Exhibit 10.1
 
STOCK PURCHASE AGREEMENT
 
This Stock Purchase Agreement (this “Agreement”) is made as of October 13, 2011
(the “Signing Date”), by and among Capsalus Corp., a Nevada corporation (the
“Purchaser”) and GeneLink, Inc., a Pennsylvania corporation (the “Seller”).
 
W I T N E S S E T H:
 
WHEREAS, the Seller owns all of the outstanding shares of capital stock (the
“Shares”) of GeneWize Life Sciences, Inc., a Delaware corporation (the
“Company”); and
 
WHEREAS, upon the terms and conditions and for the purchase price set forth
herein, the Seller desires to sell, transfer and assign to the Purchaser, and
the Purchaser desires to purchase from the Seller, the Shares.
 
NOW, THEREFORE, intending to be legally bound and in consideration of the mutual
provisions set forth in this Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
 
ARTICLE 1
DEFINITIONS AND CONSTRUCTION
 
Section 1.1  Definitions.  For the purposes of this Agreement and the Ancillary
Agreements:
 
“Affiliate” of a Person means a Person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, the first mentioned Person.  For purposes of this definition, “control”
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of an entity, whether through
the ownership of voting securities, by contract or otherwise.  For the avoidance
of doubt, “Affiliates” of the Purchaser shall include Gene Elite, LLC, Gene Pro
Elite, LLC, The Longaberger Company and any other marketing channels or entities
that Purchaser may develop in the future.

“Affiliated Group” means a group of corporations with which the Company has
filed consolidated, combined, unitary or similar Tax Returns.

 “Alternative Transaction Proposal” means any offer, inquiry, proposal or
indication of interest (other than an offer, inquiry, proposal or indication of
interest by the Purchaser or an Affiliate of the Purchaser, relating to an
Alternative Transaction).

“Business Day” means any day other than Saturday, Sunday or any day on which
banking institutions in New York, New York are closed either under applicable
law or action of any Governmental Authority.

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

 
 
 

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“Company Intellectual Property” means any Intellectual Property that is owned by
the Company in the conduct of the Company’s business as now conducted and as
presently proposed to be conducted.

“Company Plan” means any “employee benefit plan” (as defined in Section 3(3) of
ERISA) (excluding any “multiemployer plan” (as defined in Section 3(37) of
ERISA)) and any other plan, Contract or arrangement involving direct or indirect
compensation, including insurance coverage, sick leave, disability, health
benefits, vacation policies, severance benefits, change in control benefits,
deferred compensation, bonuses, stock options, stock purchase, stock awards,
phantom stock, stock appreciation or other forms of incentive compensation or
post-retirement compensation  that (i) is sponsored or maintained by the Company
or the Seller for the benefit of any Employees or their beneficiaries, (ii) has
been approved by the Company or the Seller for the benefit of any Employees or
their beneficiaries but is not yet effective or (iii) was previously maintained
by the Company or the Seller for the benefit of any Employees or their
beneficiaries and with respect to which the Company has any liability.

“Contract” means any contract, agreement, lease, license, commitment,
understanding, franchise, warranty, guaranty, mortgage, note, bond or other
instrument or consensual obligation that is legally binding.

“Employee” means any current director, officer or employee of the Company.

“Encumbrance” means any lien, pledge, mortgage, deed of trust, security
interest, claim, lease, charge, option, right of first refusal, easement,
servitude, proxy, voting trust or agreement, transfer restriction under any
shareholder or similar agreement, encumbrance or any other restriction or
limitation whatsoever other than restrictions on the transferability of
securities arising under applicable securities laws.
 
“Gene Elite” means Gene Elite, LLC, an affiliate of the Purchaser.
 
“Governing Documents” means any charter, articles, bylaws, certificate,
statement, statutes or similar document adopted, filed or registered in
connection with the creation, formation or organization of an entity.
 
“Governmental Authority” means any national, federal, state, provincial, county,
municipal or local government, foreign or domestic, or the government of any
political subdivision of any of the foregoing, or any entity, authority, agency,
ministry or other similar body exercising executive, legislative, judicial,
regulatory or administrative authority or functions of or pertaining to
government, including any authority or other quasi-governmental entity
established to perform any of such functions.

“Indebtedness” means any of the following: (a) any indebtedness for borrowed
money, (b) any obligations evidenced by bonds, notes or other similar
instruments, (c) any obligations to pay the deferred purchase price of property
or services, except trade accounts payable and other current Liabilities arising
in the ordinary course of business, (d) any obligations as lessee under
capitalized leases, (e) any indebtedness created or arising under any
conditional sale or other title retention agreement with respect to acquired
property, (f) any obligations, contingent or otherwise, under acceptance credit,
letters of credit or similar facilities, and (g) any guaranty of any of the
foregoing.
 
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“Intellectual Property” means all patents, patent applications, trademarks,
trademark applications, service marks, service mark applications, tradenames,
copyrights, trade secrets, domain names, mask works, information and proprietary
rights and processes, similar or other intellectual property rights, subject
matter of any of the foregoing, tangible embodiments of any of the foregoing,
licenses in to and under any of the foregoing.

“LDA” means that certain Licensing and Distribution Agreement entered into on
the Signing Date by and between the Seller and Gene Elite.
 
“Liabilities” of any Person shall mean all obligations and liabilities or such
Person (i) for Indebtedness (ii) for the deferred purchase price of goods or
services (other than trade payables or accruals incurred in the ordinary course
of business), (iv) under letters of credit or acceptance facilities, (v) secured
by any lien, claim, charge, mortgage, pledge, security interest, equity,
restriction or other encumbrance on the Company’s assets or property or (vi) in
the nature of guarantees, endorsements (other than for collection or deposit in
the ordinary course of business) and other contingent obligations to purchase,
to provide funds for payment, to supply funds to invest in any Person or
otherwise to assure a creditor against loss, including guarantees of the
obligations described in clauses (i) through (vi) above to any other Person.
 
“Management Agreement” means that certain Interim Management Agreement entered
into on the Signing Date by and between the Company and the Purchaser.
 
“Person” means an individual, partnership, corporation, limited liability
company or any other entity, joint stock company, unincorporated organization or
association, trust or joint venture, or a Governmental Authority.
 
“Superior Proposal” means a bona fide, unsolicited written Alternative
Transaction Proposal made by a third party and received by the Board of
Directors of the Seller or the Company that such Board of Directors determines
in good faith, taking into account all legal, financial, regulatory, timing, and
other aspects of the proposal and the Person making the
proposal:  (a) is reasonably likely to be consummated on the terms proposed, (b)
the consideration offered is greater than the Total Consideration, and (c) is
otherwise on terms that in the reasonable opinion of such Board of Directors
will result in a more favorable transaction to the shareholders of the Seller
than the transactions contemplated by this Agreement.
 
“Tax” means, (a) any federal, state, local, foreign, or other tax, charge, fee,
duty (including customs duty), levy or assessment, including any income, gross
receipts, net proceeds, alternative or add-on minimum, corporation, ad valorem,
turnover, real property, personal property (tangible or intangible), sales, use,
franchise, excise, value added, stamp, leasing, lease, user, transfer, fuel,
excess profits, profits, occupational, premium, interest equalization, windfall
profits, severance, license, registration, payroll, environmental (including
taxes under Section 59A of the Code), capital stock, capital duty, disability,
estimated, gains, wealth, welfare, employee’s income withholding, other
withholding, unemployment or social security or other tax of whatever kind
(including any fee, assessment or other charges in the nature of or in lieu of
any tax) that is imposed by any Governmental Authority, whether disputed or not
and including any obligations to indemnity or otherwise assume or succeed to the
Tax liability of any other Person; and (b) any interest, fines, penalties or
additions resulting from, attributable to, or incurred in connection with any
items described in this paragraph.  For the avoidance of doubt, the term “Tax”
also includes any penalties relating to foreign bank account reports.
 
“Tax Return” means any report, return, declaration, claim for refund, notice,
account or information return or statement related to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
 
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ARTICLE 2
THE TRANSACTION
 
Section 2.1  Sale and Purchase of Shares.  In accordance with the provisions of
this Agreement, at the Closing, the Seller will sell, transfer and assign to the
Purchaser, and the Purchaser will purchase and acquire from the Seller, all of
the Shares, free and clear of any Encumbrances.
 
Section 2.2  Purchase Price. Subject to the other terms and provisions of this
Agreement, the purchase price to be paid by the Purchaser to the Seller for the
Shares shall be an amount equal to Five Hundred Thousand and 00/100 Dollars
($500,000) (the “Purchase Price”).
 
Section 2.3  Earnout Consideration.
 
(a)  Calculation of Earnout Consideration:  The Purchaser shall pay to the
Seller earn-out consideration (“Earnout Consideration,” together with the
Purchase Price, the “Total Consideration”) of the greater of (1) Twenty Five
Thousand and 00/100 Dollars ($25,000) per calendar month (the “Monthly Base
Amount”) or (2) 15% of the Company’s Gross Revenues generated during the
proceeding calendar month (the “Monthly Earnout Amount” each of which shall be
the “Monthly Earnout” in the applicable calendar month).  The Purchaser shall
pay the Monthly Earnout as provided in Section 2.3(b), beginning as of the
second full calendar month following the Closing Date and ending sixty (60)
calendar months thereafter.  “Gross Revenues” shall mean all revenues realized
by the Company less returns, discounts and allowances.
 
(b)  Payment of Earnout Consideration. On the last day of each month that a
Monthly Earnout is payable, the Purchaser shall pay to the Seller the Monthly
Base Amount on or before the last day of each such month.  Not later than ten
(10) days after the end of each calendar month in which the Purchaser must pay
the Seller the Monthly Earnout (the “Earnout Period”), the Purchaser shall
provide to the Seller a written notice containing its calculation of the amount,
if positive, that is the difference of (i) the Monthly Earnout Amount less (ii)
the Monthly Base Amount (the “Earnout Gross Up Amount”), together with
reasonably detailed data supporting such calculation (the “Earnout
Notice”).  Not later than fifteen (15) days after receipt of the Earnout Notice
(the “Earnout Review Period”), the Seller may deliver a dispute notice to the
Purchaser (the “Dispute Notice”), notifying the Purchaser of the Seller’s
proposed adjustments to, or disputes with, the Purchaser’s calculations.  If the
Seller does not deliver a Dispute Notice during the Earnout Review Period, the
Purchaser shall, within thirty (30) days after the end of each Earnout Period,
pay the Seller the Earnout Gross Up Amount indicated in the Earnout Notice.  If
there is a dispute, the Purchaser shall, within thirty (30) days after the end
of each Earnout Period pay the Seller the portion of the Earnout Gross Up Amount
that is not in dispute and the parties shall in good faith attempt to resolve
any disputes.  If the parties can resolve such dispute within thirty (30) days
after the receipt by the Purchase of the Dispute Notice, then such agreed upon
amount shall be the Earnout Gross Up Amount and the Purchaser shall pay Seller
any remaining Earnout Gross Up Amount then due and payable.  If the parties
cannot reach agreement in resolving any dispute within such thirty (30) day time
period after the Dispute Notice is given by the Seller to the Purchaser, the
parties shall jointly select and engage an independent accounting firm (other
than the Purchaser’s or the Seller’s accounting firm) (the “Arbiter”) to resolve
any remaining disputes regarding the Earnout Gross Up Amount.  If the parties
cannot agree on the selection of an independent accounting firm to act as
Arbiter, the parties shall request the American Arbitration Association to
appoint such a firm, and such appointment shall be conclusive and binding on the
parties.  Promptly, but no later than twenty (20) calendar days after acceptance
of its appointment as Arbiter, the Arbiter shall determine (it being understood
that in making such determination, the Arbiter shall be functioning as an expert
and not as an arbitrator), based solely on written submissions by the Purchaser
and the Seller, each containing a computation of Earnout Gross Up Amount and not
by independent review, only those issues in dispute and shall render a written
report as to the resolution of the disputes and the resulting computation of the
Earnout Gross Up Amount.  Such written report shall be conclusive and binding on
the parties.  All proceedings conducted by the Arbiter shall take place in the
Company’s corporate offices.  In resolving any disputed item, the Arbiter (x)
shall be bound by the provisions of this Section 2.3 and (y) may not assign a
value to any item greater than the greatest value for such item claimed by
either party or less than the smallest value for such item claimed by either
party.  The fees, costs and expenses of the Arbiter shall be jointly paid by the
Purchaser and the Seller.
 
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(c)  Total Consideration:  The Total Consideration payable to the Seller under
this Agreement shall not exceed an aggregate of Five Million and 00/100 Dollars
($5,000,000), including the Purchase Price.
 
Section 2.4  Cash Adjustment. The parties acknowledge that on the Signing Date,
the Company and the Purchaser are entering into the Management
Agreement.  Pursuant to the Management Agreement, a cash adjustment is to be
made effective October 1, 2011, whereby the sum of cash and cash equivalents,
accounts receivable, inventory, prepaid expenses and deposits, including credit
card reserves less the Company’s Liabilities is to equal Zero and 00/100 Dollars
($0) (the “Quick Assets”).  It is contemplated that an appropriate adjustment
will have been made between the parties as of the effective date of the
Management Agreement.  To the extent that the Quick Assets are greater or less
than zero (0) at the time of the Closing, the deficit or surplus of such
variance shall be the responsibility or benefit of the Purchaser or Seller, as
applicable.
 
Section 2.5  LDA Amount.  Pursuant to the LDA and as more particularly described
in Schedule 3.2 attached thereto, Gene Elite is obligated to advance One Million
Five Hundred Thousand and 00/100 Dollars ($1,500,000) (the “LDA Amount”).  As
set forth in Section [_] of the LDA, (i) One Million and 00/100 Dollars
($1,000,000) of the LDA Amount is to be paid on the Signing Date (the “LDA
Signing Amount”) and (ii) Five Hundred Thousand and 00/100 Dollars ($500,000) of
the LDA Amount (the “Remaining LDA Payment”) is to be paid as of the Closing.
 
Section 2.6  Closing. The closing of the transactions contemplated by this
Agreement (the “Closing”) will take place as soon as practicable at the offices
of Lowenstein Sandler PC, 65 Livingston Avenue, Roseland, New Jersey 07068 at
10:00 a.m. New York City time or at such other time and place as the Seller and
the Purchaser may agree in writing.  The date on which the Closing actually
occurs is referred to in this Agreement as the “Closing Date.”
 
Section 2.7  Closing Deliveries; Form of Payment.
 
(a)  Seller Closing Deliveries.  At the Closing, the Seller shall deliver to the
Purchaser:
 
(i)  a certificate of the secretaries of the Seller and the Company in his or
her representative capacity, dated as of the Closing Date, certifying as to the
Seller and the Company which he or she represents (A) that true and complete
copies of the Governing Documents of such entity, as in effect on the Closing
Date (including any amendments thereof), are attached thereto, (B) as to the
incumbency and genuineness of the signatures of each officer executing this
Agreement, and (C) as to the genuineness of the resolutions (attached thereto)
of the Seller’s board of directors authorizing the execution, delivery and
performance of this Agreement;
 
(ii)  certificates representing the Shares, duly endorsed in blank or
accompanied by stock powers or a stock transfer form duly executed in blank in
form reasonably satisfactory to the Purchaser sufficient to transfer the Shares
to the Purchaser free and clear of all Encumbrances;
 
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(iii)  the Closing Certificates; and
 
(iv)  certificates of good standing, dated not more than five (5) Business Days
prior to the Closing Date with respect to the Seller and the Company issued by
the presiding Government Authority of the jurisdiction in which each entity was
formed.
 
(b)  At the Closing, the Purchaser will deliver or cause to be delivered to the
Seller:
 
(i)  the Closing Payment by wire transfer of immediately available funds in U.S.
dollars to the account specified by the Seller; and
 
(ii)  a certificate, dated as of the Closing Date, executed by the Purchaser
confirming the satisfaction of the conditions specified in Section 6.2.
 
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SELLER
 
The Seller represents and warrants to the Purchaser as follows, except as set
forth on the disclosure schedule delivered by the Seller to the Purchaser
concurrently with the execution and delivery of this Agreement and dated as of
the date of this Agreement (the “Seller Disclosure Schedule”):
 
Section 3.1  Organization and Good Standing.  The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania.  The Company is duly organized, validly existing
and in good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to conduct its business as presently
conducted.  The Company is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which the nature of its
activities requires.
 
Section 3.2  Authority and Enforceability.  The Seller has all requisite
corporate power and authority to execute and deliver this Agreement and to
perform its obligations under this Agreement.  The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated under this Agreement and thereby by the Seller has been duly
authorized by all necessary action on the part of the Seller.  The Seller has
duly and validly executed and delivered this Agreement.  Assuming the due
authorization, execution and delivery of this Agreement by the Purchaser, this
Agreement constitutes the valid and binding obligation of the Seller enforceable
against Seller in accordance with its terms, subject to (a) laws of general
application relating to bankruptcy, insolvency and the relief of debtors and (b)
laws governing specific performance, injunctive relief and other equitable
remedies.
 
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Section 3.3  No Conflict.
 
(a)  Neither the execution, delivery and performance of this Agreement by the
Seller, nor the consummation by the Seller of the transactions contemplated by
this Agreement, will (i) conflict with or violate the Seller’s or the Company’s
Governing Documents, (ii) except as disclosed in Section 3.3 of the Seller
Disclosure Schedule, result in a breach or default under, or create in any
Person the right to terminate, cancel, accelerate or modify, or require any
notice, consent or waiver under, any Contract to which the Seller or the Company
is a party or to which any of the assets or properties of the Seller or the
Company are subject, or (iii) violate any law or judgment applicable to the
Seller or the Company.
 
(b)  Except as set forth in Section 3.3 of the Seller Disclosure Schedule, no
consent, waiver, approval, order, permit, Governmental Authorization or other
authorization of, or declaration or filing with, or notification to, any Person
or Governmental Authority is required on the part of the Seller or the Company
in connection with (i) the execution and delivery of this Agreement, the
compliance by the Seller and the Company with any of the provisions hereof, or
the consummation of the transactions contemplated hereby, or (ii) the continuing
validity and effectiveness immediately following the Closing of any Governmental
Authorization or Contract of the Company.
 
Section 3.4  Capitalization and Ownership. The authorized capital stock of the
Company and the number of shares of such capital stock that are issued and
outstanding, and the beneficial and record ownership thereof, are set forth on
Section 3.4 of the Seller Disclosure Schedule.  The Seller is the sole record
holder and beneficial owner of all of the Shares, free and clear of all
Encumbrances.  Upon payment in full of the Closing Payment, good and valid title
to the Shares will pass to the Purchaser, free and clear of any Encumbrances,
and with no restrictions on the voting rights or other incidents of record and
beneficial ownership of such Shares.  All of the Shares are duly authorized,
validly issued, fully paid and nonassessable.  There are no Contracts to which
either the Seller or any other Person is a party or bound with respect to the
voting (including voting trusts or proxies) of the Shares.  There are no
outstanding or authorized options, warrants, rights, agreements or commitments
to which the Seller or the Company is a party or which are binding upon the
Seller or the Company providing for the issuance or redemption of any of the
Shares.
 
Section 3.5  Financial Statements.  Attached as Section 3.5 of the Seller
Disclosure Schedule is (a)  the unaudited, consolidated balance sheet of the
Company as of December 31, 2010 and the related unaudited consolidated statement
of income for the year ended December 31, 2010 and (ii) the unaudited,
consolidated balance sheet of the Company as at August 31, 2011 (the “Balance
Sheet Date”) and the related consolidated statement of income of the Company for
the eight (8) month period then ended (the “Financial Statements”).  The
Financial Statements (x) present fairly in all material respects the financial
positions of the Company as of the dates of such Financial Statements and the
results of operations for the Company as of such date, in conformity with U.S.
GAAP and (y) are prepared in accordance with the books and records of the
Company.
 
Section 3.6  No Undisclosed Liabilities.  The Company does not have any
Liabilities as of the date of this Agreement that would be required to be
reflected on the Financial Statements in accordance with U.S. GAAP except for
Liabilities (i) reflected, reserved against or otherwise disclosed in the
Financial Statements, (ii) incurred in the ordinary course of business since the
Balance Sheet Date, or (iii) disclosed herein or in the Seller Disclosure
Schedule, including Section 3.6 thereof.
 
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Section 3.7  Absence of Certain Changes and Events.  From January 1, 2011 to the
date of this Agreement, the Company has operated its business in the ordinary
course of business, and except as set forth on Section 3.7 of the Seller
Disclosure Schedule, there has not been any:
 
(a)  change in the Company’s authorized or issued shares or other equity
interests; grant of any option or right to purchase shares of the Company;
issuance of any security convertible into such shares; grant of any registration
rights; purchase, redemption, retirement or other acquisition by the Company of
any shares; or declaration or payment of any dividend or other distribution or
payment with respect to any Shares;
 
(b)  amendment to the Governing Documents of the Company;
 
(c)  damage to or destruction of any asset or property of the Company, whether
or not covered by insurance, having a replacement cost of more than $10,000 for
any single loss or $50,000 for all such losses;
 
(d)  sale (other than in the ordinary course of business), lease or other
disposition of any asset or property of the Company;
 
(e)  material change in the accounting methods used by the Company;
 
(f)  declaration, setting aside or payment of any dividend or other distribution
in respect of any shares of capital stock of the Company or any repurchase,
redemption or other acquisition by the Company of any outstanding shares of
capital stock or other securities of, or other ownership interest in, the
Company;
 
(g)  award or payment of any bonuses to Employees of the Company, or entered
into any employment, deferred compensation, severance or similar agreement (nor
amended any such agreement) or agreed to increase the compensation payable or to
become payable by it to any of the Company’s Employees or agreed to increase the
coverage or benefits available under any severance pay, termination pay,
vacation pay, company awards, salary continuation for disability, sick leave,
deferred compensation, bonus or other incentive compensation, insurance, pension
or other employee benefit plan, payment or arrangement made to, for or with such
Employees;
 
(h)  making or rescinding of any election relating to taxes or settled or
compromised any claim relating to taxes;
 
(i)  entry into any Contract, or modification or extension of any Contract;
 
(j)  making of any loans, advances or capital contributions to, or investments
in, any Person or paid any fees or expenses to the Seller or any director,
officer, partner, stockholder or Affiliate of the Seller;
 
(k)  mortgage, pledge or Encumbrance incurred upon any properties or assets of
the Company;
 
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(l)  making of, or commitment to make, any capital expenditures or capital
additions or betterments;
 
(m)  issuance, creation, assumption, guarantee, endorsement or incurrence of any
other liability or responsibility with respect to (whether directly,
contingently, or otherwise) any Indebtedness;
 
(n)  grant of any license or sublicense of any rights under or with respect to
any material Intellectual Property;
 
(o)  institution or settlement of any proceeding involving amounts in excess of
$10,000; or
 
(p)  Contract, commitment, arrangement or understanding agreed upon or entered
into by the Company to do any of the foregoing.
 
Section 3.8  Properties and Assets; Encumbrances.
 
(a)  The property and assets that the Company owns are free and clear of all
Encumbrances.  With respect to the property and assets it leases, the Company is
in compliance in all material respects with such leases and, to its knowledge,
holds a valid leasehold interest free of any Encumbrances.  The Company does not
own any real property.  Section 3.8(a) sets forth all real property and
interests in real property leased by the Company (the “Company
Properties”).  All of the Company Properties and buildings, fixtures and
improvements thereon are in good operating condition (ordinary wear and tear
excepted), and all mechanical and other systems located thereon are in good
operating condition (ordinary wear and tear excepted).  The Seller has delivered
to the Purchaser true, correct and complete copies of leases, together with all
amendments, modifications or supplements, if any, thereto (the “Real Property
Leases”).  The Company Properties are not subject to any leases or rights of
occupancy, other than the leases.  Except as set forth in Section 3.8(a) of the
Seller Disclosure Schedule, there does not exist any actual or threatened or
contemplated, condemnation or eminent domain proceedings that affect any Company
Property or any part thereof, and neither the Seller nor the Company has
received any written notice of the intention of any Governmental Authority or
other Person to take or use all or any part thereof.  No event has occurred that
with the lapse of time or the giving of notice or both would constitute a
material breach or default on the part of the Company or any other party under
any Real Property Lease.
 
(b)  Except as set forth in Section 3.8(b) of the Seller Disclosure Schedule,
the Company has good and marketable title to, or a valid leasehold interest in,
all of the items of material tangible personal property used in the business of
the Company (except as sold or disposed of subsequent to the date thereof in the
ordinary course of business and not in violation of this Agreement), free and
clear of any and all Encumbrances.  All such items of tangible personal property
which, individually or in the aggregate, are material to the operation of the
business of the Company are in good condition and in a state of good maintenance
and repair (ordinary wear and tear excepted).  Section 3.8(b) of the Seller
Disclosure Schedule sets forth a list of leases of personal property held by the
Company as of the date of this Agreement that are material to the operation of
the business.
 
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Section 3.9  Intellectual Property.  Section 3.9 of the Seller Disclosure
Schedule lists all Company Intellectual Property. The Company owns or possesses
or can acquire on commercially reasonable terms sufficient legal rights to all
Company Intellectual Property without any known conflict with, or infringement
of, the rights of others. No product or service marked or sold (or proposed to
be marked or sold) by the Company violates or will violate any license or
infringes or will infringe any intellectual property rights of any other
party.  Other than with respect to commercially available software products
under standard end-user object code license agreements or as set forth in
Section 3.9 of the Seller Disclosure Schedule, there are no outstanding options,
licenses, agreements, claims, Encumbrances or shared ownership interest of any
kind relating to the Company Intellectual Property or any Intellectual Property
used by the Company, nor is the Company bound by or a party to any options,
licenses or agreements of any kind with respect to the patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses, information,
proprietary rights and processes of any other Person.  The Company has not
received any communications alleging that the Company has violated or, by
conducting its business, would violate any of the patents, trademarks, service
marks, tradenames, copyrights, trade secrets, mask works or other proprietary
rights or processes of any other Person.  The Company has obtained and possesses
valid licenses to use all of the software programs present on the computers and
other software-enabled electronic devices that it owns or leases or that it has
otherwise provided to its Employees for its use in connection with the Company’s
business.  To the Company’s knowledge, it will not be necessary to use any
inventions of any of its employees or consultants (or Persons it currently
intends to hire) made prior to their employment or engagement by the
Company.  Each employee and consultant has assigned to the Company all
intellectual property rights he or she owns that are related to the Company’s
business as now conducted and as presently proposed to be conducted.
 
Section 3.10  Contracts.
 
(a)  Section 3.10(a) of the Seller Disclosure Schedule sets forth an accurate
and complete list as of the date hereof of each Contract to which the Company is
a party, which:
 
(i)  includes a term extending more than one (1) year beyond the date of this
Agreement;
 
(ii)  involves future annual expenditures or receipts by the Company in excess
of $5,000 in the aggregate during the term thereof;
 
(iii)  pursuant to which the Company sells products to customers or vendors;
 
(iv)  relates to the borrowing of money or guarantying any obligation for
borrowed money or otherwise, including any Contract that is a (A) mortgage,
indenture, note, installment obligation or other instrument relating to the
borrowing of money, (B) letter of credit, bond or other indemnity (including
letters of credit, bonds or other indemnities as to which the Company is the
beneficiary, but excluding endorsements of instruments for collection) or (C)
currency or interest rate swap, collar or hedge agreements;
 
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(v)  affects the ownership of, leasing of, title to, use of, or any other
possessory interest in any Company Properties;
 
(vi)  pursuant to which the Company uses Intellectual Property owned by a third
party, except for any license implied by the sale of a product and perpetual,
paid-up licenses for commonly available software programs with a value of less
than $1,000 under which the Company is the licensee;
 
(vii)  involves any labor union or other employee representative of a group of
employees;
 
(viii)  creates a partnership or joint venture with any other Person;
 
(ix)  contains covenants that in any way purport to restrict the business
activity of the Company or limit the freedom of the Company to engage in any
line of business, to compete with any Person or solicit or hire any person with
respect to employment;
 
(x)  pursuant to which the Company extends a written warranty, guaranty or other
similar undertaking with respect to contractual performance;
 
(xi)  provides for payments to Employees as a result of the transactions
contemplated by this Agreement;
 
(xii)  involves the sale of any of the assets of the Company other than in the
ordinary course of business or for the grant to any Person of any preferential
rights to purchase any of the Company’s assets;
 
(xiii)  relates to the acquisition (by merger, purchase of stock or assets or
otherwise) by the Company of any operating business or material assets or the
capital stock of any other Person;
 
(xiv)  obligates the Company to provide or obtain products or services for a
period of one (1) year or more or requiring the Company to purchase or sell a
stated portion of its requirements or outputs;
 
(xv)  under the terms thereof, the Company has made advances or loans to any
other Person;
 
(xvi)  provides for severance, retention, change in control or other similar
payments;
 
(xvii) provides for the employment of any individual on a full-time, part-time
or consulting or other basis; and
 
(xviii)  is otherwise material to the Company.
 
The Contracts listed in Section 3.10(a) of the Seller Disclosure Schedule are
referred to in this Agreement as the “Material Contracts”.
 
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(b)  With respect to each such Material Contract, neither the Company party to
the Material Contract nor any other party to the Material Contract is in breach
or default under any material provisions of such Material Contract except for
such breaches or defaults as to which requisite waivers or consents have been
issued or obtained.  No event has occurred that with the lapse of time or the
giving of notice or both would constitute a material breach or default on the
part of the Company or any other party under any Material Contract.  Upon
consummation of the transactions contemplated by this Agreement, each Material
Contract will, except as otherwise stated in Section 3.10(b) of the Seller
Disclosure Schedule, continue in full force and effect without penalty or other
adverse consequence triggered by the consummation of the transactions
contemplated by this Agreement.  Each Material Contract is enforceable as to the
Company in accordance with its terms subject to (i) laws of general application
relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of
law governing specific performance, injunctive relief and other equitable
remedies.  From January 1, 2011 to the date hereof, (i) no party to any of the
Material Contracts has exercised any termination rights with respect thereto,
(ii) no party has given written notice of any significant dispute with respect
to any Material Contract, and (iii) no party has provided written notification
to the Seller or the Company that it will stop or, other than generally
applicable price increases, materially alter the pricing or terms of any
Material Contract.  The Seller has delivered to the Purchaser true, correct and
complete copies of all of the Material Contracts, together with all amendments,
modifications or supplements thereto.
 
Section 3.11  Tax Matters.
 
(a)  (i) All Tax Returns required to be filed by or on behalf of the Company and
any Affiliated Group of which the Company is or was a member have been duly and
timely filed with the appropriate Governmental Authority in all jurisdictions in
which such Tax Returns are required to be filed (after giving effect to any
valid extensions of time in which to make such filings), and all such Tax
Returns have at all times been and remain true, complete and correct in all
material respects and were prepared in substantial compliance with all
applicable laws and regulations; and (ii) all Taxes payable by or on behalf of
the Company and any Affiliated Group of which the Company is or was a member
have been fully and timely paid.  With respect to any period for which Tax
Returns have not yet been filed or for which Taxes are not yet due or owing, the
Company has made due and sufficient accruals for such Taxes in the Financial
Statements and its books and records.  All required estimated Tax payments
sufficient to avoid any underpayment penalties or interest have been made by or
on behalf of the Company.  There are no Encumbrances for unpaid Taxes upon any
of the assets of the Company.
 
(b)  The Company has withheld and paid all Taxes required to have been withheld
and paid by any Governmental Authority in connection with any amounts paid or
owing to any employee, independent contractor, creditor, stockholder, or other
third party.
 
(c)  The Purchaser has received complete copies of (i) all federal, state, and
local income or franchise Tax Returns of or relating to the Company since
January 1, 2007 and (ii) any audit report or statement of deficiency issued
within the last three (3) years relating to any Taxes due from or with respect
to the Company.
 
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(d)  No federal, state, or local tax audits or administrative or judicial Tax
proceedings are pending, being conducted, or have been conducted with respect to
the Company.  Neither the Company nor any Affiliated Group of which the Company
is or was a member has received from any Governmental Authority any (i) notice
indicating an intent to open an audit or other review, (ii) request for
information related to Tax matters, or (iii) notice of deficiency or proposed
adjustment for any amount of Tax proposed, asserted, or assessed by any taxing
authority against the Company or any Affiliated Group of which the Company is or
was a member.
 
(e)  The Company is not a party to any contract, agreement, plan or arrangement
that has resulted or could result, separately or in the aggregate, in the
payment of (i) any “excess parachute payment” within the meaning of Code §280G
and (ii) any amount that will not be fully deductible as a result of Code
§162(m).
 
(f)  The Company has not been a U.S. real property holding corporation within
the meaning of Code §897(c)(2) during the applicable period specified in Code
§897(c)(1)(A)(ii).  The Company disclosed on its federal income Tax Returns all
positions taken therein that could give rise to a substantial understatement of
federal income Tax within the meaning of Code §6662.
 
(g)  The Company is not a party to or bound by any tax sharing, allocation,
indemnity or similar agreement or arrangement (whether or not written) other
than with the Seller.  The Company (A) has never been a member of any
consolidated, combined, affiliated or unitary group of corporations filing a
consolidated return for any Tax purposes (other than a group the parent of which
was the Seller); and (B) does not have any liability for the Taxes of any Person
under Treasury Regulations §1.1502-6, as a transferee or successor, by contract,
or otherwise.
 
(h)  The Company has not received any written claim by a Governmental Authority
in a jurisdiction where the Company does not file Tax Returns such that it is or
may be subject to taxation by that jurisdiction.
 
(i)  Neither the Company nor the Seller nor any other Person on their behalf has
(i) agreed to or is required to make any adjustments pursuant to Section 481(a)
of the Code or any similar provision of law or has any knowledge that any
Governmental Authority has proposed any such adjustment, or has any application
pending with any Governmental Authority requesting permission for any changes in
accounting methods that relate to the Company, (ii) executed or entered into a
closing agreement pursuant to Section 7121 of the Code or any similar provision
of law with respect to the Company, (iii) requested any extension of time within
which to file any Tax Return, which Tax Return has since not been filed, (iv)
waived any statute of limitations in respect of Taxes or granted any extension
for the assessment or collection of Taxes, or (v) granted to any Person any
power of attorney that is currently in force with respect to any Tax matter.
 
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(j)  The Company is not (A) currently the subject of any agreement or ruling in
respect of Taxes with any Governmental Authority, and no such agreement or
ruling is pending; or (B) entitled to any Tax holiday, Tax credit, or other
similar Tax incentive or benefit from any jurisdiction (other than such benefits
as are generally available to all Persons engaged in business and subject to tax
as a resident in such jurisdiction), which would be subject to forfeiture,
recapture, or other recovery by the Governmental Authority granting such benefit
in connection with the transactions contemplated hereby or in connection with
any dissolution, or cessation of business in, or withdrawal of assets from or a
reduction of the number of employees in the relevant jurisdiction.
 
(k)  The Company has, within applicable time limits, preserved all material
records required by law to be preserved and all other material records required
for the delivery of correct and complete Tax Returns or the computation of any
Tax.
 
(l)  Neither the Company nor any Affiliated Group of which the Company is or was
a member will be required to include any material item of income in, or exclude
any material item of deduction from, taxable income for any taxable period (or
portion thereof) ending after the Closing Date as a result of any (i) change in
method of accounting for a taxable period ending on or prior to the Closing
Date; (ii) "closing agreement" as described in Section 7121 of the Code (or any
corresponding or similar provision of Tax Law) executed on or prior to the
Closing Date; (iii) intercompany transaction or any excess loss account
described in Treasury Regulations under Section 1502 of the Code (or any
corresponding or similar provision of Tax Law); (iv) installment sale or open
transaction disposition made on or prior to the Closing Date; (v) prepaid amount
received on or prior to the Closing Date; (vi) election under Section 108(i) of
the Code; or (vii) income that accrued in, or is attributable to, a prior
taxable period but that was not included in taxable income for that or another
prior taxable period;
 
(m) Neither the Company nor any Affiliated Group of which the Company is or was
a member is or has been a party to any “reportable transaction,” as defined in
Code Section 6707A(c)(1) and Treasury Regulations §1.6011-4(b).
 
Section 3.12  Employee Benefit Matters.
 
(a)  Section 3.12(a) of the Seller Disclosure Schedule sets forth a correct and
complete list of all Company Plans.
 
(i)  There is no Liability under (A) Title IV of ERISA, (B) Section 302 of
ERISA, or (C) Sections 412 and 4971 of the Code, in each case, that would be
Liability of Purchaser or the Company following the Closing.  The Company has
not contributed to or has had an obligation to contribute to any plan subject to
Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code within the
last six (6) years of the date of this Agreement.
 
(ii)  Correct and complete copies of the following documents, with respect to
each of the Company Plans, have been made available or delivered to the
Purchaser by the Sellers, to the extent applicable: (i) any plans, all
amendments thereto and related trust documents, insurance contracts or other
funding arrangements, and amendments thereto; (ii) the three (3) most recent
Forms 5500 and all schedules thereto and the most recent actuarial report, if
any; (iii) the most recent IRS determination letter; (iv) summary plan
descriptions; (v) written communications to Employees relating to the Company
Plans; and (vi) written descriptions of all non-written agreements relating to
the Company Plans.
 
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(iii)  The Company Plans have been maintained in all material respects in
accordance with their terms and with all provisions of ERISA, the Code
(including rules and regulations thereunder) and other applicable Laws and
regulations, and neither the Seller nor the Company nor any “party in interest”
or “disqualified person” with respect to the Company Plans has engaged in a
non-exempt “prohibited transaction” within the meaning of Section 4975 of the
Code or Section 406 of ERISA.
 
(iv)  Each Company Plan that is intended to meet the requirements of a
“qualified plan” under Section 401(a) of the Code has, as of the date of this
Agreement, received a favorable determination letter or opinion letter from the
Internal Revenue Service, and nothing has occurred that would reasonably be
expected to adversely affect such Company Plan’s qualified or tax-exempt status.
 
(v)  All contributions (including all employer contributions and employee salary
reduction contributions) required to have been made by the Company under any of
the Company Plans by law (without regard to any waivers granted under Section
412 of the Code), to any funds or trusts established thereunder or in connection
therewith have been made by the due date thereof (including any valid
extension), and all contributions for any period ending on or before the Closing
Date that are not yet due will have been paid or sufficient accruals for such
contributions and other payments in accordance with U.S. GAAP are duly and fully
provided for on the Financial Statements.
 
(vi)  There are no pending actions, claims or lawsuits that have been asserted
or instituted against the Company Plans, the assets of any of the trusts under
the Company Plans or the sponsor or administrator of any of the Company Plans,
or against any fiduciary of the Company Plans with respect to the operation of
any of the Company Plans (other than routine benefit claims) that would result
in a Liability for the Company.
 
(vii)  None of the Company Plans providing benefits to Employees of the Company
provides for post-employment life or health insurance, benefits or coverage for
any participant or any beneficiary of a participant, except as may be required
under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”), and at the expense of the participant or the participant’s
beneficiary.  Each of the Company and any ERISA Affiliate which maintains a
“group health plan” within the meaning Section 5000(b)(1) of the Code has
materially complied with the notice and continuation requirements of Section
4980B of the Code, COBRA, Part 6 of Subtitle B of Title I of ERISA and the
regulations thereunder.
 
(viii)  Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment becoming due to any Employee, (ii) increase any benefits otherwise
payable under any Company Plan or (iii) result in the acceleration of the time
of payment or vesting of any such benefits under any Company Plan or Title IV
Plan in each case that would be a Liability of Purchaser or the Company.
 
(ix)  There are no Company Plans to which the Company is a party or otherwise
has liability that is a “nonqualified deferred compensation plan” (within the
meaning of Section 409A of the Code) subject to Section 409A of the Code.  The
Company does not have any commitment to compensate or reimburse any individual
for penalty taxes imposed under Section 409A of the Code.
 
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(b)  Section 3.12(b) of the Seller Disclosure Schedule lists, by individual
name, each Employee who has a change of control agreement, and the Seller has
delivered to the Purchaser true, correct and complete copies of all change of
control agreements together with all amendments, modifications or supplements
thereto.
 
Section 3.13  Employment and Labor Matters.  Except as set forth in Section 3.13
of the Seller Disclosure Schedule, as of the date hereof, the Company is not a
party to or bound by any collective bargaining agreement and no petition has
been filed or proceedings instituted by any Employee or group of Employees of
the Company with any labor relations board seeking recognition of a bargaining
representative.  Except as set forth in Section 3.13 of the Seller Disclosure
Schedule, there is no labor strike, picketing, slowdown, lockout, employee
grievance process or other work stoppage or labor dispute pending or threatened
between the Company on the one hand, and any of its Employees, on the other
hand.  As of the date of this Agreement, there is no organizing activity
involving the Company pending or threatened by any labor organization or group
of Employees.  There are no complaints, charges or claims against the Company
pending or threatened that could be brought or filed, with any Governmental
Authority based on, arising out of, in connection with or otherwise relating to
the employment or termination of employment of or failure to employ, any
individual.  The Company (i) has no direct or indirect liability with respect to
any misclassification of any Person as an independent contractor rather than as
an employee, (ii) is in compliance in all material respects with all applicable
laws respecting employment, employment practices, labor relations, employment
discrimination, health and safety, terms and conditions of employment and wages
and hours, and (iii) has not received any written remedial order or notice of
offense under applicable occupational health and safety law.  The Company has
not incurred, and does not reasonably expect to incur, any liability or
obligation under the WARN Act, and the regulations promulgated thereunder, or
any similar state or local law which remains unsatisfied.
 
Section 3.14  Environmental, Health and Safety Matters.
 
(a)  The Company is and has been in compliance in all material respects with all
Environmental Laws.  There has been no release or threatened release by the
Company of any pollutant, contaminant or toxic or hazardous material, substance
or waste, or petroleum or any fraction thereof, (each a “Hazardous Substance”)
on, upon, into or from any site currently or heretofore owned, leased or
otherwise used by the Company.  There have been no Hazardous Substances
generated by the Company that have been disposed of or come to rest at any site
that has been included in any published U.S. federal, state or local “superfund”
site list or any other similar list of hazardous or toxic waste sites published
by any governmental authority in the United States.  To the Seller’s knowledge,
there are no underground storage tanks located on, no polychlorinated biphenyls
(“PCBs”) or PCB-containing equipment used or stored on, and no hazardous waste
as defined by the Resource Conservation and Recovery Act, as amended, stored on,
any site owned or operated by the Company, except for the storage of hazardous
waste in compliance with Environmental Laws.  The Company has made available to
the Purchasers true and complete copies of all material environmental records,
reports, notifications, certificates of need, permits, pending permit
applications, correspondence, engineering studies, and environmental studies or
assessments.
 
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(b)  For purposes of this Section 3.14, “Environmental Laws” means any law,
regulation, or other applicable requirement relating to (a) releases or
threatened release of Hazardous Substance; (b) pollution or protection of
Employee health or safety, public health or the environment; or (c) the
manufacture, handling, transport, use, treatment, storage, or disposal of
Hazardous Substances.
 
Section 3.15  Governmental Authorizations.  The Company has all Governmental
Authorizations that are necessary for it to conduct its business in the manner
in which it is presently conducted.  The Company is in compliance in all
material respects with all Governmental Authorizations that are necessary for it
to conduct its business in the manner in which it was being conducted at the
applicable time.  There are no proceedings pending or threatened, relating to
the suspension, revocation or modification of any Governmental
Authorization.  The representations and warranties contained in this Section
3.15 are intended to apply generally to all matters falling within their scope
and, thus, notwithstanding any other representations and warranties contained in
this Agreement that cover any such matters with more particularity, such other
representations and warranties will be deemed to apply in addition to, and not
in limitation of, the more broad representations and warranties of general
applicability contained in this Section 3.15.
 
Section 3.16  Compliance with Laws.
 
(a)  The Company is in compliance in all material respects with all laws
applicable to it or the conduct of its business or the ownership or use of its
properties and assets.  The Company has not received any written notice of or
been charged with the violation of any laws.  To the Seller’s knowledge except
as set forth in Section 3.16 of the Seller Disclosure Schedule the Company is
not under investigation with respect to the violation of any laws, and there are
no facts or circumstances which could form the basis for any such violation, in
each case.  The representations and warranties contained in this Section 3.16
are intended to apply generally to all matters falling within their scope and,
thus, notwithstanding any other representations and warranties contained in this
Agreement that cover any such matters with more particularity, such other
representations and warranties will be deemed to apply in addition to, and not
in limitation of, the more broad representations and warranties of general
applicability contained in this Section 3.16.
 
(b)  To the Seller’s knowledge, except as forth in Section 3.16(b) of the Seller
Disclosure Schedule, there is no legal or governmental proceeding to which the
Seller or the Company is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject, including any proceeding
before the United States Food and Drug Administration of the U.S. Department of
Health and Human Services, the United States Federal Trade Commission, the
United States Government Accounting Office or any comparable federal, state,
local or foreign governmental bodies.  For the avoidance of doubt, for the
purposes of this Section 3.16(b), “proceeding” includes any formal
investigations, correspondence, or written inquiries regarding the Seller, the
Company or any property or assets owned by the Seller or the Company or used in
connection the Seller’s or the Company’s operation or business.
 
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Section 3.17  Legal Proceedings.  As of the date of this Agreement, there is no
proceeding pending or threatened: (i) against either the Seller that questions
or challenges the validity of this Agreement or the ability of the Seller to
consummate any of the transactions contemplated by this Agreement; or (ii)
against the Company or any of its properties or assets.  Other than as disclosed
on Section 3.17(a) of the Seller Disclosure Schedule, the Company is not subject
to any outstanding judgment.  Section 3.17(b) of the Seller Disclosure Schedule
sets forth a list of those Proceedings that have been pending during the last
three (3) years prior to the date of this Agreement that, if adversely
determined, are, or would have been, reasonably likely to result in a liability
in excess of $50,000 by the Company.
 
Section 3.18  Insurance.  The Company holds, or there are applicable to the
Company, insurance policies in full force and effect (i) for such amounts as are
sufficient for all requirements of law and all agreements to which the Company
is a party or by which it is bound, and (ii) which are in such amounts, with
such deductibles and against such risks and losses, as are, in the Seller’s
judgment, reasonable for the business, assets and properties of the
Company.  Set forth in Section 3.18 of the Seller Disclosure Schedule is a list
of all insurance policies and all fidelity bonds as of the date hereof held by
or applicable to the Company setting forth, in respect of each such policy, the
policy number, carrier, term, type and amount of coverage, whether the policies
may be terminated upon consummation of the transactions contemplated hereby and
if and to what extent events being notified to the insurer after the Closing
Date are generally excluded from the scope of the respective policy.  Excluding
insurance policies that have expired and been replaced in the ordinary course of
business, no insurance policy has been cancelled within the last two (2) years
and no threat has been made to cancel any insurance policy of the Company during
such period.  Except as noted on Section 3.18 of the Seller Disclosure Schedule,
all such insurance will remain in full force and effect immediately following
the consummation of the transactions contemplated hereby.  No event has occurred
as of the date hereof, including the failure by the Company to give any notice
or information or the Company giving any inaccurate or erroneous notice or
information, which limits or impairs the rights of the Company under any such
insurance policies.
 
Section 3.19  Accounts and Notes-Receivable and Payable.
 
(a)  The Company has no notes receivable.  All accounts receivable of the
Company have arisen from bona fide transactions in the ordinary course of
business consistent with past practice.  None of the accounts receivable of the
Company (i) are subject to any setoffs or counterclaims or (ii) represent
obligations for goods sold on consignment, on approval or on a sale-or-return
basis or subject to any other repurchase or return arrangement.
 
(b)  All accounts payable of the Company reflected in the Financial Statements
or arising after the Balance Sheet Date are the result of bona fide transactions
in the ordinary course of business and have been paid or are not yet due and
payable.
 
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Section 3.20  Related Party Transactions.
 
(a)  As of the date hereof, other than, in the case of Employees of the Company,
salaries, benefits and other transactions pursuant to Company Plans, no
employee, officer, consultant or director of the Company (“Related Persons”) (i)
owes any amount to the Company nor does the Company owe any amount to, or has
the Company committed to make any loan or extend or guarantee credit to or for
the benefit of, any Related Person, (ii) is involved in any business arrangement
or other relationship with the Company (whether written or oral), (iii) owns any
property or right, tangible or intangible, that is used by the Company, or (iv)
owns any direct or indirect interest of any kind in, or controls or is a
director, officer, employee or partner of, or consultant to, or lender to or
borrower from or has the right to participate in the profits of, any Person
which is a competitor, supplier, customer, landlord, tenant, creditor or debtor
of the Company other than the Seller.
 
(b)  Section 3.20(b) of the Seller Disclosure Schedule sets forth a list of all
Contracts and commercial dealings between or among the Seller and/or any of its
Affiliates, on the one hand, and the Company, on the other hand (each an
“Affiliate Contract”) and identifies and details the aggregate dollar amounts of
all purchase and sale transactions between or among the Seller and/or any of its
Affiliates, on the one hand, and the Company, on the other hand.  Section
3.20(b) of the Seller Disclosure Schedule also details all properties and/or
services shared (directly or indirectly) between or among, or utilized (directly
or indirectly) by both, the Seller and/or any of its Affiliates, on the one
hand, and the Company, on the other hand.
 
Section 3.21      Customers and Suppliers.
 
(a)  Section 3.21(a) of the Seller Disclosure Schedule sets forth a list of the
ten (10) largest suppliers of the Company, as measured by the dollar amount of
purchases therefrom during the fiscal year ending December 31, 2010 and the
completed portions of the fiscal year from January 1, 2011 to August 31, 2011
showing the approximate total purchases by the Company from each such supplier,
during such period.
 
(b)  From the Balance Sheet Date to the date hereof, none of the suppliers set
forth in Section 3.21(a) of the Seller Disclosure Schedule has provided written
notification to the Seller or the Company that it will stop or, other than
generally applicable price increases, materially increase the cost of, its
supply of materials, products or services used by the Company.
 
(c)  As of the Signing Date, the Seller has provided the Purchaser with access
to all (i) customer contact and other information necessary for operation of or
used in connection with the Company and (ii) computer software or programs or
other Company Intellectual Property used in connection with the business of the
Company, including any such software or programs used in connection with
customer sales or commission tracking.
 
Section 3.22  Certain Payments.  Neither the Company, nor any director, officer,
employee, consultant, or other Person acting on it’s behalf, has directly or
indirectly (i) made any contribution, gift, bribe, rebate, payoff, influence
payment, kickback, or other payment to any Person, private or public, regardless
of form, whether in money, property, or services (A) to obtain favorable
treatment in securing business for the Company, (B) to pay for favorable
treatment for business secured by the Company, (C) to obtain special concessions
or for special concessions already obtained, for or in respect of the Company,
or (D) in violation of any Law, or (ii) established or maintained any fund or
asset with respect to the Company that has not be recorded in the books and
records of the Company
 
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Section 3.23  Brokers Fees.  Except as set forth in Section 3.23 of the Seller
Disclosure Schedule, neither the Company nor the Seller has incurred any
Liability to pay any fees or commissions to any broker, finder or agent in
connection with any of the transactions contemplated by this Agreement for which
the Purchaser would become liable or obligated or for which the Company, after
the Closing Date, will have any continuing obligation.
 
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
 
The Purchaser represents and warrants to the Seller as follows, except as set
forth on the disclosure schedule delivered by the Purchaser to the Seller
concurrently with the execution and delivery of this Agreement and dated as of
the date of this Agreement (the “Purchaser Disclosure Schedule”):
 
Section 4.1  Organization and Good Standing.  The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada, and has all requisite corporate power and authority to conduct
its business as it is presently conducted.
 
Section 4.2  Authority and Enforceability.  The Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement and to
perform its obligations under this Agreement.  The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of the Purchaser.  The Purchaser has duly and validly executed and
delivered this Agreement.  Assuming the due authorization, execution and
delivery of this Agreement and the Ancillary Agreements by the Seller and the
other parties thereto, this Agreement constitutes the valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms, subject to (a) laws of general application relating to
bankruptcy, insolvency and the relief of debtors and (b) laws governing specific
performance, injunctive relief and other equitable remedies.
 
Section 4.3  No Conflict.
 
(a)  Neither the execution, delivery and performance of this Agreement by the
Purchaser, nor the consummation by the Purchaser of the transactions
contemplated by this Agreement, will conflict with or violate Purchaser’s
Governing Documents.
 
(b)  No consent, waiver, approval, order, permit, Governmental Authorization or
other authorization of, or declaration or filing with, or notification to, any
Person or Governmental Authority is required on the part of the Purchaser in
connection with the execution and delivery of this Agreement, respectively, the
compliance by the Purchaser with any of the provisions hereof and thereof, or
the consummation of the transactions contemplated hereby or thereby.
 
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Section 4.4  Legal Proceedings.  There is no Proceeding pending against the
Purchaser that questions or challenges the validity of this Agreement or that
may prevent, delay, make illegal or otherwise interfere with the ability of the
Purchaser to consummate any of the transactions contemplated by this Agreement.
 
ARTICLE 5
COVENANTS
 
Section 5.1  Access and Investigation.  Until the Closing and upon reasonable
advance notice from the Purchaser (except as may be necessary to comply with
law), the Seller will, and will cause the Company to, allow the Purchaser and
its accountants, counsel, financial advisors and other representatives
reasonable access during normal business hours and without unreasonable
interference with the operation of the business of the Company to (a) the
Company properties and facilities (including all the buildings, structures,
fixtures, appurtenances and improvements erected, attached or located thereon),
(b) the Company’s books, financial information (including working papers and
data in the possession of the Company or the Seller or their respective
independent public accountants, internal audit reports, and “management letters”
from such accountants with respect to the Company systems of internal control),
(c) Contracts and records of the Company, (d) such other materials and
information about the Company as the Purchaser may reasonably request and (e)
members of management of the Company as the Purchaser may reasonably
request.  The Purchaser will, and will cause its representatives to, hold
confidential all information so obtained in accordance with the terms of the
Confidentiality Agreement.
 
Section 5.2  Operation of the Businesses of the Company.
 
(a)  Until the Closing, except as otherwise set forth in this Agreement, the
Seller Disclosure Schedule or as otherwise consented to by the Purchaser (which
consent will not be unreasonably withheld, conditioned or delayed), the Seller
will cause the Company to:
 
(i)  conduct its business in the ordinary course of business in all material
respects; and
 
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(ii)  use its commercially reasonable efforts to (A) preserve the present
business operations, organization (including officers and Employees) and
goodwill of the Company and (B) preserve the present relationships with Persons
having business dealings with the Company (including customers and suppliers).
 
(b)  Until the Closing, except as otherwise set forth in this Agreement, the
Seller Disclosure Schedule or as otherwise consented to in writing by the
Purchaser (which consent will not be unreasonably withheld, conditioned or
delayed), the Seller will not cause or permit the Company to:
 
(i)  amend its Governing Documents;
 
(ii)  transfer, issue, sell, dispose or, pledge or encumber any shares of its
capital stock or securities convertible into any such shares, or any options,
warrants or rights to acquire any such shares or other convertible securities;
 
(iii)  declare, set aside or pay any dividend or other distribution in respect
of its capital stock, other than dividends and other distributions payable
solely in cash;
 
(iv)  effect any recapitalization, reclassification, stock split, combination or
like change in the capitalization of the Company, or amend the terms of any
outstanding securities of the Company;
 
(v)  terminate, amend, restate, supplement or waive any rights under any
Material Contract or Real Property Lease, other than in the ordinary course of
business;
 
(vi)  waive, compromise, cancel or release any debt, right or claim of a
material value to the Company other than in the ordinary course of business;
 
(vii)  acquire, by merger or consolidation with another entity, by purchase or
otherwise, any material properties or assets or sell, assign, license, transfer,
convey, lease or otherwise dispose of any of the material properties or assets
of, or used by, the Company, other than in the ordinary course of business;
 
(viii)  issue, create, incur, assume, guarantee, endorse or otherwise become
liable or responsible with respect to (whether directly, contingently or
otherwise) any Indebtedness from third parties;
 
(ix)  enter into any commitment for capital expenditures of the Company in
excess of $5,000 for any individual commitment and $10,000 for all commitments
in the aggregate;
 
(x)  make a change in its accounting or tax reporting principles, methods or
policies;
 
(xi)  enter into any Contract, understanding or commitment that restrains,
restricts, limits or impedes the ability of the Company to compete with or
conduct any business or line of business in any geographic area or solicit the
employment of any persons;
 
(xii)  settle or compromise any pending or threatened proceeding or any claim or
claims, in each case involving an amount individually in excess of $5,000;
 
(xiii)  change or modify its credit, collection or payment policies, procedures
or practices, including acceleration of collections or receivables (whether or
not past due) or fail to pay or delay payment of payables or other liabilities;
 
(xiv)  take any action which would adversely affect the ability of the parties
to consummate the transactions contemplated by this Agreement;
 
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(xv)  make or change any material Tax election, settle or compromise any
material Tax liability, file any material Tax Return, amend any Tax Return, or
enter into any closing or other Tax agreement with a Government Authority; or
 
(xvi)  agree to do anything (A) prohibited by this Section 5.2, or (B) intended
to make any of the representations and warranties of the Seller in this
Agreement or instruments or documents delivered in connection herewith or
therewith untrue or incorrect in any material respect or could result in any of
the conditions to the Closing not being satisfied.
 
Section 5.3  Consents and Filings; Commercially Reasonable Efforts.
 
(a)  Subject to the terms and conditions provided in this Section 5.3, the
Seller will use its commercially reasonable efforts to obtain at the earliest
practicable date all consents, waivers and approvals from, and provide all
notices to, all Persons, which consents, waivers, approvals and notices are
required to consummate, or in connection with, the transactions contemplated by
this Agreement.  All such consents, waivers, approvals and notices will be in
writing and in form and substance satisfactory to the Purchaser, and executed
counterparts of such consents, waivers and approvals will be delivered to the
Purchaser promptly after receipt thereof, and copies of such notices will be
delivered to the Purchaser promptly after the making thereof.  Notwithstanding
anything to the contrary in this Agreement, neither the Seller nor any of its
Affiliates, nor the Purchaser nor any of its Affiliates (which for purposes of
this sentence will include the Company), will be required to pay any amounts in
connection with obtaining any consent, waiver or approval.
 
(b)  Subject to, and not in limitation of, Section 5.3(a), the Seller will, and
will cause the Company to, and the Purchaser will use its commercially
reasonable efforts to (i) take, or cause to be taken, all actions necessary or
appropriate to consummate the transactions contemplated by this Agreement and
(ii) cause the fulfillment at the earliest practicable date of all of the
conditions to their respective obligations to consummate the transactions
contemplated by this Agreement.
 
(c)  Notwithstanding the any provision within this Agreement to the contrary,
subject to the provisions of Section 5.8, the Seller shall use best efforts to
secure the stockholder votes necessary to approve the transactions contemplated
by this Agreement.
 
Section 5.4  Non-Solicitation; Confidentiality.
 
(a)  The parties agree to continue to abide by that certain Non-Disclosure &
Confidentiality Agreement between the Seller and the Purchaser, dated July 11,
2011 (the “Confidentiality Agreement”), which will survive until the Closing, at
which time the Confidentiality Agreement will terminate; provided, however, that
if this Agreement is, for any reason, terminated prior to the Closing, the
Confidentiality Agreement will continue in full force and effect in accordance
with its terms.
 
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(b)  After the Closing, the Seller will not and will cause its Employees and
Affiliates not to, directly or indirectly, disclose, reveal, divulge or
communicate to any Person other than authorized officers, directors and
employees of the Purchaser or use or otherwise exploit for its own benefit or
for the benefit of anyone other than the Purchaser, the Company Information,
except to the extent compelled by law or to the extent that such Company
Information (i) must be disclosed in connection with the obligations of the
Seller pursuant to this Agreement or (ii) can be shown to have been in the
public domain through no fault of the Seller.  Notwithstanding the foregoing, in
no event will this Section 5.4(a) limit or otherwise restrict the right of the
Seller to disclose such Company information (i) to its and its Affiliates’
respective directors, officers, employees, consultants, agents and advisors to
the extent reasonably required to facilitate the negotiation, execution,
delivery or performance of this Agreement, (ii) to any Governmental Authority or
arbitrator to the extent reasonably required in connection with any proceeding
relating to the enforcement of this Agreement, and (iii) in connection with its
indemnification obligations under this Agreement.  “Company Information” means
any information with respect to the Company, including methods of operation,
customer lists, products, prices, fees, costs, technology, inventions, trade
secrets, know-how, software, marketing methods, plans, personnel, suppliers,
competitors, markets or other specialized information or proprietary matters.
 
(c)  For a period of eighteen (18) months from and after the Closing Date, the
Seller will not, and will cause its directors, officers, consultants, employees
and Affiliates not to, directly or indirectly hire, solicit or assist others in
soliciting the employment of any of the Employees of the Company unless such
Employee is also an employee, advisor or consultant of the Seller; provided,
however, nothing in this Agreement will prohibit or limit (i) the Seller from
making general employment solicitations through public advertisements, or (ii)
solicitations by employee search firms engaged by the Seller but not directed by
the Seller towards any such Employee of the Company or prohibit or limit the
Seller from hiring any individuals who respond to such solicitations.
 
(d)  The covenants and undertakings contained in this Section 5.4 relate to
matters which are of a special, unique and extraordinary character and a
violation of any of the terms of this Section 5.4 will cause irreparable injury
to the Purchaser, the amount of which will be impossible to estimate or
determine and which cannot be adequately compensated.  Accordingly, the remedy
at law for any breach of this Section 5.4 will be inadequate.  Therefore, the
Purchaser will be entitled to seek temporary and permanent injunction,
restraining order or other equitable relief from any court of competent
jurisdiction in the event of any breach of this Section 5.4 without the
necessity of proving actual damage or posting any bond whatsoever.  The rights
and remedies provided by this Section 5.4 are cumulative and in addition to any
other rights and remedies which Purchaser may have hereunder or at law or in
equity.
 
(e)  The parties hereto agree that, if any court of competent jurisdiction
determines that a specified time period, a specified geographical area, a
specified business limitation or any other relevant feature of this Section 5.4
is unreasonable, arbitrary or against public policy, then a lesser period of
time, geographical area, business limitation or other relevant feature which is
determined by such court to be reasonable, not arbitrary and not against public
policy may be enforced against the applicable party.
 
Section 5.5  Public Announcements.  Each party agrees not to issue any press
release or make any other public announcement relating to this Agreement without
the prior written approval of the other party unless required by applicable
securities law or securities listing standards (in the reasonable opinion of
counsel to the disclosing party) in which case the Seller and the Purchaser will
have the right to review such press release or other announcement prior to
issuance, distribution or publication.
 
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Section 5.6  Post-Closing Cooperation.
 
(a)  The Purchaser and the Seller shall cooperate with each other, and shall
cause their officers, employees, agents, auditors and representatives to
cooperate with each other, after the Closing to ensure the orderly transition of
the Business from the Seller to the Purchaser and to minimize any disruption to
the Business and the other respective businesses of the Seller and the Purchaser
that might result from the transactions contemplated hereby.  After the Closing,
upon reasonable written notice, the Purchaser and the Seller shall furnish or
cause to be furnished to each other and their employees, counsel, auditors and
representatives access, during normal business hours, to such information and
assistance relating to the Business (to the extent within the control of such
party) as is reasonably necessary for financial reporting and accounting
matters.
 
(b)  After the Closing, upon reasonable written notice, the Purchaser and the
Seller shall furnish or cause to be furnished to each other, as promptly as
practicable, such information and assistance (to the extent within the control
of such party) relating to the transaction contemplated hereby (including,
access to books and records) as is reasonably necessary for the filing of all
Tax returns, and making of any election related to Taxes, the preparation for
any audit by any taxing authority, and the prosecution or defense of any claim,
suit or proceeding related to any Tax return.  The Seller and the Purchaser
shall cooperate with each other in the conduct of any audit or other proceeding
relating to Taxes involving the Business.  In the event that the Seller shall
after the Closing take any position in any state or Tax return, or reach any
settlement or agreement on audit, which is in any manner inconsistent with any
position taken by the Seller in any filing, settlement or agreement made by the
Seller prior to the Closing and such inconsistent position (i) requires the
payment by the Purchaser of more Tax than would have been required to be paid
had such position not been taken or such settlement or agreement not been
reached or (ii) accelerates the time at which any Tax must be paid by the
Purchaser, or the Seller, as the case may be, shall provide timely and
reasonable notice to the Purchaser of such position.
 
(c)  Each party shall reimburse the other for reasonable out-of-pocket costs and
expenses incurred in assisting the other pursuant to this Section 5.6.  Neither
party shall be required by this Section 5.6 to take any action that would
unreasonably interfere with the conduct of its business or unreasonably disrupt
its normal operations (or, in the case of the Purchaser, the Business).
 
Section 5.7  No Shop.
 
(a)  The Seller will not, and will not permit its respective Affiliates,
directors, officers, Employees, representatives or agents (collectively, the
“Representatives”) to, directly or indirectly, (i) discuss, encourage,
negotiate, undertake, initiate, authorize, recommend, propose or enter into,
whether as the proposed surviving, merged, acquiring or acquired corporation or
otherwise, any transaction involving a merger, consolidation, business
combination, purchase or disposition of any material amount of the assets of the
Company or any capital stock or other ownership interests of the Company other
than the transactions contemplated by this Agreement (an “Alternate
Transaction”), (ii) facilitate, encourage, solicit or initiate discussions,
negotiations or submissions of proposals or offers in respect of an
Alternate Transaction, (iii) furnish or cause to be furnished, to any Person,
any information concerning the business, operations, properties or assets of the
Company in connection with an Alternate Transaction, or (iv) otherwise cooperate
in any way with, or assist or participate in, facilitate or encourage, any
effort or attempt by any other Person to do or seek any of the foregoing.
 
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(b)  The Seller will (and will cause its Representatives to) immediately cease
and cause to be terminated any existing discussions or negotiations with any
Persons (other than the Purchaser) conducted heretofore with respect to any
Alternate Transaction.  The Seller agrees not to release any third party from
the confidentiality and standstill provisions of any agreement to which the
Company is a party.
 
(c)  Notwithstanding anything to the contrary contained in Section 5.8(a),
Section 5.8(b) or elsewhere in this Agreement, in the event that the Seller or
the Company receives after the date of this Agreement and prior to obtaining the
approval of the shareholders of the Seller contemplated by Section 5.3(c) an
unsolicited, bona fide written Alternative Transaction Proposal which the Board
of Directors of the Seller or the Company reasonably determines to be a Superior
Proposal, the Seller and the Company may then take the following actions:
 
(i)  Furnish any information with respect to the Seller and the Company to the
Person or group (and their respective Representatives) making such Alternative
Transaction Proposal; provided, that (A) prior to furnishing any such
information, it receives from such Person or group an executed confidentiality
agreement containing confidentiality terms at least as restrictive as the terms
contained in the Confidentiality Agreement, and (B) contemporaneously with
furnishing any such information to such Person or group, it furnishes such
information to Purchaser; and
 
(ii)  Engage in discussions or negotiations with such Person or group (and their
Representatives) with respect to such Alternative Transaction Proposal.
 
Nothing contained herein shall prevent the Seller from disclosing to the
shareholders of the Seller a position contemplated by Rule 14d-9 and Rule
14e-2(a) promulgated under the Exchange Act with regard to an Alternative
Transaction Proposal if the Seller determines that failure to disclose such
position would be reasonably likely to be inconsistent with applicable Law.
 
(d)  Notification. In addition to the obligations of the Parties set forth in
this Section 5.8, as promptly as practicable (and in any event within one (1)
Business Day) after receipt of any Alternative Transaction Proposal, any request
for nonpublic information, or any inquiry relating in any way to, or that would
reasonably be expected to lead to, any Alternative Transaction Proposal, the
Seller shall provide the Purchaser with written notice of the material terms and
conditions of such Alternative Transaction Proposal, request, or inquiry, and
the identity of the Person or group making any such Alternative Transaction
Proposal, request, or inquiry, and a copy of all written materials provided to
it in connection with such Alternative Transaction Proposal, request, or
inquiry. In addition, the Seller shall provide the Purchaser as promptly as
practicable (and in any event within one (1) Business Day) with all information
as is reasonably necessary to keep the Purchaser fully informed of all material
oral or written communications regarding, and the status and changes to the
economic or other material terms of, any such Alternative Transaction Proposal,
request, or inquiry, and shall provide, as promptly as reasonably practicable,
to the Purchaser a copy of all material written materials provided by or to the
Seller its, or any of its Representatives in connection with such Alternative
Transaction Proposal, request, or inquiry.
 
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(e)  Changes of Recommendation; Termination.  The Board of Directors of the
Seller thereof shall not, directly, or indirectly, (i) (A) withdraw or qualify
(or amend or modify in a manner adverse to the Purchaser) or publicly propose to
withdraw or qualify (or amend or modify in a manner adverse to the Purchaser),
the approval, recommendation, or declaration of advisability by such Board of
Directors of this Agreement, or the transactions contemplated hereby, or
(B) recommend, adopt, or approve, or propose publicly to recommend, adopt, or
approve, any Alternative Transaction Proposal, or (ii) approve or recommend, or
publicly propose to approve or recommend, or allow the Company or the Seller or
any of their Affiliates to execute or enter into, any letter of intent,
memorandum of understanding, agreement in principle, merger agreement,
acquisition agreement, option agreement, joint venture agreement, partnership
agreement, or other similar agreement, arrangement or understanding
(A) constituting, or relating to, any Alternative Transaction Proposal, or (B)
requiring it (or that would require it) to abandon, terminate, or fail to
consummate any other Transaction (any of the foregoing actions being referred to
herein as an “Adverse Recommendation Change”).  Notwithstanding anything to the
contrary set forth in this Section 5.8(e) or in any other provision of this
Agreement, the Board of Directors of the Seller may, solely in response to a
Superior Proposal, terminate this Agreement pursuant to Section 7.1(f) and
concurrently enter into a definitive agreement with respect to such Superior
Proposal and make an Adverse Recommendation Change to its shareholders, if, and
only if, all of the following conditions in clauses (i) through (vi) are met:
 
(i)  such Superior Proposal has been made and has not been withdrawn and
continues to be a Superior Proposal;
 
(ii)  the approval of this Agreement and the transactions contemplated hereby by
the shareholders of the Seller has not been obtained;
 
(iii)  the Seller has (A) provided to the Purchaser five (5) Business Days’
prior written notice that states (1) the Seller has received a Superior
Proposal, (2) the material terms and conditions of the Superior Proposal
(including the per share value of the consideration offered therein and the
identity of the Person or group of Persons making the Superior Proposal) and
copies of the relevant proposed transaction agreements with the Person or group
of Persons making such Superior Proposal and other material documents, including
the definitive agreement with respect to such Superior Proposal, and (3) it
intends to terminate this Agreement, and the manner in which it intends to do
so, and (B) prior to terminating this Agreement, to the extent requested by the
Purchaser, engaged in good faith negotiations with the Purchaser to amend this
Agreement in such a manner that the Alternative Transaction Proposal ceases to
constitute a Superior Proposal;
 
(iv)  the Board of Directors of the Seller has determined in good faith that, in
light of such Superior Proposal and taking into account any revised terms
offered by the Purchaser, the failure to terminate this Agreement and accept the
Superior Proposal would reasonably be likely to constitute a breach of its
fiduciary duties under applicable law; and
 
(v)  the Seller pays all fees and expenses as required pursuant to Section
7.2(c).
 
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Section 5.8  Notification of Certain Matters.  The Seller will give notice to
the Purchaser and the Purchaser will give notice to the Seller, as promptly as
reasonably practicable upon becoming aware of (a) any fact, change, condition,
circumstance, event, occurrence or non-occurrence that has caused or is
reasonably likely to cause any representation or warranty in this Agreement made
by it to be untrue or inaccurate in any respect at any time after the date
hereof and prior to the Closing, (b) any material failure on its part to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder or (c) the institution of or the threat of institution
of any proceeding against the Seller or the Company related to this Agreement or
the transactions contemplated hereby; provided that the delivery of any notice
pursuant to this Section 5.9 will not limit or otherwise affect the remedies
available hereunder to the party receiving such notice, or the representations
or warranties of, or the conditions to the obligations of, the parties hereto.
 
Section 5.9  Additional Capital Contribution.  Prior to the Closing, the Seller
shall make a capital contribution to the Company in an amount equal to all
outstanding debt owed by the Company to the Seller as of October 1, 2011 and
shall provide the Purchaser written evidence of such capital contribution (the
“Additional Capital Contribution”).
 
Section 5.10  Removal of GeneLink from Credit Card Merchant Account
Guarantee.  Within thirty (30) days after the Closing, the Purchaser shall
remove the Seller as a guarantor of any credit card merchant services accounts
of the Company, and the Seller shall have no further responsibility or
obligation with respect to such accounts as of the date of such removal.
 
Section 5.11  Further Actions.  Subject to the other express provisions of this
Agreement, upon the request of any party to this Agreement, the other parties
will execute and deliver such other documents, instruments and agreements as the
requesting party may reasonably require for the purpose of carrying out the
intent of this Agreement and the transactions contemplated by this Agreement.
 
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATION TO CLOSE
 
Section 6.1  Conditions to the Obligation of the Purchaser.  The obligation of
the Purchaser to consummate the transactions contemplated by this Agreement is
subject to the satisfaction, on or before the Closing Date, of each of the
following conditions (any of which may be waived by the Purchaser, in whole or
in part):
 
(a)  No Action.  There must not be in effect any law or judgment that would
prohibit or make illegal the consummation of the transactions contemplated by
this Agreement or cause the transactions contemplated by this Agreement to be
rescinded following consummation;
 
(b)  Approval by Shareholders.
 
(i)  The Seller shall use its reasonable best efforts to submit a preliminary
proxy statement to the Securities and Exchange Commission (the “SEC”) providing
for the solicitation of the vote of all of the Seller’s shareholders vote in
favor of the transactions contemplated by this Agreement (the “Preliminary Proxy
Statement”) within thirty (30) days of the execution of this Agreement (the
“Signing”).
 
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(ii)  The Seller shall print and mail to shareholders the final proxy statement
requesting each shareholder’s approval of the transactions contemplated by this
Agreement along with all other necessary soliciting materials (together, the
“Final Proxy Statement”) within five (5) Business Days after (i) receipt of
notice of the SEC waiving review or (ii) the finalization of any SEC comments
issued in connection with the Preliminary Proxy Statement (the “Mailing
Period”).
 
(iii)  The Seller shall hold any shareholder meeting necessary to vote upon the
matters within the Final Proxy Statement within thirty (30) days of the last day
of the Mailing Period (the “Shareholder Meeting”).
 
(iv)  The Seller and the Purchaser shall close on the transactions contemplated
by this Agreement within three (3) Business Days of the Shareholder Meeting.
 
(c)  Distribution Agreement.  The Seller and Gene Elite shall have entered into
the LDA on mutually acceptable terms relating to the licensing of Seller-owned
Intellectual Property.
 
(d)  Additional Capital Contribution.  The Seller shall make the Additional
Capital Contribution to the Company.
 
Section 6.2  Conditions to the Obligation of the Seller.  The obligation of the
Seller to consummate the transactions contemplated by this Agreement is subject
to the satisfaction, on or before the Closing Date, of each of the following
conditions (any of which may be waived by the Seller, in whole or in part):
 
(a)  No Action.  There must not be in effect any law or judgment that would
prohibit or make illegal the consummation of the transactions contemplated by
this Agreement or cause the transactions contemplated by this Agreement to be
rescinded following consummation.
 
(b)  Licensing and Distribution Agreement.  The Seller and Gene Elite shall have
entered into the LDA.
 
(c)  Payments.  Purchaser shall have paid the Purchase Price and Gene Elite
shall have paid the Remaining LDA Payment.
 
ARTICLE 7
TERMINATION
 
Section 7.1  Termination Events.  This Agreement may, by written notice given
before or at the Closing, be terminated:
 
(a)  by mutual consent of the Purchaser and the Seller;
 
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(b)  by either the Purchaser or the Seller if any Governmental Authority has
issued a nonappealable final judgment or taken any other nonappealable final
action, in each case having the effect of permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement; provided,
however, that the right to terminate this Agreement under this Section 7.1(b)
will not be available to any party whose failure to fulfill any material
covenant under this Agreement has been the cause of or resulted in the action or
event described in this Section 7.1(b) occurring;
 
(c)  by the Seller or the Purchaser if the number of votes in favor of this
Agreement cast by the shareholders of the Seller required for the consummation
of the transaction contemplated by this Agreement shall not have been obtained
at the meeting of the shareholders of the Seller or at any adjournment thereof
duly held for such purpose;
 
(d)  by the Board of Directors of the Seller if all of the conditions set forth
in Section 5.8 have been met;
 
(e)  by the Purchaser if the Seller has not satisfied the closing condition
under Section 6.1(b) on or before January 15, 2012 (the “Termination Date”); or
 
(f)  by the Seller if the Purchaser and Gene Elite have not made the payments
required in Section 6.2(d) within five (5) Business Days after GeneLink’s
shareholders have approved the transactions contemplated by this Agreement
pursuant to the Shareholders Meeting.
 
Section 7.2  Effect of Termination.
 
(a)  If this Agreement is terminated pursuant to Section 7.1(a), the parties
shall determine the terms and conditions of such termination.
 
(b)  If this Agreement is terminated pursuant to Section 7.1(c) or Section
7.1(d), (i) the Seller shall pay the Purchaser a break-up fee in the amount of
Three Hundred Thousand and 00/100 Dollars ($300,000.00), which shall compensate
the Purchaser for the time and expense dedicated to the transactions
contemplated by this Agreement, payable upon the closing of the transaction
contemplated by the Superior Proposal, (ii) Gene Elite shall retain the initial
six million (6,000,000) warrants issued to Gene Elite (the “Gene Elite Initial
Warrants”) pursuant to the Warrant Purchase Agreement dated as of the date of
this Agreement (the “Warrant Agreement”) and the eight million (8,000,000)
Performance Warrants issuable under the Warrant Agreement shall be issued and
vest immediately as of such termination, provided that all “cashless” exercise
rights associated with the Gene Elite Initial Warrants and the Performance
Warrants shall be deemed immediately forfeited by the warrant holder at the time
of the vesting of the Performance Warrants as provided by this Section 7.2(b);
and (iii) upon written notice to the Seller (the “Purchaser Termination
Notice”), which Purchaser Termination Notice must be given within five (5) days
after the termination of this Agreement pursuant to Section 7.1(c) or Section
7.1(d), Gene Elite may immediately terminate the LDA and all rights and
obligations of the parties thereunder, in which case the Seller shall return to
Gene Elite the LDA Signing Amount within ninety (90) days of receipt of the
Purchaser Termination Notice.
 
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(c)  If this Agreement is terminated pursuant to Section 7.1(f), then (i)
GeneLink may immediately terminate the LDA and all rights and obligations of the
parties thereunder, in which event Gene Elite shall forfeit the LDA Signing
Amount, and (ii) the Warrant Agreement, and all rights and obligations of the
parties thereunder, shall be terminated and all warrants received by Gene Elite
pursuant to the Warrant Purchase Agreement shall be cancelled.
 
(d)  In the event that this Agreement is terminated, any profits and/or losses
in connection with the operation of the Company as provided for under the
Management Agreement will be allocated between the parties as of the date of
such termination, as more particularly described in Section 11 of the Management
Agreement.
 
(e)  Notwithstanding the other provisions of this Section 7.2, if this Agreement
is terminated pursuant to Section 7.1, this Agreement and all rights and
obligations of the parties under this Agreement automatically end without
liability against any party or its Affiliates, except that Section 5.4(a)
(Non-Solicitation; Confidentiality), Section 5.5 (Public Announcements), Section
7.4 (Certain Effects of Termination), Article 10 (General Provisions) and this
Section 7.2 will remain in full force and survive any termination of this
Agreement.
 
Section 7.3  Procedure Upon Termination.  In the event of termination and
abandonment by the Purchaser or the Seller, or both, pursuant to Section 7.1,
after the expiration of any applicable cure periods, written notice thereof will
forthwith be given to the other party or parties, and this Agreement will
terminate, and the purchase of the Shares hereunder will be abandoned, without
further action by the Purchaser, the Company or the Seller.
 
Section 7.4  Certain Effects of Termination.  If the Purchaser or the Seller
terminates this Agreement pursuant to Section 7.1, the Purchaser will comply
with the Confidentiality Agreement regarding the return and/or destruction of
any information furnished to the Purchaser in connection with this Agreement.
 
ARTICLE 8
INDEMNIFICATION
 
Section 8.1  Indemnification by the Seller.  Except for the terms of this
Agreement governing the indemnification of certain Tax matters as provided in
Article 9, the Seller hereby agrees to indemnify the Purchaser and its
directors, officers, Employees, Affiliates (including the Company),
stockholders, agents, attorneys, representatives, successors and assigns
(collectively, the “Purchaser Indemnified Parties”) and hold each of them
harmless from and against, and pay to the applicable Purchaser Indemnified
Parties the amount of, any and all claims, losses, liabilities, costs and
expenses (including expenses in connection with any action, suit or proceeding,
whether involving a third party claim or a claim solely between the parties
hereto) (individually, a “Loss” and, collectively, “Losses”), as suffered or
incurred (payable promptly upon written request) by such Purchaser Indemnified
Party arising from or related to (i) any breach by the Seller or any of it
Affiliates of (A) all but any representation or warranty of the Seller that is
contained in this Agreement, but only in the event that any such breach existed
as of the Signing Date and did not occur thereafter or (B) any covenant of the
Seller contained in this Agreement; or (ii) any fees, expenses or other payments
incurred or owed by the Seller or the Company to any brokers, financial advisors
or comparable other persons retained or employed by it in connection with the
transactions contemplated by this Agreement.
 
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Section 8.2  Indemnification by Purchaser.  Except for the terms of this
Agreement governing the indemnification of certain Tax matters as provided in
Article 9, from and after the Closing, the Purchaser shall indemnify the Seller
and its Affiliates and each of their respective officers, directors, employees,
stockholders, agents and representatives against, and agrees to hold them
harmless from, any Loss, as incurred (payable promptly upon written request),
for or on account of or arising from or in connection with or otherwise with
respect to (i) any breach of any representation or warranty of the Purchaser
contained in this Agreement or in any document delivered in connection herewith,
(ii) any breach of any covenant of Purchaser contained in this Agreement, or
(iv) any fees, expenses or other payments incurred or owed by Purchaser to any
brokers, financial advisors or other comparable persons retained or employed by
it in connection with the transactions contemplated by this Agreement.
 
Section 8.3  Calculation of Losses.  The amount of any Loss for which
indemnification is provided under this Article 8 shall be increased to take
account of any net Tax cost incurred by the indemnified party arising from the
receipt of indemnity payments hereunder (grossed up for such increase).
 
Section 8.4  Procedures.
 
(a)  In order for a party (the “indemnified party”), to be entitled to any
indemnification provided for under this Agreement in respect of, arising out of
or involving a claim made by any person against the indemnified party (a “Third
Party Claim”), such indemnified party must notify the indemnifying party in
writing of the Third Party Claim receipt by such indemnified party of notice of
the Third Party Claim; provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except to the extent the
indemnifying party shall have been actually and materially prejudiced as a
result of such failure.  Thereafter, the indemnified party shall deliver to the
indemnifying party, promptly following the indemnified party’s receipt thereof,
copies of all notices and documents (including court papers) received by the
indemnified party relating to the Third Party Claim.
 
(b)  If a Third Party Claim is made against an indemnified party, the
indemnifying party shall be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
indemnifying party; provided, however, that such counsel is not reasonably
objected to by the indemnified party. Should the indemnifying party so elect to
assume the defense of a Third Party Claim, the indemnifying party shall not be
liable to the indemnified party for any legal expenses subsequently incurred by
the indemnified party in connection with the defense thereof.  If the
indemnifying party assumes such defense, the indemnified party shall have the
right to participate in the defense thereof and to employ counsel, at its own
expense, separate from the counsel employed by the indemnifying party, it being
understood that the indemnifying party shall control such defense.  The
indemnifying party shall be liable for the fees and expenses of counsel employed
by the indemnified party for any period during which the indemnifying party has
not assumed the defense thereof (other than during any period in which the
indemnified party shall have failed to give notice of the Third Party Claim as
provided above).  If the indemnifying party chooses to defend or prosecute a
Third Party Claim, all the indemnified parties shall cooperate in the defense or
prosecution thereof.  Such cooperation shall include the retention and (upon the
indemnifying party’s request) the provision to the indemnifying party of records
and information that are reasonably relevant to such Third Party Claim, and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder.  Whether or not
the indemnifying party assumes the defense of a Third Party Claim, the
indemnified party shall not admit any liability with respect to, or settle,
compromise or discharge, such Third Party Claim without the indemnifying party’s
prior written consent which consent shall not be unreasonably withheld.  If the
indemnifying party assumes the defense of a Third Party Claim, the indemnified
party shall agree to any settlement, compromise or discharge of a Third Party
Claim that the indemnifying party may recommend and that by its terms obligates
the indemnifying party to pay the full amount of the liability in connection
with such Third Party Claim, which releases the indemnified party completely in
connection with such Third Party Claim and that would not otherwise adversely
affect the indemnified party.  Notwithstanding the foregoing, the indemnifying
party shall not be entitled to assume the defense of any Third Party Claim (and
shall be liable for the fees and expenses of counsel incurred by the indemnified
party in defending such Third Party Claim) if the Third Party Claim seeks an
order, injunction or other equitable relief or relief for other than money
damages against the indemnified party that the indemnified party reasonably
determines, after conferring with its outside counsel, cannot be separated from
any related claim for money damages.  If such equitable relief or other relief
portion of the Third Party Claim can be so separated from that for money
damages, the indemnifying party shall be entitled to assume the defense of the
portion relating to money damages.
 
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(c)  Other Claims.  In the event any indemnified party should have a claim
against any indemnifying party under Section 8.1 or Section 8.2 that does not
involve a Third Party Claim being asserted against or sought to be collected
from such indemnified party, the indemnified party shall deliver notice of such
claim with reasonable promptness to the indemnifying party.  The failure by any
indemnified party so to notify the indemnifying party shall not relieve the
indemnifying party from any liability that it may have to such indemnified party
under Section 8.1 or Section 8.2, except to the extent that the indemnifying
party demonstrates that it has been materially prejudiced by such failure.  If
the indemnifying party does not notify the indemnified party within ten (10)
Business Days following its receipt of such notice that the indemnifying party
disputes its liability to the indemnified party under Section 8.1 or Section
8.2, such claim specified by the indemnified party in such notice shall be
conclusively deemed a liability of the indemnifying party under Section 8.1 or
Section 8.2 and the indemnifying party shall pay the amount of such liability to
the indemnified party on demand or, in the case of any notice in which the
amount of the claim (or any portion thereof) is estimated, on such later date
when the amount of such claim (or such portion thereof) becomes finally
determined.  If the indemnifying party has timely disputed its liability with
respect to such claim, as provided above, the indemnifying party and the
indemnified party shall proceed in good faith to negotiate a resolution of such
dispute and, if not resolved through negotiations, such dispute shall be
resolved by litigation in an appropriate court of competent jurisdiction.
 
Section 8.5  Setoff.  Any amount owed to any Purchaser Indemnified Parties by
the Seller pursuant to Section 8.1 shall first be set-off against any amounts
owed by any Purchaser Indemnified Parties to the Seller or its Affiliates under
this Agreement, including any amounts owed in connection with the Earnout
Consideration.
 
Section 8.6  Limitation of Liability.  Notwithstanding anything in this
Agreement to the contrary, in no event shall (i) the Seller be liable to the
Purchaser Indemnified Parties for any Losses under this Article 8 over and above
Seven Million Five Hundred Thousand and 00/100 Dollars ($7,500,000) aggregated
across all such Losses, or (ii) either party be liable to the other party under
this Article 8 or otherwise for any punitive, consequential or special damages,
claims of lost or prospective profits or any similar claim or damage.
 
Section 8.7  Price Adjustment.  Any payment pursuant to this Article 8 shall be
treated for all tax purposes as an adjustment to the Purchase Price.
 
 
ARTICLE 9
TAX MATTERS
 
Section 9.1  Tax Matters.  The following provisions shall govern the allocation
of responsibility between the Seller and the Purchaser for certain Tax matters
following the Closing Date.
 
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(a)  Tax Indemnification.  Notwithstanding anything else contained in this
Agreement, the Seller shall indemnify the Company and the Purchaser and hold
them harmless from and against, any loss, claim, liability, expense or other
damage attributable to (i) all Taxes (or the nonpayment thereof) of Company for
all Tax periods ending on or before the Closing Date and the portion through the
end of the Closing Date of any Tax period that includes (but does not end on)
the Closing Date (each such Tax period or portion thereof hereinafter is
referred to as a “Pre-Closing Tax Period”), (ii) all Taxes of any member of an
affiliated, consolidated, combined, or unitary group of which the Company (or
any predecessor of the Company) is or was a member on or prior to the Closing
Date, including pursuant to Treasury Regulation §1.1502-6 or any analogous or
similar state, local, or foreign law or regulation; and (iii) any and all Taxes
of any person (other than Company) imposed on the Company as a transferee or
successor, by Contract or pursuant to any law, which Taxes relate to an event or
transaction occurring before the Closing.  Seller shall reimburse Purchaser for
any Taxes that are the responsibility of Seller within thirty (30) Business Days
after payment of such Taxes by the Purchaser or the Company.
 
(b)  Straddle Period.  In the case of any Tax period that includes (but does not
end on) the Closing Date (such Tax period hereinafter is referred to as a
“Straddle Period”), the amount of any Taxes based on or measured by income or
receipts of the Company for the Pre-Closing Tax Period shall be determined based
on an interim closing of the books as of the Closing Date (and for such purpose,
the Tax period of any partnership or other pass-through entity in which Company
holds any beneficial interest shall be deemed to terminate at such time) and the
amount of other Taxes of the Company for a Straddle Period that relates to the
Pre-Closing Tax Period shall be deemed to be the amount of such Tax for the
entire taxable period multiplied by a fraction the numerator of which is the
number of days from the beginning of the Straddle Period through and including
the Closing Date and the denominator of which is the number of days in such
Straddle Period.
 
(c)  Responsibility for Filing Tax Returns for Periods through Closing
Date.  The Seller shall include the income of the Company (including any
deferred items triggered into income by Treasury Regulations §1.1502-13 and any
excess loss account taken into income under Treasury Regulations §1.1502-19) on
the Seller’s consolidated federal income Tax Returns for all periods through the
Closing Date and pay any federal income Taxes attributable to such income.  For
all taxable periods ending on or before the Closing Date, the Seller shall cause
the Company to join the Seller’s consolidated federal income Tax Return and, in
jurisdictions requiring separate reporting from the Seller, to file separate
company state and local income Tax Returns.  All such Tax Returns shall be
prepared and filed in a manner consistent with prior practice, except as
required by a change in applicable law.  The Purchaser shall have the right to
review and comment on any such Tax Returns prepared by the Seller.  The
Purchaser shall cause the Company to furnish information to the Seller as
reasonably requested by the Seller to allow the Seller to satisfy its
obligations under this section in accordance with past custom and practice.  The
Purchaser shall cause the Company to file income Tax Returns or shall include
the Company in its combined or consolidated income Tax Returns for all periods
other than periods ending on or before the Closing Date.
 
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(d)  Cooperation on Tax Matters. After the Closing Date, the parties hereto
shall:
 
(i)  cooperate fully, as and to the extent reasonably requested by the other
party, in connection with the filing of Tax Returns pursuant to Section 9.1(c)
and any audits of, or disputes with Governmental Authorities regarding, any
Taxes or Tax Returns of the Company and take any actions reasonably requested by
the other party in connection therewith;
 
(ii)  make available to one another and to any Governmental Authority, as
reasonably requested in connection with any Tax Return described in this section
or any audit, litigation, or other proceeding with respect to Taxes, all
reasonably relevant information relating to any Taxes or Tax Returns of the
Company, and make employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder;
 
(iii)  furnish one another with copies of all correspondence received from any
Governmental Authority in connection with any Tax audit or information request
with respect to any Pre-Closing Tax Period;
 
(iv)  use their respective best efforts to obtain any certificate or other
document from any Governmental Authority or any other Person as may be necessary
to mitigate, reduce, or eliminate any Tax that could be imposed (including,
without limitation, with respect to the transactions contemplated hereby);
 
(v)  upon request, provide to the other party all information that the other
party may be required to report pursuant to Code Section 6043, or Code Section
6043A, or Treasury Regulations promulgated thereunder; and
 
(vi)  retain all books and records with respect to Tax matters pertinent to the
Company relating to any taxable period beginning before the Closing Date until
the expiration of the statute of limitations (and, to the extent notified by
Purchaser or Seller, any extensions thereof) of the respective taxable periods,
and to abide by all record retention agreements entered into with any
Governmental Authority, and to give the other Person reasonable written notice
prior to transferring, destroying or discarding any such books and records and,
if the other Person so requests, the Purchaser or the Seller, as the case may
be, shall allow the other Person to take possession of such books and records.
 
(e)  Tax Sharing Agreements.  All Tax sharing agreements or similar agreements
with respect to or involving Company shall be terminated as of the Closing Date
and, after the Closing Date, the Company shall not be bound thereby nor have any
liability thereunder.
 
(f)  Certain Taxes and Fees. All transfer, documentary, sales, use, stamp,
registration, and other such Taxes, and all conveyance fees, recording charges,
and other fees and charges (including any penalties and interest) incurred in
connection with consummation of the transactions contemplated by this Agreement
shall be paid by Seller when due, and Seller will, at its own expense, file all
necessary Tax Returns and other documentation with respect to all such Taxes,
fees, and charges, and, if required by applicable law, the Purchaser will, and
will cause the Company to, join in the execution of any such Tax Returns and
other documentation.
 
 
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(g)  Audits.  The Seller shall allow the Purchaser and its counsel to
participate in any audit of the Seller’s consolidated federal income Tax Returns
to the extent that such returns relate to the Company.  The Seller shall not
settle any such audit in a manner that would adversely affect the Company after
the Closing Date without the prior written consent of the Purchaser, which
consent shall not be unreasonably withheld.
 
(h)  Carrybacks.  The Seller shall immediately pay to the Purchaser any Tax
refund (or reduction in Tax liability) resulting from a carryback of a
post-acquisition Tax attribute of the Company into the Seller consolidated Tax
Return, when such refund (or reduction) is realized by the Seller’s group.  At
the Purchaser’s request, the Seller will cooperate with the Company in obtaining
such refund (or reduction), including through the filing of amended Tax Returns
or refund claims.  The Purchaser agrees to indemnify Seller for any Taxes
resulting from the disallowance of such post-acquisition Tax attribute on audit.
 
(i)  Retention of Carryovers.  The Seller shall not elect to retain any net
operating loss carryover or capital loss carryovers of the Company.
 
(j) Section 338(h)(10) Election.  At the Purchaser’s option, the Seller and the
Purchaser shall join in making an election under Code Section 338(h)(10) (and
any corresponding election under state, local or non-U.S. Tax law) (collectively
a “Section 338(h)(10) Election”) with respect to the purchase and sale of the
stock of the Company hereunder.  The Seller will pay any Tax attributable to the
making of the Section 338(h)(10) Election and will indemnify the Purchaser and
the Company against any adverse consequences arising out of any failure to pay
such Tax.   The parties agree that the Total Consideration and the liabilities
of the Company will be allocated to the assets of the Company for all purposes
(including Tax and financial accounting purposes) in a manner consistent with
Code Section 338 and Code Section 1060 and the regulations thereunder.  The
Purchaser, the Company and the Seller shall file all Tax Returns (including
amended Tax Returns and claims for refund) and information reports in a manner
consistent with such allocation.
 
ARTICLE 10
GENERAL MATTERS
 
Section 10.1  Further Assurances.  From time to time, as and when requested by
any party, each party shall execute and deliver, or cause to be executed and
delivered, all such documents and instruments and shall take, or cause to be
taken, all such further or other actions, as such other party may reasonably
deem necessary to consummate the transactions contemplated by this Agreement.
 
Section 10.2    Entire Agreement.  This Agreement contains the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior and contemporaneous arrangement or understanding with respect thereto.
 
Section 10.3  Counterparts.  This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
 
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Section 10.4  Governing Law; Jurisdiction.  All of the terms of this Agreement
and the duties, rights and remedies of the parties to it and any and all matters
arising directly or indirectly herefrom and therefrom shall be governed by and
construed according to the laws of the State of New York without respect to the
conflicts of law provisions thereof.  Each of the parties hereto hereby (i)
irrevocably consents and submits to the sole exclusive personal jurisdiction and
venue of the state and federal courts in New York County, New York (and of the
appropriate appellate courts from any of the foregoing) in connection with any
proceeding directly or indirectly arising out of or relating to this Agreement;
provided that a party to this Agreement shall be entitled to enforce an order or
judgment of such court in any United States or foreign court having jurisdiction
over the other party hereto, (ii) waives, to the fullest extent permitted by
law, any immunity from jurisdiction of any such court or from any legal process
therein, (iii) agrees not to commence any proceeding other than in such courts
and (iv) agrees that service of any summons, complaint, notice or other process
relating to any proceeding in connection herewith may be effected in the manner
provided for the giving of notice hereunder as set forth in Section 10.5
below. Each party hereto hereby waives to the fullest extent permitted by
applicable law, any right it or he may have to a trial by jury in respect to any
suit, action or other proceeding directly or indirectly arising out of, under or
in connection with this Agreement.
 
Section 10.5  Notice.  All notices and other communications under this Agreement
must be in writing and are deemed duly delivered when (a) delivered if delivered
personally or by nationally recognized overnight courier service (costs
prepaid), (b) sent by facsimile with confirmation of transmission by the
transmitting equipment (or, the first Business Day following such transmission
if the date of transmission is not a Business Day) or (c) received or rejected
by the addressee, if sent by U.S. certified or registered mail, return receipt
requested; in each case to the following addresses or facsimile numbers and
marked to the attention of the individual (by name or title) designated below
(or to such other address, facsimile number or individual as a party may
designate by notice to the other parties):
 
If to the Seller:

GeneLink, Inc.
317 Wekiva Springs Road
Suite 200
Longwood, FL  32779
Attention:  Bernard L. Kasten, Jr., M.D.
Chief Executive Officer
E-Mail:  bkasten@genelinkbio.com
 
With a copy (which will not constitute notice) to:
 
Fox Rothschild LLP
2000 Market Street, 20th Floor
Philadelphia, PA 19103
Attention:  Bradley S. Rodos, Esquire
E-Mail:  brodos@foxrothschild.com
 
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If addressed to Purchaser:
 
Capsalus Corp.
2675 Paces Ferry Road
Atlanta, GA 30339
Attention:  Steven M. Grubner
Interim Chief Executive Officer
E-Mail:  sgrubner@capsalus.com

With a copy  (which will not constitute notice) to:

Lowenstein Sandler, PC
65 Livingston Avenue
Roseland, NJ  07068
Attention:  Steven B. Fuerst, Esquire
E-Mail:  sfuerst@lowenstein.com

If addressed to Gene Elite:
 
Gene Elite LLC
1481 N. Ocean Boulevard
Pompano Beach, Florida 33062
Attention:  Gilbert Peter
E-Mail:  gpeter@fidelityholdings.com

Section 10.6  Partial Invalidity.  If any term or provision of this Agreement is
at any time held to be invalid by any court of competent jurisdiction, such
invalidity shall not affect the remaining terms and provisions of this
Agreement, which shall continue to be in full force and effect.
 
Section 10.7  Interpretation.  All Exhibits and Schedules annexed hereto or
referred to herein are hereby incorporated in and made a part of this Agreement
as if set forth in full herein.  Any capitalized terms used in any Schedule or
Exhibit but not otherwise defined therein shall have the meaning as defined in
this Agreement.  When a reference is made in this Agreement to a Section,
Exhibit or Schedule, such reference shall be to a Section of, or an Exhibit or
Schedule to, this Agreement unless otherwise indicated.
 

 
 
[Signature page follows]
 
 
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IN WITNESS WHEREOF, this Agreement has been executed as of the date first above
written.
 

 
PURCHASER
 
CAPSALUS CORP.
         
 
By:
/s/ Steven M. Grubner       Name:  Steven M. Grubner       Title:  Interim Chief
Executive Officer          

 
 
 

 
SELLER:
 
GENELINK, INC.
         
 
By:
/s/ Bernard L. Kasten, Jr., M.D.       Name:  Bernard L. Kasten, Jr., M.D.      
Title: Chief Executive Officer          

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