EXECUTION COPY
STOCK PURCHASE AGREEMENT
BY AND AMONG
TOPSPIN ASSOCIATES, L.P.,
TOPSPIN PARTNERS, L.P.,
BARISTON INVESTMENTS, LLC,
SHELDON E. KATZ,
MIKE MCINTOSH,
CHRISTOPHER E. NEEDHAM,
SELLERS’ REPRESENTATIVES
AND
DEVCON SECURITY HOLDINGS, INC.
DATED AS OF NOVEMBER 10, 2005

 

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TABLE OF CONTENTS

                                      Page 1.   PURCHASE AND SALE OF STOCK     1
 
 
    1.1     Agreement to Purchase and Sell     1  
 
    1.2     Certain Definitions     2  
 
    1.3     Index of Other Defined Terms     10  
 
                    2.   PURCHASE PRICE AND CLOSING     11  
 
    2.1     Purchase Price     11  
 
    2.2     Closing Date and Location     15  
 
    2.3     Noncompetition     15  
 
    2.4     Employment Agreements     16  
 
                    3.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLERS  
  16  
 
    3.1     Organization and Corporate Documents     16  
 
    3.2     Capitalization     17  
 
    3.3     Ownership and Transfer of Stock     18  
 
    3.4     Subsidiaries; Affiliates     18  
 
    3.5     Authority of Sellers; No Violation     18  
 
    3.6     Real Property     19  
 
    3.7     Title to Assets; Condition of Assets     19  
 
    3.8     Compliance with Laws; Litigation     20  
 
    3.9     Insurance     21  
 
    3.10     Absence of Adverse Changes or Other Events     21  
 
    3.11     Financial Statements     22  
 
    3.12     Tax Returns and Payments     23  
 
    3.13     Labor Matters     25  
 
    3.14     Intellectual Property Rights     25  
 
    3.15     Material Contracts     26  
 
    3.16     Alarm Systems and Alarm Accounts     28  
 
    3.17     Customer Agreements     29  
 
    3.18     Broker or Finder     29  
 
    3.19     Employee Benefit Plans     29  
 
    3.20     Environmental Matters     31  
 
    3.21     Banks, Directors and Powers of Attorney     32  
 
    3.22     Related Party Transactions     32  
 
    3.23     No Undisclosed Liabilities     32  
 
    3.24     Inventory     32  
 
    3.25     Accounts Receivable     33  
 
    3.26     Suppliers     33  
 
    3.27     [Reserved]     33  
 
    3.28     Disclosure     33  
 
    3.29     Working Capital Adjustment     33  
 
                    4.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER    
34  
 
    4.1     Authority of Buyer; Enforceability     34  

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TABLE OF CONTENTS

                                      Page
 
    4.2     No Conflicts     34  
 
    4.3     Litigation     35  
 
    4.4     Investment Purpose     35  
 
    4.5     Cooperation with Sellers; Licensing Requirements     35  
 
    4.6     Financial Capacity     36  
 
    4.7     Broker or Finder     36  
 
    4.8     SEC Reports     36  
 
    4.9     No Section 338 Election     37  
 
    4.10     No Other Representations     37  
 
    4.11     Disclosure     37  
 
                    5.   ACTIONS ON OR AFTER THE CLOSING DATE     37  
 
    5.1     [Reserved]     37  
 
    5.2     Resignations     37  
 
    5.3     Tax Indemnification; Returns     37  
 
    5.4     Options     42  
 
    5.5     Security Dealer Funding Corp     42  
 
                    6.   CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER     42  
 
    6.1     Documents, Certificates and Other Items     42  
 
    6.2     Satisfaction of Certain Debt     43  
 
                    7.   CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS     43  
 
    7.1     Delivery of Purchase Price     43  
 
    7.2     Documents, Certificates and Other Items     43  
 
                    8.   INDEMNIFICATION OTHER THAN FOR TAXES     44  
 
    8.1     Indemnification by Sellers and Buyer     44  
 
    8.2     Notice of Claims     45  
 
    8.3     Third Party Claims     45  
 
    8.4     Survival of Indemnity Obligations; Basket; Cap; Anti-Sandbagging    
46  
 
    8.5     Limitations     47  
 
    8.6     No Right of Off-set/Set-off     47  
 
    8.7     Payments     48  
 
    8.8     Cooperation in Litigation     48  
 
    8.9     Non-Application to Tax Claims     48  
 
    8.10     No Contribution     48  
 
                    9.   [RESERVED]     48  
 
                    10.   GENERAL PROVISIONS     48  
 
    10.1     Survival of Obligations; Effect of Investigations     48  
 
    10.2     Transfer Charges and Taxes; Other Charges; Lien Searches     49  
 
    10.3     Dispute Resolution     49  

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TABLE OF CONTENTS

                                      Page
 
    10.4     Confidentiality     50  
 
    10.5     Public Announcements     50  
 
    10.6     Governing Law     50  
 
    10.7     Notices; Sellers’ Representatives     50  
 
    10.8     Entire Agreement; Amendments     52  
 
    10.9     Interpretation     52  
 
    10.10     Waivers     52  
 
    10.11     Expenses     53  
 
    10.12     Partial Invalidity     53  
 
    10.13     Further Assurances     53  
 
    10.14     Counterparts     53  
 
    10.15     Third-Party Beneficiaries; Assignment     54  
 
    10.16     Discounted Service     54  
 
    10.17     Sellers’ Counsel     54  
 
    10.18     Waiver of Jury Trial     54  
 
    10.19     Time of the Essence     55  
 
    10.20     Rules of Construction     55  
 
    10.21     Non-Recourse     55  

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STOCK PURCHASE AGREEMENT
     THIS AGREEMENT is made as of this 10th day of November, 2005, by and among
DEVCON SECURITY HOLDINGS, INC., a Florida corporation (“Buyer”), TOPSPIN
PARTNERS, L.P., a Delaware limited partnership (“Topspin Partners”), TOPSPIN
ASSOCIATES, L.P., a Delaware limited partnership (“Topspin Associates”),
BARISTON INVESTMENTS, LLC, a Delaware limited liability company (“Bariston” and
together with Topspin Partners and Topspin Associates, collectively, the “Entity
Sellers”), SHELDON E. KATZ, an individual (“Katz”), MIKE MCINTOSH, an individual
(“McIntosh”), and CHRISTOPHER E. NEEDHAM, an individual (“Needham”) (Topspin
Partners, Topspin Associates, Bariston, Katz, McIntosh and Needham are referred
to individually as “Seller” and collectively as “Sellers”), and BARISTON
PARTNERS, LLC and TOPSPIN MANAGEMENT, LLC, solely in their capacity as
co-representatives for Sellers (“Sellers’ Representatives”).
BACKGROUND
     WHEREAS, Sellers own all of the issued and outstanding capital stock (the
“Stock”) of Coastal Security Company, a Delaware corporation (“CSC”);
     WHEREAS, CSC owns 100% of the issued and outstanding capital stock of
Coastal Security Systems, Inc., a Delaware corporation (“Coastal”);
     WHEREAS, Coastal owns 100% of the issued and outstanding capital stock of
Central One, Inc., a Florida corporation (“Central”) (CSC, Coastal and Central
are referred to individually as “Company” and collectively as “Companies”);
     WHEREAS, the Companies own and operate electronic security alarm businesses
serving both retail and wholesale customers located in the United States
(collectively, the “Security Business”); and
     WHEREAS, Sellers desire to sell, and Buyer desires to purchase, all of the
Stock on the following terms and conditions.
     NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements set forth in this Agreement, and intending to be
legally bound, the parties agree as follows:
1. PURCHASE AND SALE OF STOCK
     1.1 Agreement to Purchase and Sell.
          Upon the terms and subject to the conditions of this Agreement, on the
Closing Date, each Seller agrees to sell, transfer, assign and deliver to Buyer,
and Buyer agrees to purchase from each Seller, all of the Stock owned by such
Seller.

 

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     1.2 Certain Definitions.
          As used in this Agreement, the following terms mean the following:
               (a) “Acquired RMR” means the recurring monthly revenue from
retail customers to be acquired by the Companies pursuant to the asset purchases
described, and the asset purchase agreements listed, on Schedule 1.2(a) (the
“Pending Acquisitions”) and to be consummated after August 1, 2005, but on or
prior to Closing. Acquired RMR will only be included in Retail RMR to the extent
the Retail RMR is less than $868,000 as of the Closing Date and then only to
reach, but not exceed, the $868,000 level.
               (b) “Affiliate” means, as to any specified Person, any other
Person, which, directly or indirectly, at the time such determination is being
made, controls, is controlled by or is under common control with, such specified
Person. For purposes of this definition, “control” means the possession of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise.
               (c) “Assets” means all of the assets of the Companies, except the
Excluded Assets.
               (d) “Bariston” means Bariston Investments, LLC, a Delaware
limited liability company.
               (e) “Boca Pointe RMR” means any RMR that the Companies may obtain
on or prior to Closing from the Boca Pointe Community Association.
               (f) “Buyer Ancillary Agreements” means all agreements,
instruments and documents being or to be executed and delivered to Sellers or
Sellers’ Representatives by Buyer under this Agreement or in connection
herewith.
               (g) “Buyer’s Counsel” means Akerman Senterfitt.
               (h) “Buyer’s Senior Management” means Stephen Ruzika, Robert
Farenhem and Ron Lakey.
               (i) “Buyer’s Share of Acquired RMR Costs” means the pro rata
share of the average acquisition costs incurred by the Companies with respect to
that portion of the Acquired RMR that was not included in Retail RMR. For
example, if the Companies’ average acquisition costs for the Acquired RMR
equated to a 35 multiple and $100 of Acquired RMR was not included in Retail RMR
because the $868,000 threshold had been reached, then Buyer’s Share of Acquired
RMR Costs would be $3,500. To the extent that there exist multiple acquisitions
that contribute Acquired RMR to Retail RMR pursuant to Section 1.2(a), the
determination of which Acquired RMR shall be included in Retail RMR shall be
based on whichever Acquired RMR was acquired earliest.
               (j) “Central” means Central One, Inc., a Florida corporation.

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               (k) “Closing Escrow Fund” means $3,750,000, plus the interest
earned thereon, to be held pursuant to the Escrow Agreement.
               (l) “Coastal” means Coastal Security Systems, Inc., a Delaware
corporation.
               (m) “Code” means the Internal Revenue Code of 1986, as amended.
               (n) “Companies” means CSC, Coastal and Central.
               (o) “Companies’ Senior Management” means Katz, McIntosh and Ian
Swartz.
               (p) “Contract” means any agreement, contract, lease, note,
mortgage, indenture, loan agreement, franchise agreement, covenant, employment
agreement, license, instrument, purchase and sales order, commitment,
undertaking, or obligation, whether written or oral, express or implied.
               (q) “Credit Agreement” means the Second Amended and Restated
Revolving Credit and Term Loan Agreement dated November 18, 2002 between Coastal
and Citizens Bank of Massachusetts, as amended.
               (r) “CSC” means Coastal Security Company, a Delaware corporation.
               (s) “Disclosure Schedules” means those certain Disclosure
Schedules attached to this Agreement. The contents of each of the contracts and
other documents referred to in the Disclosure Schedules shall be deemed to be
incorporated and referred to in the Disclosure Schedules as though set forth in
full therein.
               (t) “Due Date of Payment” means the first day of the next month
following the invoice date. For example, even though the Companies’ invoices say
they are due upon receipt and even though the Companies pre-bill their customers
on the 20th day of the month for the next month’s service, the Due Date of
Payment is the 1st day of the next month. For purposes of calculating the
delinquency of RMR or Slow Pay RMR, a month shall be deemed to consist of
30 days (e.g., a customer who had not paid for March would only be 30 days past
due, not 31 days). In addition, in calculating the delinquency of RMR or Slow
Pay RMR, unpaid balances for non-RMR services (such as an unpaid installation
bill), will be ignored, even if they are more than 90 days past due, so long as
the RMR balances are 90 days or less past due. Schedule 1.2(t) sets forth the
amount of such unpaid balances for non-RMR services and identifies the customer
number and name for each such account.
               (u) “Encumbrance” means any security interest, mortgage, deed of
trust, lien, encumbrance, pledge, lease, option, warrant, right of first
refusal, claim, charge, assessment, easement, suit, proceeding, call,
commitment, voting trust, proxy, conditional sale agreement or other title
retention agreement, or other restriction of any kind or nature (including any
zoning, use or building restriction), excluding Permitted Liens.
               (v) “Escrow Agent” means Sellers’ Counsel.

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               (w) “Escrow Agreement” means that certain Escrow Agreement dated
as of the date hereof, and by and among Sellers’ Counsel and the parties hereto.
               (x) “Exchange Act” means the Securities Exchange Act of 1934, as
amended.
               (y) “Excluded Assets” means the items set forth on
Schedule 1.2(y).
               (z) “Family Members” means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include
adoptive relationships.
               (aa) “Funded Debt” means (without duplication and net of
inter-company Indebtedness): (i) Indebtedness of the Companies and (ii) purchase
price holdbacks and other payment obligations of any Company due or owing in
respect of any acquisitions (whether by asset purchase, stock purchase, merger
or otherwise) effected by such Company and including any Pending Acquisition,
net of offsetting adjustments in favor of such Company under such acquisitions.
               (bb) “GAAP” means generally accepted accounting principles as are
in effect from time to time in the United States.
               (cc) “Governmental Authority” means any foreign, federal or state
court, or any foreign, federal, state, local or municipal governmental
department, authority, commission, board, bureau, agency or instrumentality.
               (dd) “Indebtedness” means (without duplication): (i) indebtedness
for borrowed money (excluding any interest and bank fees thereon to the extent
included in current liabilities), secured or unsecured, (ii) obligations under
conditional sale or other title retention Contracts relating to purchased
property, (iii) capital lease obligations but excluding operating lease
obligations (as capital and operating leases are defined in Statement of
Financial Accounting Standards No. 13), (iv) obligations under interest rate
cap, swap, collar or similar transactions or currency hedging transactions
(valued at the termination value thereof), and (v) guarantees of any of the
foregoing of any other Person.
               (ee) “Independent Accountants” means RSM McGladrey, Inc. The
Independent Accountants have been retained by CSC and Buyer pursuant to the
terms of that certain Letter Agreement, dated October 10, 2005. At Closing,
Sellers shall cause CSC to assign its interest in this Letter Agreement to
Sellers’ Representatives.
               (ff) [Reserved].
               (gg) “Intellectual Property” means: (i) United States patents,
patent applications and statutory invention registrations, (ii) trademarks,
service marks, trade dress, logos, trade names, corporate names, domain names
and other source identifiers, and registrations and applications for
registration thereof, (iii) copyrightable works, copyrights, and registrations
and applications for registration thereof, (iv) all items of software or other

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computer program of whatever name and (v) confidential and proprietary
information, including trade secrets and know-how.
               (hh) “Inventory” shall mean all of the Companies’ supplies,
equipment, and spare parts necessary for day-to-day maintenance and repair
and/or used by the Companies in the ordinary course of business.
               (ii) “Katz” means Sheldon E. Katz, an individual.
               (jj) “Knowledge” when capitalized means:
               (a) with respect to each Seller that is an individual, if such
individual is actually aware of such fact or other matter;
               (b) with respect to (i) Topspin Partners and Topspin Associates,
if either of Leo Guthart or Steve Lebowitz is actually aware of such fact or
other matter; and (ii) Bariston, if Needham is actually aware of such fact or
other matter;
               (c) with respect to CSC and the Companies: (i) if any of Katz,
McIntosh and Ian Swartz (A) is actually aware of such fact or other matter,
(B) would reasonably be expected to have such knowledge given such individual’s
title and duties to the Company, or (C) would have had knowledge of such fact
following a reasonable investigation, if under the circumstances a reasonable
person would have determined such investigation was required or appropriate in
the normal course of fulfillment of such individual’s duties; and (ii) if Leo
Guthart is actually aware of such fact or other matter; and
               (d) with respect to Buyer: if either Stephen Ruzika or Robert
Farenhem (i) is actually aware of such fact or other matter, (ii) would
reasonably be expected to have such knowledge given such individual’s title and
duties to Buyer, or (iii) would have had knowledge of such fact following a
reasonable investigation, if under the circumstances a reasonable person would
have determined such investigation was required or appropriate in the normal
course of fulfillment of such individual’s duties.
               (kk) “Law” means any federal, state or local law, regulation,
code, statute, injunction, ordinance, decree, court order or judgment.
               (ll) “Material Adverse Effect” means an event, change or effect
that is (or is reasonably likely to be) materially adverse to the business,
aggregate assets (including intangible assets), financial condition or results
of operations of a Person and its Affiliates taken as a whole. Any event, change
or circumstance relating to the economy or financial markets in general (such as
would be caused by another terrorist attack in the U.S.) or relating to other
businesses in a geographic market (such as would be caused by an act of God)
shall not be deemed to be a Material Adverse Effect.
               (mm) “McIntosh” means Mike McIntosh, an individual.
               (nn) “Needham” means Christopher E. Needham, an individual.

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               (oo) “Net Equity Value” means the sum of: (i) $49,700,000,
(ii) plus or minus the Working Capital Adjustment, (iii) minus the RMR
Adjustment, (iv) plus Buyer’s Share of Acquired RMR Costs, (v) plus the Takeover
RMR Adjustment, and (vi) minus the amount of the Funded Debt; provided, however,
that in no event shall the Net Equity Value (excluding the impact of Funded Debt
thereon) exceed $53,000,000.
               (pp) “Organizational Documents” means, as the case may be, a
Person’s certificate/articles of incorporation, bylaws, certificate of limited
partnership, limited partnership agreement, operating agreement and other
similar agreements, together with all amendments thereto as in effect on the
date hereof.
               (qq) “Permitted Liens” means: (i) liens for Taxes and assessments
or other government charges or levies not yet due and payable or the validity of
which is being contested in good faith by appropriate proceedings so long as
adequate reserves have been made and, if required by GAAP, to the extent such
reserves increase the Companies’ current liabilities for purposes of calculating
the Working Capital Adjustment, (ii) inchoate liens of mechanics, materialmen,
laborers, warehousemen, carriers and other similar common law or statutory liens
arising in the ordinary course of business, (iii) liens arising out of pledges
or deposits under workers’ compensation, unemployment insurance, old age laws,
or to secure the performance of bids, tenders or contracts or to secure
statutory obligations of surety or appeal bonds, or to secure indemnity,
performance or other similar bonds in the ordinary course of business, (iv)
zoning, entitlement and other land use and environmental regulations by
governmental agencies, (v) any other Encumbrances and other title matters which
do not materially detract from the value or materially interfere with the
present use of the relevant asset or property, and (vi) purchase money security
interests upon tangible personal property securing deferred payments for the
purchase of such tangible personal property, but, if required by GAAP, only to
the extent that the amounts necessary to discharge the liens and security
interests under the foregoing clauses (iii) and (vi) increase Funded Debt or
otherwise increase the Companies’ current liabilities for purposes of
calculating the Working Capital Adjustment.
               (rr) “Person” means an individual, a partnership, a corporation,
an association, a limited liability company, a joint stock company, a trust, a
joint venture or an unincorporated organization.
               (ss) “RMR” means, without duplication, as of the Closing Date,
the aggregate recurring monthly residential, commercial or governmental service
contract revenue (determined net of any communication, utility company, or other
third party pass through charges, assessments, taxes, customer discounts (but
excluding free service deals offered in the ordinary course of business and
described on Schedule 1.2(ss-1)) and governmental charges (except for the
ordinary and necessary switch network charges required to send and receive alarm
signals from digital dialers at subscribers’ premises)) for a one month period
which is derived from RMR Services performed pursuant to written contracts and
oral contracts to the extent allowable under clause (iv) below. RMR shall not
include any RMR: (i) from customers who have accounts receivable balances for
RMR (other than a balance of less than $10) more than 90 days from the Due Date
of Payment, provided that Buyer agrees that pre-Closing, the Companies can write
off disputed balances which are more than 90 days

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past due from the Due Date of Payment (a schedule of which are attached hereto
as Schedule 1.2(t)) to the extent (A) such balances remain unpaid as a result of
a good faith dispute between the customer and the Companies and (B) the
Companies have a reasonable basis to believe that such customer shall remain a
customer of the Companies for the term of the customer agreement between such
customer and the Companies; (ii) that is not periodic in nature, but rather
relates to installation purchase payments or one-time assessments or charges
(including all time and material service revenue); (iii) from customers from
whom the Companies have received written notice of cancellation and the
Companies have not received written notice from the customer rescinding the
cancellation; (iv) attributable to oral contracts other than to the extent the
number of oral contracts, in the aggregate, is less than 1% of the Companies’
total number of Customer Agreements (Buyer agrees that the Companies shall not
be required to have separate written agreements with individual homeowners when
the Companies have a written agreement with the homeowners’ association); and
(v) from customers who were added or retained since June 30, 2005, as a result
of marketing efforts outside the Companies’ ordinary course of business or
otherwise inconsistent with the Companies’ past practices. Notwithstanding the
foregoing, the parties agree that the following categories of recurring revenue
will be included in RMR despite the fact that they do not meet all or part of
the criteria to qualify as RMR: Slow Pay RMR, Takeover RMR and Acquired RMR to
the extent included in Retail RMR pursuant to Section 1.2(a). The RMR as of
August 31, 2005 is set forth on the RMR Schedule attached hereto as
Schedule 1.2(ss-2) and shall be updated in connection with the final
determination of the Purchase Price. Buyer has reviewed Schedule 1.2(ss-2) and
confirms that it accepts the various categories of RMR Services described
thereon as qualifying as RMR. Buyer acknowledges that Sellers have provided
Buyer with copies of the Companies’ standard form Customer Agreements, including
Customer Agreement forms from prior acquisitions, used by the Companies in the
operation of the Security Business within the last three (3) years, and Buyer
hereby confirms that such forms are acceptable to Buyer. Buyer acknowledges and
agrees that the recurring monthly revenue from Customer Agreements that do not
contain a limitation of liability clause will nonetheless qualify as RMR, so
long as the Companies’ insurance carrier has historically provided insurance
coverage to the Companies for such Customer Agreements. Buyer has reviewed the
relevant insurance policies and is comfortable with the arrangements.
Furthermore, Buyer acknowledges and agrees that many Governmental Authorities
refuse to sign an alarm company’s form contract, preferring instead to use their
own purchase order and that such purchase orders rarely provide for limitation
of liability or third party indemnification. Buyer nonetheless agrees that the
recurring monthly revenue from purchase orders from such Governmental
Authorities still qualifies as RMR even though the Companies’ insurance carrier
has not expressly agreed to provide insurance coverage to the Companies for such
Customer Agreements. The parties agree that Boca Pointe RMR is excluded from RMR
and will not be used in calculating the Purchase Price, but any RMR paid by
Buyer or its Affiliates to the Companies will be included in RMR, and will be
used in calculating the Purchase Price. The Sellers and Buyer agree that the
AlarmNet expense for September 2005 allocable to (i) Wholesale RMR was $13,486
and Retail RMR was $6,679, and the parties hereto agree to use the AlarmNet
expense as of such date for purposes of calc ulating the Net Equity Value.

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               (tt) “RMR Adjustment” means the sum of the Wholesale RMR
Adjustment plus the Retail RMR Adjustment, all as determined in accordance with
the specific procedures set forth on Schedule 2.1(a).
               (uu) “RMR Services” means monitoring (including wholesale
monitoring for other alarm dealers), service, maintenance or leasing agreements
for such services as burglar and fire alarm, fire inspection and maintenance,
open/close and daily and event reports, CCTV and access control, keyholder,
elevator monitoring, all forms of back-up monitoring, e-mail access, two-way
voice monitoring, 24-hour testing, fire systems runner services, NFPA fire alarm
monitoring, FAX Back services for alarm dealers, UL inspection, sensitivity
testing and related services.
               (vv) “Retail RMR” means, without duplication, all of the
Companies’ RMR exclusive of the Takeover RMR, Wholesale RMR and Boca Pointe RMR,
and is as set forth on Schedule 1.2(vv).
               (ww) “Retail RMR Adjustment” means the product of 48 times the
amount by which the Retail RMR as of the Closing Date is less than $868,000.
               (xx) “SEC” means the United States Securities and Exchange
Commission.
               (yy) “SEC Reports” has the meaning set forth in Section 4.8(a).
               (zz) “Securities Act” means the Securities Act of 1933, as
amended.
               (aaa) “Seller Ancillary Agreements” means all agreements,
instruments and documents being or to be executed and delivered to Buyer by
Sellers or Sellers’ Representatives under this Agreement or in connection
herewith.
               (bbb) “Sellers’ Bank Accounts” means the bank accounts (including
wire transfer instructions therefor) to which each Seller’s Purchase Price
proceeds are to be wired as set forth on Schedule 1.2(bbb).
               (ccc) “Sellers’ Counsel” means Buchanan Ingersoll PC.
               (ddd) “Slow Pay RMR” means the aggregate amount of the RMR from
those customers identified by customer number and name on Schedule 1.2(t) whose
RMR balances are more than 90 days, but less than 150 days, past due from the
Due Date of Payment, but who have a consistent payment history that shows that
they nonetheless pay (e.g., school districts, Governmental Authorities, certain
businesses and certain individuals).
               (eee) “Solvent” means with respect to any Person on a particular
date, that on such date: (i) the fair value of the property of such Person is
greater than the total amount of liabilities, including contingent liabilities,
of such Person, (ii) the present fair salable value of the assets of such Person
is not less than the amount that will be required to pay the probable liability
of such Person on its debts as they become absolute and matured, (iii) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay such debts and liabilities as
they mature and (iv) such Person is not

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engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person’s property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
               (fff) “Takeover RMR Adjustment” means an amount equal to 35 times
the Takeover RMR.
               (ggg) “Takeover Customer” means a commercial or homeowner
association customer of the Companies who has signed one of the Companies’
Customer Agreements and is set forth on Schedule 1.2(ggg). Schedule 1.2(ggg)
sets forth a true, complete and accurate list of the Takeover Customers and
Takeover RMR as of the Closing Date.
               (hhh) “Takeover RMR” means the Retail RMR associated with the
Companies’ Takeover Customers (provided such RMR is not included in the
calculation of Retail RMR). Buyer acknowledges and agrees that, subject to the
limitations set forth in this Agreement, the Takeover RMR will be included in
calculating the Purchase Price even though it does not meet all of the criteria
of RMR at Closing, so long as the Takeover Customer is contractually obligated
to commence payment to the Companies within six (6) months following the Closing
Date.
               (iii) “Tax” means any federal, state, local or foreign income,
gross receipts, franchise, estimated, alternative minimum, add-on minimum,
sales, use, transfer, real property gains, registration, value added, excise,
natural resources, severance, stamp, occupation, premium, windfall profit,
environmental, customs, duties, real property, personal property, capital stock,
social security, unemployment, disability, payroll, license, employee or other
withholding, or other tax, of any kind whatsoever, including any interest,
penalties or additions to tax or additional amounts in respect of the foregoing;
the foregoing shall include any transferee or secondary liability for a Tax and
any liability assumed by agreement or arising as a result of being (or ceasing
to be) a member of any affiliated group (or being included (or required to be
included) in any Tax Return relating thereto).
               (jjj) “Tax Return” means any return, declaration, report, claim
for refund, information return or other document (including any related or
supporting schedule, statement or information) filed or required to be filed in
connection with the determination, assessment or collection of any Tax of any
party or the administration of any laws, regulations or administrative
requirements relating to any Tax.
               (kkk) “Topspin Associates” means Topspin Associates, L.P., a
Delaware limited partnership.
               (lll) “Topspin Management” means Topspin Management, LLC, a
Delaware limited liability company and the general partner of Topspin Associates
and Topspin Partners. Topspin Management joins in this Agreement solely to be
bound by Section 2.3(c).
               (mmm) “Topspin Partners” means Topspin Partners, L.P., a Delaware
limited partnership.

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               (nnn) “Wholesale RMR” means the RMR attributable to dealer
monitoring revenue, a schedule of which is attached hereto as Schedule 1.2(nnn).
               (ooo) “Wholesale RMR Adjustment” means the product of 16 times
the amount by which the Wholesale RMR as of the Closing Date is less than
$380,000.
               (ppp) “WIP RMR” means the Retail RMR associated with the
Companies’ Customer Agreements that, as of the Closing Date, have not yet been
“cut-in” to the Companies’ central station, but which the Companies are
obligated to “cut in” to the central station after the Closing Date.
Schedule 1.2(ppp) sets forth a true, complete and accurate list of the WIP RMR
that exists as of the Closing Date.
               (qqq) “Working Capital Adjustment” means the amount (without
duplication) by which the book value of the Companies’ current assets (excluding
any deferred tax assets but including any Tax refund receivable) less the book
value of the Companies’ current liabilities (excluding the amount of current
liabilities included in Funded Debt and any deferred tax liabilities but
including accrued Tax payables) is less than or more than zero, all as
determined in accordance with GAAP consistently applied, and the specific
procedures set forth on Schedule 2.1(a). The Parties agree that the proceeds
from the sale of the Companies’ Interest Rate Cap Agreement at Closing will be
included in the Working Capital Adjustment notwithstanding that the Companies
will not receive the proceeds therefrom until two business days after the
Closing Date; provided, however, that such proceeds only shall be included in
the Working Capital Adjustment for purposes of calculating the Final Purchase
Price to the extent so received by the Companies. The Parties further agree that
the liability accruals for special bonuses and option cancellation payments
reflected on the Initial Balance Sheet shall not be included as current
liabilities in the calculation of the Working Capital Adjustment for the
Estimated Purchase Price provided that the amount of Funded Debt is increased by
the amount of such liability accruals excluded as current liabilities from such
calculation.
          1.3 Index of Other Defined Terms.

     
Accounts Receivable
  Section 3.25
Balance Sheet
  Section 3.11
Balance Sheet Date
  Section 3.11
Buyer
  Caption
Buyer’s Aggregate Loss
  Section 8.1(a)
Buyer Indemnified Parties
  Section 8.1(a)
Claiming Party
  Section 8.2(a)
Current Standard Retail Form
  Section 3.17(b)
Customer Agreements
  Section 3.17(c)
Devcon
  Section 4.8(a)
Employment Agreements
  Section 2.4
Entity Sellers
  Caption
Estimated Purchase Price
  Section 2.1(b)
Excepted Claims
  Section 8.4(a)
Final Balance Sheet
  Section 2.1(d)
Financial Statements
  Section 3.11

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Indemnification Threshold
  Section 8.4(b)
Indemnifiable Loss
  Section 8.5
Indemnifying Party
  Section 8.2(a)
Indemnity Payment
  Section 8.5
Initial Balance Sheet
  Section 2.1(b)
ITC
  Section 5.3(e)
Leased Real Property
  Section 3.6
Licensed Intellectual Property
  Section 3.14(b)(i)
Major Suppliers
  Section 3.26
NOL
  Section 5.3(e)
Optionholders
  Section 3.2(b)
Options
  Section 3.2(b)
Owned Intellectual Property
  Section 3.14(b)(i)
Plans
  Section 3.19(a)
Purchase Price
  Section 2.1(a)
Purchase Price Adjustment Payment Date
  Section 2.1(e)
Purchase Price Objection Notice
  Section 2.1(d)
Real Property Leases
  Section 3.6
Related Parties
  Section 3.22
Responsible Parties
  Section 5.3(h)
Security Business
  Background
Seller(s)
  Caption
Seller Indemnified Parties
  Section 8.1(b)
Sellers’ Aggregate Loss
  Section 8.1(b)
Sellers’ Representatives
  Section 10.7(b)(i)
Settlement Date
  Section 2.1(d)
STI
  Section 8.1(a)
STI Deal
  Section 8.1(a)
STI Escrow Amount
  Section 2.1(i)
STI Resolution
  Section 2.1(i)
Stock
  Background
Straddle Period
  Section 5.3(c)
Tangible Assets
  Section 3.7(b)
Tax Contest
  Section 5.3(i)
Third Party Claim
  Section 8.3(a)

2. PURCHASE PRICE AND CLOSING
     2.1 Purchase Price.
          (a) The purchase price for the Stock (the “Purchase Price”) will equal
the Net Equity Value. Given the complexities involved, and the possibility of
good faith disagreements, in calculating the Working Capital Adjustment, the RMR
Adjustment, the Takeover RMR Adjustment, Buyer’s Share of Acquired RMR Costs,
and Funded Debt, the parties have set forth on Schedule 2.1(a) an example of the
procedures to be followed in such calculations by using the Companies’
August 31, 2005 balance sheet and recurring monthly

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revenue. Based on the Independent Accountant’s review of the Companies’
August 31, 2005 balance sheet and the other supporting documentation attached to
Schedule 2.1(a), the Working Capital Adjustment was $702,989, the RMR Adjustment
was $0.00, the Takeover RMR Adjustment was $271,530, Buyer’s Share of Acquired
RMR Costs was $27,754 and the Funded Debt was $17,550,423. The parties agree to
use the same procedures, assumptions and calculations outlined on
Schedule 2.1(a) to calculate the (i) RMR Adjustment, the Takeover RMR
Adjustment, Buyer’s Share of Acquired RMR Costs, and Funded Debt as of the
Closing Date except that amounts calculated for (A) clause (i) in the definition
of RMR and for (B) Slow Pay RMR will be calculated as of October 31, 2005 and
(ii) the Working Capital Adjustment as of October 31, 2005 provided that the
adjustment for increases for Funded Debt as described in the definition of
Working Capital Adjustment that will occur between October 31, 2005 and the
Closing Date. With the exception of the Working Capital Adjustment, the amounts
calculated for (A) clause (i) in the definition of RMR and for (B) Slow Pay RMR
calculated as of October 31, 2005 and the adjustment for increases in Funded
Debt described in the definition of Working Capital Adjustment that will occur
between October 31, 2005 and the Closing Date (i) all financial inputs that
impact the calculation of Net Equity Value (i.e., RMR and the related
adjustments thereto) shall be calculated as of the Closing Date and (ii) to the
extent any schedules delivered in connection with this Agreement indicate that
any such financial inputs are calculated as of a date other than the Closing
Date, the true-up of such financial inputs for purposes of calculating Final
Purchase Price shall determine the amount of such financial inputs as of the
Closing Date.
          (b) At least 2 business days prior to Closing, Sellers will prepare
and deliver to Buyer a good faith estimate of the Net Equity Value as of the
close of business on the Closing Date (the “Estimated Purchase Price”) which
shall be prepared in accordance with the procedures set forth on
Schedule 2.1(a), together with such supporting documentation as Buyer reasonably
requests, including estimated closing balance sheets for the Companies
calculated for financial reporting and tax purposes as of the Closing Date (the
“Initial Balance Sheet”); provided, however, that in calculating Net Equity
Value for purposes of determining the Initial Purchase Price, the parties shall
determine the Working Capital Adjustment as of October 31, 2005. For financial
reporting purposes, the Initial Balance Sheet will be prepared in accordance
with GAAP (to the extent practicable given that it is an estimate) as
consistently applied by the Companies and as reflected by the Companies’
August 31, 2005 balance sheet and Schedule 2.1(a).
          (c) At the Closing, (i) $3,750,000 of the Estimated Purchase Price
will be wire transferred by Buyer to the Escrow Agent to be held in escrow
pursuant to the terms of the Escrow Agreement as a reserve fund against any
Purchase Price adjustments and as security for Sellers’ indemnification
obligations hereunder, (ii) the balance of the Estimated Purchase Price (less
$275,000) will be wire transferred by Buyer to Sellers’ Bank Accounts pursuant
to the written instructions provided to Buyer by Sellers’ Representatives prior
to the Closing, (iii) $275,000 of the Estimated Purchase Price will be wire
transferred by Buyer to a separate escrow account established by Sellers’
Representatives pursuant to written instructions provided to Buyer by Sellers’
Representatives prior to Closing, (iv) the amount of Funded Debt due Citizens
Bank (as reflected in the calculation of Net Equity Value) will be wire
transferred by Buyer to Citizens Bank pursuant to a payoff letter provided to
Buyer by Citizens Bank, and (v) $134,815.36 will be wire transferred by Buyer to
the parties identified

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in the use of proceeds analysis prepared by the Sellers (for payment of
Companies’ accrued fees and expenses) in consideration of the Sellers’
representation that such amount has been accrued for as a current liability in
the calculation of the Working Capital Adjustment.
          (d) No later than 120 days after Closing (the “Settlement Date”),
Buyer will prepare and deliver to Sellers’ Representatives in writing a final,
unaudited calculation of the Net Equity Value as of the Closing Date (the “Final
Purchase Price”), together with such supporting documentation as Sellers’
Representatives reasonably request (including a final balance sheet for the
Companies calculated as of the close of business on the Closing Date, which will
be prepared in a manner consistent with the Initial Balance Sheet (the “Final
Balance Sheet”). To the extent Buyer and Sellers’ Representatives agree on all
or part of the Final Balance Sheet and Final Purchase Price, then Section 2.1(h)
shall govern the payment of amounts which are not in dispute. Unless Sellers’
Representatives give written notice to Buyer setting forth in reasonable detail
Sellers’ objection(s) to the Final Balance Sheet or the calculation of the Final
Purchase Price (the “Purchase Price Objection Notice”) within 30 days of
Sellers’ Representatives’ receipt of the Final Balance Sheet (provided such
objections raised by Sellers’ Representatives are not inconsistent with the
position(s) taken by Sellers in the calculation of the Initial Balance Sheet),
Sellers will be deemed to have accepted the Final Balance Sheet and such
calculation of the Final Purchase Price. If Sellers’ Representatives shall not
have delivered the Purchase Price Objection Notice within such 30 day period,
(i) if the Final Purchase Price is less than the Estimated Purchase Price,
Sellers and Buyer shall issue joint written instructions to the Escrow Agent to
disburse to Buyer from the Closing Escrow Fund the amount of such deficiency or,
as applicable, (ii) if the Final Purchase Price is greater than the Estimated
Purchase Price, Buyer shall deliver to Sellers’ Bank Accounts on a pro rata
basis by federal funds wire transfer the amount of such excess. If after good
faith negotiations, Buyer and Sellers’ Representatives are unable to agree upon
the amount of the Final Purchase Price within 15 days after Buyer’s receipt of
the Purchase Price Objection Notice, the Independent Accountants will resolve
the parties’ dispute regarding the Final Balance Sheet. Buyer and Sellers agree
to use commercially reasonable efforts to cause the Independent Accountants to
use their best efforts to resolve the dispute within 60 days after Buyer’s
receipt of the Purchase Price Objection Notice. The Independent Accountants will
be instructed to make their determination on a basis consistent with the
provisions of this Agreement (including the procedures set forth on
Schedule 2.1(a)) and their determination will be final and binding on the
parties. All fees and costs of the Independent Accountants will be borne by
Buyer and Sellers in proportion to the difference between the Independent
Accountants’ determination of the Final Purchase Price and Sellers’ and Buyer’s
determination of such amount. For example, if Sellers’ determination differs by
$20,000 from the Independent Accountants’ determination, but Buyer’s
determination differs by only $5,000, Sellers will bear 20/25 of such fees and
costs and Buyer will bear 5/25 of such fees and costs.
          (e) No later than 3 business days after the earlier of (i) the
resolution of any dispute between the parties regarding the Final Purchase
Price, or (ii) receipt of the Independent Accountants’ determination of the
Final Purchase Price, as the case may be (such date, the “Purchase Price
Adjustment Payment Date”), if the Final Purchase Price is less than the
Estimated Purchase Price, Sellers’ Representatives and Buyer will instruct the
Escrow Agent to forward to: (i) Sellers’ Bank Accounts on a pro rata basis by
federal funds wire transfer fifty percent (50%) of the Closing Escrow Fund, less
the amount by which the Final

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Purchase Price (as evidenced by the final closing adjustments) is less than the
Estimated Purchase Price, and less any amounts for which Buyer is seeking
indemnification from Sellers pursuant to the terms of Article 8 and/or
Section 5.3; and (ii) Buyer by federal funds wire transfer the amount by which
the Final Purchase Price (as evidenced by the final closing adjustments) is less
than the Estimated Purchase Price. In the event that the Closing Escrow Fund is
less than the amount by which the Estimated Purchase Price exceeds the Final
Purchase Price, Sellers, on a pro rata basis, promptly shall deliver to Buyer by
federal funds wire transfer the amount of such deficiency. No later than 3
business days after the Purchase Price Adjustment Payment Date, if the Final
Purchase Price is greater than the Estimated Purchase Price, (i) Buyer shall
deliver to Sellers’ Bank Accounts on a pro rata basis by federal funds wire
transfer the amount of such excess and (ii) Sellers’ Representatives and Buyer
will instruct the Escrow Agent to forward to Sellers’ Bank Accounts on a pro
rata basis by federal funds wire transfer fifty percent (50%) of the Closing
Escrow Fund.
          (f) On the 185th day after the Closing Date, the remaining amount of
the Closing Escrow Fund, less any amounts (i) for unresolved disputes between
Buyer and Sellers’ Representatives regarding the Final Purchase Price or Final
Balance Sheet and (ii) for which Buyer is seeking indemnification from Sellers
pursuant to the terms of Article 8 and/or Section 5.3, (excluding any amounts
previously withheld for the same claim pursuant to Section 2.1(e)), will be
distributed to Sellers’ Bank Accounts on a pro-rata basis by the Escrow Agent in
accordance with the terms of the Escrow Agreement.
          (g) Buyer expressly agrees that it has no right in this Agreement to a
post-Closing account guaranty from Sellers for the RMR, including the Retail
RMR, the Wholesale RMR, the Acquired RMR or the Takeover RMR. For example, the
Purchase Price will not be reduced if a customer with $100 of Retail RMR cancels
or fails to renew his contract the day after Closing. In other words and to
avoid any doubt on this critical issue, there will be no adjustment for
“defaulting RMR” or “terminated RMR” that occurs after the Closing Date.
          (h) Notwithstanding anything to the contrary set forth herein and
notwithstanding any unresolved disputes between Buyer and Sellers’
Representatives regarding the Final Purchase Price or Final Balance Sheet, to
the extent Buyer and Sellers’ Representatives agree on portions of the Final
Purchase Price and Final Balance Sheet, the parties agree to pay or to authorize
the Escrow Agent to pay, without reservation or delay, any amounts which are not
the subject of a good faith dispute.
          (i) Notwithstanding anything to the contrary set forth herein, from
and after the Closing and pending (A) STI’s full and final release of claims
against the Companies arising out of the STI Deal or (B) the final and binding
determination of the independent accounting firm appointed in accordance with
Section 1.7(c) of that certain Amended and Restated Asset Purchase Agreement
among Coastal, Strategic Technologies, Inc. and Lennar Corporation (the “STI
Resolution”), Escrow Agent shall maintain in the Closing Escrow Fund at least
$541,194.33 (the “STI Escrow Amount”). Upon the STI Resolution, Buyer and
Sellers’ Representatives shall issue joint written instructions to the Escrow
Agent to disburse to (i) STI or its principals in accordance with the STI
Resolution the amounts, if any, owed by the Companies to STI or its principals
under the STI Resolution, (ii) Buyer any Buyer Aggregate Losses (but excluding
any amounts paid pursuant to the immediately preceding

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clause (i)) reasonably incurred by Buyer and/or the Companies from and after the
Closing Date in handling the disputes arising out of the STI Deal, and
(iii) Sellers’ Bank Accounts on a pro-rata basis any balance of the STI Escrow
Amount. In the event that the STI Resolution results in Buyer and/or the
Companies receiving amounts from STI or its principals in excess of the amounts
incurred by Buyer and/or the Companies under the immediately preceding clause
(ii), Buyer and/or the Companies shall pay such excess amounts to Sellers’ Bank
Accounts on a pro-rata basis. To the extent Sellers’ defense of the claims
arising out of the STI Deal does not unduly burden Buyer’s or the Companies’
personnel (recognizing that Buyer and the Companies shall cooperate with Seller
and its counsel in its defense of such claims in accordance with Section 8.3),
Buyer shall not charge Sellers any fee for time spent by Buyer’s or the
Companies’ personnel regarding such cooperation.
     2.2 Closing Date and Location.
          (a) The consummation of the transfer and delivery of the Stock to
Buyer and the receipt of the consideration therefor by Sellers will constitute
the “Closing.” The Closing will take place at the offices of Buyer’s Counsel in
Miami, Florida, or at such other location as Buyer and Sellers’ Representatives
may agree.
          (b) The effective time of the sale of the Stock will be as of
11:59:59 P.M. on the date of Closing (the “Closing Date”).
     2.3 Noncompetition.
          In connection with the consummation of these transactions, certain
Sellers will agree to be bound (or in certain cases, continue to be bound) by
certain noncompetition provisions, while other Sellers will not be bound by any
noncompetition provisions. For those Sellers who do agree to be bound by certain
noncompetition provisions, the provisions will not be similar. Buyer and Sellers
acknowledge and accept that there are legitimate business and personal reasons
that dictate this disparate treatment.
          (a) Katz and McIntosh acknowledge that their Amended and Restated
Employee Non-Competition, Non-Disclosure, Non-Solicitation and Inventions
Agreements with CSC dated November 18, 2002, will remain in effect and without
amendment or revision and without the payment of any additional consideration.
No new noncompetition provisions will be imposed upon Katz and McIntosh by Buyer
as a result of these transactions.
          (b) Buyer agrees that Bariston and Needham will not be bound by any
noncompetition provisions.
          (c) Buyer agrees that Topspin Associates and Topspin Partners will not
be bound by any noncompetition provisions. However, their general partner will
agree to be bound by the provisions of this Section 2.3(c). Without the prior
written consent of Buyer, the general partner of Topspin Associates and Topspin
Partners, Topspin Management, agrees that for a period of 3 years from the
Closing Date, it will not knowingly provide debt or equity financing to a
security alarm company with a substantial base of operations in Florida that is
engaged in the same business in which the Companies are currently engaged and
that derives

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more than five percent (5%) or $2,000,000 of its annual revenues from the
security alarm business.
          Topspin Management acknowledges and accepts that in the event of its
breach of the provisions of this Section 2.3(c), money damages would be
inadequate and Buyer would have no adequate remedy at Law. Accordingly, Buyer
shall have the right to not only seek damages, but to seek specific performance
of this Section 2.3(c); provided, however, that Buyer shall afford Topspin
Management a reasonable opportunity to cure any inadvertent breach. If, at the
time of enforcement of this Section 2.3(c), a court shall hold that the
duration, scope or geographic area stated herein are unreasonable, Buyer and
Topspin Management agree that the maximum duration, scope or geographic area
deemed reasonable by said court shall be used.
          Buyer agrees that this Section 2.3(c) will not prohibit Topspin
Management from being a passive owner of not more than 2% of the outstanding
stock of any class of securities of a publicly traded company. In addition,
Buyer agrees that this Section 2.3(c) and the restrictions on Topspin Management
shall terminate if: (i) Buyer materially breaches this Agreement and fails to
cure such breach within 30 days after notice; (ii) Buyer or any Affiliate
thereof sells the stock or substantially all of the assets of the Companies to
an unaffiliated entity, or (iii) Buyer or Devcon: (A) voluntarily commences any
proceeding or files any petition seeking relief under any federal, state or
foreign bankruptcy, insolvency, liquidation or similar law, or consents to the
institution of, or fails to oppose in a timely and appropriate manner, any such
proceeding or filing, (B) applies for or consents to the appointment of a
receiver, trustee, custodian, sequestrator or similar official for Buyer or for
a substantial part of Buyer’s assets, (C) files an answer admitting the material
allegations of a petition filed against it in any such proceeding, (D) makes a
general assignment for the benefit of its creditors, (E) becomes unable, admits
in writing its inability or fails generally, to pay its debts as they become due
or (F) takes any corporate action for the purpose of effecting any of the
foregoing.
     2.4 Employment Agreements.
          In connection with the consummation of these transactions, Katz and
McIntosh will each execute one-year employment agreements with Buyer in the form
of Exhibit 2.4 (the “Employment Agreements”).
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLERS
     As an inducement to Buyer to enter into this Agreement and to consummate
these transactions, but subject to the disclosures set forth on Schedule 3 and
the other Schedules to this Agreement, Sellers represent, warrant, covenant and
agree on a several, and not a joint and several, basis that as of this date:
     3.1 Organization and Corporate Documents.
          (a) Each Entity Seller is either a limited partnership or a limited
liability company duly organized, validly existing and in good standing under
the laws of the state of its formation and each has the requisite power and
authority to own its portion of the Stock.

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Each of the Companies is a corporation duly incorporated and organized, validly
existing and in good standing under the laws of the state of its incorporation,
and each has the requisite corporate power and authority to own or lease all of
its portion of the Assets, to own and operate its portion of the Security
Business and to carry on its business as now conducted. Each of the Companies is
duly licensed or qualified as a foreign corporation in all jurisdictions where
the conduct of its business requires such qualification.
          (b) Except as set forth on Schedule 3.1, none of the Companies has,
within the three (3) year period immediately preceding the date of this
Agreement, changed its name, been the surviving entity of a merger or
consolidation, or acquired all or substantially all of the assets of any Person.
Schedule 3.1 also sets forth all of the fictitious names or trade names under
which the Companies have conducted business during the last three (3) years.
          (c) The Certificate or Articles of Incorporation, as the case may be,
of each of the Companies and all amendments thereto to date, certified by the
Secretary of State of the state of each entity’s incorporation and the Bylaws of
each of the Companies as amended to date, certified by the Secretary or an
Assistant Secretary of each entity, all of which have been delivered to Buyer,
are true, complete and correct. The minute books of each Company, which will be
delivered to Buyer at Closing, correctly reflect, in all material respects, all
corporate actions taken at the meetings reported therein. The stock certificate
books and ledgers of each Company, which will be delivered to Buyer at Closing,
are true, correct and complete, and accurately set forth the ownership of all of
the issued and outstanding capital stock of that Company. An organizational
chart setting forth the Companies’ ownership and corporate structure is set
forth on Schedule 3.1.
     3.2 Capitalization.
          (a) Schedule 3.2 accurately sets forth the number of authorized shares
of capital stock, the nature and description of such stock (i.e., whether common
or preferred and the class and terms thereof) and the par value of the capital
stock of each Company. Except as set forth on Schedule 3.2, all of the issued
and outstanding capital stock of each Company has been validly issued, is fully
paid and nonassessable, is entitled to vote at all shareholder meetings and is
owned beneficially and of record by the stockholders set forth on Schedule 3.2
in the amounts set forth thereon.
          (b) Except for 7 employees of the Companies (who are described on
Schedule 3.2) (the “Optionholders”) who own certain stock options (the
“Options”) and except as set forth on Schedule 3.2, there are no outstanding
subscriptions, options, rights, warrants, unsatisfied preemptive rights,
convertible securities, puts, calls, conversion rights, agreements or
commitments of any kind which have not been waived obligating any of the
Companies, or any of Sellers with respect to the Companies, to purchase, redeem,
issue, acquire or transfer any shares of their capital stock or other securities
and there is no security of any kind convertible into capital stock. The
aggregate consideration to be paid to the Optionholders on or prior to Closing
to cancel all of the Options will not exceed $250,000 (“Aggregate Option
Consideration”).

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          (c) None of the shares of stock of any Company has been issued or
subsequently transferred in violation of: (i) any applicable preemptive rights
or transfer restrictions, (ii) the Organizational Documents of that Company or
(iii) the Securities Act. Except as set forth on Schedule 3.2, there are no
existing shareholder agreements, voting agreements, voting trusts, registration
rights agreements or similar agreements respecting any shares of the capital
stock of any of the Companies.
     3.3 Ownership and Transfer of Stock.
          (a) Each stockholder of each Company owns the shares of stock
specified on Schedule 3.2, beneficially and of record, free and clear of any
Encumbrance; provided, however, that CSC’s stock in Coastal and Coastal’s stock
in Central have been pledged to the Companies’ senior lenders pursuant to the
Credit Agreement.
          (b) Each Seller has the full right and power to transfer the Stock
owned by that Seller to Buyer free and clear of any Encumbrance and without
obtaining the consent of any other person or Governmental Authority.
     3.4 Subsidiaries; Affiliates.
          (a) Except as set forth on Schedule 3.4, the Companies do not have any
subsidiaries nor any direct or indirect ownership or voting interests in any
Persons. No Company is a party to any joint venture arrangement, nor does any
Company have the right to acquire any securities of or ownership or voting
interests in any Person.
          (b) Except as set forth on Schedule 3.4, none of the Companies has
entered into any contracts or other arrangements with any Affiliate, except for
those that are terminable at will without liability.
     3.5 Authority of Sellers; No Violation.
          (a) Each Seller has the requisite power and authority (and each
individual Seller has the legal capacity) to execute and deliver this Agreement
and all of the Seller Ancillary Agreements (to which they are a party), to
perform their respective obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby to consummate these
transactions and to comply with the terms, conditions and provisions hereof.
This Agreement has been duly authorized by each Entity Seller. This Agreement
has been duly and validly executed and delivered by each Seller. This Agreement,
and the Seller Ancillary Agreements (to which they are a party) upon the
execution thereof, assuming due authorization, execution and delivery by Buyer
constitute the legal, valid and binding obligations of each Seller, enforceable
against such Seller in accordance with their terms, except as may be limited by:
(i) bankruptcy, insolvency, reorganization, moratorium and other similar Laws
affecting creditors’ rights generally; (ii) the equitable and statutory powers
of the courts of appropriate jurisdiction to stay proceedings before them and to
stay the execution of judgments; and (iii) discretion of the courts in granting
remedies of specific performance and injunction or other equitable remedies.

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          (b) Except as set forth in Schedule 3.5, the execution and delivery of
this Agreement or any of the Seller Ancillary Agreements, the consummation of
any of the transactions contemplated hereby or thereby and the compliance with
or fulfillment of the terms, conditions and provisions hereof or thereof will
not directly or indirectly, with or without notice or lapse of time:
(i) contravene any provision of the Organizational Documents, shareholder or
investor agreements of any Seller or any Company, (ii) violate or conflict with
any Law or of any arbitration award which is either applicable to, binding upon
or enforceable against any Company or its Assets or any Seller, (iii) conflict
with, result in any breach of, or constitute a default under, or give rise to a
right of payment or right to terminate, amend, modify, abandon or accelerate
payment under, any Contract which is applicable to, binding upon or enforceable
against any Company or any Seller, (iv) result in or require the creation or
imposition of any Encumbrance upon or with respect to any of the Assets,
(v) give to any individual or entity a right or claim against any Company or any
Seller or (vi) require the consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Authority, any court or
tribunal or any other Person, except any filings required to be made by Buyer.
     3.6 Real Property.
None of the Companies owns any real property or any interest in real property,
except for the leasehold interests created under the real property leases listed
in Schedule 3.6 (the “Real Property Leases”), all of which are in full force and
effect. Attached to Schedule 3.6 are true and complete copies of each Real
Property Lease (the real property covered by, and the space occupied under, such
lease the “Leased Real Property”). Except as set forth in such Schedule, each
Company party to a Real Property Lease has the right to quiet enjoyment of all
of the related Leased Real Property described in such Schedule for the full term
of each such lease or similar agreement (and any renewal option) relating
thereto, and the leasehold or other interest of such Company in such Leased Real
Property is not subject or subordinate to any Encumbrance. Except as set forth
on Schedule 3.6, there are no agreements or other documents governing or
affecting the occupancy or tenancy of any of the Leased Real Property by the
Companies. Complete and correct copies of any instruments evidencing
Encumbrances, commitments for the issuance of title insurance, title opinions,
surveys and appraisals in Sellers’ or the Companies’ possession and any policies
of title insurance currently in force and in the possession of any Seller or any
Company with respect to each such parcel of Leased Real Property have heretofore
been delivered by Sellers to Buyer. To the Knowledge of any Seller or CSC,
neither the whole nor any part of the Leased Real Property is subject to any
pending suit for condemnation or other taking by any public authority, and no
such condemnation or other taking is threatened or contemplated.
     3.7 Title to Assets; Condition of Assets.
          (a) Except as described on Schedule 3.7 and for any Encumbrances in
favor of the lenders under the Credit Agreement, the Companies have good and
valid title to all of the Assets, free and clear of any Encumbrances. Except as
set forth on Schedule 3.7, the Companies own all of the Assets in fee title and
not under lease (other than the Real Property Leases). The Assets (except for
the Excluded Assets) constitute all of the assets used in connection with the
operation of the Security Business in accordance with past practice.

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Except as disclosed on Schedule 3.7, the Companies own all security alarm boxes
installed at any location to which they provide services.
          (b) Schedule 3.7 sets forth a complete and accurate list of all of the
Companies’ rights in, to and under all central station equipment, alarm systems
(including local alarm systems installed, sold or acquired by such entities but
which generate no recurring revenue), closed circuit television and access
control equipment, electronic alarm equipment, alarm test equipment, machinery,
tools, computers and related software, office equipment, furnishings, vehicles,
inventory, spare equipment and parts for day-to-day maintenance and repair,
other tangible personal property of any nature, and the Companies’ rights in
fixtures attached to the Leased Real Property (collectively, the “Tangible
Assets”).
          (c) Except as described on Schedule 3.7, the Tangible Assets are in
good operating condition, ordinary wear and tear excepted, and suitable for
their intended uses, and are adequate for the uses to which they are being put.
None of such Tangible Assets is in need of maintenance or repairs except for
ordinary, routine maintenance and repairs that are not material in nature or
cost. All Tangible Assets at any location at which the Companies provide service
were properly installed.
     3.8 Compliance with Laws; Litigation.
          (a) The Companies are and have been in compliance with the Laws of any
Governmental Authority which are applicable to the Companies, the Assets or the
Security Business.
          (b) All reports, schedules and/or returns of any Governmental
Authority required to be filed by the Companies, or by Sellers with respect to
the Companies, have been filed.
          (c) Except as set forth on Schedule 3.8, there are no: (i) lawsuits,
claims, suits, actions or proceedings pending or, to the Knowledge of the
Companies or Sellers, threatened against or affecting the Companies or any
Seller; (ii) investigations which, to the Knowledge of the Companies or Sellers,
are threatened against or affecting the Companies or any Seller, or which
questions the validity or enforceability of this Agreement or any Seller
Ancillary Agreement or the transactions contemplated hereunder and thereunder
(and no event has occurred or circumstance exists that is reasonably likely to
give rise to or serve as a basis for the commencement of any such lawsuit,
claim, action, proceeding or investigation); or (iii) lawsuits, claims, suits,
actions or proceedings pending in which any of the Companies or any Seller is
the plaintiff or claimant, which relate to the Stock, the Assets or the Security
Business or which involve the possibility of any judgment, order, award or other
decision that might impair the ability of any Seller to perform this Agreement,
or might impair the quality of title to the Assets or the Stock, or might
adversely affect the normal operation of the Security Business, or might result
in liability for damages or might otherwise adversely affect the Companies’
right, title or interest in the Assets, the Security Business or Sellers’ right,
title or interest in the Stock. Notwithstanding the foregoing, Sellers shall
only be required to disclose on Schedule 3.8 those lawsuits, claims,
investigations, etc. which relate to the Stock or which involve the possibility
of any judgment, order, award or other decision that might

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impair the ability of any Seller to perform this Agreement. Except as set forth
on Schedule 3.8, with respect to prior acquisitions (whether by asset purchase,
stock purchase, merger or otherwise) effected by the Companies, there are no
claims asserted by any Company and still pending against any parties to such
prior acquisitions.
     3.9 Insurance.
          Schedule 3.9 sets forth a true and complete list and brief description
(including nature of coverage, limits, deductibles, premiums and the loss
experience for the most recent 3 years with respect to each type of coverage) of
all insurance policies, owned or held by or for the benefit of the Companies and
the Assets or relating to the Security Business during the past 3 years. True,
complete and correct copies of all such policies, as well as all insurance
policies of the Companies for the past 3 years, have been delivered to Buyer.
All such policies are on (and have been on) an “occurrence basis,” so that if a
claim arose after the Closing Date for an event which occurred prior to the
Closing Date, the Companies’ applicable insurance policy in existence on the
date such event occurred would cover such claim. The Companies carry property
damage, workers’ compensation, automobile, general liability and errors and
omissions insurance with respect to the Security Business and the Assets in such
amounts as are adequate and reasonable and against such risks as are customary
in relation to the character and location of such properties and the nature of
such business. The insurance maintained by the Companies’ is sufficient for
material compliance with all requirements of Law and all of the Contracts to
which any of the Companies is a party. All such policies are in full force and
effect, the Companies have not received any notice of cancellation with respect
thereto and the Companies have not failed to give any notice or present any
claim under any such insurance in a due and timely manner. During the past
2 years, no application by any Company for insurance with respect to the Assets
or the Security Business has been denied for any reason. During the past
2 years, no Company has had any claim made against it by any customer that would
adversely affect its insurance rating. During the past 3 years, no insurer under
the insurance policies maintained by the Companies has notified any of the
Companies that a loss in respect of a Customer Agreement is not (or would not
be) covered under such insurance policies on the basis that such Customer
Agreement did not (i) contain a limitation of liability clause in favor of such
Company or (ii) contain a limitation of liability clause of $250 or less in
favor of such Company.
     3.10 Absence of Adverse Changes or Other Events.
          Except as set forth on Schedule 3.10, since January 1, 2005, none of
the Companies has: (a) created or incurred any liability (absolute or
contingent) except for unsecured current liabilities under contracts entered
into in the ordinary course of business; (b) incurred any Funded Debt, loaned
any money or otherwise pledged the credit of such entity, or subjected any of
the Assets to any Encumbrance, except in the ordinary course of business;
(c) suffered any losses or any other event or condition of any character adverse
to its business, or waived any rights of substantial value; (d) made any capital
expenditures or capital additions or improvements which in the aggregate exceed
$800,000; (e) declared or paid any dividends or made any other distribution on
or in respect of, or directly or indirectly purchased, retired, redeemed or
otherwise acquired any shares of, its capital stock; (f) suffered any labor
disputes or organizational activity by its employees; (g) issued or sold any
shares of

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its capital stock or rights, options or warrants to purchase its capital stock,
or any securities convertible into its capital stock; (h) become bound by or
entered into, terminated or received termination of, any contract, commitment or
transaction other than in the ordinary course of business; (i) made any material
Tax election or settled or compromised any material United States federal,
state, local, or foreign income Tax liability; (j) paid any bonus to or
increased the rate of compensation of any of its employees or amended any of
their other terms of employment, except in the ordinary course of business (but
excluding therefrom any bonuses paid as a result of the transactions
contemplated by this Agreement); (k) sold, leased (as lessor), transferred or
otherwise disposed of, or mortgaged or pledged, or imposed or suffered to be
imposed any Encumbrance on, any of the assets reflected on the Balance Sheet or
any assets acquired by the Companies after the Balance Sheet Date, (including
any transfers from any Company to Sellers or any of their Affiliates), except
for inventory and minor amounts of personal property sold or otherwise disposed
of for fair value in the ordinary course of business consistent with past
practice; (l) accelerated or delayed collection of notes or accounts receivable
in advance of or beyond their regular due dates or the dates when the same would
have been collected in the ordinary course of business consistent with past
practice; (m) delayed or accelerated payment of any account payable or other
liability of any Company beyond or in advance of its due date or the date when
such liability would have been paid in the ordinary course of business
consistent with past practice; (n) engaged in, participated in, or entered into
any transaction, or taken any action, that could generate a liability for Taxes
outside the ordinary course of business; or (o) entered into any contract or
agreement to do or perform any of the foregoing actions.
     3.11 Financial Statements.
          Schedule 3.11 contains true, correct and complete copies of: (a) the
audited balance sheets of the Companies, on a consolidated basis, as of
December 31, 2002, 2003 and 2004 and the related consolidated statements of
operations, changes in stockholders equity and cash flows for the (i) two
(2) month period ended December 31, 2002 and (ii) twelve (12) month period ended
December 31, 2003 and 2004, together with the appropriate notes to such
financial statements and the report thereon of Goldstein Schechter Price Lucas
Horvitz & Co., P.A., and (b) the unaudited balance sheet of the Companies, on a
consolidated basis, as of August 31, 2005 (such balance sheet being herein
called the “Balance Sheet” and the date thereof, the “Balance Sheet Date”) and
the related statements of operations and cash flows for the eight months then
ended (collectively, the Financial Statements”). Except as set forth therein or
in the notes thereto, such balance sheets and statements of operations and cash
flow, have been prepared in conformity with GAAP consistently applied, and
fairly present the financial position and results of operations and cash flow of
the Companies, on a consolidated basis, as of their respective dates and for the
respective periods covered thereby. The books and records of the Companies fully
and fairly reflect all transactions, properties, assets and liabilities of the
Companies. The Financial Statements have been derived from the accounting
records of the Companies, represent only actual, bona fide transactions, and
reflect the consistent application of such accounting principles throughout the
periods involved. No financial statements of any Person other than the Companies
are required by GAAP to be included in any of the Financial Statements of the
Companies. There are no extraordinary or material non-recurring items of income
or expense during the periods covered by the Financial Statements, and the
balance sheets included in the Financial Statements do not

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reflect any write-up or revaluation increasing the book value of any assets,
except as specifically disclosed in the notes thereto. The Companies are
Solvent. Buyer acknowledges that: (A) the unaudited consolidated Balance Sheet
is subject to normal year end audit adjustments and (B) the consolidated
Financial Statements have not been adjusted for SAB104 and that it will not be
the responsibility of Sellers or the Companies (as owned by Sellers) to do so.
     3.12 Tax Returns and Payments.
          (a) Except as set forth on Schedule 3.12, each of the Companies:
(i) has timely and properly filed or caused to be filed, all Tax Returns,
reports, schedules, declarations, and Tax-related documents which it is or has
been required to file, by any jurisdiction to which it is or has been subject to
taxation, all such Tax Returns being true, correct and complete; (ii) has timely
paid or caused to be paid in full all Taxes which are or were due and payable to
any Governmental Authority; (iii) has made or caused to be made all withholdings
of Taxes required to be made, and such withholdings have either been paid to the
appropriate Governmental Authority or set aside in appropriate accounts for such
purpose; and (iv) has otherwise satisfied in all material respects all
applicable laws and agreements with respect to the filing of Tax Returns with
and the payment of Taxes to all taxing jurisdictions. True, correct and complete
copies of the federal, state and local real, personal property and sales Tax
Returns of the Companies for the last 3 fiscal years have been made available to
Buyer.
          (b) The Companies have properly accrued and reflected on the Financial
Statements and will from the date of the latest Financial Statements through the
Closing Date properly accrue, all liabilities for Taxes and assessments, all
such accruals being in the aggregate sufficient for payment of all such Taxes
and assessments.
          (c) Schedule 3.12 lists all federal, state and local income Tax
Returns filed with respect to any of the Companies for taxable periods ended on
or after January 1, 2003, indicates those Tax Returns that have been audited,
and indicates those Tax Returns that currently are the subject of an audit.
          (d) Except as set forth on Schedule 3.12, no Tax deficiencies have
been proposed or threatened against any of the Companies, nor are there any
agreements, waivers or other arrangements providing for extension of time with
respect to the assessment or collection of any Tax against any of the Companies
or with respect to the filing of any Tax Return to a date later than the Closing
Date, nor any actions, suits, proceedings, investigations or claims now pending
or threatened against any of the Companies with respect to any Tax, or any
matters under discussion with any Governmental Authority relating to any Taxes.
          (e) Except as set forth on Schedule 3.12, none of the Companies is or
ever has been a member of an affiliated group of corporations (within the
meaning of Section 1504 of the Code) other than an affiliated group, the common
parent of which is CSC, filed or been included in a combined, consolidated or
unit any income Tax Return (other than one in which CSC is the common parent).
Except as set forth on Schedule 3.12, none of the Companies is a party to, is
bound by, or has any obligation under any Tax sharing, Tax indemnity or similar

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agreement or has any current or potential liability for Taxes of any Person
(other than the Companies) under Treasury Regulation Section 1.1502-6 (or
similar state, local or foreign provision), as transferee or successor, by
contract or otherwise. Except as set forth on Schedule 3.12, none of the
Companies has made or will make a change in the method of accounting for a
taxable year beginning on or before the Closing Date, which would require it to
include any adjustment under Section 481(a) of the Code in taxable income of any
taxable year, or portion thereof, beginning on or after the Closing Date. Except
as set forth on Schedule 3.12, none of the Companies has filed a consent
pursuant to Section 341(f) of the Code, or agreed to have Section 341(f)(2) of
the Code apply to any disposition of a subsection (f) asset (as defined in
Section 341(f)(4) of the Code) owned by it. Neither Seller, nor any owner of a
Seller that is treated for federal income tax purposes as an entity disregarded
from its owner, is a “foreign person” as that term is used in Treasury
Regulation Section 1.1445-2. There is no currently effective election to be an S
corporation under Section 1362(a) of the Code with respect to any of the
Companies. None of the Companies has been a target corporation or target
affiliate in a qualified stock purchase within the meaning of Section 338 of the
Code (or any predecessor provision) nor has any Company been a “distributing
corporation” or a “controlled corporation” within the meaning of Section 355 of
the Code.
          (f) There are no Encumbrances relating to Taxes upon the assets of any
Company.
          (g) None of the Companies will be required 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.
          (h) No Company has made any payments, nor will any become obligated
under any contract entered into on or before the Closing Date, to make any
payments that will be non-deductible under Section 280G of the Code or that
would give rise to any obligation to indemnify any Person for any excise Tax
payable pursuant to Section 4999 of the Code.
          (i) To Sellers’ Knowledge, no claim has been made by a Governmental
Authority in a jurisdiction where a Company does not file Tax Returns that such
Company is or may be subject to Taxes assessed by such jurisdiction.
          (j) To Sellers’ Knowledge, no sales or use Tax, non-recurring
intangibles Tax, documentary stamp Tax, excise Tax or comparable Tax will be
payable by Buyer by virtue of the transactions contemplated by this Agreement.
          (k) Each Company has withheld and remitted to the appropriate
Governmental Authorities in compliance with all applicable Laws and regulations
all Taxes required to be withheld and remitted by such Company in connection
with payments made to other persons.
          (l) No Company is a partner, member, owner or beneficiary of any
entity treated as a partnership or a trust for tax purposes.

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          (m) The Companies have no deferred intercompany transactions within
the meaning of Treasury Regulations Section 1.1502-13, and none of the Companies
has an excess loss in the stock or equity of any entity as contemplated in
Treasury Regulations Section 1.1502-19.
          (n) None of the Companies has participated in any reportable
transaction as contemplated in Treasury Regulations Section 1.6011-4.
          (o) No Company has taken any action that is not in accordance with
past practice that could defer a liability for Taxes of such Company from any
taxable period ending on or before the Closing Date to any taxable period ending
after such date. Each Company has at all times used the accrual method of
accounting for income Tax purposes.
          (p) There is currently no limitation on the utilization of net
operating losses, capital losses, built-in losses, tax credits or similar items
of any of the Companies under Sections 269, 382, 383, 384 or 1502 of the Code
and the Treasury Regulations thereunder (and comparable provisions of state,
local or foreign law).
     3.13 Labor Matters.
          (a) Schedule 3.13 delivered at the execution of this Agreement sets
forth the name, ADP number, job title, date of hire, current rate of
compensation, and the sick and vacation leave that is accrued but unused as of
August 31, 2005, of each employee of the Companies.
          (b) Except as set forth in Schedule 3.13, none of the Companies is a
party to any employment agreement, written or oral, which that Company cannot
terminate at will without liability.
          (c) Except as set forth on Schedule 3.13, no Company is a party to or
bound by any collective bargaining agreement (and there has been no effort by
any labor union during the 24 months prior to the date hereof to organize any of
Companies’ employees into one or more collective bargaining units) or any
employment, consulting or similar agreement relating to the Security Business or
any agreement or arrangement providing for severance payments to any employee of
that Company upon termination of employment or which provide benefits upon a
change in control of that Company. Each Company has complied with all applicable
Laws which relate to prices, wages, hours, discrimination in employment, and is
not liable for any arrears of wages or any Taxes or penalties for failure to
comply with the foregoing and, to the Knowledge of Sellers, there is no basis
for any unfair labor practice charge or complaint against any of the Companies.
There are no labor strikes, work stoppages, grievances or other labor disputes
pending or, to the Knowledge of Sellers and the Companies, threatened against
the Companies.
     3.14 Intellectual Property Rights.
          (a) Schedule 3.14 sets forth all of the patents (including all
reissues, divisions, continuations and extensions thereof), applications for
patents, patent disclosures docketed, inventions, improvements, registered
trademarks, trademark applications, trade

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names and copyrights owned by the Companies, and all material licenses,
franchises, permits, authorizations, agreements and arrangements that concern
the same or that concern like items owned by others and used by the Companies.
True, correct and complete copies of all such licenses, franchises, permits,
authorizations, agreements and arrangements have been delivered by Sellers to
Buyer.
          (b) (i) The conduct of the business of the Companies as currently
conducted does not infringe upon or misappropriate the Intellectual Property
rights of any third party, and no claim has been asserted against any Company
that the conduct of the business of such Company as currently conducted
infringes upon or may infringe upon or misappropriates the Intellectual Property
rights of any third party; (ii) with respect to each item of Intellectual
Property that is owned by any Company (“Owned Intellectual Property”), such
Company is the owner of the entire right, title and interest in and to such
Owned Intellectual Property and is entitled to use such Owned Intellectual
Property in the continued operation of its respective business; (iii) with
respect to each item of Intellectual Property that is licensed to or otherwise
held or used by any Company (“Licensed Intellectual Property”), such Company has
the right to use such Licensed Intellectual Property in the continued operation
of its respective business in accordance with the terms of the license agreement
governing such Licensed Intellectual Property; (iv) none of the Owned
Intellectual Property has been adjudged invalid or unenforceable in whole or in
part and, to the Knowledge of Sellers and CSC, the Owned Intellectual Property
is valid and enforceable; (v) to the Knowledge of Sellers and CSC, no person is
engaging in any activity that infringes upon the Owned Intellectual Property;
(vi) to the Knowledge of Sellers and CSC, each license of the Licensed
Intellectual Property is valid and enforceable, is binding on all parties to
such license, and is in full force and effect; (vii) to the Knowledge of Sellers
and CSC, no party to any license of the Licensed Intellectual Property is in
breach thereof or default thereunder; (viii) the Companies have taken all
reasonable actions (including executing non-disclosure and intellectual property
assignment agreements) to protect, preserve and maintain the Owned Intellectual
Property; and (ix) neither the execution of this Agreement or any Ancillary
Seller Agreement, nor the consummation of the transactions contemplated thereby,
shall adversely affect any of the Companies’ rights with respect to the Owned
Intellectual Property or the Licensed Intellectual Property.
     3.15 Material Contracts.
          (a) Schedule 3.15 contains a list of the following Contracts to which
any Company is a party or by which any Company or its properties or assets are
bound or affected as of the date hereof:
               (i) any lease of real or personal property providing for annual
rentals of $5,000 or more;
               (ii) any Contract for the purchase of materials, supplies, goods,
services, equipment or other assets that is not terminable without material
penalty on 90 days notice by the Company party thereto and that provides for or
is reasonably likely to require either (A) annual payments to or from such
Company of $10,000 or more, or (B) aggregate payments to or from such Company of
$50,000 or more;

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               (iii) any partnership, limited liability company agreement, joint
venture or other similar agreement or arrangement relating to the formation,
creation, operation, management or control of any partnership or joint venture;
               (iv) any Contract (other than among consolidated subsidiaries)
under which Indebtedness is outstanding or may be incurred or pursuant to which
any Asset is mortgaged, pledged or otherwise subject to an Encumbrance, or any
Contract restricting the incurrence of Indebtedness or the incurrence of
Encumbrances or restricting the payment of dividends or the transfer of any
property (except, with respect to the transfer of Leased Real Property,
restrictions contained in the Real Property Leases);
               (v) any Contract that purports to limit in any material respect
the right of the Companies: (A) to engage in any line of business, or (B) to
compete with any Person or operate in any location;
               (vi) any Contract to which any Company has continuing
indemnification obligations (except in the ordinary course of business) or
potential liability under any purchase price adjustment;
               (vii) any Contract providing for the sale or exchange of, or
option to sell or exchange, any Property, or for the purchase or exchange of, or
option to purchase or exchange, any real estate;
               (viii) any Contract for the acquisition or disposition, directly
or indirectly (by merger or otherwise), of assets (other than Contracts
referenced in clause (vii) of this Section 3.15) or capital stock or other
equity interests of another person;
               (ix) any Contract pursuant to which any Company manages any real
property;
               (x) other than Contracts for ordinary repair and maintenance, any
Contract relating to the development or construction of, or additions or
expansions to, the Leased Real Property;
               (xi) any advertising or other promotional Contract providing for
payment by any Company of $10,000 or more;
               (xii) any Contract with respect to any monitoring station used by
the Companies;
               (xiii) any license, royalty or other Contract concerning
Intellectual Property; and
               (xiv) any Contract (other than Contracts referenced in clauses
(i) through (xiii) of this Section 3.15) which by its terms calls for aggregate
payments by any Company in excess of $15,000.

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               (the Contracts described in clauses (i) through (xiv) and those
required to be identified on Schedules 3.6, 3.13, and 3.14, in each case
together with all exhibits and schedules thereto being, the “Material
Contracts”).
          (b) (i) None of the Companies is and, to the Knowledge of Sellers, no
other party is in breach or violation of, or default under, any Material
Contract, (ii) none of the Companies has received any claim of default or notice
of cancellation under any Material Contract, and (iii) to the Knowledge of
Sellers, no event has occurred which would result in a breach or violation of,
or a default under, any Material Contract (in each case, with or without notice
or lapse of time or both). Each Material Contract is in full force and effect
and valid, binding and enforceable in accordance with its terms, except as may
be limited by: (i) bankruptcy, insolvency, reorganization, moratorium and other
similar Laws affecting creditors’ rights generally; (ii) the equitable and
statutory powers of the courts of appropriate jurisdiction to stay proceedings
before them and to stay the execution of judgments; and (iii) discretion of the
courts in granting remedies of specific performance and injunction or other
equitable remedies. Sellers have made available to Buyer true and complete
copies of all Material Contracts, including any amendments thereto.
     3.16 Alarm Systems and Alarm Accounts.
          (a) Except as set forth on Schedule 3.16, the alarm systems which are
leased by the Companies to customers are in good working order and condition,
except for ordinary wear and tear, routine service needs and customer misuse or
nonuse. The alarm system equipment for such alarm systems that were installed by
the Company were so installed in all material respects in accordance with good
workmanlike practices prevailing in the industry at the time of installation.
Since January 1, 2003, all equipment sold or leased by each Company to customers
was of merchantable quality at the time of its sale or lease and such Company
has not breached in any material respect any express or implied warranties in
connection with such sales or leases. All alarm systems and equipment installed
by the Companies were so installed in conformity in all material respects with
the respective subscriber contracts pursuant to which such systems were
installed and in conformity in all material respects with applicable legal
requirements at the time of installation. Each Company has performed all
warranty service and other repairs requested by customers as of September 1,
2005 with the exception of scheduled routine service and repairs.
          (b) Except as set forth on Schedule 3.16, the Companies do not have
any free, discounted or bartered service liability to existing customers (but
excluding employees of the Companies), except to specific customers as reflected
in its books and records, and, in the aggregate, not more than $500 per month
based on the Companies’ current rates for such services and nothing would
prohibit the Companies from discontinuing, without liability any free service
after Closing. The Companies do not have any liability for the refund of monies
to customers other than obligations to refund deposits, overpayments and
prepayments (without interest) made by customer in the ordinary course of
business.

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     3.17 Customer Agreements.
          (a) Set forth on Schedule 3.17(a) is a true and correct list of the
Companies’ contracts with their 50 largest customers as of August 31, 2005, as
measured by RMR attributable to such customers as of August 31, 2005.
          (b) Attached as Schedule 3.17(b) is a true and correct copy of the
current form of standard retail customer agreement (“Current Standard Retail
Form”) utilized by the Companies in the operation of the Security Business.
          (c) Set forth on the compact discs delivered by Sellers to Buyer at
the execution of this Agreement and comprising Schedule 3.17(c) is a true and
correct list of all alarm lease, maintenance, repair, service and monitoring
agreements with customers, including any third-party monitoring agreements
(collectively, the “Customer Agreements”).
          (d) Each such Customer Agreement is valid and enforceable by the
Company a party thereto against any other party thereto in accordance with its
terms except to the extent limited by: (i) bankruptcy, insolvency,
reorganization, moratorium and other similar Laws affecting creditors’ rights
generally; (ii) the equitable and statutory powers of the courts of appropriate
jurisdiction to stay proceedings before them and to stay the execution of
judgments; and (iii) discretion of the courts in granting remedies of specific
performance and injunction or other equitable remedies. Each Company is in
compliance with all of the material terms of the Customer Agreements and no
default or event of default, or event or condition that, to the Knowledge of the
Sellers and the Companies, with notice or lapse of time or both would constitute
such a default, on its part or on the part of any other party thereto exists
with respect to any liability to such customer party to any Customer Agreement.
No Customer Agreement contains any material contractual requirement with respect
to which there is a reasonable likelihood the Company party thereto will be
unable to comply in any material respect.
          (e) Except as set forth on Schedule 3.17(e), since January 1, 2003,
the Companies have provided each residential customer that they originated (and
did not acquire from a third party) with the 3 day right of rescission in
compliance with the provisions of 16 C.F.R. Part 429 (Cooling Off Period for
Door to Door Sales) and any applicable state laws; provided, however, that such
rescission notices were not given to the individual homeowners who are members
of a homeowners association that has contracted with the Companies.
     3.18 Broker or Finder.
          None of Sellers, the Companies or any party acting on their behalf has
paid or become obligated to pay any fee or commission to any broker, finder or
intermediary for or on account of these transactions.
     3.19 Employee Benefit Plans.
          (a) Except as set forth on Schedule 3.19, with respect to current or
former employees of the Companies, the Companies do not maintain or contribute
to any (i) nonqualified deferred compensation, bonus or retirement plans or
arrangements, (ii) employee

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pension benefit plans (as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”)), (iii) employee welfare plans
(as defined in Section 3(1) of ERISA) or (iv) material fringe benefit plans or
programs (collectively, the “Plans”). The Companies do not and have not within
the last 5 years contributed to, nor do they have any actual or potential
liability with respect to, any multiemployer pension plan (as defined in Section
3(37) of ERISA). The Companies do not maintain or contribute to, or have any
liability with respect to, any employee welfare benefit plan which provides
health, accident or life insurance benefits to former employees, their spouses
or dependents, other than in accordance with Section 4980B of the Code
(“COBRA”).
          (b) The Plans (and related trusts and insurance contracts) comply in
form and in operation with the applicable requirements of ERISA and the Code;
and each Plan which is intended to be qualified under the Code meets the
requirements of a qualified plan under Section 401(a) of the Code, has either
received a favorable determination letter or such is pending from the Internal
Revenue Service and was timely amended and filed with the Internal Revenue
Service for a favorable determination letter with respect to changes made by the
Tax Reform Act of 1986.
          (c) All required reports and descriptions (including Form 5500 Annual
Reports, Summary Annual Reports and Summary Plan Descriptions) with respect to
each Plan have been properly and timely filed with the appropriate government
agency or distributed to participants, and the Companies have complied and are
currently in compliance with the requirements of COBRA.
          (d) With respect to each Plan, all contributions and premium payments
which are due (including all employer contributions and employee salary
reduction contributions) have been paid to or with respect to such Plan, all
contributions or other payments for prior plan years which are not yet due and
with respect to the current plan year for the period ending on the Closing Date
have been made or accrued.
          (e) The Companies do not have any actual or potential liability to the
Pension Benefit Guaranty Corporation, the Internal Revenue Service, the
Department of Labor, any multiemployer plan or otherwise with respect to any
Plan or with respect to any employee pension benefit plan currently or
previously maintained by members of the controlled group of companies (as
defined in Section 414 of the Code) that includes the Companies (the “Controlled
Group”) that has not been satisfied in full, and no condition exists that
presents a material risk to the Companies or any member of the Controlled Group
of incurring such a liability.
          (f) With respect to each Plan, (i) there have been no prohibited
transactions as defined in Section 406 of ERISA or Section 4975 of the Code,
(ii) no fiduciary (as defined in Section 3(21) of ERISA) has any liability for
breach of fiduciary duty or any other failure to act or comply in connection
with the administration or investment of the assets of any Plan, and (iii) no
actions, investigations, suits or claims with respect to the assets thereof
(other than routine claims for benefits) are pending or threatened, and the
Companies have no Knowledge of any facts which would give rise to or could
reasonably be expected to give rise to any such actions, suits or claims.

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          (g) With respect to each of the Plans, Sellers have furnished to Buyer
true and complete copies of: (i) the plan documents and summary plan
descriptions, (ii) the most recent determination letter received from the
Internal Revenue Service, (iii) the last Form 5500 Annual Report, and (iv) all
related trust agreements, insurance contracts or other funding agreements which
implement the Plans.
     3.20 Environmental Matters.
          (a) Except as set forth on Schedule 3.20, (i) none of the Companies
has violated, or is in violation of, any Environmental Law; (ii) to the
Knowledge of the Sellers and the Companies, there is and has been no presence,
release or threat of release of Hazardous Substances at, on, under or affecting
(A) any of the properties currently owned, leased or operated by any Company, or
(B) any location at which Hazardous Substances are present for which any Company
is or is allegedly liable, under conditions in the case of either clauses (A) or
(B) that would reasonably be expected to result in a liability or obligation to
the Companies, or, as the Companies are currently operated, adversely affect the
revenues of the Companies; (iii) the Companies have obtained and are and have
been in compliance with all, and have not violated any, required Environmental
Permits; (iv) there are no written claims pending or, to the Knowledge of the
Sellers and the Companies, threatened against any Company alleging violations of
or liability or obligations under any Environmental Law or otherwise concerning
the presence or release of Hazardous Substances; and (v) none of the Companies
has received any written notice of, is a party to, or, to the Knowledge of the
Sellers and the Companies, is reasonably likely to be affected by any
proceedings, any investigations or any agreements concerning such matters. The
Companies have provided to Buyer a copy of all material studies, audits,
assessments or investigations concerning compliance with, or liability or
obligations under, Environmental Law affecting the Companies that are in the
possession or, to the Knowledge of Sellers and the Companies, control of the
Companies.
          (b) For purposes of this Agreement:
               “Environmental Laws” means any Laws (including common law) of the
United States federal, state, local, non-United States, or any other
Governmental Authority, relating to: (A) releases or threatened releases of
Hazardous Substances or materials containing Hazardous Substances; (B) the
manufacture, handling, transport, use, treatment, storage or disposal of
Hazardous Substances or materials containing Hazardous Substances; or
(C) pollution or protection of the environment or human health and safety as
affected by Hazardous Substances or materials containing Hazardous Substances.
               “Environmental Permits” means any permit, license registration,
approval, notification or any other authorization pursuant to Environmental Law.
               “Hazardous Substances” means: (A) those substances, materials or
wastes defined as toxic, hazardous, acutely hazardous, pollutants, contaminants,
or words of similar import, in or regulated under the following United States
federal statutes and any analogous state statutes, and all regulations
thereunder: the Hazardous Materials Transportation Act, the Resource
Conservation and Recovery Act, the Comprehensive

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Environmental Response, Compensation and Liability Act, the Clean Water Act, the
Safe Drinking Water Act, the Atomic Energy Act, the Federal Insecticide,
Fungicide, and Rodenticide Act and the Clean Air Act; (B) petroleum and
petroleum products, including crude oil and any fractions thereof; (C) natural
gas, synthetic gas, and any mixtures thereof; (D) polychlorinated biphenyls,
asbestos, molds that could reasonably be expected to adversely affect human
health, urea formaldehyde foam insulation and radon; and (E) any substance,
material or waste regulated by any Governmental Authority pursuant to, or that
would reasonably be expected to result in liability under, any Law in addition
to those identified in (A) above the primary purpose of which is the protection
of the environment or human health and safety as affected by environmental
media.
     3.21 Banks, Directors and Powers of Attorney.
          Schedule 3.21 contains: (a) a list of all banks or other financial
institutions (with account numbers) in which the Companies have an account or
safe deposit box and the names of all persons authorized to draw thereon or have
access thereto; (b) the names of all incumbent directors and senior officers of
the Companies; and (c) the names of all persons holding powers of attorney from
the Companies.
     3.22 Related Party Transactions.
          Excluding any inter-company transactions or arrangements and except as
set forth on Schedule 3.22, there are not any transactions, business
relationships or other relationships between (a) any Company, on the one hand,
and (b) any of the following (collectively, the “Related Parties”), on the other
hand: (i) any officer, director or employee of any Company (other than customary
transactions or relationships in their capacity as officer, director or
employee), or (ii) any Seller, or any Affiliate, trustee, beneficiary, or Family
Member of any Seller. None of the Related Parties owns any asset, tangible or
intangible, which is used in the Security Business operated by the Companies.
     3.23 No Undisclosed Liabilities.
          Except as set forth in Schedule 3.23, the Companies are not subject to
any liability (including unasserted claims, whether known or unknown), whether
absolute, contingent, accrued or otherwise, which is not shown or which is in
excess of amounts shown or reserved for in the Balance Sheet, other than
liabilities of the same nature as those set forth in the Balance Sheet and the
notes thereto and reasonably incurred after the Balance Sheet Date in the
ordinary course of business consistent with past practice
     3.24 Inventory.
          Except as set forth on Schedule 3.24, the Inventory consists of items
of a quality and quantity usable and saleable in the usual and ordinary course
of business of the Security Business, and is reflected in the Financial
Statements with adequate provision for obsolete, outdated, unsaleable, unusable
or damaged items. The Inventory meets applicable design and manufacturing
specifications and complies with any and all warranties customarily given to
customers with respect thereto. Such Inventory is capable of being installed
into

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customer’s systems at ordinary costs and by ordinary procedures consistent with
the Companies’ past practices without voiding any vendor warranties.
     3.25 Accounts Receivable.
          Except as set forth on Schedule 3.25, all existing accounts receivable
of the Companies (including those accounts receivable reflected on the Balance
Sheet (and which will be reflected on the Initial Balance Sheet) (collectively,
the “Accounts Receivable”) (a) represent valid obligations arising from sales
actually made or services actually performed in the ordinary course of business,
and (b) have arisen (i) from bona fide transactions in the ordinary course of
business, and (ii) under valid and enforceable contracts to which the Companies
are a party. Except as set forth on Schedule 3.25, all Accounts Receivable are
good and collectible in the ordinary course of business at the aggregate
recorded amounts thereof, net of any applicable allowance for doubtful accounts
reflected in the Balance Sheet and the Working Capital Adjustment determined
from the Initial Balance Sheet, which allowance will be determined on a basis
consistent with the basis used in determining the allowance for doubtful
accounts reflected in the Balance Sheet and Initial Balance Sheet, as
applicable. Except as set forth on Schedule 3.25, there is no contest, claim, or
right of set-off, of any Account Receivable relating to the amount or validity
of such Account Receivable.
     3.26 Suppliers.
          Schedule 3.26 sets forth a true, accurate and complete list of the ten
largest suppliers of the Companies (excluding any landlords) in terms of
purchases during the most recently completed fiscal year and the portion of
current fiscal year prior to the date of this Agreement (collectively, the
“Major Suppliers”). Since December 31, 2004, except as set forth on
Schedule 3.26, there has not been any material dispute between any Company and
any Major Supplier, and, no Major Supplier has indicated in writing to any
Company that such Major Supplier intends to materially reduce its purchases
from, or sales to, or to otherwise materially reduce its business relationship
with, such Company or the other Companies.
     3.27 [Reserved].
     3.28 Disclosure.
          None of Sellers’ representations, warranties and covenants in this
Agreement contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make such representations, warranties and
covenants true.
     3.29 Working Capital Adjustment.
          Except to the extent reflected in the Working Capital Adjustment
calculated as of October 31, 2005 (which has been calculated by Sellers on a pro
forma basis as of the Closing Date to the extent practicable) and the increase
in Funded Debt for special bonuses and option cancellation payments occurring
after October 31, 2005 and before the Closing Date, between October 31, 2005 and
the Closing Date, none of the Companies has: (a) created or incurred any

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current liability (absolute or contingent) except for current liabilities
incurred in the ordinary course of business; (b) made any capital expenditures
or capital additions or improvements; (c) paid any amounts or made any
distributions of property to the Sellers, their Family Members or their
Affiliates or otherwise paid any amounts other than in the ordinary course of
business consistent with past practice; (d) accelerated or delayed collection of
notes or accounts receivable in advance of or beyond their regular due dates or
the dates when the same would have been collected in the ordinary course of
business consistent with past practice; (e) otherwise taken any action other
than in the ordinary course of business consistent with past practice; or
(f) committed to do or take any of the foregoing actions.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER
          As an inducement to Sellers and Sellers’ Representatives to enter into
this Agreement and to consummate these transactions, Buyer represents, warrants
and covenants to Sellers and Sellers’ Representatives, and agrees that as of
this date:
     4.1 Authority of Buyer; Enforceability.
          (a) Buyer is a corporation, duly incorporated and organized, validly
existing and in good standing under the laws of the State of Florida. Buyer has
full corporate power and authority to enter into this Agreement and Buyer
Ancillary Agreements, to consummate these transactions and to comply with its
terms, conditions and provisions. The Board of Directors of Buyer has taken all
necessary action to authorize and approve this Agreement and Buyer Ancillary
Documents, the consummation of the transactions contemplated hereby and the
performance by Buyer of all the terms and conditions hereof on its part to be
performed. The approval of Buyer’s shareholders is not required to execute this
Agreement and Buyer Ancillary Documents, nor to consummate this transaction.
          (b) This Agreement, and the Buyer Ancillary Agreements upon the
execution thereof, has been duly and validly executed and delivered by Buyer
and, assuming due authorization, execution and delivery by the other parties
hereto, constitutes legal, valid and binding obligations of Buyer enforceable
against Buyer in accordance with its terms, except as may be limited by: (a)
bankruptcy, insolvency, reorganization, moratorium and other similar Laws
affecting creditors’ rights generally; (b) the equitable and statutory powers of
the courts of appropriate jurisdiction to stay proceedings before them and to
stay the execution of judgments; and (c) discretion of the courts in granting
remedies of specific performance and injunction or other equitable remedies.
     4.2 No Conflicts.
          The execution and delivery by Buyer of this Agreement and Buyer
Ancillary Agreements, the performance of its obligations under this Agreement
and Buyer Ancillary Agreements and the consummation of the transactions
contemplated hereby do not and shall not:

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          (a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of Buyer’s Organizational Documents, shareholder
or investor agreements;
          (b) in any material respect conflict with or result in a violation or
breach of any term or provision of any Law applicable to Buyer; or
          (c) in any material respect conflict with or result in a violation or
breach of, or constitute a default under, or require Buyer to obtain any consent
or approval under the terms of, any contract or license to which Buyer is a
party or by which any of Buyer’s assets and properties are bound.
          Except as set forth on Schedule 4.2, no consent, approval or action
of, filing with or notice to any Governmental Body on the part of Buyer is
required in connection with the execution, delivery and performance of this
Agreement and Buyer Ancillary Agreements or the consummation of the transactions
contemplated hereby or thereby, except for (i) applicable requirements of the
Exchange Act and (ii) any filings required under the rules and regulations of
the Nasdaq National Market.
     4.3 Litigation.
          There is no litigation, at law or in equity, or any proceedings before
any Governmental Authority, pending or, to the Knowledge of Buyer, threatened
against or adversely affecting Buyer involving the possibility of any judgment,
order or other decision which might impair the ability of Buyer to consummate
these transactions.
     4.4 Investment Purpose.
          Buyer is an accredited investor as defined in the Securities Act.
Buyer is acquiring the Stock for investment purposes only for its own account
and not with a view to resell or otherwise distribute. Buyer does not presently
intend to resell or otherwise dispose of all or any part of the Stock or
substantially all of the Assets.
     4.5 Cooperation with Sellers; Licensing Requirements.
          (a) Buyer is not aware of any reason why Buyer would not be acceptable
to those third parties whose consent is required to consummate these
transactions. Buyer agrees to cooperate with Sellers in a prompt and timely
manner in obtaining the consents necessary to the consummation of the
transactions contemplated by this Agreement by attending meetings with the
parties who must provide such consents and by providing the appropriate
insurance, surety bonds, financial information and other assurances required in
order to obtain such consents to assignment.
          (b) Buyer agrees that Buyer, and not Sellers, will be solely
responsible after the Closing to provide the required notices of a change of
control of the Companies and/or a change in the list of officers and directors
of the Companies to the Governmental Authorities who license the Companies.

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     4.6 Financial Capacity.
          Buyer has adequate funds available to it in order to consummate the
transactions contemplated by this Agreement.
     4.7 Broker or Finder.
          Neither Buyer nor any of its Affiliates has incurred any liability for
any fee or commission to any broker, finder, investment banker or other
intermediary in connection with the transactions contemplated by this Agreement
that would result in any liability or obligation being imposed on Sellers.
     4.8 SEC Reports.
          (a) Since January 1, 2004, Buyer’s parent corporation, Devcon
International Corp. (“Devcon”), has filed (and through the Closing Date, will
continue to file) all forms, reports and documents with the SEC required to be
filed by Devcon pursuant to the federal securities laws and the SEC rules and
regulations thereunder, all of which have complied (or will comply) as of their
respective filing dates, or in the case of registration statements, their
respective effective dates, in all material respects with all applicable
requirements of the Securities Act and the Exchange Act and the rules and
regulations promulgated thereunder (collectively, the “SEC Reports”). None of
the SEC Reports, including any exhibits, financial statements or schedules
included therein, at the time filed, or in the case of registration statements,
their respective effective dates, contained (or will contain) any untrue
statement of a material fact or omitted (or will omit) to state a 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 consolidated financial statements (including, in each case, any
notes thereto) of Devcon included in the SEC Reports complied (or will comply)
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto as of their
respective dates of filing, were prepared (or will be prepared) in accordance
with the published rules and regulations of the SEC and fairly presented (or
will fairly present) in all material respects the consolidated financial
position of Devcon and its consolidated subsidiaries as at the respective dates
thereof and the consolidated results of their operations and their consolidated
cash flows for the periods then ended (subject, in the case of unaudited
statements to normal year-end audit adjustments and to any other adjustments
described therein). Buyer is Solvent.
          (b) Buyer is a sophisticated and experienced buyer of security
alarm/fire accounts and security alarm/fire companies. Buyer has such knowledge
and experience in financial and business matters that it is capable of
evaluating the merits and risks of purchasing the Security Business. Buyer
confirms that Seller has made available to Buyer the opportunity to ask
questions of the Companies’ Senior Management.

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     4.9 No Section 338 Election.
          Buyer agrees that it shall not make an election pursuant to, or take
any action which would result in an election under, Section 338 of the Code (or
any successor provision) with respect to the transactions contemplated in this
Agreement.
     4.10 No Other Representations.
          BUYER ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, SELLERS HAVE NOT MADE AND DO NOT HEREBY MAKE ANY REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, ARISING BY OPERATION OF LAW OR OTHERWISE,
WHATSOEVER WITH RESPECT TO ANY SELLER, ANY COMPANY, THE STOCK OR THE SECURITY
BUSINESS, INCLUDING ANY REPRESENTATION OR WARRANTY REGARDING CONDITION,
HABITABILITY, SUITABILITY, QUALITY OF CONSTRUCTION, WORKMANSHIP, MERCHANTABILITY
OR FITNESS FOR ANY PARTICULAR PURPOSE. BUYER ACKNOWLEDGES THAT IT IS ENTERING
INTO THIS AGREEMENT WITHOUT RELYING UPON ANY STATEMENT, REPRESENTATION OR
WARRANTY MADE BY SELLERS, OR BY ANY OTHER PERSON OTHER THAN THE STATEMENTS,
REPRESENTATIONS AND WARRANTIES EXPRESSLY MADE BY SELLERS IN THIS AGREEMENT.
     4.11 Disclosure.
          None of Buyer’s representations, warranties or covenants in this
Agreement contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make such representations, warranties and
covenants true.
5. ACTIONS ON OR AFTER THE CLOSING DATE
          The parties covenant and agree to take the following actions on or
after the Closing Date.
     5.1 [Reserved].
     5.2 Resignations.
          Sellers will cause all members of the Board of Directors of each
Company to submit resignations as of the Closing Date in the form attached as
Exhibit 5.2.
     5.3 Tax Indemnification; Returns.
          (a) Sellers on a several, and not a joint and several, basis will be
responsible and liable for and shall indemnify and hold Buyer harmless for all
Taxes owed by, attributable to or accrued against the Companies for all periods
ending on or before October 31, 2005 (the “Tax Date of Determination”) (which
shall include with respect to Tax periods beginning before and ending after the
Tax Date of Determination, the portion of Taxes that relates to the portion of
such Tax periods ending on the Closing Date, as determined in

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Section 5.3(c)), except to the extent that the accrual of such Taxes is included
as current assets or current liabilities on the Final Balance Sheet. For the
avoidance of doubt, such Taxes shall include any Taxes imposed on any of the
Companies as a result of the (i) transfer of the Excluded Assets, regardless of
when such transfer occurs and/or (ii) the breach of Section 3.12. Buyer’s
recourse for any breaches of the Sellers’ obligations under this Section 5.3(a)
shall be against each Seller pro rata based upon its/his share of the Purchase
Price. Sellers agree with Buyer that Sellers, at their expense, will complete
and file on a timely basis all federal, foreign, state and local Tax Returns due
for the Companies for all periods ending on or prior to the Closing Date and
shall pay all Taxes shown due thereon for which they are responsible under this
Section 5.3(a), except to the extent that the accrual of such Taxes is included
as current liabilities on the Final Balance Sheet). Buyer will pay the remainder
of the Taxes shown due on such Tax Returns. Such Tax Returns will be true,
complete and correct in all material respects and shall be prepared consistently
with past practice except as required by applicable Law. The parties agree that
they will only assert a claim for indemnification in good faith and only for an
amount equal to a commercially reasonable estimate of their damages provided
that amounts set forth on the Companies’ Tax bills shall be deemed to be
commercially reasonable estimates thereof. Regardless of any good faith disputes
which may exist between them, the parties agree to pay or to authorize the
Escrow Agent to pay, without reservation or delay, any amounts which are not the
subject of a good faith dispute.
          (b) Buyer will cause the Companies to furnish to Sellers all
information pertaining to such entities reasonably requested by Sellers and
necessary for the preparation of Tax Returns for which Sellers are responsible
for preparing pursuant to Section 5.3(a) and will otherwise cooperate fully with
Sellers in the preparation of such Tax Returns. Prior to filing any such Tax
Return for a taxable period ending on or before the Closing Date, Sellers will
submit such returns to Buyer for its review. If such Tax Returns are required to
be filed after the Closing Date, and provided they meet the requirements
described in Section 5.3(a) above, the Buyer will cause an authorized
representative of the Company or Companies to execute such Tax Returns.
          (c) Buyer and/or the Companies will, at their expense, prepare or
cause to be prepared and file or cause to be filed any Tax Returns of the
Companies for Tax periods which begin before the Closing Date and end after the
Closing Date (“Straddle Period”). Sellers will pay to the Companies within
15 days after the date on which Taxes are paid with respect to such periods an
amount equal to the portion of such Taxes which relates to the portion of such
taxable period ending on the Tax Date of Determination, except to the extent
that the accrual of such Taxes is included as current liabilities on the Final
Balance Sheet. For purposes of this Section, in the case of any Taxes that are
imposed on a periodic basis and are payable for a taxable period that includes
(but does not end on) the Closing Date, a portion of such Tax which relates to
the portion of such taxable period ending on the Tax Date of Determination will:
(i) in the case of any Taxes other than Taxes based upon or related to income or
receipts, 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 Tax Date of Determination and the denominator of
which is the number of days in the entire taxable period, and (ii) in the case
of any Tax based upon or related to income or receipts, be deemed equal to the
amount which would be payable if the relevant taxable period

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ended on the Tax Date of Determination. Any credits relating to a taxable period
that begins before and ends after the Tax Date of Determination shall be
apportioned between Sellers and Buyer consistent with their Tax liability as
described above. If such Tax Returns are required to be filed after the Closing
Date, and provided they meet the requirements described in Section 5.3(a) above,
the Buyer will cause an authorized representative of the Company or Companies to
execute such Tax Returns.
          (d) Buyer and the Companies will be responsible for all Taxes and Tax
Returns of the Companies for any taxable period beginning after the Closing
Date. Sellers agree to make available to Buyer and the Companies, as
appropriate, records in the custody of Sellers or of any Affiliate, to furnish
other information (including all adjustments to and changes in Tax items of such
entities for taxable periods of such entities ending on or before the Closing
Date), and otherwise to cooperate to the extent reasonably required for the
filing of Tax Returns relating to the Companies, as appropriate for taxable
periods ending after the Closing Date and of other Tax Returns relating to such
entities for any taxable period.
          (e) Within 60-days after Closing, Sellers will furnish to Buyer a list
of the net operating loss (“NOL”) carryovers and investment tax credit (“ITC”)
carryovers attributable to the Companies as of the Closing Date. Sellers agree
to reasonably cooperate with Buyer to make available to Buyer, the NOL and ITC
carryovers attributable to the Companies as of the Closing Date, subject,
however, to any adjustment to or change in any tax item of such entities
required by the IRC.
          (f) Buyer, Sellers and the Companies will cooperate fully, as and to
the extent reasonably requested by the other parties, in connection with the
filing of Tax Returns pursuant to this Section and any audit, litigation or
other proceeding with respect to Taxes. Such cooperation will include the
retention and (upon the other party’s request) the provision of records and
information which are reasonably relevant to any such audit, litigation or other
proceeding, as well as making employees available on a mutually convenient basis
to provide additional information and explanation of any material provided
hereunder.
          (g) Sellers’ obligation to indemnify Buyer for Taxes under
Section 5.3(a) shall survive until the later of (i) 45 days after the expiration
of the statute of limitations (giving effect to extensions thereto) for the
relevant Tax and (ii) the resolution of any indemnity claim made by Buyer under
Section 5.3(a) to the extent timely notice of such claim was provided to
Sellers’ prior to the deadline for same set forth in the immediately preceding
clause (i).
          (h) Buyer acknowledges that the Companies have completed several
acquisitions where the Companies have significant on-going rights (including
covenants and indemnities) against the other parties to those acquisition
agreements. A list of these acquisitions is set forth on Schedule 8.1(a) and
copies of the acquisition agreements have been made available to Buyer. To the
extent that (i) Buyer is entitled to indemnification for Taxes for which the
Companies, in the reasonable opinion of Buyer, have a remedy under these
acquisition agreements equal to or better than the remedy Buyer then has against
Sellers under this Agreement and (ii) the parties responsible to indemnify the
Companies under these agreements (the “Responsible Parties”) are then in
existence, are not subject to a bankruptcy

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or other insolvency proceeding, and in the reasonable opinion of Buyer (to the
extent determinable by public records), have the financial ability to indemnify
the Companies for the breach or inaccuracy in question, Buyer agrees, if it
proceeds at all, not to proceed against Sellers for a period of one year
following its notice of claim to Sellers (unless Buyer must proceed against
Sellers to preserve its rights with respect to the expiration of any applicable
statute of limitations or other limitations set forth in this Agreement) and,
instead, proceed solely against the Responsible Parties. To the extent Buyer
chooses not to pursue any Responsible Parties for any Buyer’s Aggregate Loss for
which Buyer has been indemnified by Sellers, then (i) Buyer shall cause the
appropriate Company to assign its claims (to the extent assignable) underlying
Buyer’s Aggregate Loss to the Sellers and (ii) to the extent such claims are not
assignable, upon the reasonable request and direction of Sellers and to the
extent of attorney’s fees and other costs and expenses funded in advance by
Sellers, Buyer shall cause the Companies to proceed against the Responsible
Parties, provided such litigation does not, and is not reasonably likely to,
materially interfere with the Companies’ operation of the Security Business.
          (i) For periods following the Closing Date, the Buyer shall promptly
notify the Sellers’ Representatives in writing of any proposed assessment or the
commencement of any Tax audit or administrative or judicial proceeding or any
demand or claim on the Buyer, its Affiliates or the Companies that, if
determined adversely to the taxpayer or after the lapse of time, could be
grounds for indemnification by the Sellers under Section 5.3 (a “Tax Contest”).
Such notice shall contain factual information (to the extent known to the Buyer,
its Affiliates or the Companies) describing the asserted Tax liability in
reasonable detail and shall include copies of any notice or other document
received from any taxing authority in respect of any such asserted Tax
liability. If the Buyer fails to give the Sellers’ Representatives prompt notice
of an asserted Tax liability as required by this Section 5.3(i), then the
Sellers shall not have any obligation to indemnify for any loss arising out of
such asserted Tax liability, but only to the extent that failure to give such
notice results in a detriment to the Sellers.
     In the case of a Tax Contest that relates to taxable periods ending on or
before the Tax Date of Determination, the Sellers shall have the right, at their
expense, to control the conduct of such Tax Contest, provided, however, that if
settlement of such a Tax Contest could affect the Buyer’s or any of the
Companies’ liability for Taxes for which the Buyer is responsible or if Buyer
could be responsible for such Taxes because of the limitations on the Sellers’
obligation described in Section 5.3(a), or the Buyer’s right to a tax benefit to
which it is entitled, under this Agreement, such settlement shall not be agreed
to by the Sellers without the consent of the Buyer, which consent will not be
unreasonably withheld or delayed. The Buyer shall have the right to participate
in such Tax Contests at its own expense. If Sellers elect not to direct the Tax
Contest, the Buyer or the Companies may assume control of such Tax Contest (at
Buyer’s own expense).
     With respect to tax periods beginning before the Tax Date of Determination
and ending after the Tax Date of Determination, the Sellers may elect to direct
and control, through counsel of their own choosing, any Tax Contest to the
extent it involves any asserted Tax liability with respect to which indemnity
may be sought from the Sellers pursuant to this Section 5.3. The Buyer shall
direct and control any other such Tax Contest or portion thereof.

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If the Sellers elect to direct a Tax Contest, the Sellers shall within 30
calendar days of receipt of the notice of asserted Tax liability notify the
Buyer of their intent to do so, and the Buyer shall cooperate and shall cause
the Companies to fully cooperate, at the Seller’s expense, in each phase of such
Tax Contest. The Sellers shall not settle or compromise any asserted Tax
liability that could affect the Buyer’s or the Companies’ liability for Taxes
for which the Buyer is responsible or if Buyer could be responsible for such
Taxes because of the limitations on the Sellers’ obligation described in
Section 5.3(a), or the Buyer’s right to a tax benefit to which it is entitled,
under this Agreement without the consent of the Buyer, which consent will not be
unreasonably withheld or delayed. If Sellers elect not to direct the Tax
Contest, the Buyer or the Companies may assume control of such Tax Contest (at
Buyer’s own expense).
     Buyer and Sellers shall reasonably cooperate with each other at the
requesting party’s expense in the defense of any Tax Contest. Buyer and Sellers
shall cooperate in maintaining all records used in and relevant to such Tax
Contests. The party requesting such cooperation shall pay the reasonable
out-of-pocket expenses incurred in providing such cooperation (including
reasonable legal fees and disbursements) by the party providing such cooperation
and by its officers, directors, employees and agents, but shall not be
responsible for reimbursing such party or its officers, directors, employees and
agents for their time spent in such cooperation. Buyer agrees that it shall not,
and shall cause its Affiliates not to, encourage any third party to commence any
lawsuit in respect of, or otherwise pursue, claims.
          (j) In the event of any dispute relating to Taxes, the parties agree
to abide by the terms of any settlement or final determination with a taxing
authority or court and to allocate liability for Taxes (as between Buyer and
Sellers) pursuant to such settlement or final determination as described in
Section 5.3(a) and 5.3(c). The parties agree to attempt to resolve any disputes
relating to Taxes other than those subject to a settlement or final
determination by a taxing authority or court, including the preparation of Tax
Returns and resolution of disputes during the course of Tax Contests, in good
faith. In the event that such disputes cannot be so resolved, the parties agree
to submit the dispute to the Independent Accountants, who will be instructed to
make their determination on a basis consistent with the provisions of this
Agreement. Such determination will be final and binding on the parties.
          (k) Notwithstanding any other provisions to the contrary, no party
shall have any right to off-set or set-off any payment due pursuant to this
Section 5.3 against any other payment to be made pursuant to this Agreement
until a final, non-appealable determination with respect to such payment has
been made according to Section 5.3(j).
          (l) This Section 5.3 shall be the exclusive section governing
indemnification for Taxes and procedures with respect to third party claims
regarding Taxes in respect of Sections 3.10(i), 3.10(n), 3.12 and 5.3. No part
of Article 8 or Section 11.3 shall apply to claims for indemnification for
Taxes. Absent fraud, the parties hereto acknowledge and agree that the
indemnification provisions set forth in this Section 5.3 constitute the parties’
sole and exclusive remedy with respect to claims regarding Taxes in respect of
Sections 3.10(i), 3.10(n), 3.12 and 5.3, except for the parties’ right to
specific performance. Buyer expressly agrees that, with respect to Section 3.12,
it will not be a misrepresentation or a breach of warranty if Sellers have
disclosed the exception to their representation or warranty in sufficient detail
on Schedule 3.12. Notwithstanding anything to the contrary contained

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herein, the indemnification provisions in this Section 5.3 shall not apply to
any claim by Buyer of Seller’s breach of Sections 3.12 or 5.3 if Buyer’s Senior
Management had actual knowledge of such breach prior to the Closing Date, and
failed to disclose promptly such actual knowledge to Sellers’ Representatives
prior to the Closing Date.
     5.4 Options.
          Immediately prior to the Closing, Sellers have caused CSC to:
(a) cancel all of the Options, (b) pay to each Optionholder his/her pro rata
share of the Aggregate Option Consideration less any applicable withholding
taxes thereon, and (c) obtain from each Optionholder a general release of the
Companies and their Affiliates in the form attached as Exhibit 5.4. The parties
acknowledge and agree that the Aggregate Option Consideration paid to the
Optionholders will be reflected in the Working Capital Adjustment.
5.5 Security Dealer Funding Corp.
          In the event that Buyer or any of the Companies enters into Buyer’s
standard dealer agreement with Security Dealer Fundi#ng Corp. within the
six-month period following the Closing Date, Buyer agrees to promptly pay
Sellers in a lump sum payment an amount equal to the product of 16 times the RMR
arising under such dealer agreement (as RMR is defined and calculated under this
Agreement).
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
     The obligations of Buyer to purchase the Stock pursuant to this Agreement
shall, at the option of Buyer, be subject to the satisfaction, on or prior to
the Closing Date, of the following conditions:
     6.1 Documents, Certificates and Other Items.
          Sellers will have delivered or caused to be delivered to Buyer:
          (a) duly issued certificates for all of the Stock, duly endorsed in
blank or with blank stock powers attached;
          (b) resignations of all directors of the Companies;
          (c) minute books, stock certificate and transfer books, corporate
seals and other corporate records of each of the Companies;
          (d) the (i) termination of that certain Executive Employment
Agreement, dated as of November 18, 2002, between CSC, Coastal and Katz and
(ii) delivery of a release, in a form reasonably satisfactory to Buyer, executed
by Katz in favor of CSC and Coastal and releasing all rights and claims related
to such Executive Employment Agreement;
          (e) the (i) termination of that certain Employment Agreement, dated
July 15, 2002, among CSC, Bariston Partners, LLC and Mike McIntosh, as amended,
and (ii)

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delivery of a release, in a form reasonably satisfactory to Buyer, executed by
McIntosh in favor of CSC and releasing all rights and claims related to such
Employment Agreement;
(f) each Employment Agreement, duly executed;
(g) a current Certificate of Good Standing evidencing the corporate standing of
each Company issued by the Secretary of State of such entity’s state of
incorporation;
(h) the termination of that certain Amended and Restated Stockholders Agreement
among Sellers, CSC and Coastal dated as of May 28, 2004;
(i) the termination of that certain Amended and Restated Registration Agreement
among CSC and the Sellers dated as of May 28, 2004;
(j) the termination of those Amended and Restated Merchant Banking Services and
Indemnification Agreements, as amended, with Bariston Affiliates; and
(k) all other documents and instruments required under this Agreement.
     6.2 Satisfaction of Certain Debt.
          Sellers will have made appropriate arrangements for the termination of
the Encumbrances on file against the Assets by the Companies’ senior lender,
Citizens Bank of Massachusetts, and Sellers will have delivered to Buyer payoff
letters evidencing the total amount due as of the Closing Date and, subject to
Buyer’s satisfaction of the total amount due under the Credit Agreement, take
such other actions reasonably required by Buyer in order to remove such
Encumbrances of record against the Companies.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
     The obligations of the Sellers to sell the Stock pursuant to this Agreement
shall, at the option of Sellers, be subject to the satisfaction, on or prior to
the Closing Date, of the following conditions:
     7.1 Delivery of Purchase Price.
          (a) Buyer will have delivered the Estimated Purchase Price to Sellers,
less the amount of the Closing Escrow Fund.
          (b) Buyer will have delivered the Closing Escrow Fund to the Escrow
Agent.
     7.2 Documents, Certificates and Other Items.
          Buyer will have delivered or caused to be delivered to Sellers all of
the documents or instruments required under this Agreement.

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8. INDEMNIFICATION OTHER THAN FOR TAXES
     8.1 Indemnification by Sellers and Buyer.
          (a) On a several, and not a joint and several, basis, Sellers will
indemnify, hold harmless, defend and bear all costs of defending Buyer, its
Affiliates, their respective directors, officers, agents, employees, successors
and permitted assigns, which shall include the Companies following the Closing
(collectively, the “Buyer Indemnified Parties”), from, against and with respect
to any and all damage, loss, deficiency, expense (including any reasonable
attorney and accountant fees, legal costs or expenses), action, suit,
proceeding, demand, assessment or judgment to or against any Buyer Indemnified
Party (collectively, “Buyer’s Aggregate Loss”) arising out of or in connection
with (i) any breach or violation of, or nonperformance by, Sellers of any of
their representations, warranties, covenants or agreements contained in this
Agreement and (ii) Coastal’s acquisition of Strategic Technologies, Inc. (“STI”
and the acquisition thereof, the “STI Deal”), including without limitation STI’s
claims described on Schedule 3.8. Buyer expressly agrees that it will not be a
misrepresentation or a breach of warranty if Sellers have disclosed the
exception to their representation or warranty in sufficient detail on the
Schedules. Buyer’s recourse for any misrepresentations and/or breaches of
warranty, covenant and agreement which relate solely to one Seller shall be
limited to that Seller. Buyer’s recourse for any misrepresentations and/or
breaches of warranty, covenant and agreement which relate to all Sellers shall
be against each Seller pro rata based upon its/his share of the Purchase Price.
          Buyer acknowledges that the Companies have completed several
acquisitions where the Companies have significant on-going rights (including
covenants and indemnities) against the other parties to those acquisition
agreements. A list of these acquisitions is set forth on Schedule 8.1(a) and
copies of the acquisition agreements have been made available to Buyer. To the
extent that (i) Buyer suffers a Buyer’s Aggregate Loss for which the Companies,
in the reasonable opinion of Buyer, have a remedy under these acquisition
agreements equal to or better than the remedy Buyer then has against Sellers
under this Agreement and (ii) the Responsible Parties are then in existence, are
not subject to a bankruptcy or other insolvency proceeding, and in the
reasonable opinion of Buyer (to the extent determinable by public records), have
the financial ability to indemnify the Companies for the breach or inaccuracy in
question, Buyer agrees, if it proceeds at all, not to proceed against Sellers
for a period of one year following its notice of claim to Sellers (unless Buyer
must proceed against Sellers to preserve its rights with respect to the
expiration of any applicable statute of limitations or other limitations set
forth in this Agreement) and, instead, proceed solely against the Responsible
Parties. To the extent Buyer chooses not to pursue any Responsible Parties for
any Buyer’s Aggregate Loss for which Buyer has been indemnified by Sellers, then
(i) Buyer shall cause the appropriate Company to assign its claims (to the
extent assignable) underlying Buyer’s Aggregate Loss to the Sellers and (ii) to
the extent such claims are not assignable, upon the reasonable request and
direction of Sellers and to the extent of attorney’s fees and other costs and
expenses funded in advance by Sellers, Buyer shall cause the Companies to
proceed against the Responsible Parties, provided such litigation does not, and
is not reasonably likely to, materially interfere with the Companies’ operation
of the Security Business.

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          (b) Buyer will indemnify, hold harmless, defend and bear all costs of
defending Sellers, their respective Affiliates, directors, officers, agents,
employees, successors and permitted assigns (collectively, the “Seller
Indemnified Parties”) together with their successors and permitted assigns,
from, against and with respect to any and all damage, loss, deficiency, expense
(including any reasonable attorney and accountant fees, legal costs or
expenses), action, suit, proceeding, demand, assessment or judgment to or
against any Seller Indemnified Party (collectively, “Sellers’ Aggregate Loss”)
arising out of or in connection with any breach or violation of, or
nonperformance by, Buyer of any of its representations, warranties, covenants or
agreements contained in this Agreement. To the extent that Katz (or any other
Seller) has personally guaranteed any of the Companies’ obligations, Buyer
agrees to indemnify and hold Katz (or such other Seller) harmless from such
claims.
          (c) Should Buyer and Sellers be unable to agree as to the amount of
Buyer’s Aggregate Loss for which Buyer Indemnified Parties are to be
indemnified, or the amount of Sellers’ Aggregate Loss for which Seller
Indemnified Parties are to be indemnified, then either Buyer or Sellers, as the
case may be, may commence proceedings in accordance with the provisions of
Section 10.3.
     8.2 Notice of Claims.
          (a) If any claim is made by or against a party which, if sustained,
would give rise to a liability of the other party hereunder, that party (the
“Claiming Party”) will promptly cause notice of the claim to be delivered to the
other party (the “Indemnifying Party”) and will afford the Indemnifying Party
and its counsel, at the Indemnifying Party’s sole expense, the opportunity to
defend or settle the claim. Any notice of a claim will state, with reasonable
specification, the alleged basis for the claim and the amount of liability
asserted by or against the other party by reason of the claim. If such notice is
not given, it will not release the Indemnifying Party, in whole or in part, from
its obligations under this Article, except to the extent that the Indemnifying
Party’s ability to defend against such claim is actually prejudiced thereby.
Alternatively, if notice is given and the Indemnifying Party fails to assume the
defense of the claim within 15 days thereof, the claim may be defended,
compromised or settled by the Claiming Party without the consent of the
Indemnifying Party and the Indemnifying Party will remain liable under this
Article.
          (b) The parties agree that they will only assert a claim for
indemnification in good faith and only for an amount equal to a commercially
reasonable estimate of their damages. Regardless of any good faith disputes
which may exist between them, the parties agree to pay or to authorize the
Escrow Agent to pay, without reservation or delay, any amounts which are not the
subject of a good faith dispute.
     8.3 Third Party Claims.
          (a) Except as provided herein, the Indemnifying Party will engage
counsel to defend any claim brought by a third party (a “Third Party Claim”),
and will provide notice to the Claiming Party not later than 15 business days
following delivery by the Claiming Party to the Indemnifying Party of a notice
of a Third Party Claim, such notice to include an acknowledgment by the
Indemnifying Party that it will be liable in full to the Claiming Party

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for any Sellers’ Aggregate Loss or Buyer’s Aggregate Loss, as the case may be,
in connection with the Third Party Claim. The Claiming Party will fully
cooperate with such counsel. The Indemnifying Party will cause its counsel to
consult with the Claiming Party, as appropriate, as to the defense of such
claim, and the Claiming Party may, at its own expense, participate in such
defense, assistance or enforcement but the Indemnifying Party will control such
defense, assistance or enforcement. The Indemnifying Party will cause its
counsel to keep the Claiming Party, as appropriate, reasonably informed of the
status of such defense, assistance or enforcement. The parties agree that STI’s
claims described on Schedule 3.8 constitute a Third Party Claim.
          (b) The Claiming Party will have the right to engage counsel and to
control the defense of a Third Party Claim if the Indemnifying Party has not
notified the Claiming Party of its appointment of counsel and control of the
defense of a Third Party Claim pursuant to Section 8.2 within the time period
provided therein.
          (c) The Indemnifying Party may settle any Third Party Claim which it
is defending pursuant to Section 8.2 or 8.3(a) if such Third Party Claim solely
involves monetary damages and only if the amount of such settlement is to be
paid entirely by the Indemnifying Party pursuant to this Article. The
Indemnifying Party will not enter into a settlement of a Third Party Claim which
involves a non-monetary remedy or which will not be paid entirely by the
Indemnifying Party pursuant to this Article without the written consent of the
Claiming Party, which consent will not be unreasonably withheld.
          (d) Notwithstanding the foregoing, in the event of any settlement of,
or final judgment with respect to, a Third Party Claim which relates to acts,
omissions, conditions, events or other matters occurring both before and after
the Closing Date, the parties will negotiate in good faith as to the portion of
such Third Party Claim as to which such indemnification is payable. In the event
the parties are unable to agree on such portion, the matter will be resolved by
the courts pursuant to Section 10.3.
          (e) The parties will cooperate with one another in good faith in
connection with the defense, compromise or settlement of any Third Party Claim.
Neither party will dispose of, compromise or settle any Third Party Claim in a
manner that is not reasonable under the circumstances and in good faith.
     8.4 Survival of Indemnity Obligations; Basket; Cap; Anti-Sandbagging.
          (a) The rights of Buyer and Sellers to assert indemnification claims
will survive the Closing Date and will expire: (i) with respect to all claims
other than claims related to the STI Deal, fraud, a breach of covenant, and a
breach of the representations and warranties set forth in Sections 3.1, 3.2,
3.3, 3.4(a), 3.5, 3.18, 3.20, 3.22, 3.29, 4.1, 4.2(a) and (b), 4.7
(collectively, the “Excepted Claims”) 180-days after the Closing Date; and
(ii) with respect to the Excepted Claims, upon the expiration of 45 days
following the date on which the running of the statute of limitations with
respect to any such claim will bar the assessment and collection of such claim.

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          (b) Except for the Excepted Claims and claims relating to the
calculation, payment and adjustment of the Purchase Price, Buyer and Sellers
will not be required to indemnify the other unless and until Buyer’s Aggregate
Loss or Sellers’ Aggregate Loss exceeds $100,000 (the “Indemnification
Threshold”), in which case indemnity shall become due for the amount of such
Buyer’s Aggregate Loss or Sellers’ Aggregate Loss, as applicable, in excess of
the Indemnification Threshold.
          (c) The aggregate amount of the indemnification obligation of Buyer to
Sellers with respect to Sellers’ Aggregate Loss, or of Sellers to Buyer with
respect to Buyer’s Aggregate Loss, as the case may be, will not exceed
$4,000,000, exclusive of the Excepted Claims, for which there is no cap.
          (d) Notwithstanding anything to the contrary contained herein, the
indemnification provisions in Section 8.1(a) shall not apply to any claim of
Buyer of which Buyer’s Senior Management had actual knowledge prior to the
Closing Date, and failed to disclose promptly such actual knowledge to Sellers’
Representatives prior to the Closing Date. Additionally, the indemnification
provisions in Section 8.1(b) shall not apply to any claim of Sellers of which
the Sellers had actual knowledge prior to the Closing Date, and failed to
disclose promptly such actual knowledge to Buyer prior to the Closing Date.
     8.5 Limitations.
          Absent fraud, the parties hereto acknowledge and agree that the
indemnification provisions set forth in this Article constitute the parties’
sole and exclusive remedy with respect to any claims relating to the
transactions contemplated by this Agreement, except for the parties’ right to
specific performance and the Purchase Price disputes to be resolved by the
Independent Accountants. The amount which the Indemnifying Party is required to
pay to, for or on behalf of the Indemnified Party pursuant to this Article will
be reduced by any insurance proceeds actually recovered by or on behalf of the
Indemnified Party in reduction of the related indemnifiable loss (the
“Indemnifiable Loss”). Amounts required to be paid, as so reduced, are
hereinafter called an “Indemnity Payment.” If the Indemnified Party will have
received, or if the Indemnifying Party will have paid on its behalf, an
Indemnity Payment with respect to an Indemnifiable Loss and will subsequently
receive, directly or indirectly, insurance proceeds (which duplicate in whole or
in part, the Indemnity Payment) with respect to such Indemnifiable Loss, then
the Indemnified Party will promptly pay to the Indemnifying Party the amount of
such insurance proceeds, or, if less, the amount of the Indemnity Payment. The
parties hereto agree that the foregoing will not affect the subrogation rights
of any insurance companies making payments hereunder.
     8.6 No Right of Off-set/Set-off.
          Notwithstanding any other provisions to the contrary, no party shall
have any right to off-set or set-off any payment due pursuant to this Article
against any other payment to be made pursuant to this Agreement until a final,
non-appealable decision of a court of competent jurisdiction has been rendered
pursuant to Section 10.3.

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     8.7 Payments.
          Any payment pursuant to a claim for indemnification shall be made not
later than 30 days after receipt by the Indemnifying Party of written notice
from the Indemnified Party stating the amount of the claim, unless the claim is
subject to a good faith defense, in which case, payment shall be made not later
than 5 business days after the amount of the claim is finally determined.
     8.8 Cooperation in Litigation.
          Buyer and Sellers shall reasonably cooperate with each other at the
requesting party’s expense in the prosecution or defense of any claim,
litigation or other proceeding involving one or more third parties. Buyer and
Sellers shall cooperate in maintaining all records used in and relevant to such
claims. The party requesting such cooperation shall pay the reasonable
out-of-pocket expenses incurred in providing such cooperation (including
reasonable legal fees and disbursements) by the party providing such cooperation
and by its officers, directors, employees and agents, but shall not be
responsible for reimbursing such party or its officers, directors, employees and
agents for their time spent in such cooperation. Buyer agrees that it shall not,
and shall cause its Affiliates not to, encourage any third party to commence any
lawsuit in respect of, or otherwise pursue, claims.
     8.9 Non-Application to Tax Claims.
          This Article 8 shall not apply to claims for Taxes and procedures
relating to Taxes. Section 5.3 shall be the exclusive section governing the
rights and obligations of the parties with respect to claims for Taxes made
under Sections 3.12 and 5.3.
     8.10 No Contribution.
          Following the Closing and except as expressly permitted by this
Agreement, Sellers shall not exercise or assert (or attempt to exercise or
assert), any right of contribution, right of indemnity or other right or remedy
against the Companies in connection with any indemnification obligation or any
other losses or expenses for which such Sellers may become liable under this
Agreement or the Escrow Agreement.
9. [RESERVED]
10. GENERAL PROVISIONS
     10.1 Survival of Obligations; Effect of Investigations.
          Sellers and Buyer acknowledge that the representations, warranties,
covenants and agreements of Sellers and Buyer contained in this Agreement form
an integral part of the consideration given to Buyer in exchange for the
Purchase Price and to Sellers in exchange for the Stock, without which Buyer
would be unwilling to purchase, and Sellers would be unwilling to sell, the
Stock. Sellers and Buyer agree that all of the representations, warranties,
covenants and agreements of Sellers and Buyer contained in this Agreement will
survive the making of this Agreement as provided in Sections 5.3 and 8.4, and,
subject to Section 8.4(d),

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any investigation or review made by or on behalf of the parties and the Closing.
Sellers and Buyer further agree that, except as set forth in this Agreement, no
party will be deemed to have made any other representation or warranty to any
other party. The rights of Buyer and Seller to assert indemnification claims
will survive the Closing Date through 180-days after the Closing Date, except,
however, with respect to Excepted Claims and claims for Taxes (as provided in
Section 5.3), which shall survive the Closing and continue in full force and
effect for the applicable statute of limitations plus 45 days. Neither the
survival of Buyer’s right to indemnification nor any other provision of this
Agreement shall restrict in any way any Entity Seller’s right, to the extent
desired by any Entity Seller, to wind up its affairs and dissolve.
     10.2 Transfer Charges and Taxes; Other Charges; Lien Searches
          (a) Buyer will pay any transfer taxes and similar third-party fees and
charges incurred or assessed in connection with these transactions.
          (b) Buyer agrees to bear all the filing fees of any filing required by
the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, in
connection with these transactions. The parties do not believe such a filing
will be required.
          (c) Buyer agrees to bear the cost of any lien, judgment and pending
litigation searches performed against Sellers or the Companies and to supply
copies thereof to Sellers’ Counsel as soon as they are available.
     10.3 Dispute Resolution.
          Except with respect to a dispute regarding the Purchase Price and Tax
disputes to the extent not properly determined by the relevant taxing authority
(which disputes will be settled by the Independent Accountants), any controversy
or claim arising out of or relating to this Agreement, or the breach thereof,
will be commenced and settled in a court of competent jurisdiction in Miami-Dade
County, Florida. For the purpose of any suit, action or proceeding arising out
of or relating to this Agreement, the parties irrevocably consent and submit to
the jurisdiction and venue of any state or federal court of competent
jurisdiction sitting within Miami-Dade County, Florida. The parties agree that
service of the summons and complaint and all other process which may be served
in any such suit, action or proceeding may be effected by mailing by registered
mail a copy of such process to the parties at the addresses set forth in
Section 10.7. The parties irrevocably waive any objection which they may now or
hereafter have to the venue of any such suit, action or proceeding brought in
such court and any claim that such suit, action or proceeding brought in such
court has been brought in an inconvenient forum and agree that service of
process in accordance with this Section will be deemed in every respect
effective and valid personal service of process upon the parties. Nothing in
this Agreement will be construed to prohibit service of process by any other
method permitted by law. The parties agree that final judgment in such suit,
action or proceeding will be conclusive and may be enforced in any other
jurisdiction by suit on the judgment or in any other manner provided by law. The
substantially prevailing party in any legal proceeding will be entitled to
recover its legal fees and expenses.

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     10.4 Confidentiality.
          Except in connection with any action to enforce this Agreement or as
otherwise required by law, Buyer and Sellers agree that they will treat in
confidence all documents, materials and other information which they obtain
regarding the other party during the course of the negotiations leading to the
consummation of these transactions, the investigation provided for herein and
the preparation of this Agreement and other related documents. In the event
these transactions are not consummated, all copies of non-public documents and
material which have been furnished in connection with these transactions will be
promptly returned to the party furnishing such documents and material (or be
destroyed), will continue to be treated as confidential information and will not
be used for the benefit of the party who returned such confidential information.
     10.5 Public Announcements.
          Upon signing this Agreement, the parties agree to issue the press
release attached hereto as Exhibit 10.5. Neither Buyer nor Sellers will, without
the prior written approval of the other party (which may not be unreasonably
withheld), make any other press release or other public announcement concerning
these transactions, except as and to the extent that such party will be so
obligated by law, in which case, the other party will be advised in advance and
Buyer and Sellers will use their best efforts to cause a mutually agreeable
press release or announcement to be issued.
     10.6 Governing Law.
          This Agreement will be governed by, and construed and enforced in
accordance with, the laws of the State of Florida, without regard to its
conflicts of law provisions.
     10.7 Notices; Sellers’ Representatives.
          (a) All notices or other communications required or permitted
hereunder will be in writing and will be deemed given or delivered when
delivered personally, by registered or certified mail (postage prepaid), by
legible facsimile transmission followed by telephone confirmation or by
overnight courier (fare prepaid) addressed as follows:

     
If to Buyer, to:
  with a copy to:
Stephen J. Ruzika, President
   
Devcon Security Holdings, Inc.
  Stephen K. Roddenberry, Esq.
c/o Devcon International Corp.
  Akerman Senterfitt
1350 E. Newport Center Drive
  One Southeast Third Avenue
Suite 201
  28th Floor
Deerfield Beach, FL 33443
  Miami, FL 33131
Telecopy: 954-429-1500
  Telecopy: 305-374-5095

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If to Sellers’ Representatives, to:
  with a copy to:
 
   
Steve Lebowitz, Principal
  Hugh G. Van der Veer, Esq.
Topspin Management, LLC
  Buchanan Ingersoll Professional Corporation
Three Expressway Plaza
  One Oxford Centre
Roslyn Heights, NY 11577
  301 Grant Street, 20th Floor
Telecopy: 516-625-9499
  Pittsburgh, PA 15219
 
  Telecopy: 412-562-1041
 
   
and
   
 
   
Christopher E. Needham, Managing Director
  Sheldon Katz
Bariston Partners, LLC
  6291 N.W. 120 Drive
265 Franklin Street
  Coral Springs, FL 33076
18th Floor
   
Boston, MA 02110
   
Telecopy: 617-330-8951
   

          or to such address as such party may indicate by a notice delivered to
the other parties. Notice will be deemed received the same day (when delivered
personally), 5 days after mailing (when sent by registered or certified mail)
and the next business day (when delivered by overnight courier or by facsimile
transmission). Any party to this Agreement may change its address to which all
communications and notices may be sent by addressing notices of such change in
the manner provided.
          (b) (i) Upon the execution and delivery of this Agreement, Sellers
will be deemed to have appointed Bariston Partners, LLC and Topspin Management
(“Sellers’ Representatives”) as the co-agent and co-attorneys-in-fact of Sellers
and their respective successors, permitted assigns, heirs, executors and legal
representatives to act on behalf of Sellers under this Agreement for the purpose
of carrying out the provisions of this Agreement and taking any action and
executing any instruments that Sellers’ Representatives may deem necessary or
advisable in connection with these transactions, which appointment as
attorneys-in-fact is irrevocable and coupled with an interest. Sellers’
Representatives must act unanimously. Sellers hereby release Sellers’
Representatives from liability for any action taken or not taken by them in such
capacity except for any liability relating to the fraud, willful misconduct or
gross negligence of Sellers’ Representatives in carrying out their duties under
this Agreement. Buyer agrees that it will look solely to Sellers for any claims
arising under this Agreement and will have no separate right of recourse against
Sellers’ Representatives. Sellers’ Representatives may resign at any time and
without liability by giving notice to Buyer provided that such resignation will
not be effective until the later of the date set forth in the resignation notice
or the date on which a successor is appointed. Upon such resignation, a
successor Sellers’ Representatives may be appointed pursuant to a writing signed
by Sellers owning not less than 51% of the Stock. Each Seller agrees not to sue
or make a claim against Sellers’ Representatives in their capacity as Sellers’
Representatives.

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               (ii) Notwithstanding Section 10.7(a), each Seller expressly
agrees that to the extent any notice is required to be given to Sellers pursuant
to or in connection with this Agreement, delivery of notice solely to Sellers’
Representatives will be deemed to be sufficient notice to each Seller for
purposes of this Agreement. Furthermore, to the extent that any approval or
consent of, or instruction by, Sellers is required pursuant to or in connection
with this Agreement, Sellers expressly agree that such consent, approval and
instruction will be deemed to be given if given by Sellers’ Representatives, and
Buyer shall be entitled to rely on same from Sellers’ Representatives with the
same force and effect as if given by Sellers.
     10.8 Entire Agreement; Amendments.
          This Agreement is an integrated document, contains the entire
agreement between the parties and wholly cancels, terminates and supersedes any
and all previous and/or contemporaneous oral agreements, negotiations,
commitments and writings of the parties with respect to such subject matter,
excluding that certain Confidentiality Agreement by and between Buyer and
Coastal dated June 10, 2005, as amended on September 26, 2005. No change,
modification, extension, termination, notice of termination, discharge,
abandonment or waiver of this Agreement or any of its provisions, nor any
representation, promise or condition relating to this Agreement, will be binding
upon Buyer or Sellers unless made in writing and signed by Buyer and Sellers’
Representatives. The parties further agree that the prior drafts of this
Agreement will not be used to interpret this Agreement and will not be admitted
into evidence at any time.
     10.9 Interpretation.
          The Table of Contents, Index of Defined Terms, List of Schedules, List
of Exhibits, Article titles and Section headings are inserted for convenience of
reference only and are not intended to be a part of or to affect the meaning or
interpretation of any of the provisions of this Agreement. All references to
Sections and subsections contained in this Agreement refer to the Sections and
subsections of this Agreement. All references to Schedules or Exhibits contained
in this Agreement are references to the Schedules or Exhibits to this Agreement.
All references to the words “include” or “including” mean “including without
limitation.” The words “shall” and “will” have the same meaning. Any and all
Schedules, Exhibits or certificates referred to in or attached to this
Agreement, including the “Background” portion of this Agreement, are
incorporated by reference as though fully set forth at the point referred to in
this Agreement. There will be no presumption against any party on the ground
that such party was responsible for preparing this Agreement or any part of it.
All pronouns and any variations thereof will be deemed to refer to the
masculine, feminine, neuter, singular or plural as the context may require.
     10.10 Waivers.
          Any term or provision of this Agreement may be waived, or the time for
its performance may be extended, by the party or parties entitled to the benefit
thereof, but any such waiver must be in writing and must comply with the notice
provisions contained in Section 10.7. The failure of any party to enforce at any
time any provision of this Agreement will not be construed to be a waiver of
such provision, nor in any way to affect the validity of this

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Agreement or any part of it or the right of any party thereafter to enforce each
and every such provision. No waiver of any breach of this Agreement will be held
to constitute a waiver of any other or subsequent breach.
     10.11 Expenses.
          Except as otherwise provided in this Agreement, Buyer and Sellers will
each pay all of their own costs and expenses incident to the negotiation and
preparation of this Agreement and to their performance and compliance with all
agreements and conditions on their part to be performed or complied with,
including the fees, expenses and disbursements of their counsel, accountants and
other advisors; provided, however, that Sellers may cause the Companies to pay
or accrue such costs as long as the payment or accrual thereof is reflected in
the Working Capital Adjustment.
     10.12 Partial Invalidity.
          Whenever possible, each provision will be interpreted in such manner
as to be effective and valid under applicable law, but in case any one or more
of these provisions will, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
will not affect any other provisions of this Agreement, and this Agreement will
be construed as if such invalid, illegal or unenforceable provision or
provisions had never been contained herein, unless the deletion of such
provision or provisions would result in such a material change as to cause the
completion of these transactions to be unreasonable.
     10.13 Further Assurances.
          From time to time after the Closing, the parties shall, at the request
of any of the other parties, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such instruments and other documents and
perform or cause to be performed such acts and provide such information, as may
reasonably be requested by any other party to evidence or effectuate the
transactions contemplated hereunder or for the performance by the parties of any
of their other respective obligations under this Agreement. In addition to the
foregoing, prior to the Closing and at no cost to Sellers or the Companies
(excluding overhead costs for its employees), Sellers shall cause the Companies
to provide access to their books and records and accounting/financial personnel,
and cooperate with, Buyer and its accountants to allow Buyer to perform a SAB
104 analysis.
     10.14 Counterparts.
          This Agreement may be executed in one or more counterparts, each of
which will be considered an original instrument and all of which together will
be considered one and the same agreement, and will become effective when
counterparts, which together contain the signatures of each party, will have
been delivered to Buyer and Sellers. Delivery of executed signature pages by
facsimile transmission will constitute effective and binding execution and
delivery of this Agreement.

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     10.15 Third-Party Beneficiaries; Assignment.
          This Agreement will not confer any rights or remedies upon any person
other than the parties to this Agreement and their respective successors and
permitted assigns. This Agreement is not assignable by Sellers or Buyer without
the prior written consent of Buyer or Sellers’ Representatives, respectively;
provided, however, that Buyer may assign this Agreement and its rights hereunder
to (i) any Affiliate of Buyer and (ii) Capital Source Finance LLC, as a lender,
and Capital Source Finance LLC, as Agent for the lenders, in order to finance
Buyer’s consummation of the transactions contemplated hereby, provided that,
with respect to any such assignments      , Buyer gives advance written notice
of the assignment to any Affiliate to Sellers’ Representatives and Buyer remains
liable for the performance of all of Buyer’s obligations hereunder.
     10.16 Discounted Service.
          Buyer agrees to “grandfather” Coastal’s practice of providing
discounted service to the Companies’ employees.
     10.17 Sellers’ Counsel.
          (a) Buyer acknowledges that Sellers’ Counsel: (i) is serving as the
Escrow Agent, (ii) has historically represented the Companies, and (iii) will
continue to represent the Companies through Closing. After Closing, Sellers’
Counsel will no longer represent the Companies. Buyer understands and agrees
that Sellers’ Counsel will continue to represent Sellers and Sellers’
Representatives in connection with this Agreement and the transactions
contemplated thereby, including any dispute or litigation arising among Buyer,
Sellers and Sellers’ Representatives relating to the Purchase Agreement.
          (b) Buyer acknowledges that William S. Cross of Doumar, Allsworth,
Cross et al.(the “Cross Firm”): (i) currently represents the Companies in the
disputes arising out of the STI Deal and (ii) will continue to represent the
Companies following the Closing under the direction of Sellers in accordance
with Section 8.3. Buyer hereby waives any conflict of interest arising out of
the Cross Firm’s representation of the Companies prior to and following the
Closing Date.
          (c) Buyer agrees, on behalf of itself and its Affiliates, that it will
not assert that a conflict of interest is presented by Sellers’ Counsel
representing Sellers and Sellers’ Representatives in any current or future
matter, and that Buyer will not attempt to disqualify Sellers’ Counsel from
representing Sellers and Sellers’ Representatives, because of its service as
Escrow Agent or its prior representation of the Companies.
     10.18 Waiver of Jury Trial.
          THE PARTIES KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY AND ALL
RIGHT TO A TRIAL BY JURY IN ANY LITIGATION RELATING TO THIS AGREEMENT. IN SO
DOING, EACH PARTY INTENDS THAT ANY CLAIMS AND DISPUTES ARISING HEREUNDER (OTHER
THAN THOSE TO BE RESOLVED BY THE INDEPENDENT ACCOUNTANTS) WILL BE RESOLVED BY

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A JUDGE ACTING WITHOUT A JURY IN ORDER TO AVOID THE DELAYS, EXPENSES AND RISKS
OF MISTAKEN INTERPRETATION THAT EACH PARTY ACKNOWLEDGES ARE MORE LIKELY WITH A
JURY TRIAL THAN WITH A NON-JURY TRIAL.
     10.19 Time of the Essence.
          The parties agree that time is of the essence in this Agreement.
     10.20 Rules of Construction.
          The parties agree that they have been represented by counsel during
the negotiation and execution of this Agreement and, therefore, waive the
application of any Law, holding or ruling of construction providing that
ambiguities in an agreement or other document will be construed against the
party drafting such agreement or document.
     10.21 Non-Recourse.
          This Agreement is non-recourse to the shareholders, members and
partners of the parties to this Agreement.
[Signature Pages Follow]

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(Signature Page 1 of 3 to Stock Purchase Agreement)
     IN WITNESS WHEREOF, the parties have executed this Agreement, or have
caused this Agreement to be executed, as of the date first written above.

            DEVCON SECURITY HOLDINGS, INC.
      By:   /s/ Stephen J. Ruzika         Name:   Stephen J. Ruzika       
Title:   President     

              TOPSPIN ASSOCIATES, L.P.
 
       
 
  By:   Topspin Management, LLC, as its General
 
      Partner
 
  By:   LG Capital Appreciation, LLC, as its
 
      Managing Member

                  By:   /s/ Steve Lebowitz         Name:   Steve Lebowitz       
Title:   Principal     

              TOPSPIN PARTNERS, L.P.
 
       
 
  By:   Topspin Management, LLC as its General
 
      Partner
 
  By:   LG Capital Appreciation, LLC, as its
 
      Managing Member

                  By:   /s/ Steve Lebowitz         Name:   Steve Lebowitz       
Title:   Principal     

              BARISTON INVESTMENTS, LLC
 
       
 
  By:   Bariston Partners, LLC, as its Sole Member

                  By:   /s/ Christopher E. Needham         Name:   Christopher
E. Needham        Title:   Managing Director   

 

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(Signature Page 2 of 3 to Stock Purchase Agreement)

         
 
  /s/ Sheldon E. Katz    
 
       
 
  Sheldon E. Katz, an individual    
 
       
 
  /s/ Mike McIntosh    
 
       
 
  Mike McIntosh, an individual    
 
       
 
  /s/ Christopher E. Needham    
 
       
 
  Christopher E. Needham, an individual    
 
            Solely for the purpose of agreeing to serve as Sellers’
Representatives, the two undersigned limited liability companies become parties
to this Agreement.

              TOPSPIN MANAGEMENT, LLC,     as a Sellers’ Representative
 
       
 
  By:   LG Capital Appreciation, LLC,
 
      as its Managing Member

                  By:   /s/ Steve Lebowitz         Name:   Steve Lebowitz       
Title:   Principal     

         
 
  and    

            BARISTON PARTNERS, LLC
as a Sellers’ Representative
      By:   /s/ Christopher E. Needham         Name:   Christopher E. Needham   
    Title:   Managing Director   

 

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(Signature Page 3 of 3 to Stock Purchase Agreement)

              Solely for the purpose of being bound by Section 2.3(c), the
undersigned limited liability company joins in this Agreement.
 
            TOPSPIN MANAGEMENT, LLC
 
  By:   LG Capital Appreciation, LLC,
 
      as its Managing Member

                  By:   /s/ Steve Lebowitz         Name:   Steve Lebowitz       
Title:   Principal