{"id":43662,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/stock-purchase-agreement-digital-angel-corp-and-allflex-usa.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"stock-purchase-agreement-digital-angel-corp-and-allflex-usa","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/stock-purchase-agreement-digital-angel-corp-and-allflex-usa.html","title":{"rendered":"Stock Purchase Agreement – Digital Angel Corp. and Allflex USA, Inc."},"content":{"rendered":"

STOCK PURCHASE AGREEMENT<\/strong><\/p>\n

\n

by and between<\/p>\n

\n

ALLFLEX USA, INC.<\/p>\n

\n

and<\/p>\n

\n

DIGITAL ANGEL CORPORATION<\/p>\n

\n

dated as of<\/p>\n

\n

May 6, 2011<\/p>\n

\n

\n

TABLE OF CONTENTS<\/strong><\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

ARTICLE I. PURCHASE AND SALE OF SHARES<\/p>\n<\/td>\n

\n

1<\/p>\n<\/td>\n<\/tr>\n

\n

Section 1.1.<\/p>\n<\/td>\n

\n

Sale and Transfer of Shares<\/p>\n<\/td>\n

\n

1<\/p>\n<\/td>\n<\/tr>\n

\n

Section 1.2.<\/p>\n<\/td>\n

\n

Consideration; Purchase Price<\/p>\n<\/td>\n

\n

1<\/p>\n<\/td>\n<\/tr>\n

\n

ARTICLE II. THE CLOSING<\/p>\n<\/td>\n

\n

2<\/p>\n<\/td>\n<\/tr>\n

\n

Section 2.1.<\/p>\n<\/td>\n

\n

The Closing<\/p>\n<\/td>\n

\n

2<\/p>\n<\/td>\n<\/tr>\n

\n

Section 2.2.<\/p>\n<\/td>\n

\n

Post-Closing Adjustment<\/p>\n<\/td>\n

\n

3<\/p>\n<\/td>\n<\/tr>\n

\n

ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER<\/p>\n<\/td>\n

\n

4<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.1.<\/p>\n<\/td>\n

\n

Organization<\/p>\n<\/td>\n

\n

4<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.2.<\/p>\n<\/td>\n

\n

Authorization<\/p>\n<\/td>\n

\n

5<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.3.<\/p>\n<\/td>\n

\n

Execution; Validity of Agreement<\/p>\n<\/td>\n

\n

5<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.4.<\/p>\n<\/td>\n

\n

Consents and Approvals; No Violations<\/p>\n<\/td>\n

\n

5<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.5.<\/p>\n<\/td>\n

\n

Ownership of Shares<\/p>\n<\/td>\n

\n

6<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.6.<\/p>\n<\/td>\n

\n

Capitalization<\/p>\n<\/td>\n

\n

6<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.7.<\/p>\n<\/td>\n

\n

Subsidiaries<\/p>\n<\/td>\n

\n

6<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.8.<\/p>\n<\/td>\n

\n

Financial Statements<\/p>\n<\/td>\n

\n

7<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.9.<\/p>\n<\/td>\n

\n

Absence of Certain Changes<\/p>\n<\/td>\n

\n

8<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.10.<\/p>\n<\/td>\n

\n

Property and Assets<\/p>\n<\/td>\n

\n

8<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.11.<\/p>\n<\/td>\n

\n

Leases, Contracts and Commitments<\/p>\n<\/td>\n

\n

9<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.12.<\/p>\n<\/td>\n

\n

SEC Documents<\/p>\n<\/td>\n

\n

9<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.13.<\/p>\n<\/td>\n

\n

Ethical Practices<\/p>\n<\/td>\n

\n

10<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.14.<\/p>\n<\/td>\n

\n

Insurance<\/p>\n<\/td>\n

\n

10<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.15.<\/p>\n<\/td>\n

\n

Litigation; Other Proceedings<\/p>\n<\/td>\n

\n

10<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.16.<\/p>\n<\/td>\n

\n

Environmental and Health and Safety Matters<\/p>\n<\/td>\n

\n

10<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.17.<\/p>\n<\/td>\n

\n

Compliance with Laws<\/p>\n<\/td>\n

\n

11<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.18.<\/p>\n<\/td>\n

\n

Employee Benefit Employee Plans<\/p>\n<\/td>\n

\n

12<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.19.<\/p>\n<\/td>\n

\n

Tax Matters<\/p>\n<\/td>\n

\n

14<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.20.<\/p>\n<\/td>\n

\n

Intellectual Property<\/p>\n<\/td>\n

\n

16<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.21.<\/p>\n<\/td>\n

\n

Labor Matters<\/p>\n<\/td>\n

\n

18<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.22.<\/p>\n<\/td>\n

\n

Affiliate Transactions<\/p>\n<\/td>\n

\n

19<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.23.<\/p>\n<\/td>\n

\n

Information Supplied<\/p>\n<\/td>\n

\n

19<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.24.<\/p>\n<\/td>\n

\n

Condition of Physical Assets<\/p>\n<\/td>\n

\n

19<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.25.<\/p>\n<\/td>\n

\n

Accounts Receivable<\/p>\n<\/td>\n

\n

19<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.26.<\/p>\n<\/td>\n

\n

Inventory<\/p>\n<\/td>\n

\n

19<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.27.<\/p>\n<\/td>\n

\n

Material Customers and Suppliers<\/p>\n<\/td>\n

\n

19<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.28.<\/p>\n<\/td>\n

\n

Product Warranties<\/p>\n<\/td>\n

\n

20<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.29.<\/p>\n<\/td>\n

\n

Information Technology.<\/p>\n<\/td>\n

\n

20<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.30.<\/p>\n<\/td>\n

\n

Brokers or Finders<\/p>\n<\/td>\n

\n

20<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.31.<\/p>\n<\/td>\n

\n

No Retained Assets<\/p>\n<\/td>\n

\n

20<\/p>\n<\/td>\n<\/tr>\n

\n

ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER<\/p>\n<\/td>\n

\n

21<\/p>\n<\/td>\n<\/tr>\n

\n

Section 4.1.<\/p>\n<\/td>\n

\n

Organization<\/p>\n<\/td>\n

\n

21<\/p>\n<\/td>\n<\/tr>\n

\n

Section 4.2.<\/p>\n<\/td>\n

\n

Authorization; Validity of Agreement<\/p>\n<\/td>\n

\n

21<\/p>\n<\/td>\n<\/tr>\n

\n

Section 4.3.<\/p>\n<\/td>\n

\n

Consents and Approvals; No Violations<\/p>\n<\/td>\n

\n

21<\/p>\n<\/td>\n<\/tr>\n

\n

Section 4.4.<\/p>\n<\/td>\n

\n

Litigation<\/p>\n<\/td>\n

\n

21<\/p>\n<\/td>\n<\/tr>\n

\n

Section 4.5.<\/p>\n<\/td>\n

\n

Brokers or Finders<\/p>\n<\/td>\n

\n

21<\/p>\n<\/td>\n<\/tr>\n

\n

Section 4.6.<\/p>\n<\/td>\n

\n

Financing<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n

\n

Section 4.7.<\/p>\n<\/td>\n

\n

Purchaser Status<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n

\n

Section 4.8.<\/p>\n<\/td>\n

\n

Experience of Such Purchaser<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n

\n

Section 4.9.<\/p>\n<\/td>\n

\n

Company and Subsidiary Information<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

i<\/p>\n

\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

Section 4.10.<\/p>\n<\/td>\n

\n

No Other Representations and Warranties<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n

\n

ARTICLE V. COVENANTS OF SELLER AND PURCHASER<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.1.<\/p>\n<\/td>\n

\n

Interim Operations of the Company<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.2.<\/p>\n<\/td>\n

\n

Access<\/p>\n<\/td>\n

\n

24<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.3.<\/p>\n<\/td>\n

\n

Preparation of the Proxy Statement; Stockholders Meeting<\/p>\n<\/td>\n

\n

25<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.4.<\/p>\n<\/td>\n

\n

No Solicitation<\/p>\n<\/td>\n

\n

26<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.5.<\/p>\n<\/td>\n

\n

Pre-Closing Transfers<\/p>\n<\/td>\n

\n

28<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.6.<\/p>\n<\/td>\n

\n

Indebtedness<\/p>\n<\/td>\n

\n

28<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.7.<\/p>\n<\/td>\n

\n

Efforts and Actions to Cause Closing to Occur<\/p>\n<\/td>\n

\n

29<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.8.<\/p>\n<\/td>\n

\n

Tax Matters<\/p>\n<\/td>\n

\n

30<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.9.<\/p>\n<\/td>\n

\n

Publicity<\/p>\n<\/td>\n

\n

34<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.10.<\/p>\n<\/td>\n

\n

Transition Services<\/p>\n<\/td>\n

\n

34<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.11.<\/p>\n<\/td>\n

\n

Intercompany Arrangements<\/p>\n<\/td>\n

\n

34<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.12.<\/p>\n<\/td>\n

\n

Books and Records<\/p>\n<\/td>\n

\n

34<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.13.<\/p>\n<\/td>\n

\n

Insurance Policies<\/p>\n<\/td>\n

\n

35<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.14.<\/p>\n<\/td>\n

\n

Bank Accounts<\/p>\n<\/td>\n

\n

35<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.15.<\/p>\n<\/td>\n

\n

Notices of Certain Events<\/p>\n<\/td>\n

\n

35<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.16.<\/p>\n<\/td>\n

\n

Further Assurances<\/p>\n<\/td>\n

\n

36<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.17.<\/p>\n<\/td>\n

\n

Confidentiality<\/p>\n<\/td>\n

\n

36<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.18.<\/p>\n<\/td>\n

\n

Non-Competition; Non-Solicitation<\/p>\n<\/td>\n

\n

36<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.19.<\/p>\n<\/td>\n

\n

Non-Compete Agreement<\/p>\n<\/td>\n

\n

38<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.20.<\/p>\n<\/td>\n

\n

Qualified Employee Plans<\/p>\n<\/td>\n

\n

38<\/p>\n<\/td>\n<\/tr>\n

\n

Section 5.21.<\/p>\n<\/td>\n

\n

Use of Digital Angel Name<\/p>\n<\/td>\n

\n

38<\/p>\n<\/td>\n<\/tr>\n

\n

ARTICLE VI. CONDITIONS<\/p>\n<\/td>\n

\n

39<\/p>\n<\/td>\n<\/tr>\n

\n

Section 6.1.<\/p>\n<\/td>\n

\n

Conditions to Each Party153s Obligation to Effect the Closing<\/p>\n<\/td>\n

\n

39<\/p>\n<\/td>\n<\/tr>\n

\n

Section 6.2.<\/p>\n<\/td>\n

\n

Conditions to Obligations of Purchaser to Effect the Closing<\/p>\n<\/td>\n

\n

39<\/p>\n<\/td>\n<\/tr>\n

\n

Section 6.3.<\/p>\n<\/td>\n

\n

Conditions to Obligations of Seller to Effect the Closing<\/p>\n<\/td>\n

\n

40<\/p>\n<\/td>\n<\/tr>\n

\n

ARTICLE VII. TERMINATION<\/p>\n<\/td>\n

\n

40<\/p>\n<\/td>\n<\/tr>\n

\n

Section 7.1.<\/p>\n<\/td>\n

\n

Termination<\/p>\n<\/td>\n

\n

40<\/p>\n<\/td>\n<\/tr>\n

\n

Section 7.2.<\/p>\n<\/td>\n

\n

Effect of Termination<\/p>\n<\/td>\n

\n

41<\/p>\n<\/td>\n<\/tr>\n

\n

Section 7.3.<\/p>\n<\/td>\n

\n

Termination Fees<\/p>\n<\/td>\n

\n

42<\/p>\n<\/td>\n<\/tr>\n

\n

ARTICLE VIII. INDEMNIFICATION<\/p>\n<\/td>\n

\n

42<\/p>\n<\/td>\n<\/tr>\n

\n

Section 8.1.<\/p>\n<\/td>\n

\n

Indemnification; Remedies<\/p>\n<\/td>\n

\n

42<\/p>\n<\/td>\n<\/tr>\n

\n

Section 8.2.<\/p>\n<\/td>\n

\n

Notice of Claim; Defense<\/p>\n<\/td>\n

\n

44<\/p>\n<\/td>\n<\/tr>\n

\n

Section 8.3.<\/p>\n<\/td>\n

\n

Reductions for Insurance Proceeds and Other Recoveries<\/p>\n<\/td>\n

\n

44<\/p>\n<\/td>\n<\/tr>\n

\n

Section 8.4.<\/p>\n<\/td>\n

\n

Rights Under Escrow Agreement<\/p>\n<\/td>\n

\n

45<\/p>\n<\/td>\n<\/tr>\n

\n

Section 8.5.<\/p>\n<\/td>\n

\n

Tax Treatment of Payments<\/p>\n<\/td>\n

\n

45<\/p>\n<\/td>\n<\/tr>\n

\n

Section 8.6.<\/p>\n<\/td>\n

\n

Change in Control Payments<\/p>\n<\/td>\n

\n

45<\/p>\n<\/td>\n<\/tr>\n

\n

Section 8.7.<\/p>\n<\/td>\n

\n

Payment of Direct Claims<\/p>\n<\/td>\n

\n

45<\/p>\n<\/td>\n<\/tr>\n

\n

ARTICLE IX. DEFINITIONS AND INTERPRETATION<\/p>\n<\/td>\n

\n

45<\/p>\n<\/td>\n<\/tr>\n

\n

Section 9.1.<\/p>\n<\/td>\n

\n

Definitions<\/p>\n<\/td>\n

\n

45<\/p>\n<\/td>\n<\/tr>\n

\n

Section 9.2.<\/p>\n<\/td>\n

\n

Interpretation<\/p>\n<\/td>\n

\n

53<\/p>\n<\/td>\n<\/tr>\n

\n

ARTICLE X. MISCELLANEOUS<\/p>\n<\/td>\n

\n

54<\/p>\n<\/td>\n<\/tr>\n

\n

Section 10.1.<\/p>\n<\/td>\n

\n

Fees and Expenses<\/p>\n<\/td>\n

\n

54<\/p>\n<\/td>\n<\/tr>\n

\n

Section 10.2.<\/p>\n<\/td>\n

\n

Amendment and Modification<\/p>\n<\/td>\n

\n

54<\/p>\n<\/td>\n<\/tr>\n

\n

Section 10.3.<\/p>\n<\/td>\n

\n

Notices<\/p>\n<\/td>\n

\n

54<\/p>\n<\/td>\n<\/tr>\n

\n

Section 10.4.<\/p>\n<\/td>\n

\n

Counterparts; Facsimile<\/p>\n<\/td>\n

\n

55<\/p>\n<\/td>\n<\/tr>\n

\n

Section 10.5.<\/p>\n<\/td>\n

\n

Entire Agreement; No Third Party Beneficiaries<\/p>\n<\/td>\n

\n

55<\/p>\n<\/td>\n<\/tr>\n

\n

Section 10.6.<\/p>\n<\/td>\n

\n

Severability<\/p>\n<\/td>\n

\n

55<\/p>\n<\/td>\n<\/tr>\n

\n

Section 10.7.<\/p>\n<\/td>\n

\n

Governing Law<\/p>\n<\/td>\n

\n

56<\/p>\n<\/td>\n<\/tr>\n

\n

Section 10.8.<\/p>\n<\/td>\n

\n

Jurisdiction<\/p>\n<\/td>\n

\n

56<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

ii<\/p>\n

\n

\n\n\n\n\n\n\n\n
\n

Section 10.9.<\/p>\n<\/td>\n

\n

Waiver of Trial by Jury.<\/p>\n<\/td>\n

\n

56<\/p>\n<\/td>\n<\/tr>\n

\n

Section 10.10.<\/p>\n<\/td>\n

\n

Time of Essence<\/p>\n<\/td>\n

\n

56<\/p>\n<\/td>\n<\/tr>\n

\n

Section 10.11.<\/p>\n<\/td>\n

\n

Extension; Waiver<\/p>\n<\/td>\n

\n

56<\/p>\n<\/td>\n<\/tr>\n

\n

Section 10.12.<\/p>\n<\/td>\n

\n

Assignment<\/p>\n<\/td>\n

\n

56<\/p>\n<\/td>\n<\/tr>\n

\n

Section 10.13.<\/p>\n<\/td>\n

\n

Specific Performance<\/p>\n<\/td>\n

\n

57<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

iii<\/p>\n

\n

\n

STOCK PURCHASE AGREEMENT<\/strong><\/p>\n

\n

This Stock Purchase Agreement, dated as of May 6, 2011, is by and between
\nAllflex USA, Inc., a Delaware corporation (“Purchaser<\/u>“), and Digital
\nAngel Corporation, a Delaware corporation (“Seller<\/u>“). Certain capitalized
\nterms used in this Agreement have the meanings assigned to them in Article
\nIX<\/u>.<\/p>\n<\/p>\n

WHEREAS, Seller is the holder of all the capital stock of Destron Fearing
\nCorporation, a Delaware corporation (the “Company<\/u>“);<\/p>\n<\/p>\n

WHEREAS, the Company and its Subsidiaries are engaged in the business of
\ndeveloping, manufacturing, distributing and selling RFID and visual
\nidentification tags, readers and related software for animals, including cattle,
\nlivestock, swine, horses, sheep, goats, deer, llamas, companion animals and fish
\n(the “Business<\/u>“);<\/p>\n<\/p>\n

WHEREAS, Seller wishes to sell, and Purchaser wishes to acquire, all of the
\noutstanding capital stock of the Company, which consists exclusively of the
\nShares, upon the terms and subject to the conditions set forth herein;<\/p>\n<\/p>\n

WHEREAS, Seller does not intend to transfer to Purchaser, and Purchaser does
\nnot intend to be the transferee of or otherwise assume, any liabilities or
\nassets related to the Seller153s Emergency Locator Business conducted by Seller153s
\nSubsidiary Signature Industries Limited; and<\/p>\n<\/p>\n

WHEREAS, the Board of Directors of Seller has approved and adopted, and
\nrecommends that the stockholders of Seller approve and adopt this Agreement and
\nthe transactions contemplated hereby, upon the terms and subject to the
\nconditions set forth herein.<\/p>\n<\/p>\n

NOW, THEREFORE, in consideration of the foregoing and the mutual
\nrepresentations, warranties, covenants and agreements set forth herein and for
\nother good and valuable consideration, the receipt and sufficiency of which are
\nhereby acknowledged, and intending to be legally bound hereby, the parties
\nhereto agree as follows:<\/p>\n<\/p>\n

ARTICLE I.<\/strong><\/p>\n

\n

PURCHASE AND SALE OF SHARES<\/strong><\/p>\n

\n

Section 1.1. Sale and Transfer of Shares<\/u>. Subject to the terms and
\nconditions of this Agreement, at the Closing, Seller shall sell, convey, assign,
\ntransfer and deliver to Purchaser all of the issued and outstanding Shares, free
\nand clear of all Encumbrances, and Purchaser shall, or shall cause its
\ndesignated Subsidiary to, purchase, acquire and accept the Shares from Seller.\n<\/p>\n<\/p>\n

Section 1.2. Consideration; Purchase Price<\/u>.<\/p>\n<\/p>\n

(a) As consideration for the Shares and the covenants and undertakings
\ncontained herein, Purchaser shall pay to Seller, in the manner described herein,
\nan amount equal to: (i) $25,000,000 less<\/em> the Assumed Debt; as adjusted
\nin accordance with Section 2.2<\/u> (the “Purchase Price<\/u>“).<\/p>\n<\/p>\n

(b) At least five Business Days prior to the anticipated Closing Date, Seller
\nshall deliver to Purchaser Seller153s good faith estimate, together with
\nreasonable supporting detail, of the Assumed Debt (the “Estimated Assumed
\nDebt<\/u>“).<\/p>\n<\/p>\n

1<\/p>\n

\n

\n

ARTICLE II.<\/strong><\/p>\n

\n

THE CLOSING<\/strong><\/p>\n

\n

Section 2.1. The Closing<\/u>.<\/p>\n<\/p>\n

(a) The closing of the sale and transfer of the Shares by Seller to Purchaser
\n(the “Closing<\/u>“) shall take place at the offices of Winthrop &
\nWeinstine, P.A. at 10:00 am (Minneapolis time), not later than four Business
\nDays following the satisfaction or waiver of all conditions set forth in
\nArticle VI<\/u> (other than those conditions that are to be satisfied at
\nClosing, but subject to the waiver or fulfillment of those conditions), unless
\nanother date or place is agreed in writing by each of the parties hereto.<\/p>\n<\/p>\n

(b) At the Closing, Purchaser shall:<\/p>\n<\/p>\n

(i) deliver an amount in immediately available funds equal to $25,000,000
\nless<\/em> the Estimated Assumed Debt, less<\/em> the sum of (A) the
\nEscrow Amount, (B) the Adjustment Escrow Amount and (C) the Payoff Amount, by
\nwire transfer of immediately available U.S. funds to an account(s) specified in
\nwriting by Seller at least four Business Days prior to the Closing Date;<\/p>\n<\/p>\n

(ii) deposit a cash amount equal to $2,500,000 (the “Escrow Amount<\/u>“)
\nin an escrow account (the “Escrow Account<\/u>“), to be retained and
\ndistributed by Wells Fargo Bank, National Association (or such other Person as
\nis mutually agreed by Seller and Purchaser), as escrow agent (the “Escrow
\nAgent<\/u>“), pursuant to the terms of this Agreement and an escrow agreement
\nsubstantially in the form attached hereto as Exhibit A<\/u> (the “Escrow
\nAgreement<\/u>“);<\/p>\n<\/p>\n

(iii) deposit a cash amount equal to $1,200,000 (the “Adjustment Escrow
\nAmount<\/u>“) in an escrow account (the “Adjustment Escrow Account<\/u>“), to
\nbe retained and distributed by the Escrow Agent, pursuant to the terms of this
\nAgreement and the Escrow Agreement;<\/p>\n<\/p>\n

(iv) deliver an amount equal to each of the payoff amounts indicated on the
\npayoff letters delivered by Seller in accordance with Section 5.6<\/u> by wire
\ntransfer of immediately available funds (or as otherwise specified in such
\npayoff letters) to the creditors identified in such payoff letters, the
\naggregate of such amounts not to exceed the Payoff Amount;<\/p>\n<\/p>\n

(v) deliver to Seller the certificate specified in Section 6.3(c)<\/u>;<\/p>\n<\/p>\n

(vi) deliver to Seller a copy of the Escrow Agreement duly executed by
\nPurchaser; and<\/p>\n<\/p>\n

(vii) deliver to Seller a copy of the Transition Services Agreement duly
\nexecuted by the Company.<\/p>\n<\/p>\n

(c) At the Closing, Seller shall:<\/p>\n<\/p>\n

(i) deliver to Purchaser, or its Affiliate designated in writing by
\nPurchaser, one or more certificates representing all the Shares, each such
\ncertificate to be duly and validly endorsed in favor of Purchaser or accompanied
\nby a separate stock power duly and validly executed by Seller and otherwise
\nsufficient to vest in Purchaser or its designated Affiliate legal and beneficial
\nownership of such Shares, free and clear of all Encumbrances;<\/p>\n<\/p>\n

2<\/p>\n

\n

\n

(ii) deliver to Purchaser duly executed resignations and releases from the
\ndirectors of the Company and its Subsidiaries, the Seller, and the following
\nofficers of the Company: Joseph J. Grillo and Patricia M. Petersen, each
\neffective as of the Closing;<\/p>\n<\/p>\n

(iii) deliver to Purchaser the certificate specified in Section
\n6.2(c)<\/u>;<\/p>\n<\/p>\n

(iv) deliver to Purchaser a copy of the Escrow Agreement duly executed by
\nSeller;<\/p>\n<\/p>\n

(v) deliver to Purchaser a copy of the Transition Services Agreement duly
\nexecuted by Purchaser; and<\/p>\n<\/p>\n

(vi) deliver to Purchaser the executed payoff letters, UCC-3 termination
\nstatements, and other documents referred to in Section 5.6<\/u>.<\/p>\n<\/p>\n

Section 2.2. Post-Closing Adjustment<\/u>.<\/p>\n<\/p>\n

(a) Within 60 calendar days following Closing, Purchaser will deliver to
\nSeller a consolidated balance sheet of the Business as of the Closing Date (the
\n“Closing Date Balance Sheet<\/u>“), and a certificate (the “Closing
\nCertificate<\/u>“), together with reasonable supporting detail, setting forth
\nPurchaser153s calculation of the Assumed Debt and the Closing Date Net Working
\nCapital. Purchaser will provide Seller and its accountants reasonable access to
\nthe books and records and personnel of the Business during the period of the
\npreparation of the Closing Date Balance Sheet, Closing Certificate and the
\nClosing Date Net Working Capital and the resolution of any disputes that may
\narise under this Section 2.2<\/u>. The calculation of Closing Date Net Working
\nCapital shall be prepared in accordance with (i) GAAP, consistently applied, and
\nusing the same GAAP accounting, principles, practices and policies that were
\nused to prepare the Carve-Out Statements, and (ii) the illustrative calculation
\nof the Closing Date Net Working Capital, which is attached hereto as Exhibit
\nB<\/u>.<\/p>\n<\/p>\n

(b) Seller shall have 120 calendar days following receipt of the Closing
\nCertificate to deliver to Purchaser a written notice (a “Notice of
\nDispute<\/u>“) that Seller disputes Purchaser153s calculation of any of the amounts
\nor any portion of the amounts set forth therein, which Notice of Dispute shall
\nset forth in reasonable detail the basis for each element of such dispute. If
\nSeller does not deliver a Notice of Dispute on or before the expiration of such
\n120-day period (or if Seller notifies Purchaser in writing that there is no such
\ndispute), the calculation of the Assumed Debt and the Closing Date Net Working
\nCapital set forth in the Closing Certificate shall be deemed to be final,
\nbinding and conclusive as to the parties. In the event that Seller delivers a
\nNotice of Dispute with respect to only certain of the amounts or certain
\nportions of the amounts set forth in the Closing Certificate but not others,
\nthen any undisputed amount or portion thereof shall be deemed to be final,
\nbinding and conclusive as to the parties. In the event Seller delivers a Notice
\nof Dispute to Purchaser, Seller and Purchaser shall cooperate in good faith to
\nresolve any such dispute as promptly as possible.<\/p>\n<\/p>\n

3<\/p>\n

\n

\n

(c) In the event that Purchaser and Seller are unable to resolve all such
\ndisputes on or before the 30th calendar day following the delivery of the Notice
\nof Dispute, then Purchaser and Seller shall retain a partner at the accounting
\nfirm of Grant Thornton LLP to resolve such dispute, or if no partner at Grant
\nThornton LLP is willing and able to take on such assignment, a mutually
\nacceptable third party firm, the retention of which will not give rise to
\npresent or potential future auditor independence problems for any party or any
\nof their respective Affiliates as determined in each party153s reasonable
\ndiscretion (Grant Thornton LLP or such firm being referred to as the
\n“Accounting Arbitrator<\/u>“). The Accounting Arbitrator may only resolve
\ndisagreements as to matters covered by the Notice of Dispute. All matters not
\ncovered by the Notice of Dispute shall be deemed to be final, binding and
\nconclusive. The determination by the Accounting Arbitrator shall be final,
\nbinding and conclusive on Seller and Purchaser. Purchaser and Seller each shall
\npromptly provide their assertions regarding the Assumed Debt and the Closing
\nDate Net Working Capital, as applicable, in writing to the Accounting Arbitrator
\nand to each other. The Accounting Arbitrator shall consider only those items and
\namounts which are identified in the Notice of Dispute as being items which
\nSeller and Purchaser are unable to resolve. The Accounting Arbitrator153s
\ndetermination will be based solely on the calculation of the Assumed Debt and
\nthe Closing Date Net Working Capital. Further, the Accounting Arbitrator153s
\ndetermination shall be based solely on the presentations by Purchaser and Seller
\nwhich are in accordance with the terms and procedures set forth in this
\nAgreement (i.e., not on the basis of an independent review). The fees, costs and
\nexpenses of the Accounting Arbitrator shall be borne one half by Purchaser and
\none half by Seller; provided, however<\/em>, if the Accounting Arbitrator
\ndetermines that one party153s position is completely correct, then such party
\nshall pay none of the fees, costs and expenses of the Accounting Arbitrator and
\nthe other party shall pay all such fees, costs and expenses. The Accounting
\nArbitrator shall be instructed to render its determination as soon as reasonably
\npossible (which the parties agree should not be later than 60 calendar days
\nfollowing the day on which the disagreement is referred to the Accounting
\nArbitrator). The Accounting Arbitrator shall conduct its determination
\nactivities in a manner wherein all materials submitted to it are held in
\nconfidence and shall not be disclosed to third parties. The parties agree that
\njudgment may be entered upon the determination of the Accounting Arbitrator in
\nany court having jurisdiction over the party against which such determination is
\nto be enforced.<\/p>\n<\/p>\n

(d) Within five (5) Business Days after the Assumed Debt and the Closing Date
\nNet Working Capital shall have become final, binding and conclusive in all
\nrespects, in accordance with this Section 2.2<\/u>, then (i) if the Closing
\nDate Net Working Capital is less than $1,000,000, Seller and Purchaser shall
\njointly instruct the Escrow Agent to release the difference to the Purchaser
\nfrom the Adjustment Escrow Account, and if the difference is greater than the
\nbalance in the Adjustment Escrow Account, the Seller shall pay any such
\nshortfall to the Purchaser; (ii) if the Closing Date Net Working Capital is
\ngreater than $4,000,000, the Purchaser shall pay the difference to the Seller,
\n(iii) if the Assumed Debt is greater than the Estimated Assumed Debt, the Seller
\nand Purchaser shall jointly instruct the Escrow Agent to release the difference
\nto the Purchaser from the Adjustment Escrow Account, and if the difference is
\ngreater than the remaining balance in the Adjustment Escrow Account, the Seller
\nshall pay any such shortfall to the Purchaser, and (iv) after taking into
\naccount any payments under Subsections 2.2(d)(i)<\/u> or 2.2(d)(iii)<\/u>,
\nthe Seller and Purchaser shall jointly instruct the Escrow Agent to release the
\nbalance, if any, of the Adjustment Escrow Account to the Seller.<\/p>\n<\/p>\n

(e) All payments under Section 2.2(d)<\/u> shall be made by wire transfer
\nof immediately available funds to an account specified in writing by the
\nreceiving party, and such wire transfer shall include, in addition to the amount
\nspecified in Section 2.2(d)<\/u>, an amount equal to interest accrued on such
\namount at the annual Prime Rate as announced by Wells Fargo Bank, National
\nAssociation on the Closing Date (compounded quarterly) for the period from the
\nClosing Date through the date of payment.<\/p>\n<\/p>\n

ARTICLE III.<\/strong><\/p>\n

\n

REPRESENTATIONS AND WARRANTIES OF SELLER<\/strong><\/p>\n

\n

Except as set forth in the corresponding numbered Schedules of the Disclosure
\nSchedule (provided, however<\/em>, that a matter disclosed with respect to
\none representation or warranty shall also be deemed to be disclosed with respect
\nto each other representation or warranty to which the matter disclosed
\nreasonably relates, to the extent such relationship is readily apparent on the
\nface of the disclosure contained in the Disclosure Schedule), Seller represents
\nand warrants to Purchaser as follows:<\/p>\n<\/p>\n

Section 3.1. Organization<\/u>. Each of Seller and the Company (a) is a
\ncorporation duly organized, validly existing and in good standing under the laws
\nof Delaware; (b) has all requisite corporate power and authority to carry on its
\nbusiness and the Business as they are now being conducted and to own, lease and
\noperate the properties and assets that such Person now owns or that are used in
\nthe Business; and (c) is duly qualified or licensed to do business in, and is in
\ngood standing (or the equivalent) under the laws of, every jurisdiction in which
\nsuch qualification is required, except where the failure to be so qualified or
\nlicensed would not, individually or in the aggregate, have a Material Adverse
\nEffect. Seller has heretofore delivered to Purchaser complete and correct copies
\nof the certificate of incorporation and by-laws of the Company as presently in
\neffect. Schedule 3.1<\/u> contains a list that, to the Knowledge of Seller,
\nsets forth each jurisdiction in which the Company is qualified or licensed to do
\nbusiness.<\/p>\n<\/p>\n

4<\/p>\n

\n

\n

Section 3.2. Authorization<\/u>.<\/p>\n<\/p>\n

(a) Seller has the requisite corporate power and authority to execute,
\ndeliver and perform this Agreement and, subject to receipt of Stockholder
\nApproval, to consummate the Closing. The execution, delivery and performance by
\nSeller of this Agreement and the consummation by Seller of the Closing have been
\nduly authorized by the Board of Directors of Seller, and no other corporate
\naction on the part of Seller is necessary to authorize the execution, delivery
\nand performance by Seller of this Agreement or the consummation by Seller of the
\nClosing, subject in the case of the consummation by Seller of the Closing to
\nobtaining the Stockholder Approval.<\/p>\n<\/p>\n

(b) Seller153s Board of Directors has (i) approved and adopted this Agreement
\nand approved the transactions contemplated hereby, (ii) determined that the
\ntransactions contemplated hereby are advisable, fair to, and in the best
\ninterests of Seller and its stockholders, and (iii) resolved to submit this
\nAgreement to the stockholders of Seller for approval, file the Proxy Statement
\nwith the SEC and recommend that the stockholders of Seller approve and adopt
\nthis Agreement.<\/p>\n<\/p>\n

(c) The affirmative vote (in person or by proxy) of the holders of at least a
\nmajority of the outstanding shares of common stock of Seller at the Stockholders
\nMeeting, or any adjournment or postponement thereof, in favor of the approval of
\nthis Agreement and the transactions contemplated hereby (the “Stockholder
\nApproval<\/u>“) is the only vote or approval of the holders of any class or
\nseries of capital stock of Seller or any of its Subsidiaries that is necessary
\nto approve this Agreement, approve the transactions contemplated hereby, and
\nperform and consummate the transactions contemplated by this Agreement.<\/p>\n<\/p>\n

Section 3.3. Execution; Validity of Agreement<\/u>. This Agreement has been
\nduly executed and delivered by Seller, and, assuming due and valid
\nauthorization, execution and delivery hereof by Purchaser, is a valid and
\nbinding obligation of Seller, enforceable against Seller in accordance with its
\nterms, except that (i) such enforcement may be subject to applicable bankruptcy,
\ninsolvency, reorganization, moratorium, fraudulent transfer or other similar
\nLaw, now or hereafter in effect, relating to or limiting creditors153 rights
\ngenerally and (ii) equitable remedies of specific performance and injunctive and
\nother forms of equitable relief may be subject to equitable defenses and to the
\ndiscretion of the court before which any proceeding therefor may be brought.<\/p>\n<\/p>\n

Section 3.4. Consents and Approvals; No Violations<\/u>. Except for: (i)
\nthe filing by Seller with, and the receipt of the approval (or the SEC does not
\ncomment on within the required timeframe) of, the SEC of a proxy statement
\nrelating to the Stockholders Meeting (as amended or supplemented from time to
\ntime, the “Proxy Statement<\/u>“), (ii) the receipt of Stockholder Approval,
\n(iii) other filings required under, and other applicable requirements of, the
\nExchange Act and the rules and regulations promulgated thereunder, and (iv)
\nfilings, permits, authorizations, consents and approvals as may be required
\nunder, and other applicable requirements of, state securities or blue sky laws
\nthe execution and delivery of this Agreement by Seller or the performance of any
\nof Seller153s obligations hereunder will not require any filing with or notice by
\nSeller or the Company to, or the issuance or provision to Seller or the Company
\nof, any permit, authorization, consent or approval of, any Governmental Entity.
\nNone of the execution, delivery or performance of this Agreement by Seller or,
\nexcept as set forth on Schedule 3.4<\/u>, the consummation by Seller of the
\nClosing will (a) conflict with, violate or result in any breach of any provision
\nof the certificate of incorporation or by-laws of Seller or any organizational
\ndocument of the Company or any of its Subsidiaries, (b) result in a violation or
\nbreach of, or constitute (with or without notice or lapse of time or both) a
\ndefault (or give rise to any right of termination, cancellation or acceleration)
\nor adverse modification of any terms or rights under, any of the terms,
\nconditions or provisions of any note, bond, mortgage, indenture, lease, license,
\ncontract, agreement or other instrument or obligation (“Contract<\/u>“) to
\nwhich Seller, the Business, or the Company is a party or by which any of them or
\nany of their respective properties, assets or rights may be bound, (c) violate
\nany statute, law, constitutional provision, code, regulation, ordinance, rule,
\nruling, judgment, decision, order, writ, injunction, decree, issued guidance or
\nother requirement of any Government Entity (“Law<\/u>“) applicable to Seller,
\nthe Company, the Company153s Subsidiaries or any of their respective properties or
\nassets, (d) cause the Company or any Subsidiary of the Company to become subject
\nto or liable for any Tax (other than as set forth in Section 5.8(g)<\/u>), or
\n(e) result in any Encumbrance on any of the properties or assets of the Company
\nor any of the Material Company Subsidiaries.<\/p>\n<\/p>\n

5<\/p>\n

\n

\n

Section 3.5. Ownership of Shares<\/u>. Seller is the sole record, legal and
\nbeneficial owner of the Shares, free and clear of all Encumbrances, except for
\nany Encumbrances created by this Agreement. Upon the Closing, Purchaser will
\nacquire full legal and beneficial ownership of the Shares free of any
\nEncumbrance.<\/p>\n<\/p>\n

Section 3.6. Capitalization<\/u>. The authorized capital stock of the
\nCompany consists of 1,000 shares of common stock. As of the date hereof, the
\nissued and outstanding capital stock of the Company consists exclusively of
\n1,000 shares of common stock, par value $.01 per share, all of which are owned
\nby Seller (the “Shares<\/u>“). All of the Shares have been duly authorized and
\nvalidly issued, and are fully paid and non-assessable. None of the Shares were
\nissued in violation of any preemptive or similar right of any Person or in
\nviolation of any Contract. There are no outstanding or authorized options,
\nwarrants, rights or agreements to which either Seller or the Company is a party
\nor by which either of them may be bound obligating either of them (a) to issue,
\ndeliver or sell, or refrain from issuing, delivering or selling, any shares of
\ncapital stock of the Company, or to grant, extend or enter into any such option,
\nright or agreement, (b) to repurchase, redeem or otherwise acquire, or to
\nrefrain from repurchasing, redeeming or otherwise acquiring, any shares of
\ncapital stock of the Company, or to grant, extend or enter into any such option,
\nright or agreement or (c) to vote, or to refrain from voting, any shares of
\ncapital stock of the Company.<\/p>\n<\/p>\n

Section 3.7. Subsidiaries<\/u>.<\/p>\n<\/p>\n

(a) Each of the Subsidiaries of the Company, and each such Subsidiaries that
\nown more than nominal assets and liabilities related to the Business (the
\n“Material Company Subsidiaries<\/u>“), are listed on Schedule 3.7(a)<\/u>.
\nSchedule 3.7(a)<\/u> identifies the Subsidiaries of the Company that are
\nMaterial Company Subsidiaries. Except for the Material Company Subsidiaries, the
\nCompany153s Subsidiaries own only nominal assets and liabilities, none of which
\nare material to the Business. Other than as set forth in the previous sentence,
\nthe Company does not own, directly or indirectly, any capital stock or other
\nownership interests, or have any obligations to acquire any capital stock or
\nother ownership interests or make any investment, in any corporation,
\npartnership, joint venture or other Person.<\/p>\n<\/p>\n

(b) Each of the Material Company Subsidiaries (a) is duly organized, validly
\nexisting and in good standing under the laws of the jurisdiction of its
\norganization; (b) has all requisite corporate power and authority to carry on
\nthe Business as now being conducted and to own, lease and operate the properties
\nand assets that it now owns or that are used in the Business; and (c) is duly
\nqualified or licensed to do business in, and is in good standing (or the
\nequivalent) under the laws of, every jurisdiction in which such qualification is
\nrequired, except where the failure to be so qualified or licensed would,
\nindividually or in the aggregate, have a Material Adverse Effect. Seller has
\nheretofore delivered to Purchaser complete and correct copies of the
\norganizational documents of each Material Company Subsidiary as presently in
\neffect. Schedule 3.7(b)<\/u> indicates each jurisdiction in which each
\nMaterial Company Subsidiary is qualified or licensed to do business and which
\nentity owns the equity of each Material Company Subsidiary.<\/p>\n<\/p>\n

6<\/p>\n

\n

\n

(c) Other than as set forth in Schedule 3.7(c)<\/u>, with respect to each
\nof the Material Company Subsidiaries:<\/p>\n<\/p>\n

(i) all of the authorized and outstanding equity interests in the Subsidiary
\nis owned of record and beneficially by the Company or another of its Material
\nCompany Subsidiaries, free of any Encumbrance (other than Permitted
\nEncumbrances);<\/p>\n<\/p>\n

(ii) all of the outstanding equity interests in the Material Company
\nSubsidiary were validly issued in exchange for consideration required for valid
\nissuance, if any, all of which such consideration has been fully paid;<\/p>\n<\/p>\n

(iii) none of the equity interests in the Material Company Subsidiary was
\nissued in violation of a preemptive or similar right of any Person or in
\nviolation of any Contract; and<\/p>\n<\/p>\n

(iv) there are no outstanding or authorized options, warrants, rights or
\nagreements to which the Material Company Subsidiary is a party or by which it
\nmay be bound obligating it (a) to issue, deliver or sell, or refrain from
\nissuing, delivering or selling, any equity interests of the Material Company
\nSubsidiary, or to grant, extend or enter into any such option, right or
\nagreement, (b) to repurchase, redeem or otherwise acquire, or to refrain from
\nrepurchasing, redeeming or otherwise acquiring, any equity interests of the
\nMaterial Company Subsidiary, or to grant, extend or enter into any such option,
\nright or agreement or (c) to vote, or to refrain from voting, any equity
\ninterests of the Material Company Subsidiary.<\/p>\n<\/p>\n

Section 3.8. Financial Statements<\/u>.<\/p>\n<\/p>\n

(a) The Financial Statements have been prepared in accordance with GAAP
\napplied on a consistent basis and fairly present the financial position and the
\nresults of operations and cash flows of the Seller and the Business, as
\napplicable, as of the dates and for the periods referred to therein.<\/p>\n<\/p>\n

(b) The Company does not have any liabilities or obligations of any nature,
\nwhether accrued, absolute, fixed, known or unknown, contingent, or otherwise,
\nwhether due or to become due and whether or not required to be recorded or
\nreflected on a balance sheet under GAAP, other than (a) liabilities that are set
\nforth in the Carve-Out Statements, (b) liabilities (including Taxes) incurred in
\nthe ordinary course of business consistent with past practice since the Balance
\nSheet Date, (c) liabilities under contractual obligations to be performed after
\nthe date hereof under Contracts entered into the ordinary course of business,
\nand (d) as of the date hereof, the Excluded Liabilities. Schedule 3.8(b)<\/u>
\nsets forth all Indebtedness of the Company and its Subsidiaries related to the
\nBusiness, including the names of the parties to which such Indebtedness is owed
\nand the principal amount outstanding as of the date hereof.<\/p>\n<\/p>\n

(c) The books and records of each of the Company and the Material Company
\nSubsidiaries are correct and complete in all material respects. The books and
\nrecords of each of the Company and the Material Company Subsidiaries have been
\nmaintained in accordance with sound business practices, including the
\nmaintenance of a system of internal controls adequate for the size, operations
\nand business of each of the Company and the Material Company Subsidiaries to
\nensure that (i) all transactions related to each of the Company and the Material
\nCompany Subsidiaries are executed in accordance with management153s general or
\nspecific authorizations, (ii) transactions are recorded as necessary to permit
\nthe preparation of financial statements in conformity with GAAP applied on a
\nconsistent basis and to maintain proper accountability for assets, (iii) the
\nrecorded accountability for assets is compared with existing assets at
\nreasonable intervals and appropriate action is taken with respect to any
\ndifferences, and (iv) access to the properties and assets of each of the Company
\nand the Material Company Subsidiaries is permitted only in accordance with
\nmanagement153s general or specific authorizations. Seller has provided Purchaser
\nwith correct and complete copies of or access to the books and records of each
\nof the Company and the Material Company Subsidiaries.<\/p>\n<\/p>\n

7<\/p>\n

\n

\n

Section 3.9. Absence of Certain Changes<\/u>. Except as set forth on
\nSchedule 3.9<\/u>, since the Balance Sheet Date, there has not been any
\nchange, effect, event or circumstance that has had or would reasonably be
\nexpected to have a Material Adverse Effect. Except as set forth on Schedule
\n3.9<\/u>, since the Balance Sheet Date, the Company has not taken action that, if
\ntaken after the date hereof, would require Purchaser153s consent under Section
\n5.1<\/u>.<\/p>\n<\/p>\n

Section 3.10. Property and Assets<\/u>.<\/p>\n<\/p>\n

(a) Other than as set forth in Schedule 3.10(a)<\/u>, the Company has, or
\non the Closing Date will have, good title to, or a valid lease, license or right
\nto use, all assets, properties and rights used in the conduct of the Business
\nand sufficient to conduct the Business as it was conducted during the periods
\ncovered by the Financial Statements and is currently conducted, free of any
\nEncumbrances other than Permitted Encumbrances.<\/p>\n<\/p>\n

(b) Except as set forth in Schedule 3.10(b)<\/u>, those real and other
\ntangible properties purported to be owned by the Company are held free and clear
\nof all Encumbrances other than (i) Encumbrances for Taxes not yet due and
\npayable, (ii) mechanics153, materialmen153s, carriers153, warehousemen, workers153,
\nrepairers153, landlords153 and similar liens arising or incurred in the ordinary
\ncourse of business consistent with past practice, (iii) zoning, entitlement,
\nbuilding and other land use regulations that are not violated by current
\noccupancy or use, (iv) customary covenants, conditions, restrictions, easements
\nand similar restrictions of record affecting title that do not impair current
\noccupancy or use, (v) Encumbrances for Taxes that the Company is contesting in
\ngood faith, and (vi) purchase money liens and liens securing rental payments
\nunder capital lease arrangements; provided, however<\/em>, the underlying
\nobligation is paid in the ordinary course of business consistent with past
\npractice when due; (clauses (i) through (vi) being “Permitted
\nEncumbrances<\/u>“).<\/p>\n<\/p>\n

(c) Schedule 3.10(c)<\/u> sets forth a complete list of all real property
\nthat is owned (the “Owned Real Property<\/u>“) or leased (the “Leased Real
\nProperty<\/u>“) by the Company or any of its Subsidiaries as identified on the
\nSchedule.<\/p>\n<\/p>\n

(d) Each parcel of Owned Real Property is owned by the party identified on
\nSchedule 3.10(c)<\/u> and such owner has good and marketable indefeasible fee
\nsimple title to such parcel, free and clear of all Encumbrances except Permitted
\nEncumbrances. The facilities located on each parcel of Owned Real Property do
\nnot encroach any adjacent real property or any easement, right of way or other
\nEncumbrance that burdens any portion of such Owned Real Property. No structure
\nor other improvement on any land adjacent to any parcel of Owned Real Property
\nencroaches onto any portion of such Owned Real Property. There is no outstanding
\nContract to purchase, or option or right of first refusal to purchase, any
\nparcel of Owned Real Property.<\/p>\n<\/p>\n

8<\/p>\n

\n

\n

(e) With respect to Leased Real Property, Seller has delivered to Purchaser a
\ncorrect and complete copy of every lease and sublease (including all amendments,
\nextensions, renewals, guaranties and other agreements with respect to them)
\npursuant to which the Company or any of its Subsidiaries is a party or by which
\nit is bound (each, a “Real Property Lease<\/u>“). As to each Real Property
\nLease: (i) the Company or Company Subsidiary designated as lessee has peaceful
\nand undisturbed possession of the related Leased Real Property and there is no
\nmaterial claim or material Proceeding pending with respect to the Real Property
\nLease, (ii) the Real Property Lease is legal, valid, binding, enforceable and in
\nfull force and effect as to all parties to it, and contains the entire agreement
\nof the parties with respect to its subject matter, and (iii) neither the Company
\nnor any of its Subsidiaries is in material breach of the Real Property Lease,
\nand to the Knowledge of Seller, no other party is in material breach of the Real
\nProperty Lease.<\/p>\n<\/p>\n

Section 3.11. Leases, Contracts and Commitments<\/u>.<\/p>\n<\/p>\n

(a) Schedule 3.11(a)<\/u> sets forth a complete list as of the date hereof
\nof executory Contracts to which the Company or any of the Material Company
\nSubsidiaries is a party (or by which the Business or any of the assets,
\nproperties or rights of the Company, or the Business is bound) and that (i)
\nprovides for or is reasonably likely to result in future payments by the Company
\nor the Business, or to the Company or the Business, of more than $100,000 per
\nannum (excluding purchase orders for inventory entered into or incurred in the
\nordinary course of business consistent with past practice); (ii) was entered
\ninto by the Company or the Business with Seller, any Affiliate of Seller (other
\nthan the Company) or with any officer or director of Seller or any Affiliate of
\nSeller (including the Company); (iii) is a partnership, limited liability
\ncompany, joint venture or similar agreement, or pursuant to which the Company or
\nthe Business has an obligation to make an investment in or loan to any Person;
\n(iv) under which the Company or the Business has created incurred, assumed,
\nguaranteed or secured Indebtedness; (v) contains outstanding obligations
\nrelating to the settlement of any Proceeding; (vi) relates to the acquisition or
\ndisposition of any business, operations or division (whether by merger, sale of
\nstock, sale of assets or otherwise) to the extent any unresolved claims or
\nactual or contingent obligations of any party thereunder remain; (vii) restricts
\nthe Company or the Business (including any Contract that would restrict
\nPurchaser or any of its Subsidiaries at any time from and after the Closing)
\nfrom engaging in any business activity anywhere in the world; (viii) is a
\nwritten employment, consulting or collective bargaining agreement; or (ix)
\nassuming the Company were a reporting company under the Exchange Act, would need
\nto be filed as an exhibit pursuant to Item 601 of Regulation S-K (any such
\nContract, whether or not listed in Schedule 3.11(a)<\/u>, a “Material
\nContract<\/u>“).<\/p>\n<\/p>\n

(b) There is not and, to the Knowledge of Seller, there has not been claimed
\nor alleged by any Person, with respect to any Material Contract, any existing
\nbreach or event that, with notice or lapse of time or both, would constitute a
\nbreach or event of default thereunder on the part of the Company or the
\nBusiness. Each of the Material Contracts is in full force and effect and is
\nvalid and binding on the Company, and, to the Knowledge of Seller, each other
\nparty thereto.<\/p>\n<\/p>\n

Section 3.12. SEC Documents<\/u>. Since December 31, 2008, Seller has filed
\nall reports, registrations, and statements it was required to file with the SEC
\nunder the Securities Act, or under Sections 13(a), 13(c), 14 or 15(d) of the
\nExchange Act, including, but not limited to Seller153s Annual Reports on Form
\n10-K, Forms 10-Q, Form 8-K, registration statements, definitive proxy
\nstatements, and information statements (collectively, the “Seller SEC
\nDocuments<\/u>“). Seller has provided or made available, via EDGAR, to Purchaser
\ncopies of the Seller SEC Documents, each in the form (including exhibits and any
\namendments thereto) filed with the SEC (or, if not so filed, in the form used or
\ncirculated). Except to the extent amended or superseded by a subsequent filing
\nwith the SEC made prior to the date hereof, as of their respective dates or if
\nso amended or superseded, then on the date of such subsequent filing, each of
\nthe Seller SEC Documents, including the financial statements, exhibits and
\nschedules thereto, filed or circulated prior to the date hereof complied (and
\neach of the Seller SEC Documents filed prior to the Closing will comply) as to
\nform with applicable securities Laws and did not (or in the case of reports,
\nstatements, or circulars filed after the date of this Agreement, will not)
\ncontain any untrue statement of a material fact regarding the Company or omit to
\nstate a material fact regarding the Company required to be stated or
\nincorporated by reference therein or necessary in order to make the statements
\nmade therein, in the light of the circumstances under which they were made, not
\nmisleading.<\/p>\n<\/p>\n

9<\/p>\n

\n

\n

Section 3.13. Ethical Practices<\/u>. Except as permitted under applicable
\nLaw, no current or former director, officer, manager, agent or employee of the
\nCompany or any Subsidiary of the Company has offered or given anything of value
\nto any official or employee of a Governmental Entity, any political party or
\nofficial thereof, or any candidate for political office (i) with the intent of
\ninducing such Person to use such Person153s influence with any Governmental Entity
\nto affect or influence any act or decision of such Governmental Entity to assist
\nthe Company in obtaining or retaining business for, or with, or directing
\nbusiness to, any Person in contravention of any Law applicable to the Company,
\n(ii) constituting a bribe, kickback or illegal or improper payment to assist the
\nCompany in obtaining or retaining business for or with any Governmental Entity,
\nor (iii) otherwise in violation of the U.S. Foreign Corrupt Practices Act of
\n1977, as amended, or any similar Law of a non-U.S. jurisdiction in which the
\nBusiness is conducted.<\/p>\n<\/p>\n

Section 3.14. Insurance<\/u>. Seller has provided Purchaser with true and
\naccurate copies of all insurance policies in effect as of the date hereof that
\nprovide coverage with respect to the Business or any properties or assets used
\nin the Business. No written notice of default, cancellation or termination has
\nbeen received with respect to any such insurance policy, and to the Knowledge of
\nSeller, no event has occurred that, with the lapse of time or the giving of
\nnotice or both, would constitute a default under any such insurance policy.
\nThere are no historical gaps in coverage with respect to any such policy, and no
\nsuch limitations of liability have been exhausted under any such policy.<\/p>\n<\/p>\n

Section 3.15. Litigation; Other Proceedings<\/u>. Except as set forth in
\nSchedule 3.15<\/u>, there is no Proceeding pending (or, to the Knowledge of
\nSeller, threatened) (a) by, against or relating to the Company, the Business or
\nany properties, assets or rights of the Company or the Business or (b) as of the
\ndate hereof, relating to this Agreement or any Related Document or any of the
\ntransactions contemplated hereby or thereby. The Company is not subject to any
\noutstanding order, writ, injunction or decree of any Governmental Entity (an
\n“Order<\/u>“).<\/p>\n<\/p>\n

Section 3.16. Environmental and Health and Safety Matters<\/u>.<\/p>\n<\/p>\n

(a) During the three years preceding the Closing Date, each of the Company
\nand the Material Company Subsidiaries has been and is currently in material
\ncompliance with all applicable Environmental Laws. Any past violations have been
\nresolved without any pending, ongoing or future costs, obligations or
\nliabilities.<\/p>\n<\/p>\n

(b) During the three years preceding the Closing Date, neither the Company
\nnor any Material Company Subsidiary is conducting or funding any investigation,
\ncleanup, mitigation, restoration or reparation, or remedial or corrective action
\nor has agreed to assume the liability of any other Person (including without
\nlimitation agreements to indemnify or hold harmless any such other Person) with
\nrespect to any Release of Hazardous Materials, whether voluntarily or as
\nrequired by Environmental Law.<\/p>\n<\/p>\n

(c) During the three years preceding the Closing Date, each of the Company
\nand the Material Company Subsidiaries has (i) maintained and has been and is in
\nmaterial compliance with all Permits required for the Business pursuant to
\nEnvironmental Laws, (ii) has filed all applications and made any required
\npayments for the renewal of such Permits, in each case, in a timely manner, and
\n(iii) made all other filings and reports required by such Permits with the
\nappropriate Governmental Entity in a timely manner.<\/p>\n<\/p>\n

10<\/p>\n

\n

\n

(d) There is no Proceeding pending (or, to the Knowledge of Seller,
\nthreatened) by, against or relating to the Company or any of the Material
\nCompany Subsidiaries either (i) pursuant to Environmental Laws or (ii) arising
\nfrom the Release or presence of or exposure to Hazardous Substances, whether on
\nor off the property owned or operated by the Company or any of the Material
\nCompany Subsidiaries.<\/p>\n<\/p>\n

(e) There are no conditions or circumstances, including without limitation
\nthe Release or presence of or exposure to any Hazardous Substances, reasonably
\nanticipated to result in liabilities or obligations to, or requirements for
\nnotification, investigation or remediation by, the Company or any of the
\nMaterial Company Subsidiaries pursuant to Environmental Laws.<\/p>\n<\/p>\n

(f) All waste materials generated by the Company or any of the Material
\nCompany Subsidiaries have been properly stored, transported, treated and
\ndisposed of in accordance with all applicable Environmental Laws.<\/p>\n<\/p>\n

(g) Seller has provided to Purchaser with true and complete copies of all
\nwritten environmental, health or safety assessments, audits, investigations, and
\nsampling or similar reports directed to or obtained by the Company or any of the
\nMaterial Company Subsidiaries since January 1, 2009, including any documents
\nrelating to the Release or presence of or exposure to Hazardous Substances.<\/p>\n<\/p>\n

(h) No Encumbrances pursuant to Environmental Laws have been or are imposed
\non the Owned Real Property or the Leased Real Property (or any other property
\noperated by the Company or any of the Material Company Subsidiaries), and to the
\nKnowledge of Seller, no such Encumbrances have been threatened.<\/p>\n<\/p>\n

Section 3.17. Compliance with Laws<\/u>.<\/p>\n<\/p>\n

(a) The Company or its Subsidiaries are in possession of all franchises,
\ngrants, authorizations, licenses, permits, easements, variances, exceptions,
\nconsents, certificates, approvals and orders (“Permits<\/u>“) of any
\nGovernmental Entity that is necessary for it to carry on the Business as it is
\nnow being conducted and is in material compliance with the terms and
\nrequirements of all such Permits and no suspension or cancellation of any of the
\nforegoing is pending or, to the Knowledge of Seller, threatened. Schedule
\n3.17(a)<\/u> contains a list that, to the Knowledge of Seller, is a true and
\ncomplete list of all Permits material to the Business, the Company or any of the
\nMaterial Company Subsidiaries.<\/p>\n<\/p>\n

(b) Since January 1, 2009, none of the Company or its Subsidiaries (i) has
\nbeen in material violation of any applicable Law or (ii) has received written
\nnotice of any violation or alleged violation of any Law, except violations or
\nalleged violations that have been resolved prior to the date hereof without any
\ncontinuing obligation or liability of the Company or its Subsidiaries. To the
\nKnowledge of the Seller, no Law has been enacted but is not yet effective, or
\nhas been proposed, that, if and when effective, would require a material
\nmodification to the conduct of the Business in the same manner in which it was
\nconducted during the periods covered by the Financial Statements and as
\nconducted since. Each of the Company and its Subsidiaries has complied at all
\ntimes since January 1, 2009 with all Laws of the United States and any other
\ncountry that restrict or prohibit the export, import, re-export, trade or
\ntransfer of products of the Business or technical data or other information,
\nincluding: the U.S. Export Administration Regulations; the Arms Export Control
\nAct; the Export Administration Act of 1979; the International Emergency Economic
\nPowers Act; the International Traffic in Arms Regulations; the Munitions List;
\nthe National Defense Authorization Act; the National Emergencies Act; and the
\nTrading with the Enemy Act, each as amended.<\/p>\n<\/p>\n

11<\/p>\n

\n

\n

Section 3.18. Employee Benefit Employee Plans<\/u>.<\/p>\n<\/p>\n

(a) Schedule 3.18(a)<\/u> contains a true and complete list of all Employee
\nPlans. The Company has delivered to Purchaser a true and complete copy of (i)
\neach written Employee Plan and all amendments thereto and each agreement
\ncreating or modifying any related trust or other funding vehicle, (ii) the three
\nmost recent annual reports (including schedules and attachments) with respect to
\neach Employee Plan (if any such report was required by applicable Law); (iii)
\nthe most recent summary plan description (or similar document) for each Employee
\nPlan, along with any summary of material modifications; (iv) all determination,
\nopinion and advisory letters received from the IRS with respect to each Employee
\nPlan, if applicable (and a complete set of plan and trust documents (including a
\ncomplete set of plan and trust documents of any plans merged into such Employee
\nPlan) since January 1, 1989 or, if later, the date of the last determination
\nletter for such Employee Plan); (v) financial statements and actuarial reports
\nfor each Employee Plan for the past three years, if applicable; (vi) any pending
\ndetermination letter application, or if none, a complete set of the last
\ndetermination letter application submitted to the Internal Revenue Service with
\nrespect to each Employee Plan, along with any subsequent correspondence
\nregarding such determination letter, and (vii) all material correspondence with
\nany Governmental Entity regarding any Employee Plan.<\/p>\n<\/p>\n

(b) No Employee Plan has been a “multi-employer plan,” as defined in Section
\n3(37) of ERISA or under the provisions of any other applicable Law nor has any
\nEmployee Plan been subject to Section 302 or 303 or Title IV of ERISA or Section
\n412 or 430 of the Code. No liability under Title I or IV or Section 302 or 303
\nof ERISA, the penalty, excise Tax or joint and several liability provisions of
\nthe Code or under any Law or regulation relating to the Employee Plans has been
\nincurred by the Company or any ERISA Affiliate. The PBGC has not instituted
\nproceedings to terminate any Title IV Employee Plan and no condition exists that
\npresents a risk that such proceedings will be instituted. Neither the Company
\nnor any ERISA Affiliate has ever had any liability or obligation under Title IV
\nof ERISA, Section 302 or 303 of ERISA or Section 412 or Section 430 of the Code,
\nincluding, but not limited to, any contribution obligation to a “multiemployer
\nplan,” as defined in Section 3(37) of ERISA. No Employee Plan is a “multiple
\nemployer plan” (within the meaning of Section 413(c) of the Code or Section
\n4001(a)(3) of ERISA). Except as disclosed in Schedule 3.18(b)<\/u> neither the
\nCompany nor Purchaser (or its Subsidiaries) will on or after Closing have any
\nliability or obligation for any Employee Plan.<\/p>\n<\/p>\n

(c) None of the Employee Plans provide, and the Company has no liability with
\nrespect to, any post-employment life or health insurance or other welfare
\nbenefits except as may be required by Section 4980B of the Code or other
\napplicable Law.<\/p>\n<\/p>\n

(d) Each Employee Plan has been, to the extent applicable, established,
\nregistered, qualified, funded, invested, operated and administered in accordance
\nwith, and is in good standing under, its terms and applicable Law, including
\nERISA and the Code. Seller and Company have not been notified of any, and to the
\nKnowledge of Seller, there are no investigations by any Governmental Entity,
\ntermination proceedings or other claims (except routine claims for benefits
\npayable under the Employee Plans) against or involving any Employee Plan or
\nasserting any rights to or claims for benefits under any Employee Plan. All
\ncontributions or premiums required by Law or by the terms of the Employee Plan
\nhave been made. There are no Taxes, penalties or fees owing under any of the
\nEmployee Plans and no facts or circumstances exist with respect to any such
\nEmployee Plan which would lead to such Taxes, penalties or fees. All liabilities
\nof the Company (whether accrued, absolute, contingent or otherwise) related to
\nall Employee Plans have been fully and accurately disclosed in accordance with
\nGAAP in the Financial Statements and no changes have occurred to any Employee
\nPlan or are reasonably expected to occur which could adversely affect the report
\nrelated to such Employee Plan, if any, or the Financial Statements.<\/p>\n<\/p>\n

12<\/p>\n

\n

\n

(e) Each Employee Plan which is intended to meet the requirements of a
\n“qualified plan” under Code Section 401(a) (“Qualified Employee Plan<\/u>“)
\neither (A) has received a determination letter from the IRS to the effect that
\nsuch Employee Plan is so qualified and meets the requirements of Code Section
\n401(a) and its trust is exempt from federal income taxation under Section 501(a)
\nof the Code, or (B) is a prototype plan or volume submitter plan subject to an
\nopinion letter or advisory letter issued by the IRS on which letter the Company
\nis permitted to rely from January 1, 1989, forward. Each of the Qualified
\nEmployee Plans (including but not limited to any plan merged into such Qualified
\nEmployee Plan) has been timely amended by the appropriate parties to comply with
\nall applicable legislation and IRS guidance, as required by ERISA, the Code and
\nother applicable law. Each Qualified Employee Plan that is (a) individually
\ndesigned or (b) a prototype\/volume submitter plan has a favorable determination
\nletter from the IRS which covers all amendments to the Code, as amended by the
\nTax Reform Act of 1986, and as further amended by subsequent legislation (or has
\ntimely submitted an application to the IRS requesting that such a letter be
\nissued). No favorable determination letter (or if applicable, opinion letter)
\nhas been revoked with respect to any Qualified Employee Plan, and revocation has
\nnot been threatened, nor has any event or omission occurred that would adversely
\naffect the qualification under Section 401(a) of the Code of each Qualified
\nEmployee Plan. There has been no termination or, except as set forth on
\nSchedule 3.18(e)<\/u>, partial termination, as defined in Section 411(d) of
\nthe Code and regulations thereunder, with respect to any Qualified Employee
\nPlan.<\/p>\n<\/p>\n

(f) Except as listed on Schedule 3.18(f)<\/u>, neither the execution or
\ndelivery of this Agreement nor the consummation of the transactions contemplated
\nby this Agreement will, either alone or in conjunction with any other event
\n(whether contingent or otherwise) (i) result in any payment or benefit becoming
\ndue or payable or required to be provided, to any director, employee or
\nindependent contractor of the Company, (ii) increase the amount or value of any
\nbenefit or compensation otherwise payable or required to be provided to any such
\ndirector, employee or independent contractor, (iii) result in the acceleration
\nof the time of payment, vesting or funding of any such benefit or compensation
\nor (iv) result in any amount failing to be deductible under Section 280G or
\nsubject to any tax under Section 4999 of the Code.<\/p>\n<\/p>\n

(g) Except as listed on Schedule 3.18(g)<\/u>, there exists no liability in
\nconnection with any Employee Plan that has terminated, and all procedures for
\ntermination of each Employee Plan have been properly followed in accordance with
\nthe terms of such terminated Employee Plan and applicable Law.<\/p>\n<\/p>\n

(h) None of the assets of any Employee Plan include any securities issued by
\nthe Company or any ERISA Affiliate. None of the assets of any Employee Plan is
\nor has been invested in any property constituting employer real property within
\nthe meaning of Section 407(d) of ERISA. Except as listed on Schedule
\n3.18(h)<\/u>, each Employee Plan covers only employees of the Company (or former
\nemployees or beneficiaries with respect to service with the Company), so that
\nthe transaction contemplated by this Agreement will require no spin-off of
\nassets or other division or transfer of rights with respect to any such plan.\n<\/p>\n<\/p>\n

(i) Each <\/u>Employee Plan that is a “nonqualified deferred compensation
\nplan” (as determined under Section 409A of the Code) is exempt from the
\nsubstantive provisions of Section 409A of the Code.<\/p>\n<\/p>\n

(j) Since the date such Employee Plans were supplied to Purchaser, the
\nCompany and its ERISA Affiliates have not modified, changed or terminated any
\nEmployee Plan, and none of the Company and its ERISA Affiliates have any such
\ncommitment, other than with respect to a modification, change or termination
\nrequired by ERISA, the Code or other applicable Law.<\/p>\n<\/p>\n

13<\/p>\n

\n

\n

(k) No Employee Plan documentation or agreement, summary plan description or
\nother written communication distributed generally to employees, in any way
\nrestricts, impairs or prohibits (whether legally binding or not) the Company,
\nany ERISA Affiliate or the Purchaser or any successor thereof from amending,
\nmerging, terminating or otherwise discontinuing any Employee Plan in accordance
\nwith the express terms of any such plan and applicable Law at or after Closing.\n<\/p>\n<\/p>\n

(l) The Company has no obligation or liability to, maintain, establish,
\nsponsor, participate in, or contribute to any International Benefit Employee
\nPlan. “International Benefit Employee Plan<\/u>” means each Employee Plan that
\nhas been adopted or maintained by Seller, Company or any of its ERISA
\nAffiliates, whether informally or formally, or with respect to which Seller,
\nCompany and any of its ERISA Affiliates will or may have any liability, for the
\nbenefit of employees who perform services outside the United States.<\/p>\n<\/p>\n

Section 3.19. Tax Matters<\/u>.<\/p>\n<\/p>\n

(a) Except as set forth on Schedule 3.19(a)<\/u>, the Company and its
\nSubsidiaries have timely filed with appropriate Governmental Entities all Tax
\nReturns required to be filed by the Company and its Subsidiaries, and such Tax
\nReturns are correct, accurate and complete in all material respects. No
\nextension of time in which to file any such Tax Returns is currently in effect.\n<\/p>\n<\/p>\n

(b) All Taxes of the Company and its Subsidiaries to the extent due and
\npayable have been timely paid except to the extent of amounts that are being
\ncontested in good faith. Any Taxes of the Company and its Subsidiaries that are
\nbeing contested in good faith are set forth on Schedule 3.19(f)<\/u> and are
\nadequately reserved for in the Financial Statements and will be adequately
\nreserved for on the Closing Date Balance Sheet.<\/p>\n<\/p>\n

(c) All consolidated, combined or unitary Tax Returns that include the
\nCompany or its Subsidiaries that are required to have been filed, have been
\ntimely filed with appropriate Governmental Entities on or prior to the date
\nhereof, and such Tax Returns are correct in all material respects. No extension
\nof time in which to file any such Tax Returns is currently in effect. All Taxes
\ndue with respect to such consolidated, combined or unitary Tax Returns that
\ninclude the Company or its Subsidiaries have been paid, except to the extent of
\namounts that are being contested in good faith are set forth on Schedule
\n3.19(f)<\/u>, are adequately reserved for in the Financial Statements and will be
\nadequately reserved for in the Closing Date Balance Sheet.<\/p>\n<\/p>\n

(d) The Company and its Subsidiaries have withheld and paid timely all Taxes
\nrequired to have been withheld and paid in connection with amounts paid or owing
\nto any employee, independent contractor, creditor, stockholder, or other third
\nparty, and all Tax Returns required with respect thereto have been properly
\ncompleted and timely filed.<\/p>\n<\/p>\n

(e) There are no Encumbrances for Taxes upon any property or assets of the
\nCompany and its Subsidiaries, except for Encumbrances for Taxes not yet due and
\npayable and except to the extent of amounts that are being contested in good
\nfaith.<\/p>\n<\/p>\n

(f) Except as set forth in Schedule 3.19(f)<\/u>, no federal, state, local,
\nor foreign audits, examinations, investigations, reassessments, or other
\nadministrative proceedings (such audits, examinations, investigations and other
\nadministrative proceedings referred to collectively as “Audits<\/u>“) or court
\nproceedings are presently pending or, to the Knowledge of Seller, being
\ninitiated or considered with regard to any Taxes or Tax Returns filed by or on
\nbehalf of the Company or any of its Subsidiaries, and there are no outstanding
\nissues that have been raised and communicated to Seller or the Company or any of
\nits Subsidiaries by any Governmental Entity for any fiscal period in respect of
\nwhich a Tax Return of the Company or any of its Subsidiaries has been audited.
\nSince January 1, 2004, no Governmental Entity has challenged or disputed a
\nfiling position taken by the Company or its Subsidiaries or a Company
\nPredecessor in any Tax Return. Neither Seller nor the Company or any of its
\nSubsidiaries is aware of any contingent liabilities for Taxes or any grounds for
\nan assessment or reassessment of the Company or any of its Subsidiaries,
\nincluding unreported benefits conferred on any stockholder of the Company.
\nNeither Seller nor the Company nor any of the Company153s Subsidiaries has
\nreceived any indication from any Governmental Entity that an assessment or
\nreassessment of the Company or any of its Subsidiaries is proposed in respect of
\nany Taxes, regardless of its merits.<\/p>\n<\/p>\n

14<\/p>\n

\n

\n

(g) There are no outstanding requests, agreements, consents or waivers to
\nextend the statutory period of limitations applicable to the assessment of any
\nTaxes or deficiencies against the Company or any of its Subsidiaries or with
\nrespect to which the Company or any of its Subsidiaries could be held liable.\n<\/p>\n<\/p>\n

(h) There is no obligation of the Company or any of its Subsidiaries to
\ncontribute to the payment of any Tax or any portion of a Tax (or any amount
\ncalculated with reference to any portion of a Tax) of any Person other than the
\nCompany and its Subsidiaries, including as transferee or successor, by Contract
\nor otherwise. Schedule 3.19(h) <\/u>lists all consolidated, combined or
\nunitary groups that the Company in which the Company or any of its Subsidiaries
\nhas been a member since January 1, 2004.<\/p>\n<\/p>\n

(i) No claim has been made in writing by any authority in a jurisdiction
\nwhere the Company or any of its Subsidiaries does not file Tax Returns that the
\nCompany or any of its Subsidiaries is or may be subject to taxation by that
\njurisdiction.<\/p>\n<\/p>\n

(j) Prior to the date hereof, Company has made available to Purchaser
\ncomplete and accurate copies of all Tax Returns filed prior to the date hereof
\nby Company or any of its Subsidiaries for all Tax periods beginning on or after
\nJanuary 1, 2007. As of the Closing Date, Company has provided to Purchaser
\ncomplete and accurate copies of all Tax Returns filed after the date hereof and
\nprior to the Closing Date.<\/p>\n<\/p>\n

(k) Prior to the date hereof, the Company and its Subsidiaries have made
\navailable to Purchaser complete and accurate copies of all Audit reports,
\nstatements of deficiency, and similar documents received from any Governmental
\nEntity since January 1, 2004 relating to federal, state, local, or foreign Taxes
\ndue from or with respect to the Company or any of its Subsidiaries.<\/p>\n<\/p>\n

(l) Except for any agreement with Seller or an Affiliate, neither the Company
\nnor any of its Subsidiaries is a party to or bound by any Tax-sharing agreement,
\nTax indemnity obligation in favor of any Person or similar agreement in favor of
\nany Person with respect to Taxes (including any advance pricing agreement or
\nother similar agreement relating to Taxes with any Governmental Entity). The
\nCompany has provided a copy of any Tax-sharing or other agreement with respect
\nto Taxes between the Company or any of its Subsidiaries on the one hand, and the
\nSeller or an Affiliate of the Seller on the other hand.<\/p>\n<\/p>\n

(m) Neither the Company nor any of its Subsidiaries is a party to any
\nagreement, contract, arrangement, or plan that has resulted or would result,
\nseparately or in the aggregate, in the payment of any “excess parachute payment”
\nwithin the meaning of Code \u00a7 280G (or any corresponding provision of state,
\nlocal, or foreign Tax law).<\/p>\n<\/p>\n

15<\/p>\n

\n

\n

(n) The Company has not been a United States real property holding
\ncorporation within the meaning of Code \u00a7897(c)(2) during the applicable period
\nspecified in Code \u00a7897(c)(1)(A)(ii). Except as set forth on Schedule
\n3.19(n)<\/u>, the Company has not been a member of an affiliated group filing a
\nconsolidated federal income tax return (other than a group the common parent of
\nwhich was the Seller).<\/p>\n<\/p>\n

(o) Neither the Company nor any of its Subsidiaries will be required to
\ninclude any item of income in, or exclude any item of deduction from, taxable
\nincome for any taxable period (or portion thereof) ending after the Closing Date
\nas a result of any: (A) change in method of accounting for a taxable period
\nending on or prior to the Closing Date; (B) “closing agreement” as described in
\nCode \u00a7 7121 (or any corresponding or similar provision of state, local or
\nforeign income Tax law) executed on or prior to the Closing Date; intercompany
\ntransactions or any excess loss account described in Treasury Regulations under
\nCode \u00a7 1502 (or any corresponding or similar provision of state, local or
\nforeign income Tax law); (D) installment sale or open transaction disposition
\nmade on or prior to the Closing Date; (E) prepaid amount received on or prior to
\nthe Closing Date; or (F) election under Code \u00a7 108(i).<\/p>\n<\/p>\n

(p) Neither the Company nor any of its Subsidiaries has distributed stock of
\nanother Person, and has not had its stock distributed by another Person, in a
\ntransaction that was purported or intended to be governed in whole or in part by
\nCode \u00a7355 or Code \u00a7361.<\/p>\n<\/p>\n

(q) Neither the Company nor any of its Subsidiaries is or has ever been a
\nparty to any “listed transaction” as defined in \u00a76707A(c)(2) and Treas. Reg.
\n \u00a71.6011-4(b)(2). The Seller and the Company and each of its Subsidiaries have
\nproperly disclosed all “reportable transactions” (within the meaning of Treasury
\nRegulations \u00a7 1.6011-4(b)(1), any predecessor regulation, or any similar
\nprovision of state or foreign law) with respect to the Company or any of its
\nSubsidiaries on the applicable Tax Return of the reporting entity.<\/p>\n<\/p>\n

(r) Schedule 3.19(r)<\/u> lists all entities, the Company153s ownership
\npercentage and the classification of each such entity for federal and state
\nincome tax purposes that are owned in whole or in part directly or indirectly by
\nthe Company that are treated as: (i) a corporation (including an association
\ntaxable as a corporation); (ii) a partnership; or (iii) a disregarded entity. If
\na “check-the-box” election under Treas. Reg. \u00a7301.7701-3 has been made with
\nrespect to any of the entities listed on Schedule 3.19(r)<\/u>, Schedule
\n3.19(r)<\/u> also indicates that a “check-the-box” election has been made with
\nrespect to the applicable entity and the date of each check-the-box election.\n<\/p>\n<\/p>\n

(s) To the Knowledge of Seller and without regard to any limitation that may
\nbe imposed by the Closing, Schedule 3.19(s) <\/u>accurately sets forth the
\namount of all loss and Tax credits of the Company and its Subsidiaries eligible
\nto be carried forward as of December 31, 2009 and as estimated as of December
\n31, 2010 and, to the Knowledge of Seller as set forth on such schedule, lists
\nwhether these losses or credits are or will be immediately prior to the Closing
\nDate subject to any limitations under Code \u00a7382 , \u00a7383 or any other applicable
\nprovision of federal, state, or foreign Tax Law.<\/p>\n<\/p>\n

Section 3.20. Intellectual Property<\/u>.<\/p>\n<\/p>\n

(a) The Intellectual Property held under Licenses, together with the Owned
\nIntellectual Property (collectively, the “Material Intellectual
\nProperty<\/u>“), constitutes all of the material Intellectual Property used or
\nheld for use in the conduct and operation of the Business as currently
\nconducted. Immediately following the Closing Date, no Intellectual Property
\nrelating to the Business will be owned or licensed by Seller. The Company or its
\nSubsidiaries are the sole and exclusive owners of all right, title and interest
\nin or have the valid right to use, the Material Intellectual Property, free and
\nclear of all Encumbrances (other than Permitted Encumbrances) and shall have
\nsuch rights immediately after the Closing Date. Excluding all packaged,
\ncommercially available “off-the-shelf” licensed software programs sold to the
\npublic, Schedule 3.20(a)<\/u> contains an accurate and complete list and
\ndescription of all Material Intellectual Property including, where applicable,
\nthe name of the owner or licensee, registration or application numbers and dates
\nof registration or application. Except as set forth on Schedule 3.20(a)<\/u>,
\nneither the Company nor any Subsidiary of the Company has granted to any third
\nparty, by License or otherwise, any right or interest in such Intellectual
\nProperty, other than non-exclusive licenses to customers of the Business that
\nare software related, in the ordinary course of business consistent with past
\npractice.<\/p>\n<\/p>\n

16<\/p>\n

\n

\n

(b) The conduct and operation of the Business as currently conducted,
\nincluding the use of the Material Intellectual Property therein, does not
\ninfringe upon, misappropriate, violate or conflict in any way with any rights
\n(including rights in Intellectual Property) held by any Person. Neither Seller,
\nthe Company nor any of their Affiliates have received any written demand,
\nwritten claim or written notice with respect to the Material Intellectual
\nProperty which alleges that the Company or its Subsidiaries infringes upon,
\nmisappropriates, violates or conflicts with the Intellectual Property rights of
\nany Person or which challenges the ownership, validity or enforceability of any
\nMaterial Intellectual Property. There is no pending or, to the Knowledge of
\nSeller, threatened written assertion or written claim that the use or
\nexploitation of any Material Intellectual Property by the Company or its
\nSubsidiaries or the conduct of the Business infringes upon, misappropriates,
\nviolates or conflicts with the rights of any Person. None of the Material
\nIntellectual Property is subject to any outstanding Order or agreement adversely
\naffecting the use thereof in the Business or rights thereto of the applicable
\nowner. The Company is not party to any Proceeding which involves a claim of
\ninfringement or misappropriation of any Intellectual Property of any third party
\nor of any Material Intellectual Property.<\/p>\n<\/p>\n

(c) To the Knowledge of Seller, (i) there are no unauthorized uses,
\ndisclosures, infringements or misappropriations of any Material Intellectual
\nProperty by any third party; (ii) there is not any fact or matter which would or
\nmay create any such unauthorized use, disclosure, infringement or
\nmisappropriation; (iii) registered Owned Intellectual Property is valid,
\nsubsisting, in full force and effect and has not been cancelled, expired or
\nabandoned; (iv) there is no existing or threatened default under or violation of
\nany of the Licenses included in Schedule 3.20(a)<\/u>; and (v) there are no
\nmaterial problems or defects in any software within the Owned Intellectual
\nProperty that prevent such software from operating substantially as described in
\nits related documentation or specifications. Each of Seller, the Company and the
\nMaterial Company Subsidiaries is taking and has taken reasonable precautions to
\nprotect the secrecy, confidentiality and value of any of its Material
\nIntellectual Property that constitutes a Trade Secret or confidential
\ninformation.<\/p>\n<\/p>\n

(d) Neither this Agreement nor the transaction contemplated hereunder will
\nresult in: (i) the Company, a Material Company Subsidiary or Purchaser granting
\nto any third party any right to or with respect to any Intellectual Property
\nowned by, or licensed to, the Company or any of its Subsidiaries, or (ii) the
\nCompany, a Material Company Subsidiary or Purchaser being bound by, or subject
\nto, any non-compete or other material restriction on the operation or scope of
\ntheir respective businesses or of the Business.<\/p>\n<\/p>\n

(e) The Company and the Material Company Subsidiaries have required each
\nemployee and independent contractor of the Business, that has had material
\ninvolvement in the development of Intellectual Property used in the Business, to
\nexecute an agreement relating to the confidentiality of their Business-related
\nwork with the Company or the relevant Material Company Subsidiary, and execute
\nwritten assignments of any Business-related inventions to the Company or the
\nrelevant Material Company Subsidiary.<\/p>\n<\/p>\n

17<\/p>\n

\n

\n

Section 3.21. Labor Matters<\/u>.<\/p>\n<\/p>\n

(a) Schedule 3.21(a)<\/u> contains a correct and complete list of the
\nfollowing information for each employee of the Business employed by the Company
\nor a Subsidiary of the Company as of the date hereof, including each employee on
\nleave of absence or layoff status (with benefit accruals or credits, as of the
\nmost recent month-end): (i) employer; (ii) name; (iii) job title; (iv) vacation
\naccrued; (v) service credited for purposes of vesting and eligibility to
\nparticipate under any Employee Plan, (vi) the base compensation of each employee
\nwhose base compensation for the current fiscal year exceeds $50,000, and (vii)
\nfor each employee who has a target or other bonus or commission for the current
\nfiscal year in excess of $20,000, the target or other bonus amount. The
\nemployees listed on Schedule 3.21(a)<\/u> constitute all the employees
\nsufficient to conduct the Business as it is currently conducted.<\/p>\n<\/p>\n

(b) Except as set forth on Schedule 3.21(b)<\/u>, the employment of the
\nemployees of the Business is “at will” and is terminable on such notice as is
\nrequired by Law, including common law notice.<\/p>\n<\/p>\n

(c) There is no labor strike, dispute, slowdown, stoppage or lockout actually
\npending, or to the Knowledge of Seller, threatened against the Company or any of
\nthe Material Company Subsidiaries.<\/p>\n<\/p>\n

(d) Except as set forth on Schedule 3.21(d)<\/u>, (i) no employee of the
\nBusiness is represented by a labor union or labor organization, and (ii) none of
\nthe Company or the Material Company Subsidiaries is a party to or bound by any
\ncollective bargaining agreement, labor contract, letter of understanding, letter
\nof intent, voluntary recognition agreement or legally binding commitment or
\nwritten communication with any labor organization, labor union, trade union or
\nemployee organization and there are no pending, or to the Knowledge of Seller,
\nthreatened representation campaigns, elections or proceedings concerning union
\nrepresentation involving any employee of the Business.<\/p>\n<\/p>\n

(e) There is no unfair labor practice charge or complaint against the Company
\npending or, to the Knowledge of Seller, threatened before the National Labor
\nRelations Board. Each of the Company and the Material Company Subsidiaries is in
\ncompliance with all applicable Laws relating to labor and employment, including
\nbut not limited to Laws relating to discrimination, disability, labor relations,
\nhours of work, payment of wages and overtime wages, pay equity, immigration,
\nworkers compensation, working conditions, employee scheduling, family and
\nmedical leave, and employee terminations.<\/p>\n<\/p>\n

(f) Since January 1, 2009, neither the Company nor any of the Material
\nCompany Subsidiaries has effectuated a “plant closing” (as defined in the WARN
\nAct) affecting any site of employment or one or more facilities or operating
\nunits within any site of employment or facility of the Business, and there has
\nnot occurred a “mass layoff” (as defined in the WARN Act) affecting any site of
\nemployment or facility of the Business. Within the last six months, neither the
\nCompany nor any of the Material Company Subsidiaries has incurred any liability
\nor obligation which remains unsatisfied under the WARN Act or any other
\napplicable Laws regarding the termination or layoff of employees.<\/p>\n<\/p>\n

(g) To the Knowledge of Seller, none of the employees of the Company is in
\nviolation of any non-competition, non-solicitation, non-disclosure or any
\nsimilar agreement with any third party.<\/p>\n<\/p>\n

18<\/p>\n

\n

\n

(h) Schedule 3.21(h)<\/u> contains a description of the workers153
\ncompensation claims experience of the Business since September 30, 2008, as well
\nas, to the Seller153s Knowledge, any injury to or illness of any employee that
\ncould become the subject of a workers153 compensation claim.<\/p>\n<\/p>\n

Section 3.22. Affiliate Transactions<\/u>. None of (i) Seller, (ii) any
\nAffiliate of the Seller (other than the Company and its Subsidiaries) or (iii)
\nany director or officer of (x) the Seller or (y) any Affiliate of the Seller
\n(other than the Company and its Subsidiaries) (each of the foregoing, a
\n“Related Party<\/u>“) has any interest in any Contract with, or relating to,
\nthe Business or any of the properties, assets or rights of the Business, except
\nfor those listed in Schedule 3.22<\/u> and for normal compensation for
\nservices as an officer, director or employee of the Business.<\/p>\n<\/p>\n

Section 3.23. Information Supplied<\/u>. The Proxy Statement will not, on
\nthe date it is first mailed to stockholders of Seller and at the time of the
\nStockholders Meeting, contain any untrue statement of a material fact or omit to
\nstate any material fact required to be stated therein or necessary in order to
\nmake the statements therein, in light of the circumstances under which they are
\nmade, not misleading. The Proxy Statement, when filed with the SEC, will comply
\nas to form with the applicable requirements of the Exchange Act. The
\nrepresentations and warranties contained in this Section 3.23<\/u> will not
\napply to statements or omissions included in the Proxy Statement based upon
\ninformation furnished in writing to Seller by Purchaser specifically for use
\ntherein.<\/p>\n<\/p>\n

Section 3.24. Condition of Physical Assets<\/u>. Except as set forth in
\nSchedule 3.24<\/u>, all tangible personal property used in the Business is in
\ngood operating condition and repair (subject to normal wear and tear) and is
\nsuitable for the purposes for which it is currently used in the Business. The
\nOwned Real Property and the Leased Real Property is structurally sound and in
\nsuitable condition for the conduct of the Business in the same manner as it was
\nconducted during the periods covered by the Financial Statements, as conducted
\nsince. Except for the foregoing warranty, Seller makes no warranties with
\nrespect to the tangible personal property of the Company.<\/p>\n<\/p>\n

Section 3.25. Accounts Receivable<\/u>. All accounts receivable of the
\nBusiness that are reflected on the accounting records of the Company as of the
\nClosing Date (collectively, the “Accounts Receivable<\/u>“) represent or will
\nrepresent valid obligations arising from sales actually made or services
\nactually performed in the ordinary course of business. Unless paid prior to the
\nClosing, the Accounts Receivable are, or will be as of the Closing, current and
\ncollectible, net of the reserves shown on the accounting records of the Company
\nas of the Closing. Subject to such reserves, each of the Accounts Receivable
\neither has been or will be collected in full, without any set-off, within one
\nhundred twenty (120) days after the day on which it first becomes due and
\npayable. To the Knowledge of Seller, there is no contest, claim, or right of
\nset-off, other than returns, customary reconciliation adjustments and customer
\ndisputes in the ordinary course of business, under any Contract with any obligor
\nof an Accounts Receivable relating to the amount or validity of such Accounts
\nReceivable.<\/p>\n<\/p>\n

Section 3.26. Inventory<\/u>. All inventory of the Company consists of a
\nquality and quantity usable and salable in the ordinary course of business,
\nexcept for obsolete items and items of below-standard quality, all of which have
\nbeen written off or written down to net realizable value on the accounting
\nrecords of the Company as of the Closing. All inventories of the Company not
\nwritten off have been priced at the lower of cost or market value on a first in,
\nfirst out basis.<\/p>\n<\/p>\n

Section 3.27. Material Customers and Suppliers<\/u>. None of the five
\nlargest customers (by revenue) of the Business (“Material Customers<\/u>153),
\nand none of the five largest suppliers (by sales to the Business) of the
\nBusiness (“Material Suppliers<\/u>“), in each case in the most recently
\ncompleted fiscal year, has delivered to Seller, the Company or any of the
\nMaterial Company Subsidiaries any notice which (a) terminated or materially
\ndecreased its relationship with the Business, (b) changed the material terms of
\nits business arrangements with the Business, or (c) indicated its intention to
\ndo so. Schedule 3.27<\/u> sets forth a list of the Material Customers and
\nMaterial Suppliers of the Business for the most recently completed fiscal year
\n(listing, for each such Material Customer and Material Supplier, the total
\nannual sales thereto or therefrom (as applicable) during such time period).
\nNeither the Company nor any Material Company Subsidiary is engaged in a material
\ndispute with any Major Customer or Major Supplier.<\/p>\n<\/p>\n

19<\/p>\n

\n

\n

Section 3.28. Product Warranties<\/u>. Each product sold, leased or
\notherwise distributed by the Company and its Subsidiaries in connection with the
\nBusiness, whether manufactured by them or by another Person (each, a
\n“Company Product<\/u>“), (i) has been manufactured in compliance with
\napplicable Law and (ii) has conformed to all requirements of quality or
\ncondition in the applicable Contract and with any related implied warranty.
\nNeither the Company nor any Material Company Subsidiary has any liability (and
\nthere is no basis for any claim) for replacement or repair of Company Products
\nor other damages in connection with Company Products in excess of the reserve
\nfor product warranty or product liability claims shown on the Carve-Out
\nStatements, as such reserve would be adjusted for the passage of time through
\nthe Closing Date in an amount consistent with the past warranty claim reserve
\nexperience of the Business during the periods covered by the Carve-Out
\nStatements.<\/p>\n<\/p>\n

Section 3.29. Information Technology<\/u>.<\/p>\n<\/p>\n

(a) Other than databases created by employees in the ordinary course of
\nbusiness, as of the Closing Date, there will be no unlicensed software or
\ndatabase is used by the Business or stored on any system or premises used or
\noccupied by any of the Company or Material Company Subsidiaries without the
\nCompany or relevant Material Company Subsidiary paying for same or otherwise
\naccessing same lawfully in accordance with the terms under which access is
\ngranted.<\/p>\n<\/p>\n

(b) The Company and Material Company Subsidiaries maintain commercially
\nreasonable disaster recovery plans and security procedures, taking into account
\nthe nature of the Business.<\/p>\n<\/p>\n

(c) There have been no material interruptions, data losses or similar
\nincidents attributable to the Company Systems used by the Business. The Company
\nSystems have the capacity and performance necessary to meet the requirements of
\nthe Business as currently conducted in all material respects, with respect to
\nthe usage of the Company Systems.<\/p>\n<\/p>\n

(d) As used herein, “Company Systems<\/u>” shall mean the material computer
\nand data processing systems, servers, software, databases, maintenance service
\nagreements, information and communications technologies used in the Business.
\nSchedule 3.29(d)<\/u> sets forth a complete and correct list of all Company
\nSystems, including expiration or termination dates, if applicable, and
\nindicating whether such Company Systems are owned or licensed by the Company or
\na Material Company Subsidiary.<\/p>\n<\/p>\n

Section 3.30. Brokers or Finders<\/u>. Other than AgriCapital Corporation,
\nwhose fees and expenses will be paid by Seller, no agent, broker, investment
\nbanker, financial advisor or other firm is or will be entitled to any brokers153
\nor finder153s fee or other commission or similar fee in connection with the
\ntransactions contemplated by this Agreement except for any agent, broker,
\ninvestment banker, financial advisor or other firm or Person engaged by
\nPurchaser.<\/p>\n<\/p>\n

Section 3.31. No Retained Assets<\/u>. Effective as of the Closing, Seller
\nshall have, and caused each of its Subsidiaries to, transfer all assets owned by
\nSeller, directly or indirectly, that are used in the operation of the Business
\nto the Company or one of its Subsidiaries. Immediately after Closing, Seller
\nshall not, directly or indirectly, retain any assets that are used in the
\noperation of the Business.<\/p>\n<\/p>\n

20<\/p>\n

\n

\n

ARTICLE IV.<\/strong><\/p>\n

\n

REPRESENTATIONS AND WARRANTIES OF PURCHASER<\/strong>\n<\/p>\n

\n

Purchaser represents and warrants to Seller that:<\/p>\n<\/p>\n

Section 4.1. Organization<\/u>. Purchaser is a corporation duly organized,
\nvalidly existing and in good standing under the laws of Delaware, (b) has all
\nrequisite corporate or other legal entity power and authority to carry on its
\nbusiness as it now being conducted and to own the properties and assets it now
\nowns and (c) is duly qualified or licensed to do business in every jurisdiction
\nin which such qualification is required, except where the failure to be so
\nqualified or licensed would, individually or in the aggregate, have a material
\nadverse effect on the Purchaser.<\/p>\n<\/p>\n

Section 4.2. Authorization; Validity of Agreement<\/u>. Purchaser has the
\nrequisite corporate power and authority to execute, deliver and perform this
\nAgreement and to consummate the Closing. The execution, delivery and performance
\nby Purchaser of this Agreement and the consummation by Purchaser of the Closing
\nhave been duly authorized by the Board of Directors of Purchaser, and no other
\ncorporate action on the part of Purchaser is necessary to authorize the
\nexecution, delivery and performance by Purchaser of this Agreement or the
\nconsummation by Purchaser of the Closing. This Agreement has been duly executed
\nand delivered by Purchaser, and, assuming due and valid authorization, execution
\nand delivery hereof by Seller, is a valid and binding obligation of Purchaser,
\nenforceable against Purchaser in accordance with its terms, except that (i) such
\nenforcement may be subject to applicable bankruptcy, insolvency, reorganization,
\nmoratorium, fraudulent transfer or other similar Law, now or hereafter in
\neffect, relating to or limiting creditors153 rights generally and (ii) equitable
\nremedies of specific performance and injunctive and other forms of equitable
\nrelief may be subject to equitable defenses and to the discretion of the court
\nbefore which any proceeding therefor may be brought.<\/p>\n<\/p>\n

Section 4.3. Consents and Approvals; No Violations<\/u>. Except for filings
\nrequired under, and other applicable requirements of, the Exchange Act and the
\nrules and regulations promulgated thereunder, except for filings, permits,
\nauthorizations, consents and approvals as may be required under, and other
\napplicable requirements of, state securities or blue sky laws, none of the
\nexecution, delivery or performance of this Agreement by Purchaser or the
\nconsummation by Purchaser of the Closing will (a) conflict with or result in any
\nbreach of any provision of the certificate of incorporation or by-laws or
\nsimilar organizational document of Purchaser, (b) require any filing with or
\nnotice to, or permit, authorization, consent or approval of, any Governmental
\nEntity, (c) result in a violation or breach of, or constitute (with or without
\nnotice or lapse of time or both) a default (or give rise to any right of
\ntermination, cancellation or acceleration) or any adverse modification of any
\nterms or rights under, any of the terms, conditions or provisions of any
\nContract to which Purchaser or any of its Subsidiaries is a party or by which
\nany of them or any of their respective properties, assets or rights may be bound
\nor (d) violate any Law applicable to Purchaser, any of its Subsidiaries or any
\nof their respective properties or assets.<\/p>\n<\/p>\n

Section 4.4. Litigation<\/u>. As of the date hereof, there is no Proceeding
\npending or, to the knowledge of Purchaser, threatened against Purchaser or any
\nof its Affiliates relating to Seller, the Company, this Agreement or any Related
\nDocument or any of the transactions contemplated hereby or thereby.<\/p>\n<\/p>\n

Section 4.5. Brokers or Finders<\/u>. Neither Purchaser nor any of its
\nSubsidiaries or its Affiliates has entered into any agreement or arrangement
\nentitling any agent, broker, investment banker, financial advisor or other firm
\nor Person to any broker153s or finder153s fee or any other commission or similar fee
\nin connection with any of the transactions contemplated by this Agreement.<\/p>\n<\/p>\n

21<\/p>\n

\n

\n

Section 4.6. Financing<\/u>. Purchaser has sufficient funds to enable it to
\nconsummate the transactions contemplated by this Agreement.<\/p>\n<\/p>\n

Section 4.7. Purchaser Status<\/u>. Purchaser is either: (i) an “accredited
\ninvestor” as defined in Rule 501(a) under the Securities Act or (ii) a
\n“qualified institutional buyer” as defined in Rule 144A(a) under the Securities
\nAct.<\/p>\n<\/p>\n

Section 4.8. Experience of Such Purchaser<\/u>. Purchaser, either alone or
\ntogether with its representatives, has such knowledge, sophistication and
\nexperience in business and financial matters so as to be capable of evaluating
\nthe merits and risks of purchasing the Shares, and has so evaluated the merits
\nand risks of such investment.<\/p>\n<\/p>\n

Section 4.9. Company and Subsidiary Information<\/u>. Purchaser has had an
\nopportunity to discuss the Company and the Business with directors, officers and
\nmanagement of Seller and the Company. Purchaser has also had the opportunity to
\nask questions of and receive answers from, Seller and the Company and their
\nmanagement, regarding the terms and conditions of purchasing the Shares pursuant
\nto this Agreement. Purchaser has used such access to its satisfaction in making
\nits investment decision.<\/p>\n<\/p>\n

Section 4.10. No Other Representations and Warranties<\/u>. Purchaser
\nacknowledges and agrees that Seller makes no representations or warranties other
\nthan as set forth in this Agreement and any certificates or documents delivered
\npursuant to a requirement hereto or thereto.<\/p>\n<\/p>\n

ARTICLE V.<\/strong><\/p>\n

\n

COVENANTS OF SELLER AND PURCHASER<\/strong><\/p>\n

\n

Section 5.1. Interim Operations of the Company<\/u>. Except as expressly
\ncontemplated by this Agreement, during the period from the date of this
\nAgreement to the Closing, Seller will cause the Company and its Subsidiaries to
\nconduct the Business according to its ordinary course of business consistent
\nwith past practice, and Seller will use, and will cause each of the Company and
\nits Subsidiaries to use, its commercially reasonable efforts to preserve intact
\nits business organization, to keep available the services of its current
\nofficers and employees and to preserve the goodwill of and maintain satisfactory
\nrelationships with those Persons having business relationships with the Company
\nor the Business. Without limiting the generality of the foregoing and except as
\notherwise expressly provided in this Agreement, Schedule 5.1<\/u> or (after
\nprior notice to Purchaser) required by Law, during the period from the date of
\nthis Agreement to the Closing, Seller will cause each of the Company and its
\nSubsidiaries (excluding Signature Industries Limited and Timely Technology
\nCorporation) not to:<\/p>\n<\/p>\n

(a) (i) amend its certificate of incorporation or by-laws or (ii) (A) issue,
\nsell, transfer, pledge, dispose of or encumber any shares of any class or series
\nof its capital stock, or securities convertible into or exchangeable for, or
\noptions, warrants, calls, commitments or rights of any kind to acquire, any
\nshares of any class or series of its capital stock, (B) declare, set aside or
\npay any non-cash dividend or any other distribution payable in stock or property
\n(other than cash and cash equivalents) with respect to any shares of any class
\nor series of its capital stock, (C) split, combine or reclassify any shares of
\nany class or series of its stock or (D) redeem, purchase or otherwise acquire
\ndirectly or indirectly any shares of any class or series of its capital stock,
\nor any instrument or security which consists of or includes a right to acquire
\nsuch shares;<\/p>\n<\/p>\n

(b) adopt a plan of complete or partial liquidation, dissolution, merger,
\nconsolidation, restructuring, recapitalization or other corporate
\nreorganization;<\/p>\n<\/p>\n

22<\/p>\n

\n

\n

(c) change in any material respect any of the accounting methods used by it
\nunless required by a change in applicable GAAP;<\/p>\n<\/p>\n

(d) (i) adopt or change any accounting method relating to Taxes, (ii) make,
\nchange or revoke any election relating to Taxes, or (iii) enter into any closing
\nagreement relating to Taxes, settle any claim or assessment relating to Taxes or
\nconsent to any claim or assessment relating to Taxes or any waiver of the
\nstatute of limitations for any such claim or assessment, without the express
\nwritten consent of the Purchaser, such consent not to be unreasonably withheld,
\nconditioned or delayed;<\/p>\n<\/p>\n

(e) make or become legally committed to any new capital lease or any other
\nnew capital expenditure in excess of $100,000 individually or $200,000 in the
\naggregate;<\/p>\n<\/p>\n

(f) sell, lease, license, subject to any Encumbrance (other than Permitted
\nEncumbrances) or otherwise dispose of any assets (including Material
\nIntellectual Property) other than (i) the sale of assets having a market value
\nnot in excess of $25,000 individually or $50,000 in the aggregate and not
\notherwise material to the Business, (ii) the sale of inventory or excess or
\nobsolete equipment, or settlement of accounts receivable; (iii) sale of products
\nto customers, in each case in the ordinary course of business consistent with
\npast practice; or (iv) the transfer of Excluded Assets in accordance with
\nSection 5.5<\/u>;<\/p>\n<\/p>\n

(g) acquire or offer to acquire any corporation, partnership, limited
\nliability company, other business organization or division thereof or any
\nassets, in each case involving payments or receipt of consideration in excess of
\n$25,000 individually or $50,000 in the aggregate (other than acquisitions from
\nsuppliers in the ordinary course of business consistent with past practice);<\/p>\n<\/p>\n

(h) make any loans or advances to any Person other than loans to employees
\n(who are not officers or directors) in the ordinary course of business
\nconsistent with past practice;<\/p>\n<\/p>\n

(i) settle or compromise any Proceeding if such settlement or compromise (i)
\ninvolves aggregate payments by (or forgiveness of amounts payable to) the
\nCompany after the Closing in excess of $100,000 in respect of any such
\nProceedings or in excess of $200,000 in respect of all such Proceedings, (ii)
\ninvolves any relief other than money damages or (iii) relates to this Agreement,
\nany Related Document, or any of the transactions contemplated hereby or thereby;\n<\/p>\n<\/p>\n

(j) cancel, compromise, fail to exercise, waive or release any Indebtedness
\nor other right or claim, or series of related rights or claims, that have a
\nvalue that would reasonably be expected to exceed $100,000 in the aggregate;<\/p>\n<\/p>\n

(k) create, incur, assume, guarantee or amend the terms of any Indebtedness,
\nexcept for Indebtedness incurred pursuant to existing credit facilities in the
\nordinary course of business consistent with past practice;<\/p>\n<\/p>\n

(l) to the extent that such transaction would be required to be disclosed
\nunder Section 3.22<\/u> (Affiliate Transactions) if such transaction were
\nentered into immediately prior to the date hereof, enter into any transaction
\nwith or for the benefit of any Related Party other than the transactions
\ncontemplated by this Agreement;<\/p>\n<\/p>\n

(m) except in the ordinary course of business consistent with past practice,
\nenter into, assume or amend in any material respect, terminate, or waive or
\nassign any material rights under, any Material Contract or other Contract or
\ncommitment that would have been a Material Contract if entered into prior to the
\ndate hereof;<\/p>\n<\/p>\n

23<\/p>\n

\n

\n

(n) fail to maintain insurance on its material assets and properties in such
\namounts and of such kinds comparable to that in effect since January 1, 2011;\n<\/p>\n<\/p>\n

(o) fail to maintain an adequate stock of inventory due to a failure to place
\npurchase orders for inventory or continue its advertising and promotional
\nactivities, and pricing and purchasing policies in the aggregate in accordance
\nwith the ordinary course of business consistent with past practice;<\/p>\n<\/p>\n

(p) change in any material respect its policies or practices regarding its
\naccounts receivable or accounts payable;<\/p>\n<\/p>\n

(q) fail to make any applications for renewal as and when required for any
\nPermits necessary for the conduct of its business or the operation of its
\nfacilities or the Business;<\/p>\n<\/p>\n

(r) (i) make or commit to make any change in the compensation (including
\nbonuses) payable or to become payable to any director, manager, officer or other
\nemployee of the Business (other than normal recurring salary and wage increases
\nin the ordinary course of business consistent with past practice or pursuant to
\nplans, programs or agreements existing on the date hereof) or (ii) enter into,
\nor adopt or amend, any bonus, incentive, deferred compensation, insurance,
\nmedical, hospital, disability or severance plan, agreement or arrangement or
\nenter into, adopt or materially amend any employee benefit plan or employment,
\nconsulting or management agreement, other than any such amendment to an employee
\nbenefit plan that is made to maintain the qualified status of such plan or its
\ncontinued compliance with applicable Law;<\/p>\n<\/p>\n

(s) (i) adopt, amend or terminate any Employee Plan or adopt or enter into
\nany plan or arrangement that would be considered an Employee Plan if it were in
\nexistence on the date hereof or increase the benefits provided under any
\nEmployee Plan, or promise or commit to undertake any of the foregoing in the
\nfuture or (ii) enter into, amend or extend any collective bargaining or other
\nlabor agreement or agree to the certification of any bargaining unit without the
\nprior written consent of Purchaser, which consent shall not be unreasonably
\nwithheld, conditioned or delayed;<\/p>\n<\/p>\n

(t) (i) hire any individual as an officer of the Company or a Material
\nCompany Subsidiary without Purchaser153s prior written consent (not to be
\nunreasonably withheld or delayed), (ii) hire any other employee of the Business
\nexcept in the ordinary course of business consistent with past practice; or
\n(iii) terminate any employee of the Business except in the ordinary course of
\nbusiness consistent with past practice, unless such employee153s employment is
\nterminated prior to the Closing Date for cause (as determined by Seller in its
\nreasonable discretion) or due to such employee153s death, disability or voluntary
\nresignation, or, except as otherwise provide by applicable Law;<\/p>\n<\/p>\n

(u) take, or agree to or commit to take, any action that would cause, or fail
\nto take any action that would prevent, the failure of (i) any of the
\nrepresentations and warranties in Article III<\/u> to be true and correct as
\nif made and restated during the period after the date hereof through and
\nincluding the Closing Date or (ii) any of the conditions to the Closing set
\nforth in Article VI<\/u> to be satisfied; or<\/p>\n<\/p>\n

(v) enter into any agreement, contract, commitment or arrangement to do any
\nof the foregoing.<\/p>\n<\/p>\n

Notwithstanding the foregoing Sections 5.1 (a)<\/u> through (v)<\/u>,
\nSeller and Company may take the actions contemplated in Section 5.5<\/u>
\nwithout notice to or consent of Purchaser.<\/p>\n<\/p>\n<\/p>\n

Section 5.2. Access<\/u>. Seller shall and shall cause the Company and its
\nSubsidiaries prior to the Closing to (a) give Purchaser and its authorized
\nrepresentatives, upon reasonable advance notice and during regular business
\nhours, reasonable access to all books, records, personnel, officers and other
\nfacilities and properties of or related to the Business, (b) permit Purchaser to
\nmake such copies and inspections thereof, upon reasonable advance notice and
\nduring regular business hours, as Purchaser may reasonably request and (c) cause
\nthe officers of the Business and the Company and the Material Company
\nSubsidiaries to furnish Purchaser with such unaudited financial and operating
\ndata and other information with respect to the Business and the business and
\nproperties of the Company as is regularly prepared in the ordinary course that
\nPurchaser may from time to time reasonably request and provide to Purchaser,
\nwhether or not requested, copies of all monthly and quarterly financial reports
\nabout the Business that are distributed to officers or directors of the Company
\nor Seller; provided, however<\/em>, that any such access shall be conducted
\nat a reasonable time and not interfere with the normal operations of the
\nbusiness of Seller or the Company. Any information obtained by Purchaser
\npursuant to this Section 5.2<\/u> shall be subject to the terms and conditions
\nof the Confidentiality Agreement.<\/p>\n<\/p>\n

24<\/p>\n

\n

\n

Section 5.3. Preparation of the Proxy Statement; Stockholders
\nMeeting<\/u>.<\/p>\n<\/p>\n

(a) As soon as practicable following the date of this Agreement, Seller shall
\nprepare the Proxy Statement, and within no more than 10 days after the date
\nhereof and after consulting with Purchaser and giving Purchaser at least three
\nBusiness Days to review and comment (and the Seller shall give reasonable and
\ngood faith consideration to all additions, deletions or changes suggested
\nthereto by Purchaser), Seller shall file the preliminary Proxy Statement with
\nthe SEC. Seller shall thereafter use its reasonable best efforts to respond as
\npromptly as practicable to any comments of the SEC with respect to the Proxy
\nStatement and to cause the Proxy Statement to be mailed to the stockholders of
\nSeller as promptly as practicable after the date of this Agreement. Seller shall
\npromptly notify Purchaser upon the receipt of any comments from the SEC or its
\nstaff or any request from the SEC or its staff for amendments or supplements to
\nthe Proxy Statement, shall consult with Purchaser prior to responding to any
\nsuch comments or request or filing any amendment or supplement to the Proxy
\nStatement, and shall provide Purchaser with copies of all correspondence between
\nSeller and its representatives, on the one hand, and the SEC and its staff, on
\nthe other hand relating to the Proxy Statement. If at any time prior to the
\nClosing any information in the Proxy Statement should be discovered by Seller
\nwhich should be set forth in an amendment or supplement to the Proxy Statement
\nso that any of such documents would not include any misstatement of a material
\nfact or omit to state any material fact necessary to make the statements
\ntherein, in light of the circumstances under which they were made, not
\nmisleading, Seller shall promptly notify Purchaser and, to the extent required
\nby Law, file with the SEC and mail to its stockholders an appropriate amendment
\nor supplement describing such information.<\/p>\n<\/p>\n

(b) Seller shall, as soon as practicable following the date of this
\nAgreement, establish a record date for, duly call, give notice of, convene and
\nhold a meeting of its stockholders (the “Stockholders Meeting<\/u>“) for the
\npurpose of obtaining Stockholder Approval. Subject to Section 5.4<\/u>, Seller
\nshall, through its Board of Directors, recommend to its stockholders approval of
\nthis Agreement and include such recommendation in the Proxy Statement.
\nNotwithstanding anything to the contrary contained in this Agreement, unless
\nthis Agreement has been terminated in accordance with Section 7.1<\/u>: (i)
\nSeller shall be required to hold the Stockholders Meeting even if its Board of
\nDirectors has adopted an Adverse Recommendation Change, and (ii) Seller shall
\nnot change the record date for, postpone or adjourn the Stockholders Meeting
\nwithout the prior written consent of the Purchaser. Unless the Seller153s Board of
\nDirectors shall have effected an Adverse Recommendation Change, the Seller shall
\nuse reasonable best efforts to solicit proxies in favor of the approval of this
\nAgreement. Seller shall ensure that all proxies solicited in connection with the
\nStockholders Meeting are solicited in compliance with all applicable Laws.<\/p>\n<\/p>\n

25<\/p>\n

\n

\n

Section 5.4. No Solicitation<\/u>.<\/p>\n<\/p>\n

(a) Seller shall not, and shall cause its Subsidiaries respective directors,
\nofficers and employees and each investment banker, financial advisor, attorney,
\naccountant and each other advisor, agent or representative retained by or acting
\nat the direction of Seller in connection with the transactions contemplated by
\nthis Agreement (collectively, “Representatives<\/u>“) to not, directly or
\nindirectly: (i) solicit, initiate, facilitate or knowingly encourage any
\nTakeover Proposal or any inquiry that constitutes or would reasonably be likely
\nto lead to a Takeover Proposal; (ii) other than to inform such third party of
\nthe provisions of this Section 5.4<\/u>, participate in any discussions or
\nnegotiations regarding any Takeover Proposal or any inquiry that constitutes or
\nwould reasonably be likely to lead to a Takeover Proposal, furnish to any Person
\nany information or data with respect to, or otherwise cooperate with or take any
\naction to knowingly facilitate any proposal that constitutes or would reasonably
\nbe expected to lead to any Takeover Proposal, or requires Seller to abandon,
\nterminate or fail to consummate the transactions contemplated by this Agreement;
\nor (iii) enter into any letter of intent, memorandum of understanding, merger
\nagreement or other agreement or understanding (whether oral or written, binding
\nor nonbinding) relating to, or that would reasonably be expected to lead to, any
\nTakeover Proposal. Notwithstanding the foregoing, prior to Stockholder Approval,
\nif the Board of Directors of Seller determines, after consultation with outside
\ncounsel, in good faith by resolution duly adopted that an unsolicited written
\nTakeover Proposal received after the date hereof other than in breach of this
\nSection 5.4<\/u> constitutes or is reasonably likely to lead to a Superior
\nProposal and that it is reasonably necessary to take such action to comply with
\nits fiduciary duties to the stockholders of Seller under applicable Law, then
\nSeller, after giving Purchaser prompt written notice of such determination (and
\nin any event no later than 48 hours after such determination), may (A) furnish
\nany information with respect to Seller and the Company to the Person (and its
\nRepresentatives) making such Takeover Proposal pursuant to a confidentiality
\nagreement not less restrictive of such Person than the Confidentiality
\nAgreement; provided, however<\/em>, all such information provided or
\nfurnished to such Person has been provided or furnished previously to Purchaser
\nor is provided or furnished to Purchaser concurrently with it being provided or
\nfurnished to such Person and (B) participate in discussions and negotiations
\nwith such Person (and its Representatives) regarding a Takeover Proposal.<\/p>\n<\/p>\n

(b) In the event Seller receives a Takeover Proposal or request for
\ninformation or inquiry that relates to or would be reasonably likely to lead to
\na Takeover Proposal, Seller shall promptly (within 48 hours) provide Purchaser
\nwith a copy (if in writing) and summary of the material terms and conditions of
\nsuch Takeover Proposal, request or inquiry and the identity of the Person (and
\nits equity investors, if known by Seller) making such Takeover Proposal, request
\nor inquiry, and shall keep Purchaser reasonably informed of the status of any
\nfinancial or other material modifications to such Takeover Proposal, request or
\ninquiry, including by conveying a copy of all such modifications that are in
\nwriting, promptly (within 48 hours) of any of Seller153s officers153, directors153 or
\nfinancial advisors153 receipt thereof.<\/p>\n<\/p>\n

26<\/p>\n

\n

\n

(c) Except as expressly permitted by this Section 5.4(c)<\/u>, the Board of
\nDirectors of Seller or any committee thereof shall not and shall not publicly
\npropose to (i)(A) withdraw or modify, in a manner adverse to Purchaser, the
\napproval of this Agreement or the recommendation by such Board of Directors or
\ncommittee that stockholders of Seller approve this Agreement (the “Board
\nRecommendation<\/u>“), (B) recommend to the stockholders of Seller, or approve or
\nadopt, a Takeover Proposal or (C) in the event that any Takeover Proposal is
\npublicly announced or any Person commences a tender offer or exchange offer for
\nany outstanding shares of common stock of Seller, fail to issue a press release
\nthat reaffirms the Board Recommendation and, in the case of a tender offer or
\nexchange offer, recommend against acceptance of such tender offer or exchange
\noffer by Seller stockholders, in each case within 10 Business Days of such
\nannouncement or commencement (for the avoidance of doubt, the taking of no
\nposition by the Board of Directors of Seller in respect of the acceptance of any
\ntender offer or exchange offer by its stockholders shall constitute a failure to
\nrecommend against any such offer) (any action, publicly proposed action or
\ninaction described in this clause (i) being referred to as an “Adverse
\nRecommendation Change<\/u>“); or (ii) enter into, approve or authorize Seller or
\nthe Company to enter into any letter of intent, memorandum of understanding, or
\nany merger, acquisition, option, joint venture, partnership or similar agreement
\n(whether oral or written, binding or nonbinding) with respect to any Takeover
\nProposal (other than a confidentiality agreement, subject to the requirements
\nset forth in Section 5.4(a)<\/u>) (each, an “Acquisition Agreement<\/u>“).
\nNotwithstanding the foregoing, (x) the Board of Directors of Seller may, subject
\nto compliance with this Section 5.4<\/u>, withdraw or modify the Board
\nRecommendation if such Board determines (after receiving the advice of its
\noutside counsel) in good faith by resolution duly adopted that it is reasonably
\nnecessary to do so to comply with its fiduciary duties to the stockholders of
\nSeller under applicable Law or (y) if the Board of Directors of Seller receives
\na Takeover Proposal that such Board determines, in good faith by resolution duly
\nadopted, constitutes a Superior Proposal, Seller or the Company may, subject to
\ncompliance with this Section 5.4<\/u>, enter into a definitive written
\nAcquisition Agreement with respect to such Superior Proposal if such Board
\ndetermines (after receiving the advice of its outside counsel) in good faith by
\nresolution duly adopted that it is reasonably necessary to do so to comply with
\nits fiduciary duties to the stockholders of Seller under applicable Law and
\nconcurrently with entering into such Acquisition Agreement terminates this
\nAgreement pursuant to Section 7.1(d)(ii)<\/u>. If Seller desires to enter into
\nsuch a Acquisition Agreement with respect to a Takeover Proposal or to make an
\nAdverse Recommendation Change, it shall give Purchaser written notice (an
\n“Adverse Recommendation Notice<\/u>“) containing a description of the material
\nterms of such Takeover Proposal or any other basis for an Adverse Recommendation
\nChange, the most current version of any Acquisition Agreement relating to the
\nSuperior Proposal, if any, any other information required by Section
\n5.4(b)<\/u> and, if applicable, advising Purchaser that the Board of Directors of
\nSeller has determined that such Takeover Proposal is a Superior Proposal, that
\nsuch Board has determined (after receiving the advice of its outside counsel) in
\ngood faith by resolution duly adopted that it is reasonably necessary to do so
\nto comply with its fiduciary duties to the stockholders of Seller under
\napplicable Law and that the Board intends to enter into a definitive written
\nAcquisition Agreement with respect to such Superior Proposal. Seller may make an
\nAdverse Recommendation Change or terminate this Agreement pursuant to
\nSection 7.1(d)(ii)<\/u> only if during the five Business Day period following
\nPurchaser153s receipt of the Adverse Recommendation Notice (it being understood
\nand agreed that the Seller shall provide notice to Purchaser of any material
\namendment to the terms of any such Superior Proposal and such five Business Day
\nnotice period shall be extended such that five Business Days remain in the
\nnotice period from the time the Purchaser is notified of the amendment), (i) the
\nSeller shall have offered to negotiate with (and, if accepted, negotiated in
\ngood faith with), and shall have caused its respective financial and legal
\nadvisors to offer to negotiate with (and, if accepted, negotiate in good faith
\nwith), Purchaser in making adjustments to the terms and conditions of this
\nAgreement as would enable the Seller to proceed with the transactions
\ncontemplated by this Agreement and the other transactions contemplated by this
\nAgreement, and (ii) the Seller153s Board of Directors shall have determined in
\ngood faith, after the end of such five Business Day period (as so extended, if
\napplicable), after considering the results of any such negotiations and the
\nrevised proposals made by Purchaser, if any, that the Superior Proposal giving
\nrise to such notice continues to be a Superior Proposal.<\/p>\n<\/p>\n

(d) For purposes of this Agreement:<\/p>\n<\/p>\n

(i) “Takeover Proposal<\/u>” means, other than a transaction between Seller
\nand Purchaser, any proposal or offer, whether or not conditional, whether or not
\nbinding, and whether or not written, from any Person (other than Purchaser and
\nits Affiliates) relating to any direct or indirect (A) acquisition of
\nsubstantially all of the assets of Seller (including securities of the Company),
\n(B) acquisition of substantially all of the assets of the Company, (C)
\nacquisition of more than 50% of the outstanding shares of common stock of Seller
\nor of the Shares, voting power of Seller or the Company or any class of equity
\nsecurities of Seller or the Company, (D) tender offer or exchange offer that if
\nconsummated would result in any Person beneficially owning more than 50% of the
\noutstanding shares of common stock of Seller or (D) merger, consolidation, share
\nexchange, business combination, recapitalization, liquidation, dissolution or
\nsimilar transaction involving Seller or the Company.<\/p>\n<\/p>\n

27<\/p>\n

\n

\n

(ii) “Superior Proposal<\/u>” means a bona fide written Takeover Proposal
\nmade by a third party, and which is otherwise on terms and conditions which the
\nBoard of Directors of Seller determines in its good faith judgment and by
\nresolution duly adopted (after consultation with outside counsel and its
\nfinancial advisors and in light of all relevant circumstances that the Board of
\nDirectors deems relevant, including all the terms and conditions of such
\nproposal and this Agreement and the timing and certainty of consummation) to be
\nmore favorable to Seller153s stockholders from a financial point of view than the
\nterms set forth in this Agreement or the terms of any other proposal made by
\nPurchaser after Purchaser153s receipt of an Adverse Recommendation Notice, and
\nwhich the Board of Directors of Seller determines in good faith is reasonably
\ncapable of being consummated on the terms so proposed, taking into account any
\nfinancing and approval requirements, timing of such consummation and all
\nfinancial, regulatory, legal and other aspects of such proposal that the Board
\nof Directors deems relevant.<\/p>\n<\/p>\n

(e) Nothing in this Section 5.4<\/u> shall prohibit the Board of Directors
\nof Seller from taking and disclosing to Seller153s stockholders a position
\ncontemplated by Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of Regulation M-A
\npromulgated under the Exchange Act, or other applicable Law, if such Board
\ndetermines, after consultation with outside counsel, that there is a reasonable
\nlikelihood that failure to so disclose such position would constitute a
\nviolation of applicable Law and it understood and agreed that, for purposes of
\nthis Agreement, any “stop, look and listen” communication by the Board of
\nDirectors to the stockholders of Seller pursuant to Rule 14d-9(f) of the
\nExchange Act or any similar communication to the stockholders shall not
\nconstitute an Adverse Recommendation Change; provided, however<\/em>, in no
\nevent will Seller, the Board of Directors of Seller or any committee thereof (A)
\nrecommend that the stockholders of Seller tender their shares in connection with
\nany tender or exchange offer (or otherwise approve or recommend any Takeover
\nProposal) or (B) engage in an Adverse Recommendation Change, in each case other
\nthan in accordance with Section 5.4(c)<\/u>.<\/p>\n<\/p>\n

Section 5.5. Pre-Closing Transfers<\/u>. On or prior to the Closing, Seller
\nshall cause the Company to transfer all Excluded Assets and Excluded Liabilities
\n(including, without limitation, the Excluded Assets and Excluded Liabilities
\nlisted on Schedule 5.5<\/u>) of the Company to a Person that is not the
\nCompany or a Subsidiary of the Company, without any liability or obligation
\n(including, without limitation, any indemnification obligations) of the
\nPurchaser, or the Company or its Subsidiaries at or after the Closing in respect
\nof such transfer or Excluded Liabilities. On or prior to the Closing, Seller
\nshall transfer any assets held by it or any of its Affiliates (other than the
\nCompany and its Subsidiaries) used in the Business (including, without
\nlimitation, the assets listed on Schedule 5.5<\/u>) to the Company or a
\nMaterial Company Subsidiary.<\/p>\n<\/p>\n

Section 5.6. Indebtedness<\/u>.<\/p>\n<\/p>\n

(a) With respect to each item of Indebtedness (other than Assumed Debt) that
\nwould exist with respect to the Company and its Subsidiaries as of the Closing
\nor immediately thereafter, Seller shall deliver, at least five Business Days
\nprior to the Closing Date, executed payoff letters or final invoices, as
\napplicable, from each lender, creditor, noteholder or other counterparty to whom
\nsuch obligation is owing (whether or not then due and payable), in each case (A)
\nthat sets forth the amount to be paid on the Closing Date, together with wire
\ntransfer instructions, (B) evidencing that the payment of such amount would
\nresult in the full repayment, satisfaction, release, and discharge of all
\ncurrent and future obligations of the Company or its Subsidiaries (and, in the
\ncase of hedging, swap or similar agreements, the complete unwind and settlement
\nof such arrangements) in respect of such item (except obligations for
\nindemnification and reimbursement that expressly survive repayment in full) and
\nof all current and future Encumbrances relating to such item and (C)
\ncontemplating the delivery of UCC-3 termination statements and mortgage releases
\nthat when filed or recorded, as the case may be, will be sufficient to release
\nany and all Encumbrances relating to such item. Seller shall arrange for
\ndelivery of all such UCC-3 termination statements and mortgage releases, if any,
\nat the Closing. Prior to the Closing, Seller and Purchaser shall use reasonable
\ncommercial efforts to ensure that all Indebtedness of the Company or its
\nSubsidiaries can be (i) paid by the Purchaser for the benefit of the Company and
\nits Subsidiaries at Closing, (ii) remain unpaid as a portion of the Assumed
\nDebt, or (iii) be assigned to the Seller or an Affiliate of the Seller (other
\nthan the Company or its Subsidiaries) as part of the Excluded Liabilities.
\nNotwithstanding the foregoing, Purchaser may require in a written notice
\nprovided to Seller not less than five days prior to Closing, to treat any such
\nIndebtedness not assigned to Seller or an Affiliate of the Seller pursuant to
\nclause (iii) as a portion of the Payoff Amount or a portion of the Assumed Debt,
\nbut in all cases subject to the limitation set forth in the definition of
\nAssumed Debt; provided<\/em>, that Seller may require that any such Assumed
\nDebt proposed in the notice be included in the Payoff Amount if Seller does not
\nreceive, prior to Closing, such written releases and documentation satisfactory
\nto Seller in its sole discretion that all obligations and guaranties of Seller
\nrelated to such proposed Assumed Debt are released and extinguished prior to or
\nas of Closing.<\/p>\n<\/p>\n

28<\/p>\n

\n

\n

(b) Seller and Purchaser agree to use commercially reasonable efforts to
\ntake, or cause to be taken, all actions, and to do, or cause to be done and
\ncooperate with each other in order to do, all things necessary, proper or
\nadvisable to release all guarantees provided by Seller for Assumed Debt,
\nprovided that nothing in this Section 5.6(b)<\/u> shall require Purchaser to,
\nor to cause any of its Subsidiaries to (i) provide any non-public information
\nconcerning its or its Subsidiaries153 operations to any other party hereto, (ii)
\nmake or agree to make any out-of-pocket payment, or (iii) agree to any
\nadditional financial obligation including a substitution of such guarantees.<\/p>\n<\/p>\n

Section 5.7. Efforts and Actions to Cause Closing to Occur<\/u>.<\/p>\n<\/p>\n

(a) Prior to the Closing, upon the terms and subject to the conditions of
\nthis Agreement, Purchaser and Seller shall use their respective commercially
\nreasonable efforts to take, or cause to be taken, all actions, and to do, or
\ncause to be done and cooperate with each other in order to do, all things
\nnecessary, proper or advisable to consummate the Closing as promptly as
\npracticable, including (i) the preparation and filing of all forms,
\nregistrations and notices required to be filed to consummate the Closing and the
\ntaking of such actions as are necessary to obtain any requisite approvals,
\nauthorizations, consents, orders, licenses, permits, qualifications, exemptions
\nor waivers by any third party or Governmental Entity, (ii) defending all
\nlawsuits and other proceedings by or before any Governmental Entity challenging
\nthis Agreement or the consummation of the Closing, and (iii) causing to be
\nlifted or rescinded any ruling, Order or other action of any Governmental Entity
\nadversely affecting the ability of the parties to consummate the Closing;
\nprovided, however<\/em>, that, without Purchaser153s consent, Seller shall not
\nenter into any settlement with holders or purported holders of any securities or
\nrights to acquire securities of Seller or any of its Affiliates in connection
\nwith the transactions contemplated by this Agreement unless such settlement does
\nnot have any adverse effect on the Business, Purchaser or on Seller153s ability to
\nsatisfy its Closing obligations under this Agreement. In addition, no party
\nhereto shall take any action after the date hereof that could reasonably be
\nexpected to materially delay the obtaining of, or result in not obtaining, any
\npermission, approval or consent from any Governmental Entity or other Person
\nrequired to be obtained prior to Closing.<\/p>\n<\/p>\n

(b) If any party hereto or Affiliate thereof receives a request for
\ninformation or documentary material from any Governmental Entity with respect to
\nthis Agreement or any of the transactions contemplated hereby, then such party
\nshall endeavor in good faith to make, or cause to be made, as soon as reasonably
\npracticable and after consultation with the other party, an appropriate response
\nin compliance with such request.<\/p>\n<\/p>\n

29<\/p>\n

\n

\n

(c) The parties shall keep each other apprised of the status of matters
\nrelating to the completion of the transactions contemplated hereby and work
\ncooperatively in connection with obtaining the requisite approvals, consents or
\nOrders of each applicable Governmental Entity, including, without limitation:\n<\/p>\n<\/p>\n

(i) cooperating with each other in connection with filings under the Exchange
\nAct and the rules and regulations promulgated thereunder;<\/p>\n<\/p>\n

(ii) cooperating with each other in connection with any filings, proceedings
\nor discussions with any Competition Authority;<\/p>\n<\/p>\n

(iii) furnishing to the other party all information within its possession
\nthat is requested by a Competition Authority, in connection with the
\ntransactions contemplated by this Agreement;<\/p>\n<\/p>\n

(iv) promptly notifying each other of any communications from or with any
\nCompetition Authority with respect to the transactions contemplated by this
\nAgreement, unless it consults with the other party in advance, and, to the
\nextent permitted by such Competition Authority, gives the other party the
\nopportunity to attend and participate thereat; and<\/p>\n<\/p>\n

(v) consulting and cooperating with one another in connection with all
\nanalyses, appearances, presentations, memoranda, briefs, arguments, opinions and
\nproposals made or submitted by or on behalf of any party hereto in connection
\nwith proceedings or discussions with any Competition Authority, in connection
\nwith the transactions contemplated by this Agreement.<\/p>\n<\/p>\n

(d) Prior to Closing, each party shall, and Seller shall cause the Company
\nto, use commercially reasonable efforts to obtain from any third party that is
\nnot a Governmental Entity any consents, licenses, waivers, approvals or
\nauthorizations and send any notices, in each case, which are required to be
\nobtained, made or sent in connection with the execution, delivery and
\nperformance of this Agreement or the consummation of the transactions
\ncontemplated by this Agreement (the “Third-Party Consents<\/u>“);
\nprovided, however<\/em>, no material modification of any Contracts or
\nentrance into new Contracts other than in the ordinary course of business
\nconsistent with past practice shall be made pursuant to this Section
\n5.7(d)<\/u> without the prior written consent of Purchaser.<\/p>\n<\/p>\n

(e) Notwithstanding the foregoing, this Section 5.7<\/u> shall not require
\nPurchaser to, or to cause any of its Subsidiaries to (i) provide any non-public
\ninformation concerning its or its Subsidiaries153 operations to any other party
\nhereto, or (ii) make or agree to make any out-of-pocket payment other than
\napplication fees and other nominal payments.<\/p>\n<\/p>\n

Section 5.8. Tax Matters<\/u>. The following provisions shall govern the
\nallocation of responsibility as between Seller, the Company, and Purchaser for
\ncertain Tax matters following the Closing Date:<\/p>\n<\/p>\n

(a) Tax Indemnification<\/u>. Seller shall indemnify the Company and
\nPurchaser and hold them harmless from and against (i) any breach or inaccuracy
\nof any representation or warranty made by Seller in Section 3.19<\/u> of this
\nAgreement or the Schedules thereto, (ii) all Taxes of the Company for all
\ntaxable periods ending on or before the Closing Date and the portion through the
\nend of the Closing Date for any taxable period that includes (but does not end
\non) the Closing Date (a “Pre-Closing Tax Period<\/u>“), (iii) any and all
\nincome or similar Taxes of any member of an affiliated, consolidated, combined,
\nor unitary group of which the Company (or any predecessor of the Company) or any
\nSubsidiary of the Company (or any predecessor of such Subsidiary of the Company)
\nis or was a member on or prior to the Closing Date, including pursuant to
\nTreasury Regulation \u00a7 1.1502-6 or any analogous or similar state, local, or
\nforeign law or regulation, and (iv) any and all Taxes of any Person (other than
\nthe Company) imposed on the Company as a transferee or successor, by contract or
\npursuant to any law, rule or regulation, which Taxes relate to an event or
\ntransaction occurring before the Closing, except, in the case of any of clauses
\n(i), (ii), (iii), or (iv) above, to the extent that any such amount is, or
\nalready has been, reflected in the calculation of the Closing Date Net Working
\nCapital. The provisions of Article VIII<\/u> apply to any indemnification
\npursuant to this Section 5.8<\/u>.<\/p>\n<\/p>\n

30<\/p>\n

\n

\n

(b) Straddle Period<\/u>. In the case of any taxable period that includes
\n(but does not end on) the Closing Date (a “Straddle Period<\/u>“), the amount
\nof any Taxes for the Pre-Closing Tax Period shall be determined (i) as to
\nincome, receipts or similar Taxes, based on an interim closing of the books as
\nof the close of business on the Closing Date (and for such purpose, the taxable
\nperiod of any partnership or other pass-through entity in which the Company
\nholds a beneficial interest shall be deemed to terminate at such time), and (ii)
\nas to all other Taxes, based on a daily proration. For purposes of any Taxes
\ndetermined based on a daily proration basis, the amount of such Taxes allocated
\nto the Pre-Closing Tax Period shall be the full, actual amount of such Taxes
\nmultiplied by a fraction the numerator of which is the number of days in the Tax
\nperiod ending on (and including) the Closing Date and the denominator of which
\nis the number of days in the entire Straddle Period.<\/p>\n<\/p>\n

(c) Tax Returns<\/u>.<\/p>\n<\/p>\n

(i) Seller shall prepare and file timely, or cause to be prepared and filed
\ntimely, all Tax Returns for the Company and its Subsidiaries that are filed
\nafter the Closing Date with respect to a Pre-Closing Period that ends on or
\nbefore the Closing Date and with respect to periods for which a consolidated,
\nunitary or combined income or similar Tax Return of Seller will include the
\noperations of the Company and its Subsidiaries (each a “Seller Tax
\nReturns<\/u>“). All such Seller Tax Returns with respect to the Company and its
\nSubsidiaries shall be prepared and filed in a manner consistent with prior
\npractice, except as required by a change in applicable Tax Law. Seller shall
\npermit Purchaser to review and comment on each such Seller Tax Return (or the
\nallocable portions of such Seller Tax Returns that include the Company and its
\nSubsidiaries) at least 10 Business Days prior to the filing of such Seller Tax
\nReturn. If such Seller Tax Returns could reasonably be expected to result in an
\nincrease in the Company153s Tax liability for the taxable periods (or portions
\nthereof) after the Closing Date, then Seller shall make such revisions to such
\nTax Returns as Purchaser reasonably requests.<\/p>\n<\/p>\n

(ii) Purchaser shall prepare and file timely, or cause to be prepared and
\nfiled timely, all Tax Returns for the Company and its Subsidiaries other than
\nthe Seller Tax Returns that are filed after the Closing Date. Purchaser shall
\npermit Seller to review and comment on each such Tax Return described in the
\npreceding sentence for which Seller may reasonably be expected to have liability
\nfor some or all of the Taxes relating to such Tax Return pursuant to this
\nAgreement at least 10 Business Days prior to the filing of such Tax Return and
\nshall make such revisions to such Tax Return as Seller reasonably requests. A
\nTax Return applicable to a Straddle Period shall be prepared on a consistent
\nbasis with how the Tax Return has been prepared for prior taxable periods,
\nunless otherwise required by applicable Law.<\/p>\n<\/p>\n

(iii) Neither Seller, nor Purchaser or the Company, shall amend, without the
\nother parties153 prior written consent, which consent shall not be unreasonably
\nwithheld, conditioned, or delayed, a Tax Return to which this Section
\n5.8(c)<\/u> applies.<\/p>\n<\/p>\n

31<\/p>\n

\n

\n

(iv) If the Seller or the Purchaser cannot agree as to any revisions of a Tax
\nReturn to be filed under this Section 5.8(c)(i)<\/u> or (ii)<\/u>, then at
\nleast 5 Business Days prior to the filing date of such Tax Return (including
\napplicable extensions) any disputed item shall be resolved (within a reasonable
\ntime, taking into account the deadline for filing such Tax Return) by a
\nnationally recognized independent accounting firm chosen by both Purchaser and
\nSeller. Upon resolution of all disputed items, the relevant Tax Return shall be
\nfiled on that basis. The costs, fees and expenses of such accounting firm shall
\nbe borne equally by Purchaser and Seller.<\/p>\n<\/p>\n

(d) Refunds and Tax Benefits<\/u>. Except as described in Section
\n5.8(j)<\/u>, any Tax refunds that are received by the Company or Purchaser, and
\nany amounts credited against Tax to which the Company or Purchaser becomes
\nentitled, that relate to Pre-Closing Tax Periods shall be for the account of
\nSeller, and Purchaser and\/or the Company shall pay to Seller the amount of any
\nsuch refund or any such credit within fifteen (15) days after receipt or
\nentitlement thereto.<\/p>\n<\/p>\n

(e) Cooperation on Tax Matters<\/u>. Seller, the Company, and Purchaser
\nshall cooperate fully, as and to the extent reasonably requested by another
\nParty, in connection with the filing of Tax Returns pursuant to this Section
\n5.8<\/u> and any audit, litigation or other proceeding with respect to Taxes.
\nSuch cooperation shall include the retention and (upon another Party153s request)
\nthe provision of records and information that are reasonably relevant to any
\nsuch audit, litigation or other proceeding and making employees available on a
\nmutually convenient basis to provide additional information and explanation of
\nany material provided hereunder. Subject to Section 5.12<\/u>, Seller, the
\nCompany, and Purchaser agree to retain all books and records with respect to Tax
\nmatters pertinent to the Company relating to any taxable period beginning before
\nthe Closing Date until the expiration of the statute of limitations (and, to the
\nextent notified by Seller, the Company, or Purchaser, any extensions thereof) of
\nthe respective taxable periods, and to abide by all record retention agreements
\nentered into with any taxing authority. Seller, the Company, and Purchaser
\nfurther agree, upon request, to use their best efforts to obtain any certificate
\nor other document from any Governmental Entity or any other Person as may be
\nnecessary to mitigate, reduce or eliminate any Tax that could be imposed
\n(including, but not limited to, with respect to the transactions contemplated by
\nthis Agreement). Seller, the Company, and Purchaser further agree, upon request,
\nto provide any other Party with all information that may be required to report
\npursuant to Code \u00a7 6043A or the Treasury Regulations promulgated thereunder.<\/p>\n<\/p>\n

(f) Termination of Existing Tax-Sharing Agreements<\/u>. Any and all
\nexisting Tax-sharing agreements or arrangements, written or oral, between Seller
\nand\/or an Affiliate on the one hand and the Company or any Subsidiary of the
\nCompany on the other hand shall terminate as of the Closing Date and after the
\nClosing Date, the Company and its Subsidiaries shall not be bound thereby or
\nhave any liability thereunder (whether for the current year, a future year, or a
\npast year).<\/p>\n<\/p>\n

(g) Transfer Taxes and Fees<\/u>. All transfer, documentary, sales, use,
\nstamp, registration and other such Taxes and all conveyance fees, recording
\ncharges and other fees and charges (including, as to any such Taxes, fees, or
\ncharges, any penalties and interest) incurred in connection with the
\nconsummation of the transactions contemplated by this Agreement shall be borne
\nfifty percent (50%) by Seller and fifty percent (50%) by Purchaser.<\/p>\n<\/p>\n

32<\/p>\n

\n

\n

(h) Amendment of Pre-Closing Tax Returns<\/u>. Purchaser and the Company
\nagree to not amend any Tax Returns of Seller that were filed prior to the
\nClosing Date unless required by Law or resulting from a challenge by applicable
\nTax authorities, without the written consent of Seller, such consent not to be
\nunreasonably withheld, conditioned or delayed.<\/p>\n<\/p>\n

(i) Contest Provisions<\/u>.<\/p>\n<\/p>\n

(i) In the event Purchaser receives notice of any pending or threatened Tax
\naudit or assessment or other dispute concerning Taxes with respect to which
\nSeller may incur liability under Section 5.8(a)<\/u>, Purchaser shall notify
\nSeller promptly of such matter in writing, provided that failure of Purchaser to
\ncomply with this provision shall not affect Purchaser153s right to indemnification
\nunder Section 5.8(a)<\/u> unless such failure materially adversely affects the
\nability of Seller to challenge such Tax audits or assessments.<\/p>\n<\/p>\n

(ii) Seller shall control any Tax audit or administrative or court proceeding
\nrelating to any Tax for any taxable period ending on or before the Closing Date,
\nand to employ counsel of its choice at Seller153s expense provided that (x)
\nPurchaser shall have the right to participate (at its own expense) in any such
\nTax audit or administrative or court proceeding and (y) Seller shall keep
\nPurchaser reasonably informed of the details and status of such Tax audit or
\nadministrative or court proceeding (including providing Purchaser with copies of
\nall written correspondence regarding such matter). Notwithstanding the
\nforegoing, Seller shall not be entitled to settle, either administratively or
\nafter the commencement of litigation, any claim regarding Taxes with respect to
\nany Tax Return of the Company that adversely would affect the liability for
\nTaxes of Purchaser or the Company for any period beginning on or after the
\nClosing Date without the prior written consent of Purchaser, which consent shall
\nnot be unreasonably conditioned, withheld or delayed; provided,
\nhowever<\/em>, that such consent shall not be necessary to the extent that Seller
\nindemnifies Purchaser against the effects of such settlement.<\/p>\n<\/p>\n

(iii) Purchaser shall have the sole right to represent the interests of the
\nCompany in any Tax audit or administrative or court proceeding relating to Taxes
\nwith respect to taxable periods including (but not ending on) the Closing Date
\nand to employ counsel of its choice at its expense; provided, however<\/em>,
\nthat Purchaser shall not be entitled to settle, either administratively or after
\nthe commencement of litigation, any claim regarding Taxes that would create an
\nobligation of Seller to such Tax authority or as indemnity obligation on the
\npart of Seller hereunder, without the prior consent of Seller, which consent
\nshall not be unreasonably conditioned, withheld or delayed; provided,
\nhowever<\/em>, that such consent shall not be required to the extent that
\nPurchaser directly pays such additional amounts owed by the Seller, if any, and
\nagrees in writing with Seller not to seek indemnity from the Seller against the
\neffects of such settlement. Where consent to a settlement is withheld by Seller
\npursuant to this section, Seller may continue or initiate any further
\nproceedings at its own expense.<\/p>\n<\/p>\n

(j) Carrybacks<\/u>. Seller shall, within 15 days, pay to Purchaser any Tax
\nrefund (or reduction in Tax liability) resulting from a carryback of a
\npost-acquisition Tax attribute of any of the Company and its Subsidiaries into
\nthe Seller153s consolidated Tax Return, when such refund (or reduction) is
\nrealized by the Seller or a member of the Seller153s Affiliated Group. At
\nPurchaser153s request, Seller will cooperate with the Company and its Subsidiaries
\nat Purchaser153s expense in obtaining such refund (or reduction), including
\nthrough the filing of amended Tax Returns or refund claims. Purchaser agrees to
\nindemnify Seller for any Taxes resulting from the disallowance of such
\npost-acquisition Tax attribute on audit or otherwise.<\/p>\n<\/p>\n

(k) Indemnification Provisions<\/u>. The provisions of Article VIII<\/u>
\napply to any indemnification pursuant to this Section 5.8<\/u>. All indemnity
\npayments under this Agreement and any adjustment to any payment of the Purchase
\nPrice as described in Section 2.2<\/u> shall be treated as an adjustment to
\nthe Purchase Price paid for the Shares for tax purposes.<\/p>\n<\/p>\n

33<\/p>\n

\n

\n

(l) Section 338(h)(10)<\/u>. At Purchaser153s option and sole discretion,
\nPurchaser and Seller shall join in making an election under Code \u00a7338(h)(10)
\n(and any corresponding elections under state, local, or non-U.S. tax law)
\n(collectively, a “ \u00a7338(h)(10) Election<\/u>“) with respect to the purchase and
\nsale of the stock of the Company and any of its Subsidiaries hereunder. If the
\nPurchaser elects to have the Seller and Purchaser to join in making a
\n \u00a7338(h)(10) Election, Purchaser will timely pay to the Seller (to be forwarded
\nby Seller to the appropriate Governmental Entity) the amount of any increase in
\nTaxes actually payable by Seller (after reducing the amount of such Taxes
\npayable by the amount of any losses, net operating loss carryovers, capital loss
\ncarryovers and tax credits available to the Seller) at least 5 Business Days
\nprior to the due date (including any applicable extensions) for filing the
\nSeller’s Tax Returns that include the deemed asset sale resulting from the
\n \u00a7338(h)(10) Election and Purchaser agrees to indemnify and hold Seller harmless
\nagainst any Losses resulting from the Purchaser’s failure to pay to Seller such
\nTaxes. The Purchaser and Seller agree that if a \u00a7338(h)(10) Election is made,
\nthe Purchase Price and the liabilities of the Company and its Subsidiaries will
\nbe allocated to the assets of the Company and its Subsidiaries for all purposes
\n(including Tax and financial accounting purposes) as reasonably determined by
\nPurchaser, but in any event in a manner consistent with Code \u00a7338 and the
\nTreasury Regulations thereunder. If a \u00a7338(h)(10) Election is made, Purchaser,
\nSeller and the Company and its Subsidiaries shall file all Tax Returns
\n(including amended returns and claims for refund) and information reports in a
\nmanner consistent with such allocation.<\/p>\n<\/p>\n

Section 5.9. Publicity<\/u>. The Seller and Purchaser shall consult with
\neach other before issuing any press release or otherwise making any public
\nstatements (including scheduling a press conference or conference call with
\ninvestors or analysts) with respect to this Agreement or any of the transactions
\ncontemplated by this Agreement and shall not issue any such press release or
\nmake any such public statement without the prior consent of the other party,
\nwhich consent shall not be unreasonably withheld or delayed; provided,
\nhowever,<\/em> that a party may, without the prior consent of the other party,
\nissue such press release or make such public statement as may be required by Law
\nor Order including as required by the Securities Exchange Act of 1934, as
\namended, or the applicable rules of the SEC.<\/p>\n<\/p>\n

Section 5.10. Transition Services<\/u>. Except as provided in the
\nTransition Services Agreement, all data processing, cash management, accounting,
\ninsurance, banking, personnel, legal, communications and other products and
\nservices between the Company and its Subsidiaries on the one hand, and Seller or
\nany Affiliates (other than the Company and its Subsidiaries) on the other hand,
\nincluding any agreements or understandings (written or oral) with respect
\nthereto, shall terminate simultaneously with the Closing without any further
\naction or liability on the part of the parties thereto.<\/p>\n<\/p>\n

Section 5.11. Intercompany Arrangements<\/u>. Seller shall arrange, in a
\nmanner that has no adverse Tax effects upon the Company or any Subsidiary of the
\nCompany, for Intercompany Accounts to be entirely settled effective as of the
\nClosing, without any further liability of any kind on the part of the Company or
\nany Subsidiary of the Company. In addition, except as otherwise expressly
\ncontemplated by this Agreement, all agreements and commitments, whether written,
\noral or otherwise, which are solely between the Company or a Subsidiary of the
\nCompany, on the one hand, and Seller and its Affiliates (excluding the Company
\nor a Subsidiary of the Company), on the other hand, shall be terminated and of
\nno further effect, simultaneously with the Closing without any further action or
\nliability of any kind on the part of the Company or any Subsidiary of the
\nCompany.<\/p>\n<\/p>\n

Section 5.12. Books and Records<\/u>. After the Closing Date, upon any
\nreasonable request from a party hereto or its representatives, the party holding
\napplicable records shall (a) provide to the requesting party or its
\nrepresentatives reasonable access to such records during normal business hours
\nand (b) permit the requesting party or its representatives to make copies of
\nsuch records, in each case at no cost to the requesting party or its
\nrepresentatives (other than for reasonable out-of-pocket expenses);
\nprovided, however<\/em>, that nothing herein shall require either party to
\ndisclose any information to the other if such disclosure would jeopardize any
\nattorney-client or other legal privilege or contravene any applicable Law. Such
\nrecords may be sought under this Section for any reasonable purpose, including
\nto the extent reasonably required in connection with the audit, accounting, Tax,
\nlitigation, federal securities disclosure or other similar needs of the party
\nseeking such records. Notwithstanding the foregoing, any and all such records
\nmay be destroyed by a party if such destroying party sends to the other party
\nhereto written notice of its intent to destroy such records, specifying in
\nreasonable detail the contents of the records to be destroyed; such records may
\nthen be destroyed after the 60th day following such notice unless the other
\nparty hereto notifies the destroying party that such other party desires to
\nobtain possession of such records, in which event the destroying party shall
\ntransfer the records to such requesting party and such requesting party shall
\npay all reasonable expenses of the destroying party in connection therewith. On
\nor before the Closing Date, Seller shall be permitted to make and retain a copy
\nof the e-mails and any attachments residing on the Company153s existing server or
\nthe digitalangel.com website. On and after Closing, Seller shall be permitted to
\nutilize such copy of the e-mails and attachments, provided that its use is
\nnecessary for (1) concluding Seller’s involvement in the Business, (2) complying
\nwith Seller’s obligations under applicable Law or Seller153s contractual
\nobligations, or (3) continued operation of the Emergency Locator Business or the
\non-going activities of Seller not related to the Business; provided, further,
\nthat such use shall only be permitted to the extent it does not violate the
\nrestrictive covenants set forth in Section 5.19<\/u> and to the extent Seller
\ncomplies with the confidentiality provisions of Section 5.17<\/u> with respect
\nto such information.<\/p>\n<\/p>\n

34<\/p>\n

\n

\n<\/p>\n

Section 5.13. Insurance Policies<\/u>.<\/p>\n<\/p>\n

(a) If (i) the Company would be entitled to the proceeds of a claim made
\nafter Closing under an occurrence-based insurance policy held by Seller or any
\nof its Subsidiaries (other than the Company and its Subsidiaries) before Closing
\nand (ii) Purchaser informs Seller in a timely manner of such claim, Seller shall
\nreport and pursue such claim.<\/p>\n<\/p>\n

(b) Notwithstanding anything herein to the contrary, all proceeds paid out
\nunder insurance policies of Seller and its Subsidiaries from and after the
\nClosing shall be for the benefit of Purchaser to the extent such proceeds are in
\nrespect of the Company or the Business, and Seller shall cause such proceeds to
\nbe transferred to Purchaser within thirty (30) Business Days after receipt.<\/p>\n<\/p>\n

Section 5.14. Bank Accounts<\/u>. Seller shall provide Purchaser with a
\ncomplete list of each of the bank accounts of the Company and the authorized
\nsignatories for each such account as soon as practicable before the Closing
\nDate. The Seller represents that such bank accounts are the only bank accounts
\nused in the Business. The parties shall cooperate in connection with the
\nreplacement or supplementation of such signatories effective as of the Closing.\n<\/p>\n<\/p>\n

Section 5.15. Notices of Certain Events<\/u>. From and after the date of
\nthis Agreement until the earlier of the Closing or the termination of this
\nAgreement, Seller shall promptly notify Purchaser of: (a) any change or event
\nthat would cause any of the conditions in Article VI<\/u> of this Agreement
\nnot to be satisfied; (b) any event that would constitute a breach or default by
\nSeller of any representation, warranty, agreement or covenant of such Party
\ncontained in this Agreement; (including inaccuracies in representations and
\nwarranties as if made and restated on and as of a date between the date hereof
\nand Closing); (c) any written notice or other written communication from any
\nPerson alleging that the consent of such Person is or may be required in
\nconnection with the transactions contemplated by this Agreement; and (d) any
\nProceeding or investigation commenced or, to the Knowledge of Seller, threatened
\nagainst, relating to or involving this Agreement or any transaction contemplated
\nhereby or thereby; provided, however<\/em>, that, (x) no such notice will be
\ndeemed to cure any breach or inaccuracy of any representation or warranty made
\npursuant to this Agreement or limit any rights or remedies and (y) no such
\nnotice will relieve any party of any obligation or liability under this
\nAgreement.<\/p>\n<\/p>\n

35<\/p>\n

\n

\n

Section 5.16. Further Assurances<\/u>.<\/p>\n<\/p>\n

(a) From and after the Closing, each of Seller and Purchaser shall furnish or
\ncause to be furnished to the other party and its employees, counsel, auditors
\nand other representatives such information and assistance relating to the
\nCompany (to the extent within the control of such other party) as is reasonably
\nnecessary for financial reporting and accounting matters of the other party,
\nincluding the furnishing of such documentation and information relating to the
\nCompany as may be reasonably requested in connection with the preparation of
\nreports, accounts and other documents and materials to be filed with or
\nsubmitted to the SEC or any stock exchange. In order to facilitate the
\nresolution of any claims made against or incurred by Seller, for a period of six
\nyears following the Closing, Purchaser shall provide Seller and its
\nRepresentatives reasonable access (for the purposes of examining and copying at
\nthe sole cost and expense of Seller), during normal business hours and on at
\nleast two (2) Business Days153 prior written notice, to those portions of the
\nbooks and records of the Business kept by Purchaser solely with respect to
\nperiods prior to the Closing Date. Subject to Seller153s discretion to destroy
\npre-Closing records as set forth in Section 5.12<\/u>, for a period of six
\nyears following the Closing, Seller shall provide Purchaser and its
\nRepresentatives reasonable access (for the purposes of examining and copying at
\nthe sole cost and expense of Purchaser), during normal business hours and on at
\nleast two (2) Business Days153 prior written notice, to those portions of the
\nbooks and records related to the Company in Seller153s possession solely with
\nrespect to periods prior to the Closing Date. Any information obtained by either
\nparty pursuant to this Section 5.16(a)<\/u> shall be subject to the terms and
\nconditions of the Confidentiality Agreement.<\/p>\n<\/p>\n

(b) At any time and from time to time, each party to this Agreement agrees,
\nsubject to the terms and conditions of this Agreement, to take such actions and
\nto execute and deliver such documents as may be necessary to effectuate the
\npurposes of this Agreement at the earliest practicable time.<\/p>\n<\/p>\n

Section 5.17. Confidentiality<\/u>. Seller shall, and shall cause its
\nAffiliates and its and their respective agents, representatives, employees,
\nofficers and directors to, from and after the Closing Date: (a) treat and hold
\nas confidential all (and not disclose or provide any third party access to any)
\ninformation relating to Trade Secrets and all other confidential or proprietary
\ninformation of the Company and the Business (collectively, “Confidential
\nInformation<\/u>“), (b) in the event that Seller, any of its Affiliates or any of
\nits or their respective agents, representatives, employees, officers or
\ndirectors becomes legally compelled to disclose any such information, provide
\nPurchaser with prompt written notice of such requirement (to the extent legally
\npermissible) so that Purchaser may seek (at Purchaser153s cost) a protective order
\nor other remedy or waive compliance with this Section 5.17<\/u>, and (c) in
\nthe event that such protective order or other remedy is not obtained, or
\nPurchaser waives compliance with this Section 5.17<\/u>, furnish only that
\nportion of such Confidential Information that is legally required to be provided
\nand cooperate with Purchaser (at Purchaser153s cost) to obtain assurances that
\nconfidential treatment will be accorded such Confidential Information;
\nprovided, however<\/em>, that this Section 5.17<\/u> shall not apply to any
\ninformation that, at the time of disclosure, (i) is available publicly or
\notherwise known to the public other than as a result of disclosure in breach of
\nthis Agreement or (ii) is required to be disclosed by applicable Law (subject to
\ncompliance with clauses (b) and (c) of this Section 5.17<\/u>).<\/p>\n<\/p>\n

Section 5.18. Non-Competition; Non-Solicitation<\/u>. Seller acknowledges
\nthat prior to Closing, the Seller had access to confidential and proprietary
\ninformation of the Business and the agreements and covenants contained in this
\nSection 5.18<\/u> are essential to protect the Business. Accordingly, Seller
\ncovenants and agrees as follows:<\/p>\n<\/p>\n

36<\/p>\n

\n

\n

(a) During the Restricted Period (as defined below), neither Seller nor any
\nof its Affiliates shall, within any Territory (as defined below), directly or
\nindirectly:<\/p>\n<\/p>\n

(i) (A) engage or invest in, or own, control, manage or participate in the
\nownership, control or management of any Person that engages in the Restricted
\nBusiness (a “Competitor<\/u>“); (B) render any services related to the
\nRestricted Business to, any Person, entity or enterprise, which Person, entity
\nor enterprise is that a Competitor; or (C) become associated with any Competitor
\nin any capacity, including, without limitation, as a shareholder, manager,
\nconsultant, lessor or developer; or<\/p>\n<\/p>\n

(ii) (A) solicit, divert or take away, or accept any business relating to the
\nRestricted Business (or help any other Person, entity or enterprise to solicit,
\ndivert, take-away or accept any such business) from any Person, entity or
\nenterprise who, during the two year period ending on the Closing Date, is or was
\na customer or supplier of any of the Business, or who, to the Knowledge of the
\nSeller, during the Restricted Period becomes a customer or supplier of the
\nCompany or any Material Company Subsidiary or (B) actively cause any customer,
\nreferral source, supplier or other business relation to curtail doing business
\nwith the Company or any Material Company Subsidiary.<\/p>\n<\/p>\n

(b) During the Restricted Period, neither Seller nor any of its Affiliates
\nshall, directly or indirectly or by assisting others, (i) solicit for hire or
\notherwise attempt to hire any individual who within a twelve (12) month period
\nof such hiring or solicitation served as an officer, employee, consultant or
\nadvisor of the Business and to whom the Seller, the Company or any Material
\nCompany Subsidiary paid aggregate compensation during the most recently
\ncompleted fiscal year of the Seller in excess of $50,000 or (ii) encourage or
\nattempt to induce any such officer, employee, consultant or advisor to terminate
\nsuch Person153s or entity153s relationship with the Business or to work for any
\nbusiness other than the Business, whether or not a Competitor of the Business
\nand whether or not under contract with the Company or any Material Company
\nSubsidiary, or at will. Notwithstanding the foregoing portion of this
\nSection 5.18(b)<\/u>, Seller and its Affiliates may employ, contract with,
\nengage and use the services of Joseph J. Grillo, Parke Hess, Patricia Petersen
\nand Jason Prescott unless such individual remained employed by Company through
\nand after the Closing. Additionally, Seller and its Affiliates may employ,
\ncontract with, engage and use the services of all members of Seller153s Board of
\nDirectors and Seller153s legal, accounting and professional advisors after
\nClosing.<\/p>\n<\/p>\n

(c) As used herein, the term “Restricted Period<\/u>” shall mean in the
\nperiod commencing on the Closing Date and ending on the expiration of three
\nyears following the Closing Date. If Seller breaches any agreement or covenant
\ncontained in Section 5.18<\/u> hereof, the Restricted Period for purposes of
\nSection 5.18<\/u> shall be extended for an additional period equal to the
\nperiod during which such breach occurred and continued. The Seller acknowledges
\nthat the Company and the Material Company Subsidiaries have operations in, sell
\ntheir products, and\/or otherwise conduct the Business throughout the United
\nStates of America, Canada, South America, Asia, Australia, New Zealand and
\nEurope. As used herein, the term “Territory<\/u>” shall mean the United States
\nof America, Canada, South America, Asia, Australia, New Zealand and Europe. As
\nused herein, the term “Restricted Business<\/u>” shall mean the business of
\ndeveloping, manufacturing, distributing and selling RFID and visual
\nidentification tags, readers and related software for animals, including cattle,
\nlivestock, swine, horses, sheep, goats, deer, llamas, companion animals and
\nfish.<\/p>\n<\/p>\n

37<\/p>\n

\n

\n

(d) The Seller agrees and acknowledges that the duration, scope and
\ngeographic area of the covenants described in this Section 5.18<\/u> are fair,
\nreasonable and necessary in order to protect the goodwill and other legitimate
\ninterests of the Purchaser. If, however, for any reason any court of competent
\njurisdiction determines that the restrictions in this Section 5.18<\/u> are
\nnot reasonable, such restrictions shall be interpreted, modified or rewritten to
\ninclude as much of the duration, scope and geographic area identified in this
\nSection 5.18<\/u> as will render such restrictions valid and enforceable.<\/p>\n<\/p>\n

Section 5.19. Non-Compete Agreement<\/u>. On the date hereof, Joseph J.
\nGrillo shall execute and deliver the Non-Compete Agreement, which Non-Compete
\nAgreement, by and subject to its terms, shall come into full force and effect on
\nthe Closing.<\/p>\n<\/p>\n

Section 5.20. Qualified Employee Plans<\/u>. The Seller, the Company or its
\nERISA Affiliates, as appropriate, shall amend the Seller153s Qualified Employee
\nPlans and any underlying loan agreements on or before the Closing Date:<\/p>\n<\/p>\n

(a) to the extent necessary to avoid a default of any loans under the
\nQualified Employee Plans as a result of the termination of participation of the
\nCompany under the Qualified Employee Plans as of the Closing;<\/p>\n<\/p>\n

(b) to terminate the participation of the Company in the Qualified Employee
\nPlans as of the Closing and to fully vest all Company employees as of the
\nClosing;<\/p>\n<\/p>\n

(c) to rollover the loan notes and other property in the Qualified Employee
\nPlans to a tax qualified plan of Purchaser (“Buyer Plan<\/u>“); and<\/p>\n<\/p>\n

(d) make such other amendments to the Qualified Employee Plans as may be
\nreasonably requested by Purchaser related to or concerning this Agreement and
\nthe employees of the Company (collectively the “Amendments<\/u>“).<\/p>\n<\/p>\n

Any Amendments shall be subject to review and approval of Purchaser, and the
\nSeller shall provide to Purchaser an executed duplicate original of any such
\nAmendments on the Closing Date and evidence on or before Closing satisfactory to
\nthe Seller that any such Amendments have been duly adopted by the Seller through
\nproper corporate action.<\/p>\n<\/p>\n

In the event that a rollover of assets to a Buyer Plan from the trust of the
\nSeller153s Qualified Employee Plans is reasonably anticipated to trigger
\nliquidation charges, surrender charges, or other material fees to be imposed
\nupon the account of any participant or beneficiary under such Qualified Employee
\nPlan as a result of the transactions contemplated by this Agreement, then the
\nSeller shall reimburse Purchaser or participants, as applicable, for any and all
\ncharges and fees that are paid or incurred attributable to accounts of Company
\nemployees who receive a rollover distribution from such Qualified Employee Plan.\n<\/p>\n<\/p>\n

Section 5.21. Use of Digital Angel Name<\/u>. At Closing, the Company shall
\ngrant Seller: (i) a non-exclusive, personal, limited, revocable, royalty-free
\nright and license to use the mark DIGITAL ANGEL in the corporate name of Seller
\nthrough December 31, 2012; and (ii) an exclusive, personal, limited, revocable,
\nroyalty-free right and license to use the domain name DIGITALANGEL.COM through
\nDecember 31, 2012. The license will contain customary restrictions on use and
\nquality control reasonably satisfactory to the parties. Additionally, the
\nlicense shall prohibit Seller from using the DIGITAL ANGEL mark in connection
\nwith marketing products.<\/p>\n<\/p>\n

38<\/p>\n

\n

\n

ARTICLE VI.<\/strong><\/p>\n

\n

CONDITIONS<\/strong><\/p>\n

\n

Section 6.1. Conditions to Each Party153s Obligation to Effect the
\nClosing<\/u>. The obligation of each party to consummate the Closing shall be
\nsubject to the satisfaction or waiver on or prior to the Closing Date of each of
\nthe following conditions:<\/p>\n<\/p>\n

(a) Stockholder Approval<\/u>. The Stockholder Approval shall have been
\nobtained.<\/p>\n<\/p>\n

(b) Statutes; Court Orders<\/u>. No Law shall have been enacted or
\npromulgated by any Governmental Entity which prohibits or makes illegal the
\nconsummation of the Closing; and there shall be no Order of a court of competent
\njurisdiction in effect precluding consummation of the Closing.<\/p>\n<\/p>\n

Section 6.2. Conditions to Obligations of Purchaser to Effect the
\nClosing<\/u>. The obligation of Purchaser to consummate the Closing shall be
\nsubject to the satisfaction or waiver on or prior to the Closing Date of each of
\nthe following conditions:<\/p>\n<\/p>\n

(a) The representations and warranties of Seller set forth in Article
\nIII<\/u> shall be true and correct in all material respects (provided that any
\nmateriality qualifications already included in such representations and
\nwarranties shall be read out for purposes of this Section 6.2(a)) as of the
\nClosing Date as if made on the Closing Date (except that representations and
\nwarranties that refer specifically to an earlier date must be true and correct
\nas of such earlier date). Notwithstanding the above, the Fundamental
\nRepresentations shall be true and correct (without giving effect to materiality
\nqualifications already included in such representations and warranties) as of
\nthe Closing Date as if made on the Closing Date (except that representations and
\nwarranties that refer specifically to an earlier date must be true and correct
\nas of such earlier date)<\/p>\n<\/p>\n

(b) Seller shall have performed and complied with, in all material respects,
\nall covenants and obligations required by this Agreement to be performed or
\ncomplied with by it prior to or at the Closing.<\/p>\n<\/p>\n

(c) Purchaser shall have received a certificate signed by a senior officer of
\nSeller to the effect that the conditions set forth in clauses (a) and (b) above
\nhave been satisfied.<\/p>\n<\/p>\n

(d) Seller shall have delivered to Purchaser all of the items specified to be
\ndelivered by Seller in Section 2.1(c)<\/u>.<\/p>\n<\/p>\n

(e) Seller shall not have (i) applied for, consented to, or suffered to exist
\nthe appointment of, or the taking of possession by, a receiver, custodian,
\ntrustee, liquidator or other fiduciary of itself or of all or a substantial part
\nof its property, (ii) made a general assignment for the benefit of creditors,
\n(iii) commenced a voluntary case under any state or federal bankruptcy laws (as
\nnow or hereafter in effect), (iv) been adjudicated a bankrupt or insolvent, (v)
\nfiled a petition seeking to take advantage of any other law providing for the
\nrelief of debtors, (vi) acquiesced to, or failed to have dismissed, within
\nthirty (30) days, any petition filed against it in any involuntary case under
\nsuch bankruptcy laws, or (vii) taken any action for the purpose of effecting any
\nof the foregoing.<\/p>\n<\/p>\n

(f) No Material Adverse Effect shall have occurred since the date this
\nAgreement was signed.<\/p>\n<\/p>\n

(g) Seller and Company shall have (i) transferred all of the Excluded Assets
\nand Excluded Liabilities to a Person that is not the Company or a Subsidiary of
\nthe Company, and (ii) transferred all assets of the Business owned by the Seller
\nor its Affiliates (other than the Company and its Subsidiaries) to the Company
\nor a Material Company Subsidiary.<\/p>\n<\/p>\n

39<\/p>\n

\n

\n

(h) All guaranties made by the Company and its Subsidiaries with respect to
\nSeller153s (or its Subsidiaries153) Indebtedness, and all Intercompany Accounts
\nshall have been terminated and released.<\/p>\n<\/p>\n

(i) All consents or approvals listed in Schedule 3.4<\/u> shall have been
\nobtained by the Seller in form reasonably satisfactory to the Purchaser and
\nSeller.<\/p>\n<\/p>\n

(j) No Regulatory Restrictions exist as of the Closing Date.<\/p>\n<\/p>\n

Section 6.3. Conditions to Obligations of Seller to Effect the
\nClosing<\/u>. The obligations of Seller to consummate the Closing shall be
\nsubject to the satisfaction or waiver on or prior to the Closing Date of each of
\nthe following conditions:<\/p>\n<\/p>\n

(a) The representations and warranties of Purchaser set forth in Article
\nIV<\/u> shall be true and correct in all material respects (provided that any
\nmateriality qualifications already included in such representations and
\nwarranties shall be read out for purposes of this Section 6.3(a)) as of the
\nClosing Date as though made on and as of the Closing Date (except that
\nrepresentations and warranties that by their terms speak specifically as of the
\ndate of this Agreement or another date shall be true and correct as of such
\ndate).<\/p>\n<\/p>\n

(b) Purchaser shall have performed and complied with, in all material
\nrespects, all covenants and obligations required by this Agreement to be
\nperformed or complied with by it prior to or at the Closing.<\/p>\n<\/p>\n

(c) Seller shall have received a certificate signed by an officer of
\nPurchaser to the effect that the conditions set forth in clauses (a) and (b)
\nabove have been satisfied.<\/p>\n<\/p>\n

(d) Purchaser shall have delivered to Seller all of the items specified to be
\ndelivered by Purchaser in Section 2.1(b)<\/u>.<\/p>\n<\/p>\n

ARTICLE VII.<\/strong><\/p>\n

\n

TERMINATION<\/strong><\/p>\n

\n

Section 7.1. Termination<\/u>. This Agreement may be terminated at any time
\nprior to the Closing, whether before or after receipt of the Stockholder
\nApproval:<\/p>\n<\/p>\n

(a) by the mutual written consent of Seller and Purchaser; or<\/p>\n<\/p>\n

(b) by either of Seller or Purchaser, upon written prior notice to the other:\n<\/p>\n<\/p>\n

(i) if the Closing shall not have occurred on or before August 4, 2011, (the
\n“Walk-Away Date<\/u>“); provided, however<\/em>, that the right to
\nterminate this Agreement under this Section 7.1(b)(i)<\/u> shall not be
\navailable to a party if the failure of the Closing to have occurred on or before
\nthe Walk-Away Date was primarily due to the failure of such party to perform any
\nof its obligations under this Agreement; further provided<\/em>, that in the
\nevent of Regulatory Restrictions the Purchaser may request, and Seller shall
\ngrant, a one time 30 day extension of the Walk-Away Date;<\/p>\n<\/p>\n

40<\/p>\n

\n

\n

(ii) if any Law or Order having the effect set forth in Section 6.1(b)<\/u>
\nshall be in effect and shall have become final and nonappealable; or<\/p>\n<\/p>\n

(iii) if Stockholder Approval shall not have been obtained at the
\nStockholders Meeting duly convened therefor or at any adjournment or
\npostponement thereof.<\/p>\n<\/p>\n

(c) by Purchaser, upon prior written notice to Seller:<\/p>\n<\/p>\n

(i) if Seller shall have materially breached or failed to perform in all
\nmaterial respects any of its representations, warranties, covenants or
\nagreements set forth in this Agreement, which breach or failure to perform (x)
\nwould give rise to the failure of a condition set forth in Section 6.2(a)<\/u>
\nor (b)<\/u> and (y) cannot be cured by Seller or, if curable, is not cured by
\nthe Walk-Away Date, provided<\/em> that Purchaser shall not have the right to
\nterminate this Agreement pursuant to this Section 7.1(c)(i)<\/u> if Purchaser
\nis then in material breach of any of its covenants or agreements contained in
\nthis Agreement;<\/p>\n<\/p>\n

(ii) if Seller153s Board of Directors has adopted an Adverse Recommendation
\nChange;<\/p>\n<\/p>\n

(iii) if any of the conditions set forth in Section 6.1<\/u> or 6.2<\/u>
\nshall have become incapable of satisfaction before the Walk-Away Date;
\nprovided<\/em> that a breach by Purchaser is not the cause thereof; or<\/p>\n<\/p>\n

(iv) if a Material Adverse Effect shall have occurred.<\/p>\n<\/p>\n

(d) by Seller, upon prior written notice to Purchaser:<\/p>\n<\/p>\n

(i) if Purchaser shall have materially breached or failed to perform in all
\nmaterial respects any of its representations, warranties, covenants or
\nagreements set forth in this Agreement, which breach or failure to perform (x)
\nwould give rise to the failure of a condition set forth in Sections
\n6.3(a)<\/u> or (b)<\/u> and (y) cannot be cured by Purchaser or, if curable, is
\nnot cured by the Walk-Away Date, provided<\/em> that Seller shall not have
\nthe right to terminate this Agreement pursuant to this Section 7.1(d)(i)<\/u>
\nif Seller is then in material breach of any of its covenants or agreements
\ncontained in this Agreement;<\/p>\n<\/p>\n

(ii) if Seller (A) has complied with its obligations under Sections
\n5.3<\/u> and 5.4<\/u>, and (B) is in compliance with Section 5.4<\/u>,
\nconcurrently enters into a definitive written Acquisition Agreement providing
\nfor a Superior Proposal; provided, however<\/em>, Seller may not terminate
\nthis Agreement pursuant to this Section 7.1(d)(ii)<\/u> until at least five
\nBusiness Days have passed since the date of the most recent Adverse
\nRecommendation Notice;<\/p>\n<\/p>\n

(iii) if any of the conditions set forth in Sections 6.1<\/u> or 6.3<\/u>
\nshall have become incapable of satisfaction before the Walk-Away Date;
\nprovided<\/em> that a breach by Seller is not the cause thereof; or<\/p>\n<\/p>\n

(iv) if Regulatory Restrictions affirmatively enjoining or otherwise
\nprohibiting the Closing have been imposed.<\/p>\n<\/p>\n

Section 7.2. Effect of Termination<\/u>. In the event of the termination of
\nthis Agreement as provided in Section 7.1<\/u>, written notice thereof shall
\nbe given to the other party, specifying the provision hereof pursuant to which
\nsuch termination is made, and this Agreement shall forthwith become null and
\nvoid (other than Sections 5.17, 7.2<\/u> and 7.3<\/u>, and Article
\nX<\/u>, all of which shall survive termination of this Agreement), and there
\nshall be no liability on the part of Purchaser or Seller except (i) as provided
\nin Section 7.3<\/u>, (ii) as set forth in Section 5.17<\/u>, and (iii)
\nnothing shall relieve any party from liability for fraud or any willful or
\nintentional breach of this Agreement.<\/p>\n<\/p>\n

41<\/p>\n

\n

\n

Section 7.3. Termination Fees<\/u>.<\/p>\n<\/p>\n

(a) Paid by Seller<\/u>.<\/p>\n<\/p>\n

(i) In the event that this Agreement is properly terminated by Purchaser
\npursuant to Section 7.1(c)(i)<\/u>, (ii)<\/u> or (iv)<\/u> Seller shall
\npromptly pay to Purchaser $500,000.<\/p>\n<\/p>\n

(ii) In the event that this Agreement is terminated by Seller pursuant to
\nSection 7.1(d)(ii)<\/u>, Seller shall promptly pay to Purchaser $1,000,000.\n<\/p>\n<\/p>\n

(b) Paid by Purchaser<\/u>.<\/p>\n<\/p>\n

(i) In the event that this Agreement is properly terminated by Seller
\npursuant to Section 7.1(d)(i)<\/u> or (iv)<\/u> Purchaser shall promptly pay
\nto Seller $750,000, provided Seller is not in material breach of any of its
\ncovenants or agreements contained in this Agreement.<\/p>\n<\/p>\n

(ii) In the event that this Agreement is terminated by either party pursuant
\nto<\/p>\n<\/p>\n

Section 7.1(b)(i)<\/u> due to the existence of Regulatory Restrictions,
\nthen Purchaser shall promptly pay to Seller $750,000; provided,
\nhowever<\/em>, Purchaser shall not have to pay such fee unless (A) the Walk-Away
\nDate has occurred (and, for avoidance of doubt, Seller shall have extended the
\nWalk-Away Date by 30 days as per Section 7.1(b)(i)<\/u>), (B) the Stockholder
\nApproval has been received, and (C) Seller is not in material breach of any of
\nits covenants or agreements contained in this Agreement.<\/p>\n<\/p>\n

(c) For the avoidance of doubt, neither party will be required to pay more
\nthan one termination fee.<\/p>\n<\/p>\n

(d) Each of Seller and Purchaser acknowledges that the agreements contained
\nin this Section 7.3<\/u> are an integral part of the Agreement. Following
\ntermination of this Agreement, amounts paid pursuant to this Section 7.3<\/u>
\nshall constitute, for the party receiving the fee, such party153s sole and
\nexclusive remedy following such termination (other than as provided in
\nSection 7.2<\/u> above).<\/p>\n<\/p>\n

ARTICLE VIII.<\/strong><\/p>\n

\n

INDEMNIFICATION<\/strong><\/p>\n

\n

Section 8.1. Indemnification; Remedies<\/u>.<\/p>\n<\/p>\n

(a) Seller153s Indemnification Obligations<\/u>. Seller shall indemnify,
\ndefend and hold harmless Purchaser, the Company (after Closing), the respective
\nAffiliates of each of the foregoing, and the respective officers, directors,
\nemployees and agents of each of the foregoing (“Purchaser Indemnified
\nPersons<\/u>“) from and against any and all Losses arising out of or relating to:\n<\/p>\n<\/p>\n

(i) any breach or inaccuracy of any of the representations and warranties of
\nSeller contained in this Agreement by virtue of such breach or inaccuracy on and
\nas of the Closing Date with the same effect as though made on such date or, in
\nthe case of any representation or warranty that speaks as of a specific date or
\ntime, on and as of such specific date or time;<\/p>\n<\/p>\n

42<\/p>\n

\n

\n

(ii) any breach by Seller of its covenants or obligations contained in this
\nAgreement;<\/p>\n<\/p>\n

(iii) (A) any Excluded Liabilities, or (B) any claims or threatened claims of
\nany kind against Purchaser or the Company by any holders or purported holders of
\nany securities or rights to acquire securities of Seller or the Company in
\nconnection with the transactions contemplated by this Agreement, including
\nwithout limitation claims alleging violation of fiduciary duties or securities
\nlaws or related to appraisal or dissenters153 rights;<\/p>\n<\/p>\n

(iv) any Taxes that are payable by Seller pursuant to Section 5.8<\/u>
\n(except to the extent that the amount of such Taxes is, or already has been,
\nreflected in the Financial Statements and in the calculation of the Closing Date
\nNet Working Capital;<\/p>\n<\/p>\n

(b) Limitations on Seller153s Indemnification<\/u>. Seller153s indemnification
\nobligation under Section 8.1(a)(i)<\/u> shall be subject to each of the
\nfollowing limitations:<\/p>\n<\/p>\n

(i) with respect to indemnification under Section 8.1(a)(i)<\/u>, such
\nobligation to indemnify shall terminate on the 18-month anniversary of the
\nClosing Date (the “Cut-Off Date<\/u>“) unless before such date Purchaser has
\nprovided Seller with an applicable Claim Notice, provided<\/em> that (x) the
\nrepresentations and warranties in Sections 3.2<\/u> (Authorization),
\n3.3<\/u> (Execution; Validity of Agreement), 3.5<\/u> (Ownership of Shares),
\n3.6<\/u> (Capitalization), 3.7<\/u> (but excluding 3.7(b)<\/u>)
\n(Subsidiaries), 3.10(b)<\/u> (Title to Assets), 3.21(f)<\/u> (WARN Act),
\n3.30<\/u> (Brokers or Finders) and 3.31<\/u> (No Retained Assets) (the
\nforegoing, collectively, the “Fundamental Representations<\/u>“) shall survive
\nthe Closing indefinitely and (y) the representations and warranties in
\nSection 3.19<\/u> (Tax Matters) and Section 3.16<\/u> (Environmental
\nMatters) shall survive until 30 days after the expiration of the relevant
\nstatute of limitations;<\/p>\n<\/p>\n

(ii) there shall be no obligation to indemnify under Section 8.1(a)(i)<\/u>
\nfor any Losses for which Seller, but for this Section 8.1(b)(ii)<\/u>, would
\nbe liable in excess of $4,000,000 in the aggregate, provided, however<\/em>,
\nthat that the limitation on indemnification set forth in this Section
\n8.1(b)(ii)<\/u> shall not apply to any Losses arising out of or relating to
\nbreaches or inaccuracies of the Fundamental Representations or the
\nrepresentations and warranties in Sections 3.16<\/u> (Environmental Matters)
\nor 3.19<\/u> (Tax Matters); and<\/p>\n<\/p>\n

(iii) there shall be no obligation to indemnify under Section
\n8.1(a)(i)<\/u> until the aggregate amount of all Losses exceeds $250,000, in
\nwhich event only the first $125,000 of such aggregate amount of all Losses shall
\nnot be recoverable and amounts in excess of the first $125,000 shall be
\nrecoverable; provided, however<\/em>, that the limitation on indemnification
\nset forth in this Section 8.1(b)(iv)<\/u> shall not apply to any Losses
\narising out of or relating to breaches or inaccuracies of the Fundamental
\nRepresentations or the representations and warranties in Section 3.16<\/u>
\n(Environmental Matters) or 3.19<\/u> (Tax Matters).<\/p>\n<\/p>\n

(c) Purchaser153s Indemnification<\/u>. From and after the Closing, Purchaser
\nshall indemnify, defend and hold harmless Seller and its Affiliates of each of
\nthe foregoing and the respective officers, directors, employees and agents of
\neach of the foregoing from and against any and all Losses arising out of or
\nrelating to (i) any breach or inaccuracy of any of the representations and
\nwarranties of Purchaser contained in this Agreement by virtue of such breach or
\ninaccuracy on and as of the Closing Date with the same effect as though made on
\nsuch date or, in the case of any representation or warranty that speaks as of a
\nspecific date or time, on and as of such specific date or time, or (ii) any
\nbreach by Purchaser of its covenants or obligations contained in this Agreement.\n<\/p>\n<\/p>\n

43<\/p>\n

\n

\n

(d) Nothing in this Agreement shall prejudice any action by Seller or
\nPurchaser for fraud.<\/p>\n<\/p>\n

Section 8.2. Notice of Claim; Defense<\/u>.<\/p>\n<\/p>\n

(a) If (i) any third-party institutes or asserts any claim, demand,
\ninvestigation, action or proceeding (each of the foregoing, a
\n“Proceeding<\/u>“) that may give rise to Losses for which a party (an
\n“Indemnifying Party<\/u>“) may be liable for indemnification under this
\nArticle VIII<\/u> (a “Third-Party Claim<\/u>“) or (ii) any Person entitled
\nto indemnification under this Agreement (an “Indemnified Party<\/u>“) shall
\nhave a claim to be indemnified by an Indemnifying Party that does not involve a
\nThird-party Claim (a “Direct Claim<\/u>“), then, in case of clause (i) or
\n(ii), the Indemnified Party shall promptly send to the Indemnifying Party a
\nwritten notice specifying the nature of such claim and the amount of all related
\nLosses (a “Claim Notice<\/u>“). The Indemnifying Party shall be relieved of
\nits indemnification obligations under this Article VIII<\/u> only to the
\nextent that it is materially prejudiced by the failure of the Indemnified
\nParties to provide a timely and adequate Claim Notice. No Person shall be liable
\nfor any claim for indemnification under Article VIII<\/u> unless such claim
\narises prior to the applicable survival period and the applicable Claim Notice
\nis delivered by the Indemnified Party to the Indemnifying Party prior to the
\nexpiration of the applicable survival period.<\/p>\n<\/p>\n

(b) In the event of a Third-Party Claim, the Indemnifying Party may elect to
\nretain counsel of its choice, reasonably acceptable to the relevant Indemnified
\nParties, to represent such Indemnified Parties in connection with such
\nProceeding and shall pay the reasonable fees and expenses of such counsel. The
\nIndemnified Parties may participate, at their own expense and through legal
\ncounsel of their choice, in any such Proceeding, provided that (i) the
\nIndemnifying Party may elect to control the defense of the Indemnified Parties
\nin connection with such Proceeding and (ii) the Indemnified Parties and their
\ncounsel shall cooperate with the Indemnifying Party and its counsel in
\nconnection with such Proceeding. The Indemnifying Party shall not settle any
\nsuch Proceeding without the Indemnified Party153s prior written consent (which
\nshall not be unreasonably withheld), unless the terms of such settlement provide
\nfor no relief other than the payment of monetary damages that are fully
\nindemnified pursuant to this Article VIII<\/u>. Notwithstanding the foregoing,
\nif (x) the Indemnifying Party elects not to retain counsel and assume control of
\nsuch defense, (y) both the Indemnifying Party and any Indemnified Party are or
\nmay be parties to or subjects of such Proceeding or conflicts of interests exist
\nbetween the Indemnifying Party and such Indemnified Party or (z) the Proceeding
\nis reasonably likely to establish a precedential custom or practice that is
\ndetrimental to the continuing business interests of the Indemnified Party, then
\nthe Indemnified Parties shall retain counsel reasonably acceptable to the
\nIndemnifying Party in connection with such Proceeding and assume control of the
\ndefense in connection with such Proceeding, and the reasonable fees and expenses
\nof no more than one such counsel per jurisdiction selected by the Indemnified
\nParties shall be reimbursed by the Indemnifying Party. Under no circumstances
\nwill the Indemnifying Party have any liability in connection with any settlement
\nof any Proceeding that is entered into without its prior written consent (which
\nshall not be unreasonably withheld or delayed).<\/p>\n<\/p>\n

(c) From and after the delivery of a Claim Notice, at the reasonable request
\nof the Indemnifying Party, each Indemnified Party shall grant the Indemnifying
\nParty and its counsel, experts and representatives full access, during normal
\nbusiness hours, to the books, records, personnel and properties of the
\nIndemnified Party to the extent reasonably related to the Claim Notice at no
\ncost to the Indemnifying Party (other than for reasonable out-of-pocket expenses
\nof the Indemnified Parties).<\/p>\n<\/p>\n

Section 8.3. Reductions for Insurance Proceeds and Other Recoveries<\/u>.
\nThe amount of any Loss subject to indemnification hereunder or of any claim
\ntherefor shall be calculated net of any insurance proceeds (net of direct
\ncollection expenses) actually received by the Indemnified Party on account of
\nsuch Loss. Each Indemnified Party shall use commercially reasonable efforts to
\nseek full recovery under all insurance policies that such Person reasonably
\nbelieves cover any Loss to the same extent as they would if such Loss were not
\nsubject to indemnification hereunder. Any Losses shall be reduced (retroactively
\nor prospectively) by any insurance proceeds, proceeds of subrogation and any
\nindemnity, contribution or other similar payment from third parties actually
\nrecovered (net of direct collection expenses). The existence of a claim for
\nmonies by an Indemnified Party against an insurer or other third party in
\nrespect of any Losses shall not, however, delay any payment otherwise due and
\nowing under this Article VIII<\/u>. In such event, the Indemnifying Party
\nshall make payment in full to the applicable Indemnified Party of the amount due
\nand owing under this Article VIII<\/u> against an assignment by the
\nIndemnified Party to the Indemnifying Party of the entire claim for insurance
\nproceeds or against such third party. Notwithstanding any other provisions of
\nthis Agreement, the parties intend that no insurer or any other third party
\nshall be (i) entitled to a benefit it would not be entitled to receive in the
\nabsence of the provisions of this Article VIII<\/u> or (ii) relieved of the
\nresponsibility to pay any claims for which it is obligated. If an Indemnified
\nParty has received the payments required by this Article VIII<\/u> from an
\nIndemnifying Party in respect of any Losses and later receives insurance
\nproceeds or other amounts in respect of such Losses, then the Indemnified Party
\nshall as promptly as practicable pay to the Indemnifying Party a sum equal to
\nthe amount of insurance proceeds or other amounts received, net of any costs
\nincurred in connection with such insurance or other third-party recoveries, up
\nto the aggregate amount of any payments received from the Indemnifying Party
\npursuant to this Article VIII<\/u> in respect of such Losses (or if there is
\nmore than one Indemnifying Party, the Indemnified Party shall pay each
\nIndemnifying Party its proportionate share, based on the payments received from
\nthe Indemnifying Party, of such insurance or other proceeds).<\/p>\n<\/p>\n

44<\/p>\n

\n

\n

Section 8.4. Rights Under Escrow Agreement<\/u>. In the event Seller has
\nany liability to any Purchaser Indemnified Person pursuant to Section
\n8.1(a)(i)<\/u> for any Losses, the Purchaser Indemnified Person shall receive
\npayment thereof against and to the extent of the balance of the Escrow Amount
\nunder the Escrow Agreement and, thereafter, from Seller, subject to the
\nlimitations set forth in Section 8.1(b)<\/u>. In the event Seller has any
\nliability to any Purchaser Indemnified Person pursuant to Sections
\n8.1(a)(ii)<\/u>, 8.1(a)(iii)<\/u>, 8.1(a)(iv)<\/u> or for fraud, the
\nPurchaser Indemnified Person shall receive payment thereof, first, against and
\nto the extent of the balance of the Escrow Amount under the Escrow Agreement,
\nand, thereafter, from any other Person from whom Purchaser may be entitled to
\nrecover.<\/p>\n<\/p>\n

Section 8.5. Tax Treatment of Payments<\/u>. Seller, Purchaser, the Company
\nand their respective Affiliates shall treat any and all payments under this
\nArticle VIII<\/u> as an adjustment to the Purchase Price for Tax purposes.<\/p>\n<\/p>\n

Section 8.6. Change in Control Payments<\/u>. Notwithstanding anything in
\nthis Agreement to the contrary, Seller shall retain all liability with respect
\nto, and shall indemnify and hold harmless Purchaser, the Company, and their
\nrespective Affiliates, for any change in control payment, transaction bonus,
\nretention bonus or similar payment to which any director, employee or former
\nemployee of the Company may be entitled in connection with the transactions
\ncontemplated by this Agreement, whether contingent or otherwise (collectively,
\n“Change in Control Payments<\/u>“).<\/p>\n<\/p>\n

Section 8.7. Payment of Direct Claims<\/u>. A claim for indemnification for
\nany matter not involving a Third-Party Claim may be asserted by notice to the
\nparty from whom indemnification is sought and shall be paid within fifteen (15)
\ndays after such notice.<\/p>\n<\/p>\n

ARTICLE IX.<\/strong><\/p>\n

\n

DEFINITIONS AND INTERPRETATION<\/strong><\/p>\n

\n

Section 9.1. Definitions<\/u>. For all purposes of this Agreement, except
\nas otherwise expressly provided or unless the context clearly requires
\notherwise:<\/p>\n<\/p>\n

45<\/p>\n

\n

\n

“Accounting Arbitrator<\/u>” has the meaning set forth in Section
\n2.2(c)<\/u>.<\/p>\n<\/p>\n

“Accounts Receivable<\/u>” has the meaning set forth in Section
\n3.25<\/u>.<\/p>\n<\/p>\n

“Acquisition Agreement<\/u>” shall have the meaning set forth in
\nSection 5.4(c)<\/u>.<\/p>\n<\/p>\n

“Adverse Recommendation Change<\/u>” shall have the meaning set forth in
\nSection 5.4(c)<\/u>.<\/p>\n<\/p>\n

“Adverse Recommendation Notice<\/u>” shall have the meaning set forth in
\nSection 5.4(c)<\/u>.<\/p>\n<\/p>\n

“Affiliate<\/u>” shall have the meaning set forth in Rule 12b-2 of the
\nExchange Act.<\/p>\n<\/p>\n

“Affiliated Group<\/u>” means any affiliated group within the meaning of
\nCode \u00a71504(a) or any similar group defined under a similar provision of state,
\nlocal or non-U.S. law.<\/p>\n<\/p>\n

“Agreement<\/u>” means this Stock Purchase Agreement, together with the
\nExhibits and Schedules hereto and the Disclosure Schedule.<\/p>\n<\/p>\n

“Assumed Debt<\/u>” means any Indebtedness of the Company or its
\nSubsidiaries set forth on Schedule 3.8(b)<\/u> other than Indebtedness
\nincluded in the Payoff Amount. In no event will the aggregate amount of such
\nIndebtedness exceed $5,000,000.<\/p>\n<\/p>\n

“Audits<\/u>” shall have the meaning set forth in Section 3.19(d)<\/u>.\n<\/p>\n<\/p>\n

“Balance Sheet Date<\/u>” means the date of the most recent audited balance
\nsheet included in the Financial Statements.<\/p>\n<\/p>\n

“Board Recommendation<\/u>” shall have the meaning set forth in Section
\n5.4(c)<\/u>.<\/p>\n<\/p>\n

“Business<\/u>” shall have the meaning set forth in the recitals.<\/p>\n<\/p>\n

“Business Day<\/u>” means a day other than Saturday, Sunday or any day on
\nwhich the principal commercial banks located in the State of Minnesota are
\nauthorized or obligated to close under the laws of such state.<\/p>\n<\/p>\n

“Carve-Out Statements<\/u>” means the unaudited balance sheet of the
\nBusiness on a standalone basis as at March 31, 2011 together with the unaudited
\nstatements of income and cash flows of the Business on a standalone basis for
\nthe three month period ended March 31, 2011, being the equivalent financial
\nstatements of the Company adjusted to eliminate the effects of, among other
\nthings, the Emergency Locator Business and to include any assets or liabilities
\nof the Business currently held by the Seller.<\/p>\n<\/p>\n

“Change in Control Payments<\/u>” shall have the meaning set forth in
\nSection 8.7<\/u>.<\/p>\n<\/p>\n

“Claim Notice<\/u>” shall have the meaning set forth in Section
\n8.2(a)<\/u>.<\/p>\n<\/p>\n

“Closing<\/u>” shall have the meaning set forth in Section 2.1(a)<\/u>.\n<\/p>\n<\/p>\n

“Closing Certificate<\/u>” shall have the meaning set forth in Section
\n2.2(a)<\/u>.<\/p>\n<\/p>\n

“Closing Date<\/u>” means the date on which the Closing occurs.<\/p>\n<\/p>\n

“Closing Date Balance Sheet<\/u>” shall have the meaning set forth in
\nSection 2.2(a)<\/u>.<\/p>\n<\/p>\n

46<\/p>\n

\n

\n

“Closing Date Net Working Capital<\/u>” means Current Assets less<\/em>
\nCurrent Liabilities as of the Closing Date.<\/p>\n<\/p>\n

“Code<\/u>” means the Internal Revenue Code of 1986, as amended.<\/p>\n<\/p>\n

“Company<\/u>” shall have the meaning set forth in the recitals.<\/p>\n<\/p>\n

“Company Predecessor<\/u>” means any predecessors of the Company as a
\nresult of one or more amalgamations or wind-up.<\/p>\n<\/p>\n

“Company Product<\/u>” has the meaning set forth in Section 3.28<\/u>.\n<\/p>\n<\/p>\n

“Competition Authority<\/u>” means any Governmental Entity responsible for
\nenforcement of antitrust or competition law (including the U.S. Federal Trade
\nCommission, Antitrust Division of the U.S. Department of Justice, European
\nCommission, or Office of Fair Trade).<\/p>\n<\/p>\n<\/p>\n

“Competitor<\/u>” has the meaning set forth in Section 5.18(a)(i)<\/u>.\n<\/p>\n<\/p>\n<\/p>\n

“Confidential Information<\/u>” shall have the meaning set forth in
\nSection 5.17<\/u>.<\/p>\n<\/p>\n

“Confidentiality Agreement<\/u>” means the agreement between Company and
\nPurchaser dated June 3, 2009.<\/p>\n<\/p>\n

“Contract<\/u>” shall have the meaning set forth in Section 3.4<\/u>.<\/p>\n<\/p>\n

“Copyrights<\/u>” means U.S. and foreign registered and unregistered
\ncopyrights (including those in computer software and databases), rights of
\npublicity and, if applicable, all registrations and applications to register the
\nsame.<\/p>\n<\/p>\n

“Current Assets<\/u>” means cash and cash equivalents, Accounts Receivable,
\nprepaid expenses and inventory of the Business.<\/p>\n<\/p>\n

“Current Liabilities<\/u>” means the current liabilities of the Business,
\nincluding accounts payable, customer deposits, deferred revenue, deferred rent,
\nsales taxes payable, accrued withholding taxes, payroll taxes payable and
\nsalaries, bonuses payable and any other accrued expenses, but excluding any
\nportion of the Company153s Indebtedness deemed current.<\/p>\n<\/p>\n

“Cut-Off Date<\/u>” shall have the meaning set forth in Section
\n8.1(b)(i)<\/u>.<\/p>\n<\/p>\n

“Direct Claim<\/u>” shall have the meaning set forth in Section
\n8.2(a)<\/u>.<\/p>\n<\/p>\n

“Disclosure Schedule<\/u>” means the disclosure schedule of even date
\nherewith delivered by Seller to Purchaser simultaneously with the execution
\nhereof.<\/p>\n<\/p>\n

“Emergency Locator Business<\/u>” means the products developed,
\nmanufactured, assembled sold and marketed by Signature Industries, Limited,
\nSeller153s majority-owned Subsidiary.<\/p>\n<\/p>\n

“Employee Plan<\/u>” means any agreement, contract, plan, fund, program,
\nagreement or arrangement involving direct or indirect compensation (other than
\nordinary salary and wage payments) or any other employee benefit of any kind,
\nincluding, but not limited to, each deferred compensation, incentive
\ncompensation, bonus, stock purchase, stock option, other equity compensation,
\nemployee benefit, supplemental unemployment benefit, severance or termination
\npay, salary continuation, medical, dental, surgical, disability,
\nhospitalization, life insurance, welfare, profit-sharing, stock bonus, pension,
\nsavings, retirement, supplementary retirement, employment, termination, change
\nin control, severance, dependent care, Code Section 125 or other pre-tax
\nbenefits, in each case, that has been sponsored, maintained or contributed to or
\nrequired to be contributed to by the Company, or by any ERISA Affiliate, or to
\nwhich the Company, or an ERISA Affiliate has been a party or has any liability
\nwith respect to, whether written or oral, for the benefit of any director,
\nemployee or former employee of the Company or any ERISA Affiliate (or their
\nrespective beneficiaries, dependents or spouses).<\/p>\n<\/p>\n

47<\/p>\n

\n

\n

“Encumbrances<\/u>” means any and all liens, charges, security interests,
\noptions, claims, mortgages, pledges, proxies, voting trusts or agreements,
\nobligations, understandings or arrangements or other restrictions on title or
\ntransfer of any nature whatsoever.<\/p>\n<\/p>\n

“Environmental Laws<\/u>” means all Laws relating to: (i) protection,
\npreservation or cleanup of the environment or natural resources; (ii) any
\nRelease or threatened Release, including, without limitation, control,
\ninvestigation, study, assessment, testing, monitoring, containment, removal,
\nremediation, cleanup or abatement of such Release or threatened Release; (iii)
\nthe management, manufacture, generation, formulation, processing, labeling,
\ndistribution, introduction into commerce, registration, use, treatment,
\nhandling, storage, disposal, transportation, re-use, recycling or reclamation of
\nany Hazardous Substance, or (iv) health and safety.<\/p>\n<\/p>\n

“ERISA<\/u>” means the Employee Retirement Income Security Act of 1974, as
\namended.<\/p>\n<\/p>\n

“ERISA Affiliate<\/u>” means any trade or business, whether or not
\nincorporated, that together with the Company or Seller has been treated as a
\n“single employer” within the meaning of Section 4001(b) of ERISA or Section
\n414(b), (c), (m) or (o) of the Code.<\/p>\n<\/p>\n

“Escrow Account<\/u>” shall have the meaning set forth in Section
\n2.1(b)(ii)<\/u>.<\/p>\n<\/p>\n

“Escrow Agent<\/u>” shall have the meaning set forth in Section
\n2.1(b)(ii)<\/u>.<\/p>\n<\/p>\n

“Escrow Agreement<\/u>” shall have the meaning set forth in Section
\n2.1(b)(ii)<\/u>.<\/p>\n<\/p>\n

“Escrow Amount<\/u>” shall have the meaning set forth in Section
\n2.1(b)(ii)<\/u>.<\/p>\n<\/p>\n

“Exchange Act<\/u>” means the Securities Exchange Act of 1934, as amended.\n<\/p>\n<\/p>\n

“Excluded Assets<\/u>” means: (i) the shares of capital stock of Signature
\nIndustries Limited owned by the Company; (ii) assets related solely to the
\nEmergency Locator Business owned by the Company, if any; and (iii) the shares of
\ncapital stock of Timely Technology Corporation, a California corporation, owned
\nby the Company; unless and to the extent any such assets are used in the
\noperation of the Business.<\/p>\n<\/p>\n

“Excluded Liabilities<\/u>” means any and all liabilities, whether primary
\nor secondary, known or unknown, accrued or contingent, of any kind or nature,
\nother than liabilities related to the Business. Without limiting the generality
\nof the foregoing, “Excluded Liabilities” shall include any and all liabilities:
\n(i) incurred as a result of the operation of or in connection with the Emergency
\nLocator Business, (ii) of Signature Industries Limited; (iii) of Timely
\nTechnology Corporation; and (iv) liabilities and Indebtedness Seller owes to
\nHillair Capital, LLC (and related purchasers) and the guaranties thereof made by
\nthe Company and its Subsidiaries.<\/p>\n<\/p>\n

48<\/p>\n

\n

\n

“Financial Statements<\/u>” means (a) the audited consolidated balance
\nsheets of Seller as at December 31, 2010 and December 31, 2009, together with
\nthe audited consolidated statements of income and cash flows of Seller for the
\nyears ended December 31, 2010 and 2009, (b) the unaudited consolidated balance
\nsheet of Seller as at March 31, 2011 together with the unaudited consolidated
\nstatements of income and cash flows of Seller for the three month period ended
\nMarch 31, 2011, and (c) the Carve-Out Statements.<\/p>\n<\/p>\n

“Fundamental Representations<\/u>” shall have the meaning set forth in
\nSection 8.1(b)(i)<\/u>.<\/p>\n<\/p>\n

“GAAP<\/u>” means U.S. generally accepted accounting principles,
\nconsistently applied throughout the periods presented in accordance with
\nSeller153s accounting policies and practices.<\/p>\n<\/p>\n

“Governmental Entity<\/u>” means a foreign or domestic court, arbitral
\ntribunal, administrative agency, commission, governmental or department,
\nregulatory authority, agency, any stock exchange or self-regulatory authority.\n<\/p>\n<\/p>\n

“Hazardous Substances<\/u>” means any substances, materials, wastes or
\nagents that are designated as hazardous or toxic or subject to regulation or
\nliability under Environmental Laws, including without limitation petroleum or
\nany fraction thereof, asbestos, polychlorinated biphenyls, and mold.<\/p>\n<\/p>\n

“Indebtedness<\/u>” of any Person means, as of any date, the amount equal
\nto the sum (without any double-counting) of the following obligations (whether
\nor not then due and payable), to the extent they are of such Person: (i) all
\noutstanding indebtedness for borrowed money owed to third parties, (ii) accrued
\ninterest payable with respect to Indebtedness referred to in clause (i), (iii)
\nall obligations evidenced by notes, bonds, debentures or other similar
\ninstruments (whether or not convertible) or arising under indentures, (iv) all
\nobligations arising out of any financial hedging, swap or similar arrangements,
\n(v) all obligations as lessee that would be required to be capitalized in
\naccordance with GAAP, and (vi) all obligations in connection with any letter of
\ncredit, banker153s acceptance, guarantee, surety, performance or appeal bond, or
\nsimilar credit transaction.<\/p>\n<\/p>\n

“Indemnified Party<\/u>” shall have the meaning set forth in Section
\n8.2(a)<\/u>.<\/p>\n<\/p>\n

“Indemnifying Party<\/u>” shall have the meaning set forth in Section
\n8.2(a)<\/u>.<\/p>\n<\/p>\n

“Intellectual Property”<\/u> means all of the following: Trademarks,
\nPatents, Copyrights, Trade Secrets, Internet domain names and Licenses.<\/p>\n<\/p>\n

“Intercompany Accounts<\/u>” means all balances related to indebtedness,
\nincluding any intercompany indebtedness, loan, guaranty, receivable, payable or
\nother account between Seller and the Company or any Subsidiary of the Company.\n<\/p>\n<\/p>\n

“IRS<\/u>” means the U.S. Internal Revenue Service.<\/p>\n<\/p>\n

“Knowledge of Seller<\/u>” means the actual knowledge of Joseph J. Grillo,
\nSeller153s Chief Executive Officer, Jason Prescott, Seller153s Chief Financial
\nOfficer or Parke Hess, Seller153s Chief Operating Officer, and such knowledge that
\nany such person would be deemed to have acquired upon reasonable inquiry of
\nthose in the Company and its Subsidiaries with relevant subject matter
\nresponsibility.<\/p>\n<\/p>\n

“Law<\/u>” shall have the meaning set forth in Section 3.4<\/u>.<\/p>\n<\/p>\n

“Leased Real Property<\/u>” shall have the meaning set forth in Section
\n3.10(c)<\/u>.<\/p>\n<\/p>\n

49<\/p>\n

\n

\n

“Licenses<\/u>” means all licenses and agreements pursuant to which the
\nCompany has acquired rights in or to any Intellectual Property, or licenses and
\nagreements pursuant to which the Company has licensed or transferred the right
\nto use any Intellectual Property.<\/p>\n<\/p>\n

“Losses<\/u>” means any and all damages, losses, actions, Proceedings,
\ncauses of action, obligations, liabilities, claims, encumbrances, penalties,
\ndemands, assessments, settlements, judgments, costs and expenses, including
\ncourt costs and reasonable attorneys153 and disbursements and costs of litigation;
\nprovided, however<\/em>, that Losses shall not include punitive damages,
\ntreble damages or exemplary damages (except to the extent such damages are
\nawarded in connection with a Third Party Claim for which indemnification is
\navailable to an Indemnified Party).<\/p>\n<\/p>\n

“Material Adverse Effect<\/u>” means any event, change, effect,
\ndevelopment, condition or occurrence that has had or would reasonably be
\nexpected to have, individually or in the aggregate, a material adverse effect on
\nthe business, financial or other condition, or results of operations of the
\nCompany or the Business; provided, however<\/em>, none of the following shall
\nbe deemed to constitute, and none of the following shall be taken into account
\nin determining whether there has been, a Material Adverse Effect: (a) any event,
\nchange, effect, development, condition or occurrence arising from or relating to
\n(i) general business or economic conditions not specific or peculiar to the
\nCompany or the Business, (ii) national or international political or social
\nconditions, including the engagement by the U.S. in hostilities, whether or not
\npursuant to the declaration of a national emergency or war, or the occurrence of
\nany military or terrorist attack upon the U.S., or any of its territories,
\npossessions, or diplomatic or consular offices or upon any military
\ninstallation, equipment or personnel of the U.S., (iii) disruption to financial,
\nbanking, or securities markets in general (including any disruption thereof and
\nany decline in the price of any security or any market index), (iv) changes in
\nGAAP, that, except to the extent such event, change, effect, development,
\ncondition or occurrence described in clauses (i) through (iv) has a
\ndisproportionate effect on the Company or the Business when compared to other
\ncompanies in the industry in which the Company or the Business operates; (b) the
\ntaking of any action required by this Agreement or the Related Documents, (c)
\nthe announcement or disclosure of the transactions contemplated herein, or (d)
\nthe presence of Regulatory Restrictions.<\/p>\n<\/p>\n

“Material Company Subsidiaries<\/u>” shall have the meaning set forth in
\nSection 3.7<\/u>.<\/p>\n<\/p>\n

“Material Contract<\/u>” shall have the meaning set forth in Section
\n3.11(a)<\/u>.<\/p>\n<\/p>\n

“Material Intellectual Property<\/u>” shall have the meaning set forth in
\nSection 3.20(a)<\/u>.<\/p>\n<\/p>\n

“Non-Compete Agreement<\/u>” means a non-compete agreement entered into
\nbetween the Purchaser and Joseph J. Grillo on the date hereof in the form
\nattached hereto as Exhibit C<\/u>.<\/p>\n<\/p>\n

“Notice of Dispute<\/u>” shall have the meaning set forth in Section
\n2.2(b)<\/u>.<\/p>\n<\/p>\n

“Order<\/u>” shall have the meaning set forth in Section 3.15<\/u>.<\/p>\n<\/p>\n

“Owned Intellectual Property<\/u>” means Intellectual Property owned by the
\nCompany that is material to the Business, excluding Intellectual Property
\nassociated with the Emergency Locator Business.<\/p>\n<\/p>\n

“Owned Real Property<\/u>” shall have the meaning set forth in Section
\n3.10(c)<\/u>.<\/p>\n<\/p>\n

“Patents<\/u>” means issued U.S. and foreign patents and pending patent
\napplications, patent disclosures, and any and all divisions, continuations,
\ncontinuations-in-part, reissues, reexaminations, and extensions thereof, any
\ncounterparts claiming priority therefrom, utility models, patents of
\nimportation\/confirmation, certificates of invention and similar statutory
\nrights.<\/p>\n<\/p>\n

50<\/p>\n

\n

\n

“Payoff Amount<\/u>” means the aggregate of the amounts of Indebtedness
\nowed to certain Persons by the Company or its Subsidiaries as indicated on the
\npayoff letters delivered by the Seller to the Purchaser in accordance with
\nSection 5.6<\/u>.<\/p>\n<\/p>\n

“PBGC<\/u>” means the Pension Benefit Guaranty Corporation.<\/p>\n<\/p>\n

“Permits<\/u>” shall have the meaning set forth in Section 3.17<\/u>.<\/p>\n<\/p>\n

“Permitted Encumbrances<\/u>” shall have the meaning set forth in
\nSection 3.10(b)<\/u>.<\/p>\n<\/p>\n

“Person<\/u>” means a natural person, partnership, corporation, limited
\nliability company, business trust, joint stock company, trust, unincorporated
\nassociation, joint venture, Governmental Entity or other entity or organization.\n<\/p>\n<\/p>\n

“Pre-Closing Tax Period<\/u>” shall have the meaning set forth in
\nSection 5.8(a)<\/u>.<\/p>\n<\/p>\n

“Proceeding<\/u>” shall have the meaning set forth in Section
\n8.2(a)<\/u>.<\/p>\n<\/p>\n

“Proxy Statement<\/u>” shall have the meaning set forth in Section
\n3.4<\/u>.<\/p>\n<\/p>\n

“Purchase Price<\/u>” shall have the meaning set forth in Section
\n1.2(a)<\/u>.<\/p>\n<\/p>\n

“Purchaser<\/u>” shall have the meaning set forth in the opening paragraph.\n<\/p>\n<\/p>\n

“Purchaser Indemnified Persons<\/u>” shall have meaning set forth in
\nSection 8.1(a)<\/u>.<\/p>\n<\/p>\n

“Real Property Lease<\/u>” has the meaning set forth in Section
\n3.10(e)<\/u>.<\/p>\n<\/p>\n

“Related Documents<\/u>” means the Escrow Agreement and the Transition
\nServices Agreement.<\/p>\n<\/p>\n

“Related Party<\/u>” shall have the meaning set forth in Section
\n3.22<\/u>.<\/p>\n<\/p>\n

“Release<\/u>” means any spilling, leaking, pumping, pouring, emitting,
\nemptying, discharging, injecting, escaping, leaching, dumping, disposing, of any
\nHazardous Substances at, in, on, into or onto the environment, including,
\nwithout limitation, the migration of any Hazardous Substances through or in the
\nenvironment.<\/p>\n<\/p>\n

“Regulatory Restrictions<\/u>” means any one or more of the following: (i)
\nthe seeking by a Competition Authority of an Order temporarily or permanently
\nenjoining the Closing, (ii) the imposition of an Order sought in clause (i),
\n(iii) the filing of a complaint (or similar) by any Competition Authority
\nchallenging the transactions contemplated in this Agreement as violating
\ncompetition Laws (including or similar to Section 1 of the Sherman Antitrust
\nAct, Section 7 of the Clayton Act or Section 5 of the Federal Trade Commission
\nAct), (iv) the initiation of a formal or informal investigation by any
\nCompetition Authority in connection with the transactions contemplated herein,
\nor (v) any indication (written or oral) from a Competition Authority that it is
\nlikely to challenge the transactions contemplated by this Agreement or impose
\nmaterial sanctions on any party upon consummation of the transactions
\ncontemplated by this Agreement or, to the extent no such indication has been
\nreceived from a Competition Authority (after inquiry) and the Stockholder
\nApproval has been obtained, Purchaser has received written advice from its
\ncounsel that a significant risk exists that consummation of the transactions
\ncontemplated by this Agreement will result in a Competition Authority
\nchallenging the transactions or imposing material sanctions on the Purchaser or
\nthe Company after Closing.<\/p>\n<\/p>\n

51<\/p>\n

\n

\n

“Representatives<\/u>” shall have the meaning set forth in Section
\n5.4(a)<\/u>.<\/p>\n<\/p>\n

“Restricted Business<\/u>” has the meaning set forth in Section
\n5.18(c)<\/u>.<\/p>\n<\/p>\n

“Restricted Period<\/u>” has the meaning set forth in Section
\n5.18(c)<\/u>.<\/p>\n<\/p>\n

“Schedule<\/u>” means an individual section of the Disclosure Schedule.<\/p>\n<\/p>\n

“SEC<\/u>” means the U.S. Securities and Exchange Commission.<\/p>\n<\/p>\n

“Securities Act<\/u>” means the Securities Act of 1933, as amended.<\/p>\n<\/p>\n

“Seller<\/u>” shall have the meaning set forth in the opening paragraph.\n<\/p>\n<\/p>\n

“Seller SEC Documents<\/u>” has the meaning set forth in Section
\n3.12<\/u>.<\/p>\n<\/p>\n

“Shares<\/u>” shall have the meaning set forth in Section 3.6<\/u>.<\/p>\n<\/p>\n

“Stockholder Approval<\/u>” shall have the meaning set forth in Section
\n3.2(d)<\/u>.<\/p>\n<\/p>\n

“Stockholders Meeting<\/u>” shall have the meaning set forth in Section
\n5.3(b)<\/u>.<\/p>\n<\/p>\n

“Straddle Period<\/u>” shall have the meaning set forth in Section
\n5.8(b)<\/u>.<\/p>\n<\/p>\n

“Subsidiary<\/u>” means, with respect to any Person, any corporation or
\nother organization, whether incorporated or unincorporated, of which (a) at
\nleast a majority of the securities or other interests having by their terms
\nordinary voting power to elect a majority of the board of directors or others
\nperforming similar functions with respect to such corporation or other
\norganization is directly or indirectly owned or controlled by such Person or by
\nany one or more of its Subsidiaries, or by such Person and one or more of its
\nSubsidiaries or (b) such Person or any other Subsidiary of such Person is a
\ngeneral partner (excluding any such partnership where such Person or any
\nSubsidiary of such Person does not have a majority of the voting interest in
\nsuch partnership).<\/p>\n<\/p>\n

“Superior Proposal<\/u>” shall have the meaning set forth in Section
\n5.4(d)(ii)<\/u>.<\/p>\n<\/p>\n

“Takeover Proposal<\/u>” shall have the meaning set forth in Section
\n5.4(d)(i)<\/u>.<\/p>\n<\/p>\n

“Tax<\/u>” or “Taxes<\/u>” means any federal, state, local, or foreign
\nincome, gross receipts, net worth, capital, license, payroll, estimated,
\nemployment, excise, severance, stamp, business and occupation, premium, windfall
\nprofits, environmental, capital stock, franchise, profits, margin, gross margin,
\nwithholding, social security (or similar), unemployment, disability, real
\nproperty, personal property, sales, use, transfer, registration, ad valorem,
\ncustoms duties, value added, alternative or add-on minimum tax, estimated or any
\nother taxes of any kind imposed by a Governmental Entity, including any
\ninterest, penalty, or addition thereto, whether disputed or not, and including
\nany obligations to indemnity or otherwise assume or succeed to the Tax liability
\nof any other Person (other than pursuant to this Agreement).<\/p>\n<\/p>\n

52<\/p>\n

\n

\n

“Tax Return<\/u>” means any return, declaration, report, claim for refund,
\nor information return or statement relating to Taxes, including any schedule or
\nattachment thereto, and including any amendment thereof.<\/p>\n<\/p>\n

“Territory<\/u>” has the meaning set forth in Section 5.18(c)<\/u>.<\/p>\n<\/p>\n

“Third-Party Claim<\/u>” shall have the meaning set forth in Section
\n8.2(a)<\/u>.<\/p>\n<\/p>\n

“Third-Party Consents<\/u>” shall have the meaning set forth in Section
\n5.7(d)<\/u>.<\/p>\n<\/p>\n

“Title IV Employee Plan<\/u>” means an Employee Plan that has been subject
\nto Section 302, Section 303 or Title IV of ERISA or Section 412 or Section 430
\nof the Code.<\/p>\n<\/p>\n

“Trademarks<\/u>” means U.S. and foreign registered and unregistered
\ntrademarks, trade dress, service marks, logos, trade names, corporate names and
\nall registrations and applications to register the same.<\/p>\n<\/p>\n

“Trade Secrets<\/u>” means all categories of trade secrets as defined in
\nthe Uniform Trade Secrets Act, including business information and industrial
\ndesigns, discoveries, improvements, ideas, designs, models, formulae, patterns,
\ncompilations, data collections, drawings, blueprints, mask works, devices,
\nmethods, techniques, processes, know-how, proprietary information, customer
\nlists, technical information and trade secrets.<\/p>\n<\/p>\n

“Transition Services Agreement<\/u>” means the agreement for transition
\nservices to be provided by the Company to Seller after Closing substantially in
\nthe form attached hereto as Exhibit D<\/u>.<\/p>\n<\/p>\n

“U.S.<\/u>” means the United States of America.<\/p>\n<\/p>\n

“U.S. Dollar<\/u>” or “$<\/u>” means the lawful currency of the United
\nStates of America.<\/p>\n<\/p>\n

“Walk-Away Date<\/u>” shall have the meaning set forth in Section
\n7.1(b)(i)<\/u>.<\/p>\n<\/p>\n

“WARN Act<\/u>” means the Worker Adjustment and Retraining Notification
\nAct.<\/p>\n<\/p>\n

Section 9.2. Interpretation<\/u>.<\/p>\n<\/p>\n

(a) The headings contained in this Agreement are for reference purposes only
\nand shall not affect in any way the meaning or interpretation of this Agreement.\n<\/p>\n<\/p>\n

(b) Whenever the words “include”, “includes” or “including” are used in this
\nAgreement they shall be deemed to be followed by the words “without limitation.”\n<\/p>\n<\/p>\n

(c) The words “hereof”, “herein” and “herewith” and words of similar import
\nshall, unless otherwise stated, be construed to refer to this Agreement as a
\nwhole and not to any particular provision of this Agreement, and article,
\nsection, paragraph, exhibit and schedule references are to the articles,
\nsections, paragraphs, exhibits and schedules of this Agreement unless otherwise
\nspecified.<\/p>\n<\/p>\n

(d) The meaning assigned to each term defined herein shall be equally
\napplicable to both the singular and the plural forms of such term, and words
\ndenoting any gender shall include all genders. Where a word or phrase is defined
\nherein, each of its other grammatical forms shall have a corresponding meaning.\n<\/p>\n<\/p>\n

53<\/p>\n

\n

\n

(e) A reference to any party to this Agreement or any other agreement or
\ndocument shall include such party153s successors and permitted assigns.<\/p>\n<\/p>\n

(f) A reference to any legislation or to any provision of any legislation
\nshall include any amendment to, and any modification or re-enactment thereof,
\nany legislative provision substituted therefor and all regulations and statutory
\ninstruments issued thereunder or pursuant thereto.<\/p>\n<\/p>\n

(g) A reference herein to any other agreement or document shall be to such
\nagreement or document as it may have been or may hereafter be amended, modified,
\nsupplemented, waived or restated from time to time in accordance with its terms
\nand, to the extent applicable, the terms of this Agreement, and shall include
\nall annexes, exhibits, schedules and other documents or agreements attached
\nthereto.<\/p>\n<\/p>\n

(h) The parties have participated jointly in the negotiation and drafting of
\nthis Agreement. In the event an ambiguity or question of intent or
\ninterpretation arises, this Agreement shall be construed as if drafted jointly
\nby the parties, and no presumption or burden of proof shall arise favoring or
\ndisfavoring any party by virtue of the authorship of any provisions of this
\nAgreement.<\/p>\n<\/p>\n

(i) All payments and adjustments under this Agreement shall be made in U.S.
\nDollars.<\/p>\n<\/p>\n

ARTICLE X.<\/strong><\/p>\n

\n

MISCELLANEOUS<\/strong><\/p>\n

\n

Section 10.1. Fees and Expenses<\/u>. All costs and expenses incurred in
\nconnection with this Agreement and the consummation of the Closing shall be paid
\nby the party incurring such expenses, except as specifically provided to the
\ncontrary in this Agreement.<\/p>\n<\/p>\n

Section 10.2. Amendment and Modification<\/u>. This Agreement may be
\namended, modified and supplemented in any and all respects, but only by a
\nwritten instrument signed by all of the parties hereto expressly stating that
\nsuch instrument is intended to amend, modify or supplement this Agreement.<\/p>\n<\/p>\n

Section 10.3. Notices<\/u>. All notices, requests and other communications
\nhereunder to a party shall be in writing and shall be deemed given: (1) on the
\ndate of delivery, if personally delivered, (2) on the day of receipt, if
\ndelivered by a nationally recognized next-day courier service, or (3) on the
\nthird Business Day following the date of mailing, if mailed by registered or
\ncertified mail (return receipt requested), in each case to such party at its
\naddress set forth below or such other address as such party may specify by
\nnotice to the parties hereto.<\/p>\n<\/p>\n

If to Purchaser, to:<\/p>\n<\/p>\n<\/p>\n

Allflex USA, Inc.<\/p>\n<\/p>\n

P.O. Box 612266<\/p>\n<\/p>\n

DFW Airport, TX 75261<\/p>\n<\/p>\n

Attention: Harold B. Kernodle<\/p>\n<\/p>\n

Telecopy: (972) 456-3882<\/p>\n<\/p>\n

54<\/p>\n

\n

\n<\/p>\n

with a copy which shall not constitute notice to:<\/p>\n<\/p>\n<\/p>\n

Hunton & Williams LLP<\/p>\n<\/p>\n

1445 Ross Avenue<\/p>\n<\/p>\n

Suite 3700<\/p>\n<\/p>\n

Dallas, TX 75202<\/p>\n<\/p>\n

Attention: T. Allen McConnell, Esq.<\/p>\n<\/p>\n

Telecopy: (214) 740-7147<\/p>\n<\/p>\n<\/p>\n

and if to Seller, to:<\/p>\n<\/p>\n<\/p>\n

Digital Angel Corporation<\/p>\n<\/p>\n

490 Villaume Avenue<\/p>\n<\/p>\n

South St. Paul, MN 55075<\/p>\n<\/p>\n

Facsimile No.: (651) 455-0217<\/p>\n<\/p>\n

Telephone No.: (651) 455-1621<\/p>\n<\/p>\n

Attention: Chief Executive Officer<\/p>\n<\/p>\n<\/p>\n

with a copy which shall not constitute to:<\/p>\n<\/p>\n<\/p>\n

Winthrop & Weinstine, P.A.<\/p>\n<\/p>\n

Capella Tower, Suite 3500<\/p>\n<\/p>\n

225 South Sixth Street<\/p>\n<\/p>\n

Minneapolis, MN 55402<\/p>\n<\/p>\n

Facsimile No.: (612) 604-6929<\/p>\n<\/p>\n

Telephone No.: (621) 604-6400<\/p>\n<\/p>\n

Attention: Philip T. Colton, Esq.<\/p>\n<\/p>\n

Email: pcolton@winthrop.com<\/u><\/p>\n<\/p>\n<\/p>\n

Section 10.4. Counterparts; Facsimile<\/u>. This Agreement may be executed
\nin two or more counterparts, all of which shall be considered one and the same
\nagreement and shall become effective when two or more counterparts have been
\nsigned by each of the parties and delivered to the other parties. Any signature
\npage of any such counterpart, or any electronic facsimile thereof, may be
\nattached or appended to any other counterpart to complete a fully executed
\ncounterpart of this Agreement, and any telecopy or other facsimile transmission
\nof any signature shall be deemed an original and shall bind such party.<\/p>\n<\/p>\n

Section 10.5. Entire Agreement; No Third Party Beneficiaries<\/u>. This
\nAgreement, together with and the Related Documents (a) constitute the entire
\nagreement and supersede all prior agreements and understandings, both written
\nand oral, between the parties with respect to the subject matter hereof and
\nthereof and (b) are not intended to confer upon any Person other than the
\nparties hereto and thereto any rights or remedies hereunder (except that the
\nPurchaser Indemnified Persons are intended to be third party beneficiaries of
\nArticle VIII<\/u> hereof); provided<\/em> that this Agreement shall not
\nsupersede or in any way modify the terms of the Confidentiality Agreement.<\/p>\n<\/p>\n

Section 10.6. Severability<\/u>. Any term or provision of this Agreement
\nthat is held by a court of competent jurisdiction or other authority to be
\ninvalid, void or unenforceable in any situation in any jurisdiction shall not
\naffect the validity or enforceability of the remaining terms and provisions
\nhereof or the validity or enforceability of the offending term or provision in
\nany other situation or in any other jurisdiction. If the final judgment of a
\ncourt of competent jurisdiction or other authority declares that any term or
\nprovision hereof is invalid, void or unenforceable, the parties agree that the
\ncourt making such determination shall have the power to reduce the scope,
\nduration, area or applicability of the term or provision, to delete specific
\nwords or phrases, or to replace any invalid, void or unenforceable term or
\nprovision with a term or provision that is valid and enforceable and that comes
\nclosest to expressing the intention of the invalid or unenforceable term or
\nprovision.<\/p>\n<\/p>\n

55<\/p>\n

\n

\n

Section 10.7. Governing Law.<\/u> This Agreement and the transactions
\ncontemplated herein, and all disputes, claims, or controversies between the
\nparties under or, except to the extent governing law is expressly set forth in a
\nRelated Document, related to this Agreement or the facts and circumstances
\nleading to its execution or performance, whether in contract, tort or otherwise,
\nshall be governed by and construed in accordance with the Laws of the State of
\nDelaware, without giving effect to any choice of law or conflict of law
\nprovision or rule (whether of the State of Delaware or any other jurisdiction)
\nthat would cause the application of the Laws of any jurisdiction other than the
\nState of Delaware.<\/p>\n<\/p>\n

Section 10.8. Jurisdiction<\/u>. Each of the parties irrevocably submits
\nitself to the non-exclusive personal jurisdiction of all state and federal
\ncourts sitting in the State of Delaware, including to the jurisdiction of all
\ncourts to which an appeal may be taken from such courts, in any action, suit or
\nproceeding arising out of or relating to this Agreement, any of the transactions
\ncontemplated by this Agreement or any facts and circumstances leading to its or
\ntheir execution or performance.<\/p>\n<\/p>\n

Section 10.9. Waiver of Trial by Jury<\/u>. EACH OF THE PARTIES HEREBY
\nACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER OR RELATING
\nTO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN IS LIKELY TO INVOLVE
\nCOMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND
\nUNCONDITIONALLY WAIVES ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
\nANY LITIGATION (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) DIRECTLY OR
\nINDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
\nCONTEMPLATED HEREBY, THE FACTS OR CIRCUMSTANCES LEADING TO ITS OR THEIR
\nEXECUTION OR PERFORMANCE OR ANY ACTIONS OF ANY OF ANY OTHER PARTY153S AFFILIATES
\nAND REPRESENTATIVES. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (1) NO
\nREPRESENTATIVE OR AFFILIATE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
\nOTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
\nENFORCE THE FOREGOING WAIVER, (2) IT UNDERSTANDS AND HAS CONSIDERED THE
\nIMPLICATIONS OF SUCH WAIVER, (3) IT MAKES SUCH WAIVER KNOWINGLY AND VOLUNTARILY
\nAND (4) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
\nTHE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 10.9<\/u>.<\/p>\n<\/p>\n

Section 10.10. Time of Essence<\/u>. Each of the parties hereto hereby
\nagrees that, with regard to all dates and time periods set forth or referred to
\nin this Agreement, time is of the essence.<\/p>\n<\/p>\n

Section 10.11. Extension; Waiver<\/u>. At any time prior to the Closing
\nDate, either party hereto may extend the time for the performance of any of the
\nobligations or other acts of the other party. Any agreement on the part of a
\nparty to any such extension shall be valid only if set forth in an instrument in
\nwriting signed by or on behalf of such party. The failure of either party to
\nthis Agreement to assert any of its rights under this Agreement or otherwise
\nshall not constitute a waiver of those rights.<\/p>\n<\/p>\n

Section 10.12. Assignment<\/u>. Neither this Agreement nor any of the
\nrights, interests or obligations hereunder shall be transferred by either party
\n(whether by operation of law or otherwise) without the prior written consent of
\nthe other party, provided, however<\/em>, that Purchaser may transfer any of
\nits rights and obligations to any Affiliate of Purchaser, but no such assignment
\nshall relieve Purchaser of its obligations hereunder. Any transfer of any
\nrights, interests or obligations hereunder in violation of this Section shall be
\nnull and void.<\/p>\n<\/p>\n

56<\/p>\n

\n

\n

Section 10.13. Specific Performance<\/u>. Each party shall be entitled to
\nequitable relief, including specific performance, in the event of any breach or
\nthreatened breach of this Agreement.<\/p>\n<\/p>\n

[Signature Page Follows]<\/p>\n

\n

5966987v10<\/p>\n<\/p>\n

57<\/p>\n

\n

\n

IN WITNESS WHEREOF, Purchaser and Seller have executed this Agreement or
\ncaused this Agreement to be executed by their respective officers thereunto duly
\nauthorized as of the date first written above.<\/p>\n<\/p>\n

SELLER:<\/p>\n<\/p>\n<\/p>\n

DIGITAL ANGEL CORPORATION<\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n

By: \/s\/ Joseph J. Grillo<\/u><\/p>\n<\/p>\n

Its: Chief Executive Officer<\/u><\/p>\n<\/p>\n<\/p>\n

PURCHASER:<\/p>\n<\/p>\n<\/p>\n

ALLFLEX USA, INC.<\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n

By: \/s\/ Harold B. Kernodle<\/u><\/p>\n<\/p>\n

Its: Chief Financial Officer<\/u><\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n

[Signature Page to Stock Purchase Agreement]<\/p>\n

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