EXHIBIT 10.1

EXECUTION COPY

THIS STOCK PURCHASE AGREEMENT, dated as of April 30, 2008, is by and among
Lumificient Corporation, a Minnesota corporation (the “Company”), the
shareholders of the Company listed on Schedule I hereto (the “Shareholders”) and
Nexxus Lighting, Inc., a Delaware corporation (the “Purchaser”). The Company,
the Shareholders and the Purchaser are sometimes referred to herein collectively
as the “Parties” and each individually as a “Party.”

WHEREAS, the Shareholders own all of the capital stock of the Company; and

WHEREAS, pursuant to that certain Agreement for Purchase and Sale of Business,
dated January 10, 2008, the Company purchased all of the tangible and intangible
assets and assumed certain specified liabilities of Lumificient Technologies,
LLC, a Delaware limited liability company (the “LT Predecessor”); and

WHEREAS, each Shareholder desires to sell to Purchaser, and Purchaser is willing
to purchase from each Shareholder, the capital stock of the Company set forth
opposite such Shareholder’s name on Schedule I in exchange for the consideration
set forth next to such Shareholder’s name on Schedule I, subject to the terms
and conditions of this Agreement; and

WHEREAS, in order to induce Purchaser to enter into this Agreement, the
Shareholders are entering into new employment agreements with the Company (the
“Employment Agreements”) simultaneously with the execution of this Agreement;
and

WHEREAS, certain terms used in this Agreement are defined in Section 9.1, and to
the extent that terms bearing initial upper case letters appear in this
Agreement, but are not defined in Section 9.1, such terms shall have the
meanings set forth elsewhere in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants, representations and
warranties made herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I

PURCHASE AND SALE TRANSACTION

Section 1.1. Sale of Company Shares. On and subject to the terms and conditions
of this Agreement, at the closing of the transactions contemplated hereby (the
“Closing”), each Shareholder will sell, assign, transfer and deliver to the
Purchaser, and the Purchaser will purchase from such Shareholder, the shares of
the common stock, no par value per share, of the Company (the “Company Shares”),
set forth opposite such Shareholder’s name on Schedule I hereto, constituting
all of the outstanding Company Shares owned by such Shareholder.

Section 1.2. Purchase Price. Subject to the terms and conditions hereof, the
total consideration to be paid for the Company Shares (the “Purchase Price”)
shall be an amount equal to (i) an aggregate of $1,100,000 in cash, payable to
the Shareholders by electronic funds transfer at the Closing (the “Initial Cash
Purchase Price”) plus (ii) an aggregate of 475,000 shares of unregistered common
stock, $.001 par value per share of the Purchaser (“Purchaser Common Stock”)
issued to the Shareholders at the Closing, plus (iii) the Earnout Payments, if
any, calculated in accordance with Section 1.5 of this Agreement. Every
component of the Purchase

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Price payable hereunder (x) shall be allocated among the Shareholders in the
amounts and/or percentages set forth on Schedule I of this Agreement and (y) is
subject to adjustment as provided in Section 1.4 of this Agreement.

Section 1.3. Closing Date. Subject to the satisfaction of the conditions set
forth in this Section 1.3 and Sections 5.1 and 5.2 (or the waiver thereof by the
Party entitled to waive such conditions), the Closing shall take place at the
offices of Lowndes Drosdick Doster Kantor & Reed, P.A., 215 North Eola Drive,
Orlando, Florida 32801 at 10:00 a.m. on the date hereof or at such other time,
date and place as the Parties shall mutually agree. The date on which the
Closing occurs is referred to herein as the “Closing Date.” At the Closing,
(i) each Shareholder will deliver to the Purchaser the stock certificate or
certificates evidencing all of the Company Shares owned by such Shareholder,
duly endorsed to the Purchaser or accompanied by a duly executed stock power
assigning such Company Shares to the Purchaser and otherwise in good form for
transfer, (ii) the Purchaser shall (x) pay to each Shareholder the applicable
portion of the Initial Cash Purchase Price, as set forth on Schedule I and
(y) issue to each Shareholder the applicable number of shares of Purchaser
Common Stock as set forth on Schedule I, and deliver the applicable certificate
to each Shareholder, and (iii) the Parties shall make the deliveries described
in Article V. Purchaser shall not be required to purchase any Company Shares
unless all Company Shares are properly tendered in accordance with the terms of
this Agreement.

Section 1.4. Purchase Price Adjustment. The Purchase Price shall be subject to
adjustment after the Closing Date as follows:

(a) Within 60 days after the Closing Date, Purchaser shall prepare and deliver
to the Representative a balance sheet (the “Closing Date Balance Sheet”) for the
Company as of the close of business on the Closing Date (determined on a pro
forma basis as though the transactions contemplated by this Agreement had not
occurred and in accordance with GAAP applied on a basis consistent with the same
accounting methodologies historically used by the Company as set forth in the
Balance Sheet of the Company dated January 31, 2008 attached hereto as part of
Schedule 1.4 (the “Balance Sheet”)). The Closing Date Balance Sheet will include
a determination of the Net Worth of the Company as of the close of business on
the Closing Date (the “Closing Date Net Worth”). Purchaser will make the
workpapers and back-up materials used in preparing the Closing Date Balance
Sheet available to the Representative and his accountants and other
representatives at reasonable times and upon reasonable notice during (i) the
review by Representative of the Closing Date Balance Sheet and (ii) the
resolution by Purchaser and the Representative of any objections to the Closing
Date Balance Sheet.

(b) If the Representative has any objection to the Closing Date Balance Sheet or
the Closing Date Net Worth, the Representative shall deliver a detailed
statement describing such objection to Purchaser in writing within 20 days after
receiving the Closing Date Balance Sheet. Purchaser and the Representative will
attempt in good faith to resolve any such objections. If Purchaser and the
Representative do not reach a resolution of all objections within 30 days after
Purchaser has received the statement of objections, Purchaser and the
Representative will select a mutually acceptable accounting firm to resolve any
remaining objections. If Purchaser and the Representative are unable to agree on
the choice of an accounting firm, they will select a nationally recognized
accounting firm by lot (after excluding the regular outside accounting firms of
Purchaser and the Company). The accounting firm will

 

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determine, in accordance with GAAP applied on a basis consistent with the
preparation of the Balance Sheet, the amounts to be included in the Closing Date
Balance Sheet and the Closing Date Net Worth. Each Party shall provide the
accounting firm, within 15 days of its selection, with a definitive statement of
the position of such Party with respect to each unresolved objection and will
advise the accounting firm that the Parties accept the accounting firm as the
appropriate Person to interpret this Agreement for all purposes relevant to the
resolution of the unresolved objections. Purchaser will provide the accounting
firm access to the books and records of the Company. Purchaser and the
Representative shall use their best efforts to cause the accounting firm to
carry out a review of the unresolved objections and prepare a written statement
of its determination regarding each unresolved objection within 30 days after
its appointment. The determination of any accounting firm so selected will be
set forth in writing and will be conclusive and binding upon the Parties.
Purchaser will revise the Closing Date Balance Sheet and the determination of
the Closing Date Net Worth as appropriate to reflect the resolution of any
objections to the Closing Date Balance Sheet pursuant to this Section 1.4.

(c) If Purchaser and the Shareholders submit any unresolved objections to an
accounting firm for resolution as provided in this Section 1.4, Purchaser, on
the one hand, and the Shareholders, jointly and severally, on the other hand,
shall each pay one-half of the fees, costs and expenses of the accounting firm
(including legal fees and costs).

(d) Within 10 Business Days after the date on which the Closing Date Net Worth
is finally determined pursuant to this Section 1.4:

(i) If the Closing Date Net Worth exceeds the Base Net Worth (the amount of such
excess, the “Excess Net Worth”), Purchaser will pay Shareholders an aggregate
amount equal to the Excess Net Worth.

(ii) If the Closing Date Net Worth is less than the Base Net Worth (the amount
of such deficiency, the “Net Worth Shortfall”), the Shareholders will, jointly
and severally, pay Purchaser an aggregate amount equal to the Net Worth
Shortfall.

(iii) All payments to be made pursuant to this Section 1.4 will be promptly made
by wire transfer of immediately available funds to the accounts designated by
Purchaser or the Shareholders, as applicable.

Section 1.5. Earnout Payments. As part of the Purchase Price, Purchaser shall
deliver to the Shareholders the following shares of Purchaser Common Stock (each
of the following amounts an “Earnout Payment”) in accordance with the provisions
of this Section 1.5:

(a) Calculation of Earnout Payments.

(i) Provided that the Purchaser subsidiary operating the Business of the Company
after the consummation of the purchase and sale of the Company Shares (the “LC
Subsidiary”) and the Company have combined revenue for the year ended
December 31, 2008 at least equal to $3,500,000 (the “2008 Revenue Threshold”),
Purchaser will issue the Shareholders an aggregate of 30,000 unregistered shares
of Purchaser Common Stock. For each additional $500,000 in incremental revenue
of the LC Subsidiary and the Company for calendar year 2008, over the 2008
Revenue

 

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Threshold, Purchaser will issue the Shareholders an aggregate of 9,000
additional unregistered shares of Purchaser Common Stock up to a maximum of
183,000 shares for corresponding revenue of $12,000,000 or more.

(ii) Provided that the Company and the LC Subsidiary have combined earnings
before interest, taxes, depreciation and amortization (“EBITDA”) for the year
ended December 31, 2008 at least equal to $50,000 (the “2008 EBITDA Threshold”),
Purchaser will issue the Shareholders an aggregate of 10,000 unregistered shares
of Purchaser Common Stock. For each additional $50,000 in incremental EBITDA of
the LC Subsidiary and the Company for calendar year 2008, over the 2008 EBITDA
Threshold, Purchaser will issue the Shareholders an aggregate of 5,000
additional unregistered shares of Purchaser Common Stock up to a maximum of
220,000 shares for corresponding EBITDA of $2,150,000 or more.

(iii) Provided that the LC Subsidiary has revenue for the year ended
December 31, 2009 at least equal to $8,000,000 (the “2009 Revenue Threshold”),
Purchaser will issue the Shareholders an aggregate of 111,000 unregistered
shares of Purchaser Common Stock. For each additional $500,000 in incremental
revenue of the LC Subsidiary for calendar year 2009, over the 2009 Revenue
Threshold, Purchaser will issue the Shareholders an aggregate of 9,000
additional unregistered shares of Purchaser Common Stock up to a maximum of
507,000 shares for corresponding revenue of $30,000,000 or more.

(iv) Provided that the LC Subsidiary has EBITDA for the year ended December 31,
2009 at least equal to $200,000 (the “2009 EBITDA Threshold”), Purchaser will
issue the Shareholders an aggregate of 10,000 unregistered shares of Purchaser
Common Stock. For each additional $50,000 in incremental EBITDA of the LC
Subsidiary for calendar year 2009, over the 2009 EBITDA Threshold, Purchaser
will issue the Shareholders 5,000 additional unregistered shares of Purchaser
Common Stock up to a maximum of 815,000 shares for corresponding EBITDA of
$8,075,000 or more.

For purposes of calculating the Earnout Payments pursuant to this Section 1.5,
revenue and EBITDA of the Company and the LC Subsidiary shall be determined in
accordance with GAAP and with respect to the LC Subsidiary, the accounting
policies and procedures consistent with those employed in preparation of
Purchaser’s publicly filed financial statements.

(b) Payment Date. On or before the ninetieth (90th) day following the end of
each of the 12 month periods ending on December 31, 2008 and December 31, 2009
(each a “Payment Date”) or on the immediately following Business Day if the
Payment Date is not a Business Day, Purchaser shall deliver the shares of
Purchaser Common Stock payable to the Shareholders pursuant to Section 1.5(a) of
this Agreement.

(c) Operation of the LC Subsidiary. From the Closing Date until December 31,
2009 (the “Earnout Period”), Purchaser agrees that the LC Subsidiary shall be
operated as a direct or indirect wholly owned subsidiary of Purchaser and
conducted in good faith as a going concern. During the Earnout Period: (x) the
LC Subsidiary shall be controlled by a Board of Directors elected or appointed,
directly or indirectly, by Purchaser (the “Board”); however,

 

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provided that Mr. Grajcar is an employee of Purchaser or any of its Affiliates,
Purchaser shall appoint Mr. Grajcar to the Board during the Earnout Period,
(y) the operation of the LC Subsidiary shall be subject to the control of the
Board, and ultimate authority for all decisions affecting the LC Subsidiary
shall rest with the Board and (z) without the consent of the Representative, the
LC Subsidiary shall not sell or transfer, outside the ordinary course of
business, all, or any significant portion of, its assets.

(d) Calculation of Earnout Payments. The amount of each Earnout Payment, if any,
shall be calculated and agreed upon by the Parties as follows:

(i) On or before each Payment Date, Purchaser shall prepare and deliver to the
Representative a statement setting forth the calculation of the amount of the
Earnout Payment, if any, payable on such Payment Date (the “Earnout Statement”).
Purchaser shall provide the Representative and his accountants and other
representatives with reasonable access to all books and records and working
papers to the extent reasonably necessary to enable the Representative and such
representatives to verify the calculation of the amount of the Earnout Payment,
if any.

(ii) If the Representative has any objections to the calculation of the Earnout
Payment as set forth in the Earnout Statement, the Representative shall deliver
a detailed statement describing such objections to Purchaser in writing within
20 days after receiving the Earnout Statement. Purchaser and the Representative
will attempt in good faith to resolve any such objections.

(iii) If Purchaser and the Representative do not reach a resolution of all
objections within 30 days after Purchaser has received the statement of
objections, Purchaser and the Representative will select a mutually acceptable
accounting firm to resolve any remaining objections. If Purchaser and the
Representative are unable to agree on the choice of an accounting firm, they
will select a nationally recognized accounting firm by lot (after excluding the
regular outside accounting firms of Purchaser and the Company). The accounting
firm will determine the amount of the Earnout Payments, if any, in accordance
with GAAP and accounting policies and procedures consistent with those employed
in the preparation of Purchaser’s publicly filed financial statements. Each
Party shall provide the accounting firm, within 15 days of its selection, with a
definitive statement of the position of such Party with respect to each
unresolved objections and will advise the accounting firm that the Parties
accept the accounting firm as the appropriate Person to interpret this Agreement
for all purposes relevant to the resolution of the unresolved objections.
Purchaser will provide the accounting firm access to the books and records of
the LC Subsidiary. Purchaser and the Representative shall use their best efforts
to cause the accounting firm to carry out a review of the unresolved objections
and prepare a written statement of its determination regarding each unresolved
objection within 30 days of its appointment. The determination of any accounting
firm so selected will be set forth in writing and will be conclusive and binding
upon the Parties. Purchaser will revise the Earnout Statement as appropriate to
reflect the resolution of any objections to the calculation of the Earnout
Payment pursuant to this Section 1.5.

 

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(iv) If Purchaser the Representative submit any unresolved objections to an
accounting firm for resolution as provided in this Section 1.5, Purchaser, on
the one hand, and the Shareholders, jointly and severally, on the other hand,
shall each pay one-half of the fees, costs and expenses of the accounting firm
(including legal fees and costs).

Within 10 Business Days after the date on which the Earnout Payment is finally
determined pursuant to this Section 1.5, Purchaser will deliver to the
Shareholders the aggregate amount of shares of Purchaser Common Stock, if any,
payable pursuant to the terms of this Section 1.5. Each of the Shareholders
acknowledges and agrees that neither Purchaser nor any other Person has made any
guarantee or representation to such Shareholder that any Earnout Payment will be
realized. Any Earnout Payment shall be treated as a component of the Purchase
Price.

Section 1.6. Indemnity Holdback. A portion of the Purchase Price in the amount
of $200,000 (the “Indemnity Holdback Amount”) shall be deposited by Purchaser
into an account mutually agreed to by the Representative and Purchaser at RBC
Centura Bank, or any other mutually agreeable financial institution (the
“Holdback Account”). The Indemnity Holdback Amount shall be applied in
accordance with the terms of this Agreement to pay amounts owing or payable
under this Agreement by the Shareholders to Purchaser with any remaining funds
to be distributed to the Shareholders. The Indemnity Holdback Amount shall be
applied by Purchaser as follows:

(a) In the event of a claim for indemnification pursuant to Article VII of this
Agreement by a Purchaser Indemnified Party hereunder (a “Claim”), Purchaser
shall give the Representative the Required Notice pursuant to Section 7.3 of
this Agreement.

(b) In the event that (i) the Representative shall not have furnished to
Purchaser a written objection to the Required Notice within thirty (30) calendar
days of receipt thereof or (ii) the Representative shall have delivered to
Purchaser, the Representative’s written objection to the Required Notice and
either (x) the Representative and Purchaser shall have, subsequent to the giving
of such notice, mutually agreed that the Shareholders are obligated to indemnify
the Purchaser Indemnified Parties for a specified amount or (y) Purchaser and
the Representative shall have received a final, non-appealable order of any
court of competent jurisdiction (the “Court”) relating to the disposition of
such Claim (a “Final Judgment”), Purchaser shall disburse to the Purchaser
Indemnified Party the entire amount determined to be owed to the Purchaser
Indemnified Part as set forth in the Required Notice, the Final Judgment, or as
determined by mutual agreement of Purchaser and the Representative, as the case
may be.

(c) On March 31, 2009 (the “Initial Disbursement Date”), so long as there is no
Claim then pending, Purchaser shall disburse one half of the Indemnity Holdback
Amount (including any earnings thereon) to the Shareholders. If there is a Claim
pending on the Initial Disbursement Date, Purchaser shall disburse to the
Shareholder an amount equal to one-half of (i) the Indemnity Holdback Amount
(including any earnings thereon) less (ii) the amount for which indemnification
has been demanded in the applicable Required Notice.

(d) On March 31, 2010 (the “Final Disbursement Date”), so long as there is no
Claim then pending, Purchaser shall disburse the remaining Indemnity Holdback
Amount

 

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(including any earnings thereon) to the Shareholders. If there is a Claim
pending on the Final Disbursement Date, Purchaser shall disburse to the
Shareholders an amount equal to (i) the remaining Indemnity Holdback Amount
(including any earnings thereon) less (ii) the amount for which indemnification
has been demanded in the applicable Required Notice.

(e) Unless Purchaser shall disburse the Indemnity Holdback Amount (including any
earnings thereon) pursuant to this Section 1.6, and except as otherwise mutually
agreed upon by Purchaser and the Representative in writing, Purchaser shall
continue to hold the Indemnity Holdback Amount (including any earnings thereon)
in the Holdback Account until receipt by Purchaser of a Final Judgment. Upon
receipt by Purchaser of a Final Judgment, Purchaser shall disburse the Indemnity
Holdback Amount (including any earnings thereon) as provided in such Final
Judgment.

Section 1.7. Payment of Purchase Price. The Purchase Price shall be paid in the
following manner:

(a) On the Closing Date, Purchaser shall pay the Shareholders an aggregate of
$1,100,000, less the Indemnity Holdback Amount by wire transfer of immediately
available funds to accounts that the Shareholders designate prior to the Closing
Date.

(b) On the Closing Date, Purchaser shall issue and deliver to the Shareholders
475,000 unregistered shares of Purchaser Common Stock (the “Initial Shares”).

(c) On the Closing Date, Purchaser shall deposit the Indemnity Holdback Amount
in the Holdback Account.

(d) The Earnout Payments, if any, shall be paid and delivered to the
Shareholders in accordance with Section 1.5 of this Agreement.

All amounts set forth herein are stated in U.S. dollars.

Section 1.8. Lock-Up Agreement. During the applicable Restricted Period, the
Shareholders shall not sell, pledge, hedge or otherwise dispose of any direct or
indirect economic interest in any of the Purchaser Common Stock (including by
entering into any covered or uncovered short transaction). “Restricted Period”
means (a) with respect to the Initial Shares, the period ending 180 days after
the Closing Date and (b) with respect to any shares of Purchaser Common Stock
issued as Earnout Payments, the period ending 180 days after the applicable
Payment Date

Section 1.9. Restrictions on Purchaser Common Stock; Resale Registration.

(a) Each of the Shareholders acknowledges that the shares of Purchaser Common
Stock issued to such Shareholders hereunder, including the shares issued as
Earnout Payments, if any, will be restricted securities which may not be sold,
transferred or otherwise disposed of except pursuant to an effective
registration statement of Purchaser filed under the Securities Act of 1933, as
amended (the “Securities Act”), or in accordance with an opinion of counsel in
form and substance reasonably satisfactory to Purchaser that an exemption from
such registration is available. In addition, to the extent a Shareholder would
be a reporting person

 

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under Section 16(a) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) his shares of Purchaser Common Stock would be subject to the
restrictions of Section 16(b) of the Exchange Act. Subject to the terms of this
Agreement, Purchaser shall have the right to offset indemnity claims, if any,
for breaches of this Agreement against the Purchaser Common Stock issuable to
the Shareholders as Earnout Payments, if any.

(b) The certificates representing the Purchaser Common Stock issued to the
Shareholders hereunder shall bear the following legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT FILED UNDER THE ACT, AND IN COMPLIANCE WITH APPLICABLE
SECURITIES LAWS OF ANY STATE WITH RESPECT THERETO, OR IN ACCORDANCE WITH AN
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT.

The stock certificates evidencing the Purchaser Common Stock may also bear any
legends required by applicable state blue sky Laws.

(c) Purchaser shall use its reasonable best efforts to file a resale
registration statement under the Securities Act on or before 180 days after the
Closing Date (or, if at such time Purchaser has on file with the Securities and
Exchange Commission an effective shelf registration statement pursuant to which
Purchaser may register such shares of Purchaser Common Stock for resale by the
Shareholders by means of filing a prospectus supplement or amendment thereto,
file such prospectus supplement or amendment) and take such other commercially
reasonable actions as are required to permit such Purchaser Common Stock to be
resold pursuant to such registration statement for a period of at least one year
thereafter; provided, however, that notwithstanding the foregoing, Purchaser
shall not have an obligation to file any such resale registration statement (or
prospectus supplement or amendment, if applicable, thereto) if Purchaser is at
such time not eligible to register shares of Purchaser Common Stock for resale
on Form S-3 (or any successor form). In the event that Purchaser shall not
register such shares of Purchaser Common Stock for resale in accordance with the
provisions of this Section, then Purchaser shall take reasonable action to
facilitate the sale of any such Purchaser Common Stock under Rule 144 of the
Securities Act. All expenses of filing such prospectus supplement or amendment
will be borne by Purchaser but Purchaser will not be responsible for any
expenses of the Shareholders (including without limitation for any underwriting
commissions or discounts or any legal or other advisory expenses of the
Shareholders).

(d) Purchaser may, at its option, but without any obligation to do so, include
in any non-underwritten registration of shares of Purchaser Common Stock any or
all such shares issued or to be issued for the account of the Shareholders
hereunder. The inclusion of any shares of Purchaser Common Stock issued to the
Shareholders hereunder that are subject to the

 

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restrictions set forth in Section 1.6 in a registration statement filed by
Purchaser, or a prospectus supplement or amendment thereto, shall not affect the
operation of Section 1.6 except as otherwise agreed by Purchaser in its sole
discretion.

(e) Purchaser will indemnify and hold harmless, to the fullest extent permitted
by Law, the Shareholders from and against all damages, as incurred, arising out
of or based upon any untrue or alleged untrue statement of a material fact
contained in a registration statement pursuant to which any of the shares of
Purchaser Common Stock issued to the Shareholders hereunder are registered for
resale (each a “Resale Registration Statement”), any prospectus or form of
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except to the extent the same are based
upon information with respect to the Shareholders furnished in writing to
Purchaser by a Shareholder expressly for use therein; provided, however, that
Purchaser will not be liable to the Shareholders to the extent that any such
damages arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any preliminary prospectus if
either (A)(i) a Shareholder failed to send or deliver a copy of the prospectus
with or prior to the delivery of written confirmation of the sale by the
Shareholder of shares of Purchaser Common Stock to the person asserting the
claim from which such damages arise and (ii) the prospectus would have corrected
such untrue statement or alleged untrue statement or such omission or alleged
omission or (B) such untrue statement or alleged untrue statement or such
omission or alleged omission is corrected in an amendment or supplement to the
prospectus previously furnished by or on behalf of Purchaser with copies of the
prospectus as so amended or supplemented delivered by Purchaser, and a
Shareholder thereafter fails to deliver such prospectus as so amended or
supplemented prior to or concurrently with the sale of shares of Purchaser
Common Stock to the person asserting the claim from which such damages arise;
provided, further, however, that the indemnity agreement contained in this
Section 1.9(e) will not apply to amounts paid in settlement of any such damages
if such settlement is effected without the consent of Purchaser (which consent
will not be unreasonably withheld).

(f) The Shareholders will, jointly and severally, indemnify and hold harmless,
to the fullest extent permitted by Law, Purchaser and its Affiliates (including,
from and after the Closing, the LC Subsidiary), the officers, directors and
agents, affiliates, advisors, brokers and employees of each of them, each
underwriter of securities covered by a Resale Registration Statement, each
person who controls any such Person (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act), and the officers, directors,
agents, affiliates, advisors, brokers and employees of any such underwriter or
controlling person, from and against all damages, as incurred, arising out of or
based upon any untrue or alleged untrue statement of a material fact contained
in any registration statement, prospectus or form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent the same are contained in information
with respect to the Shareholders furnished in writing to Purchaser by the
Shareholders expressly for use therein; provided, however, that the indemnity
agreement contained in this Section 1.9(f) will not apply to amounts paid in
settlement of any such damages if such settlement is effected without the
consent of the Representative (which consent will not be unreasonably withheld).

 

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ARTICLE II

REPRESENTATIONS AND WARRANTIES REGARDING THE SHAREHOLDERS

Each Shareholder represents and warrants to Purchaser that the following
statements are correct and complete as of the date hereof and as of the Closing
Date:

Section 2.1. Authorization of Transactions. Such Shareholder has full power and
authority to execute and deliver this Agreement, and the other Transaction
Documents to which such Shareholder is a party, and to perform such
Shareholder’s obligations hereunder and thereunder. This Agreement and each
other Transaction Document constitutes the valid and legally binding obligation
of such Shareholder, enforceable in accordance with its terms and conditions.

Section 2.2. Conflicts; Consents of Third Parties. The execution and delivery by
such Shareholder of this Agreement, and the other Transaction Documents to which
such Shareholder is a party, the consummation of the transactions contemplated
hereby or thereby, and compliance by such Shareholder with the provisions hereof
or thereof will not (i) conflict with, violate, result in the breach or
termination of, or constitute a default under any Contract to which such
Shareholder is a party or by which such Shareholder or such Shareholder’s
properties or assets is bound, or require a Consent from any Person in order to
avoid any such conflict, violation, breach, termination or default; (ii) violate
any Law or any Order by which such Shareholder is bound; or (iii) result in the
creation of any Lien upon the properties or assets of such Shareholder. No
governmental franchise, easement, permit, right, application, filing,
registration, license or other authorization (each a “Permit”), Order, waiver,
declaration or filing with, or notification to any Person, including without
limitation any Governmental Body, is required on the part of such Shareholder in
connection with the execution, delivery and performance of this Agreement or the
other Transaction Documents to which such Shareholders is a party, or the
compliance by such Shareholder with any of the provisions hereof or thereof.

Section 2.3. Broker’s Fees. Such Shareholder has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Company or Purchaser
could become liable or obligated. Such Shareholder shall be solely responsible
for any obligations described in this Section 2.3 and will indemnify and hold
the Purchaser Indemnitees (as defined below) harmless from and against any
Losses (as defined below) resulting from or arising out of any such obligations
or matters.

Section 2.4. Company Shares. Such Shareholder holds of record and owns
beneficially the number of Company Shares set forth next to such Shareholder’s
name on Schedule I free and clear of any Lien. Such Shareholder is not a party
to any option, warrant, purchase right, or other contract or commitment that
could require such Shareholder to sell, transfer, or otherwise dispose of any
capital stock of the Company (other than this Agreement). Such Shareholder is
not a party to any voting trust, proxy, or other agreement or understanding with
respect to the voting of any capital stock of the Company.

 

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Section 2.5. Investment Intent; Accredited Investor Status. Each Shareholder has
had the opportunity to discuss the transactions contemplated hereby with
Purchaser and has had the opportunity to obtain such information pertaining to
Purchaser as has been requested, including but not limited to filings made by
Purchaser with the Securities and Exchange Commission (“SEC”) under the Exchange
Act. Each Shareholder is an “accredited investor” within the meaning of
Regulation D promulgated under the Securities Act, and has such knowledge and
experience in business or financial matters that he is capable of evaluating the
merits and risks of an investment in the Purchaser Common Stock. Each
Shareholder hereby represents that (i) he is acquiring the Purchaser Common
Stock for his own account for purposes of investment and he has no present
intention to distribute such Purchaser Common Stock, and (ii) he can bear the
economic risk of losing his investment in the Purchaser Common Stock and has
adequate means for providing for his current financial needs and contingencies.
Each Shareholder hereby represents that he has the financial acumen and
sophistication to make an informed investment decision with respect to the
shares of Purchaser Common Stock to be issued hereunder, understands that the
Shares are restricted and not freely tradable, and has had the opportunity to
inquire to Purchaser and ask all relevant questions regarding the Purchaser, its
operations and financial condition and has received answers to any and all of
such questions. Each Shareholder represents and warrants that he has reviewed
the Purchaser’s public filings with the Securities and Exchange Commission,
including the risk factors set forth therein. Each Shareholder further
represents and warrants that he is a resident of the State of Minnesota, and
that he understands that Purchaser has relied on the aforesaid representations
in entering into this Agreement and issuing and agreeing to issue shares of
Purchaser Common Stock to such Shareholder.

ARTICLE III

REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY

Each Shareholder represents and warrants to the Purchaser, jointly and
severally, that, except as set forth in the Disclosure Schedule attached hereto
(the “Disclosure Schedule”), the following statements are correct and complete
as of the date hereof and as of the Closing Date. Nothing in the Disclosure
Schedule shall be deemed adequate to disclose an exception to a representation
or warranty made herein, unless the Disclosure Schedule makes explicit reference
to the particular representation or warranty as to which exception is taken,
which in each case shall constitute the sole representation and warranty as to
which such exception shall apply. Without limiting the generality of the
foregoing, the disclosure of the existence of a contract or other item on the
Disclosure Schedule shall not, without more, constitute the disclosure of any
particular provisions of such contract or the actual or potential consequences
thereof, and the Disclosure Schedule shall identify the exception with
reasonable particularity and describe the relevant facts in reasonable detail.
The Disclosure Schedule shall be arranged in paragraphs corresponding to the
lettered and numbered paragraphs contained in this Article III.

Section 3.1. Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Minnesota and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business. The Company is duly
qualified or authorized to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction in which it owns or leases real
property and each other jurisdiction in which the conduct of its business or the
ownership of

 

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its properties requires such qualification or authorization, except where the
failure to be so qualified or authorized would not have a Company Material
Adverse Effect. Section 3.1 of the Disclosure Schedule sets forth a true,
correct and complete list of each jurisdiction in which the Company is qualified
or authorized to do business as a foreign corporation.

Section 3.2. Authorization and Enforceability. The Company has all requisite
power and authority to execute and deliver this Agreement and each other
Transaction Document to which it is a party, and has the requisite power and
authority to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by the Company of each of the Transaction
Documents to which it is a party has been duly authorized by all necessary
corporate action on the part of the Company. This Agreement and the other
Transaction Documents have been duly and validly executed and delivered by the
Company and constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective.

Section 3.3. Capitalization; No Subsidiaries. The authorized capital stock of
the Company consists solely of 1,248,440 shares of common stock, no par value
per share, of which 1,248,440 shares are issued and outstanding and no shares
are held in treasury. All outstanding shares of the Company’s common stock have
been duly and validly authorized and issued, are fully paid and nonassessable,
and all such shares are held of record and owned beneficially by the
Shareholders in the amounts set forth on Schedule I. No shares of the Company’s
common stock have been issued in violation of any preemptive rights. The Company
has no outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, preemptive rights or
other contracts or commitments that could require the Company to issue, sell, or
otherwise cause to become outstanding any of its capital stock or securities
convertible or exchangeable for, or any options, warrants, or rights to
purchase, any of such capital stock. There are no outstanding obligations of the
Company to repurchase, redeem or otherwise acquire any of its capital stock.
There are no outstanding or authorized stock appreciation, phantom stock, profit
participation or similar rights with respect to the Company. The Company does
not own, directly or indirectly, any interest in any corporation, partnership,
joint venture or other Person.

Section 3.4. Company Records.

(a) The minute book of the Company made available to the Purchaser contains
(i) all existing records of meetings and other corporate action of the
shareholders and Board of Directors (including committees thereof) of the
Company and (ii) complete and accurate records of all meetings and all other
action of the shareholders and Board of Directors (including committees thereof)
of the Company since inception. The certificate books and transfer ledgers of
the Company provided to Purchaser are true, correct and complete.

(b) The Books and Records and accounts of the Company accurately and fairly
present the financial condition, results of operations, shareholders’ equity and
cash flows of the Company. The Company has not engaged in any transaction with
respect to its business, maintained any bank account for its business or used
any of its funds, except for transactions, bank accounts and funds which have
been and are reflected in the normally maintained books, records and accounts of
the Company. The Shareholders have no knowledge that any fraud, whether or not
material, has occurred that involves or involved management or other employees
of the Company or the LT Predecessor.

 

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Section 3.5. Conflicts; Consents of Third Parties. The execution and delivery by
the Company of this Agreement, the execution and delivery by the Company of the
other Transaction Documents to which the Company is a party, the consummation of
the transactions contemplated hereby or thereby, and compliance by the Company
with the provisions hereof or thereof will not (i) conflict with, or result in
the breach of, any provision of the certificate of incorporation or bylaws or
comparable organizational documents (collectively, “Organizational Documents”)
of the Company; (ii) conflict with, violate, result in the breach or termination
of, or constitute a default under any Contract to which the Company is a party
or by which the Company or its properties or assets is bound, or require a
Consent from any Person in order to avoid any such conflict, violation, breach,
termination or default; (iii) violate any Law or any Order by which the Company
is bound; or (iv) result in the creation of any Lien upon the properties or
assets of the Company. No Permit, Order, waiver, declaration or filing with, or
notification to any Person, including without limitation any Governmental Body,
is required on the part of the Company in connection with the execution,
delivery and performance of this Agreement or the other Transaction Documents to
which the Company is a party, the compliance by the Company with any of the
provisions hereof or thereof, or the consummation by the Company or the
Shareholders of the transactions contemplated by this Agreement or the other
Transaction Documents.

Section 3.6. Financial Statements. Included in Section 3.6 of the Disclosure
Schedule are (i) the balance sheets of the LT Predecessor as at December 31,
2005, 2006 and 2007 and the related statements of income of the LT Predecessor
for the years then ended and (ii) the interim balance sheet of the Company as at
March 31, 2008 and the related statement of income of the Company for the
three-month period then ended (such annual and interim statements, including the
related notes and schedules thereto, are referred to herein as the “Financial
Statements”). The Financial Statements have been prepared from the books and
records of the LT Predecessor and the Company, as applicable, and fairly present
in all material respects the financial position and results of operations and
shareholders’ equity of the Company and the LT Predecessor, as applicable, as at
the dates and for the periods reflected thereon in accordance with GAAP applied
on a consistent basis throughout the periods indicated, except for the failure
of the interim Financial Statements to include the footnotes required by GAAP.

Section 3.7. No Undisclosed Liabilities. The Company does not have any
Liabilities except (a) to the extent specifically reflected and accrued for or
specifically reserved against in the March 31, 2008 balance sheet attached
hereto and (b) for Liabilities incurred subsequent to March 31 2008 in the
ordinary course of business consistent with past custom and practice (none of
which results from, arises out of, relates to, is in the nature of, or was
caused by any breach of contract, breach of warranty, tort, infringement, or
violation of law) and which in the aggregate are not material to the Company.

 

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Section 3.8. Absence of Certain Developments. Except as set forth in Section 3.8
of the Disclosure Schedule, since January 10, 2008:

(a) there has not been any Company Material Adverse Change nor has there
occurred any event which is reasonably likely to result in a Company Material
Adverse Change;

(b) there has not been any damage, destruction or loss, whether or not covered
by insurance, with respect to the property and assets of the Company having a
replacement cost of more than $5,000 for any single loss or in the aggregate for
any related losses;

(c) the Company has not made any change in the rate of compensation, commission,
bonus or other direct or indirect remuneration payable, or paid or agreed or
promised to pay, orally or in writing, conditionally or otherwise, any bonus,
incentive, retention or other compensation, retirement, welfare, fringe or
severance benefit or vacation pay, to or in respect of any member, shareholder,
manager, director, officer, employee, distributor or agent of the Company or the
LT Predecessor, other than increases in the ordinary course of business
consistent with past practice in the base salaries of employees of the Company
other than officers or senior managers;

(d) the Company has not entered into any employment, deferred compensation,
severance or similar agreement (nor amended any such agreement);

(e) there has not been any change by the Company in accounting or Tax reporting
principles, methods or policies or any settlement of any Tax controversy;

(f) the Company has not conducted its business other than in the ordinary course
consistent with past practice;

(g) the Company has not entered into any material transaction or Contract;

(h) the Company has not hired employees or engaged independent contractors to
provide services for clients of the Company or any of its Subsidiaries other
than in the ordinary course of business consistent with, and at a level
consistent with, past practice;

(i) the Company nor any of its Subsidiaries has breached any Contract or amended
any Contract;

(j) the Company nor any of its Subsidiaries has failed to promptly pay and
discharge current Liabilities except where disputed in good faith in an
appropriate manner;

(k) the Company has not made any loans, advances or capital contributions to, or
investments in, any Person or paid any fees or expenses to any Affiliate of
Company or the LT Predecessor;

(l) the Company has not mortgaged, pledged or subjected to any Lien any of its
assets, or acquired any assets or sold, assigned, transferred, conveyed, leased
or otherwise disposed of any assets of the Company except for assets acquired or
sold, assigned, transferred, conveyed, leased or otherwise disposed of in the
ordinary course of business consistent with past practice;

 

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(m) the Company has not discharged or satisfied any Lien, or paid any obligation
or Liability, except in the ordinary course of business consistent with past
practice and which, in the aggregate, are not material to the Company;

(n) the Company has not canceled or compromised any debt or claim or amended,
canceled, terminated, relinquished, waived or released any Contract or right
except in the ordinary course of business consistent with past practice and
which, in the aggregate, are not material to Company;

(o) the Company has not made or committed to make any capital expenditures or
capital additions or improvements in excess of $5,000 individually or in the
aggregate, except as set forth in Section 3.8(o) of the Disclosure Schedule, or
otherwise in the ordinary course of business consistent with past practices;

(p) the Company has not entered into any prepaid services transactions with any
of its customers or otherwise accelerated revenue recognition or the sales of
its services for periods prior to the Closing;

(q) the Company has not amended any of its Organizational Documents;

(r) the Company has not issued any equity securities or any security exercisable
or exchangeable for or convertible into equity securities of the Company; and

(s) the Company has not entered into any agreements to do or perform in the
future any actions referred to in this Section 3.8 which have not been
consummated as of the date hereof.

Section 3.9. Taxes.

(a) Except as set forth on Section 3.9(a) of the Disclosure Schedule, each of
the Company and the LT Predecessor has timely filed with the appropriate taxing
authorities all Tax Returns that it has been required to file. All such Tax
Returns are true, correct and complete in all respects. All Taxes owed by the
Company and/or the LT Predecessor (whether or not shown on any Tax Return) have
been paid. Adequate reserves have been established on the Financial Statements
to provide for the payment of any Taxes which are not yet due and payable with
respect to the Company and/or the LT Predecessor, as applicable, for taxable
periods or portions thereof ending on or before March 31, 2008. Neither the
Company nor the LT Predecessor is the beneficiary of any extension of time
within which to file any Tax Return. No claim has ever been made by an authority
in a jurisdiction where the Company or the LT Predecessor does not file Tax
Returns that the Company or the LT Predecessor is or may be subject to taxation
by that jurisdiction. There are no Liens on any of the assets of the Company or
the LT Predecessor that have arisen in connection with any failure (or alleged
failure) to pay any Tax.

(b) Each of the Company and the LT Predecessor has withheld and paid to the
appropriate taxing authority or other Governmental Body all Taxes required to
have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third party.

 

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(c) Neither the Company nor the LT Predecessor has waived or extended any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to the assessment, payment or collection of any Tax.

(d) To the extent that the Company has or will incur Taxes with respect to
periods or portions thereof ending on or prior to the Closing Date, the Company
shall pay all such Taxes on or prior to the Closing Date in compliance with all
applicable laws and regulations, or if such Taxes are not yet due and payable on
such date, the amount of such Taxes shall be accrued on the Closing Date Balance
Sheet.

(e) None of the properties or assets of the Company is property which, for Tax
purposes, is required to be treated as owned by another Person. The Company is
not an obligor on, and none of its assets have been financed directly or
indirectly by, any tax-exempt bonds. No property or assets of the Company is
“tax-exempt use property” within the meaning of Section 168(h) of the Code.

(f) No deficiency or proposed adjustment which has not been settled or otherwise
resolved for any amount of Taxes has been asserted or assessed by any taxing
authority or other Governmental Body against the Company or the LT Predecessor.
Except as set forth on Section 3.9(f) of the Disclosure Schedule, there has not
been, within the past five calendar years, an audit, examination or written
notice of potential examination of any Tax Returns filed by the Company or the
LT Predecessor.

(g) There is no action, suit, examination, investigation, Governmental Body
proceeding, or audit or claim for refund in progress, pending, proposed or
threatened against or with respect to the Company or the LT Predecessor
regarding Taxes.

(h) Neither the Company nor the LT Predecessor has ever agreed to or been
required to make any adjustment pursuant to Section 481(a) of the Code or any
corresponding provision of state, local or foreign law by reason of any change
in accounting method initiated by it or on its behalf; no taxing authority has
proposed any such adjustment or change in accounting method; and neither the
Company nor the LT Predecessor has any application pending with any taxing
authority requesting permission for any change in accounting method. The Company
will not be required (A) as a result of a change in method of accounting for a
taxable period ending on or prior to the Closing Date, to include any adjustment
under Section 481(c) of the Code in taxable income for any taxable period (or
portion thereof) beginning after the Closing or (B) as a result of any “closing
agreement,” as described in Section 7121 of the Code, to include any item of
income or exclude any item of deduction from any taxable period (or portion
thereof) beginning after the Closing.

(i) Neither the Company nor the LT Predecessor has been a member of an
affiliated group (as defined in Section 1504 of the Code), filed or been
included in a combined, consolidated or unitary income Tax Return, and is not a
partner, member, owner or beneficiary of any entity treated as a partnership or
a trust for Tax purposes. The Company does not have any liability for Taxes of
any Person including, without limitation, the LT Predecessor, under Treasury
Regulations Section 1.1502-6 or similar state or local laws, or otherwise, as a
successor or transferee, by contract or otherwise.

 

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(j) The Company is not a party to or bound by any Tax allocation or Tax sharing
agreement and has no contractual obligation to indemnify any other Person with
respect to Taxes.

(k) The Company is not, and has not been, a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

(l) True, correct and complete copies of all income and sales Tax Returns filed
by or with respect to the Company and the LT Predecessor for taxable periods
ending on or after December 31, 2003 have been furnished to Purchaser.

(m) The Company has not participated in any reportable transaction as
contemplated in Treasury Regulations Section 1.6011-4.

(n) The Company has not taken any action that is not in accordance with past
practice that could defer a liability for Taxes of the Company from any taxable
period ending on or before the Closing Date to any taxable period ending after
such date.

(o) The Company is not required to include any item of income for any taxable
period ending after the Closing as a result of an installment sale, open
transaction or prepaid amount received on or prior to Closing Date.

(p) The Company has not distributed stock or had its stock distributed in a
transaction that could be governed in whole or part by Section 355 or 361 of the
Code.

(q) The Company is not subject to Tax, nor does it have a permanent
establishment, in any foreign jurisdiction.

(r) The Company does not have any pending ruling requests filed by it or on its
behalf with any taxing authority or Governmental Body.

(s) The Company has not ever been a personal holding company within the meaning
of Section 542 of the Code.

Section 3.10. Real Property.

(a) The Company does not own in fee any real property or interest in real
property. Section 3.10 of the Disclosure Schedule sets forth a complete list of
all real property and interests in real property leased by the Company
(individually, a “Real Property Lease” and the real properties specified in such
leases being referred to herein individually as a “Company Property” and
collectively as the “Company Properties”) as lessee. The Company Property
constitutes all interests in real property currently used or currently held for
use in connection with the Business or which are necessary for the continued
operation of the Business as the Business is currently conducted and proposed to
be conducted. The Company has a valid and enforceable leasehold interest under
each of the Real Property Leases, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally and subject, as to enforceability, to general principles of
equity

 

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(regardless of whether enforcement is sought in a proceeding at law or in
equity). The Company has not received any written notice of any default or event
that with notice or lapse of time, or both, would constitute a default under any
of the Real Property Leases, and the Company, and to the Shareholder’s
Knowledge, each other party thereto, is in compliance with all obligations of
such party thereunder. All of the Company Property, buildings, fixtures and
improvements thereon owned or leased by the Company are in good operating
condition and repair (subject to normal wear and tear). The Company has
delivered to the Purchaser true, correct and complete copies of the Real
Property Leases, together with all amendments, modifications or supplements, if
any, thereto.

(b) The Company has all certificates of occupancy and Permits of any
Governmental Body necessary or, except as set forth in Section 3.10(b) of the
Disclosure Schedule, useful for the current use and operation of each Company
Property, and the Company has fully complied with all conditions of the Permits
applicable to each Company Property. No default or violation, or event that with
the lapse of time or giving of notice or both would become a default or
violation, has occurred in the due observance of any Permit.

Section 3.11. Tangible Personal Property; Title; Sufficiency of Assets.

(a) Section 3.11 of the Disclosure Schedule lists all leases of personal
property (“Personal Property Leases”) involving annual payments in excess of
$5,000 relating to personal property used by the Company, or to which the
Company is a party or by which the properties of the Company are bound. The
Company has delivered to the Purchaser true, correct and complete copies of the
Personal Property Leases, together with all amendments, modifications or
supplements thereto.

(b) The Company has a valid leasehold interest under each of the Personal
Property Leases under which it is a lessee, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity), and there is no default under any Personal
Property Lease by the Company or, to the Knowledge of the Shareholders, by any
other party thereto, and no event has occurred that with the lapse of time or
the giving of notice or both would constitute a default thereunder. The Company
and, to the Knowledge of the Shareholders, each other party thereto, is in
compliance with all obligations of the Company or such other party, as the case
may be, under each Personal Property Lease.

(c) The Company has exclusive, good and marketable title to all of its assets as
of the date hereof (which include, without limitation, all of the assets
reflected in the March 31, 2008 balance sheet attached hereto), free and clear
of any and all Liens other than the Permitted Encumbrances. All tangible
personal property included in such assets, and all of the items of tangible
personal property used by the Company under the Personal Property Leases, are in
working order and in a state of good maintenance and repair (ordinary wear and
tear excepted) and are suitable for the purposes used. The assets of the Company
include all assets, rights and interests reasonably required for the continued
conduct of the Business by the Company as now being conducted and proposed to be
conducted.

 

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Section 3.12. Intellectual Property.

(a) The Company owns, free and clear from all Liens (other than Permitted
Encumbrances) or otherwise possess legally enforceable rights to use all of the
Intellectual Property reasonably necessary to conduct the Business as currently
conducted or proposed to be conducted. The Intellectual Property owned by the
Company (“Owned Intellectual Property”) and the Intellectual Property licensed
to the Company comprise all of the Intellectual Property that is or has at any
time been used in or is reasonably necessary to conduct the Business as
currently conducted or proposed to be conducted.

(b) Section 3.12(b)(i) of the Disclosure Schedule sets forth a true, complete
and correct list of all Owned Intellectual Property for which a registration or
application has been filed with a Governmental Body, including patents,
trademarks, service marks and copyrights, issued by or registered with, or for
which any application for issuance or registration thereof has been filed with,
any Governmental Body. Section 3.12(b)(ii) of the Disclosure Schedule sets forth
a complete and correct list of all trademarks, service marks and other trade
designations that are Owned Intellectual Property and not otherwise identified
in Section 3.12(b)(i) of the Disclosure Schedule. Section 3.12(b)(iii) of the
Disclosure Schedule also sets forth a complete and correct list of all written
or oral licenses and arrangements (other than ordinary course licenses of
commercially available software), (A) pursuant to which the use by any Person of
Intellectual Property is permitted by the Company or (B) pursuant to which the
use by the Company of Intellectual Property is permitted by any Person
(collectively, the “Intellectual Property Licenses”). The Intellectual Property
Licenses are in full force and effect.

(c) The continued operation of the Business as presently conducted or reasonably
expected to be conducted does not interfere with, infringe upon, misappropriate,
or otherwise come into conflict with, any Intellectual Property rights of third
parties.

(d) There is no claim or demand of any Person pertaining to, or any proceeding
which is pending or, to the Knowledge of the Shareholders, threatened, that
challenges the rights of the Company in respect of any Owned Intellectual
Property, or claims that any default exists under any Intellectual Property
License.

(e) All of the copyrights in any of the products of the Company (including but
not limited to any works of authorship incorporated in or distributed with such
products) are owned by or licensed to the Company and, if licensed, are subject
to Intellectual Property Licenses that are in full force and effect.

(f) All Employees of the Company and all other Persons involved in the
development of Owned Intellectual Property, including computer programs and
software (including source code, object code and databases), have entered into
confidentiality agreements substantially in the form included in Section 3.12 of
the Disclosure Schedule.

(g) The Company has not created any Intellectual Property under contract with
U.S. government customers.

Section 3.13. Contracts. (a) Section 3.13 of the Disclosure Schedule sets forth
all of the Contracts to which the Company is a party or by which the Company is
bound and categorizes

 

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such Contracts by the types described below: (i) Contracts relating to the
employment of any Person, or any bonus, deferred compensation, pension, profit
sharing, stock option, employee stock purchase, retirement, retention,
severance, change of control or other employee benefit plan or arrangement;
(ii) Contracts other than those described in clause (i) with any current or
former member, manager, shareholder, officer, director or employee of the
Company, the LT Predecessor, or any Affiliate of the Company, the LT
Predecessor, or any such Person; (iii) Contracts with any employee of the
Company or labor union or association representing any employee; (iv) Contracts
relating to capital expenditures other than Contracts not exceeding $5,000
individually or in the aggregate; (v) Contracts entered into within the last
five years relating to the acquisition or disposition of any equity interests in
or, except in the ordinary course of business, assets of any Person; (vi) joint
venture or partnership agreements; (vii) Contracts limiting the ability of the
Company to engage in any line of business or to compete with any Person or to
conduct business in any geographical area or to solicit any Person for
employment; (viii) Contracts relating to the confidentiality or limitation on
use of any information; (ix) Contracts relating to any indebtedness of the
Company (other than accounts payable to trade creditors in the ordinary and
usual course of business consistent with past custom and practice), including
credit facilities, promissory notes, security agreements, and other credit
support arrangements; (x) Contracts relating to any loan (other than accounts
receivable from trade debtors in the ordinary and usual course of business
consistent with past custom and practice) or advance to (other than ordinary
course travel allowances to the employees of the Company), or investments in,
any Person; (xi) Contracts relating to any guarantee or other contingent
Liability in respect of any indebtedness or obligation of any Person (other than
the endorsement of negotiable instruments for collection in the ordinary and
usual course of business consistent with past custom and practice); (xii) all
current customer Contracts; (xiii) any license agreement relating in whole or in
part to Intellectual Property (other than standard “off-the-shelf” or
“shrink-wrap” license agreements); (xiv) any Contract which involves aggregate
payments of $5,000 or more or which is not cancelable without penalty within 120
days, (xv) any Contracts not described above outside the ordinary and usual
course of business consistent with past custom and practice; and (xvi) all other
Contracts. There are no outstanding powers of attorney executed on behalf of the
Company.

(b) Correct and complete copies of the items required to be set forth in
Section 3.13 of the Disclosure Schedule have previously been furnished to
Purchaser. All of the Company’s Contracts (including all Real Property Leases)
shall, following the Closing, remain enforceable by the Company and binding on
the other parties thereto, without the Consent of any third party. The Company
is not in default, nor has any event occurred which, with the giving of notice
or the passage of time or both, would constitute a default, under any Contract
or any other obligation owed by the Company, and no event has occurred which,
with the giving of notice or the passage of time or both, would constitute a
default by any other party to any such Contract. Each of the Contracts disclosed
in Section 3.13 of the Disclosure Schedule is in full force and effect, is valid
and enforceable in accordance with its terms and is not subject to any claims,
charges, setoffs or defenses.

Section 3.14. Employee Benefits.

(a) Section 3.14 of the Disclosure Schedule sets forth a complete and correct
list of (i) all “employee benefit plans,” as defined in Section 3(3) of the
Employee Retirement

 

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Income Security Act of 1974, as amended (“ERISA”), and any other pension plans
or employee benefit agreements, arrangements, programs or payroll practices
(including without limitation severance pay, other termination benefits or
compensation, vacation pay, company awards, salary continuation for disability,
sick leave, retirement, deferred compensation, bonus or other incentive
compensation, stock purchase arrangements or policies, hospitalization, medical
insurance, life insurance and scholarship programs) that are currently in effect
or were maintained, sponsored or contributed to by the Company or the LT
Predecessor within the last six years to which the Company contributes or is
obligated to contribute thereunder with respect to employees of the Company, or
that has been approved before the date hereof but is not yet effective
(“Employee Benefit Plans”) and (ii) all “employee pension plans,” as defined in
Section 3(2) of ERISA, maintained by the Company the LT Predecessor or any trade
or business (whether or not incorporated) which are under control, or which are
treated as a single employer under Section 414(b), (c), (m) or (o) of the
(“ERISA Affiliate”) or to which the Company or the LT Predecessor or any ERISA
Affiliate contributed or is obligated to contribute thereunder (“Pension Plans”)
within the last six years. Section 3.14 of the Disclosure Schedule identifies,
in separate categories, Employee Benefit Plans or Pension Plans that are
(i) subject to Section 4063 and 4064 of ERISA (“Multiple Employer Plans”),
(ii) multiemployer plans (as defined in Section 4001(a)(3) of ERISA)
(“Multiemployer Plans”) or (iii) “benefit plans”, within the meaning of
Section 5000(b)(1) of the Code providing continuing benefits after the
termination of employment (other than as required by Section 4980B of the Code
or Part 6 of Title I of ERISA and at the former employee’s or his beneficiary’s
sole expense).

(b) Neither the Company nor the LT Predecessor nor any ERISA Affiliate
maintains, sponsors, or contributes, or has, within the past six years,
maintained, sponsored or had any obligation to contribute to, for the benefit of
current or former employees a defined benefit plan subject to Title IV of ERISA,
(ii) any Multiemployer Plan or (iii) any Multiple Employer Plan.

(c) Each of the Employee Benefit Plans and Pension Plans intended to qualify
under Section 401 of the Code (“Qualified Plans”) so qualifies and has received
a determination letter from the IRS to such effect and the trusts maintained
thereto are exempt from federal income taxation under Section 501 of the Code
and nothing has occurred or is expected to occur with respect to the operation
of any such plan which caused or would cause the loss of such qualification or
exemption or the imposition of any liability, penalty or tax under ERISA or the
Code.

(d) All contributions and premiums required by Law or by the terms of any
Employee Benefit Plan or Pension Plan or any agreement relating thereto have
been timely made (without regard to any waivers granted with respect thereto) to
any funds or trusts established thereunder or in connection therewith, and no
accumulated funding deficiencies exist in any of such plans.

(e) There has been no violation of or failure to comply with ERISA or the Code
with respect to the filing of applicable returns, reports, documents and notices
regarding any of the Employee Benefit Plans or Pension Plans with the DOL, the
IRS, the PBGC or any other Governmental Body or the furnishing of such notices
or documents to the participants or beneficiaries of the Employee Benefit Plans
or Pension Plans.

 

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(f) True, correct and complete copies of the following documents, with respect
to each of the Employee Benefit Plans and Pension Plans, have been delivered to
Purchaser: (A) any plans and related trust documents (all amendments thereto),
investment management agreements, administrative service contracts, group
annuity contracts, insurance contracts, collective bargaining agreements and
employee handbooks, (B) the most recent Forms 5500 for the past three years and
schedules thereto, (C) the most recent financial statements and actuarial
valuations for the past three years, (D) the most recent IRS determination
letter, (E) the most recent summary plan descriptions (including letters or
other documents updating such descriptions) and (F) written descriptions of all
non-written agreements relating to the Employee Benefit Plans and Pension Plans.

(g) There are no pending Legal Proceedings which have been asserted or
instituted or, to the Knowledge of the Shareholders, threatened against any of
the Employee Benefit Plans or Pension Plans, the assets of any such plans or of
any related trust or the Company or the LT Predecessor, the plan administrator
or any fiduciary of the Employee Benefit Plans or Pension Plans with respect to
the operation of such plans (other than routine, uncontested benefit claims),
and there are no facts or circumstances which could form the basis for any such
Legal Proceeding. No Employee Benefit Plan or Pension Plan is under audit or
investigation by the IRS, DOL, or any other Government Body and no such
completed audit, if any, has resulted in the imposition of Tax, interest, or
penalty.

(h) Each of the Employee Benefit Plans and Pension Plans complies with and has
been maintained in accordance with its terms and all provisions of applicable
Law, including ERISA and the Code, and all reporting and disclosure requirements
have been satisfied on a timely basis.

(i) The Company, the LT Predecessor and any ERISA Affiliate which maintains a
“group health plan” within the meaning of Section 5000(b)(1) of the Code and
each plan sponsor or administrator has complied with the COBRA reporting,
disclosure, notice, election, and other benefit continuation and coverage
requirements of Section 4980B of the Code or Part 6 of Title I of ERISA and the
applicable regulations thereunder and any comparable state laws, and has not
incurred any direct or indirect liability, and is not subject to any loss,
assessment or excise tax, penalty, loss of federal income tax deduction or other
sanction arising on account of or in respect of any direct or indirect failure
at any time to comply with any such federal or state benefit continuation
coverage requirements.

(j) Neither the Company nor the LT Predecessor nor a “party in interest” or
“disqualified person” with respect to the Employee Benefit Plans or Pension
Plans has engaged in a “prohibited transaction” within the meaning of
Section 4975 of the Code or Section 406 of ERISA which has subjected or could
subject the Company, any ERISA Affiliates, Purchaser, or any trustee,
administrator or other fiduciary to a tax penalty on prohibited transaction or
any other liabilities with respect thereto.

(k) Neither the execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will (i) result in any payment becoming due
to any employee; (ii) increase any benefits otherwise payable under any Employee
Benefit Plan or Pension Plan; or (iii) result in the acceleration of the time of
payment or vesting of any such benefits.

 

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(l) No security issued by the Company forms or has formed any part of the assets
of any Employee Benefit Plan or Pension Plan.

(m) The consummation of the transactions contemplated by this Agreement will not
give rise to any liability for termination of any agreements related to any
Employee Benefit Plan or Pension Plan.

(n) No amounts payable under any Employee Benefit Plan and Pension Plan or any
other agreement will fail to be deductible for federal income tax purposes by
virtue of Section 280G of the Code.

(o) Each Employee Benefit Plan or Pension Plan that purports to provide benefits
which qualify for tax-favored treatment under Sections 79, 105, 106, 117, 120,
125, 127, 129, and 132 of the Code satisfies the requirements of said
Section(s).

(p) Each Employee Benefit Plan or any other agreement that purports to defer
income complies with Section 409A of the Code.

(q) Each Employee Benefit Plan, or Pension Plan, its related trust and insurance
agreement may be unilaterally amended or terminated on no more than 90 days
notice.

Section 3.15. Labor.

(a) Neither the Company nor the LT Predecessor is a party to any labor or
collective bargaining agreement and there are no labor or collective bargaining
agreements which pertain to employees of the Company or the LT Predecessor.

(b) No employees of the Company or the LT Predecessor are represented by any
labor organization. No labor organization or group of employees of the Company
or the LT Predecessor has made a pending demand for recognition, and there are
no representation proceedings or petitions seeking a representation proceeding
presently pending or, to the Knowledge of the Shareholders, threatened to be
brought or filed, with the National Labor Relations Board or other labor
relations tribunal. There is no organizing activity involving the Company
pending or, to the Knowledge of the Shareholders, threatened by any labor
organization or group of employees of the Company.

(c) There are no (i) strikes, work stoppages, slowdowns, lockouts or
arbitrations or (ii) grievances or other labor disputes pending or, to the
Knowledge of the Shareholders, threatened against or involving the Company or
the LT Predecessor. There are no unfair labor practice charges, grievances or
complaints pending or, to the Knowledge of the Shareholders, threatened by or on
behalf of any employee or group of employees of the Company or the LT
Predecessor.

(d) There are no complaints, charges or claims against the Company or the LT
Predecessor pending or, to the Knowledge of the Shareholders, threatened which
could be

 

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brought or filed, with any public or Governmental Body based on, arising out of,
in connection with, or otherwise relating to the employment or termination of
employment by the Company or the LT Predecessor, of any individual.

(e) Each of the Company and the LT Predecessor is in compliance with all Laws
and Orders relating to the employment of labor, including all such Laws and
orders relating to wages, hours, the Worker Adjustment and Retraining
Notification Act and any similar state, local or foreign “plant closing” Law
(“WARN”), collective bargaining, discrimination, civil rights, safety and
health, worker’s compensation, payment of overtime wages and the collection and
payment of withholding and/or social security taxes and any similar tax.

(f) To the Knowledge of the Shareholders, no executive, key employee, or group
of employees currently has any plans to terminate employment with the Company
independently of or as a result of this Agreement.

Section 3.16. Litigation. Except as set forth in Section 3.16 of the Disclosure
Schedule, there is no suit, action, proceeding, investigation, complaint or
claim pending or, to the Knowledge of the Shareholders, threatened against the
Company or the LT Predecessor (or pending or threatened against any of the
officers, directors or key employees of the Company or the LT Predecessor in
relation to the Company or the LT Predecessor, as applicable, or the business of
either) before any court or other Governmental Body or any arbitral tribunal,
nor is there any basis for any such suit, action, proceeding, investigation,
complaint or claim. Neither the Company nor the LT Predecessor has received any
written opinion or memorandum or legal advice from legal counsel retained by the
Company or the LT Predecessor to the effect that it is exposed, from a legal
standpoint, to any Liability. Neither the Company the LT Predecessor is engaged
in any legal action to recover monies due it or for damages sustained by it.
Section 3.16 of the Disclosure Schedule sets forth a list of all closed
litigation matters to which the Company or the LT Predecessor was a party during
the five (5) years preceding the date hereof, the date such litigation was
commenced or concluded, and the nature of the resolution thereof (including
amounts paid in settlement or judgment). Neither the Company nor the LT
Predecessor is subject to any Order of any Governmental Body.

Section 3.17. Compliance with Laws; Permits. The Company and the LT Predecessor
are, and have at all times been, in compliance with all Laws applicable to them
or the operation, use, occupancy or ownership of their assets or properties or
the conduct of the Business, and neither the Company nor the LT Predecessor has
received notice (written or oral) from any Governmental Body of, and has no
Knowledge of, any failure to so comply. The Company holds all Permits necessary
under Law for the conduct of the Company’s Business as currently conducted or
proposed to be conducted, and the operations of the Company are not being
conducted in violation of any Permit held by the Company. There is no
investigation by a Governmental Body pending against or, to the Knowledge of the
Shareholders, threatened against the Company or the LT Predecessor.

 

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Section 3.18. Environmental Matters.

(a) The operations of the Company are in compliance with all applicable
Environmental Laws and all Permits issued pursuant to Environmental Laws or
otherwise (“Environmental Permits”).

(b) The operations of the LT Predecessor were in compliance with all applicable
Environmental Laws and all Environmental Permits.

(c) Neither the Company nor the LT Predecessor has received any written
communication alleging either that the Company or the LT Predecessor may be in
violation of any Environmental Law or Environmental Permit or that the Company
or the LT Predecessor may have any liability under any Environmental Law.

(d) Neither the Company nor the LT Predecessor has incurred, assumed or
undertaken any current contingent liability in connection with any Release of
any Hazardous Materials into the indoor or outdoor environment (whether on-site
or off-site) and there are no facts, circumstances or conditions relating to,
arising out of or attributable to the Company or the LT Predecessor that could
give rise to liability under Environmental Laws.

Section 3.19. Insurance. Section 3.19 of the Disclosure Schedule includes a
correct and complete list and description, including policy number, coverage and
deductible, of all insurance policies owned by the Company, correct and complete
copies of which policies have previously been delivered to Purchaser. Such
policies are in full force and effect, all premiums due thereon have been paid
and the Company is not in default thereunder. The Company has not received any
notice of cancellation or intent to cancel or increase or intent to increase
premiums with respect to such insurance policies nor is there any basis for any
such action. All such insurance policies contain coverage that is reasonably
adequate and prudent in light of the risks inherent in the Business.
Section 3.19 of the Disclosure Schedule also contains a list of all pending
claims and any claims in the past two (2) years with any insurance company by
the Company or the LT Predecessor and any instances within the previous two
(2) years of a denial of coverage of the Company or the LT Predecessor by any
insurance company.

Section 3.20. Receivables; Payables; Indebtedness at Closing.

(a) The accounts receivable of the Company reflected in the Balance Sheet and/or
the Closing Date Balance Sheet have arisen in bona fide arm’s-length
transactions in the ordinary and usual course of business consistent with past
custom and practice, and all such receivables are valid and binding obligations
of the account debtors without any counterclaims, setoffs or other defenses
thereto and are collectible in the ordinary and usual course of business
consistent with past custom and practice. All work-in-process or accrued billing
reflected in the Balance Sheet and/or the Closing Date Balance Sheet has been
performed pursuant to a written customer order or contract therefor and shall
become accounts receivable in due course, which shall be collectible for the
full amount in the ordinary and usual course of business consistent with past
custom and practice at the full recorded amount thereof.

(b) All accounts payable of the Company reflected on the Balance Sheet and/or
the Closing Date Balance Sheet are the result of bona fide transactions in the
ordinary course of business and have been fully paid or are not yet due and
payable, except for accounts payable that are being disputed in good faith in an
appropriate manner.

 

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(c) Except as set forth on the closing Date Balance Sheet, at Closing, the
Company shall have no Indebtedness outstanding other than trade payables not yet
delinquent incurred in the ordinary course of business.

Section 3.21. Related Party Transactions. Except as described in Section 3.21 of
the Disclosure Schedule, the Company has not loaned or borrowed any amounts from
and does not have outstanding any indebtedness or other similar obligations to
or owing from any Affiliate of the Company. Neither the Company nor any
Affiliate of the Company nor any officer or employee of any of them (i) owns any
direct or indirect interest of any kind in, or controls or is a director,
officer, employee or partner of, or consultant to, or lender to or borrower from
or has the right to participate in the profits of, any Person which is (A) a
competitor, supplier, customer, landlord, tenant, creditor or debtor of the
Company, (B) engaged in a business related to the business of the Company, or
(C) a participant in any transaction to which the Company is a party or (ii) is
a party to any Contract with the Company. The Company does not have any Contract
or understanding with any officer, director, employee, manager, member or
shareholder of the Company or the LT Predecessor, or any Affiliate of any such
Person that relates, directly or indirectly, to the subject matter of any
Transaction Document or the consideration payable thereunder or that contains
any terms, provisions or conditions relating to the Company’s entry into or
performance of any Transaction Document.

Section 3.22. Customers; Projects. Section 3.22 of the Disclosure Schedule is a
complete and correct list of all clients and customers of the Company as of
March 31, 2008. Except as set forth on Section 3.22 of the Disclosure Schedule,
no client or customer has cancelled or otherwise terminated reduced, or
threatened to cancel or terminate or reduce, its relationship with the Company.
Section 3.22 of the Disclosure Schedule includes a complete and accurate list of
all projects or engagements (collectively, “Projects”) for which the Company is
currently engaged or proposed to be engaged. All current Projects (i) are bona
fide business relationships or projects that the Company is currently working
on, and (ii) are proceeding according to plan and budget and are expected to be
completed in a timely manner, for the full benefit thereof and without loss to
the Company or Purchaser.

Section 3.23. No Misrepresentation. No representation or warranty of the Company
or any Shareholder contained in this Agreement or any other Transaction Document
or in any Schedule hereto or thereto or in any certificate or other instrument
furnished to Purchaser pursuant to the terms hereof or thereof contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained herein or therein not misleading.

Section 3.24. Financial Advisors. The Company nor any of its Shareholders has
Liability or obligation to pay any fees or commissions to any broker, finder or
agent with respect to the transactions contemplated by this Agreement. The
Shareholders shall be solely responsible for any obligations described in this
Section 3.24 and will jointly and severally indemnify and hold the Purchaser
Indemnitees harmless from and against any Losses resulting from or arising out
of or any such obligations or matters.1

 

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to the Shareholders that the following
statements are correct and complete as of the date hereof.

Section 4.1. Organization. The Purchaser is a business entity duly organized,
validly existing and in good standing under the Laws of the State of Delaware
and has all requisite corporate power and authority to own, lease and operate
its properties and carry on its business as now conducted.

Section 4.2. Authorization of Transaction. The Purchaser has full corporate
power and authority to execute and deliver this Agreement and each of the
Transaction Documents, to perform its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by of this Agreement and each Transaction Document, and
the consummation of the transactions contemplated hereby and thereby, have been
duly authorized by all necessary corporate action on the part of Purchaser. This
Agreement has been, and each Transaction Document will be at or prior to the
Closing, duly and validly executed and delivered by Purchaser and (assuming the
due authorization, execution and delivery by the other parties hereto and
thereto) this Agreement constitutes, and each Transaction Document when so
executed and delivered will constitute, the legal, valid and binding obligation
of Purchaser enforceable against Purchaser in accordance with their respective
terms.

Section 4.3. Noncontravention. Neither the execution and the delivery by
Purchaser of this Agreement and the other Transaction Documents to which it is a
party, nor the consummation of the transactions contemplated hereby and thereby
on the part of Purchaser will (i) violate any Law or any Order by which
Purchaser is bound or any provision of its Organizational Documents or
(ii) result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any Contract to which Purchaser is a
party or by which Purchaser is bound or to which any of its assets is subject.
No Order, Permit or waiver, or declaration or filing with any Governmental Body
is required on the part of Purchaser in connection with the execution, delivery
and performance of this Agreement or the other Transaction Documents to which it
is a party, or the compliance by Purchaser with any of the provisions hereof or
thereof.

Section 4.4. Brokers’ Fees. Purchaser does not have any Liability or obligation
to pay any fees or commissions to any broker, finder or agent with respect to
the transactions contemplated by this Agreement. Purchaser will be solely
responsible for any obligations described in this Section 4.4 and will indemnify
and hold the Shareholders harmless from and against any Losses resulting from or
arising out of or any such obligations or matters.

 

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Section 4.5. Litigation. There are no material Legal Proceedings pending or, to
the knowledge of Purchaser, threatened against Purchaser or to which Purchaser
is otherwise a party relating to this Agreement, the Transaction Documents or
the transactions contemplated hereby and thereby.

Section 4.6. Investment Intent. Purchaser is acquiring the Company Shares for
its own account for investment purposes, and not with a view to the distribution
of any capital stock thereof.

Section 4.7. Purchaser Common Stock. The shares of Purchaser Common Stock will,
when issued and delivered in accordance with this Agreement, be duly authorized,
validly issued, fully paid and nonassessable.

Section 4.8. SEC Filings; Financial Statements.

(a) Purchaser has filed all forms, reports, schedules, statements and other
documents required to be filed by it during the 12 months immediately preceding
the date of this Agreement (collectively, as supplemented and amended since the
time of filing, the “Purchaser SEC Reports”) with the SEC. The Purchaser SEC
Reports (i) were prepared in all material respects in accordance with all
applicable requirements of the Securities Act and the Exchange Act, as
applicable, and (ii) did not, at the time they were filed, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The representation
in clause (ii) of the preceding sentence does not apply to any misstatement or
omission in any Purchaser SEC Report that was superseded by subsequent Purchaser
SEC Reports.

(b) The audited financial statements and unaudited interim financial statements
of Purchaser included or incorporated by reference in the Purchaser SEC Reports
have been prepared in accordance with GAAP consistently applied during the
periods indicated (except as may otherwise be indicated in the notes) and
present fairly the financial position, results of operations and cash flows of
Purchaser at the respective dates and for the respective periods indicated
(except interim financial statements may not contain all notes and are subject
to year end adjustments (which will not be material individually or in the
aggregate)).

ARTICLE V

CONDITIONS TO CLOSING

Section 5.1. Conditions Precedent to Obligations of Purchaser at the Closing.
The obligation of Purchaser to consummate the transactions contemplated by this
Agreement is subject to the fulfillment, on or prior to the Closing Date, of
each of the following conditions precedent (any or all of which may be waived by
Purchaser in whole or in part to the extent permitted by applicable Law):

(a) all representations and warranties of the Company and/or any of the
Shareholders contained herein shall be true and correct on and as of the Closing
Date, except to the extent expressly made as of an earlier date;

 

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(b) the Company and each Shareholder shall have performed and complied in all
material respects with all obligations and covenants required by this Agreement
to be performed or complied with by the Company or such Shareholder on or prior
to the Closing Date;

(c) there shall not have been or occurred any Company Material Adverse Change;

(d) no Legal Proceedings shall have been instituted or threatened or claim or
demand made against the Company, any Shareholder, or Purchaser seeking to
restrain or prohibit or to obtain substantial damages with respect to the
consummation of the transactions contemplated hereby;

(e) there shall not be in effect any Order by a Governmental Body of competent
jurisdiction restraining, enjoining or otherwise prohibiting the consummation of
the transactions contemplated hereby;

(f) the Employment Agreements shall be in full force and effect and none of the
employees party thereto shall have become employed by any Person other than the
Company or indicated that he does not intend to continue employment with the
Company following the Closing;

(g) (i) to the extent applicable, the waiting period under the HSR Act shall
have expired or early termination shall have been granted and the Company shall
have obtained or made any other consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Body required to be
obtained or made by it in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby and
(ii) the Company shall have obtained all consents, waivers and approvals
required for the consummation of the transactions herein in a form reasonably
satisfactory to Purchaser;

(h) Each Shareholder shall have delivered to Purchaser the following:

(i) a certificate(s) representing all issued and outstanding Company Shares
owned by such Shareholder endorsed in blank or with stock powers duly executed
to transfer all such Company Shares to Purchaser;

(ii) a copy of IRS Form W-9 duly and properly executed by such Shareholder;

(iii) an affidavit described in Section 1445(b)(2) of the Code from such
Shareholder in form and substance reasonably satisfactory to Purchaser; and

(iv) such other documents, instruments or certificates as shall be reasonably
requested by Purchaser or its counsel.

 

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(i) In addition, Purchaser shall have received the following items:

(i) a certificate executed by each Shareholder dated the Closing Date to the
effect that each of the conditions specified in Section 5.1(a) through (e) are
satisfied in all respects

(ii) a legal opinion of counsel to the Company and the Shareholders in the form
of Exhibit A hereto;

(iii) copies of board of directors and shareholder resolutions, certified by the
Secretary of the Company, as to the authorization of this Agreement and all of
the transactions contemplated hereby;

(iv) (A) the certificate of incorporation, as amended through the Closing Date,
of the Company, certified as of a recent date by the Secretary of State of the
State of Minnesota, (B) good standing certificates for the Company, certified by
the Secretary of State of the State of Minnesota, and each state in which the
Company is qualified to do business as a foreign corporation, as of a recent
date, and (C) a copy of the by-laws (or similar organizational document) of the
Company, as in effect on the Closing Date, certified by the Secretary of the
Company;

(v) all Consents, if any, with respect to Contracts shall have been obtained,
including without limitation such Consents listed on Schedule II, and Purchaser
shall have received satisfactory evidence thereof;

(vi) a duly executed assignment of lease and estoppel certificate with respect
to each Real Property Lease in form and substance reasonably satisfactory to
Purchaser and its counsel;

(vii) letters in form and substance reasonably satisfactory to Purchaser from
all holders of indebtedness of the Company that would be reflected on the
Closing Date Balance Sheet or that is secured by any of the assets of the
Company confirming the full payment and satisfaction of such indebtedness, if
any, to be paid at or prior to Closing (by way of application of a portion of
the Purchase Price for such purpose or otherwise), and all related Liens shall
have been released and appropriate UCC termination statements filed with respect
thereto;

(viii) confirmation that any and all indebtedness owing from or to directors,
officers, employees or stockholders of the Company has been fully repaid as of
the time of the Closing (by way of application of a portion of the Purchase
Price for such purpose or otherwise);

(ix) releases from Zdenko Grajcar and Carey Burkett, in form and substance
reasonably satisfactory to Purchaser and its counsel;

(x) audited financial statements for the Company, prepared by BDO Seidman, LLP
which satisfy the Form 8-K filing requirements of the Exchange Act applicable to
the transactions contemplated by this Agreement, and which do not materially
differ from the Financial Statements and Balance Sheet; provided, however, that
in determining whether such audited financial statements materially differ from
the

 

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Financial Statements and the Balance Sheet, neither the lack of footnotes nor
any normal year-end adjustments in the Financial Statements and Balance Sheet
shall be considered; and

(xi) such other documents, instruments or certificates as shall be reasonably
requested by Purchaser or its counsel.

(j) all the directors and officers of the Company shall have resigned effective
as of the Closing, except Zdenko Grajcar shall not resign as a director and
Carey Burkett shall not resign as president of the Company, and individuals
designated by Purchaser shall have been elected or appointed as directors and
officers of the Company, effective as of the Closing;

Section 5.2. Conditions Precedent to Obligations of the Shareholders at the
Closing. The obligations of the Shareholders to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, prior to or on
the Closing Date, of each of the following conditions (any or all of which may
be waived by the Representative in whole or in part to the extent permitted by
applicable Law):

(a) all representations and warranties of Purchaser contained herein shall be
true and correct on and as of the Closing Date;

(b) Purchaser shall have performed and complied in all material respects with
all obligations and covenants required by this Agreement to be performed or
complied with by Purchaser on or prior to the Closing Date;

(c) Purchaser shall have delivered to the Representative a certificate executed
by an officer of Purchaser dated the Closing Date, to the effect that each of
the conditions specified in Section 5.2(a) and (b) is satisfied in all respects;

(d) no Legal Proceedings shall have been instituted or threatened or claim or
demand made against the Company, any Shareholder, or Purchaser seeking to
restrain or prohibit or to obtain substantial damages with respect to the
consummation of the transactions contemplated hereby; and

(e) there shall not be in effect any Order by a Governmental Body of competent
jurisdiction restraining, enjoining or otherwise prohibiting the consummation of
the transactions contemplated hereby.

ARTICLE VI

POST-CLOSING COVENANTS

The parties agree as follows with respect to the period following the Closing:

Section 6.1. General. In the event that at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents) as any other
Party reasonably may request.

 

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Section 6.2. Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstances, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Company, each of the other Parties will
cooperate reasonably with such Party and such Party’s counsel in the contest or
defense, make available their personnel, and provide such testimony and access
to their books and records as shall be necessary in connection with the contest
or defense, all at the sole cost and expense of the contesting or defending
Party (unless the contesting or defending Party is entitled to indemnification
therefor hereunder).

Section 6.3. Confidentiality. From and after the date hereof (unless this
Agreement is terminated in accordance with its terms), each Shareholder will,
and will cause such Shareholder’s Affiliates to, hold in strict confidence, and
will not, and will cause such Shareholder’s Affiliates not to, disclose to any
third party or use for any purpose, any and all information with respect to the
Company, the Business, the Transaction Documents or the transactions
contemplated thereby (collectively, “Confidential Information”). Notwithstanding
the foregoing, each Shareholder may, and may permit such Shareholder’s
Affiliates to, disclose Confidential Information (i) if compelled to disclose
the same by judicial or administrative process or by other requirements of Law
(but subject to the following provisions of this Section), (ii) if the same
hereafter is in the public domain through no fault of such Shareholder or
(iii) if the same is later acquired by such Shareholder from another source that
is not under an obligation to another Person to keep such information
confidential. If such Shareholder or any of such Shareholder’s Affiliates is
requested or required (by oral questions, interrogatories, requests for
information or documents in legal proceedings, subpoena, civil investigative
demand or other similar process) to disclose any Confidential Information, such
Shareholder shall provide Purchaser with prompt written notice of any such
request or requirement so that Purchaser may seek a protective order or other
appropriate remedy and/or waive compliance with the provisions of this Section.
If, in the absence of a protective order or other remedy or the receipt of a
waiver by Purchaser, such Shareholder or such Affiliate, as the case may be,
nonetheless, based on the written advice of outside counsel, is required to
disclose Confidential Information to any tribunal or in accordance with
applicable Law, such Shareholder or such Affiliate, without liability hereunder,
may disclose that portion of such information which such counsel advises such
Shareholder or such Affiliate it is legally required to disclose. Each
Shareholder acknowledges and agrees that money damages would not be an adequate
remedy for any breach of his agreements contained in this Section 6.3 and that
in addition to any other remedies available to Purchaser, Purchaser shall be
entitled to the remedies of injunction, specific performance and other equitable
relief for any threatened or actual breach of this Section 6.3.

Section 6.4. Names and Logos. From and after the Closing, neither Shareholder
will, and each Shareholder will cause his Affiliates not to, use any names or
logos incorporating “Lumificient” or any derivatives thereof in connection with
any operations or provision of services. The covenant contained in the preceding
sentence shall indefinitely survive the consummation of the transactions
contemplated by this Agreement.

 

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ARTICLE VII

INDEMNIFICATION

Section 7.1. Indemnity Obligations of the Shareholders. Each Shareholder
covenants and agrees, jointly and severally, to defend, indemnify and hold
harmless Purchaser and its Affiliates (including, following the Closing, the
Company) and their respective officers, directors, employees, agents, advisers
and representatives (collectively, the “Purchaser Indemnitees”), from and
against, and to pay or reimburse Purchaser Indemnitees for, any and all claims,
liabilities, obligations, losses, fines, costs, proceedings or damages (whether
absolute, accrued, conditional or otherwise and whether or not resulting from
third party claims), including all reasonable fees and disbursements of counsel
incurred in the investigation or defense of any of the same or in asserting any
of their respective rights hereunder (collectively, “Losses”), based on,
resulting from, arising out of or relating to:

(i) any misrepresentation or breach of any representation or warranty of the
Company or any Shareholder contained in the Transaction Documents; provided that
in determining whether any such misrepresentation or breach occurred and in
determining the amount of Losses incurred in connection with any such
misrepresentation or breach, any dollar amount thresholds, materiality
qualifiers and Company Material Adverse Effect qualifier contained in any
representation or warranty herein shall be disregarded;

(ii) any failure of the Company or any Shareholder to perform any covenant or
agreement made or contained in the Transaction Documents or fulfill any
obligation in respect thereof;

(iii) except (A) as specifically set forth on the Closing Date Balance Sheet and
(B) obligations of the Company to be paid or performed after the Closing Date
under the Contracts disclosed in the Disclosure Schedule (except to the extent
such obligations, but for a breach or default by the Company, would have been
paid, performed or otherwise discharged on or prior to the Closing Date or to
the extent the same arise out of any such breach or default), any Liabilities of
the Company or any of its Affiliates of any kind or nature whatsoever caused by,
or incurred in connection with, any transaction, status, event, condition,
occurrence or situation existing, arising or occurring on or prior to the
Closing Date (including, without limitation, any indebtedness or similar
obligations owed by the Company and fees and expenses incurred the Company in
connection with the transactions contemplated hereby);

(iv) the matters disclosed or required to be disclosed in Section 3.16 of the
Disclosure Schedule;

(v) the LT Predecessor and/or its members, managers, officers, directors,
employees, agents, advisors and representatives including, without limitation,
any noncompliance with bulk sales laws or fraudulent transfer laws, or any other
matter with respect to the purchase and sale of the assets of the LT Predecessor
by the Company or any Employee Benefit Plan of the LT Predecessor;

 

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(vi) any product or component thereof manufactured or shipped, or any service
provided by the Company, in whole or in part, prior to the Closing Date,
excluding warranty claims in the ordinary and usual course of the business of
the Company consistent with past custom and practice;

(vii) any Taxes payable by the Company or the LT Predecessor to the States of
Michigan, Maine, or California relating to or resulting from an event or
transaction occurring prior to Closing; or

(viii) any Losses relating to violations by the Company or the LT Predecessor of
the Fair Labor Standards Act prior to Closing.

The Shareholders shall not be required to indemnify Purchaser Indemnitees with
respect to any claim for indemnification (other than a claim for indemnification
based on a breach of the representations and warranties contained in Article II
or in Sections 3.1, 3.2, 3.3 or 3.9) resulting from or arising out of matters
described in clause (i) above pursuant to this Section 7.1 (and not resulting
from or arising out of matters described in clauses (ii) through (vi) above)
unless and until the aggregate amount of all such claims against the
Shareholders exceeds $25,000 (the “Threshold Amount”), in which case the
Shareholders shall be required to indemnify the Purchaser Indemnitees for the
full amount of such claims in excess of the Threshold Amount. Claims thereafter
may be asserted regardless of amount. The Shareholders’ maximum liability to
Purchaser Indemnitees under clause (i) above (and not resulting from or arising
out of matters described in clauses (ii) through (vi) above) shall not exceed
$1,100,000 at any time. Notwithstanding anything to the contrary contained
herein, nothing in this Agreement limits the liability of any Person for fraud
or willful misconduct. In addition to any other rights or remedies of the
Purchaser Indemnitees, the Purchaser Indemnitees shall have recourse against the
Earnout Payments and any amounts contained in the Holdback Account for any
Losses described in this Section 7.1.

Section 7.2. Indemnity Obligations of Purchaser. Purchaser covenants and agrees
to defend, indemnify and hold harmless the Shareholders from and against any and
all Losses based on, resulting from, arising out of or relating to:

(i) any misrepresentation or breach of warranty of Purchaser contained in the
Transaction Documents; provided that in determining whether any such
misrepresentation or breach occurred and in determining the amount of Losses
incurred in connection with any such misrepresentation or breach, any dollar
amount thresholds and materiality qualifiers contained in any representation or
warranty herein shall be disregarded;

(ii) any failure of Purchaser to perform any covenant or agreement made or
contained in the Transaction Documents or fulfill any other obligation in
respect thereof; or

Purchaser shall not be required to indemnify the Shareholders with respect to
any claim for indemnification (other than a claim for indemnification based on a
breach of the representations and warranties contained in Sections 4.1 or 4.2)
resulting from or arising out of matters described

 

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in clause (i) above pursuant to this Section 7.2 (and not resulting from or
arising out of matters described in clause (ii) above) unless and until the
aggregate amount of all claims against Purchaser exceeds the Threshold Amount,
in which case Purchaser shall be required to indemnify the Shareholders for the
full amount of such claims in excess of the Threshold Amount. Claims thereafter
may be asserted regardless of amount. Purchaser’s maximum liability (exclusive
of liabilities based on claims for indemnification based on a breach of the
representations and warranties contained in Sections 4.1 or 4.2) to the
Shareholders under clause (i) above (and not resulting from or arising out of
matters described in clause (ii) above) shall not exceed $1,100,000 at any time.
Notwithstanding anything to the contrary contained herein, nothing in this
Agreement limits the liability of any Person for fraud or willful misconduct.

Section 7.3. Indemnification Procedures.

(a) Third Party Claims. In the case of any claim asserted by a third party
against a party entitled to indemnification under this Agreement (the
“Indemnified Party”), written notice (the “Required Notice”) shall be given by
the Indemnified Party to the party required to provide indemnification (the
“Indemnifying Party”) as soon as practicable after such Indemnified Party has
actual knowledge of any claim as to which indemnity may be sought. If the
Indemnifying Party acknowledges that the third party claim is within the scope
of the indemnification obligations of the Indemnifying Party, the Indemnified
Party shall permit the Indemnifying Party (at the expense of such Indemnifying
Party) to assume the defense of any third party claim or any litigation with a
third party resulting therefrom; provided, however, that (a) the counsel for the
Indemnifying Party who shall conduct the defense of such claim or litigation
shall be subject to the approval of the Indemnified Party (which approval shall
not be unreasonably withheld or delayed), (b) the Indemnified Party may
participate in such defense at such Indemnified Party’s expense (which shall not
be subject to reimbursement hereunder except as provided below), and (c) the
failure by any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its indemnification obligation under this
Agreement except and only to the extent that such Indemnifying Party is actually
and materially damaged as a result of such failure to give notice. Except with
the prior written consent of the Indemnified Party, no Indemnifying Party, in
the defense of any such claim or litigation, shall consent to entry of any
judgment or enter into any settlement that provides for injunctive or other
nonmonetary relief affecting the Indemnified Party or that does not include as
an unconditional term thereof the giving by each claimant or plaintiff to such
Indemnified Party of a general release from any and all liability with respect
to such claim or litigation. If the Indemnified Party shall in good faith
determine that the conduct of the defense of any claim subject to
indemnification hereunder or any proposed settlement of any such claim by the
Indemnifying Party might be expected to affect adversely the ability of the
Indemnified Party to conduct its business, or that the Indemnified Party may
have available to it one or more defenses or counterclaims that are inconsistent
with one or more of those that may be available to the Indemnifying Party in
respect of such claim or any litigation relating thereto, the Indemnified Party
shall have the right at all times to take over and assume control over the
defense, settlement, negotiations or litigation relating to any such claim at
the sole cost of the Indemnifying Party; provided, however, that if the
Indemnified Party does so take over and assume control, the Indemnified Party
shall not settle such claim or litigation without the prior written consent of
the Indemnifying Party, such consent not to be unreasonably withheld or

 

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delayed. If the Indemnifying Party does not accept the defense of any matter as
above provided within thirty (30) days after receipt of the notice from the
Indemnified Party described above, the Indemnified Party shall have the full
right to defend against any such claim or demand at the sole cost of the
Indemnifying Party and shall be entitled to settle or agree to pay in full such
claim or demand. In any event, the Indemnifying Party and the Indemnified Party
shall reasonably cooperate in the defense of any claim or litigation subject to
this Article VII and the records of each shall be reasonably available to the
other with respect to such defense.

(b) Non-Third Party Claims. With respect to any claim for indemnification
hereunder which does not involve a third party claim, the Indemnified Party will
give the Indemnifying Party written notice of such claim. The Indemnifying Party
may acknowledge and agree by notice to the Indemnified Party in writing to
satisfy such claim within twenty (20) days of receipt of notice of such claim
from the Indemnified Party. If the Indemnifying Party shall dispute such claim,
the Indemnifying Party shall provide written notice of such dispute to the
Indemnified Party within such 20-day period, setting forth in reasonable detail
the basis of such dispute. Upon receipt of notice of any such dispute, the
Indemnified Party and the Indemnifying Party shall use reasonable efforts to
resolve such dispute within thirty (30) days of the date such notice of dispute
is received. If the Indemnifying Party shall fail to provide written notice to
the Indemnified Party within twenty (20) days of receipt of notice from the
Indemnified Party that the Indemnifying Party either acknowledges and agrees to
pay such claim or disputes such claim, the Indemnifying Party shall be deemed to
have acknowledged and agreed to pay such claim in full and to have waived any
right to dispute such claim. Once (a) the Indemnifying Party has acknowledged
and agreed to pay any claim pursuant to this Section 7.3, (b) any dispute under
this Section 7.3 has been resolved in favor of indemnification by mutual
agreement of the Indemnifying Party and the Indemnified Party, or (c) any
dispute under this Section 7.3 has been finally resolved in favor of
indemnification by order of a court of competent jurisdiction or other tribunal
(including an arbitrator contemplated by this agreement) having jurisdiction
over such dispute, then the Indemnifying Party shall pay the amount of such
claim to the Indemnified Party within twenty (20) days of the date of
acknowledgement by the Indemnifying Party or final resolution in favor of
indemnification, as the case may be, to such account and in such manner as is
designated in writing by the Indemnified Party.

Section 7.4. Expiration of Representations and Warranties. All representations
and warranties contained in this Agreement shall survive the Closing until
March 31, 2010; provided, however, that (i) the representations and warranties
stated in Section 3.9 shall survive the Closing for the period ending on the
date that is 30 days after the expiration of the applicable statute of
limitations period and (ii) the representations and warranties stated in
Article II and in Sections 3.1, 3.2, 3.3, 4.1, 4.2 and 4.4 shall survive
indefinitely; provided further that any claim for indemnification hereunder,
with respect to a breach of a representation or warranty, which is asserted
prior to the end of the survival period of such representation or warranty shall
survive until final resolution of such claim.

Section 7.5. Exclusive Remedy. Absent fraud, willful misrepresentation or
misconduct, or criminal activity (i) and except as provided under Sections 6.3
and 6.4 and in Article VIII, the indemnifications provided for in this
Article VII shall be the sole and exclusive post-Closing remedies available to
any party against any other party for any claims under or based upon this
Agreement. The Shareholders acknowledge that the representations and warranties
contained in the Transaction Documents shall not be deemed waived or otherwise
affected by any investigation by or on behalf of Purchaser.

 

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Section 7.6. Set Off. If a Shareholder shall have any Liability to Purchaser or
any Purchaser Indemnitee, including any of its Subsidiaries (pursuant to this
Article VII, Article VIII or otherwise), Purchaser or such Purchaser Indemnitee,
as the case may be, shall be entitled, in addition to any other right or remedy
they may have, to exercise rights of set-off against any payments or securities
payable or deliverable to the Shareholders in connection with the Transaction
Documents or otherwise including, without limitation, pursuant to Section 1.5 of
this Agreement.

ARTICLE VIII

CERTAIN TAX MATTERS

Section 8.1. Taxable Periods That Begin Before and End After the Closing Date.
For purposes of this Agreement, in the case of any taxable period of the Company
that commences prior to and includes (but does not end on) the Closing Date (a
“Straddle Period”), the amount of any Taxes based on or measured by income or
receipts of the Company for the Pre-Closing Tax Period shall be determined based
on an interim closing of the books as of the close of business on the Closing
Date and the amount of other Taxes of the Company for a Straddle Period which
relate to the Pre-Closing Tax Period shall be deemed to be the amount of such
Tax for the entire taxable period multiplied by a fraction the numerator of
which is the number of days in the taxable period ending on the Closing Date and
the denominator of which is the number of days in such Straddle Period.

Section 8.2. Tax Returns; Tax Sharing Agreements. (a) The Representative will
prepare any income Tax Return of the Company for taxable periods ending on or
before the Closing Date. The Representative shall permit Purchaser to review and
comment on each such Tax Return prior to filing and shall make such revisions to
such Tax Returns as are reasonably requested by Purchaser. Purchaser will
prepare or cause to be prepared and file or cause to be filed all other Tax
Returns of the Company which are filed after the Closing Date. The Shareholders
agree jointly and severally to remit to the Company the amount of any Taxes due
with respect to taxable periods ending on or before the Closing Date and the
amount of any Taxes allocable to the Pre-Closing Tax Period under Section 8.3
with respect to a Straddle Period Tax Return within the later of 10 days of
Purchaser or the Company’s request therefor or 10 days prior to the date on
which the Tax liability is required to be satisfied.

(b) All Tax sharing agreements or similar agreements with respect to or
involving the Company shall be terminated as of the Closing Date and, after the
Closing Date, the Company shall not be bound thereby or have any liability
thereunder.

Section 8.3. Tax Indemnity. (a) The Shareholders will jointly and severally
indemnify and hold Purchaser the Company and each of their respective successors
and assigns (each, a “Tax Indemnitee”) harmless against all Losses attributable
to (i) any Tax of the Company for any Pre-Closing Tax Period, (ii) Taxes of any
member of an affiliated, consolidated, combined or unitary group of which the
Company (or any predecessor of the Company) is or was a member

 

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on or prior to the Closing Date, including pursuant to Section 1.1502-6 of the
Treasury Regulations or any analogous or similar state, local or foreign income
Tax law or regulation, (iii) Taxes of any Person (including, without limitation,
the LT Predecessor) other than the Company that are imposed on the Company as a
transferee or successor, by contract, or otherwise, which Taxes related to or
resulted from an event or transaction occurring prior to the Closing and
(iv) any breach of the covenants in this Article VIII; provided, however, that
in any such case the Shareholders will be liable only to the extent that such
Taxes exceed the amount, if any, reserved for such Taxes as reflected in the
Closing Date Balance Sheet. The limitations on indemnification contained in
Article VII will not apply to any claim for indemnification under this
Article VIII. If a Party has any indemnification obligations with respect to any
Loss under both this Article VIII and Article VII, the indemnification
obligations under this Article VIII will control and be their exclusive
obligation. Subject to Section 8.3(b), the Shareholders shall reimburse
Purchaser and the Company for any Losses which are the responsibility of any
Shareholder pursuant to this Section 8.3(a) within ten days after Purchaser’s or
the Company’s request thereof.

(b) After the Closing, Purchaser shall inform the Representative within fifteen
(15) days of its receipt of any notice of any Tax audit, assessment, adjustment,
examination or proceeding (“Tax Contest”) relating in whole or in part to Taxes
for which a Tax Indemnitee may be entitled to indemnity from the Shareholders
hereunder; provided, however, that the failure of Purchaser to provide such
notice shall not affect the Shareholders’ indemnity obligations under
Section 8.3(a) except to the extent, and only to the extent, that the
Shareholders are materially prejudiced. If the Representative notifies Purchaser
within thirty (30) days following receipt of notice of such Tax Contest that the
Representative intends to exercise his contest rights under this Section 8.3(b),
the Representative shall have the right to control such Tax Contest at his
expense and to employ counsel of his choice. Purchaser shall have the right to
participate in any such Tax Contest at their own expense, shall be entitled to
control the disposition of any issue in any such Tax Contest that does not
affect a potential liability of the Shareholders, and shall be entitled to
jointly control with the Representative the defense and disposition of any issue
in any such Tax Contest that relates to any Straddle Period. Purchaser shall
control any other Tax Contests. With respect to a Tax Contest which the
Representative is entitled to control, the Representative shall have the right
to determine all issues relating to the Tax Contest except that the
Representative shall not settle any Tax Contest without the prior consent of
Purchaser (which consent may not be unreasonably withheld). Purchaser shall
deliver to the Representative any power of attorney reasonably required to allow
the Representative and his counsel to represent Purchaser, Purchaser and the
Company in connection with any Tax Contest that the Representative is entitled
to control hereunder and shall use its reasonable efforts to provide the
Representative with such assistance as may be reasonably requested by the
Representative in connection with any such Tax Contest. The Parties each agree
to consult with and to keep the other Parties hereto informed on a regular basis
regarding the status of any Tax Contest to the extent that such Tax Contest
could affect a liability of such other Party (including indemnity obligations
hereunder).

(c) To the extent allowable under applicable law, all amounts payable under
Article VII and this Section 8.3 will be treated for Tax purposes as adjustments
to the Purchase Price.

 

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(d) Purchaser, the Company and the Shareholders shall cooperate fully, as and to
the extent reasonably requested by one another, in connection with the
preparation and filing of Tax Returns and any audit, litigation or other
proceeding with respect to Taxes. Such cooperation shall include the retention
and (upon another’s request) the provision of records and information which are
reasonably relevant to any such audit, litigation or other proceeding and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Purchaser and
the Company on the one hand, and the Shareholders on the other, agree (i) to
retain all books and records with respect to Tax matters pertinent to the
Company relating to any taxable periods, and (ii) to give the other party
reasonable written notice prior to transferring, destroying or discarding any
such books and records and, if so requested, Purchaser, the Company, or the
applicable Shareholder, as the case may be, shall allow the requesting party to
take possession of such books and records. The Parties hereto agree, upon
request, to use reasonable efforts to obtain any certificate or other document
from any taxing authority or any other Person as may be necessary to mitigate,
reduce or eliminate any Tax that could otherwise be imposed.

ARTICLE IX

MISCELLANEOUS

Section 9.1. Certain Definitions.

For purposes of this Agreement, the following terms shall have the meanings
specified in this Section 9.1:

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person,
and in the case of any natural Person shall include all relatives and family
members of such Person. For purposes of this definition, a Person shall be
deemed to control another Person if such first Person and/or any relatives or
family members of such first Person directly or indirectly owns or holds five
percent (5%) or more of the ownership interests in such other Person.

“Base Net Worth” means an amount equal to $(74,632).

“Books and Records” means all books and records of the Company, including
manuals, price lists, mailing lists, lists of customers, sales and promotional
materials, purchasing materials, documents evidencing intangible rights or
obligations, personnel records, accounting records and litigation files
(regardless of the media in which stored), in each case relating to or used in
the Business.

“Business” means the business of the Company as conducted or proposed to be
conducted as of the date hereof, including, without limitation, all activities
involving lighting products, services and devices.

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

 

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

“Company Material Adverse Change” or “Company Material Adverse Effect” means any
change effect that is materially adverse to (i) the business, properties,
results of operations, prospects or condition (financial or otherwise) of the
Company, (ii) the ability of the Company or any Shareholder to perform its
obligations under this Agreement or (iii) the ability of Purchaser to conduct
the Business after the Closing Date as the Business is being conducted as of the
date hereof.

“Consent” means any consent, approval, authorization, waiver, permit, grant,
franchise, concession, agreement, license, exemption or order of, registration,
certificate, declaration or filing with, or report or notice to, any Person,
including any Governmental Body.

“Contract” means any contract, agreement, indenture, note, bond, loan, mortgage,
license, instrument, lease, commitment or other arrangement or agreement.

“Environmental Law” means any foreign, federal, state or local statute,
regulation, ordinance, or rule of common law as now or hereafter in effect in
any way or any other legally binding requirement relating to the environment,
natural resources or protection of human health and safety including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. § 9601 et seq.), the Hazardous Materials Transportation Act (49
U.S.C. App. § 1801 et seq.), the Resource Conservation and Recovery Act (42
U.S.C. § 6901 et seq.), the Clean Water Act (33 U.S.C. § 1251 et seq.), the
Clean Air Act (42 U.S.C. § 7401 et seq.) the Toxic Substances Control Act (15
U.S.C. § 2601 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act
(7 U.S.C. § 136 et seq.), and the Occupational Safety and Health Act (29 U.S.C.
§ 651 et seq.), and the regulations promulgated pursuant thereto.

“GAAP” means United States generally accepted accounting principles as in effect
from time to time.

“Governmental Approval” means any Consent of, with or to any Governmental Body.

“Governmental Body” means any government or governmental or regulatory authority
or body thereof, or political subdivision thereof, whether federal, state, local
or foreign, or any agency, instrumentality or authority thereof, or any court or
arbitrator (public or private).

“Hazardous Material” means any substance, material or waste which is regulated
by the United States, the foreign jurisdictions in which the Company or any of
its Subsidiaries conducts business, or any state, local or foreign governmental
authority including, without limitation, petroleum and its by-products,
asbestos, and any material or substance which is defined as a “hazardous waste,”
“hazardous substance,” “hazardous material,” “restricted hazardous waste,”
“industrial waste,” “solid waste,” “contaminant,” “pollutant,” “toxic waste” or
“toxic substance” under any provision of Environmental Law.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.

 

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“Indebtedness” of any Person means, without duplication, (i) the principal,
accreted value, accrued and unpaid interest, prepayment and redemption premiums
or penalties (if any), unpaid fees or expenses and other monetary obligations in
respect of (A) indebtedness of such Person for money borrowed and
(B) indebtedness evidenced by notes, debentures, bonds or other similar
instruments for the payment of which such Person is responsible or liable;
(ii) all obligations of such Person issued or assumed as the deferred purchase
price of property, all conditional sale obligations of such Person and all
obligations of such Person under any title retention agreement (but excluding
trade accounts payable and other accrued current liabilities arising in the
ordinary course of business (other than the current liability portion of any
indebtedness for borrowed money)); (iii) all obligations of such Person under
leases required to be capitalized in accordance with GAAP; (iv) all obligations
of such Person for the reimbursement of any obligor on any letter of credit,
banker’s acceptance or similar credit transaction; (v) all obligations of such
Person under interest rate or currency swap transactions (valued at the
termination value thereof); (vi) all obligations of the type referred to in
clauses (i) through (v) of any Persons for the payment of which such Person is
responsible or liable, directly or indirectly, as obligor, guarantor, surety or
otherwise, including guarantees of such obligations; and (vii) all obligations
of the type referred to in clauses (i) through (vi) of other Persons secured by
(or for which the holder of such obligations has an existing right, contingent
or otherwise, to be secured by) any Lien on any property or asset of such Person
(whether or not such obligation is assumed by such Person).

“Intellectual Property” means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations and renewals in connection therewith, (d) all mask works and all
applications, registrations and renewals in connection therewith, (e) all trade
secrets and confidential information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals), (f) all computer software (including data and related
documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).

“IRS” means the United States Internal Revenue Service.

“Knowledge” or words of similar effect, regardless of case, means the actual
knowledge after reasonable investigation (which investigation the Shareholders
hereby represent and warrant has been made) of a Shareholder or any other
officer, director or employee of the Company having primary responsibility
relating to the matter.

“Law” means any federal, state, local or foreign law (including common law),
statute, code, ordinance, rule, regulation or other requirement.

 

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“Legal Proceeding” means any judicial, administrative or arbitral actions,
suits, proceedings (public or private), claims or governmental proceedings.

“Liability” means any liability (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), including
any liability for Taxes.

“Lien” means any lien (including any Tax lien), pledge, mortgage, deed of trust,
security interest, claim, lease, charge, option, right of first refusal,
easement, servitude, transfer restriction or any other encumbrance, restriction
or limitation whatsoever.

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

“Permitted Encumbrances” means (i) statutory liens for current taxes,
assessments or other governmental charges not yet delinquent or the amount or
validity of which is being contested in good faith by appropriate proceedings,
provided an appropriate reserve has been established therefor; (ii) mechanics’,
carriers’, workers’, repairers’ and similar Liens arising or incurred in the
ordinary course of business that are not material to the business, operations
and financial condition of the property so encumbered or the Company;
(iii) zoning, entitlement and other land use and environmental regulations by
any Governmental Body, provided that such regulations have not been violated;
and (iv) such other imperfections in title, charges, easements, restrictions and
encumbrances which do not materially detract from the value of or materially
interfere with the present use of the assets subject thereto or affected
thereby.

“Person” means any individual, corporation, partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization,
Governmental Body or other entity.

“Pre-Closing Tax Period” means any taxable period ending on or before the
Closing Date and the portion, ending on the Closing Date, of any Straddle
Period.

“Release” means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, migration or leaching into the indoor
or outdoor environment, or into or out of any property.

“Representative” means Zdenko Grajcar.

“Subsidiary” means, as to any Person, any other Person of which a 50% or more of
the outstanding voting securities or other equity interests are owned, directly
or indirectly, by such Person.

“Tax” or “Taxes” shall mean means any federal, state, provincial, local or
foreign income, alternative minimum, accumulated earnings, personal holding
company, franchise, capital stock, net worth, capital, profits, windfall
profits, gross receipts, value added, sales, use, goods and services, excise,
customs duties, transfer, conveyance, mortgage, registration, stamp,
documentary, recording, premium, severance, environmental (including taxes under
Section 59A of the Code or any analogous or similar provision of any state,
local or foreign law or regulation), real property, personal property, ad
valorem, intangibles, unclaimed property, rent,

 

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occupancy, license, occupational, employment, unemployment insurance, social
security, disability, workers’ compensation, payroll, health care, withholding,
estimated or other similar tax, duty or other governmental charge or assessment
or deficiencies thereof, and including any interest, penalties or additions to
tax attributable to the foregoing.

“Tax Return” means any return, report, declaration, form, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

“Transaction Documents” means, with respect to any Person, this Agreement
together with any other agreements, instruments, certificates and documents
executed by such Person in connection herewith or therewith or in connection
with the transactions contemplated hereby or thereby (including without
limitation any Employment Agreement executed by such Person).

“Treasury Regulations” means the regulations promulgated under the Code,
including temporary and proposed regulations.

Section 9.2. Publicity . No party shall issue any press release or make any
other public announcement relating to the subject matter of this Agreement
without the prior written consent of Purchaser.

Section 9.3. Shareholder Representative. Each Shareholder hereby irrevocably
appoints the Representative to represent him and act as his attorney-in-fact and
agent with respect o any and all maters relating to, arising out of, or in
connection with the Transaction Documents, including without limitation, any
adjustment, disposition, settlement or other handling of any amounts or claims
under Sections 1.4 and 1.5 of this Agreement. Except to the extent otherwise
explicitly set forth herein or in any other Transaction Document, all actions,
omissions, notices, communications and determinations by the Representative
pursuant or with respect to any provision of a Transaction Document shall
conclusively be deemed to have been authorized by, and shall be binding upon and
made on behalf of, each Shareholder. Purchaser and the Company may rely
conclusively on the Representative in taking any such action and otherwise
performing for and on behalf of the Shareholders, with the same conclusive
authority as if each Shareholder had individually so acted. A decision, act,
consent or instruction of the Representative will constitute a decision of all
the Shareholders, and will be final, binding and conclusive upon each of the
Shareholders. Purchaser and the Company are hereby relieved from any liability
to any person or entity for acts done by them in accordance with such decision,
act, consent or instruction of the Representative. The Shareholders are hereby
deemed to acknowledge that they are in receipt of sufficient documentation that
will constitute the written notice appointing the Representative as their
representative hereunder.

Section 9.4. Payment of Sales, Use or Similar Taxes; Transfer Taxes. The
Shareholders shall be responsible for and pay in a timely manner all sales, use,
value added, documentary, stamp, gross receipts, registration, transfer,
conveyance, excise, recording, license and other similar Taxes and fees
(“Transfer Taxes”), arising out of or in connection with or attributable to the
transactions effected pursuant to the Transaction Documents. Each party hereto
shall prepare and timely file all Tax Returns required to be filed in respect of
Transfer Taxes that are the primary responsibility of such party under
applicable Law; provided, however, that such party’s preparation of any such Tax
Returns shall be subject to the other party’s approval, which approval shall not
be unreasonably withheld or delayed.

 

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Section 9.5. Expenses. Purchaser shall bear its own expenses incurred in
connection with the negotiation and execution of this Agreement and each other
agreement, document and instrument contemplated by this Agreement and the
consummation of the transactions contemplated hereby and thereby. The
Shareholders shall bear their own expenses and those of the Company incurred
prior to the Closing in connection with the negotiation and execution of this
Agreement and each other agreement, document and instrument contemplated by this
Agreement and the consummation of the transactions contemplated thereby.
Promptly after Closing, the Shareholders shall pay all such transaction expenses
of the Company incurred prior to Closing that are not paid on or before the
Closing Date.

Section 9.6. Specific Performance. The Shareholders and the Company acknowledge
and agree that the breach of this Agreement would cause irreparable damage to
Purchaser and that Purchaser will not have an adequate remedy at law. Therefore,
the obligations of the Shareholders and the Company under this Agreement,
including, without limitation, the Shareholders’ obligations to sell the Company
Shares to Purchaser, shall be enforceable by a decree of specific performance
issued by any court of competent jurisdiction, and appropriate injunctive relief
may be applied for and granted in connection therewith (without the requirement
of the posting of a bond or other surety). Such remedies shall, however, be
cumulative and not exclusive and shall be in addition to any other remedies
which any party may have under this Agreement or otherwise.

Section 9.7. Submission to Jurisdiction; Consent to Service of Process.

(a) The Parties hereto irrevocably submit to the exclusive personal jurisdiction
of any state or federal court sitting in Minneapolis, Minnesota (and any
appellate court from any thereof) over any dispute arising out of or relating to
this Agreement or any of the transactions contemplated hereby and each Party
hereby irrevocably agrees that all claims in respect of such dispute or any
suit, action proceeding related thereto may be heard and determined in such
courts. The Parties hereby irrevocably waive, to the fullest extent permitted by
applicable Law, any objection which they may now or hereafter have to the laying
of venue of any such dispute brought in such court or any defense of
inconvenient forum for the maintenance of such dispute. Each of the Parties
hereto agrees that a judgment in any such dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by Law

(b) Each of the Parties hereto hereby consents to process being served by any
Party to this Agreement in any suit, action or proceeding by delivery of a copy
thereof in accordance with the provisions of Section 9.11.

Section 9.8. Entire Agreement; Amendments and Waivers. This Agreement (including
the schedules and exhibits hereto) represents the entire understanding and
agreement between the parties hereto with respect to the subject matter hereof
and can be amended, supplemented or changed, and any provision hereof can be
waived, only by written instrument making specific reference to this Agreement
signed by Purchaser, in the case of an amendment, supplement, modification or
waiver sought to be enforced against Purchaser, or the Representative, in the

 

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case of an amendment, supplement, modification or waiver sought to be enforced
against any Shareholder or the Company. No action taken pursuant to this
Agreement, including without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representation, warranty, covenant or agreement
contained herein. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a further or continuing
waiver of such breach or as a waiver of any other or subsequent breach. No
failure on the part of any party to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of such right, power or remedy by such party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.

Section 9.9. Governing Law. This Agreement, the rights and obligations of the
parties under this Agreement, and any claim or controversy directly or
indirectly based upon or arising out of this Agreement or the transactions
contemplated by this Agreement (whether based upon contact, tort or any other
theory), including all matters of construction, validity and performance, shall
be governed by and construed in accordance with the internal Laws of the State
of Delaware, without regard to any conflict of Laws provision that would require
the application of the Law of any other jurisdiction.

Section 9.10. Table of Contents and Headings. The table of contents and section
headings of this Agreement are for reference purposes only and are to be given
no effect in the construction or interpretation of this Agreement.

Section 9.11. Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given when delivered personally or
mailed by certified mail, return receipt requested, to the parties (and shall
also be transmitted by facsimile to the Persons receiving copies thereof) at the
following addresses (or to such other address as a party may have specified by
notice given to the other party pursuant to this provision):

If to the Company, to:

Lumificient Corporation

8752 Monticello Lane North, Maple Grove, MN 55369

Attn: Zdenko Grajcar, President

Telecopier: (763) 390-3135

With a copy to:

George E. Antrim, Esq.

201 Ridgewood Avenue, Minneapolis, Minnesota 55403

Telecopier: (612) 870-0689

 

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If to the Representative or any Shareholder, to:

Zdenko Grajcar

8752 Monticello Lane North, Maple Grove, MN 55369

Telecopier: (763) 390-3135

With a copy to:

George E. Antrim, Esq.

201 Ridgewood Avenue, Minneapolis, Minnesota 55403

Telecopier: (612) 870-0689

If to Purchaser, to:

Nexxus Lighting, Inc.

124 Floyd Smith Drive, Suite 300, Charlotte, NC 28262

Attn: John Oakley, Chief Financial Officer

Telecopier: (704) 405-0422

With a copy to:

Lowndes Drosdick Doster Kantor & Reed, P.A.

215 North Eola Drive

Orlando, Florida 32801

Facsimile: 407-843-4600

Attention: Suzan A. Abramson, Esq.

Any such notice or communication shall be deemed to have been received (i) when
delivered, if personally delivered or transmitted by electronic mail, with
receipt acknowledgment by the recipient by return electronic mail, (ii) when
sent, if sent by facsimile on a business day during normal business hours (or,
if not sent on a business day during normal business hours, on the next business
day after the date sent by facsimile), (iii) on the next business day after
dispatch, if sent by nationally recognized, overnight courier guaranteeing next
business day delivery, and (iv) on the 5th business day following the date on
which the piece of mail containing such communication is posted, if sent by
mail.

Section 9.12. Severability. If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced by any Law or public policy,
all other terms or provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.

 

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Section 9.13. Assignment of Works. Each Shareholder agrees that all Work Product
belongs in all instances to the Company. To the extent any Shareholder
previously had or retained any right, title or interest of any kind or nature
whatsoever in any Work Product, such Shareholder hereby assigns all such right,
title and interest to the Company and agrees to take any such action as may be
reasonably requested by Purchaser following the Closing to confirm the Company’s
exclusive right, title and interest in and to the Work Product. For purposes
hereof, “Work Product” means all inventions, innovations, improvements,
technical information, systems, software developments, methods, designs,
analyses, drawings, reports, service marks, trademarks, trade names, logos and
all similar or related information (whether patentable or unpatentable) which
relates to any business conducted or proposed to be conducted by the Company as
of the date hereof.

Section 9.14. Binding Effect; Assignment. This Agreement shall not be assigned
by any Shareholder or the Company, and neither any Shareholder’s or the
Company’s obligations hereunder, or any of them, shall be delegated, without the
consent of Purchaser. Subject to the preceding sentence, this Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns. Except as provided in Article VIII, nothing in this
Agreement shall create or be deemed to create any third party beneficiary rights
in any person or entity not a party to this Agreement.

Section 9.15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile shall be
effective as delivery of a mutually executed counterpart to the Agreement.

Section 9.16. No Third Party Beneficiary. It is the intent of the Parties that
this Agreement is solely for their benefit and, therefore, except as provided in
Article VIII, no Person or Persons other than the Parties hereto shall have any
right or privileges under this Agreement either as third party beneficiaries or
otherwise.

Section 9.17. Further Assurances. Each Party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of the terms of this Agreement and the transactions contemplated hereby.

Section 9.18. Notification of Certain Matters. Each of the Parties to this
Agreement shall give prompt notice to the other Parties of the occurrence or non
occurrence of any event which would likely cause any representation or warranty
made by such Party herein to be untrue or inaccurate or any covenant, condition
or agreement contained herein not to be complied with or satisfied (provided,
however, that, any such disclosure shall not in any way be deemed to amend,
modify or in any way affect the representations, warranties and covenants made
by any Party in or pursuant to this Agreement).

Section 9.19. Arms Length Negotiation. Each Party herein expressly represents
and warrants to all other Parties hereto that (a) before executing this
Agreement, said Party has fully informed itself of the terms, contents,
conditions and effects of this Agreement; (b) said Party has

 

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relied solely and completely upon its own judgment in executing this Agreement;
(c) said Party has had the opportunity to seek and has obtained the advice of
counsel before executing this Agreement; (d) said Party has acted voluntarily
and of its own free will in executing this Agreement; (e) said Party is not
acting under duress, whether economic or physical, in executing this Agreement;
and (f) this Agreement is the result of arms length negotiations conducted by
and among the Parties and their respective counsel.

Section 9.20. Waiver of Jury Trial.

THE PARTIES TO THIS AGREEMENT EACH HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR (ii) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT
OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY
OR OTHERWISE. THE PARTIES TO THIS AGREEMENT EACH HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

Section 9.21. No Presumption Against Drafter. The Parties hereto have
participated jointly in the negotiation and drafting of this Agreement and, in
the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as jointly drafted by the Parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provision of this Agreement.

Section 9.22. Definitional and Interpretive Matters. Unless otherwise expressly
provided, for purposes of this Agreement, the Exhibits and Schedules to this
Agreement are hereby incorporated and made a part hereof and are an integral
part of this Agreement. All Exhibits and Schedules annexed hereto or referred to
herein are hereby incorporated in and made a part of this Agreement as if set
forth in full herein. The disclosure of an item in a Schedule or Exhibit does
not qualify any other Schedules, Exhibits, sections and paragraphs in this
Agreement except to the extent it is clear by appropriate cross-references that
a given disclosure is applicable to such other Schedules, Exhibits, sections and
paragraphs. The listing or inclusion of a copy of a document or other item is
not adequate to disclose an exception to any representation or warranty in this
Agreement unless the representation or warranty relates to the existence of the
document or item itself. Any capitalized terms used in any Schedule or Exhibit
but not otherwise defined therein shall be defined as set forth in this
Agreement.

* * * * * * *

 

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IN WITNESS WHEREOF, this Stock Purchase Agreement has been executed by or on
behalf of each of the Parties as of the day first written above.

 

LUMIFICIENT CORPORATION, a Minnesota corporation By:   /s/ Zdenko Grajcar Name:
  Zdenko Grajcar Title:   President

 

NEXXUS LIGHTING, INC., a Delaware corporation By:   /s/ Michael A. Bauer Name:  
Michael A. Bauer Title:   President and Chief Executive Officer

 

 

SHAREHOLDERS: /s/ Zdenko Grajcar Zdenko Grajcar

 

/s/ Carey Burkett Carey Burkett

 

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SCHEDULES AND EXHIBITS

Exhibit A         Opinion of Company Counsel

Schedule I       Shareholders

Schedule II     Closing Consents

Schedule 1.4   Purchase Price Adjustment

Disclosure Schedules:

 

  3.1 Foreign qualifications

 

  3.6 Financial Statements

 

  3.8 Developments

 

  3.9 Taxes

 

  3.10 Leased Real Property/Permits

 

  3.11 Personal Property

 

  3.12 Technology and Intellectual Property

 

  3.13 Material Contracts

 

  3.14 Employee Benefit Plans

 

  3.16 Litigation

 

  3.19 Insurance

 

  3.21 Related Party Transactions

 

  3.22 Customers; Projects

 

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SCHEDULE I

Shareholders

 

Shareholder

   Company Shares    Percentage     Initial Cash
Purchase
Price     Initial
Shares

Zdenko Grajcar

   1,000,000    80.10 %   $ 881,100 *   380,475

Carey Burkett

   248,440    19.90 %   $ 218,900 *   94,525

 

* Subject to Section 1.6.

 

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