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ASSET PURCHASE AGREEMENT

by and among

J. M. STEWART CORPORATION,
DISPLAY TECHNOLOGIES, INC.

and

J.M. STEWART ACQUISITION, INC.

 

November 16, 2001

 

 

 

 

 

 

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LIST OF SCHEDULES

Schedule 1.1(a)

Tradenames, Trademarks, etc.

Schedule 1.1(c)

Domain Names

Schedule 1.1(e)

Equipment

Schedule 1.1(i)

Deposits and Prepaid Advertising

Schedule 1.1(j)

Accounts Receivable

Schedule 2.1

Interim Balance Sheet

Schedule 3.1(a)

Leases and Other Contracts

Schedule 3.1(b)

Outstanding Accounts Payable

Schedule 3.1(c)

Sales Orders for Finished Goods

Schedule 3.1(e)

Other Obligations and Liabilities of JMS

Schedule 8.1

States in which JMS is Qualified

Schedule 8.3

Joint Ventures, etc.

Schedule 8.4

Conflicts of Interest

Schedule 8.5

Good and Marketable Title of JMS

Schedule 8.6

Pending Litigation, Arbitration and Administrative or Regulatory Proceedings of
JMS

Schedule 8.7

Adverse Changes

Schedule 8.8

Contracts and Commitments

Schedule 8.9

Agreements Related to Intellectual Property, Trademarks, etc.

Schedule 8.10

Financial Statements - Exceptions to GAAP

Schedule 8.12

Tax Matters of JMS and Parent

Schedule 8.13

Employee Taxes, etc.

Schedule 8.14

Insurance of JMS

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Schedule 8.16

No Violation of JMS

Schedule 8.17

List of Hazardous Substances, Hazardous Materials and Hazardous Wastes of JMS

Schedule 8.18

Loss Sustained by JMS

Schedule 8.27

Employee Benefits and ERISA

Schedule 8.29

Customer Deposits

Schedule 12.7(a)

Existing Employment or Noncompetition Agreements

Schedule 12.7(b)

Continuing Employees

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ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (hereinafter sometimes referred to as "this
Agreement") made this 16th day of November, 2001, by and among J. M. Stewart
Corporation, a Florida corporation ("JMS"), Display Technologies, Inc., a Nevada
corporation ("Parent"), and J.M. Stewart Acquisition, Inc., a Florida
corporation ("Buyer");

W I T N E S S E T H:

WHEREAS, JMS wishes to transfer substantially all of its assets and all of the
business presently conducted by it (all such business is hereinafter sometimes
referred to as "The Acquired Business"), to Buyer in exchange for cash and the
assumption by Buyer of certain specified liabilities of JMS as herein provided;

WHEREAS, Buyer wishes to acquire such assets and business of JMS all as
hereinafter more fully set forth;

WHEREAS, SouthTrust Bank, an Alabama banking corporation, holds a valid,
perfected first priority security interest in all of the Purchased Assets and
has consented to the sale of the Purchased Assets pursuant to this Agreement;
and

WHEREAS, Parent owns all of the outstanding capital stock of JMS.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements hereinafter set forth, the parties hereto mutually covenant and agree
as follows:

ARTICLE 1
ASSETS TO BE PURCHASED

Section 1.1.         Description of Purchased Assets.  On the terms and subject
to the conditions herein expressed, JMS agrees to sell, convey, transfer,
assign, set over and deliver to Buyer on the Closing Date, effective as of the
Effective Time (as said terms are defined in Section 4.2 hereof) all of the
assets, whether tangible or intangible, utilized by or in connection with, or
produced by, The Acquired Business and owned by JMS or J.M. Stewart Industries,
Inc., including but not limited to the following specified assets, regardless of
where such assets are located:

(a)          the exclusive ownership of and right to use all tradenames,
trademarks, service marks, trade dress, copyrights and applications therefor
used in connection with The Acquired Business or otherwise owned or controlled
by JMS, including, without limitation, those

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described in Schedule 1.1(a) hereto, along with the goodwill of the business
associated with each of the foregoing;

(b)          all inventions, patents, patent rights, applications for patents,
production rights, manufacturing rights, reproduction rights, similar rights,
trade secrets, know-how, processes, formulae, licenses and designs;

(c)          all right, title and interest in the marks and domain names set
forth on Schedule 1.1(c) hereto, as well as all right, title and interest,
including copyright rights, in the Work or any portion thereof (as hereinafter
defined), including the rights to use and/or sell for profit, distribute to
third parties, display, perform, digitally transmit, create derivative works
from, disassemble, reverse engineer, otherwise claim any ownership rights in or
rightful title to the "look and feel" of the Work. For purposes of this
Agreement, "Work" is defined as all documents, images, things, work product and
works of authorship (all of which may be either electronic or hard copy) that
are created by or for JMS, or in which JMS owns a transferable interest,
including, without limitation, all website pages and in any software programs,
scripts, graphics, animations, controls, user interfaces, database schemes or
other tangible or intangible "products" or "information" developed by either JMS
or any agent, employee or independent contractor of JMS for purposes related to
or used in connection with The Acquired Business ;

(d)          all current inventories of raw materials, supplies, purchased parts
to be incorporated in finished products, work-in-process and finished products
(the "Inventory");

(e)          all tooling, molds, machinery, equipment and computer hardware,
including, without limitation, those described in Schedule 1.1(e)hereto, (the
"Equipment");

(f)          all books and records of JMS, including, without limitation, all
purchasing accounting, sales, export, import, manufacturing, marketing,
shipping, agent and distributor records, all marketing studies, customer lists,
customer files, art work, supplier files, sales agent and manufacturers'
representatives files, credit files, credit data, appraisals, valuations, and
consulting studies and all other records and reports relating to the assets
purchased and the liabilities assumed by Buyer, all printed and other
advertising, sales and promotional materials, and catalogues and supplies, all
general ledgers, books of accounts, financial statements and banking records,
and all computer programs, computer software, computer manuals, flowcharts,
printouts, data files, program documentation and all other related materials of
JMS and all copies of each thereof in whatever form each of the foregoing may
exist, including computer files and related documentation; provided that JMS may
retain a copy of all tax returns and tax records;

(g)          all interests of JMS under the leases, employee noncompetition
agreements and other contracts described in Schedule 3.1(a) hereto, subject to
Buyer crediting JMS with any prepaid rent, taxes and similar prepaid items,
prorated to the Effective Time;

(h)          any insurance proceeds paid after the Effective Time or payable to
JMS pursuant to any contract of insurance as a result of damage to or loss of
any of the assets owned or operated by JMS that are to be, or in the absence or
loss would otherwise have been, sold to Buyer hereunder, or damage or loss with
respect to or interruption of

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the operation of The Acquired Business, the purpose of this provision being to
assure that Buyer receives the insurance proceeds otherwise payable to JMS
intended to make JMS whole on account of any damage or loss to the assets that
are purchased by Buyer or damage or loss to or interruption of the operations of
The Acquired Business subsequent to the Effective Time;

(i)          all deposits, prepaid advertising, including, without limitation,
prepaid catalogues, brochures, photographs and advertising, and other prepaid
items and deferred charges related to The Acquired Business, including, but not
limited to, those described in Schedule 1.1(i) hereto;

(j)          all accounts receivable of JMS existing on the Closing Date and the
proceeds of any thereof, including, but not limited to, those listed in Schedule
1.1(j);

(k)          all stationery and other imprinted material and office supplies,
business records (or copies thereof), the right to receive mail and other
communications and shipments of merchandise addressed to JMS, and the rights to
telephone numbers relating to The Acquired Business.

Said assets, properties, interests and business of JMS to be so sold, conveyed,
transferred, assigned, set over and delivered to Buyer on the Closing Date are
herein sometimes collectively called the "Purchased Assets". For purposes of
this Agreement, the term, "current inventories" as used in subsection (d) above
shall include only items which are saleable or are to be incorporated into a
saleable product.

Section 1.2.          Retained Assets.

JMS shall on the Closing Date retain the following assets used in the conduct of
its business (hereinafter referred to as the "Retained Assets"):

(a)          its corporate seal, minute books and stock record books;

(b)          cash on hand and in banks at the Effective Time except those
proceeds of insurance policies insuring the Purchased Assets against damage or
loss described in clause (h) of Section 1.1 hereof;

(c)          any tax refunds relating to transactions prior to the Effective
Time and contract rights arising in connection with obligations or liabilities
not assumed by Buyer;

(d)          any refund of insurance premiums or dividends with respect to an
insurance policy pertaining to any policy year ending on or before the Effective
Time or any policy year including the Effective Time (any such premium refund or
dividend relating to a policy year containing the Effective Time being prorated
so that JMS shall retain that portion of the premium refund or dividend
pertaining to the portion of such policy year up to the Effective Time); and

(e)          JMS’ rights and obligations under the Government Contracts (as
hereinafter defined) but only to the extent the United States Government does
not consent to the transfer of said Government Contracts as contemplated in
Section 6.9 herein.

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ARTICLE 2
PURCHASE PRICE OF THE PURCHASED ASSETS

Section 2.1          Purchase Price.          (a) The purchase price of the
Purchased Assets shall be an amount equal to [Two Million Five Hundred
Fifty-Seven Thousand Fifteen Dollars ($2,557,015)] (the "Interim Purchase
Price"), reduced by the amount, if any, of the Post-Closing Adjustment (as
defined below) (the Interim Purchase Price as adjusted by the Post-Closing
Adjustment being referred to as the "Final Purchase Price"). The Interim
Purchase Price was determined based on the balance sheet of JMS as of October
31, 2001, a copy of which is set forth as Schedule 2.1 hereto (the "Interim
Balance Sheet").

(b) Not later than forty-five (45) days after the Closing Date, Buyer will
prepare a balance sheet of the Acquired Business as of the Closing Date prepared
in accordance with generally accepted accounting principles as consistently
applied by JMS (the "Closing Balance Sheet"). The Interim Purchase Price shall
be reduced by the amount, if any, that the value of the Net Assets (as defined
below) reflected on the Closing Balance Sheet are less than the Net Assets
reflected on the Interim Balance Sheet (such amount being referred to as the
"Post-Closing Adjustment"). For the purposes of this Agreement, "Net Assets"
shall mean the Purchased Assets less the Assumed Liabilities (as defined in
Section 3.1 below).

 ARTICLE 3
PAYMENT OF THE PURCHASE PRICE AND
ASSUMPTION OF CERTAIN LIABILITIES

Section 3.1.          Assumption of Certain Liabilities.     At the closing on
the Closing Date, Buyer shall not be obligated to assume, and shall not assume,
any of the liabilities and obligations of JMS whether existing as of the
Effective Time or asserted after the Effective Time and relating to events that
occurred before the Effective Time, or otherwise, except Buyer shall assume and
agrees to pay, perform and discharge, as additional consideration for the
Purchased Assets, the following liabilities and obligations of JMS as of the
Effective Time (the "Assumed Liabilities"), which shall be assumed by Buyer on
the Closing Date as of the Effective Time:

(a)          the future obligations of JMS as of the Effective Time under the
contracts described in Schedule 3.1(a) hereto;

(b)          the outstanding accounts payable of JMS relating to The Acquired
Business, entered in the ordinary course of business, as of the close of
business on the date immediately prior to the Closing Date, as listed in
Schedule 3.1(b) hereto (as the same may be updated immediately prior to the
Closing Date);

(c)         the obligations of JMS to fill sales orders for finished goods with
respect to The Acquired Business entered into in the ordinary course of
business, provided, that all consideration for such sales shall belong to Buyer,
each such individual obligation of JMS to fill sales orders for finished goods
having an aggregate sales price in excess of $5,000 as of the close of business
on November 15, 2001, being listed in Schedule 3.1(c) hereto (as the same may be
updated immediately prior to the Closing Date);

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(d)          present and future warranty claims that are reserved for on the
Closing Balance Sheet, calculated in a manner consistent with the past practices
of The Acquired Business; and

(e)          those other obligations and liabilities of JMS that are specified
in Schedule 3.1(e) hereto.

Section 3.2.          Excluded Liabilities.     Buyer will not assume and does
not agree to pay, perform or discharge the following ("Excluded Liabilities"):

(a)          any obligations and liabilities of JMS or Parent other than the
Assumed Liabilities, regardless of when such liability arises; and

(b)          any liabilities related to the Retained Assets.

JMS and Parent will pay, perform or discharge (i) all liabilities of JMS other
than the Assumed Liabilities, regardless of when such liabilities arise, and
(ii) all liabilities related to the Retained Assets, as and when such
liabilities and obligations become due.

Section 3.3.          Payment of Purchase Price.       On the Closing Date,
Buyer shall pay to JMS by delivery of immediately available funds by wire
transfer to an account designated by JMS an amount (the "Closing Payment") equal
to the Interim Purchase Price less $100,000 (the "Reserve Amount").

(b)          If the Final Purchase Price exceeds the amount of the Closing
Payment, Buyer shall remit to JMS an amount equal to the Final Purchase Price
less the Closing Payment ninety (90) days after the Closing Date. If the amount
of the Closing Payment exceeds the Final Purchase Price, JMS shall remit to
Buyer an amount equal to the Closing Payment less the Final Purchase Price five
(5) business days after JMS receives from Buyer the Closing Balance Sheet.

Section 3.4.          Assignment of Contract Rights.     In connection with the
sale and transfer of the Purchased Assets and on the terms and subject to the
conditions herein expressed, JMS will assign, or cause to be assigned, to Buyer
all of JMS’ rights, title and interest in and to all contracts, leases and other
agreements to be assumed by Buyer hereunder, and all guaranties, warranties and
service contracts relating to the Purchased Assets.

Section 3.5.          Execution of Assignment and Assumption Agreement.     In
connection with the sale and transfer of the Purchased Assets and the assumption
of the liabilities to be assumed by Buyer pursuant to Section 3.1 of this
Agreement, JMS and Buyer shall as of the closing execute and deliver an
Assignment and Assumption Agreement (the "Assignment and Assumption Agreement")
for each contract set forth in Schedule 3.1(a) hereto.

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ARTICLE 4
THE CLOSING

Section 4.1.          The Closing.     The closing shall take place at the
offices of Bradley Arant Rose & White LLP located at 2001 Park Place, Suite
1400, in Birmingham, Alabama on the first business day following the date upon
which all of the conditions to Closing set forth herein have been satisfied or
waived, or at such other time and place as the parties may agree upon in
writing.

Section 4.2.          Closing Date; Effective Time.     For purposes of this
Agreement, the term "Closing Date" shall mean the date on which the closing
shall occur. For purposes of this Agreement, the term "Effective Time" shall
mean the start of business on the Closing Date.

ARTICLE 5
DELIVERIES AT THE CLOSING

Section 5.1.          Deliveries By JMS and Parent.     At the closing on the
Closing Date, effective as of the Effective Time, JMS and Parent shall deliver
to Buyer, in addition to all other items specified elsewhere in this Agreement,
the following:

(a)          the Purchased Assets free and clear of all mortgages, pledges,
liens, encumbrances or charges of any kind (except as otherwise disclosed herein
or in any schedule hereto);

(b)          such instruments of sale, conveyance, transfer, assignment,
endorsement, direction or authorization as will be sufficient or requisite, in
the reasonable opinion of Buyer and its counsel, to vest in Buyer, its
successors and assigns, all right, title and interest (which title and interest
shall be good and marketable except to the extent disclosed herein or in any
schedule hereto), in and to the Purchased Assets, including, without limitation,
the Assignment and Assumption Agreement, the Bill of Sale, the Assignment of
Intellectual Property, the Assignment of Lease Agreement, the Assignment of
Government Contracts, the Assignment of Corporate Name, and the Internet Domain
Name Transfer Agreement.

(c)          the legal opinion referred to in Article 12 hereof;

(d)          such assignments, and consents thereto, if any, of the various
franchises, leases, contracts and commitments to be assumed by Buyer pursuant to
Section 3.1 hereof as will be sufficient or requisite, in the reasonable opinion
of Buyer and its counsel, to vest in Buyer all of JMS’ rights, powers and
privileges thereunder;

(e)          a written consent from SouthTrust Bank releasing its lien on the
Purchased Assets together with forms UCC-3 from all parties with liens on the
Purchased Assets evidencing the release of their respective liens;

(f)          Articles of Amendment to the respective Articles of Incorporation
of JMS, J. M. Stewart Industries, Inc. and J.M. Stewart Manufacturing, Inc.
changing their respective corporate names to names that do not include the
phrase "J.M. Stewart," all of such Articles of Amendment to be duly authorized
and executed and ready for filing with the Florida Secretary of State’s office;
and

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(g)          Schedules 1.1(j), 3.1(b), 3.1(c) and 3.1(e), updated to a date as
close as possible to the Closing Date.

Section 5.2.          Deliveries by Buyer.     At the closing on the Closing
Date, Buyer shall deliver to JMS the following:

(a)          documents (including, without limitation, the Assignment and
Assumption Agreement referred to in Section 3.5 hereof) evidencing the
assumption by Buyer of the liabilities and franchises, agreements, leases,
contracts and commitments of JMS to be assumed by Buyer pursuant to Section 3.1
hereof; and

(b)          The Closing Payment in accordance with the provisions of Section
3.3 hereof.

ARTICLE 6
POST-CLOSING COVENANTS OF JMS
AND PARENT

JMS and Parent, jointly and severally, covenant and agree as follows:

Section 6.1.          Change of Names.     (a) At the closing on the Closing
Date, JMS and Parent shall deliver to Buyer Articles of Amendment to the
respective Articles of Incorporation of JMS, J.M. Stewart Industries, Inc., and
J.M. Stewart Manufacturing, Inc. changing their respective corporate names to
names that do not include the phrase "J. M. Stewart", all of such Articles of
Amendment to be duly authorized and executed and ready for filing with the
office of the Florida Secretary of State.

(b)          Within five (5) business days following the Closing Date, JMS and
Parent shall have filed all requisite documents in all states in which JMS, J.M.
Stewart Industries, Inc. and J.M. Stewart Manufacturing, Inc. have registered to
transact intrastate business notifying such states of their respective changes
of corporate names. Thereafter, JMS and Parent will cooperate with Buyer in
making such corporate names available to Buyer in each state in which JMS
transacts, or has transacted, business, and JMS and Parent shall cease to use
the name "J.M. Stewart Corporation" and all derivations thereof, including
without limitation "J.M. Stewart Manufacturing" and "J.M. Stewart Industries".

Section 6.2.         Non-Solicitation and Non-Competition.      (a) For a period
of five (5) years from and after the Closing Date, neither JMS nor Parent shall,
directly or indirectly, (i) make known to any other person, firm, corporation or
entity the names, addresses or any other information of any of The Acquired
Business’ customers, employees, or vendors, nor will JMS or Parent, directly or
indirectly, solicit, seek business from or contract with any firm, person, sole
proprietorship, partnership, corporation or other entity which, at any time
during the five (5) years preceding the Closing Date, was a customer, employee
or vendor of The Acquired Business, or which had or planned to have a business
relationship with The Acquired Business; or (ii) own, manage, operate, join,
control, invest in or participate in or be employed by or give consultation or
advice to or extend credit to or otherwise be connected in any manner, directly
or indirectly, with any firm, person, corporation or enterprise which would be
competitive with The

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Acquired Business in any area of Canada, South America and the United States of
America in which The Acquired Business is conducted by JMS or Parent immediately
prior to the Effective Time or in which the products related to The Acquired
Business are or have been sold. With respect to clause (ii) above, nothing
herein shall prohibit JMS or Parent from acquiring and holding not more than
five percent (5%) of any outstanding class of securities of any company whose
shares are publicly traded on any exchange or in any established
over-the-counter market, or from continuing to operate the businesses of Don
Bell Industries, Inc. and Lockwood Sign Group, Inc. in the manner in which they
have been operated prior to the Effective Time, provided that the operation of
said businesses do not in any way violate the provisions of clause (i) above.
JMS and Parent expressly agree that this Agreement is a partial restraint on its
business and activities and contains reasonable limitations as to time,
geographical area and scope of activity to be restricted that do not impose a
greater restraint than is necessary to protect the goodwill and business
interests of The Acquired Business and Buyer.

(b)          The period during which the agreement contained in subparagraph (a)
hereof shall apply shall be extended by one day for each day in which Buyer
establishes one or more violations by JMS or Parent of any provision of such
agreement, and Buyer shall be entitled to an injunction restraining JMS and
Parent from further violations for a period of five (5) years from the date of
the final decree less only such number of days subsequent to the date hereof as
JMS and Parent have not violated such agreement. The burden shall be on JMS and
Parent to establish the number of days, following the first established
violation, on which violations have not occurred. The purpose of this provision
is to prevent JMS and Parent from profiting from their own wrongs if JMS or
Parent violates the agreement contained in subparagraph (a) hereof.

(c)          JMS and Parent acknowledge and recognize that a violation of this
Section 6.2 by JMS or Parent may cause irreparable and substantial damage and
harm to Buyer, could constitute a failure of consideration, and that money
damages will not provide a full remedy for Buyer for such violations. JMS and
Parent agree that in the event of a breach of this Section 6.2, Buyer will be
entitled, if it so elects, to institute and prosecute proceedings at law or in
equity, to enforce the specific performance of this Section 6.2 by JMS and
Parent, and to enjoin JMS and Parent from engaging in any activity in violation
hereof. JMS and Parent hereby consent to service of process, in personam
jurisdiction, subject matter jurisdiction and venue in the Circuit Court of
Shelby County, Alabama and in the United States District Court for the Northern
District of Alabama. JMS and Parent further recognize that any material breach
of any covenant, representation or warranty herein will authorize Buyer to
withhold any payments to be made pursuant to this Agreement in accordance with
Section 10.5.

Section 6.3.          Further Assurances.     Upon the reasonable request of
Buyer at any time and from time to time after the Closing Date, JMS and Parent
will forthwith execute and deliver such further instruments of assignment,
transfer, conveyance, endorsement, direction or authorization and do all things
necessary or proper, as Buyer or its counsel may reasonably request, in order to
vest, perfect or confirm, of record or otherwise, the right, title and interest
of Buyer, its successors and assigns, in and to the Purchased Assets and the
assignment to, and assumption by Buyer of the franchises, agreements, leases,
contracts and commitments to be assigned to, and assumed by, Buyer pursuant to
this Agreement or otherwise to carry out the purpose of this Agreement.

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Section 6.4.         Confidentiality.      JMS and Parent agree that, after the
Closing Date, each of them will treat as confidential and will not use or
disclose to others or permit any affiliate of JMS to use or disclose to others,
any trade secrets or other confidential information concerning the Purchased
Assets, or The Acquired Business theretofore conducted by JMS, or concerning
Buyer, or the business, operations or affairs thereof, until such information
becomes publicly known through no fault of JMS or Parent, except in connection
with the enforcement of their rights under this Agreement or as otherwise
required by law or legal process or for a legitimate business purpose. JMS and
Parent acknowledge that such confidential information shall include, but not be
limited to, the identities of suppliers and business contacts of JMS, that such
confidential information is important to The Acquired Business, that the value
of the Purchased Assets derives in part from this confidential information
possessed by JMS and Parent, and, if any of them breaches this Agreement, then
Buyer will be deprived of the benefit of its bargain.

Section 6.5.          Availability of Employees.     JMS will, after the Closing
Date, cooperate fully in providing to Buyer or its designees information
necessary to prosecute or defend any third-party litigation relating to
operation of The Acquired Business acquired by Buyer and will use its best
efforts to provide and make available the services of employees and agents of
JMS to participate in the preparation and prosecution or defense of such
litigation, all at no charge to Buyer other than direct reasonable out-of-pocket
expenses, which shall be charged to Buyer.

Section 6.6.          Allocation of Purchase Price.     Within forty-five (45)
days following the Closing Date, JMS and Buyer shall agree upon the manner in
which the Purchase Price shall be allocated among the Purchased Assets. Such
allocation shall be made in accordance with Section 1060 of the Internal Revenue
Code of 1986, as amended (the "Code"), and, to the extent required by the Code,
JMS and Buyer shall file Form 8594, Asset Acquisition Statement Under Section
1060, with their respective tax returns for the taxable year that includes the
Closing Date. If the parties are required by the Code to file Form 8495, JMS and
Buyer shall file said Form 8495 in a manner consistent with the allocation of
the Purchase Price as agreed to by said parties in accordance with this Section
6.6.

Section 6.7.          Accounts Receivable.     Ninety (90) days following the
Closing Date, JMS and Parent shall repurchase from Buyer any uncollected
accounts receivable that were on the books of JMS as of the Effective Time, as
listed on Schedule 1.1(j), to the extent the amount of such uncollected accounts
receivable exceeds the amount reserved for uncollected accounts receivable in
the Closing Balance Sheet. Buyer shall have the right to offset any amounts owed
to it under this Section 6.7 against any payments otherwise owed to JMS or
Parent by Buyer in accordance with Section 10.5 hereof.

Section 6.8.        Government Contracts.      (a)  JMS, Parent and Buyer
acknowledge that it will not be possible to effect an assignment prior to the
Closing Date of that certain Contract for Commercial Items between the General
Services Administration and JMS, signed February 3, 1999, and that certain
Nonappropriated Fund Purchase Agreement between the Air Force Nonappropriated
Fund Purchasing Office and JMS, dated September 23, 1997 (collectively, the
"Government Contracts"). JMS, Parent and Buyer agree that following the
Effective Time, each of them shall take all necessary steps to obtain the
consent of the United States Government to the transfer of the Government
Contracts from JMS to Buyer, including but not limited to seeking novation in
accordance with applicable statutes and regulations,

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including 48 C.F.R. § ("FAR") 42.1204 and/or as the respective contracting
officer or other representative of the United States Government may request. If
so requested by Buyer, JMS shall present as soon as practicable after the
Closing Date, completed copies of the Novation Agreement prescribed at FAR
42.1204(e) executed by JMS and all documentation (including balance sheets)
required of JMS or Parent either under FAR 42.1204(c) and/or as the respective
contracting officer or other representative of the United States Government may
request, which documentation will be complete in all material respects. JMS and
Parent shall cooperate with Buyer as reasonably requested to obtain the consent
of the United States Government to the transfer of the Government Contracts,
including the execution of all necessary documents as requested by Buyer. JMS
and Parent shall cooperate with Buyer in every manner required to cause
continued satisfactory performance of the Government Contracts during the period
prior to the Closing Date. JMS and Parent will direct the United States
Government to make payments with respect to the Government Contracts directly
into an account specified by Buyer. Any payments otherwise received by JMS or
Parent from the United States Government with respect to the Government
Contracts on or after the Closing Date shall be endorsed and delivered to Buyer
for deposit, and not deposited by JMS or Parent.

(b)          While the request for consent is pending or in the event that the
United States Government declines to novate or otherwise consent to the transfer
of any of the Government Contracts to Buyer, then JMS shall continue to perform
all such Government Contracts in accordance with their terms and until
performance is complete. Buyer shall provide to JMS, at no cost to JMS, any and
all Purchased Assets, labor, management personnel, support systems, inventory,
supplies and all other things reasonably necessary and shall cooperate in every
manner required to complete contract performance, all at the direction of JMS
and Parent. JMS and Parent shall use their best efforts to maintain satisfactory
performance of the Government Contracts. Each of the Government Contracts shall
be performed for the economic benefit of the Buyer. Neither JMS nor Parent shall
retain any paid on such contracts on or after the Closing Date, but shall
promptly and immediately render to Buyer all proceeds from and after the Closing
date. Parent agrees that it shall not cause JMS to be dissolved during any
period in which JMS is performing the Government Contracts.

Section 6.9.          Enforcement of Noncompetition Agreements.     To the
extent that Buyer is prohibited from exercising the rights of JMS pursuant to
those certain noncompetition agreements with those employees of JMS set forth on
Schedule 12.7(a) that JMS is assigning to Buyer pursuant to this Agreement (the
"JMS Noncompetition Agreements") and at the written request and expense of
Buyer, JMS will enforce the JMS Noncompetition Agreements after the Closing Date
for the benefit of Buyer.

ARTICLE 7
COVENANTS OF BUYER

Section 7.1.          Access to Records.     Buyer agrees, for a period of five
(5) years after the Closing Date, to preserve and protect, or, in the event
Buyer wishes to destroy or discard such items, offer to surrender to JMS, all
books and records of JMS delivered to Buyer pursuant to this Agreement, and
Buyer's books and records maintained for eighteen months after the closing
relating to delivery of products to customers for the purpose of identifying
whether JMS or Buyer is responsible for claims for loss or injury relating to
the sale of products of The Acquired Business, and to afford, at JMS’ expense
and subject to Section 6.4 hereof,

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to the officers, employees and authorized representatives of JMS, reasonably
free and full access for legitimate business purposes during normal business
hours to such books and records; and, Buyer further agrees that such officers,
employees and authorized representatives of JMS shall be free during such
period, subject to Section 6.4 hereof, to make copies of and to take notes from
such books and records at JMS’ expense.

Section 7.2.          Availability of Employees and Facilities.     Buyer will,
after the Closing Date, cooperate fully in providing to JMS or its designees
information necessary to prosecute or defend any third-party litigation relating
to the business of JMS and will use its best efforts to provide and make
available the services of employees and agents of Buyer to participate in the
preparation and prosecution or defense of such litigation, all at no charge to
JMS other than direct reasonable out-of-pocket expenses, which shall be charged
to JMS.

Section 7.3.          Accounts Receivable.     Buyer agrees that it will assign
to JMS and Parent any and all rights to collect those accounts receivable that
are repurchased by JMS and Parent pursuant to Section 6.7. If Buyer collects any
payments on such accounts receivable after the accounts receivable have been
repurchased, Buyer shall remit such payment to JMS and Parent.

ARTICLE 8
REPRESENTATIONS AND
WARRANTIES OF JMS AND PARENT

JMS and Parent, jointly and severally, warrant and represent to and covenant
with Buyer and its successors and assigns (which warranties, representations and
covenants together with the other warranties, representations and covenants of
JMS and Parent set forth in this Agreement or contained in any schedule hereto,
or in any certificate or other document required to be delivered to Buyer by JMS
and Parent pursuant to this Agreement, shall, except as otherwise expressly
provided herein, survive the closing hereof) as follows:

Section 8.1.          Organization, etc.     JMS is a corporation, duly
organized, validly existing and in good standing under the laws of Florida and
has the corporate power and all material licenses, permits, authorizations and
approvals (governmental, corporate or otherwise) necessary to own and operate
its properties and to carry on The Acquired Business as it is now being
conducted. JMS is qualified to transact business as a foreign corporation in
each jurisdiction in which the nature of the property owned, used or operated by
JMS, or the nature of the activities conducted by JMS requires such
qualification, each of which is listed on Schedule 8.1.

 

Section 8.2.         Real Estate.      Neither JMS or Parent, or any affiliate
thereof, has any interest as owner in any real estate used in The Acquired
Business.

Section 8.3.         Joint Venture, etc.      Except as set forth on Schedule
8.3 hereto, on the date hereof, neither JMS nor its shareholders, directors or
officers own, nor on the Closing Date will own, any interest in any partnership,
joint venture or other entity engaged in any business competitive with The
Acquired Business, other than a less than 5% interest in publicly held entities.

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Section 8.4.         Conflict of Interest.      Except as set forth on Schedule
8.4 hereto, no affiliate of JMS or Parent, no shareholder or officer or director
or employee of JMS or Parent, nor any spouse or child of any of them, directly
or indirectly

(a)          has any interest in (i) any entity which does business with JMS or
(ii) any property, asset or right which is used by JMS in the conduct of The
Acquired Business, or

(b)          has any contractual relationship with JMS respecting The Acquired
Business.

There are no loans outstanding to or from any of such persons from or to JMS
except (y) reasonable officer expense accounts and (z) as set forth in Schedule
8.4 hereto.

Section 8.5.         Good Title, etc.      JMS has good and marketable title to
all of the Purchased Assets, subject to no mortgages, pledges, liens,
encumbrances or other charges of any kind, except as set forth in Schedule 8.5
hereto.

Section 8.6.          No Litigation.     There is no litigation at law or in
equity, no arbitration proceeding and no proceeding before any commission or
other administrative or regulatory authority pending, or to the knowledge of JMS
or Parent threatened, against or affecting the Purchased Assets or The Acquired
Business or JMS’ right to carry on such businesses as conducted on the date
hereof, except as set forth in Schedule 8.6. JMS is not in default with respect
to any order, writ, injunction or decree of any federal, state, local or foreign
court, department, agency or instrumentality. Except as set forth in Schedule
8.6, JMS is not presently engaged in any legal action to recover monies due to
it or damages sustained by it.

Section 8.7.         No Adverse Change.      Except as otherwise disclosed in
this Agreement or in Schedule 8.7, since June 30, 2001, there has been no
material adverse change in the financial condition, assets, liabilities,
business (including relations with employees, dealers, distributors, entities
with which JMS has joint marketing or endorsement relationships, government
contracting officers, suppliers and customers) or property of JMS, the prospects
of The Acquired Business or the Purchased Assets, and neither JMS nor Parent has
any knowledge of any information not known to the public on the basis of which
JMS or Parent would conclude that any such material adverse change may likely be
expected to occur in the reasonably foreseeable future.

Section 8.8.          Contracts and Commitments.          Except as set forth in
Schedule 8.8, Schedules 3.1(a), 3.1(b), 3.1(c) and 3.1(e) together contain a
true and complete list and brief description of all written contracts,
agreements and other instruments made other than in the ordinary course of
business to which JMS is a party at the date hereof, or made in the ordinary
course of business and referred to in clauses (a) through (j) of this Section
8.8. Except as shown in said Schedules 3.1(a), 3.1(b), 3.1(c), 3.1(e) and 8.8,
JMS is not a party to any written or oral

(a)          distributor, sales, advertising, agency, manufacturer's
representative, joint marketing and endorsement agreements, or similar contract,

(b)          contract or collective bargaining agreement with or commitment to
any labor union,

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(c)          contract continuing over a period of more than six months from the
date hereof for the future purchase of material, supplies, equipment or services
involving more than $10,000 or for a quantity in excess of normal operating
requirements,

(d)          contract continuing over a period of more than six months from the
date hereof for the future sale of products or the performance of services by
JMS,

(e)          profit-sharing, bonus, stock option, pension, retirement, stock
purchase, hospitalization, insurance or similar plan or agreement, formal or
informal, providing benefits to any current or former director, officer,
employee or shareholder,

(f)          indenture, mortgage, promissory note, loan agreement or other
agreement or commitment for the borrowing of money or for a line of credit,

(g)         contract or commitment of any other nature with any current or
former director, officer, employee or shareholder,

(h)         contract or commitment for capital expenditures,

(i)          agreement or arrangement for the sale of any of its assets,
property or rights other than in the ordinary course of its business or
requiring the consent of any party to the transfer and assignment of such
assets, property, and rights, or

(j)          guaranty of the obligations of third parties, other than the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection.

JMS has performed all the obligations required to be performed by it to date and
is not in default or alleged to be in material default in any respect under any
agreement, lease or contract to which it is a party, and there exists no event,
condition or occurrence which, after notice or lapse of time, or both, would
constitute such a default by it of any of the foregoing. JMS has furnished or
made available to Buyer true and correct copies of all documents described in
said Schedules 3.1(a), 3.1(b), 3.1(c), 3.1(e) and 8.8 (collectively the
"Contracts") and there have been no modifications, amendments or terminations
thereof not reflected in such copies. None of the Contracts are materially
unprofitable to JMS. JMS has no present expectation or intention of not fully
performing or inability to perform, its obligations under any Contract, and
neither JMS nor Parent has any knowledge of any breach or anticipated breach by
any other party to any Contract. With respect to those Contracts listed in
Section 8.8(a) which by their written terms have expired, JMS and the relevant
parties have continued to operate in accordance with the terms of the written
agreements notwithstanding their expiration. JMS has not received notice of the
intent of any party to any of the Contracts to cancel or discontinue performance
under any of the Contracts.

Section 8.9.         Copyrights, Trademarks, etc.      Except as identified on
Schedule 8.9, no licenses, sublicenses, covenants or agreements have been
granted or entered into by JMS or Parent in respect of any copyrights,
trademarks, service marks, trade names, brand names, patents or trade secrets,
used or usable in The Acquired Business. There are no copyrights, trademarks,
service marks, trade names, brand names, patents or trade secrets that are not
being sold to Buyer and without which the Business could not be conducted as
presently conducted. Neither JMS nor Parent have been advised of any claim of
infringement of any such copyright,

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proprietary right, trademark, service mark, trade name, brand name, patent or
trade secret. After the Closing Date, JMS and Parent will not use or otherwise
infringe upon any of the names used in The Acquired Business, including without
limitation the name "J.M. Stewart Corporation" or any derivative or alteration
thereof, which shall be sold, assigned and transferred to Buyer pursuant to this
Agreement.

Section 8.10.          Financial Statements.

(a)          JMS has heretofore delivered to Buyer the balance sheet of JMS as
of June 30, 2001 (such balance sheet being sometimes referred to as the "Base
Balance Sheet" and such date being sometimes referred to as the "Base Balance
Sheet Date"). JMS has also heretofore delivered to Buyer the Interim Balance
Sheet. Except as set forth in Schedule 8.10 hereto, the Base Balance Sheet and
Interim Balance Sheet have been prepared in accordance with generally accepted
accounting principles consistently applied and present fairly the financial
position of JMS as of the Base Balance Sheet Date and the date of the Interim
Balance Sheet, respectively. The reserve amount established for losses with
respect to warranties and the liability amount established for accounts payable
are adequate to provide for (i) losses relating to warranty claims and (ii)
amounts owing pursuant to accounts payable.

(b)          JMS has not used any improper accounting practice for the purpose
of incorrectly reflecting on its financial statements or in its books of
account, or for the purpose of not reflecting on such financial statements or in
its books of account, any of its assets, liabilities, revenues or expenses.

(c)          The books of account, cost reports, sales reports and other
financial data of JMS have been maintained and prepared in accordance with its
normal practices, consistently applied.

Section 8.11.         No Undisclosed Liabilities.      As of the date hereof,
JMS has no liability of any nature, whether accrued, absolute, contingent or
otherwise, relating to The Acquired Business not disclosed in this Agreement or
any certificate, schedule or other instrument or list or information required to
be furnished by JMS pursuant to this Agreement.

 

Section 8.12 .        Tax Matters.     For all periods prior to the date of this
Agreement, except as set forth in Schedule 8.12.

(a)          all Federal, state, local and foreign tax returns and tax reports
required to be filed by JMS and Parent have been timely filed with the
appropriate governmental agencies in all jurisdictions in which such returns and
reports are required to be filed and all of the foregoing are true, correct and
complete;

(b)          all Federal, state, local and foreign income, profits, franchise,
sales, use, occupation, property, excise, highway use and other taxes (including
interest and penalties) due from JMS and Parent have been fully paid or adequate
provisions made therefor;

(c)          no issues have been raised or proposed by any governmental tax
authority with respect to any filed tax return of JMS or Parent, nor has any
claim ever been made by an authority in a jurisdiction where JMS does not file
tax returns that it is or may be subject to taxation by that jurisdiction; and

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(d)          there are no liens, judgments or security interests on any of the
Purchased Assets that arose in connection with any failure (or alleged failure)
to pay any tax.

Section 8.13.          Employee Taxes, etc.     With respect to The Acquired
Business of JMS and except as set forth in Schedule 8.13:

(a)          proper and accurate amounts have been withheld by JMS from its
employees for all periods prior to the Effective Time in compliance with the tax
withholding provisions of applicable Federal, foreign, state and local laws;

(b)          proper and accurate Federal, foreign, state and local returns have
been filed by JMS for all periods for which returns were due with respect to
employee income tax withholding, social security and unemployment taxes, and the
amounts shown thereon to be due and payable have been paid in full or adequate
provisions therefor; and

(d)          hours worked by and payments made to the respective employees of
JMS have not been in violation of the Fair Labor Standards Act or any applicable
laws of the United States, any state or other jurisdiction dealing with such
matters.

Section 8.14.          Insurance.     With respect to The Acquired Business, JMS
or Parent has in force all policies of insurance described in Schedule 8.14
insuring it which policies JMS believes provide adequate insurance with respect
to all risks normally insured against by companies similarly situated, and it
will have in force on the Closing Date policies of insurance of the same
character and coverage as those so described in Schedule 8.14. JMS will promptly
notify Buyer in writing of any changes in such insurance coverage occurring
prior to the closing.

Section 8.15.         Ownership of Essential Assets; Presence of Essential
Assets.      There is no material asset used by JMS in the conduct of The
Acquired Business or without which The Acquired Business could not be conducted
as presently conducted, which is not either owned by JMS or leased to JMS under
any of the leases listed in Schedule 3.1(a), except as otherwise disclosed in
this Agreement, and all such assets owned or used by JMS are encompassed within
the Purchased Assets and are, on the date hereof, in good operating condition
and repair, ordinary wear and tear excepted. On the Closing Date, effective as
of the Effective Time, JMS will deliver to Buyer all of the Purchased Assets.

Section 8.16.          No Violation.     The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby do not
and will not except as described in Schedule 8.16 hereto, or otherwise disclosed
in this Agreement

(a)          violate, conflict with or result in a breach of or default under
any of the terms, provisions or conditions of the articles of incorporation or
bylaws of JMS or any statute, regulation or court or administrative order or
process, or any agreement or instrument to which JMS is a party or by which it
or any of its properties or assets, is bound;

(b)          result in the creation of any lien, charge or encumbrance upon any
of the Purchased Assets under any of the foregoing;

(c)          terminate, delay or give any party thereto the right to terminate,
delay, amend, abandon, or refuse to perform any provision of any agreement or
instrument to which

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JMS is a party;

(d)          accelerate or give any party thereto the right to accelerate or
modify the time within which, or the terms under which, JMS is to perform any
agreement or instrument; or

(e)          require the consent of any other person or entity to the transfer
or assignment to Buyer, or the purchase or assumption by Buyer, pursuant to this
Agreement of the properties, franchises, licenses, contracts, or other rights or
commitments of JMS.

Section 8.17.            Certain Governmental Regulations.      (a) Except as
described in Schedule 8.17 hereto or otherwise disclosed in this Agreement, The
Acquired Business of JMS has not been conducted in violation of any statute,
law, ordinance or regulation of any governmental entity affecting The Acquired
Business with respect to health and safety in plants and environmental and
pollution control, including the disposition of hazardous or toxic waste
materials. JMS has not received notice of and is not aware of any condition or
event relating to The Acquired Business which by the passage of time would
result in the violation of any such statute, law, ordinance or regulation of any
governmental entity, or would require remedial action by JMS, except as
described in Schedule 8.17 hereto.

(b)          Without limiting the generality of the foregoing, JMS’ operations,
including on site and off site disposal, have been and are presently being
operated in all respects in conformity with all statutes, rules, regulations and
other governmental requirements, including standards promulgated thereunder with
respect to environmental and pollution controls and the generation, manufacture,
refinement, transport, treatment, storage, handling, disposition, production or
processing of hazardous substances, hazardous materials or hazardous wastes, as
those terms are defined in the statutes named below, including, but not limited
to, the requirements of the Resource Conservation Recovery Act ("RCRA"), 42
U.S.C. §§ 6901 et. seq., the Comprehensive Environmental Response, Compensation
and Liability Act ("CERCLA"), 42 U.S.C. §§ 9601 et. seq., the Clean Water Act 33
U.S.C. §§ 1251 et. seq., the Clean Air Act, 42 U.S.C. §§ 7401 et. set., or any
environmental law in the State of Florida, or in any other state, country,
province, county or locality in which the nature of the business of JMS would
subject JMS to the environmental law of such state, country, province, county or
locality, as the same shall be in effect and interpreted on the Closing Date
(hereinafter collectively defined as "Environmental Law"), and JMS has not
permitted, nor do JMS or Parent have any knowledge of, any release or threat of
the release of such hazardous materials, substances or wastes, on site or off
site of any such plant in violation of Environmental Law, or any condition or
event relating to The Acquired Business which by the passage to time may require
remedial action, which has not been cured by JMS as of the date hereof.

(c)          Schedule 8.17 hereto includes a complete list of hazardous
substances, hazardous materials and hazardous wastes, as those terms are defined
in the aforementioned Environmental Law, which are currently or have in the past
been generated, manufactured, transported, produced, stored, handled, treated,
refined or disposed of by JMS with respect to The Acquired Business (the "JMS
Hazardous Waste") and also includes a complete list of all persons and entities
used by JMS with respect to The Acquired Business to transport any such JMS
Hazardous Waste. Also listed on Schedule 8.17 are all sites where JMS Hazardous
Waste has been stored, treated, refined or otherwise disposed of.

Section 8.18.          No Losses.     Since June 30, 2001, JMS has not sustained
any loss

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on account of fire, flood, accident or other calamity of such character as to
interfere materially with the continued operation of The Acquired Business
regardless of whether or not such loss was insured against, other than as set
forth in Schedule 8.18.

Section 8.19.          Approval.     JMS and Parent, at the time of closing,
will have taken all requisite corporate action to approve this Agreement and the
transactions contemplated by this Agreement, and there shall have at the time of
closing been delivered to Buyer certified copies of the resolutions duly adopted
in connection therewith.

Section 8.20.          No Untrue Statements.     Neither this Agreement, nor any
certificate, schedule, or other instrument or list or information required to be
furnished by JMS pursuant to this Agreement, contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements contained herein or therein not misleading.

Section 8.21.          No Default Under Leases.     Each lease referred to in
Schedule 3.1(a) is in full force and effect and no default exists on the part of
JMS in the performance of its obligations under such leases, and JMS has not
received any notice from the lessor under any such lease of the existence of any
default on the part of JMS which has not been heretofore performed or cured by
JMS. JMS has not made any prior assignment, whether for security purposes or
otherwise, of the interest of JMS in, to or under any such lease. Payments under
each of such leases has been paid to at least the Closing Date except to the
extent, if any, reflected in Schedule 3.1(a). To the best of the knowledge of
JMS there are no unperformed obligations on the part of the lessor under any
lease with respect to the premises leased pursuant to such lease.

Section 8.22.          Confidential Material.     JMS will deliver to Buyer on
the Closing Date all documents and other materials and all copies thereof owned
or used by JMS reasonably believed by JMS to be both confidential and reasonably
appropriate for the operation of The Acquired Business conducted by JMS through
use of the Purchased Assets.

Section 8.23.          No Undue Influence.       JMS has not, directly or
indirectly, made any payments to or entered into any transactions with any
person as an inducement to such person (or to induce such person to influence
another person) to take action deemed to be to the advantage of JMS in such
person's official position with a governmental authority, or in such person's
position with any other business entity, nor has JMS knowingly made any other
payment to any person or entity, that was contrary to any law or regulation of
any such governmental authority.

Section 8.24.          Sales Orders.     Each of the sales orders referred to in
clause (c) of Section 3.1 of this Agreement and listed in Schedule 3.1(c) hereto
was taken in the ordinary course of JMS’ business.

Section 8.25.          Inventories.     All inventories shown on the Interim
Balance Sheet consist of items of a quality and quantity usable or saleable in
the ordinary course of business, each class thereof was priced at the lower of
cost or market on the cost basis and, as to the classes of items inventoried and
methods of counting and pricing, such inventories were determined in a manner
consistent with prior years except as to minor amounts of inventory which in the
aggregate are not material in amount.

Section 8.26.          Accounts Receivable.     All accounts receivable of JMS
are reflected

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properly on its books and records have been accounted for consistently in
accordance with GAAP, are valid receivables subject to no set-offs or
counterclaims, are current and collectible, and will be collected in accordance
with their terms at their recorded amounts, within 90 days of the Closing Date.

Section 8.27.         Employee Benefits and ERISA.

(a)          Schedule 8.27  hereto sets forth a complete and correct list of all
Benefit Plans (as defined in Section 8.27(k) below).

(b)          JMS and Parent have delivered to Buyer complete and accurate copies
of: all plan texts and other agreements adopted in connection with each Benefit
Plan; all summary plan descriptions and other material employee communications
relating thereto; and the most recent annual report and financial statement (or
similar report) therefor, if any. JMS and Parent do not currently maintain, and
in the past has not maintained any employee retirement, profit-sharing, stock
bonus, deferred compensation, group insurance plans or other employee benefit or
welfare plan in which employees of JMS participated, other than as set forth on
Schedule 8.27 hereto.

(c)          No event has occurred relating, directly or indirectly, to the
Benefit Plans in connection with which JMS, Parent or any Benefit Plan, directly
or indirectly, would be subject to any liability under ERISA, including, but not
limited to, Section 409, 502(i), 4062, 4063, 4064, 4069, 4201, 4244 or 4243
thereof, the Internal Revenue Code of 1986, as amended (the "Code"), including,
but not limited to, Section 4971 thereof, or any other applicable law. No
"prohibited transaction" (as defined in Section 4975 of the Code) and no
"reportable event" (as defined in Section 4043(b) of ERISA) has occurred with
respect to any Benefit Plan prior to the date hereof.

(d)          With respect to each Benefit Plan: (i) full payment of all amounts
which JMS or Parent is or has been required to pay under the terms of each such
plan to have paid as contributions to such plan has been made; (ii) no
accumulated funding deficiency (as defined in Section 302 of ERISA and Section
412 of the Code), whether or not waived, exists with respect to any such plan;
(iii) except as provided in Schedule 8.27 hereto, in all material respects, each
such plan conforms to, and its administration is in compliance with, all
applicable laws and regulations, including, but not limited to ERISA; and (iv)
there are not actions, suits or claims pending (other than routine claims for
benefits) or threatened against any such plan or against the assets of any such
plan which could reasonably be expected to result in a liability.

(e)          No unpaid or contingent liability to the PBGC has been or is
expected to be incurred, directly or indirectly, by JMS (other than for payment
of PBGC premiums in the ordinary course). No event has occurred which presents a
material risk of the termination or partial termination of any Pension Plan,
which would result, directly or indirectly, in a liability on part of JMS.

(f)          Except as set forth on Schedule 8.27, there is no Benefit Plan
which is a "welfare plan" (as defined in Section 3(a) of ERISA) and which
provides medical, death or other benefits (whether or not insured) to employees
beyond their retirement or other termination of service (other than (i) coverage
mandated by statute and (ii) any such plan which provides a conversion privilege
from group coverage to individual coverage upon retirement or separation from
service).

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(g)          Except as set forth on Schedule 8.27, there are no reserves,
assets, surpluses or prepaid premiums under any Benefit Plan which is a welfare
plan (as defined in Section 3(a) of ERISA).

(h)          There are no unfunded pension benefit obligations arising in any
jurisdiction.

(i)          Except as set forth on Schedule 8.27, the consummation of the
transactions contemplated by this Agreement will not (i) entitle any employee of
JMS to severance pay, unemployment compensation or similar payment, or (ii)
accelerate the time of payment, vesting, or increase the amount of any
compensation due to any employee or JMS.

(j)          Neither JMS nor Parent has contributed to or become obligated to
contribute to any multi employer plan (as defined in Section 4001(a)(3) of
ERISA) with respect to any employee of JMS.

(k)          Whenever any of the terms set forth below is used in this Section
8.27, it shall have the following meaning: (i) "Benefit Plan" shall mean any
plan, agreement, arrangement or commitment which is an employment or consulting
agreement, executive compensation plan, bonus plan, deferred compensation
agreement, employee pension, profit-sharing, savings or retirement plan,
employee stock option or stock purchase plan, severance pay plan or arrangement,
vacation plan or practice, group like, health, or accident insurance or other
employee benefit plan, agreement, arrangement or commitment which is an
"employee benefit plan," as defined in Section 3(3) of ERISA, with respect to
which JMS has some liability or obligation to contribution or pay benefits and
which related to current or former employees of JMS: (ii) "ERISA" shall mean the
Employee Retirement Income Security Act of 1974, as amended; (iii) "PBGC" shall
mean the Pension Benefit Guaranty Corporation; and (iv) "Pension Plan" shall
mean an employee pension benefit plan, as defined in Section 3(2) of ERISA.

Section 8.28.         SouthTrust Lien.      SouthTrust Bank, an Alabama banking
corporation ("SouthTrust") holds a valid, perfected first priority security
interest in the Purchased Assets (the "SouthTrust Lien"). The SouthTrust Lien
secures a debt equal to approximately $9,691,000 as of the date hereof.

Section 8.29.         Customer Deposits.      Schedule 8.29 sets forth a
complete list (the "Deposit List") of customer deposits collected by JMS through
the date of this Agreement for which the ordered product has not yet been
delivered to the customer. The Deposit List shall include, at a minimum, the
customer’s name and address, the product ordered, the date the deposit was
received and the amount of the deposit. Schedule 8.29 shall be updated as of the
Closing Date.

ARTICLE 9
REPRESENTATIONS AND
COVENANTS OF BUYER

Buyer warrants and represents to and covenants with JMS as follows:

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Section  9.1.         Organization, etc.      Buyer is a corporation, duly
organized, validly existing and in good standing under the laws of Delaware and
has all necessary corporate power and authority to enter into this Agreement and
the transactions contemplated hereby.

Section 9.2.          No Violation.     The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby do not
and will not violate, conflict with or result in a breach of or default under
any of the terms, provisions or conditions of the certificate of incorporation
or by-laws of Buyer or any statute, regulation or any court or administrative
order or process, or any agreement or instrument to which Buyer is a party or by
which it, or its properties or assets is bound or result in the creation of any
lien, charge or encumbrance upon any of the assets of Buyer under any of the
foregoing.

Section 9.3.          Payment of Liabilities Assumed.     Buyer shall pay and
discharge all the liabilities and obligations of JMS that are assumed hereunder,
as outlined in Schedules 3.1(a) and 3.1(e) when and as the same shall become due
and payable or dischargeable.

ARTICLE 10
INDEMNIFICATION

Section 10.1.          Indemnity by JMS and Parent.     JMS and Parent, jointly
and severally, agree to indemnify and hold harmless Buyer, its officers,
directors, stockholders, employees, representatives and agents, and their
affiliates, successors and assigns (collectively, the "Buyer Indemnitees") from
and against any material loss, damage or expense (including reasonable
attorney's fees) suffered by any Buyer Indemnitee, resulting from

(a)          any inaccuracy or misrepresentation in or breach of any of the
representations, warranties or covenants made by JMS or Parent herein or in any
Schedule hereto;

(b)          any inaccuracy or misrepresentation in or breach of any certificate
or other agreement or document required to be delivered by JMS or Parent
pursuant to any provision of this Agreement;

(c)          any suit in which a Buyer Indemnitee is involved alone or in
conjunction with JMS or Parent, and resulting directly or indirectly from the
alleged failure of JMS to pay any of the alleged liabilities or obligations of
JMS or to fulfill any alleged contractual obligation of JMS incurred prior to
the Closing and not assumed by Buyer;

(d)          any claim, demand, administrative proceeding or suit against a
Buyer Indemnitee arising out of or related to the business or operations or any
action or omission of JMS or any of its officers, directors, stockholders,
employees, representatives, agents or any of their affiliates, including,
without limitation, any tort claim or demand and any claim or liability arising
out of the manufacture or sale of products or the performance of services by JMS
(other than the liability for which has been assumed by Buyer); provided,
however, that, with respect to products and services constituting a part of The
Acquired Business purchased by Buyer, the acts, deeds, omissions or contractual
undertakings giving rise to such claim, demand or liability were acts, deeds,
omissions or contractual undertakings by JMS which shall have transpired,
occurred

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or been done, performed or omitted prior to the Effective Time.

Section 10.2.          Notification to JMS and Parent and Related
Matters.     Upon obtaining knowledge thereof, Buyer shall promptly notify JMS
in writing (which notice shall constitute notice to Parent) of any claim of
loss, damage or expense which Buyer has determined has given or reasonably may
give rise to a right of indemnification under this Agreement and shall specify
details thereof, without regard to whether the amount of any loss, damage or
expense has been finally determined, and JMS and Parent shall have a reasonable
time to contest any such claim. If such claim or demand relates to a claim or
demand by a third party against Buyer, JMS and Parent shall have the right to
settle any such claim or demand (at JMS’ or Parent’s expense and without
admitting that Buyer had any liability with respect thereto) or to employ
counsel reasonably acceptable to Buyer to defend any such claim or demand
asserted against Buyer and Buyer shall have the right to cooperate in the
defense of any such claim with counsel of Buyer’s selection (the expense of
which additional counsel to be borne by Buyer). So long as JMS and Parent are
defending in good faith any such claim or demand, Buyer will not settle such
claim or demand. Buyer shall make available to JMS, Parent or their respective
representatives, at JMS’ and Parent’s expense, all records and other materials
required by them for their use in contesting any such claim or demand asserted
by a third party against Buyer. Whether or not JMS or Parent so elect to defend
any such claim or demand, Buyer shall have no obligation to do so. If such claim
or demand relates to a claim or demand other than one asserted by a third party
against Buyer, Buyer shall promptly notify JMS (which notice shall constitute
notice to Parent) of Buyer’s claim or demand against JMS or Parent and of
Buyer’s demand for indemnification hereunder. JMS shall then promptly pay to
Buyer the amount of Buyer’s claim or demand, if undisputed. In the event that
JMS or Parent shall dispute such claim or demand or any portion thereof, JMS or
Parent shall immediately notify Buyer in writing, specifying in detail the
portion of such claim or demand (if less than all) which is disputed and the
facts relied upon by JMS or Parent as a basis for such dispute. JMS, Parent and
Buyer agree to negotiate in good faith to attempt to reach a resolution of any
disputed claim or demand for indemnification hereunder in order to attempt to
avoid resorting to arbitration as provided by this Agreement.

Section 10.3.         Indemnity by Buyer.      Buyer agrees to indemnify and
hold harmless JMS, Parent, their respective officers, directors, stockholders,
employees, representatives and agents, and their affiliates (the "JMS
Indemnitees") from and against any material loss, damage or expense (including
reasonable attorneys' fees) suffered by the JMS Indemnitees resulting from

(a)          any inaccuracy in or misrepresentation in or breach of any of the
representations, warranties or covenants made by the Buyer herein or in any
schedule hereto;

(b)          any inaccuracy or misrepresentation in or breach of any certificate
or other agreement or document required to be delivered by Buyer pursuant to any
provision of this Agreement;

(c)          any suit in which JMS or an JMS Indemnitee is involved alone or in
conjunction with Buyer, and resulting directly or indirectly from alleged
failure of Buyer to pay any of the alleged liabilities or obligations of Buyer
or to fulfill any alleged contractual obligation of Buyer arising following the
Closing or expressly assumed by Buyer; provided, however, that neither JMS nor
any JMS Indemnitee shall be entitled to assert any rights of indemnification
hereunder to the extent that JMS has retained such liability; or

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(d)          any claim, demand, administrative proceeding or suit against JMS
Indemnitee arising out of or related to the business or operations or any action
or omission of Buyer or any of its officers, directors, stockholders, employees,
representatives, agents or any of their affiliates, including, without
limitation, any tort claim or demand and any claim or liability arising out of
the manufacture or sale of products or the performance of services by Buyer
(other than a liability of JMS which has not been expressly assumed by Buyer);
provided, however, that, with respect to products and services constituting a
part of The Acquired Business purchased by Buyer, the acts, deeds, omissions or
contractual undertakings giving rise to such claim, demand or liability were
acts, deeds, omissions or contractual undertakings by Buyer which shall have
transpired, occurred or been done, performed or omitted after the Effective
Time.

Section 10.4.         Notification to Buyer.      Upon obtaining knowledge
thereof, JMS or Parent shall promptly notify Buyer of any claim or demand which
JMS or Parent has determined has given or reasonably may give rise to a right of
indemnification under this Agreement and Buyer shall have a reasonable time to
contest any such claim. If such claim or demand relates to a claim or demand
asserted by a third party against JMS or Parent, Buyer shall have the right to
settle any such claim or demand (at the expense of Buyer and without admitting
that JMS or Parent had any liability with respect thereto) or to employ counsel
reasonably acceptable to JMS or Parent to defend any such claim or demand
asserted against JMS or Parent, and JMS or Parent shall have the right to
cooperate in the defense of any such claim with counsel of JMS’ or Parent’s
selection (the expense of which additional counsel to be borne by JMS or
Parent). So long as Buyer is defending in good faith any such claim or demand,
neither JMS nor Parent will settle such claim or demand. JMS and Parent shall
make available to Buyer or its representatives, at the expense of Buyer all
records and other materials required by them for their use in contesting any
such claim or demand asserted by a third party against JMS or Parent. Whether or
not Buyer so elects to defend any such claim or demand, JMS and Parent shall
have no obligation to do so. If such claim or demand relates to a claim or
demand other than one asserted by a third party against JMS or Parent, JMS and
Parent shall promptly notify Buyer of JMS’ or Parent’s claim or demand against
Buyer and of JMS’ and Parent’s demand for indemnification hereunder. Buyer shall
then promptly pay to JMS or Parent, as appropriate, the amount of JMS’ or
Parent’s claim or demand, if undisputed. In the event that Buyer shall dispute
such claim or demand or any portion thereof, Buyer shall immediately notify JMS
and Parent in writing specifying in detail the portion of such claim or demand
(if less than all) which is disputed and the facts relied upon by Buyer as a
basis for such dispute. JMS, Parent and Buyer agree to negotiate in good faith
to attempt to reach a resolution of any disputed claim for indemnification
hereunder in order to attempt to avoid resorting to a court of competent
jurisdiction for such resolution.

Section 10.5.          Right of Offset Against Amounts Due JMS and
Parent.     JMS and Parent agree to pay promptly in accordance with Section 10.2
above the amount which JMS and Parent may owe to Buyer from time to time by
reason of the provisions of this Agreement or otherwise. Should JMS fail or
refuse to pay any such amount promptly as set forth herein, then Buyer, at its
election, may elect to offset any amount thus due and owing against any amounts
which may be due to be paid pursuant to any other provision hereof, including,
without limitation, the Reserve Amount.

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ARTICLE 11
SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF JMS

All representations, warranties, covenants and obligations in this Agreement and
the Schedules hereto shall survive the closing and shall continue in full force
and effect for the benefit of Buyer in accordance with the terms thereto,
notwithstanding the closing or any investigation by Buyer prior thereto, and
shall terminate on the third anniversary of the Closing Date; provided, however,
the representations and warranties contained in Sections 8.12, 8.13 and 8.27
shall continue for the period of the statute of limitations related to the
subject thereof.

ARTICLE 12
CONDITIONS TO CLOSING APPLICABLE TO BUYER

The obligations of Buyer hereunder (including the obligation of Buyer to close
the transactions and consummate the purchase herein contemplated) are subject to
the following conditions precedent:

Section 12.1.         Correctness of Warranties, etc.      The warranties and
representations made by JMS and Parent herein or in any Schedules or list or
information required to be delivered pursuant hereto shall be true and correct
in all material respects on and as of the Closing Date with the same effect as
if such warranties and representations had been made on and as of the Closing
Date and JMS and Parent shall have in all material respects, performed and
complied with all agreements, covenants and conditions on their parts required
to be performed or complied with on or prior to the Closing Date.

Section 12.2.         No Undisclosed Liabilities, etc.      On the Closing Date,
JMS shall not have any material liability of any nature, whether accrued,
absolute, contingent or otherwise, relating to The Acquired Business (of the
types which would be reflected in balance sheets or the notes thereto prepared
in accordance with generally accepted accounting principles) other than those
disclosed in the Interim Balance Sheet and Schedule hereto, those incurred in
the ordinary course of its business since the date of the Interim Balance Sheet,
and those agreed to in writing by Buyer.

Section 12.3.         No Proceedings.      No proceeding or formal investigation
shall have been commenced by any governmental or regulatory agency or by any
other person or entity with respect to any of the transactions contemplated by
this Agreement.

Section 12.4.          Satisfaction of Buyer and its Counsel.     All
proceedings to be taken in connection with the consummation of the transactions
contemplated by this Agreement, and all documents incident thereto, shall be
reasonably satisfactory in form and substance to Buyer and its counsel, and
Buyer and its counsel shall have received copies of such documents as its
counsel may reasonably request in connection with said transactions.

Section 12.5.         Opinion of Counsel.      At the closing there shall be
delivered to Buyer the written opinion of Kilpatrick Stockton, LLP, counsel for
JMS and Parent, dated the Closing Date. Such opinion shall be acceptable to
Buyer and its counsel.

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Section 12.6.         Consents.      In the case of those properties,
franchises, agreements, leases, contracts or other rights or commitments of JMS
and to be assumed by Buyer which are not transferable or assignable to Buyer or
cannot be purchased or assigned by Buyer pursuant to this Agreement without the
consent of another party, there shall have been delivered to Buyer the written
consent of such party to such transfer and assignment to Buyer and assumption by
Buyer pursuant to this Agreement.

Section 12.7.          Employment and Noncompetition Agreements.

(a)          JMS and Parent shall assign to Buyer all existing noncompetition
agreements with those persons set forth on Schedule 12.7(a), and will terminate
any existing employee agreements with such persons.

(b)          Buyer shall have entered into Noncompetition Agreements and
employment arrangements with those persons listed on Schedule 12.7(b) in forms
acceptable to Buyer.

Section 12.8.         Manufacturing Agreement.       Buyer shall have entered
into a manufacturing agreement with ESCO Manufacturing, Incorporated in a form
acceptable to Buyer.

Section 12.9.          Release of Liens.     Any and all liens with respect to
the Purchased Assets shall have been released, and SouthTrust shall have
consented in writing to the transfer of the Purchased Assets to Buyer.

Section 12.10.          Bankruptcy.       (a)     Neither Parent nor JMS shall
have filed a petition for bankruptcy protection or be adjudged bankrupt or
insolvent under any applicable federal or state bankruptcy or insolvency law,
nor shall a receiver or trustee be appointed for all or substantially all of the
assets of JMS or Parent.

(b)          Buyer shall have received from Raymond James & Associates, Inc.
("Raymond James") a letter setting forth (i) that Raymond James marketed The
Acquired Business in a manner consistent with customary industry practice and
(ii) Buyer’s offer embodied in this Agreement constitutes the highest and best
offer received by Raymond James that was reasonably determined to be able to be
consummated within a reasonable time.

 ARTICLE 13
CONDITIONS TO CLOSING APPLICABLE TO JMS AND PARENT

The obligations of JMS and Parent hereunder (including the obligation of JMS and
Parent to close the transactions herein contemplated) are subject to the
following conditions precedent:

Section 13.1.          Correctness of Warranties, etc.     All warranties and
representations made by Buyer herein shall be true and correct in all material
respects on and as of the Closing Date with the same effect as if such
warranties and representations had been made on and as of the Closing Date, and
Buyer shall have, in all material respects, performed and complied with all
agreements, covenants and conditions on its part required to be performed or
complied with on 

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or prior to the Closing Date.

Section 13.2.          No Proceedings.     No proceeding or formal investigation
shall have been commenced by any governmental or regulatory agency or by any
other person or entity with respect to any of the transactions contemplated in
this Agreement.

Section 13.3.         Satisfaction of JMS and its Counsel.      All proceedings
to be taken in connection with the consummation of the transactions contemplated
by this Agreement, and all documents incident thereto, shall be reasonably
satisfactory in form and substance to JMS and its counsel, and JMS and its
counsel shall have received copies of such documents as its counsel may
reasonably request in connection with said transactions.

ARTICLE 14
BROKERS

The parties hereto agree that this Agreement was not induced or procured through
any person, firm or corporation acting as a broker or finder, other than Raymond
James & Associates, Inc., whose fee shall be at the expense of JMS and not
Buyer. Buyer, on the one hand, and JMS and Parent, on the other, agree to hold
each other harmless from any loss, damage or expense resulting from any claim by
any other person, firm or corporation based upon any such other person, firm or
corporation having acted as a broker or finder for or in connection with this
transaction on behalf of Buyer on the one hand, or on behalf of JMS and Parent
on the other.

 ARTICLE 15
MISCELLANEOUS

Section 15.1.          Termination.      JMS or Parent may terminate this
Agreement prior to the Closing Date if the Buyer has not satisfied those
conditions to closing set forth in Article 13 hereof on or prior to the close of
business on November 21, 2001. Buyer may terminate this Agreement prior to the
Closing Date if (i) JMS and Parent have not satisfied those conditions to
closing set forth in Article 12 hereof on or prior to the close of business on
November 21, 2001, or (ii) JMS or Parent files a petition for bankruptcy
protection or either is adjudged bankrupt or insolvent under any applicable
federal or state bankruptcy or insolvency laws, or if a receiver or trustee is
appointed for all or substantially all of the respective assets of JMS or
Parent.

Section 15.2.         Notices.      Unless otherwise notified in writing to the
contrary, any notice required or permitted by the terms hereof to be given any
party hereto shall be effectively delivered for all purposes if delivered
personally or if mailed, upon deposit in the United States mail, postage
prepaid, and if directed to JMS or Parent, properly addressed to Parent at
Display Technologies, Inc., 201 McCullough Drive, Suite 220, Charlotte, North
Carolina 28262, Attention: Bill Lunsford with copy thereof addressed and mailed
to Kilpatrick Stockton, LLP, Attention: Larry Ledbetter, and if directed to
Buyer properly addressed to J.M. Stewart Acquisition, Inc., c/o EBSCO
Industries, Inc. at 5724 Highway 280 East, Birmingham, Alabama 35242, Attention:
President or Chief Financial Officer, with a copy thereof addressed and mailed
to Bradley Arant Rose & White LLP, 2001 Park Place, Suite 1400, Birmingham,
Alabama 35203, Attention: Denson N. Franklin III.

Section 15.3.         Governing Law; Arbitration.      This Agreement shall be
governed in

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all respects in conformity with the intent of the parties as expressed in the
provisions of this Agreement. To the extent any issue between the parties is not
controlled by this Agreement, then any dispute between the parties shall be
governed and construed in accordance with the laws of the State of Alabama,
without regard to its choice of law principles. UNLESS THIS AGREEMENT
SPECIFICALLY PROVIDES FOR ANOTHER TYPE OF DISPUTE RESOLUTION WITH RESPECT TO A
PARTICULAR KIND OF DISPUTE, ANY AND ALL CONTROVERSIES AND CLAIMS ARISING OUT OF
OR RELATING TO THIS AGREEMENT, OR THE BREACH THEREOF, SHALL BE SETTLED BY FINAL
AND BINDING ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF
THE AMERICAN ARBITRATION ASSOCIATION THEN IN EFFECT. Any such arbitration
proceedings shall be and remain confidential. The panel of arbitrators for any
such arbitration shall consist of three members of the American Arbitration
Association, one of whom shall be selected by Buyer, one of whom shall be
selected by JMS, and the third who will be selected by the other two. Judgment
upon the decision rendered by the arbitrators may be entered in any court having
jurisdiction thereof. The parties specifically acknowledge that this Agreement
evidences a transaction involving, affecting, affected by, and a part of,
interstate commerce and that this agreement to arbitrate is governed by and
enforceable under 9 U.S.C. §§ 1 et seq. The place of arbitration shall be
Birmingham, Alabama.

Section 15.4.         Captions.      The captions and other headings contained
in this Agreement as to the contents of particular articles, sections,
paragraphs or other subdivisions contained herein are inserted for convenience
of reference only and are in no way to be construed as part of this Agreement or
as limitations on the scope of the particular articles, sections, paragraphs or
other subdivisions to which they refer and shall not affect the interpretation
or meaning of this Agreement.

Section 15.5.         Incorporation of Schedules. This Agreement shall be deemed
to have incorporated by reference all of the Schedules referred to herein to the
same extent as if such Schedules were fully set forth herein. Each reference
herein to "the Agreement" or "this Agreement" shall be construed to include each
such Schedule.

Section 15.6.         Entire Agreement and Amendment.      This Agreement and
the Schedules attached hereto and additional documents and agreements delivered
by the parties at the closing on the Closing Date represent the entire
understanding and agreement between the parties with respect to the subject
matter hereof and shall supersede any prior agreements and understanding between
the parties with respect to that subject matter. This Agreement may not be
amended or modified except by a written instrument executed by an officer of
Buyer, and an officer of JMS and Parent.

Section 15.7.          Successors and Assigns; No Third-Party Rights.     This
Agreement may not be assigned by JMS or Parent without the written consent of
Buyer. This Agreement shall bind and inure to the benefit of and be enforceable
by the parties hereto, and their respective successors, heirs, and personal and
legal representatives, but no assignment shall relieve any party of its
obligations hereunder. Nothing expressed or referred to in this Agreement will
be construed to give any person other than the parties to this Agreement any
legal or equitable right, remedy or claim under or with respect to this
Agreement or any provision of this Agreement. This Agreement and all of its
provisions and conditions are for the sole and exclusive benefit of the parties
to this Agreement and their Successors and assigns.

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Section 15.8.         Counterparts.      This Agreement may be executed
simultaneously and in any number of counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument.

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IN WITNESS WHEREOF, JMS, Parent and Buyer have each caused this Agreement to be
duly executed on their respective behalves by their respective duly authorized
officers, all as of the day and year first above written.

   

J. M. STEWART CORPORATION

By

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Its

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DISPLAY TECHNOLOGIES, INC.

By

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Its

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J.M. STEWART ACQUISITION, INC.

By

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Its

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