to pay Taxes or file Returns.

(8) Company has not made an election under Section 341(f) of the Code or agreed to have Code Section 341(f)(2) (and corresponding state, local and foreign tax law provisions) apply to the disposition of any asset owned by it. Company has not been a personal holding company under Section 542 of the Code and has not participated in an international boycott within the meaning of Section 999 of the Code.

(9) Except as set forth in Exhibit 4.(l), Company has not agreed nor is required to make any adjustment under Section 481(a) or 263(A) of the Code or any comparable provision of state, local or foreign Tax laws for any reason.

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(10) Company has made no payments, is not obligated to make any payments, and is not a party to any agreement that under any circumstances could obligate it to make any payments that will not be deductible under Section 280G of the Code.

(11) To Seller’s knowledge, the Company is in compliance with all material transfer pricing requirements in all jurisdictions in which they do business. To Seller’s knowledge, all compensation and other payments to employees, officers, and any other party (related or unrelated to Seller) are on an arm’s length basis. All intercompany loans are on an arm’s length basis.

(12) To Seller’s knowledge, the Company has no liability for any Taxes of any entity (other than Company) under Treasury Regulation 1.1502-6 (or any corresponding provision of state, local or foreign income tax law), as transferee or successor, by contract or otherwise.

(13) Neither Seller nor Company has taken any action that would prevent the acquisition of the Shares pursuant to the Agreement from being treated as a “qualified stock purchase” within the meaning of Section 338 of the Code.

(14) For purposes of this Agreement, the term “Tax” or “Taxes” shall mean all taxes, charges, fees, levies or other assessments, including, without limitation, income, gross receipts, capital, excise, stamp, property, sales, use, license, payroll, franchise, duties, business occupation, transfer and recording taxes, fees and charges, imposed by the United States, or any state, local or foreign authority, government or subdivision or agency thereof whether computed on a consolidated, unitary, combined, separate or any other basis; and such term shall include any and all interest, penalties and additions to tax, as well as any primary or secondary liability for taxes; the term “Pre-Closing Period” shall mean any taxable year that ends on or before the Closing Date, and, with respect to any taxable year beginning on or before and ending after the Closing Date, shall mean the portion of such taxable year ending on the Closing Date; the term “Income Taxes” shall mean all federal, state, local, foreign and other governmental Taxes imposed on or with respect to gross or net income.

(m) [Intentionally omitted.]

(n) Warranties and Product Liability. Seller has previously delivered to Buyer true, correct and complete copies of all outstanding standard product warranties and guaranties given by Company with respect to the Business and true, correct and compete copies of all other product warranties and guaranties now in effect with respect to products manufactured or sold by Company concerning the Business. Except as fully described in Exhibit 4.(n), there are no pending claims or actions against Company for breach of warranty or based upon product liability (whether based on tort or contract principles) and, to the best of Company’s and Seller’s knowledge, no such claims or actions are threatened. There are no defects in craftsmanship, design or engineering

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with respect to any product now or previously sold or manufactured by Company in the Business which may constitute the basis for any such claim against Company or Buyer.

(o) Contingent and Undisclosed Liabilities. Company has no debts, obligations or liabilities, whether known or unknown, fixed or contingent, of any nature whatsoever, relating to the Business not disclosed in writing to Buyer and neither Company nor Seller knows of no basis for any assertion of any claim against the Company or Buyer for any liability relating to the Business except (i) those disclosed in Exhibit 4.(o), (ii) liabilities arising out of post-Closing performance of executory contracts and (iii) Closing Liabilities (items (i) – (iii) collectively “Permitted Exceptions”). The foregoing representation shall not, however, be deemed to apply in respect to the Randolph Environmental Condition or any matters that are specifically addressed by another representation or warranty in this Section 4.

(p) Performance of Contracts. Except as disclosed in Exhibit 4.(p), Company is not in material default, nor has it materially breached any provision of, any contract, agreement, lease, obligation, license or permit (including the Contracts) with regard to all agreements relating to the Business to which it is a party or by which it is bound. Except as disclosed in Exhibit 4.(p), Company has fully performed each material term, condition and covenant of each such contract, agreement, lease, obligation, license or permit required to be performed on or prior to the date of this Agreement (including the Contracts). Except as disclosed in Exhibit 4.(p), Seller knows of no state of facts which, with or without the giving of notice or the passage of time, or both, would give rise to any default or revocation. Except as disclosed in Exhibit 4.(p), Company is neither subject to any penalty, discount or liquidated damages due to the delayed delivery of products, goods or services of the Business prior to Closing, nor has it received any notice that any of the Business’s customer relations are in jeopardy because of such late deliveries or otherwise.

(q) Events Subsequent to February 23, 2003. Except as disclosed in Exhibit 4.(q), Company has not, since February 23, 2003:

(1) Incurred Liabilities. Incurred any obligation or liability (absolute, contingent, accrued or otherwise) or guaranteed or become a surety of any debt, except in connection with the performance of this Agreement or in the ordinary course of business;

(2) Discharged Debt. Discharged or satisfied any lien or encumbrance, pertaining to the Business, or paid or satisfied any obligation or liability (absolute, contingent, accrued or otherwise) other than liabilities incurred since such date in the ordinary course of business;

(3) Encumbrances. Mortgaged, pledged or subjected to any lien, charge, security interest or other encumbrance any of the properties utilized in the Business;

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(4) Disposition of Assets. Sold or transferred any of the properties utilized in the Business, or canceled any debts or claims or waived any rights, except in the ordinary course of business;

(5) Sale of Business. Entered into any contract for the sale of the Business, or any part thereof, or for the purchase of another business, whether by merger, consolidation, exchange of capital stock or otherwise (other than negotiations with respect to this Agreement);

(6) Accounting Procedure. Materially changed or modified the accounting methods or practices relating to the Business; or

(7) Capital Expenditure. Purchased or made a commitment for the purchase of capital assets for use or employment in the Business, except in respect to the purchase of vehicles under certain operating leases at Buyer’s request.

(r) Customer Relations. To Seller’s knowledge, no state of facts exist nor have any communications been received, which would indicate that (i) any current customer of Company which accounted for more than 5% of Company’s sales relative to the Business for the most recent fiscal year ended, or (ii) any current supplier of Company (if such supplier could not be replaced by Company at comparable cost), will terminate its business relations with Company.

(s) Brokerage. Company has made no commitment for a brokerage fee in connection with the transactions contemplated by this Agreement. Seller agrees to hold Buyer harmless from all amounts owed by them for any brokerage fee.

(t) Books and Records. The books and accounts of Company relating to the Business are true, complete and correct in all material respects and fully and fairly reflect all of the transactions entered into by or on behalf of Company to which it is a party or by which it is affected.

(u) Transactions with Affiliates. Except as set forth in Exhibit 4.(u), there are no agreements or transactions between Company and Seller or any of its affiliates, and all properties used in the Business are owned by Company.

(v) Binding effect. The Agreement and all documents executed in connection herewith have been duly executed and delivered by Seller and constitute the legal, valid and binding obligation of Seller, enforceable against it, in accordance with their respective terms, subject to the laws of general application affecting creditors’ rights.

(w) Authorization. The transactions contemplated by this Agreement have been duly authorized by the Board of Directors of Seller and on the Closing Date all of the necessary corporate action to authorize the consummation of this Agreement will have been taken. Seller has the power and authority to enter into this Agreement.

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(x) Employee Relations. Exhibit 4.(x) sets forth a list of all of the officers, employees and agents of Company. Seller has heretofore provided, for each such person, his or her position, salary or wage rate and respective fringe benefits and any other remuneration paid or payable. Except as disclosed on Exhibit 4.(x):

(1) There is not now in existence or pending, nor has there been within the last three years, any grievance, arbitration, administrative hearing, claim of unfair labor practice, wrongful discharge, employment discrimination or sexual harassment or other employment dispute of any nature pending or, to the best of Company and Seller’s knowledge, threatened against Company.

(2) Company is, and during all applicable limitation periods has been, in material compliance with all applicable Federal, state, local or foreign laws, executive orders and regulations respecting employment and employment practice, terms and conditions of employment, occupational safety, wages and hours and there is no existing but unasserted claim for violation of any such laws, executive orders or regulations nor, to the best of Company and Seller’s knowledge, is there any factual basis upon which such a claim could be asserted.

(3) Company has no collective bargaining agreements and is not a party to any written or oral, express or implied, other contract, agreement or arrangement with any labor union or any other similar arrangement that is not terminable at will by Company without cost, liability or penalty.

(4) Company is not a party to any written or oral contract, agreement or arrangement with any of its present or former directors, officers, employees or agents with respect to length, duration or conditions of employment (or the termination thereof), salaries, bonuses, percentage compensation, deferred compensation or any other form of remuneration, or with respect to any matter not disclosed on Exhibit 4.(x)(4).

(5) There is no pending claim or, to the best of Company and Seller’s knowledge, threatened or existing but unasserted claim, against Company for violation of any contract, agreement or arrangement described in Exhibit 4.(x)(4), nor to the best of Company and Seller’s knowledge, is there any factual basis upon which such a claim could be asserted.

(6) Upon termination of the employment of any of Company’s employees, Buyer shall not, subject to Section 7 and except for liabilities arising from the acts or omissions of Buyer or Company after Closing, incur any liability of such termination.

(7) To Seller’s knowledge and except as noted on Exhibit 4.(x), all of the employees listed on Exhibit 4.(x) are able to work a 40-hour work week (based on Company’s current practices) without medical restriction.

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(y) Employee Benefit Plans.

(1) Exhibit 4.(y) sets forth all “employee welfare benefit plans”, “employee pension benefit plans” and “multi-employer plans” within the respective meanings of Sections 3(1) and 3(2) and 3(37) of the Employment Retirement Income Security Act of 1974, as amended (“ERISA”), all incentive compensation plans, benefit plans for retired employees and all other employee benefit plans maintained by Company, or to which Company has made payments or contributions on behalf of its employees in the last three years, including, without limitation, all plans or contracts providing for bonuses, pensions, profit-sharing, stock options, stock purchase rights, deferred compensation, insurance and retirement benefits of any nature, whether formal or informal and whether legally binding or not (each such plan is referred to individually as a “Plan”, collectively as the “Plans”).

(2) To Seller’s knowledge, and except for any multi-employer plans, all Plans covered by the Code and ERISA are, and during all applicable limitation periods have been, in material compliance with the Code and ERISA, and all retirement or pension Plans and welfare benefit plans are qualified plans under the Code and each Plan is in compliance with the applicable provisions of the Code.

(3) There has been no transaction in connection with which Company or any of its directors, agents, officers, or employees could be subject to either a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code or any similar provision of foreign law.

(4) No Plan that is a qualified plan under Section 401(a) of the Code and no trust created thereunder has been terminated, partially terminated, curtailed, discontinued or merged into another plan or trust, except in compliance with notice and disclosure to the Internal Revenue Service (“IRS”), the Department of Labor and the Pension Benefit Guaranty Corporation (“PBGC”); and any such termination, partial termination, curtailment, discontinuance or merger has been accompanied by the issuance of a current favorable determination letter by the IRS and, where applicable, has been accompanied by plan termination proceedings with and through the PBGC.

(5) There are no payments that have become due from any Plan, the trusts created thereunder, or from Company that have not been paid through normal administrative procedures to the Plan participants or beneficiaries entitled thereto.

(6) Company has made full and timely payment of all required and discretionary contributions to the Plans.

(7) There has been no “reportable event” as defined in Section 4043 of ERISA with respect to any Plan or any trust created thereunder.

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(8) Except as set forth in Exhibit 4.(y), none of the Plans is a “defined benefit plan” within the meaning of Section 3(35) of ERISA and none is subject to Title IV of ERISA.

(9) Neither Company nor any of its directors, officers, employees, or agents has any outstanding liabilities of any nature to the PBGC, the IRS, or the Department of Labor in any way relating to the Plans, and all annual returns required to be filed with respect to the Plans have been timely filed.

(10) Company is not a party to or otherwise subject to any express or implied agreement or plan to provide health coverage or other benefits to retired or current employees except as set forth in Exhibit 4.(y).

(11) Company is not a party to or otherwise subject to any express or implied agreement or plan to provide any employee benefits, wages, deferred compensation, or any other form of benefit or remuneration beyond the date of Closing, except as listed in Exhibit 4.(y).

(12) With respect to all “covered employees” as defined in Section 4980B(f)(7) of the Code and Section 607(2) of ERISA and “qualified beneficiaries” as defined in Section 4980B(g)(1) of the Code and Section 607(3) of ERISA as of the Closing Date, Company has in all material respects complied with all applicable health care continuation requirements under the Code, ERISA and current Federal Regulations. Sellers agree to use their best efforts expeditiously to provide Buyer with all information that Buyer deems necessary to determine whether there have been any failures to comply with the continuation health care requirements of Section 4980B of the Code and Sections 601 through 609 of ERISA as such requirements have applied to any group health plan maintained by or for Company which failure occurred with respect to any covered employee or qualified beneficiary on or prior to the Closing Date. Sellers further agree to use their best efforts expeditiously to provide to Buyer all information that Buyer needs to correct any failures to comply with such continuation health care coverage requirements. For purposes of this provision, references to the Code and ERISA shall include references to any provisions of such statutes as they may be amended from time to time.

(z) Environmental Matters. Seller has provided Buyer with true, complete and accurate copies of all of the environmental information listed on Exhibit 4.(z)(i) regarding the environmental condition located at the Randolph, Wisconsin real estate (collectively, “Environmental Information”) (“Randolph Facility”). Other than the Environmental Information relating to the environmental condition at the Randolph Facility (“Randolph Environmental Condition”), there is no other information relevant to the Randolph Environmental Condition. Except with respect to the Randolph Environmental Condition and as disclosed on Exhibit 4.(z)(ii):

(1) Company has not, since the date of incorporation, conducted or operated any business from any location other than the Premises.

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(2) Company and the Premises comply with all applicable Environmental Laws.

(3) All Hazardous Substances have been or are currently generated, stored, transported, utilized, disposed of, managed, released or located on, under or from the Premises or any other parcel of real estate owned, leased or operated (whether or not in reportable quantities) by Company or its agents or invitees (collectively, “Company Properties”), or in any manner introduced onto Company Properties by Company or its agents or invitees, including, without limitation, the septic, sewage or other waste disposal systems serving the Premises in accordance with all applicable Environmental Laws.

(4) Seller and Company have no knowledge of any threat of Release of any Hazardous Substances on, under or from the Premises. There is no threat of Release of any Hazardous Substances which Company or any of its agents or invitees generated, stored, transported, utilized, disposed of, managed or owned.

(5) Company has no liability for response or corrective action, natural resource damage, or other harm pursuant to any Environmental Laws; Company is not subject to, has no notice or knowledge of, and is not required to give any notice of any Environmental Claim involving Company or Company Properties; there are no conditions or occurrences at Company Properties currently operated or owned by Company which could form the basis for an Environmental Claim against Company.

(6) Company has not received any notice from the United States Environmental Protection Agency or any other Governmental Authority claiming that (i) the Company Properties, or any use thereof, violates any of the Environmental Laws, or (ii) Company or any of its employees or agents have violated any of the Environmental Laws.

(7) Company has not incurred any liability to the State of Wisconsin, the United States of America or any other Governmental Authority under any of the Environmental Laws.

(8) Company Properties currently operated or owned by Company are not subject to any, and Company and Sellers have no knowledge of any imminent, restriction on the ownership, occupancy, use, or transferability of the Premises in connection with any (i) Environmental Laws or (ii) Release, threatened Release, or disposal of Hazardous Substances.

(9) The Premises do not contain and have not contained any: (i) underground storage tanks, (ii) any amount of asbestos-containing building material, (iii) any landfills or dumps, (iv) Hazardous Substances resulting in its classification as a hazardous waste management facility as defined pursuant to RCRA or any comparable state law, or (v) Hazardous Substances resulting in its classification as a site on or

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nominated for the National Priority List promulgated pursuant to CERCLA or any state remedial priority list promulgated or published pursuant to any comparable state law.

(10) There are no Environmental Enforcement Actions pending or, to the best of Company and Seller’s knowledge, threatened.

(11) There are no conditions or circumstances at or migrating from the Premises which pose a risk to the environment or the health or safety of persons.

(12) There are no environmental reports, investigations and audits relating to Company Properties which have been prepared within the past five (5) years (whether conducted by or on behalf of Company and Seller or a third party, and whether done at the initiative of Company and Sellers or directed by a governmental or other third party) (collectively, “Reports”). A true, complete and accurate copy of each of the Reports has been made available to Buyer or it consultants.

(13) The following definitions apply to this paragraph.

(A) “CERCLA” shall mean the Comprehensive Environmental Response Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorizations Act of 1986, 42 USC 9601 et seq., and future amendments;

(B) “Environmental Claim” shall mean any investigation, notice, violation, demand, allegation, action, suit, injunction, judgment, order, consent decree, penalty, fine, lien, proceeding, or claim (whether administrative, judicial, or private in nature) arising (A) pursuant to, or in connection with, an actual or alleged violation of, any Environmental Laws, (B) in connection with any Hazardous Substances, (C) from any abatement, removal, remedial, corrective, or other response action in connection with Hazardous Substances, Environmental Laws or other order of a Governmental Authority or (D) from any actual alleged damage, injury, threat, or harm to health, safety, natural resources, or the environment;

(C) “Environmental Enforcement Actions” means actions or orders instituted, threatened, required or completed by any Governmental Authority and all claims made or threatened by any person against Company with respect to the Premises arising out of or in connection with any of the Environmental Laws or the assessment, monitoring, clean-up, containment, re-mediation or removal of, or damages caused or alleged to be caused by, any Hazardous Substances (A) located on or under the Premises, (B) emanating from the Premises or (C) generated, stored, transported, utilized, disposed of, managed or released by Company on, under or from the Premises;

(D) “Environmental Laws” means federal, state and local laws, statutes, ordinances, rules, regulations, codes, orders, judgments, orders and the like applicable to (A) environmental conditions on, under or emanating from the Premises including, but not limited to, (a) laws of the Wisconsin; and the associated rules and

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regulations promulgated in connection with any of these laws, and (b) laws of the federal government commonly known as CERCLA, RCRA, the Toxic Substance Control Act, as amended, the Federal Water Pollution Control Act, as amended, and the Federal Clean Air Act; and the associated rules and regulations promulgated in connection with any of these laws; and (B) the generation, storage, transportation, utilization, disposal, management or release of Hazardous Substances by Company (whether or not on, under or from the Premises) or Company (on, under or from the Premises);

(E) “Governmental Authority” means agencies, authorities, bodies, boards, commissions, courts, instrumentalities, legislatures and offices of any nature whatsoever for any government unit or political subdivision, whether federal, state, county, district, municipal, city or otherwise, and whether now or later in existence;

(F) “Hazardous Substances” shall mean, collectively, (A) any “hazardous material,” “hazardous substance,” “hazardous waste,” “oil,” “regulated substance,” “toxic substance,” “restricted hazardous waste,” “special waste” or words of similar import as defined under any of the Environmental Laws; (B) asbestos in any form; (C) urea formaldehyde foam insulation; (D) polychlorinated biphenyls; (E) radon gas; (F) flammable explosives; (G) radioactive materials; (H) any chemical, contaminant, solvent, material, pollutant or substance that may be dangerous or detrimental to the environment or the health and safety of occupants of the Premises or of the owners or occupants of any other real property nearby the Premises, and (I) any substance, the generation, storage, transportation, utilization, disposal, management, Release or location of which on, under or from the Premises is prohibited or otherwise regulated pursuant to any of the Environmental Laws;

(G) “Premises” shall mean all locations listed on Exhibit 4.(z)(13)(G).

(H) “RCRA” shall mean the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42 USC 6901 et seq., and any future amendments; and

(I) “Release” shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the indoor or outdoor environment, including, without limitation, the abandonment or discarding of barrels, drums, containers, tanks, and other receptacles containing or previously containing any Hazardous Substances.

(aa) Bank Accounts. Attached as Exhibit 4.(aa) is a complete and accurate list of all banks, brokerage firm or other financial intermediaries or institutions in which Company has an account or safety deposit box (collectively, “Accounts”) and the names of all individuals authorized to draw on these Accounts, have access to the Accounts or otherwise give instructions regarding the Accounts.

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(bb) Insurance. Exhibit 4.(bb) lists all current policies of liability, property damage, fire, workers’ compensation/employer’s liability, title or other forms of insurance owned or carried by Company (“Policies”) and insurance agents or brokers providing such insurance coverage. Company has received no notice from any insurance carrier regarding the possible cancellation of or premium increase with respect to the Policies. Subject to Exhibit 4.(j) (item #1), Company has no claim pending or anticipated against any of the insurance carriers under any of the Policies and there has been no actual or alleged occurrence of any kind that may give rise to any such claim.

(cc) Permits, Licenses and Registrations. Attached Exhibit 4.(cc)(1) is a complete and accurate list of all material licenses, permits, registrations, sub registrations, authorizations and approvals required by any Governmental Entities (as defined below) (collectively, “Licenses”) as are necessary to own, lease or operate Company’s Business. All of the Licenses are valid and in full force and effect. Except as disclosed in Exhibit 4.(cc)(2), Company is in material compliance with all obligations under all Licenses, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination of any Licenses. The term “Governmental Entities” shall mean any federal, state, local, foreign or supranational court, commission, governmental body, regulatory agency, authority or tribunal. Company and Seller have not received any notice asserting noncompliance with any applicable law, rule or regulation which if enforced would have a material adverse effect on the Business. No Governmental Entities have indicated any intention to initiate any investigation, inquiry or review involving Company, any Plans or any of Company’s rights or properties.

5. [Intentionally omitted.]

6. Representations and Warranties of Buyer. In order to induce Seller to enter into this Agreement, Buyer makes the following representations and warranties, each of which shall be deemed to be independent materially and relied upon by Seller, regardless of any investigation made by, or information known to, Seller:

(a) Organization. Buyer is, and on the Closing Date shall be, a corporation validly existing and in good standing under the laws of the State of Michigan.

(b) Authorization. The execution and delivery of this Agreement and the transactions contemplated by it have been duly authorized by the Board of Directors of Buyer and on the Closing Date all of the necessary corporate action to authorize the execution and delivery of this Agreement will have been taken.

(c) No Violation. The execution and delivery of this Agreement by the Buyer and the consummation of the transactions contemplated by it will not violate any law, order or regulation of any governmental authority, or corporate charter or bylaws of Buyer or constitute a default under any judgment, order or decree of any court or

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governmental agency or instrumentality, or conflict with or constitute a breach or default under any agreement to which Buyer is a party or by which it is bound.

(d) Brokerage. Buyer has not made a commitment for a brokerage, finders or similar fees in connection with the transactions contemplated by this Agreement.

(e) Binding Effect. The Agreement and all related documents have been duly executed, made and delivered by Buyer and constitute legal, valid and binding obligations of Buyer enforceable against Buyer in accordance with their respective terms, subject to the laws of general application affecting creditors’ rights.

7. Employee Matters.

(a) General. As of the Closing, Buyer will cause Company to offer employment of all individuals currently employed by Company as set forth on Exhibit 4.(x) (“Company Employees”) with position and salary substantially the same as current levels. In addition, the Buyer will cause Company to provide Company Employees with the health, welfare and retirement benefits similar to those provided by Buyer to all its other employees, as contractually allowed by such benefit plans. Notwithstanding anything to the contrary herein, Seller shall (i) retain and be responsible for the termination of no more than four (4) Company Employees, (ii) be responsible for any former employees and all qualified beneficiaries who, on the Closing Date, are receiving health benefits pursuant to COBRA or have retired and are receiving retiree health or other retiree benefits, and (iii) retain responsibility for one (1) Company Employee who has requested to be placed on long-term disability; provided, however, that once such disability period ends and all medical restrictions lifted, Buyer will cause the Company to offer such employee a position comparable to that previously held within the Company Business. In addition, Seller will offer severance to one Company employee on short-term disability as of Closing. If the offer of severance is declined, such employee shall be offered employment on terms and conditions established by Buyer in its discretion and otherwise such shall become the sole responsibility of Buyer.

(b) Pension Plan. As of the Closing Date, Company Employees shall cease to actively participate in the ConAgra Pension Plan for Salaried Employees (the “Pension Plan”) and will receive no further benefit accruals under the Pension Plan.

(c) 401(k) Plans. As of the Closing Date, Company Employees shall cease to actively participate in the ConAgra Retirement Income Savings Plan (the “401(k) Plan”) and no further contributions shall be made to the 401(k) Plan for the benefit of Company Employees. As of the Closing Date, the interests of Company Employees in the 401(k) Plan shall be one hundred percent (100%) vested and shall be fully nonforfeitable.

(d) Welfare Plans. The parties acknowledge that Company Employees participate in Seller’s Plans (as defined in Section 4.(y)). As of the Closing Date, Company Employees shall cease to participate in such welfare plans and programs.

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(e) Buyer Plans. Buyer shall cause Company to have prior periods of service with Seller and its affiliates to count for purposes of Buyer’s vacation plan. Buyer shall waive pre-existing condition requirements, evidence of insurability provisions, and waiting period requirements or any similar provisions, under any medical plan provided to Company Employees after the Closing Date.

(f) Employee Agreements. Buyer and Seller agree that after Closing Buyer will require all Company Employees to sign a statement by which they agree that, effective immediately, (i) their employment is “at will”; (ii) they acknowledge receipt of the employee handbook which will govern the terms of their employment; and (iii) any other information mutually agreed upon.

(g) Cooperation. The parties shall cooperate with each other to provide any information, filings or notices as appropriate with respect to this Section 7. Buyer shall assist in providing any information, filings or notices (including the notice required by Section 204(h) of ERISA as needed to cease the benefit accruals.

8. [Intentionally omitted.]

9. Survival of Representations and Indemnification.

(a) Survival of Representations. Buyer and Seller agree that all representations, warranties and indemnities (“Representations”) shall, subject to Section 12, survive the execution and delivery of this Agreement as follows. The Representations given in (i) Paragraphs 4.(a), (d)(1) (second sentence only), (d)(2) (fourth sentence only), (f)(2) (second sentence only), (f)(3) (second sentence only), (v) and (w), Paragraphs 6.(a), (b) and (e) shall continue indefinitely; (ii) all Seller’s environmental representations in Section 4 (excluding the Randolph Environmental Condition) without regard as to whether the breach of the warranty or representation is characterized as litigation, non-compliance with law, environmental or other breach of Seller’s environmental matters shall expire upon the 10^th anniversary of the Closing Date; (iii) Paragraphs 4(l) and 12 (and indemnification relating to tax matters) shall continue until 90 days after expiration of the applicable statute of limitation; (iv) Paragraphs 4.(j), (k), (n) and (o) (other than those items that fall under (ii) above) shall expire upon the 5^th anniversary of the Closing Date; and (v) all others shall expire upon the 2^nd anniversary of the Closing Date. Any claim that an item breaches more than one Representation shall be deemed to fall into the category that has the longest survival period. This Paragraph 9 shall not apply to either party’s covenants set forth in this Agreement.

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(b) Indemnification by Seller. Subject to the limitations set forth in Paragraphs 9.(b) and (f), Seller agrees to indemnify and hold Buyer harmless from and against any and all Damages (as defined in Paragraph 9.(d)) incurred by Buyer or which Buyer may sustain at any time arising out of or by reason of:

(2) The inaccuracy or breach of any of the Representations made by Seller in or pursuant to this Agreement (with Damages associated with such inaccuracy or breach to be determined without giving effect to any materiality qualification);

(3) Any failure by Seller to perform any obligation or comply with any covenant or agreement of Seller specified in this Agreement or in any other document executed at Closing;

(4) Any claim (i) for wages or fringe benefits made by any employee of Company with respect to the period ending immediately preceding the Closing Date (except as may be accrued as Closing Liabilities); (ii) for severance payments or other liabilities with respect to the termination of any employees of Company, provided such payments or liabilities arose from events occurring prior to the Closing Date; or (iii) with respect to the injury or death of any such employee arising out of events occurring prior to the Closing Date, subject to the parties’ obligations under Section 7;

(5) Any claim (including, without limitation, claims alleging death or injury to persons or damage to property), whether based in tort, contract or otherwise resulting from or caused by any product made, sold, or service provided, by Company prior to the Closing Date;

(6) Any Company debt, obligation or liability, whether known or unknown, fixed or contingent, of any nature whatsoever before the Closing Date, including but not limited to all taxes and environmental liabilities of any nature (other than the Randolph Environmental Condition, and other than the EPA claim described in Exhibit 4.(j), item #2) other than Permitted Exceptions ;

(7) Any liability or obligation arising out of (A) the termination of employment of any employee by Company on or prior to the Closing, or (B) any Benefit Plan; or

(8) Any several liability of Company under Treasury Regulation Section 1.1502-6 promulgated by the Department of Treasury (“Treasury Regulation”) or any under any comparable or similar provision under state, local or foreign tax laws or regulations for any period ending on or before the Closing Date.

Seller agrees that it shall not have any claim or right of indemnification or contribution or any other right of recourse against Company with respect to Damages and Seller waives and releases any and all such claims and right. Seller further agrees that the indemnities set forth in clauses (3) through (7) above shall not be affected by disclosures which relate thereto and are contained in the Exhibits.

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Seller and Buyer agree that its indemnity rights pursuant to this Paragraph 9.(b) shall be available if and only if the claim for indemnification is made in accordance with Paragraph 9.(e) within the following periods of the Closing Date:

Paragraphs (b)(3) and (6) within 2 years.

Paragraphs (b)(4) within five years.

Paragraph (b)5) within five years, except all environmental matters within 10 years.

Paragraph (b)(7) within 90 days of the expiration of the statute of limitations.

Any claim that an item breaches more than one provision of Paragraph 9.(b) shall be deemed to fall into the preceding category that has the longest survival period.

(c) Indemnification by Buyer. Buyer agrees to defend, indemnify and hold harmless Seller from and against any Damages incurred by reason of any breach of any representation, warranty or covenant of Buyer and, for a period of ten years after Closing, all Damages Seller incurs by reason of the Randolph Environmental Condition. Buyer agrees to cause Company to defend, indemnify and hold harmless Seller from and against any Damages incurred by reason of (I) liabilities arising out of the Randolph Environmental Condition; (II) any liabilities arising from the operation or conduct of Company by Buyer subsequent to the Closing Date; and (III) any product shipped or manufactured by or any services provided by Company with respect to the Business subsequent to the Closing Date.

(d) Damages. An Indemnified Party (as defined in Paragraph 9.(e)(1)) shall be entitled to recover the full amount of any liabilities, losses, debts, obligations, monetary damages, fines, fees, penalties, deficiencies, expenses (including amounts paid in settlement, interest obligations, court costs, the reasonable costs of investigators, the reasonable fees and expenses of attorneys, accountants, financial advisors or other experts, and other reasonable expenses of litigation or administrative proceedings) incurred due to the matter for which indemnification is sought, but any recovery shall be net of any economic benefit to which the Indemnified Party (as defined in Paragraph 9.(e)(1)) is entitled due to such liabilities, expenses, costs or loss, including, without limitation, (i) any tax refund, reduction or benefit, (ii) any insurance proceeds to which the Indemnified Party (as defined in Paragraph 9.(e)(1))) is entitled and (iii) any warranty reimbursements (collectively, “Damages”).

(e) Assertion and Defense of Indemnification Claims.

(1) Assertion of Claim. Buyer or Seller under Paragraphs 9.(b) and (c), respectively (“Indemnified Party”), shall give notice to the other (“Indemnifying Party”) as soon as reasonably possible after the Indemnified Party has actual knowledge of any claim to which the Indemnifying Party has an obligation to indemnify, including the amount, if known, and shall promptly supply any other information in possession of the Indemnified Party supporting the claim. The omission by the Indemnified Party to give Notice as soon as reasonably possible will not relieve the Indemnifying Party of its indemnification obligations, unless the failure to give notice to the Indemnifying Party materially prejudices the Indemnifying Party or notice is given after the end of the survival period of the applicable representation of warranty or other

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basis of the claim. All indemnification claims must be asserted by giving notice within the survival period of the applicable representation or warranty or other basis for the claim.

(2) Defense of Undisputed Claim. The Indemnified Party will permit the Indemnifying Party (at its expense) to assume the defense of any third party claim in any litigation. The Indemnifying Party may settle or compromise any third party claim or litigation only with the consent of the Indemnified Party, which consent shall not be unreasonably withheld. The Indemnified Party shall have the right at all times to participate in the defense, settlement, negotiations or litigation relating to any third party claim or demand at its own expense. If the Indemnifying Party does not assume the defense of any matter which it has an obligation to indemnify, then the Indemnified Party shall have the right to defend any such third party claim or demand, and will be entitled to settle any such claim or demand in its discretion, all at the expense of the Indemnifying Party. In any event, the Indemnified Party will cooperate in the defense of any such action at the expense of the Indemnifying Party and the pertinent records of each party shall be available to the other with respect to the defense.

(3) Defense of Disputed Claim. Should an Indemnifying Party provide Notice to the Indemnified Party regarding a claim or action by a third party for which the Indemnifying Party declines to assume the defense, the Indemnified Party shall give the Indemnifying Party a reasonable opportunity: (1) to conduct any proceedings or negotiations in connection therewith; (2) to take all other required steps or proceedings to settle or defend any third party action; or (3) to employ counsel to contest any third party claim or action in the name of the Indemnified Party or otherwise. If the Indemnifying Party desires to assume the defense of the third party claim or action, it shall promptly give Notice to the Indemnified Party. The Indemnifying Party and the Indemnified Party may participate in the defense at their own expense.

(f) Limitation on Recovery. Anything in this Paragraph 9 to the contrary notwithstanding, there shall be no recovery under (I) Paragraph 9.(b) until, and only to the extent that, the total claims for indemnification under those provisions exceed one percent (1%) of the Purchase Price, as adjusted as provided in this Agreement; (II) Paragraph 9(b) to the extent the total recovery on all claims for indemnification under Paragraph 9.(b) exceeds the Purchase Price, as adjusted as provided in this Agreement; and (III) Paragraph 9(c) until and only to the extent that, the total claims for indemnification under those provisions exceed one percent (1%) of the Purchase Price, as adjusted as provided in this Agreement; however, the foregoing clause (III) shall not apply towards obligations relating to the Randolph Environmental Condition, the EPA claim described in Exhibit 4(j), or the Closing Liabilities, nor shall the foregoing clauses (I) or (III) apply towards any obligations of the parties under Sections 2(e), 10, 11 or 12.

(g) Intentionally Omitted.

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(h) Sole Remedy. Each party agrees that its sole remedy in respect to breach of any warranty or representation by the other party hereunder shall be limited to indemnification pursuant to this Section 9.

10. Covenants.

(a) Seller’s Covenants. Seller covenants and agrees with Buyer as follows:

(1) Confidentiality. For a period of five (5) years following the Closing, (i) Seller shall hold in confidence (unless and to the extent compelled to disclose by judicial or administrative process or, in the opinion of its counsel, by other legal requirements) all Company Information (as defined below) and will not disclose the same to any third party or use the same for any purpose referred to in and (ii) shall return all such Company Information to Company. The term “Company Information” shall mean all information concerning Company and its business and assets, including without limitation all information concerning Company’s products, product formulations, services, manufacturing and other processes, Proprietary Rights, technology, suppliers, customers, pricing policies and mark ups, except information (x) ascertainable or obtained from public information, or (y) which is or becomes known to the public, other than through a breach of this Agreement. Notwithstanding any provision contained herein, each party hereto (and each of their respective employees, representatives or other agents) may disclose to any and all persons, without limitations of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including opinions and other tax analyses) that are provided to the taxpayer relating to such tax treatment and tax structure.

(2) Covenant not to Compete. In furtherance of the sale to Buyer of the Shares and the business represented thereby, ConAgra Foods, Inc. and Seller, each separately agree that for a period of five (5) years from the Closing Date, neither it nor any of its respective subsidiaries or affiliates (collectively, “CNC Parties”) shall, directly or indirectly, through equity ownership or otherwise, for themselves or any other person or entity, engage in the business of formulating, developing or manufacturing rodenticide products anywhere in the world; provided, however, that nothing herein shall be construed to prevent any CNC Parties from owning, as an investment, up to one percent (1%) of a class of equity securities issued by any competitor of Buyer or Company that is publicly traded and registered under Section 12 of the 1934 Act. The parties intend that the covenant contained in the preceding sentence shall be construed as a series of separate covenants, one for each county and city included within each such state and, except for geographic coverage, each such separate covenant shall be deemed identical. The parties agree that the mutual covenants contained within this Agreement provide adequate consideration for the enforcement of this Paragraph.

(3) Remedies. Seller agrees that the restrictive covenants in Paragraph 10.(a)(2) is reasonable in their geographic scope and duration and may be enforced by specific performance or otherwise. Seller shall not raise any issue of reasonableness as a defense in any proceeding to enforce any of such covenants. In

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the event that, notwithstanding the foregoing, a covenant included in Paragraph 10.(a)(2) of this Agreement shall be deemed by any court to be unreasonably broad or violative of applicable law in any respect, it shall be modified in order that it be reasonable or not violative of applicable law, as the case may be, and shall be enforced accordingly. Without limitation of the foregoing, in the event that, notwithstanding the foregoing, in any judicial proceeding, a court shall refuse to enforce any of the covenants contained in Paragraph 10.(a)(2) or any of the separate covenants deemed included in Paragraph 10.(a)(2), then the unenforceable covenant shall be deemed eliminated from the provisions of this Agreement for the purpose of those proceedings to the extent necessary to permit such covenant and the remaining separate covenants of Paragraph 10(a)(2) to be enforced.

11. Transactions Subsequent to Closing.

(a) Further Assurances. Buyer and Seller agree that, from time to time after Closing, and upon request, they shall execute, acknowledge and deliver such other instruments as reasonably may be required to more effectively transfer and vest in Buyer the Shares or to otherwise carry out the terms and conditions of this Agreement.

(b) Storage of Certain Products. For a period of up to 30 days after Closing, Buyer agrees to cause Company to store at the Randolph Facility for no charge all insecticide inventories on hand at the Randolph Facility on the Closing Date; provided Seller agrees to insure these inventories and bears all risk of loss other than on account of Company’s negligence.

(c) Relocation of Certain Inventories. Seller agrees to transport, at its sole cost and expense, all Inventories not located at the Randolph Facility or the Leased Property on the Closing Date to a location designated by Buyer in Randolph, Wisconsin; provided, however, such location must be designated and made available within forty five (45) days after Closing.

(d) Transition Services. Seller agrees to perform and cause other affiliates to provide the services for the period of time after Closing and for the cost identified on Exhibit 11.(d). (“Transition Services”) for Buyer and Company

(e) Audit. The Seller recognizes the legitimate needs of the Buyer to obtain audited financial information to meet the Buyer’s obligations for filings with the Securities and Exchange Commission. The Seller will use all commercially-reasonable efforts to provide the audit firm of the Buyer’s choice access to personnel, systems and information needed for the audit firm to complete their procedures in a cost effective manner.

(f) Insurance Matters. Buyer acknowledges that Company is covered by certain insurance policies and insurable risk programs made available through Seller as described in Exhibit 4.(bb). As of Closing, all such coverages shall be discontinued and

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Buyer shall cause Company to implement its own insurance policies and programs as of the Closing Date.

(g) Trade Names. Seller specifically and exclusively retains, and Buyer acknowledges that it will not acquire, and that Company does not own, any right, title or interest to the trade names “ConAgra”, “United Agri Products”, “UAP”, “Loveland”, or any derivations thereof, or any logos or trademarks related thereto. Buyer agrees that promptly after Closing it will cause Company to discontinue the use of any stationery, letterhead, preprinted forms, advertising or other form of media that uses or references any such names or logos and take all such other action as may be necessary to dissociate Seller with the operations of Company after Closing; provided that Buyer will be permitted to exhaust all of the packaging materials on hand at Closing containing these names and marks for a period not to exceed twelve months after Closing.

(h) Record Retention. Except as set forth below, Buyer will cause all books and records of Company relating to pre-Closing matters (collectively, the “Records”) to be retained for seven years after the date such document was created (“Retention Term”). During the Retention Term, Buyer shall allow Seller and its representatives access to inspect or copy the Records during normal business hours. In the event Buyer intends to destroy any Records at the end of such Retention Term, Buyer shall first notify Seller at which time Seller shall have the right to remove the Records at its own cost.

(i) Company Information. Buyer shall cooperate with and provide to Seller any such records and information as may be needed after Closing for purposes of finalizing its accounting records of, and responding to any audits or other government inquiries relating to, Company. Such information shall be furnished to Seller without charge, except that Seller will reimburse Buyer for any out-of-pocket copy costs.

(j) Prozap License. Buyer understands that in order to have use of the “Prozap” trademark, it must independently negotiate and enter into a license with Chem-Tech, Ltd. in which such trademark would be licensed to Company on a perpetual, royalty free basis, solely in respect to molluscicide products and zinc-phosphide rodenticide products. Buyer would be responsible for all registration obligations associated with such products.

(k) Environmental Covenant Not to Sue. Buyer covenants that Seller shall have no responsibility to Buyer or Company in respect to the Randolph Environmental Condition. Buyer, for itself and on behalf of the Company, hereby forever waives, releases and covenants not to bring or aid any investigation, inquiry, action, demand, liability, claim, lawsuit or any other type of administrative or judicial action, whether known, unknown, actual or contingent, accrued or unaccrued, against Seller or its affiliates which Buyer, the Company, or any of their respective affiliates, predecessors or successors may now or hereafter hold, which arise from or relate to the Randolph Environmental Condition.

(l) Discontinuation of Seller Services. The parties agree that the services provided to Company by Seller as set forth on Exhibit 4.(u) will, subject to

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Section 11.(d), be discontinued as of Closing. The bank accounts set forth in Exhibit 4.(aa) will be retained by Seller.

(m) Registration Assistance. Seller has prepared and filed the necessary transfers of product registrations to Company at the U.S. federal level, Seller is in the process of, and will continue, renewing product registrations at the appropriate U.S. state level for calendar year 2004. For those registrations which have been recently transferred by Seller to Company at the federal level, Seller will continue such filings during the appropriate discontinuance periods dictated by applicable state law. For those registrations which were not transferred by Seller prior to Closing, Seller will complete the renewal process at each state for calendar year 2004. Except for Seller’s filing obligations described above, which in all events will be discontinued as of December 31, 2003, Buyer shall be responsible for any and all other product registration filings. It is agreed that any and all federal and state registration fees paid in respect to calendar year 2004 will be included as a prepaid item and therefore included as a Closing Liability. For all of the above filings made by Seller after Closing, Buyer agrees to reimburse Seller for the state registration fees, as well as any and all related out-of-pocket payments to third parties, on a monthly basis. Seller agrees to provide Buyer in advance of any payment for which it is responsible with a copy of the applicable invoice, if any, description of the registration to which the payment relates and any other information relevant to permit Buyer to approve or disapprove of the payment.

(n) Receivables. Seller shall retain all trade receivables (other than Customer Receivables) that relate to Business sales transactions that arose prior to Closing. Buyer shall be entitled to the Customer Receivables and all trade receivables relating to Business sales transactions that arise after Closing. Accordingly, (i) if Buyer receives any remittance from any account debtor with respect to any receivables retained by Seller, Buyer shall endorse such remittance to the order of Seller and forward it to Seller immediately upon receipt thereof, and (ii) if Seller receives any remittance from any account debtor with respect to any receivables of Buyer, Seller shall endorse such remittance to the order of Buyer and forward it to Buyer immediately upon receipt thereof. Buyer and Seller agree to provide each other all information, reports and reconciliations, including, without limitation, reports detailing such collections, reasonably requested and to take all such other action reasonably necessary to ensure the purposes of this Section.

(o) Rebates. Set forth at Exhibit 4.(d)(1)(iii) are written descriptions of customer incentive, cooperative advertising and rebate programs in effect with respect to certain customers of the Business. Seller has paid or will pay as of the Closing Date, all rebates or incentives accrued or earned with respect to any and all such programs through the Closing Date. Buyer shall pay any and all rebates or incentives accrued or earned with respect to such programs after the Closing.

Certain of the programs contain annual sales incentives which are not ascertainable until the end of February 2004 (“Annual Sales Incentives”). After Closing, but prior to Settlement, Buyer and Seller hereby agree to estimate the Annual Sales

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Incentive due each applicable customer based upon sales made during the nine (9) month period of February 2003 through November 2003. The estimated Annual Sales Incentive for each such customer shall be based on estimated sales equal to the product of (x) the customer’s sales during the period of February 24, 2003 through November 23, 2003, multiplied by (y) 1.333. Seller shall pay to each customer 75% of such estimated Annual Sales Incentive and Buyer shall pay the balance, if any, owed to each customer regardless of whether the balance plus the amount paid by Seller exceeds such estimated amount.

Certain customers of the Business participate in “cooperative advertising programs” which involve the payment of certain advertising costs. The amounts available under those programs cannot be determined at Closing. Consequently, Buyer and Seller agree to prepare after Closing, but prior to Settlement, a good faith estimate of payments owed to such customers through Closing. Seller shall be responsible for paying such estimated amounts to Company, and Company shall be responsible for all other payment obligations (if any) owed under such advertising programs.

After Closing, and except as provided above, Seller shall have no further liability to any Customer for Annual Sales Incentive payments or any other obligations relating to the Customer programs except as provided in this Section 11(o).

12. Tax Matters.

(a) Tax Sharing Agreements. Seller will cause any tax sharing or other allocation agreement with respect to Taxes between Company and Seller (or any affiliates) to be terminated as of the Closing Date so that they have no further effect for any taxable period. This Paragraph 12 and Paragraph 4(l) above shall control all of the parties’ respective obligations for Taxes affecting Company and supersedes any and all prior agreements, contracts or understandings regarding Company’s Taxes. Paragraph 12 shall control any conflict between Paragraphs 12 and 4.(l).

(b) Section 338(h)(10) Election. Seller agrees that it will, and with Buyer’s cooperation will cause Company to, make an election or join in making an election under Section 338(h)(10) of the Code in order to treat the sale of the Shares as a sale of all the assets of Company for federal income Tax purposes and an election under the statutes of such states and localities as permit an equivalent election to treat the sale of the Shares as a sale of all its assets as provided by such states’ and localities’ applicable laws for state and local income Tax purposes. Seller agrees that it will, and with Buyer’s cooperation will cause Company to, comply with all of the requirements and conditions of Section 338(h)(10) of the Code and the treasury regulations thereunder and all other applicable Code sections and treasury regulations relating thereto, including without limitation, the execution and timely filing of Form 8023 entitled “Elections Under Section 338 for Corporations Making Qualified Stock Purchases” or any successor form of similar import, and any forms required to effectuate similar elections for state or local income Tax purposes. The parties agree that the Purchase Price shall be allocated to the assets of Company in accordance with Exhibit 12(b)(2) hereto. Each party covenants to report a gain, loss or cost basis, as the case may be,

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and to act and file Tax Returns (including but not limited to, IRS Form 8883) in a manner consistent with Exhibit 12(b)(2) for federal, state and local Income Tax purposes. Neither Seller, Buyer nor Company shall take any position (whether in audits, Tax Returns or otherwise) that is inconsistent with Exhibit 12(b)(2) unless required to do so by a final, non-appealable decision of a court of competent jurisdiction. Buyer will promptly notify Seller in the event the IRS challenges, or threatens to challenge, such allocations. Buyer shall cause Company after the Closing Date to cooperate with Seller in the timely and proper filing of all applicable federal, state and local elections required to be filed under this Section.

(c) Tax Returns.

(1) Income Tax Returns. Buyer shall cause Company to consent to join, for all Tax periods of Company ending on or before the Closing Date for which Company is eligible to do so, in any consolidated or combined federal, state or local Income Tax Returns of Seller. Seller shall cause to be prepared and timely filed any and all consolidated or combined federal, state or local Income Tax Returns as well as any separate federal, state, local or foreign Income Tax Returns for Company for all Tax periods of Company ending on or before the Closing Date. Buyer shall cause to be prepared and timely filed any and all Income Tax Returns of Company for Tax periods of Company ending after the Closing Date. Seller shall have the right to approve all Income Tax Returns of Company that are prepared by or at the direction of Buyer that covers a tax period beginning before and ending after the Closing Date, which approval shall not be unreasonably withheld or delayed. The parties agree to cooperate with each other and each other’s affiliates in the preparation of the portions of such Returns pertaining to Company. The parties shall be entitled to utilize the services of the personnel who would have been responsible for preparing such Returns as they relate to Company, to the extent reasonably necessary in preparing said Returns on a timely basis. The parties shall also provide each other with full access to applicable records to enable the preparation of said Returns. Seller shall pay on a timely basis all income Taxes in respect to the Pre-Closing Period shown as due on such Returns. Buyer shall pay on a timely basis all income Taxes in respect to tax periods of Company ending after the Closing Date. The parties shall make available to each other copies of the portions of such Returns relating to Company for taxable years ending before or including the Closing Date.

(2) Non-Income Tax Returns. Seller shall cause to be prepared and timely filed all non-Income Tax Returns of Company for all Tax periods ending on or before the Closing Date. Buyer shall cause Company to prepare and timely file all non-Income Tax Returns for all Tax periods ending after the Closing Date. Seller shall have the right to approve all non-Income Tax Returns of Company that are prepared by or at the direction of Buyer that covers a tax period beginning before and ending after the Closing Date, which approval shall not be unreasonably withheld or delayed. The parties agree to cooperate with each other and their affiliates in the preparation of such non-Income Tax Returns. The parties shall be entitled to utilize the services of the personnel who would have been responsible for preparing such Returns to the extent reasonably necessary in preparing said Returns on a timely basis. The parties shall

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also provide each other with full access to applicable records to enable the preparation of such Returns. Except to the extent accrued as a current non-Income Tax liability in Company’s books and records as of the Closing Date, Seller shall pay on a timely basis all non-Income Taxes in respect of the Pre-Closing Period as shown as due on such returns; provided, that Buyer shall pay or cause Company to pay on a timely basis the portion of such Pre-Closing Period non-Income Taxes which are part of the Closing Liabilities. Buyer shall cause Company to pay all non-Income Taxes to which such non-Income Tax Returns relate for all periods after the Closing Date. The parties shall make available to each other copies of non-Income Tax Returns of the Companies covering Tax periods ending before or including the Closing Date.

(3) Allocations. Seller shall include the income and deductions of Company (including any deferred income triggered into income by Treas. Reg. Section 1.1502-13 and Treas. Reg. Section 1.1502-19, or equivalent provisions of state or local law) on Seller’s consolidated or combined federal, state or local Income Tax Returns for all periods through the Closing Date and shall pay any Taxes attributable thereto. In any case where any Tax Return covers a Tax period beginning before and ending after the Closing Date, the amount of Taxes allocable between Seller on one hand, and Buyer and Company on the other hand, shall be determined by closing the books of Company as of and including the Closing Date. If the allocation of an item of income, deduction, loss or credit cannot be specifically allocated based on such closing of the books, such item shall be allocated on a daily basis. In case of the Taxes attributable to the Pre-Closing Period, Seller shall be liable for such Taxes except to the extent such Taxes are part of the Closing Liabilities. In case of (i) the Taxes attributable to the portion of such Tax period following the Closing Date, and (ii) the portion of Taxes part of the Closing Liabilities, Buyer and Company shall, as to Seller, be jointly and severally liable for such Taxes.

(d) Allocation of Income Tax Benefits.

(1) If any adjustments shall be made to any federal, state, local or foreign Income Tax returns relating to Company or Seller for the Pre-Closing Period which result in any Income Tax detriment to Seller or any affiliate of Seller with respect to such period and any Income Tax benefit to Company, Buyer or any affiliate of Buyer for any Tax period ending after the Closing Date (to the extent such Income Tax benefit is realized after the Closing Date), Seller shall be entitled to the benefit of such Income Tax benefit to the extent of the related Income Tax detriment (except to the extent accrued as a Prepaid), and Buyer shall or shall cause Company to pay to Seller such amount at such times or times as and to the extent that Company, Buyer or any affiliate of Buyer actually realizes such benefit through a refund of Income Tax or reduction in the amount of Income Tax which any of them would otherwise have had to pay if such adjustment had not been made.

(2) If any adjustment shall be made to any federal, state, local or foreign Income Tax returns relating to Company for any Tax period ending after the Pre-Closing Period which result in any Income Tax detriment to Buyer, Company or any affiliate of Buyer with respect to such period and any Income Tax benefit to Seller or any

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affiliate of Seller for any Pre-Closing Period, Buyer shall be entitled to the benefit of such Income Tax benefits to the extent of the related Income Tax detriment. Seller shall pay to Buyer such amount (except to the extent part of the Closing Liabilities) at such time or times as and to the extent that Seller or any affiliate of Seller actually realizes such benefit through a refund of Income Tax or reduction in the amount of Income Taxes which Seller or any such affiliate would otherwise have had to pay if such adjustment had not been made.

(3) Notwithstanding anything contained in Paragraph 9(f) to the contrary, payments pursuant to Paragraphs 12 shall not be limited by any indemnity baskets, caps or other limitations whatsoever.

(e) Seller’s Tax Indemnity. From and after the Closing Date, Seller shall pay for, and shall indemnify, defend and hold harmless each of the Buyer and Company from and against, any liability for Taxes imposed on Company in respect to the Pre-Closing Period to the extent not included in the Closing Liabilities.

(f) Refunds. Any refunds of Taxes received by Company attributable to the Pre-Closing Period shall be for the benefit of Seller except to the extent included in the Prepaids. Buyer shall or shall cause Company to pay to Seller or its order any such refunds within ten (10) days of receipt thereof.

(g) Cooperation. After the Closing Date, Seller and Buyer shall make available to the other and to Company, free of charge, cost or expense and as reasonably requested, all information, records or documents reasonably relevant to Tax liabilities or potential Tax liabilities of either Company or its predecessors for all periods prior to or including the Closing Date (or any matter, transaction or event occurring on or before the Closing Date that may affect such a Tax liability) and each such person shall preserve all such available information, records and documents until the expiration of any applicable statute of limitations or extensions thereof. Each such person shall provide, free of charge, cost or expense, the other(s) and the pertinent Tax Authority with all available information and documentation reasonably necessary to comply with all Tax audit information requests or inquiries made of any such periods relevant to such Tax liabilities or potential Tax liabilities (or any matter, transaction or event occurring on or before the Closing date that reasonably may affect such a Tax liability). Any information obtained pursuant to this Section 12 shall be held in strict confidence and shall be used solely in connection with the reason for which it was requested.

(h) Tax Audits. Buyer shall promptly notify Seller in writing upon receipt by Buyer, any affiliate of Buyer, or Company, and Seller shall promptly notify Buyer in writing upon receipt by Seller or any affiliate of Seller, of notice of any pending or threatened federal, state, local or foreign Tax audits, examinations or assessments of Company (other than consolidated or combined Income Tax audits, examinations or assessments), so long as any Taxable year within the Pre-Closing Period remains open. Seller shall have the sole right to represent Company and its predecessors in any Tax audit or administrative or court proceeding relating to the Pre-Closing Period, and to employ counsel of its choice at its expense; provided Seller shall not agree or consent to any proposed adjustment that

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adversely affects Company or Seller after the Closing without Buyer’s prior written consent, which shall not be unreasonably withheld or delayed.

(i) Buyer’s Indemnity. From and after the Closing Date, Buyer and Company shall jointly and severally indemnify, defend and hold Seller and its affiliates harmless from and against, any liability for all Taxes for Tax periods (or portion thereof) of Company which occur or begin after the Closing Date, including, without limitation, any such liability with respect to operations of Company and dispositions of assets by Company after the Closing Date, and Buyer shall pay, indemnify and hold Seller and its affiliates harmless from and against any liability resulting directly or indirectly from any breach or nonfulfillment of any agreement or covenants on the part of Buyer or Company under this Section 12.

13. Notices. All notices and other communications required or permitted under this Agreement shall be given if mailed by registered or certified mail, postage prepaid, or otherwise delivered by hand or messenger, overnight courier, fax or telegram to the parties at the following addresses, or to such other changed address as such party may have given by notice:

Buyer:	Neogen Corporation 620 Lesher Place Lansing, Michigan 48912 Attn: President Facsimile: 517-372-0108
And a copy to:	Foster Zack & Lowe, P.C. Attention: Richard C. Lowe 2125 University Park Drive, Suite 250 Lansing, MI 48933 Facsimile: 517-706-5801
Seller:	United Agri Products, Inc. 7251 West 4th Street Greeley, CO 80634 Attn: President Facsimile: (970) 339-2633
And a copy to:	ConAgra Foods, Inc. One ConAgra Drive Omaha, NE 68102 Attn: Corporate Controller Facsimile: (402) 595-4611

14. Applicable Law. This Agreement shall be interpreted and the rights and liabilities of the parties shall be determined in accordance with the laws of the State of Michigan.

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15. Integration. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter, and supersedes all prior discussions, representations, amendments or understandings of every kind and nature between them.

16. Amendments. Any amendment, alteration, supplement, modification or waiver shall be invalid unless it is in writing and signed by both parties.

17. Severability. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without the provision.

18. Assignability. This Agreement may be assigned by Buyer without the prior written consent of Seller; provided, Buyer shall continue to be liable for the performance of all obligations pursuant to the Agreement. Seller may not assign this Agreement without the prior written consent of Buyer.

19. Benefit. This Agreement shall be binding upon and inure to the benefit of Buyer and Sellers and their respective successors and permitted assigns.

20. Captions. Captions contained in this Agreement are inserted for reference and in no way define, limit, extend or describe the Agreement or the intent of any provision in this Agreement.

21. Pronouns. All pronouns and any variation thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the parties may require.

22. Exhibits. The parties agree that the Exhibits attached to this Agreement shall be treated for all purposes as part of this Agreement.

23. Prevailing Party. The prevailing party in any litigation or arbitration should the parties mutually agree to arbitrate involving this Agreement (other than those matters governed by Paragraph 9, which, for the avoidance of doubt, contains its own provision for fees and expenses) shall be entitled to recover, in addition to any other relief obtained, the costs and expenses, including reasonable attorney’s fees and expenses, incurred by the prevailing party.

24. Construction of Agreement. The parties agree that this Agreement has been jointly drafted and that neither party may assert an ambiguity in the construction of this Agreement against another party because the other party allegedly drafted the allegedly ambiguous provision.

25. Interpretation. Whenever the words “include,” “includes,” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The term “Seller’s knowledge” shall mean the actual knowledge of those

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individuals set forth on Exhibit 25. All terms defined in this Agreement shall have the defined meanings contained herein when used in any certificate or other document made or delivered pursuant to the Agreement unless otherwise defined in the Agreement. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. Any agreement, instrument, or statute defined or referred to in this Agreement or in any agreement or instrument that is referred to in the Agreement means such agreement, instrument, or statute as from time to time amended, qualified or supplemented, including (in the case of agreements and instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and all attachments thereto and instruments incorporated therein. References to any person or entity are also to its permitted successors and assigns.

26. Terms of Sale. Buyer acknowledges that except as otherwise specifically set forth in Section 4 of this Agreement, the Shares are being sold to Buyer on an “as-is, where-is” basis without any representations or warranties, express or implied. Except to the extent and as expressly covered by a representation or warranty made by Seller and contained in Section 4 of this Agreement Without limiting the generality of the foregoing, Buyer agrees that Seller has made no representation or warranty to Buyer with respect to, and shall have no liability for:

(a) Any projections, forecasts, estimates, plans or budgets of future revenues, expenses or expenditures, future results of operations (or any component thereof), future cash flows (or any component thereof) or future financial condition (or any component thereof) of the Business or Company, or the future business, operations or affairs of Company or the Business, heretofore or hereafter delivered to or made available to Buyer or its counsel, accountants, advisors, lenders, representatives or affiliates; or

(b) Any other information, statement or documents heretofore or hereafter delivered to or made available to Buyer or its counsel, accountants, advisors, lenders, representatives or affiliates with respect to the Business.

27. Defined Terms. Defined terms used in this Agreement have the meanings ascribed to them in the paragraphs contained in attached Exhibit 27.

28. Expenses. Each party shall pay its own costs associated with the preparation and negotiation of this Agreement. Buyer will obtain and pay all premiums on title insurance for the Randolph Facility. Seller will be responsible for any costs associated with obtaining the title commitment specified in Section 4(d)(2).

[The rest of this page was intentionally left blank.]

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The parties have executed this Agreement as of the date first above written.

SELLER:
United Agri Products, Inc.
By:
	,
Its

BUYER:
Neogen Corporation
By:
	James L. Herbert,
	its President

For valuable consideration, ConAgra Foods, Inc. (“CAF”) agrees to (i) be bound by Paragraphs 10(a)(2), 13 – 25 and 27 and (ii) absolutely and unconditionally guaranties to Buyer the prompt and timely collection of any and all monetary obligations of Seller pursuant to Section 9(b) of the Agreement. These obligations of CAF are continuing and irrevocable and, provided CAF has consented in writing thereto, will not be discharged or affected by any new agreements, extensions, amendments, renewals or waivers of default by Seller with Buyer or any other adjustments or compromises between Seller and Buyer or any other circumstance (other than complete satisfaction of the obligations of Seller) that might constitute a legal or equitable discharge of a guarantor or surety. The above notwithstanding, CAF shall not be construed as a guarantor, or as indemnifying Buyer or Company in respect to any breach, of the performance by Seller of any post-Closing covenant herein, specifically including those set forth in Sections 10 and 11.

ConAgra Foods, Inc.
By:
	,
Its

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Index of Exhibits

Exhibit 2.(c)(1)	Target Receivables
Exhibit 2(c)(2)	Target Inventories
Exhibit 2.(c)(3)	Target Prepaids
Exhibit 4.(a)	Foreign Qualification; Directors and Officers
Exhibit 4.(c)	Financial Statements and Preparation Information
Exhibit 4.(d)(1)(i)	List of Non-Real Estate Assets
Exhibit 4.(d)(1)(ii)	Exceptions to Good Title to Assets and Free and Clear of Liens
Exhibit 4.(d)(1)(iii)	List of Contracts
Exhibit 4.(d)(2)(i)	Real Property
Exhibit 4.(d)(2)(ii)	Exceptions to Good Title to Owned Real Estate and Free and Clear of Liens
Exhibit 4.(d)(4)	Assets Not Used in the Business
Exhibit 4.(e)	Non-Compliance
Exhibit 4.(f)(1)	Technology Licenses and Registrations
Exhibit 4.(f)(2)	Patents, Trademarks, Service Marks and Copyrights
Exhibit 4.(f)(3)	Unregistered Trademarks, Service Marks, Copyrights and Trade Names
Exhibit 4.(f)(5)	Software Developed by Seller; Software Used in Business
Exhibit 4.(f)(6)	Unauthorized Use of Intellectual Property of Others
Exhibit 4.(f)(7)	Grant of Rights
Exhibit 4.(f)(8)	Claims of Infringement of Intellectual Property of Others
Exhibit 4.(f)(9)	Claims of Unauthorized Use of Intellectual Property of Others

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Exhibit 4.(h)	Inventory Valuation Policy
Exhibit 4.(j)	Litigation
Exhibit 4.(l)	Tax Related Disclosures
Exhibit 4.(n)	Liability Claims
Exhibit 4.(o)	Undisclosed and Contingent Liabilities
Exhibit 4.(p)	Non-Performance of Contracts
Exhibit 4.(q)	Changes Since February 23, 2003
Exhibit 4.(u)	Transactions with Affiliates
Exhibit 4.(x)	Employee Information
Exhibit 4.(x)(4)	Employment Agreements
Exhibit 4.(y)	Employee Benefit Plans and Related Matters
Exhibit 4.(z)(i)	Randolph Environmental Information
Exhibit 4.(z)(ii)	Environmental Matters
Exhibit 4.(z)(13)(G)	Company’s Prior and Current Locations
Exhibit 4.(aa)	Bank Accounts
Exhibit 4.(bb)	Insurance Information
Exhibit 4.(cc)(1)	List of Licenses and Permits
Exhibit 4.(cc)(2)	Non-Compliance with Licenses and Permits
Exhibit 11.(d)	Transition Services
Exhibit 12.(b)(2)	Section 338(h)(10) Allocation of Purchase Price
Exhibit 25	Individuals with Seller’s Knowledge
Exhibit 27	Index of Defined Terms

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EX-10.AE

Exhibit 10.(ae)

STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT is made on November 21, 2003 between Neogen Corporation, a Michigan corporation whose address is 620 Lesher Place, Lansing, Michigan 48912 (“Buyer”), and United Agri Products, Inc., a Delaware corporation whose address is 7251 West 4^th Street, Greeley, Colorado 80634 (“Seller”) (“Agreement”).

RECITALS

A. Seller owns 500 shares of common stock (“Shares”) of Hess & Clark, Inc., an Ohio corporation whose address is 10 East 7^th Street, Ashland, Ohio 44805 (“Company”).

B. Company is engaged in the business of development, manufacture and marketing of disinfectants and animal health products (collectively, the “Business”).

C. Buyer and Seller are discussing the purchase and sale of all the stock of HACCO, Inc. in a completely separate and distinct transaction no part of which shall have any applicability to this Agreement.

D. Buyer desires to purchase and Seller desires to sell, the Shares upon the terms, conditions and covenants contained in this Agreement.

The parties agree as follows:

1. Purchase and Sale. Based upon the representations, warranties and agreements contained in this Agreement and subject to the terms and conditions set forth in this Agreement, at the Closing Date, as defined in Paragraph 3, Seller agrees to sell, transfer and deliver to Buyer, and Buyer shall purchase and accept from Seller, the Shares.

2. Purchase Price and Method of Payments. Seller agrees to sell the Shares solely for the consideration provided in this Paragraph 2.

(a) Buyer shall pay Two Million Eight Hundred Twenty Nine Thousand Seven Hundred Dollars ($2,829,700) (“Tentative Price”) in immediately available funds to Seller at Closing (as defined below), subject to adjustment as provided in this Agreement.

(b) The Tentative Price shall be reduced by the amount of any liabilities to be paid by the Company after Closing that relate in any way to the operations of Company and which arose on or prior to the Closing Date (as defined in Paragraph 3) including

but not limited to all taxes owed by the Company to any taxing authority (collectively, “Closing Liabilities”).

(c) The Tentative Price to be paid Seller shall be increased or decreased by the following:

(1) The Tentative Price shall be increased by the amount that the Company’s Customer Receivables (as defined in this Paragraph 2.(c)(1)) as of the Closing Date exceed the Customer Receivables as of February 23, 2003 of $46,000 (“Target Receivables”). Alternatively, the Tentative Price shall be decreased by the amount that the Target Receivables exceed the Company’s Customer Receivables as of the Closing Date. The term “Customer Receivables” shall mean the face amount of accounts receivable arising from the sale of inventory or services in the ordinary course of the Business as of Closing. A complete list of the Target Receivables is contained in Exhibit 2.(c)(1).

(2) The Tentative Price shall be increased by the amount that the Company’s Inventories (as defined in this Paragraph 2.(c)(2)) as of the Closing exceed the Inventories as of February 23, 2003 of $849,000 (“Target Inventories”). Alternatively, the Tentative Price shall be decreased by the amount that the Target Inventories exceed the Company’s Inventories as of closing. Such “Inventories” shall be as defined and determined to mean the pursuant to Paragraph 4.(h) as of the Closing Date using a joint physical count at all locations where Inventories are located. A complete list of the Target Inventories is contained in Exhibit 2.(c)(2).

(3) The Tentative Price shall be increased by the amount of Company Prepaids (as defined in this paragraph 2(c)(3)) that exist as of the Closing exceed the Prepaids as of February 23, 2003 of $14,000. Alternatively, the Tentative Price shall be decreased by the amount that the Target Prepaids exceed the Company Prepaids. The term “Prepaids” shall mean the face value of all prepaid registration fees, taxes and other such items as of Closing that were paid in the ordinary course of the Business. A complete list of the Target Prepaids is contained in Exhibit 2.(c)(3).

(4) The Tentative Price was calculated by Buyer inclusive of the amounts for any reserves for doubtful accounts receivable and reserves for inventory obsolescence of as reflected on the Financial Statements as of February 23, 2003.

(d) Seller and Buyer agree to estimate the Closing Liabilities, Customer Receivables, Inventories and Prepaids as of the Closing Date (“Estimated Amounts”). Buyer agrees to pay Seller at Closing an amount equal to the Tentative Price plus or minus the net adjustment determined by using the Estimated Amounts, Target Receivables, Target Inventories and Target Prepaids (“Closing Payment”). As soon as practicable after Closing, but in no event more than forty-five days after Closing, the parties shall prepare a statement (“Settlement Statement”) which sets forth the appropriate increase or decrease in the Tentative Price using actual amounts (as adjusted, the “Purchase Price”).

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(e) The settlement of the transactions and the final payment of the Purchase Price as provided in this Paragraph shall take place promptly following completion of the Settlement Statement. At such time Buyer shall remit to Seller by wire transfer the amount by which the Purchase Price exceeds the Closing Payment together with interest thereon at the rate of 5%. In the event the Closing Payment exceeds the Purchase Price, Seller shall refund the amount of such overpayment to Buyer by wire transfer together with interest thereon at the rate of 5%. Seller irrevocably appoints ConAgra Foods, Inc. as its lawful attorney-in-fact for purposes of conducting and completing all aspects relating to the settlement of the Purchase Price with Buyer (including the execution of the Settlement Statement), and for receiving (or paying) any proceeds that may be payable by (or to) Buyer in connection therewith, pursuant to the terms of this Agreement.

3. The Closing. The closing of the purchase and sale of the Shares as provided in this Agreement shall occur on the date hereof at the offices of Seller, or at such other place as may be fixed by mutual agreement of Buyer and Seller. The date and event of closing are respectively referred to in this Agreement as the “Closing Date” and “Closing.” At the Closing:

(a) Seller shall deliver to Buyer stock certificates representing all of the Shares, accompanied by stock powers (duly endorsed in blank) or other duly executed instruments of transfer approved by Buyer, as well as resignations of the current officers and directors of Company; and

(b) Buyer shall deliver to Seller the Closing Payment.

4. Representations and Warranties of Seller. In order to induce Buyer to enter into this Agreement, Seller makes the following representations and warranties, each of which shall be relied upon by Buyer:

(a) Organization and Qualification, Subsidiaries and Ownership.

(1) Company is validly existing and in good standing under the laws of the State of Ohio. No failure on the part of Company to be qualified as a foreign corporation in any jurisdiction materially and adversely affects the Business or financial position or results of the operation of the properties of Company by reason of any disability affecting its right to own property, collect receivables, enforce contracts or otherwise. Company has the requisite corporate power and authority to own or hold under lease or similar agreement all of its properties and to carry on the Business as it is now being conducted. Company is duly qualified to do business and is in good standing as a foreign corporation in the state and jurisdiction as a foreign corporation is required in connection with the conduct of its business as disclosed on Exhibit 4.(a)(1), except for those jurisdictions in which the failure to so qualify would not have a material adverse effect on the Business. Seller has previously delivered to Buyer complete and correct copies of Company’s Articles of Incorporation and Bylaws and all amendments to them. Seller has delivered to Buyer a complete and accurate copy of the Company minute book in which there are accurate records of all meetings, and consents in lieu of

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meetings, of the Company’s board of directors and shareholders held or executed since the incorporation of Company. Exhibit 4.(a)(1) sets forth the current officers and directors of Company. The stock books and ledgers of Company have been delivered to Buyer for its inspection, and such books and records are accurate and complete.

(2) Company has no subsidiaries or other divisions or operations and neither owns nor has a right or obligation to acquire any equity interest (or option) of any other entity. Company neither participates nor has an interest in any partnership, joint venture or similar ownership equity-participation arrangement.

(3) The Shares constitute all of the issued and outstanding shares of capital stock of, and other voting, equity or other ownership interest in, Company, all of which are held of record and beneficially by Seller. Other than Seller, no person or entity is or will be entitled to receive any payment from Buyer with respect to the transfer of the Shares to Buyer. The authorized capital stock of Company is 750 shares of voting common stock, par value $1.00. All Shares have been validly authorized and issued, are fully paid and non-assessable and have not been issued in violation of any preemptive right or of any securities laws. There is no security, option, warrant, right, call, subscription, agreement, commitment or understanding of any nature whatsoever, fixed or contingent, that directly or indirectly (i) calls for the issuance, sale, pledge, or other disposition of any shares of Company stock or any securities convertible into, or other rights to acquire, any Company shares; (ii) obligates Company or any other entity to grant, offer or enter into any of the forgoing; or (iii) relates to the voting or control of any such capital stock, securities or rights. Seller has, and shall transfer to Buyer at Closing, good, valid and marketable title to the Shares free and clear of any security interest, pledge, lien, charge, claim, option, equity, right, proxy, voting or other agreement, restriction on transfer or encumbrance of any nature.

(b) No Violation. The execution and delivery of this Agreement by Seller and the consummation of the transactions contemplated by it will not violate any provision of law, order, or regulation of any governmental authority applicable to Company or the corporate charter or by-laws of Company or constitute a default under any judgment, order or decree of any court of governmental agency or instrumentality, or conflict or constitute a breach or a default of a material nature under any agreement to which Company or Seller is a party or by which any of them is bound.

(c) Financial Information. Exhibit 4.(c) contains pro forma balance sheets and statements of earnings before income taxes, depreciation and amortization prepared by Seller for the (i) one-year periods ended February 24, 2002 and February 23, 2003, and (ii) six-month periods ended August 25, 2002 and August 24, 2003 (collectively, the “Financial Statements”) which have been previously provided to Buyer. The Financial Statements were prepared in accordance with the accounting principles and assumptions stated in Exhibit 4. (c), and based thereon present fairly, in all material respects, the pro forma financial position and earnings before income taxes, depreciation and amortization of Company and its affiliates had the Business been

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accounted for on a separate entity basis as of such dates and for such periods and years then ended.

(d) Title to Assets.

(1) Exhibit 4.(d)(1)(i) is a list of all of Company’s non-real estate assets used in the Business categorized in the following groups: machinery and equipment, Customer Receivables, vehicles, inventories, intangible property and other (“Assets”). Company owns and has corporate power to own, and has good and marketable title to the Assets free and clear of liens, security interests, mortgages, pledges, claims or encumbrances of any kind whatsoever, except as shown in Exhibit 4.(d)(1)(ii). Seller has delivered to Buyer true and complete copies of all written leases, contracts, agreements, options, purchase orders, instruments and commitments relating to Company or the Business and written summaries of all oral contracts binding on Company, which involve annual expenditures in excess of $5,000, as evidenced in Exhibit 4.(d)(1)(iii) (collectively, “Contracts”). All Contracts are legally valid and binding and in full force and effect in respect to Company, and there are no defaults or breaches by Company or counterclaims or defenses against it. Company has received no notice of any default, breach, counterclaim or offset by any other party to any of the Contracts, nor do Company or Seller have any knowledge thereof. To Seller’s knowledge, all written Contracts will continue in full force and effect on the same terms as currently exists, notwithstanding the consummation of the sale contemplated by this Agreement.

(2) Subject to Exhibit 4.(d)(2), there are no assets of a material nature that are owned by Company other than those that are used in the Business. Subject to Exhibit 4.(d)(4), all customer lists, customer records, billing history, vendor records, regulatory records, employee records, payroll records, intellectual property rights records, environmental records, EPA registrations and sub registrations and related records, licenses, permits, software agreements, Contracts, real estate records, and manufacturing records related to the Business are located at 110 Hopkins, Randolph, Wisconsin.

(e) Condition of Assets. To Seller’s knowledge and except as disclosed in Exhibit 4.(e), all properties utilized in the Business conform in all material respects with all health and safety rules and other rules and regulations. To Seller’s knowledge, all properties utilized in the Business, including all their components and parts, are ready for operation, and, taking into account their ages, are in normal operating condition and good order and repair. There are no conditions or events, except for normal wear and tear, proper use and the age of the properties, which would, to Seller’s knowledge, prevent their continued normal operation or would otherwise materially and adversely affect their operation or use by Buyer after the Closing as currently used by Company. The above notwithstanding, all representations and warranties of Seller in respect to environmental matters are limited exclusively to Section 4.(z).

(f) Intellectual Property. Company owns, or is licensed to use, or otherwise has the right to use all patents, trademarks, service marks, trade names, trade secrets, franchises, registrations, sub registrations and copyrights, and all applications for any of

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the foregoing, and all technology, know-how and processes necessary for the conduct of the Business as now conducted (collectively, “Proprietary Rights”). With respect to Company’s Proprietary Rights:

(1) All license, registration and sub registration arrangements relating in any manner to any of the Proprietary Rights (whether or not in writing) are set forth on Exhibit 4.(f)(1). Except as disclosed in Exhibit 4.(f)(1), Company is in compliance with and is not in default under any of such license, registration and sub registration agreements, and all other parties to any of such agreements are, to Seller’s knowledge, in material compliance with and are not in default under any of such agreements.

(2) Exhibit 4.(f)(2) sets forth a complete list of all patents, trademarks, service marks, and copyrights used by Company in the conduct of the Business that are currently registered in any jurisdiction. To Seller’s knowledge, Company has good and marketable title to all such assets free and clear of all liens, charges and encumbrances (except for such license agreements listed in Exhibit 4.(f)(1). All filing or maintenance fees that are required to maintain such registrations that are due and payable as of the date of this Agreement have been paid and all associated maintenance filings have been made.

(3) Exhibit 4.(f)(3) sets forth a complete list of all unregistered trademarks, service marks, and trade names used by Company in the conduct of the Business. To Seller’s knowledge, Company has good and marketable title to all such assets free and clear of all liens, charges and encumbrances (except for such license agreements listed in Exhibit 4.(f)(1)).

(4) [Intentionally omitted.]

(5) Exhibit 4.(f)(5) sets forth a complete list of all software that Company has had written or developed by any person or entity not an employee of Company, lists the current owner of the copyright interest in such software, and if Company is the current owner, lists the date of the written assignment of the copyright interest to Company. Exhibit 4.(f)(5) sets forth a complete list of all other software used in the Business, but excluding “shrink wrapped software”;

(6) Company, except as disclosed in Exhibit 4.(f)(6), has not intentionally infringed, misappropriated, or otherwise used in an unauthorized manner the proprietary rights (including but not limited to the patent, trade secret, trademark, trade dress, or copyright rights) of any third party.

(7) Company has not granted or committed to grant any rights in Company’s Proprietary Rights of any nature whatsoever to any third party except as disclosed in Exhibit 4.(f)(7);

(8) Except as disclosed in Exhibit 4.(f)(8), no claim has been asserted against Company by any person or entity (i) to the effect that any action by Company infringes on the intangible or intellectual property rights of any other person or entity; or

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(ii) that challenges or questions the right of Company to use any of the Proprietary Rights being used by it; or (iii) which asserts the right of any third party to use such Proprietary Rights.

(9) Except as disclosed on Exhibit 4.(f)(9) and to Seller’s knowledge, there is no basis for any claim against Company that any of its operations, activities, products, or publications infringes on any patent, trademark, service mark, trade name, copyright, or other proprietary right of a third party, or that Company is illegally or in any unauthorized manner using the trade secrets or any proprietary rights of others.

(10) To Seller’s knowledge, no person or entity is infringing upon or has misappropriated any of Company’s Proprietary Rights. To Seller’s knowledge and except in respect to rights arising from commercially-available software and other such licensed rights, no person or entity other than Company has any right to use any Proprietary Rights.

(g) Customer Receivables. All Customer Receivables arose from the arms’ length sale of inventory and services in the ordinary course of business.

(h) Inventories. All inventories, including but not limited to merchandise, materials, component parts, manufacturing supplies, packaging, work in process and finished goods related to the Business (collectively, “Inventories”) listed in the Financial Statements and those on hand on the Closing Date are accurately and consistently valued at prices determined in accordance with the policy attached as Exhibit 4.(h). No Inventories have been consigned to others.

(i) Contracts. Exhibit 4.(d)(1)(iii) describes all Contracts to which Company is a party or to which it is bound and which arose out of, or relate to, the Business that extend beyond the Closing Date. Sellers have delivered true and correct copies of all such documents evidencing all written Contracts to Buyer. All such Contracts shall remain vested with Company without change or the occurrence of any default following the consummation of the transactions contemplated by this Agreement, except as described on Exhibit 4.(d)(1)(ii).

(j) Litigation. Except as disclosed in Exhibit 4.(j), there are no actions, suits, proceedings or investigations pending or threatened against Company at law or in equity, or before any federal, state or municipal or other governmental department, commission, board, agency or instrumentality, domestic or foreign, which involves a demand for any judgment or liability and which could materially affect the Business or the transactions contemplated by this Agreement. Company is not in default with respect to any order, writ, injunction or decree of any court of federal, state, or municipal or other governmental department, commission, board, agency or instrumentality, domestic or foreign, and that there are no such orders, decrees, injunctions or regulations issued specifically against Company which may affect, limit or control the method or manner of the Business or any transactions contemplated by this Agreement.

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(k) Compliance with Law. Company and Seller have, in all material respects, complied with all applicable laws, orders and regulations of any federal, state or municipal or other governmental department, commission, board, agency or instrumentality, domestic or foreign, having jurisdiction, including, but not limited to, laws, orders and regulations thereof relating to antitrust, wage, hours, collective bargaining, employee safety, or legislation pertaining to illegal bribes or kickbacks. The above notwithstanding, all representations and warranties of Seller in respect to environmental matters are limited exclusively to Section 4.(z).

(l) Taxes.

(1) Other than those Taxes (as defined below) specifically listed in Exhibit 4.(l), to Seller’s knowledge, Company has duly and timely filed all required declarations, returns, and reports with foreign, federal, state and local taxing authorities for which Company may be liable which are due and required to be filed by any applicable Tax law (“Returns”). To Seller’s knowledge, all Taxes, interest and penalties shown to be due and payable on the Returns have been paid or adequate provision for the payment thereof has been made. To the knowledge of Seller, there is no Tax audit or examination now pending or threatened with respect to Company.

(2) Company is a member of a consolidated tax group of which Seller is a member for federal income Tax purposes, and has filed income Tax Returns as a member of such tax group since September 1980.

(3) Except as set forth in Exhibit 4.(l), Company has not waived any statute of limitations in respect of any Taxes or agreed to any extension of time with respect to any tax assessment or deficiency. Company is not the beneficiary of any extension of time within which to file any Returns.

(4) No Company property is subject to a tax benefit transfer lease subject to the provisions of former Section 168(f)(8) of the Internal Revenue Code of 1986, as amended (“Code”), and no Company property is “tax-exempt use property” within the meaning of Section 168(h) of the Code.

(5) Neither Company nor Seller is a foreign person subject to withholding under Section 1445 of the Code and the regulations promulgated thereunder, and certification to that effect will be delivered to Buyer at the Closing.

(6) To Seller’s knowledge, Company has complied in all material respects with all applicable laws, rules and regulations relating to information reporting with respect to payments made to third parties and the withholding of and payment of withheld Taxes and has timely withheld from employee wages and other payments and paid over to the proper taxing authorities all amounts required to be so withheld and paid over for all periods under all applicable laws.

(7) Except as set forth in Exhibit 4.(l), there are no pending audits, judicial proceedings, or assessments or deficiencies asserted with respect to Taxes of

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Company. There is no material pending claim by any taxing authority in any jurisdiction in which Company does not pay Taxes or file Returns that Company is required to pay Taxes or file Returns.

(8) Company has not made an election under Section 341(f) of the Code or agreed to have Code Section 341(f)(2) (and corresponding state, local and foreign tax law provisions) apply to the disposition of any asset owned by it. Company has not been a personal holding company under Section 542 of the Code and has not participated in an international boycott within the meaning of Section 999 of the Code.

(9) Except as set forth in Exhibit 4.(l), Company has not agreed nor is required to make any adjustment under Section 481(a) or 263(A) of the Code or any comparable provision of state, local or foreign Tax laws for any reason.

(10) Company has made no payments, is not obligated to make any payments, and is not a party to any agreement that under any circumstances could obligate it to make any payments that will not be deductible under Section 280G of the Code.

(11) To Seller’s knowledge, the Company is in compliance with all material transfer pricing requirements in all jurisdictions in which they do business. To Seller’s knowledge, all compensation and other payments to employees, officers, and any other party (related or unrelated to Seller) are on an arm’s length basis. All intercompany loans are on an arm’s length basis.

(12) To Seller’s knowledge, the Company has no liability for any Taxes of any entity (other than Company) under Treasury Regulation 1.1502-6 (or any corresponding provision of state, local or foreign income tax law), as transferee or successor, by contract or otherwise.

(13) Neither Seller nor Company has taken any action that would prevent the acquisition of the Shares pursuant to the Agreement from being treated as a “qualified stock purchase” within the meaning of Section 338 of the Code.

(14) For purposes of this Agreement, the term “Tax” or “Taxes” shall mean all taxes, charges, fees, levies or other assessments, including, without limitation, income, gross receipts, capital, excise, stamp, property, sales, use, license, payroll, franchise, duties, business occupation, transfer and recording taxes, fees and charges, imposed by the United States, or any state, local or foreign authority, government or subdivision or agency thereof whether computed on a consolidated, unitary, combined, separate or any other basis; and such term shall include any and all interest, penalties and additions to tax, as well as any primary or secondary liability for taxes; the term “Pre-Closing Period” shall mean any taxable year that ends on or before the Closing Date, and, with respect to any taxable year beginning on or before and ending after the Closing Date, shall mean the portion of such taxable year ending on the Closing Date;

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the term “Income Taxes” shall mean all federal, state, local, foreign and other governmental Taxes imposed on or with respect to gross or net income.

(m) [Intentionally omitted.]

(n) Warranties and Product Liability. Seller has previously delivered to Buyer true, correct and complete copies of all outstanding standard product warranties and guaranties given by Company with respect to the Business and true, correct and compete copies of all other product warranties and guaranties now in effect with respect to products manufactured or sold by Company concerning the Business. Except as fully described in Exhibit 4.(n), there are no pending claims or actions against Company for breach of warranty or based upon product liability (whether based on tort or contract principles) and, to the best of Company’s and Seller’s knowledge, no such claims or actions are threatened. There are no defects in craftsmanship, design or engineering with respect to any product now or previously sold or manufactured by Company in the Business which may constitute the basis for any such claim against Company or Buyer.

(o) Contingent and Undisclosed Liabilities. Company has no debts, obligations or liabilities, whether known or unknown, fixed or contingent, of any nature whatsoever, relating to the Business not disclosed in writing to Buyer and neither Company nor Seller knows of no basis for any assertion of any claim against the Company or Buyer for any liability relating to the Business except (i) those disclosed in Exhibit 4.(o), (ii) liabilities arising out of post-Closing performance of executory contracts and (iii) Closing Liabilities (items (i) – (iii) collectively “Permitted Exceptions”). The foregoing representation shall not, however, be deemed to apply in respect to Company’s former facility in Ashland, Ohio (“Ashland Facility”) or any matters that are specifically addressed by another representation or warranty in this Section 4.

(p) Performance of Contracts. Except as disclosed in Exhibit 4.(p), Company is not in material default, nor has it materially breached any provision of, any contract, agreement, lease, obligation, license or permit (including the Contracts) with regard to all agreements relating to the Business to which it is a party or by which it is bound. Except as disclosed in Exhibit 4.(p), Company has fully performed each material term, condition and covenant of each such contract, agreement, lease, obligation, license or permit required to be performed on or prior to the date of this Agreement (including the Contracts). Except as disclosed in Exhibit 4.(p), Seller knows of no state of facts which, with or without the giving of notice or the passage of time, or both, would give rise to any default or revocation. Except as disclosed in Exhibit 4.(p), Company is neither subject to any penalty, discount or liquidated damages due to the delayed delivery of products, goods or services of the Business prior to Closing, nor has it received any notice that any of the Business’s customer relations are in jeopardy because of such late deliveries or otherwise.

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(q) Events Subsequent to February 23, 2003. Except as disclosed in Exhibit 4.(q), Company has not, since February 23, 2003:

(1) Incurred Liabilities. Incurred any obligation or liability (absolute, contingent, accrued or otherwise) or guaranteed or become a surety of any debt, except in connection with the performance of this Agreement or in the ordinary course of business;

(2) Discharged Debt. Discharged or satisfied any lien or encumbrance, pertaining to the Business, or paid or satisfied any obligation or liability (absolute, contingent, accrued or otherwise) other than liabilities incurred since such date in the ordinary course of business;

(3) Encumbrances. Mortgaged, pledged or subjected to any lien, charge, security interest or other encumbrance any of the properties utilized in the Business;

(4) Disposition of Assets. Sold or transferred any of the properties utilized in the Business, or canceled any debts or claims or waived any rights, except in the ordinary course of business;

(5) Sale of Business. Entered into any contract for the sale of the Business, or any part thereof, or for the purchase of another business, whether by merger, consolidation, exchange of capital stock or otherwise (other than negotiations with respect to this Agreement);

(6) Accounting Procedure. Materially changed or modified the accounting methods or practices relating to the Business; or

(7) Capital Expenditure. Purchased or made a commitment for the purchase of capital assets for use or employment in the Business, except in respect to the purchase of vehicles under certain operating leases at Buyer’s request.

(r) Customer Relations. To Seller’s knowledge, no state of facts exist nor have any communications been received, which would indicate that (i) any current customer of Company which accounted for more than 5% of Company’s sales relative to the Business for the most recent fiscal year ending, or (ii) any current supplier of Company (if such supplier could not be replaced by Company at comparable cost), will terminate its business relations with Company.

(s) Brokerage. Company has made no commitment for a brokerage fee in connection with the transactions contemplated by this Agreement. Seller agrees to hold Buyer harmless from all amounts owed by them for any brokerage fee.

(t) Books and Records. The books and accounts of Company relating to the Business are true, complete and correct in all material respects and fully and fairly reflect all of the transactions entered into by or on behalf of Company to which it is a party or by which it is affected.

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(u) Transactions with Affiliates. Except as set forth in Exhibit 4.(u), there are no agreements or transactions between Company and Seller or any of its affiliates, and all properties used in the Business are owned by Company.

(v) Binding effect. The Agreement and all documents executed in connection herewith have been duly executed and delivered by Seller and constitute the legal, valid and binding obligation of Seller, enforceable against it, in accordance with their respective terms, subject to the laws of general application affecting creditors’ rights.

(w) Authorization. The transactions contemplated by this Agreement have been duly authorized by the Board of Directors of Seller and on the Closing Date all of the necessary corporate action to authorize the consummation of this Agreement will have been taken. Seller has the power and authority to enter into this Agreement.

(x) Employee Relations. There are no employees of Company. Seller or Company has paid all wages and other compensation including but not limited to salary, bonus, holiday, sick pay, severance and all fringe benefits to which employees were entitled. Except as disclosed on Exhibit 4.(x):

(1) There is not now in existence or pending, nor has there been within the last three years, any grievance, arbitration, administrative hearing, claim of unfair labor practice, wrongful discharge, employment discrimination or sexual harassment or other employment dispute of any nature pending or, to the best of Company and Seller’s knowledge, threatened against Company.

(2) Company is, and during all applicable limitation periods has been, in material compliance with all applicable Federal, state, local or foreign laws, executive orders and regulations respecting employment and employment practice, terms and conditions of employment, occupational safety, wages and hours and there is no existing but unasserted claim for violation of any such laws, executive orders or regulations nor, to the best of Company and Seller’s knowledge, is there any factual basis upon which such a claim could be asserted.

(3) Company has no collective bargaining agreements and is not a party to any written or oral, express or implied, other contract, agreement or arrangement with any labor union or any other similar arrangement that is not terminable at will by Company without cost, liability or penalty.

(4) Company is not a party to any written or oral contract, agreement or arrangement with any of its present or former directors, officers, employees or agents with respect to length, duration or conditions of employment (or the termination thereof), salaries, bonuses, percentage compensation, deferred compensation or any other form of remuneration, or with respect to any matter not disclosed on Exhibit 4.(x).

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(5) There is no pending claim or, to the best of Company and Seller’s knowledge, threatened or existing but unasserted claim, against Company for violation of any contract, agreement or arrangement described in Exhibit 4.(x), nor to the best of Company and Seller’s knowledge, is there any factual basis upon which such a claim could be asserted.

(y) Employee Benefit Plans.

(1) Exhibit 4.(y) sets forth all “employee welfare benefit plans”, “employee pension benefit plans” and “multi-employer plans” within the respective meanings of Sections 3(1) and 3(2) and 3(37) of the Employment Retirement Income Security Act of 1974, as amended (“ERISA”), all incentive compensation plans, benefit plans for retired employees and all other employee benefit plans maintained by Company, or to which Company has made payments or contributions on behalf of its employees in the last three years, including, without limitation, all plans or contracts providing for bonuses, pensions, profit-sharing, stock options, stock purchase rights, deferred compensation, insurance and retirement benefits of any nature, whether formal or informal and whether legally binding or not (each such plan is referred to individually as a “Plan”, collectively as the “Plans”).

(2) To Seller’s knowledge, and except for any multi-employer plans, all Plans covered by the Code and ERISA are, and during all applicable limitation periods have been, in material compliance with the Code and ERISA, and all retirement or pension Plans and welfare benefit plans are qualified plans under the Code and each Plan is in compliance with the applicable provisions of the Code.

(3) There has been no transaction in connection with which Company or any of its directors, agents, officers, or employees could be subject to either a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code or any similar provision of foreign law.

(4) No Plan that is a qualified plan under Section 401(a) of the Code and no trust created thereunder has been terminated, partially terminated, curtailed, discontinued or merged into another plan or trust, except in compliance with notice and disclosure to the Internal Revenue Service (“IRS”), the Department of Labor and the Pension Benefit Guaranty Corporation (“PBGC”); and any such termination, partial termination, curtailment, discontinuance or merger has been accompanied by the issuance of a current favorable determination letter by the IRS and, where applicable, has been accompanied by plan termination proceedings with and through the PBGC.

(5) There are no payments that have become due from any Plan, the trusts created thereunder, or from Company that have not been paid through normal administrative procedures to the Plan participants or beneficiaries entitled thereto.

(6) Company has made full and timely payment of all required and discretionary contributions to the Plans.

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(7) There has been no “reportable event” as defined in Section 4043 of ERISA with respect to any Plan or any trust created thereunder.

(8) Except as set forth in Exhibit 4.(y), none of the Plans is a “defined benefit plan” within the meaning of Section 3(35) of ERISA and none is subject to Title IV of ERISA.

(9) Neither Company nor any of its directors, officers, employees, or agents has any outstanding liabilities of any nature to the PBGC, the IRS, or the Department of Labor in any way relating to the Plans, and all annual returns required to be filed with respect to the Plans have been timely filed.

(10) Company is not a party to or otherwise subject to any express or implied agreement or plan to provide health coverage or other benefits to retired or current employees except as set forth in Exhibit 4.(y).

(11) Company is not a party to or otherwise subject to any express or implied agreement or plan to provide any employee benefits, wages, deferred compensation, or any other form of benefit or remuneration beyond the date of Closing, except as listed in Exhibit 4.(y).

(12) With respect to all “covered employees” as defined in Section 4980B(f)(7) of the Code and Section 607(2) of ERISA and “qualified beneficiaries” as defined in Section 4980B(g)(1) of the Code and Section 607(3) of ERISA as of the Closing Date, Company has in all material respects complied with all applicable health care continuation requirements under the Code, ERISA and current Federal Regulations. Sellers agree to use their best efforts expeditiously to provide Buyer with all information that Buyer deems necessary to determine whether there have been any failures to comply with the continuation health care requirements of Section 4980B of the Code and Sections 601 through 609 of ERISA as such requirements have applied to any group health plan maintained by or for Company which failure occurred with respect to any covered employee or qualified beneficiary on or prior to the Closing Date. Sellers further agree to use their best efforts expeditiously to provide to Buyer all information that Buyer needs to correct any failures to comply with such continuation health care coverage requirements. For purposes of this provision, references to the Code and ERISA shall include references to any provisions of such statutes as they may be amended from time to time.

(z) [Intentionally Omitted.]

(aa) Bank Accounts. Attached as Exhibit 4.(aa) is a complete and accurate list of all banks, brokerage firm or other financial intermediaries or institutions in which Company has an account or safety deposit box (collectively, “Accounts”) and the names of all individuals authorized to draw on these Accounts, have access to the Accounts or otherwise give instructions regarding the Accounts.

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(bb) Insurance. Exhibit 4.(bb) lists all policies of liability, property damage, fire, workers’ compensation/employer’s liability, title or other forms of insurance owned or carried by Company (“Policies”) and insurance agents or brokers providing such insurance coverage. Company has received no notice from any insurance carrier regarding the possible cancellation of or premium increase with respect to the Policies. Company has no claim pending or anticipated against any of the insurance carriers under any of the Policies and there has been no actual or alleged occurrence of any kind that may give rise to any such claim.

(cc) Permits, Licenses and Registrations. Attached Exhibit 4.(cc)(1) is a complete and accurate list of all material licenses, permits, registrations, sub registrations, authorizations and approvals required by any Governmental Entities (as defined below) (collectively, “Licenses”) as are necessary to own, lease or operate Company’s Business. All of the Licenses are valid and in full force and effect. Except as disclosed in Exhibit 4.(cc)(2), Company is in material compliance with all obligations under all Licenses, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination of any Licenses. The term “Governmental Entities” shall mean any federal, state, local, foreign or supranational court, commission, governmental body, regulatory agency, authority or tribunal. Company and Seller have not received any notice asserting noncompliance with any applicable law, rule or regulation which if enforced would have a material adverse effect on the Business. No Governmental Entities have indicated any intention to initiate any investigation, inquiry or review involving Company, any Plans or any of Company’s rights or properties.

5. [Intentionally omitted.]

6. Representations and Warranties of Buyer. In order to induce Seller to enter into this Agreement, Buyer makes the following representations and warranties, each of which shall be deemed to be independent materially and relied upon by Seller, regardless of any investigation made by, or information known to, Seller:

(a) Organization. Buyer is, and on the Closing Date shall be, a corporation validly existing and in good standing under the laws of the State of Michigan.

(b) Authorization. The execution and delivery of this Agreement and the transactions contemplated by it have been duly authorized by the Board of Directors of Buyer and on the Closing Date all of the necessary corporate action to authorize the execution and delivery of this Agreement will have been taken.

(c) No Violation. The execution and delivery of this Agreement by the Buyer and the consummation of the transactions contemplated by it will not violate any law, order or regulation of any governmental authority, or corporate charter or bylaws of Buyer or constitute a default under any judgment, order or decree of any court or governmental agency or instrumentality, or conflict with or constitute a breach or default under any agreement to which Buyer is a party or by which it is bound.

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(d) Brokerage. Buyer has not made a commitment for a brokerage, finders or similar fees in connection with the transactions contemplated by this Agreement.

(e) Binding Effect. The Agreement and all related documents have been duly executed, made and delivered by Buyer and constitute legal, valid and binding obligations of Buyer enforceable against Buyer in accordance with their respective terms, subject to the laws of general application affecting creditors’ rights.

7. [Intentionally omitted.]

8. [Intentionally omitted.]

9. Survival of Representations and Indemnification.

(a) Survival of Representations. Buyer and Seller agree that all representations, warranties and indemnities (“Representations”) shall, subject to Section 12, survive the execution and delivery of this Agreement as follows. The Representations given in (i) Paragraphs 4.(a), (d)(1) (second sentence only), (f)(2) (second sentence only), (f)(3) (second sentence only), (v) and (w), Paragraphs 6.(a), (b) and (e) shall continue indefinitely; (ii) Paragraphs 4(l) and 12 (and indemnification relating to tax matters) shall continue until 90 days after expiration of the applicable statute of limitation; (iii) Paragraphs 4.(j), (k), (n) and (o) (other than those items that fall under (ii) above) shall expire upon the 5^th anniversary of the Closing Date; and (v) all others shall expire upon the 2^nd anniversary of the Closing Date. Any claim that an item breaches more than one Representation shall be deemed to fall into the category that has the longest survival period. This Paragraph 9 shall not apply to either party’s covenants set forth in this Agreement.

(b) Indemnification by Seller. Subject to the limitations set forth in Paragraphs 9.(b) and (f), Seller agrees to indemnify and hold Buyer harmless from and against any and all Damages (as defined in Paragraph 9.(d)) incurred by Buyer or which Buyer may sustain at any time arising out of or by reason of:

(1) The inaccuracy or breach of any of the Representations made by Seller in or pursuant to this Agreement (with Damages associated with such inaccuracy or breach to be determined without giving effect to any materiality qualification);

(2) Any failure by Seller to perform any obligation or comply with any covenant or agreement of Seller specified in this Agreement or in any other document executed at Closing;

(3) Any claim (i) for wages or fringe benefits made by any employee of Company with respect to the period ending immediately preceding the Closing Date (except as may be accrued as Closing Liabilities); (ii) for severance payments or other liabilities with respect to the termination of any employees of Company, provided such payments or liabilities arose from events occurring prior to the Closing Date; or (iii) with

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respect to the injury or death of any such employee arising out of events occurring prior to the Closing Date, subject to the parties’ obligations under Section 7;

(4) Any claim (including, without limitation, claims alleging death or injury to persons or damage to property), whether based in tort, contract or otherwise resulting from or caused by any product made, sold, or service provided, by Company prior to the Closing Date;

(5) Any Company debt, obligation or liability, whether known or unknown, fixed or contingent, of any nature whatsoever before the Closing Date, including but not limited to all taxes and environmental liabilities (including those relating to the Ashland Facility) of any nature, other than Permitted Exceptions;

(6) Any liability or obligation arising out of (A) the termination of employment of any employee by Company on or prior to the Closing, or (B) any Benefit Plan; or

(7) Any several liability of Company under Treasury Regulation Section 1.1502-6 promulgated by the Department of Treasury (“Treasury Regulation”) or any under any comparable or similar provision under state, local or foreign tax laws or regulations for any period ending on or before the Closing Date.

Seller agrees that it shall not have any claim or right of indemnification or contribution or any other right of recourse against Company with respect to Damages and Seller waives and releases any and all such claims and right. Seller further agrees that the indemnities set forth in clauses (3) through (7) above shall not be affected by disclosures which relate thereto and are contained in the Exhibits.

Seller and Buyer agree that its indemnity rights pursuant to this Paragraph 9.(b) shall be available if and only if the claim for indemnification is made in accordance with Paragraph 9.(e) within the following periods of the Closing Date:

Paragraphs (b)(3) and (6) within 2 years.

Paragraphs (b)(4) within five years.

Paragraph (b)(5) within five years, except all environmental matters.

Paragraphs (b)(5) as to environmental matters and (b)(7) within 90 days of the expiration of the statute of limitations.

Any claim that an item breaches more than one provision of Paragraph 9.(b) shall be deemed to fall into the preceding category that has the longest survival period.

(c) Indemnification by Buyer. Buyer agrees to defend, indemnify and hold harmless Seller from and against any Damages incurred by reason of any breach of any representation, warranty or covenant of Buyer. Buyer agrees to cause Company to defend, indemnify and hold harmless Seller from and against any Damages incurred by reason of (I) any liabilities arising from the operation or conduct of Company by Buyer

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subsequent to the Closing Date; and (II) any product shipped or manufactured by or any services provided by Company with respect to the Business subsequent to the Closing Date.

(d) Damages. An Indemnified Party (as defined in Paragraph 9.(e)(1)) shall be entitled to recover the full amount of any liabilities, losses, debts, obligations, monetary damages, fines, fees, penalties, deficiencies, expenses (including amounts paid in settlement, interest obligations, court costs, the reasonable costs of investigators, the reasonable fees and expenses of attorneys, accountants, financial advisors or other experts, and other reasonable expenses of litigation or administrative proceedings) incurred due to the matter for which indemnification is sought, but any recovery shall be net of any economic benefit to which the Indemnified Party (as defined in Paragraph 9.(e)(1)) is entitled due to such liabilities, expenses, costs or loss, including, without limitation, (i) any tax refund, reduction or benefit, (ii) any insurance proceeds to which the Indemnified Party (as defined in Paragraph 9.(e)(1))) is entitled and (iii) any warranty reimbursements (collectively, “Damages”).

(e) Assertion and Defense of Indemnification Claims.

(1) Assertion of Claim. Buyer or Seller under Paragraphs 9.(b) and (c), respectively (“Indemnified Party”), shall give notice to the other (“Indemnifying Party”) as soon as reasonably possible after the Indemnified Party has actual knowledge of any claim to which the Indemnifying Party has an obligation to indemnify, including the amount, if known, and shall promptly supply any other information in possession of the Indemnified Party supporting the claim. The omission by the Indemnified Party to give Notice as soon as reasonably possible will not relieve the Indemnifying Party of its indemnification obligations, unless the failure to give notice to the Indemnifying Party materially prejudices the Indemnifying Party or notice is given after the end of the survival period of the applicable representation of warranty or other basis of the claim. All indemnification claims must be asserted by giving notice within the survival period of the applicable representation or warranty or other basis for the claim.

(2) Defense of Undisputed Claim. The Indemnified Party will permit the Indemnifying Party (at its expense) to assume the defense of any third party claim in any litigation. The Indemnifying Party may settle or compromise any third party claim or litigation only with the consent of the Indemnified Party, which consent shall not be unreasonably withheld. The Indemnified Party shall have the right at all times to participate in the defense, settlement, negotiations or litigation relating to any third party claim or demand at its own expense. If the Indemnifying Party does not assume the defense of any matter which it has an obligation to indemnify, then the Indemnified Party shall have the right to defend any such third party claim or demand, and will be entitled to settle any such claim or demand in its discretion, all at the expense of the Indemnifying Party. In any event, the Indemnified Party will cooperate in the defense of any such action at the expense of the Indemnifying Party and the pertinent records of each party shall be available to the other with respect to the defense.

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(3) Defense of Disputed Claim. Should an Indemnifying Party provide Notice to the Indemnified Party regarding a claim or action by a third party for which the Indemnifying Party declines to assume the defense, the Indemnified Party shall give the Indemnifying Party a reasonable opportunity: (1) to conduct any proceedings or negotiations in connection therewith; (2) to take all other required steps or proceedings to settle or defend any third party action; or (3) to employ counsel to contest any third party claim or action in the name of the Indemnified Party or otherwise. If the Indemnifying Party desires to assume the defense of the third party claim or action, it shall promptly give Notice to the Indemnified Party. The Indemnifying Party and the Indemnified Party may participate in the defense at their own expense.

(f) Limitation on Recovery. Subject to the last sentence of this Paragraph 9.(f), anything in this Paragraph 9 to the contrary notwithstanding, there shall be no recovery under (I) Paragraph 9.(b) until, and only to the extent that, the total claims for indemnification under those provisions exceed one percent (1%) of the Purchase Price, as adjusted as provided in this Agreement; (II) Paragraph 9(b) to the extent the total recovery on all claims for indemnification under Paragraph 9.(b) exceeds the Purchase Price, as adjusted as provided in this Agreement; and (III) Paragraph 9(c) until and only to the extent that, the total claims for indemnification under those provisions exceed one percent (1%) of the Purchase Price, as adjusted as provided in this Agreement; provided however the forgoing clause (III) shall not apply towards obligations relating to the Closing Liabilities, nor shall the foregoing clauses (I) or (III) apply towards any obligation of the parties under Sections 2(e), 10, 11, or 12. The limitations provided in Paragraph 9.(f)(I) and (II) shall not apply to any claims of Buyer for indemnification that relate to environmental matters.

(g) [Intentionally Omitted.]

(h) Sole Remedy. Each party agrees that its sole remedy in respect to breach of any warranty or representation by the other party hereunder shall be limited to indemnification pursuant to this Section 9.

10. Covenants.

(a) Seller’s Covenants. Seller covenants and agrees with Buyer as follows:

(1) Confidentiality. For a period of five (5) years following the Closing, (i) Seller shall hold in confidence (unless and to the extent compelled to disclose by judicial or administrative process or, in the opinion of its counsel, by other legal requirements) all Company Information (as defined below) and will not disclose the same to any third party or use the same for any purpose referred to in and (ii) shall return all such Company Information to Company. The term “Company Information” shall mean all information concerning Company and its business and assets, including without limitation all information concerning Company’s products, product formulations, services, manufacturing and other processes, Proprietary Rights, technology, suppliers,

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customers, pricing policies and mark ups, except information (x) ascertainable or obtained from public information, or (y) which is or becomes known to the public, other than through a breach of this Agreement. Notwithstanding any provision contained herein, each party hereto (and each of their respective employees, representatives or other agents) may disclose to any and all persons, without limitations of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including opinions and other tax analyses) that are provided to the taxpayer relating to such tax treatment and tax structure.

(2) Covenant not to Compete. In furtherance of the sale to Buyer of the Shares and the business represented thereby, ConAgra Foods, Inc. and Seller each separately agree that for a period of five (5) years from the Closing Date, neither it nor any of its respective subsidiaries or affiliates (collectively, “CNC Parties”) shall, directly or indirectly, through equity ownership or otherwise, for themselves or any other person or entity, engage in the business of formulating, developing or manufacturing disinfectant products for use in dairy, poultry or other such livestock applications, or for other animal healthcare purposes, anywhere in the world; provided, however, that nothing herein shall be construed to prevent any CNC Parties from owning, as an investment, up to one percent (1%) of a class of equity securities issued by any competitor of Buyer or Company that is publicly traded and registered under Section 12 of the 1934 Act. It is further understood that Seller’s sodium chlorate product is not a part of the Business, and Seller therefore has the right to potentially manufacture, formulate, market and sell animal-feed products that contain sodium chlorate. In addition, the foregoing shall not prohibit the production of the “NFZ” product as defined in Paragraph 11.(o) solely for Buyer (or Company) pursuant to this Agreement, or the products required under the certain agreement with Merial Limited. The parties intend that the covenant contained in the preceding sentence shall be construed as a series of separate covenants, one for each county and city included within each such state and, except for geographic coverage, each such separate covenant shall be deemed identical. The parties agree that the mutual covenants contained within this Agreement provide adequate consideration for the enforcement of this Paragraph.

(3) Remedies. Seller agrees that the restrictive covenants in Paragraphs 10.(a)(2) are reasonable in their geographic scope and duration and may be enforced by specific performance or otherwise. Seller shall not raise any issue of reasonableness as a defense in any proceeding to enforce any of such covenants. In the event that, notwithstanding the foregoing, a covenant included in Paragraph 10.(a)(2) of this Agreement shall be deemed by any court to be unreasonably broad or violative of applicable law in any respect, it shall be modified in order that it be reasonable or not violative of applicable law, as the case may be, and shall be enforced accordingly. Without limitation of the foregoing, in the event that, notwithstanding the foregoing, in any judicial proceeding, a court shall refuse to enforce any of the covenants contained in Paragraph 10.(a)(2) or any of the separate covenants deemed included in Paragraph 10.(a)(2), then the unenforceable covenant shall be deemed eliminated from the provisions of this Agreement for the purpose of those

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proceedings to the extent necessary to permit such covenant and the remaining separate covenants of Paragraph 10(a)(2) to be enforced.

11. Transactions Subsequent to Closing.

(a) Further Assurances. Buyer and Seller agree that, from time to time after Closing, and upon request, they shall execute, acknowledge and deliver such other instruments as reasonably may be required to more effectively transfer and vest in Buyer the Shares or to otherwise carry out the terms and conditions of this Agreement.

(b) Purchase of Certain Assets. For a period of up to 10 days after Closing, Seller agrees to give Company the right to purchase certain assets, as set forth on Exhibit 11(b), on or before October 10, 2003; provided, however, it is understood that certain of those assets will be used for production purposes by Seller or its affiliates for approximately one (1) month after Closing to fulfill its obligations pursuant to Paragraph 11.(o).

(c) Disassembly and Transportation of Certain Equipment. Seller agrees disassemble and prepare for shipment any equipment a the Ashland, Ohio facility purchased by Buyer. Buyer shall be responsible for all transportation costs associated with the shipment of this equipment. Seller expects to complete the disassembly of this equipment no later than January 31, 2004.

(d) Transition Services. Seller agrees to perform and cause other affiliates to provide the services for the period of time after Closing and for the cost identified on Exhibit 11.(d). (“Transition Services”) for Buyer and Company

(e) Financial Information. The Seller recognizes the legitimate needs of the Buyer to obtain audited financial information to meet the Buyer’s obligations for filings with the Securities and Exchange Commission. The Seller will use all commercially-reasonable efforts to provide the audit firm of the Buyer’s choice access to personnel, systems and information needed for the audit firm to complete their procedures in a cost effective manner.

(f) Insurance Matters. Buyer acknowledges that Company is covered by certain insurance policies and insurable risk programs made available through Seller as described in Exhibit 4.(bb). As of Closing, all such coverages shall be discontinued and Buyer shall cause Company to implement its own insurance policies and programs as of the Closing Date.

(g) Trade Names. Seller specifically and exclusively retains, and Buyer acknowledges that it will not acquire, and that Company does not own, any right, title or interest to the trade names “ConAgra”, “United Agri Products”, “UAP”, “Loveland”, or any derivations thereof, or any logos or trademarks related thereto. Buyer agrees that promptly after Closing it will cause Company to discontinue the use of any stationery, letterhead, preprinted forms, advertising or other form of media that uses or references any such names or logos and take all such other action as may be necessary to dissociate

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Seller with the operations of Company after Closing; provided that Buyer will be permitted to exhaust all of the packaging materials on hand at Closing containing these names and marks for a period not to exceed twelve months after Closing.

(h) Record Retention. Except as set forth below, Buyer will cause all books and records of Company relating to pre-Closing matters (collectively, the “Records”) to be retained for seven years after the date such document was created (“Retention Term”). During the Retention Term, Buyer shall allow Seller and its representatives access to inspect or copy the Records during normal business hours. In the event Buyer intends to destroy any Records at the end of such Retention Term, Buyer shall first notify Seller at which time Seller shall have the right to remove the Records at its own cost.

(i) Company Information. Buyer shall cooperate with and provide to Seller any such records and information as may be needed after Closing for purposes of finalizing its accounting records of, and responding to any audits or other government inquiries relating to, Company. Such information shall be furnished to Seller without charge, except that Seller will reimburse Buyer for any out-of-pocket copy costs.

(j) [Intentionally omitted.]

(k) [Intentionally Omitted.]

(l) Discontinuation of Seller Services. The parties agree that the services provided to Company by Seller as set forth on Exhibit 4.(u) will, subject to Section 11.(d), be discontinued as of Closing. The bank accounts set forth in Exhibit 4.(aa) will be retained by Seller.

(m) Registration Assistance. Seller has prepared and filed the necessary transfers of product registrations to Company at the U.S. federal level, Seller is in the process of, and will continue, renewing product registrations at the appropriate U.S. state level for calendar year 2004. For those registrations which have been recently transferred by Seller to Company at the federal level, Seller will continue such filings during the appropriate discontinuance periods dictated by applicable state law. For those registrations which were not transferred by Seller prior to Closing, Seller will complete the renewal process at each state for calendar year 2004. Except for Seller’s filing obligations described above, Buyer shall be responsible for any and all other product registration filings. It is agreed that any and all federal and state registration fees paid in respect to calendar year 2004 will be included as a prepaid item and therefore included as a Closing Liability. For all of the above filings made by Seller after Closing, Buyer agrees to reimburse Seller for the state registration fees, as well as any and all related out-of-pocket costs paid to third parties, on a monthly basis. Seller agrees to provide Buyer in advance of any payment for which it is responsible with a copy of the applicable invoice, if any, description of the registration to which the payment relates and any other information relevant to permit Buyer to approve or disapprove of the payment. Seller also agrees to initiate, at its own expense, transfers of any Business-related product registrations in respect of Canada and Australia.

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(n) Receivables. Seller shall retain all trade receivables (other than Customer Receivables) that relate to Business sales transactions that arose prior to Closing. Buyer shall be entitled to the Customer Receivables and all trade receivables relating to Business sales transactions that arise after Closing. Accordingly, (i) if Buyer receives any remittance from any account debtor with respect to any receivables retained by Seller, Buyer shall endorse such remittance to the order of Seller and forward it to Seller immediately upon receipt thereof, and (ii) if Seller receives any remittance from any account debtor with respect to any receivables of Buyer, Seller shall endorse such remittance to the order of Buyer and forward it to Buyer immediately upon receipt thereof. Buyer and Seller agree to provide each other all information, reports and reconciliations, including, without limitation, reports detailing such collections, reasonably requested and to take all such other action reasonably necessary to ensure the purposes of this Section.

(o) NFZ Product Supply.

(1) Production and Supply of Products. Company currently produces a certain nitrofurozone product labeled NFZ Wound Dressing and bearing FDA registration number NADA 140-851 (SKU #144-955) (the “Product”). After Closing, Seller agrees to produce and supply the Product to Buyer (or Company) in accordance with the formulas, production and packaging specifications heretofore utilized by Company in producing the Product.

(2) Orders. Buyer has heretofore provided Seller with its estimated purchase requirements of the Product, consisting of 1,050 cases (10 batches). It is understood, however, that minor adjustments may be made to such purchase requirements upon reasonable prior notice to Seller. In no event, however, shall Seller have any responsibility for production of the Product beyond December 31, 2003.

(3) Delivery. All Product shall be delivered F.O.B. Seller’s production facility in Ashland, Ohio. Buyer shall bear all responsibility for arranging for the transport of the Product from the Ashland Facility on a weekly basis, and the cost of all such transportation services shall be paid by Buyer. Seller shall load the Product on Buyer’s trucks at the Ashland Facility. Title and risk of loss to the Product shall pass to the Buyer upon such loading.

(4) Price. Buyer shall pay Seller for the Product at a price equal to Seller’s standard cost of production, as historically determined by Company in producing the Product.

(5) Payment. Each Monday, Seller shall invoice Buyer for all Product shipped during the prior week of this Agreement, indicating on each such weekly invoice (i) a description and quantity of all Product delivered, and (ii) the total price for such Product. Buyer shall make payment to Seller immediately following receipt of each such invoice.

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(6) Packaging; Raw Materials. Upon termination of production, Buyer shall purchase at Seller’s cost, any and all remaining raw materials and packaging that were acquired by Seller in order to meet Buyer’s estimated requirements of Product as of November 10, 2003.

(p) Rebates. Set forth at Exhibit 4.(d)(1)(iii) are written descriptions of customer incentive and rebate programs in effect with respect to certain customers of the Business. Seller has paid or will pay as of the Closing Date, all rebates or incentives accrued or earned with respect to any and all such programs through the Closing Date. Buyer shall pay any and all rebates or incentives accrued or earned with respect to such programs after the Closing. Certain of the programs contain annual sales incentives which are not ascertainable until the end of February 2004 (“Annual Sales Incentives”). Buyer and Seller hereby agree to estimate the Annual Sales Incentive due each applicable customer based upon sales made during the nine (9) month period of February 2003 through November 2003. The estimated Annual Sales Incentive for each such customer shall be based on estimated sales equal to the product of (x) the customer’s sales during the period of February 2003 through November 2003, multiplied by (y) 1-1/3. Seller shall pay to each customer 75% of such estimated Annual Sales Incentive and Buyer shall pay the balance, if any, owed to each customer regardless of whether the balance plus the amount paid by Seller exceeds such estimated amount. After Closing, Seller shall have no further liability to any customer for Annual Sales Incentive payments or other obligations relating to the customer programs except as provided in this Agreement.

Certain customers of the Business participate in “cooperative advertising programs” which involve the payment of certain advertising costs. The amounts available under those programs cannot be determined at Closing. Consequently, Buyer and Seller agree to prepare after Closing, but prior to Settlement, a good faith estimate of payments owed to such customers through Closing. Seller shall be responsible for paying such estimated amounts to Company, and Company shall be responsible for all other payment obligations (if any) owed under such advertising programs.

After Closing, and except as provided above, Seller shall have no further liability to any customer for Annual Sales Incentive payments or any other obligations relating to the customer programs except as provided in this Section 11(p).

(q) Merial Agreement. It is understood that a certain Settlement Agreement and Mutual Release dated October 23, 2003, with Merial Limited has been assigned by Company to Loveland Products, Inc. Seller shall cause Loveland Products, Inc. to be fully responsible for the completion of such Agreement without liability to Company.

12. Tax Matters.

(a) Tax Sharing Agreements. Seller will cause any tax sharing or other allocation agreement with respect to Taxes between Company and Seller (or any affiliates) to be terminated as of the Closing Date so that they have no further effect for any taxable period. This Paragraph 12 and Paragraph 4(l) above shall control all of the parties’

24

respective obligations for Taxes affecting Company and supersedes any and all prior agreements, contracts or understandings regarding Company’s Taxes. Paragraph 12 shall control any conflict between Paragraphs 12 and 4.(l).

(b) Section 338(h)(10) Election. Seller agrees that it will, and with Buyer’s cooperation will cause Company to, make an election or join in making an election under Section 338(h)(10) of the Code in order to treat the sale of the Shares as a sale of all the assets of Company for federal income Tax purposes and an election under the statutes of such states and localities as permit an equivalent election to treat the sale of the Shares as a sale of all its assets as provided by such states’ and localities’ applicable laws for state and local income Tax purposes. Seller agrees that it will, and with Buyer’s cooperation will cause Company to, comply with all of the requirements and conditions of Section 338(h)(10) of the Code and the treasury regulations thereunder and all other applicable Code sections and treasury regulations relating thereto, including without limitation, the execution and timely filing of Form 8023 entitled “Elections Under Section 338 for Corporations Making Qualified Stock Purchases” or any successor form of similar import, and any forms required to effectuate similar elections for state or local income Tax purposes. The parties agree that the Purchase Price shall be allocated to the assets of Company in accordance with Exhibit 12(b)(2) hereto. Each party covenants to report a gain, loss or cost basis, as the case may be, and to act and file Tax Returns (including but not limited to, IRS Form 8883) in a manner consistent with Exhibit 12(b)(2) for federal, state and local Income Tax purposes. Neither Seller, Buyer nor Company shall take any position (whether in audits, Tax Returns or otherwise) that is inconsistent with Exhibit 12(b)(2) unless required to do so by a final, non-appealable decision of a court of competent jurisdiction. Buyer will promptly notify Seller in the event the IRS challenges, or threatens to challenge, such allocations. Buyer shall cause Company after the Closing Date to cooperate with Seller in the timely and proper filing of all applicable federal, state and local elections required to be filed under this Section.

(c) Tax Returns.

(1) Income Tax Returns. Buyer shall cause Company to consent to join, for all Tax periods of Company ending on or before the Closing Date for which Company is eligible to do so, in any consolidated or combined federal, state or local Income Tax Returns of Seller. Seller shall cause to be prepared and timely filed any and all consolidated or combined federal, state or local Income Tax Returns as well as any separate federal, state, local or foreign Income Tax Returns for Company for all Tax periods of Company ending on or before the Closing Date. Buyer shall cause to be prepared and timely filed any and all Income Tax Returns of Company for Tax periods of Company ending after the Closing Date. Seller shall have the right to approve all Income Tax Returns of Company that are prepared by or at the direction of Buyer that covers a tax period beginning before and ending after the Closing Date, which approval shall not be unreasonably withheld or delayed. The parties agree to cooperate with each other and each other’s affiliates in the preparation of the portions of such Returns pertaining to Company. The parties shall be entitled to utilize the services of the personnel who would have been responsible for preparing such Returns as they relate

25

to Company, to the extent reasonably necessary in preparing said Returns on a timely basis. The parties shall also provide each other with full access to applicable records to enable the preparation of said Returns. Seller shall pay on a timely basis all income Taxes in respect to the Pre-Closing Period shown as due on such Returns. Buyer shall pay on a timely basis all income Taxes in respect to tax periods of Company ending after the Closing Date. The parties shall make available to each other copies of the portions of such Returns relating to Company for taxable years ending before or including the Closing Date.

(2) Non-Income Tax Returns. Seller shall cause to be prepared and timely filed all non-Income Tax Returns of Company for all Tax periods ending on or before the Closing Date. Buyer shall cause Company to prepare and timely file all non-Income Tax Returns for all Tax periods ending after the Closing Date. Seller shall have the right to approve all non-Income Tax Returns of Company that are prepared by or at the direction of Buyer that covers a tax period beginning before and ending after the Closing Date, which approval shall not be unreasonably withheld or delayed. The parties agree to cooperate with each other and their affiliates in the preparation of such non-Income Tax Returns. The parties shall be entitled to utilize the services of the personnel who would have been responsible for preparing such Returns to the extent reasonably necessary in preparing said Returns on a timely basis. The parties shall also provide each other with full access to applicable records to enable the preparation of such Returns. Except to the extent accrued as a current non-Income Tax liability in Company’s books and records as of the Closing Date, Seller shall pay on a timely basis all non-Income Taxes in respect of the Pre-Closing Period as shown as due on such returns; provided, that Buyer shall pay or cause Company to pay on a timely basis the portion of such Pre-Closing Period non-Income Taxes which are part of the Closing Liabilities. Buyer shall cause Company to pay all non-Income Taxes to which such non-Income Tax Returns relate for all periods after the Closing Date. The parties shall make available to each other copies of non-Income Tax Returns of the Companies covering Tax periods ending before or including the Closing Date.

(3) Allocations. Seller shall include the income and deductions of Company (including any deferred income triggered into income by Treas. Reg. Section 1.1502-13 and Treas. Reg. Section 1.1502-19, or equivalent provisions of state or local law) on Seller’s consolidated or combined federal, state or local Income Tax Returns for all periods through the Closing Date and shall pay any Taxes attributable thereto. In any case where any Tax Return covers a Tax period beginning before and ending after the Closing Date, the amount of Taxes allocable between Seller on one hand, and Buyer and Company on the other hand, shall be determined by closing the books of Company as of and including the Closing Date. If the allocation of an item of income, deduction, loss or credit cannot be specifically allocated based on such closing of the books, such item shall be allocated on a daily basis. In case of the Taxes attributable to the Pre-Closing Period, Seller shall be liable for such Taxes except to the extent such Taxes are part of the Closing Liabilities. In case of (i) the Taxes attributable to the portion of such Tax period following the Closing Date, and (ii) the portion of Taxes part of the Closing Liabilities, Buyer and Company shall, as to Seller, be jointly and severally liable for such Taxes.

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(d) Allocation of Income Tax Benefits.

(1) If any adjustments shall be made to any federal, state, local or foreign Income Tax returns relating to Company or Seller for the Pre-Closing Period which result in any Income Tax detriment to Seller or any affiliate of Seller with respect to such period and any Income Tax benefit to Company, Buyer or any affiliate of Buyer for any Tax period ending after the Closing Date (to the extent such Income Tax benefit is realized after the Closing Date), Seller shall be entitled to the benefit of such Income Tax benefit to the extent of the related Income Tax detriment (except to the extent accrued as a Prepaid), and Buyer shall or shall cause Company to pay to Seller such amount at such times or times as and to the extent that Company, Buyer or any affiliate of Buyer actually realizes such benefit through a refund of Income Tax or reduction in the amount of Income Tax which any of them would otherwise have had to pay if such adjustment had not been made.

(2) If any adjustment shall be made to any federal, state, local or foreign Income Tax returns relating to Company for any Tax period ending after the Pre-Closing Period which result in any Income Tax detriment to Buyer, Company or any affiliate of Buyer with respect to such period and any Income Tax benefit to Seller or any affiliate of Seller for any Pre-Closing Period, Buyer shall be entitled to the benefit of such Income Tax benefits to the extent of the related Income Tax detriment. Seller shall pay to Buyer such amount (except to the extent part of the Closing Liabilities) at such time or times as and to the extent that Seller or any affiliate of Seller actually realizes such benefit through a refund of Income Tax or reduction in the amount of Income Taxes which Seller or any such affiliate would otherwise have had to pay if such adjustment had not been made.

(3) Notwithstanding anything contained in Paragraph 9(f) to the contrary, payments pursuant to Paragraphs 12 shall not be limited by any indemnity baskets, caps or other limitations whatsoever.

(e) Seller’s Tax Indemnity. From and after the Closing Date, Seller shall pay for, and shall indemnify, defend and hold harmless each of the Buyer and Company from and against, any liability for Taxes imposed on Company in respect to the Pre-Closing Period to the extent not included in the Closing Liabilities.

(f) Refunds. Any refunds of Taxes received by Company attributable to the Pre-Closing Period shall be for the benefit of Seller except to the extent included in the Prepaids. Buyer shall or shall cause Company to pay to Seller or its order any such refunds within ten (10) days of receipt thereof.

(g) Cooperation. After the Closing Date, Seller and Buyer shall make available to the other and to Company, free of charge, cost or expense and as reasonably requested, all information, records or documents reasonably relevant to Tax liabilities or potential Tax liabilities of either Company or its predecessors for all periods prior to or including the Closing Date (or any matter, transaction or event occurring on or before the Closing Date that may affect such a Tax liability) and each such person shall preserve all

27

such available information, records and documents until the expiration of any applicable statute of limitations or extensions thereof. Each such person shall provide, free of charge, cost or expense, the other(s) and the pertinent Tax Authority with all available information and documentation reasonably necessary to comply with all Tax audit information requests or inquiries made of any such periods relevant to such Tax liabilities or potential Tax liabilities (or any matter, transaction or event occurring on or before the Closing date that reasonably may affect such a Tax liability). Any information obtained pursuant to this Section 12 shall be held in strict confidence and shall be used solely in connection with the reason for which it was requested.

(h) Tax Audits. Buyer shall promptly notify Seller in writing upon receipt by Buyer, any affiliate of Buyer, or Company, and Seller shall promptly notify Buyer in writing upon receipt by Seller or any affiliate of Seller, of notice of any pending or threatened federal, state, local or foreign Tax audits, examinations or assessments of Company (other than consolidated or combined Income Tax audits, examinations or assessments), so long as any Taxable year within the Pre-Closing Period remains open. Seller shall have the sole right to represent Company and its predecessors in any Tax audit or administrative or court proceeding relating to the Pre-Closing Period, and to employ counsel of its choice at its expense; provided Seller shall not agree or consent to any proposed adjustment that adversely affects Company or Seller after the Closing without Buyer’s prior written consent, which shall not be unreasonably withheld or delayed.

(i) Buyer’s Indemnity. From and after the Closing Date, Buyer and Company shall jointly and severally indemnify, defend and hold Seller and its affiliates harmless from and against, any liability for all Taxes for Tax periods (or portion thereof) of Company which occur or begin after the Closing Date, including, without limitation, any such liability with respect to operations of Company and dispositions of assets by Company after the Closing Date, and Buyer shall pay, indemnify and hold Seller and its affiliates harmless from and against any liability resulting directly or indirectly from any breach or nonfulfillment of any agreement or covenants on the part of Buyer or Company under this Section 12.

13. Notices. All notices and other communications required or permitted under this Agreement shall be given if mailed by registered or certified mail, postage prepaid, or otherwise delivered by hand or messenger, overnight courier, fax or telegram to the parties at the following addresses, or to such other changed address as such party may have given by notice:

Buyer: Neogen Corporation 620 Lesher Place Lansing, Michigan 48912 Attn: President Facsimile: 517-372-0108

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And a copy to:	Foster Zack & Lowe, P.C. Attention: Richard C. Lowe 2125 University Park Drive, Suite 250 Lansing, MI 48933 Facsimile: 517-706-5801
Seller:	United Agri Products, Inc. 7251 West 4th Street Greeley, CO 80634 Attn: President Facsimile: (970) 339-2633
And a copy to:	ConAgra Foods, Inc. One ConAgra Drive Omaha, NE 68102 Attn: Corporate Controller Facsimile: (402) 595-4611

14. Applicable Law. This Agreement shall be interpreted and the rights and liabilities of the parties shall be determined in accordance with the laws of the State of Michigan.

15. Integration. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter, and supersedes all prior discussions, representations, amendments or understandings of every kind and nature between them.

16. Amendments. Any amendment, alteration, supplement, modification or waiver shall be invalid unless it is in writing and signed by both parties.

17. Severability. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without the provision.

18. Assignability. This Agreement may be assigned by Buyer without the prior written consent of Seller; provided, Buyer shall continue to be liable for the performance of all obligations pursuant to the Agreement. Seller may not assign this Agreement without the prior written consent of Buyer.

19. Benefit. This Agreement shall be binding upon and inure to the benefit of Buyer and Sellers and their respective successors and permitted assigns.

20. Captions. Captions contained in this Agreement are inserted for reference and in no way define, limit, extend or describe the Agreement or the intent of any provision in this Agreement.

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21. Pronouns. All pronouns and any variation thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the parties may require.

22. Exhibits. The parties agree that the Exhibits attached to this Agreement shall be treated for all purposes as part of this Agreement.

23. Prevailing Party. The prevailing party in any litigation or arbitration should the parties mutually agree to arbitrate involving this Agreement (other than those matters governed by Paragraph 9, which, for the avoidance of doubt, contains its own provision for fees and expenses) shall be entitled to recover, in addition to any other relief obtained, the costs and expenses, including reasonable attorney’s fees and expenses, incurred by the prevailing party.

24. Construction of Agreement. The parties agree that this Agreement has been jointly drafted and that neither party may assert an ambiguity in the construction of this Agreement against another party because the other party allegedly drafted the allegedly ambiguous provision.

25. Interpretation. Whenever the words “include,” “includes,” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The term “Seller’s knowledge” shall mean the actual knowledge of those individuals set forth on Exhibit 25. All terms defined in this Agreement shall have the defined meanings contained herein when used in any certificate or other document made or delivered pursuant to the Agreement unless otherwise defined in the Agreement. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. Any agreement, instrument, or statute defined or referred to in this Agreement or in any agreement or instrument that is referred to in the Agreement means such agreement, instrument, or statute as from time to time amended, qualified or supplemented, including (in the case of agreements and instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and all attachments thereto and instruments incorporated therein. References to any person or entity are also to its permitted successors and assigns.

26. Terms of Sale. Buyer acknowledges that except as otherwise specifically set forth in Section 4 of this Agreement, the Shares are being sold to Buyer on an “as-is, where-is” basis without any representations or warranties, express or implied. Except to the extent and as expressly covered by a representation or warranty made by Seller and contained in Section 4 of this Agreement Without limiting the generality of the foregoing, Buyer agrees that Seller has made no representation or warranty to Buyer with respect to, and shall have no liability for:

(a) Any projections, forecasts, estimates, plans or budgets of future revenues, expenses or expenditures, future results of operations (or any component thereof),

30

future cash flows (or any component thereof) or future financial condition (or any component thereof) of the Business or Company, or the future business, operations or affairs of Company or the Business, heretofore or hereafter delivered to or made available to Buyer or its counsel, accountants, advisors, lenders, representatives or affiliates; or

(b) Any other information, statement or documents heretofore or hereafter delivered to or made available to Buyer or its counsel, accountants, advisors, lenders, representatives or affiliates with respect to the Business.

27. Defined Terms. Defined terms used in this Agreement have the meanings ascribed to them in the paragraphs contained in attached Exhibit 27.

28. Expenses. Each party shall pay its own costs associated with the preparation and negotiation of this Agreement.

[The rest of this page was intentionally left blank.]

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The parties have executed this Agreement as of the date first above written.

SELLER:
United Agri Products, Inc.
By:
	,
Its

BUYER:
Neogen Corporation
By:
	James L. Herbert, its President

For valuable consideration, ConAgra Foods, Inc. (“CAF”) agrees to (i) be bound by Paragraphs 10(a)(2), 13 – 25 and 27 and (ii) absolutely and unconditionally guaranties to Buyer the prompt and timely collection of any and all monetary obligations of Seller pursuant to Section 9(b) of the Agreement. These obligations of CAF are continuing and irrevocable and, provided CAF has consented in writing thereto, will not be discharged or affected by any new agreements, extensions, amendments, renewals or waivers of default by Seller with Buyer or any other adjustments or compromises between Seller and Buyer or any other circumstance (other than complete satisfaction of the obligations of Seller) that might constitute a legal or equitable discharge of a guarantor or surety. The above notwithstanding, CAF shall not be construed as a guarantor, or as indemnifying Buyer or Company in respect to any breach, of the performance by Seller of any post-Closing covenant herein, specifically including those set forth in Sections 10 and 11.

ConAgra Foods, Inc.
By:
	,
Its

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Index of Exhibits

Exhibit 2.(c)(1)	Target Receivables
Exhibit 2.(c)(2)	Target Inventories
Exhibit 2.(c)(3)	Target Prepaids
Exhibit 4.(a)(1)	Foreign Qualification; Directors and Officers
Exhibit 4.(c)	Financial Statements and Preparation Information
Exhibit 4.(d)(1)(i)	List of Non-Real Estate Assets
Exhibit 4.(d)(1)(ii)	Exceptions to Good Title to Assets and Free and Clear of Liens
Exhibit 4.(d)(1)(iii)	List of Contracts
Exhibit 4.(d)(2)	Assets Not Used in the Business
Exhibit 4.(e)	Non-Compliance
Exhibit 4.(f)(1)	Technology Licenses and Registrations
Exhibit 4.(f)(2)	Patents, Trademarks, Service Marks and Copyrights
Exhibit 4.(f)(3)	Unregistered Trademarks, Service Marks, Copyrights and Trade Names
Exhibit 4.(f)(5)	Software Developed by Seller; Software Used in Business
Exhibit 4.(f)(6)	Unauthorized Use of Intellectual Property of Others
Exhibit 4.(f)(7)	Grant of Rights
Exhibit 4.(f)(8)	Claims of Infringement of Intellectual Property of Others
Exhibit 4.(f)(9)	Claims of Unauthorized Use of Intellectual Property of Others
Exhibit 4.(h)	Inventory Valuation Policy
Exhibit 4.(j)	Litigation
Exhibit 4.(l)	Tax Related Disclosures
Exhibit 4.(n)	Liability Claims

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Exhibit 4.(o)	Undisclosed and Contingent Liabilities
Exhibit 4.(p)	Non-Performance of Contracts
Exhibit 4.(q)	Changes Since February 23, 2003
Exhibit 4.(u)	Transactions with Affiliates
Exhibit 4.(x)	Employment Agreements
Exhibit 4.(y)	Employee Benefit Plans and Related Matters
Exhibit 4.(z)	Environmental Matters
Exhibit 4.(z)(13)(G)	Company’s Prior and Current Locations
Exhibit 4.(aa)	Bank Accounts
Exhibit 4.(bb)	Insurance Information
Exhibit 4.(cc)(1)	List of Licenses and Permits
Exhibit 4.(cc)(2)	Non-Compliance with Licenses and Permits
Exhibit 11.(b)	Option Assets
Exhibit 11.(d)	Transition Services
Exhibit 11.(o)	Supply Agreement
Exhibit 12.(b)(2)	Section 338(h)(10) Allocation of Purchase Price
Exhibit 25	Individuals with Seller’s Knowledge
Exhibit 27	Index of Defined Terms

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EX-31.1

EXHIBIT 31.1

13 a. – 14(a) CERTIFICATION OF CEO

NEOGEN CORPORATION AND SUBSIDIARIES

CEO CERTIFICATION

I, James L. Herbert, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Neogen Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; and

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting.

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 14, 2004

/s/    JAMES L. HERBERT        

James L. Herbert

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

13 a. – 14(a) CERTIFICATION OF CFO

NEOGEN CORPORATION AND SUBSIDIARIES

CFO CERTIFICATION

I, Richard R. Current, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Neogen Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; and

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting.

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 14, 2004

/s/    RICHARD R. CURRENT        

Richard R. Current

Chief Financial Officer

EX-32

EXHIBIT 32

18 U.S.C. SECTION 1350 CERTIFICATION

NEOGEN CORPORATION

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this quarterly report on Form 10-Q of Neogen Corporation (the “Company”) for the period ended November 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James L. Herbert, as Chief Executive Officer of the Company and I, Richard R. Current, as Chief Financial Officer, hereby certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) This Report fully complies with the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934; and

(2) Information contained in this Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: January 14, 2004

/s/    JAMES L. HERBERT        

James L. Herbert

Chief Executive Officer

/s/    RICHARD R. CURRENT        

Richard R. Current

Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.