ASSET PURCHASE AGREEMENT





                                 By and Among





                           AFFINITY INDUSTRIES INC.



                   LYDALL INDUSTRIAL THERMAL SOLUTIONS, INC.





                                      and





                      LYDALL FILTRATION/SEPARATION, INC.





                         Dated as of October 19, 2001



--------------------------------------------------------------------------------

<PAGE>



                           ASSET PURCHASE AGREEMENT

                           ------------------------





  This Agreement (the "Agreement") made and entered into this 19th day of

October, 2001 by and among Lydall Industrial Thermal Solutions, Inc., a Delaware

corporation having a principal office in Green Island, New York ("Lydall"),

Lydall Filtration/Separation, Inc., a Connecticut corporation having a principal

office in Green Island, New York  ("Lydall F/S") and Affinity Industries Inc., a

New Hampshire corporation having a principal office in Ossipee, New Hampshire,

(together with its wholly owned Subsidiaries, as defined in Section 1.07,

hereinafter referred to as "Affinity").



                             W I T N E S S E T H:



  WHEREAS, Affinity is the owner and operator of: (i) a manufacturing operation

which fabricates and manufactures chillers and heat exchangers at leased

facilities located at 775 Route 16, Ossipee, New Hampshire 03864 and (ii) sales

offices in leased space in Austin, Texas; San Carlos, California and Singapore

(together referred to hereinafter as "Operation"); and



  WHEREAS, Affinity desires to sell and transfer to Lydall, and Lydall desires

to purchase and assume from Affinity, certain assets, certain liabilities and

the business



                                       1

<PAGE>



as a going concern of Affinity, upon the terms and subject to the conditions set

forth in this Agreement; and



     WHEREAS, Affinity is willing to enter into this Agreement only if Lydall

F/S guarantees the payment obligations of Lydall hereunder;



     NOW, THEREFORE, in consideration of the mutual promises hereinafter set

forth, the parties agree as follows:



     1.  PURCHASE AND SALE OF ASSETS.  At the Closing (as defined in Article 5),

and upon the basis of the representations, warranties, covenants and agreements

in this Agreement, Affinity shall sell, transfer, assign, convey and deliver to

Lydall, and Lydall shall purchase on the terms and conditions set forth in this

Agreement, all of Affinity's right, title and interest in and to the Assets.

The "Assets" shall mean all real, personal and mixed properties, which are owned

by Affinity on the Closing Date (as defined in Article 5) or used exclusively in

the business of Affinity except as set forth in Article 2 below, including,

without limitation:



     1.01    Lease of Real Property.  All of Affinity's right, title and

             ----------------------

interest in and to the leases set forth in Schedule 1.01, of the land and

buildings, improvements and fixtures located at Ossipee, New Hampshire; Austin,

Texas; San Carlos, California and Singapore in which facilities Affinity or its

Subsidiaries conduct the Operation (the "Leases").  (The real property,

improvements and fixtures which are the subject of the Leases are referred to as

the "Real Property".  The real property, improvements and fixtures which are the

subject of the Lease of the Ossipee, New Hampshire property are referred to as

the "Ossipee Property".);



                                       2

<PAGE>



     1.02    Equipment and Personalty.  All of the fixtures, machinery,

             ------------------------

equipment, tools, motor vehicles, spare parts, furniture, appliances, supplies,

computer hardware, software and all other items of tangible personal property

owned by Affinity or used in the Operation on the Closing Date (the "Equipment

and Personalty") including without limitation all items set forth in a list and

description of such Equipment and Personalty, attached as Schedule 1.02;



     1.03    Contract Rights and Leases.  All rights, benefits and obligations

             --------------------------

of Affinity under the contracts, purchase orders, agreements and leases in the

ordinary course (in addition to the Leases) in effect on the Closing Date

entered into by, or for the benefit of, Affinity relating to the Operation,

including without limitation those listed on Schedule 1.03 attached;



     1.04    Prepaid Expenses and Deferred Costs.  Except as provided by

             -----------------------------------

Sections 2.03 and 2.04, all rights to prepaid expenses and deferred costs of

Affinity relating exclusively to the Operation and existing on the Closing Date,

including without limitation all items set forth on a list and description of

such prepaid expenses and deferred costs, as of the date specified being

attached as Schedule 1.04 (collectively, the "Prepaid Expenses");



     1.05    Inventory.  All of the raw materials, work in process, finished

             ---------

goods, spare parts and supplies inventory used by Affinity in connection with

the Operation on the Closing Date, excluding obsolete, defective or damaged

items to be identified by Lydall within 60 days after Closing, of which $150,000

worth, at Affinity's standard cost, will be subsequently removed by Affinity

(the "Inventory");



                                       3

<PAGE>



     1.06    Accounts Receivable.   All of the accounts receivable of Affinity

             -------------------

attributable to the Operation of its business as of the Closing Date (the

"Accounts Receivable"). Affinity shall furnish within 5 days prior to the

Closing Date a list of the Accounts Receivable anticipated as of the Closing

Date, by customer and by aging category as follows: current, 1 to 30 days past

due, 31 to 60 days past due, 61 to 90 days past due and greater than 90 days

past due, which list is attached hereto as Schedule 1.06.  For purposes hereof,

Accounts Receivable shall include (without limitation) all invoices for shipped

but unbilled goods and rendered but unbilled services as of the Closing;



     1.07    Membership Interests and Assets of Subsidiaries.  All membership

             -----------------------------------------------

interests of, and assets held by all subsidiaries of Affinity, including but not

limited to, JDF Ventures, LLC and Affinity Industries Asia, LLC (sometimes

referred to unofficially as "Affinity Industries Asia PTE, Ltd.") (collectively

referred to herein as the "Subsidiaries");



     1.08    Records.  All books, accounts, documents and records (whether in

             -------

printed or electronic form) of Affinity relating exclusively to the Operation,

except as otherwise provided in Section 2.02;



     1.09    Goodwill.  The goodwill of the business of Affinity, including its

             --------

going concern value;



     1.10    Intangible Property.   All inventions, patents, formulae, know-how,

             -------------------

patent applications, copyrights, trade secrets, trademarks, trade names,

drawings, designs, blue prints, computer programs, software and manufacturing

records owned



                                       4

<PAGE>



by Affinity, relating to products presently produced or in development or used

in the Operation. Affinity shall execute assignments to Lydall for the same,

except as set forth in Schedule 1.10;



     1.11    Customer and Supplier List.  All customer and supplier lists,

             --------------------------

including a complete and accurate list of: a) all of  the customers of Affinity

and b) suppliers of Affinity who supply critical components and/or are sole

source suppliers and c) all other suppliers of Affinity with accounts exceeding

$5,000, which lists shall include such accounts shipped to in 1998, 1999 and

2000 by dollar amount, plus all new customers and suppliers added in 2001; a

copy of which is attached as Schedule 1.11; and



     1.12    Affinity Names.  Any right to use the name "Affinity Industries

             --------------

Inc." and any derivation and all related names, marks, logos and abbreviations.



     2.      ASSETS TO BE RETAINED BY AFFINITY.  Notwithstanding the foregoing,

the Assets to be sold, transferred, assigned or conveyed to Lydall shall not

include the following:



     2.01    Cash.  All of Affinity's cash on hand and all cash contained in any

             ----

account of Affinity;



     2.02    Certain Records. Affinity's check registers, canceled checks,

             ---------------

income tax returns and such business records as relate to the assets and

obligations of Affinity retained by Affinity, provided, however, that Affinity

shall preserve and maintain such check registers, canceled checks, and business

records for a period of seven (7) years from and after the Closing Date, or

until all open tax years are closed, whichever



                                       5

<PAGE>



is later, and permit Lydall reasonable access to the same and not destroy or

discard the same without Lydall's consent within that period;



     2.03    Insurance Policies.  All insurance policies of Affinity and rights

             ------------------

in connection including, without limitation, any prepaid premiums;



     2.04    Tax Credits and Refunds.  Local, state and federal income and

             -----------------------

franchise tax credits, refunds and prepayments arising with respect to the

property, business or income of Affinity prior to the Closing, whether or not in

being or known at the Closing Date;

Home        Intelligence        Services        Subscriptions        News        About Us

Contact Us       Terms of Use       Resend Documents       Shopping Cart

Copyright © 2008 The Consus Group LLC