Exhibit 10.1

PREFERRED UNIT PURCHASE AGREEMENT

THIS PREFERRED UNIT PURCHASE AGREEMENT (“Agreement”) is entered into as of
October 2, 2007, by and among Elandia, Inc., a Delaware corporation
(“Purchaser”), Bella Durmiente, LLC, a Delaware limited liability company
(“Seller”), Desca Holding, LLC, a Delaware limited liability company (the
“Company”), and Jorge Enrique Alvarado Amado, an individual (the “Responsible
Party”). Purchaser, Seller, the Company and the Responsible Party may
hereinafter be referred to individually as a “Party” and collectively as the
“Parties.”

Recitals

A. The Parties are executing and delivering this Agreement in reliance upon the
exemptions from registration provided by Regulation D (“Regulation D”)
promulgated by the Securities and Exchange Commission (the “Commission”) under
the Securities Act and/or Section 4(2) of the Securities Act.

B. Upon the terms and conditions of this Agreement, Purchaser has agreed to
purchase, and Seller wishes to issue and sell to Purchaser, 7,000,000 Series A
Convertible Preferred Units of Seller (the “Series A Preferred Units”), the
terms of which are as set forth in the Limited Liability Company Agreement
attached hereto as Exhibit A (the “LLC Agreement”).

C. The Series A Preferred Units shall be convertible into common membership
interest units of Seller (the “Common Units”), pursuant to the terms set forth
in the LLC Agreement.

D. As of the date hereof, the Responsible Party owns all of the issued and
outstanding Common Units of Seller and all of the issued and outstanding
membership interest units of the Company.

E. The Responsible Party is the chief executive officer and sole manager of the
Company.

F. At the Closing, the Responsible Party will (i) contribute all of his
ownership interests in the Company to Seller, and (ii) contribute all of his
ownership interests in Desca Colombia to the E.T.V.E.

G. Promptly after the Closing, the Company will (i) contribute all of its
ownership interests in Desca USA and Desca Panama to Seller, and (ii) contribute
all of its ownership interests in all of its foreign Subsidiaries (except Desca
Panama) to the E.T.V.E.

Operative Terms

In consideration of the premises and the mutual promises herein made, and in
consideration of the representations, warranties, and covenants herein
contained, the Parties agree as follows.

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Section 1. Definitions.

“AAA” has the meaning set forth in Section 10(t)(i).

“Accounting Firm” has the meaning set forth in Section 4(h).

“Acquisition Transaction” means any transaction involving: (i) the sale,
license, disposition or acquisition of all or a material portion of the business
or assets of the Company or any direct or indirect Subsidiary or division of the
Company; (ii) the issuance, grant, disposition or acquisition of (A) any
membership interest or other equity security of the Company or any direct or
indirect Subsidiary of the Company, (B) any option, call, warrant or right
(whether or not immediately exercisable) to acquire any membership interest or
other equity security of the Company or any direct or indirect Subsidiary of the
Company, or (C) any security, instrument or obligation that is or may become
convertible into or exchangeable for any membership interest or other equity
security of the Company or any direct or indirect Subsidiary of the Company; or
(iii) any merger, consolidation, business combination, share exchange,
reorganization or similar transaction involving the Company or any direct or
indirect Subsidiary of the Company.

“Adverse Consequences” means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and attorneys’ fees and expenses; provided, however,
that the term “Adverse Consequences” shall exclude punitive, special or
consequential damages.

“Affiliate” has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Exchange Act, 17 C.F.R. 240.12b-2 (2006).

“Affiliated Group” means any affiliated group within the meaning of Code
Section 1504(a) or any similar group defined under a similar provision of state,
local or foreign law.

“Agreed Amount” has the meaning set forth in Section 8(f)(iii).

“Agreement” has the meaning set forth in the Preface.

“Alvarado Indemnification Deductible” has the meaning set forth in
Section 8(e)(i)(A).

“Alvarado Indemnification Cap” has the meaning set forth in Section 8(e)(i)(B).

“Basis” means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or could form the basis for any
specified consequence.

“Bridge Loan” means that certain loan from Purchaser to the Company in the
amount of US $5,000,000 pursuant to the terms and conditions of the Credit
Agreement.

 

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“Business Day” means any day except a Saturday, Sunday or other day in which
federal banking institutions in the United States of America or banking
institutions in Miami, Florida are authorized by law or regulation to close.

“Call” has the meaning ascribed to it in the LLC Agreement.

“Call Term” has the meaning ascribed to it in the LLC Agreement.

“Cisco” has the meaning set forth in Section 5(v).

“Cisco Agreement” has the meaning set forth in Section 5(v).

“Cisco Estoppel and Waiver” has the meaning set forth in Section 5(v).

“Claim” has the meaning set forth in Section 8(f).

“Claim Certificate” has the meaning set forth in Section 8(f)(i).

“Closing” has the meaning set forth in Section 2(c).

“Closing Date” has the meaning set forth in Section 2(c).

“Closing Payment” has the meaning set forth in Section 2(b)(i).

“COBRA” means the requirements of Part 6 of Subtitle B of Title I of ERISA and
Code Section 4980B and of any similar state law.

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

“Commission” has the meaning set forth in Recital A.

“Commission Filings” has the meaning set forth in Section 3(b)(xii).

“Common Units” has the meaning set forth in Recital C.

“Company” has the meaning set forth in the Preface.

“Company Indemnified Parties” has the meaning set forth in Section 8(c)(i).

“Company Legal Opinion” has the meaning set forth in Section 8(q).

“Competing Business” has the meaning set forth in Section 4(gg).

“Completed FCPA Matter Form 8-K” has the meaning set forth in Section 7(a)(xx).

“Confidential Information” has the meaning set forth in Section 9(e).

“Contract” means any contract, open order, lease or other agreement (whether
written or oral and whether express or implied) to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its Subsidiaries
or any of its assets is

 

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otherwise legally bound, including without limitation, all distributor, sales
representative and dealer agreements, contract manufacturing agreements, other
outsourcing agreements, purchase and supply contracts, loan agreements and
related agreements and documents, leases, maintenance contracts, license
agreements, royalty agreements, works for hire or works made for hire
agreements, government contracts, partnering agreements, indebtedness
instruments, letters of credit, performance bonds, currency contracts,
agreements with respect to guaranties, suretyships, covenants not to compete,
confidentiality or indemnification agreements by or for the benefit of the
Company or any of its Subsidiaries or by which the Company or any of its
Subsidiaries is bound, purchase and sale orders and all other contracts and
agreements whatsoever, and all amendments relating to any of the foregoing.

“Credit Agreement” means that certain Credit Agreement of even date herewith by
and between the Company and Purchaser.

“Desca Colombia” means Desca Colombia, S.A., a Colombian Sociedad Anonima.

“Desca Costa Rica” means Desca SYS Centroamérica Sociedad Anonima.

“Desca Ecuador” means Desca Ecuador, S.A., an Ecuador Sociedad Anonima.

“Desca Mexico” means Servidesca Mexico, S. de R.L. de C.V.

“Desca Panama” means Desca Panama, Inc., a Panamanian corporation.

“Desca USA” means Desca, Corp., a Florida corporation.

“Desca Venezuela” means Dessarrollo de Soluciones Especificas, C.A. (Desca).

“Disclosure Schedule” has the meaning set forth in Section 4.

“Elandia Shares” has the meaning set forth in LLC Agreement.

“Employee Benefit Plan” means any “employee benefit plan” (as such term is
defined in ERISA Section 3(3)) and any other employee benefit plan, program or
arrangement of any kind.

“Employee Pension Benefit Plan” has the meaning set forth in ERISA Section 3(2).

“Employee Welfare Benefit Plan” has the meaning set forth in ERISA Section 3(1).

“Employment Agreement” has the meaning set forth in Section 5(m).

“Environmental, Health, and Safety Requirements” shall mean, as amended and as
now and hereafter in effect, all federal, state, local, and foreign statutes,
regulations, ordinances, and other provisions having the force or effect of law,
all judicial and administrative orders and determinations, all contractual
obligations, and all common law concerning public health and safety, worker
health and safety, pollution, or protection of the environment, including,
without limitation, all those relating to the presence, use, production,
generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge,

 

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release, threatened release, control, or cleanup of any hazardous materials,
substances, or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise, or radiation.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means each entity that is treated as a single employer with
the Company for purposes of Code Section 414.

“Escrow Agent” means Shutts & Bowen, LLP.

“Escrow Agreement” means the Escrow Agreement by and among Purchaser, the
Responsible Party and the Escrow Agent, in the form attached hereto as Exhibit
B.

“Escrow Fund” has the meaning set forth in Section 6(j).

“Escrow Payments” has the meaning set forth in Section 2(b)(ii).

“Escrowed Units” has the meaning set forth in Section 5(p).

“E.T.V.E.” has the meaning set forth in Section 6(m).

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Family” means (i) the individual, (ii) the individual’s spouse and former
spouses, (iii) any other natural person who is related to the individual or the
individual’s spouse within the second degree, and (iv) any other natural person
who resides with such individual.

“FCPA” has the meaning set forth in Section 7(a)(xx).

“FCPA Matter” has the meaning set forth in Section 7(a)(xx).

“Fiduciary” has the meaning set forth in ERISA Section 3(21).

“Final Decision” has the meaning set forth in Section 8(f)(v).

“Financial Statements” has the meaning set forth in Section 4(g).

“FCPA Material Adverse Effect” has the meaning set forth in Section 7(b)(x).

“FCPA Matter Claims” has the meaning set forth in Section 7(c)(ii).

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

“Guarino Stock Purchase Agreement” has the meaning set forth in Section 2(e).

“Improvements” has the meaning set forth in Section 4(n)(iv).

 

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“Indemnified Party” has the meaning set forth in Section 8(d)(i).

“Indemnifying Party” has the meaning set forth in Section 8(d)(i).

“Intellectual Property” means:

(i) all trademarks (registered or unregistered), service marks, brand names,
trade names, domain names, certification marks, trade dress, assumed names,
other indications of origin and the goodwill associated therewith, and all
registrations or applications for registration thereof in any jurisdiction,
including any extension, modification or renewal of any such registration or
application;

(ii) all patents, patent applications, continuations, continuations-in-part,
divisionals and foreign counterparts in any jurisdiction;

(iii) all copyrights, database rights and moral rights in both published works
and unpublished works, including all such rights in software, user and training
manuals, marketing and promotional materials, internal reports, business plans
and any other writings, expressions, mask works, firmware and videos, whether
copyrighted, copyrightable or not, and all registrations or applications for
registration of copyrights thereof and any renewals or extensions thereof in any
jurisdiction;

(iv) trade secret and confidential information, and rights in any jurisdiction
to limit the use or disclosure thereof by a third party, including such rights
in inventions, discoveries and ideas, whether patented, patentable or not in any
jurisdiction (and whether or not reduced to practice), know-how, customer lists,
technical information, proprietary information, technologies, processes and
formulae, software, data, plans, drawings and blue prints, whether tangible or
intangible and whether stored, compiled, or memorialized physically,
electronically, photographically or otherwise; and

(v) any similar intellectual property or proprietary rights similar to any of
the foregoing, licenses, immunities, covenants not to sue and the like relating
to the foregoing, and any claims or causes of action arising out of or related
to any infringement, misuse or misappropriation of any of the foregoing.

“Knowledge” means the actual knowledge of the Person in question after
reasonable investigation.

“Leased Real Property” means all leasehold or subleasehold estates and other
rights to use or occupy any land, buildings, structures, improvements, fixtures,
or other interest in real property held by the Company or any of its
Subsidiaries.

“Leases” means all leases, subleases, licenses, concessions and other agreements
(written or oral), including all amendments, extensions, renewals, guaranties,
and other agreements with respect thereto, pursuant to which the Company or any
of its Subsidiaries holds any Leased Real Property, including the right to all
security deposits and other amounts and instruments deposited by or on behalf of
the Company or any of its Subsidiaries thereunder.

 

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

“Lien” means any mortgage, pledge, lien, encumbrance, charge, or other security
interest.

“LLC Agreement” has the meaning set forth in Recital B.

Material Adverse Effect” or “Material Adverse Change” means any effect or change
that would be (or could reasonably be expected to be) materially adverse to the
business, assets, condition (financial or otherwise), operating results,
operations, or business prospects of the Company and its Subsidiaries, taken as
a whole, or to the ability of Seller or the Company to consummate timely the
transactions contemplated hereby (regardless of whether or not such adverse
effect or change can be or has been cured at any time or whether Purchaser has
knowledge of such effect or change on the date hereof), including any adverse
change, event, development, or effect arising from or relating to (a) general
business or economic conditions, including such conditions related to the
business of the Company or any of its Subsidiaries, (b) national or
international political or social conditions, including the engagement by the
United States in hostilities (other than the current hostilities in Iraq and
Afghanistan), whether or not pursuant to the declaration of a national emergency
or war, or the occurrence of any military or terrorist attack upon the United
States, or any of its territories, possessions, or diplomatic or consular
offices or upon any military installation, equipment or personnel of the United
States, (c) financial, banking, or securities markets (including any suspension
of trading in, or limitation on prices for, securities on the New York Stock
Exchange, American Stock Exchange, or Nasdaq Stock Market for a period in excess
of three hours or any decline of either the Dow Jones Industrial Average or the
Standard & Poor’s Index of 500 Industrial Companies by an amount in excess of
15% measured from the close of business on the date hereof), (d) changes in
GAAP, and (e) changes in laws, rules, regulations, orders, or other binding
directives issued by any governmental entity.

“Material Contract” means (i) any Contract which represents five percent (5%) or
more of revenue on a per country basis (whether fixed, contingent or otherwise)
to the Company or its Subsidiaries, or (ii) any Contract which represents five
percent (5%) or more of the total assets on a per country basis (whether fixed,
contingent or otherwise) of the Subsidiary located in such country, or (iii) any
Contract between the Company or its Subsidiaries and an Affiliate.

“Material Customers” has the meaning set forth in Section 4(ee)(i).

“Material Interest” means direct or indirect beneficial ownership (as defined in
Rule 13d-3 under the Exchange Act) of voting securities or other voting
interests representing at least 1% of the outstanding voting power of a Person
or equity securities or other equity interests representing at least 1% of the
outstanding equity securities or equity securities in a Person.

“Material Suppliers” has the meaning set forth in Section 4(ee)(ii).

“Maturity Date” has the meaning set forth in the Credit Agreement.

 

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“Most Recent Balance Sheet” means the balance sheet contained within the Most
Recent Financial Statements.

“Most Recent Financial Statements” has the meaning set forth in Section 4(g).

“Most Recent Fiscal Month End” has the meaning set forth in Section 4(g).

“Most Recent Fiscal Year End” has the meaning set forth in Section 4(g).

“Multiemployer Plan” has the meaning set forth in ERISA Section 3(37).

“No Election Notice” has the meaning set forth in Section 7(c)(iii).

“Non-Compete Agreement” has the meaning set forth in Section 5(n).

“Ordinary Course of Business” means the ordinary course of business consistent
with past custom and practice (including with respect to quantity and
frequency).

“Owned Real Property” means all land, together with all buildings, structures,
improvements, and fixtures located thereon, including all electrical,
mechanical, plumbing and other building systems, fire protection, security and
surveillance systems, telecommunications, computer, wiring, and cable
installations, utility installations, water distribution systems, and
landscaping, together with all easements and other rights and interests
appurtenant thereto (including air, oil, gas, mineral, and water rights), owned
by the Company or any of its Subsidiaries.

“Party” or “Parties” has the meaning set forth in the Preface.

“PCAOB” means the Public Company Accounting Oversight Board.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Permits” has the meaning set forth in Section 4(l).

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or any other business entity, or a governmental
entity (or any department, agency, or political subdivision thereof).

“Primary Company Documents” has the meaning set forth in Section 4(a).

“Principal Executive Officer” and “Principal Financial Officer” shall have the
meanings ascribed to such terms in SOX.

“Prohibited Transaction” has the meaning set forth in ERISA Section 406 and Code
Section 4975.

“Purchase Price” has the meaning set forth in Section 2(b).

 

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“Purchaser” has the meaning set forth in the Preface.

“Purchaser Election Period” has the meaning set forth in Section 7(c)(i).

“Purchaser Financials” has the meaning set forth in Section 3(b)(xiii).

“Purchaser Indemnification Deductible” has the meaning set forth in
Section 8(e)(ii)(A).

“Purchaser Indemnification Cap” has the meaning set forth in
Section 8(e)(ii)(B).

“Purchaser Indemnified Parties” has the meaning set forth in Section 8(b).

“Purchaser Irrevocable Cash Election” has the meaning set forth in
Section 7(c)(i).

“Purchaser Irrevocable Cash Election Notice” has the meaning set forth in
Section 7(c)(i).

“Purchaser Material Adverse Effect” or “Purchaser Material Adverse Change” means
any effect or change that would be (or could reasonably be expected to be)
materially adverse to the business, assets, condition (financial or otherwise),
operating results, operations, or business prospects of the Purchaser and its
Subsidiaries, taken as a whole, or to the ability of the Purchaser to consummate
timely the transactions contemplated hereby (regardless of whether or not such
adverse effect or change can be or has been cured at any time or whether the
other parties hereto have knowledge of such effect or change on the date
hereof).

“Purchaser ROFR” has the meaning set forth in Section 9(c)(i).

“Purchaser ROFR Exercise Notice” has the meaning set forth in Section 9(c)(ii).

“Purchaser ROFR Notice” has the meaning set forth in Section 9(c)(ii).

“Purchaser ROFR Period” means the period commencing on December 15, 2007 and
ending on December 14, 2008.

“Put” has the meaning ascribed to it in the LLC Agreement.

“Put/Call Consideration” has the meaning set forth in Section 6(j).

“Put Term” has the meaning ascribed to it in the LLC Agreement.

“Real Property” has the meaning set forth in Section 4(n)(iii).

“Real Property Permits” has the meaning set forth in Section 4(n)(v).

“Regulation D” has the meaning set forth in Recital A.

“Released Parties” has the meaning set forth in Section 6(k)(i).

 

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“Releasor” has the meaning set forth in Section 6(k)(i).

“Related Person” means, (i) with respect to a particular individual, (a) each
other member of such individual’s Family; (b) any Person that is directly or
indirectly controlled by such individual or one or more members of such
individual’s Family; (c) any Person in which such individual or members of such
individual’s Family hold (individually or in the aggregate) a Material Interest;
and (d) any Person with respect to which such individual or one or more members
of such individual’s Family serves as a director, officer, partner, executor, or
trustee (or in a similar capacity); (ii) with respect to a specified Person
other than an individual, (a) any Person that directly or indirectly controls,
is directly or indirectly controlled by, or is directly or indirectly under
common control with such specified Person; (b) any Person that holds a Material
Interest in such specified Person; (c) each Person that serves as a director,
officer, partner, executor, or trustee of such specified Person (or in a similar
capacity); (d) any Person in which such specified Person holds a Material
Interest; (e) any Person with respect to which such specified Person serves as a
general partner or a trustee (or in a similar capacity); and (f) any Related
Person of any individual described in clause (b) or (c).

“Related Proceeding” has the meaning set forth in Section 10(p).

“Representatives” means, (i) as it relates to the Company, (A) the Company’s
officers, managers, members, employees, Affiliates, attorneys, advisors,
accountants, agents and representatives, and (B) the officers, directors,
managers, shareholders, members, employees, affiliates, attorneys, advisors,
accountants, agents and representatives of the Company’s Subsidiaries, and
(ii) as it relates to the Responsible Party, his Family, employees, Affiliates,
attorneys, advisors, accountants, agents and representatives.

“Reportable Event” has the meaning set forth in ERISA Section 4043.

“Required Payment” has the meaning set forth in Section 8(g)(i).

“Responsible Party” has the meaning set forth in the Preface.

“Responsible Party MAE Notice” has the meaning set forth in Section 7(c)(i).

“Rule 144” has the meaning set forth in Section 3(b)(iv).

“Securities” means the Series A Preferred Units or the Common Units issuable
upon conversion thereof.

“Securities Act” means the Securities Act of 1933, as amended.

“Seller” has the meaning set forth in the Preface.

“Series A Preferred Units” has the meaning set forth in Recital B.

“SIBL” has the meaning set forth in Section 7(a)(xxi).

“SIBL Financing” has the meaning set forth in Section 7(a)(xxi).

 

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“Stanford” has the meaning set forth in Schedule 3(b)(xi) hereto.

“Stanford Panama Segregated Account” means that certain account of Seller into
which funds shall be deposited by Purchaser to fund an acquisition pool as set
forth in Section 2(e).

“SOX” means the Sarbanes-Oxley Act of 2002.

“Subsidiary” or “Subsidiaries” means, with respect to any Person, any
corporation, limited liability company, partnership, association, or other
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof or
(ii) if a limited liability company, partnership, association, or other business
entity (other than a corporation), a majority of the partnership or other
similar ownership interests thereof is at the time owned or controlled, directly
or indirectly, by that Person or one or more Subsidiaries of that Person or a
combination thereof and for this purpose, a Person or Persons own a majority
ownership interest in such a business entity (other than a corporation) if such
Person or Persons shall be allocated a majority of such business entity’s gains
or losses or shall be or control any managing director or general partner of
such business entity (other than a corporation). The term “Subsidiary” shall
include all Subsidiaries of such Subsidiary.

“Systems” has the meaning set forth in Section 4(dd).

“Tax” or “Taxes” means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code
Section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not and including any
obligations to indemnify or otherwise assume or succeed to the Tax liability of
any other Person.

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

“Third Party Claim” has the meaning set forth in Section 8(d)(i).

“Treasury Regulations” shall mean the treasury regulations, including temporary
regulations, promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).

“Updated Company Financials” has the meaning set forth in Section 5(xi).

“WARN Act” has the meaning set forth in Section 4(y)(iii).

 

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Section 2. Purchase and Sale; Use of Proceeds.

(a) Purchase of Series A Preferred Units. Subject to the terms and conditions in
this Agreement, Purchaser hereby agrees to purchase from Seller, and Seller
hereby agrees to issue and sell to Purchaser an aggregate of 7,000,000 newly
issued Series A Preferred Units in such amounts and for the consideration set
forth in Section 2(b) below.

(b) Amount of Series A Preferred Units Purchased; Purchase Price. Purchaser
shall purchase, and Seller shall sell, 7,000,000 Series A Preferred Units, which
comprises 70.00% of the total issued and outstanding units of Seller, for the
purchase price of US $26,000,000 (“Purchase Price”), payable at the Closing as
follows:

(i) $14,000,000 payable to Seller by wire transfer of immediately available
funds (the “Closing Payment”); and

(ii) $12,000,000 payable by wire transfer of immediately available funds (the
“Escrow Payment”) to the Stanford Panama Segregated Account, which shall be
released only upon the approval and signature of the chief executive officer of
Purchaser, the chief financial officer of Purchaser and the Responsible Party.

(c) Closing. The closing of the transactions contemplated by this Agreement (the
“Closing”) shall take place at the offices of Purchaser’s counsel, Carlton
Fields, P.A., 100 Southeast Second Street, Suite 4000, Miami, Florida, 33131,
commencing at 10:00 a.m. local time on the second business day following the
satisfaction or waiver of all conditions to the obligations of the Parties to
consummate the transactions contemplated hereby (other than conditions with
respect to actions the respective Parties will take at the Closing itself) or
such date as Purchaser and the Company may mutually determine (the “Closing
Date”).

(d) Deliveries at Closing. At the Closing, (i) Seller will deliver to Purchaser
(A) a membership certificate evidencing the 7,000,000 Series A Preferred Units,
and (B) the various certificates, instruments, and documents referred to in
Section 7(a) below, (ii) Purchaser will deliver to Seller (A) the Closing
Payment in the manner required under Section 2(b)(i) above, (B) the various
certificates, instruments, and documents referred to in Section 7(b) below,
(iii) Purchaser will pay the Escrow Payment as provided in Section 2(b)(ii)
above, and (iv) the Responsible Party will deliver to the Escrow Agent a unit
certificate representing his 3,000,000 Common Units.

(e) Use of Proceeds. Seller shall use the proceeds from the sale of the Series A
Preferred Units as follows: (i) $4,500,000 to redeem, pursuant to the terms of
the LLC Agreement, 1,274,788 Common Units held in the name of the Responsible
Party, (ii) $500,000 to purchase 100% of the shares of common stock in Desca USA
held in the name of Gerardo Guarino pursuant to the terms and conditions
contained in a stock purchase agreement mutually agreeable to the parties
thereto (the “Guarino Stock Purchase Agreement”), (iii) $12,000,000 to fund an
acquisition pool, which amount shall be held in the Stanford Panama Segregated
Account and which shall be released only upon the approval and signature of the
chief executive officer of Purchaser, the chief financial officer of Purchaser
and the Responsible Party, and (iv) the remaining $9,000,000 for Seller’s
capital expenditures and general working capital needs, as approved by the board
of managers of Seller.

 

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(f) Allocation. The Parties agree to allocate the Purchase Price (and all other
capitalizable costs) among the Company and the Subsidiaries for all purposes
(including financial accounting and Tax purposes) in accordance with the
allocation schedule attached hereto as Schedule 2(f). Purchaser and Seller and
their Affiliates shall report and file Tax Returns (including, but not limited
to Internal Revenue Service Form 8594) in all respects and for all purposes
consistent with such allocation. Neither Purchaser nor Seller shall take any
position (whether in audits, tax returns or otherwise) that is inconsistent with
such allocation unless required to do so by applicable law.

Section 3. Representations and Warranties Concerning Transaction.

(a) The Responsible Party’s Representations and Warranties. The Responsible
Party represents and warrants to Purchaser that the following statements
contained in this Section 3(a) are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 3(a)), except as set forth in Annex I attached
hereto:

(i) Authorization of Transaction. The Responsible Party has full legal capacity
and is competent to execute and deliver this Agreement and to perform his
obligations hereunder. This Agreement constitutes the valid and legally binding
obligation of the Responsible Party, enforceable in accordance with its terms
and conditions (except insofar as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally, or by principles governing the availability of
equitable remedies). The Responsible Party does not need to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the transactions
contemplated by this Agreement.

(ii) Non-contravention. Neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, will (A) violate
any constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any government, governmental
agency, or court to which the Responsible Party is subject, or (B) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice and/or consent under any Material Contract to
which the Responsible Party is a party or by which he is bound or to which any
of his assets are subject, or (C) result in the imposition or creation of a Lien
upon or with respect to the Series A Preferred Units.

(iii) Preferred Units. Other than as contemplated to be issued to Purchaser
hereunder, there are no outstanding Series A Preferred Units.

 

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(iv) Litigation. There is no action, suit, proceeding or investigation pending
or, to the Knowledge of the Responsible Party, currently threatened against the
Company that questions the validity of the Primary Company Documents or the
right of the Company or the Responsible Party to enter into any such agreements
or to consummate the transactions contemplated hereby and thereby, nor, to the
Knowledge of the Responsible Party, is there any Basis for the foregoing.

(v) Brokers’ Fees. The Responsible Party has no Liability to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement.

(b) Purchaser’s Representations and Warranties. Purchaser represents and
warrants to Seller, the Company and the Responsible Party that the following
statements contained in this Section 3(b) are correct and complete as of the
date of this Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were substituted for the
date of this Agreement throughout this Section 3(b)), except as set forth in
Annex II attached hereto:

(i) Organization. Purchaser is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware.

(ii) Qualified Investor. Purchaser is (i) experienced in making investments of
the kind described in this Agreement and the related documents, (ii) able to
afford the entire loss of its investment in the Series A Preferred Units, and
(iii) an “accredited investor” as defined in Rule 501(a) of Regulation D and
knows of no reason to anticipate any material change in its financial condition
for the foreseeable future.

(iii) Non-contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, and
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Purchaser or any of its Subsidiaries is
subject or any provision of its certificate of incorporation, bylaws, or other
governing documents, or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice and/or consent
under any material contract to which Purchaser or any of its Subsidiaries is a
party or by which it is bound or to which any of its assets is subject (or
result in the imposition of any Lien upon any of its assets). Except for
Stanford, Purchaser does not need to give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement.

(iv) Restricted Securities. Purchaser acknowledges that the securities of Seller
are “restricted securities” as defined in Rule 144 promulgated by the Commission
under the Securities Act (“Rule 144”). All subsequent offers and sales by
Purchaser of the Series A Preferred Units, and the Common Units issuable upon
conversion of the Series A Preferred Units, shall be made pursuant to an
effective registration statement under the Securities Act or pursuant to an
applicable exemption from such registration.

 

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(v) No Other Representations or Reliance. Neither the Seller, the Company nor
the Responsible Party, nor any of their agents, employees or attorneys, has made
any representations or warranties relating to the Company or otherwise in
connection with the transactions contemplated hereby other than those expressly
set forth herein, and Purchaser has not relied on any other promise, projection
or statement in making its decision to enter into this Agreement and complete
the transactions contemplated in this Agreement.

(vi) Reliance on Representations for Securities Registration Exemption Purposes.
Purchaser understands that the Series A Preferred Units are being offered and
sold to it in reliance upon exemptions from the registration requirements of the
United States federal securities laws, and that Seller is relying upon the
truthfulness and accuracy of Purchaser’s representations and warranties, and
Purchaser’s compliance with its covenants and agreements, each as set forth
herein, in order to determine the availability of such exemptions and the
eligibility of Purchaser to acquire the Series A Preferred Units.

(vii) Access to Information. Purchaser (i) has been provided with sufficient
information with respect to the business of the Company and its Subsidiaries for
Purchaser to determine the suitability of making an investment in the Company
and such documents relating to the Company and its Subsidiaries as Purchaser has
requested and Purchaser has carefully reviewed the same, (ii) has been provided
with such additional information with respect to the Company and its
Subsidiaries and its business and financial condition as Purchaser, or
Purchaser’s agent or attorney, has requested, and (iii) has had access to
management of the Company and its Subsidiaries and the opportunity to discuss
the information provided by management of the Company and any questions that
Purchaser had with respect thereto have been answered to the full satisfaction
of Purchaser.

(viii) Legality. Purchaser has the requisite corporate power and authority to
enter into this Agreement.

(ix) Authorization. This Agreement and any related agreements, and the
transactions contemplated hereby and thereby, have been duly and validly
authorized by Purchaser, and such agreements, when executed and delivered by
each of the Parties will each be a valid and binding agreement of Purchaser,
enforceable in accordance with their respective terms, except to the extent that
enforcement of each such agreement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to creditors rights generally and to general
principles of equity.

(x) Investment. Purchaser is acquiring the Series A Preferred Units for
investment for Purchaser’s own account, not as a nominee or agent, and not with
the view to, or for resale in connection with, any distribution thereof, nor
with any present

 

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intention of distributing or selling such Series A Preferred Units. Purchaser is
aware of the limits on resale imposed by virtue of the transaction contemplated
by this Agreement and is aware that the Series A Preferred Units will bear
restrictive legends.

(xi) Brokers’ Fees. Except for a fee payable to Stanford Group Company, or any
of its Affiliates (“Stanford”), which fee will be paid by Purchaser, Purchaser
has no Liability to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement.

(xii) Commission Filings. Purchaser has made all filings with the Commission
(the “Commission Filings”) that it has been required to make under the
Securities Act and the Exchange Act. As of their respective filing dates, the
Commission Filings already filed by Purchaser or to be filed by Purchaser after
the date hereof complied, or as to the filings to be made after the date hereof
will comply, in all material respects with the requirements of the Securities
Act and the Exchange Act, and the rules and regulations of the Commission
promulgated thereunder, as the case may be, and none of the Commission Filings
contained or will contain any untrue statement of a material fact or omitted or
will omit any material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances in which they were
made, not misleading, except to the extent such filings have been all prior to
the date of this Agreement corrected, updated or superseded by a document
subsequently filed with the Commission.

(xiii) Financial Statements. The financial statements and related notes thereto
contained in the Commission Filings (the “Purchaser Financials”) are correct and
complete in all material respects, comply in all material respects with the
Exchange Act, and the rules and regulations of the Commission promulgated
thereunder and have been prepared in accordance with GAAP. The Purchaser
Financials present fairly and accurately the consolidated financial condition
and operating results of Purchaser and its Subsidiaries in all material respects
as of the dates and during the periods indicated therein and are consistent with
the books and records of Purchaser. Except as set forth in the Purchaser
Financials, Purchaser and its Subsidiaries have no material liabilities,
contingent or otherwise.

(xiv) Capitalization. On the date hereof, the authorized capital of Purchaser
consists of: (i) 50,000,000 shares of common stock, par value $0.00001 per
share, of which 13,516,313 shares are issued and outstanding; (ii) 35,000,000
shares of preferred stock, par value $0.00001 per share, of which – 0 – shares
of Series A Preferred Stock are issued and outstanding and – 0 – shares of
Series B Preferred Stock are outstanding; (iii) 2,606,700 shares of common stock
reserved for issuance upon exercise of options under Purchaser’s 2007 Stock
Option and Incentive Plan; and (iv) 2,098,000 shares of common sock underlying
currently exercisable warrants. In addition, Purchaser is the maker of
convertible promissory notes which may be converted at any time, at the option
of the holder thereof, into 6,013,000 shares of Series A Preferred Stock which
are ultimately convertible into that same amount of shares of common stock,
subject to adjustment as provided in the Certificate of Designation of the
Series A Preferred Stock. The Commission Filings accurately disclose the
outstanding capital stock of Purchaser and all outstanding options, warrants,
notes, or any other rights or instruments which would entitle the holder

 

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thereof to acquire shares of the common stock or other equity interests in
Purchaser upon conversion or exercise, setting forth for each such holder the
type of security, number of equity shares covered thereunder, the exercise or
conversion price thereof, the vesting schedule thereof (if any), and the
issuance date and expiration date thereof. Other than as disclosed in the
Commission Filings, there are no outstanding rights, agreements, arrangements or
understandings to which Purchaser is a party (written or oral) which would
obligate Purchaser to issue any equity interest, option, warrant, convertible
note, or other types of securities or to register any shares in a registration
statement filed with the Commission. Other than as disclosed in the Commission
Filings, there is no agreement, arrangement or understanding between or among
any entities or individuals which affects, restricts or relates to voting,
giving of written consents, dividend rights or transferability of shares with
respect to any voting shares of Purchaser, including without limitation any
voting trust agreement or proxy. The Commission Filings accurately disclose all
the shares subject to “lock-up” or similar agreements or arrangements by which
any equity shares are subject to resale restrictions. Except as set forth in the
Commission Filings, there are no outstanding obligations of Purchaser to
repurchase, redeem or otherwise acquire for value any outstanding shares of
capital stock or other ownership interests of Purchaser or to provide funds to
or make any investment (in the form of a loan, capital contribution or
otherwise) in any other entity.

(xv) No Material Adverse Change. Except for the FCPA Matter, since the most
recent Commission Filing, there has not been any Purchaser Material Adverse
Change.

(xvi) Legal Compliance. Except as disclosed in the Commission Filings and for
the FCPA Matter, Purchaser and its Subsidiaries have complied with all
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof), except where the
failure to comply would not result in a Purchaser Material Adverse Effect.

(xvii) Litigation. Except as disclosed in the Commission Filings, there is no
action, suit, proceeding, inquiry or investigation before or by any court,
governmental authority, commission, board, bureau, agency or instrumentality or
any other person, public board or body pending or, to the knowledge of
Purchaser, threatened against or affecting Purchaser or its Subsidiaries or to
which Purchaser or its Subsidiaries is a party or of which Purchaser is
otherwise aware, wherein an unfavorable decision, ruling or finding would have a
Purchaser Material Adverse Effect. Except as disclosed in the Commission
Filings, there are no outstanding or unsatisfied judgments, orders, decrees,
writs, injunctions or stipulations to which Purchaser or its Subsidiaries is a
party or by which any of them or any of their properties is bound that have a
Purchaser Material Adverse Effect.

(xviii) Taxes. Purchaser and its Subsidiaries have filed all Tax Returns that
they are required to file under applicable laws and regulations, and have paid
all income Taxes shown thereon as owing, except where the failure to file income
Tax

 

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Returns or to pay income Taxes would not have a material adverse effect on
Purchaser. All such Tax Returns were correct and complete in all material
respects and were prepared in substantial compliance with all applicable laws
and regulations. Purchaser is not currently the beneficiary of any extension of
time within which to file any Tax Return. No claim has ever been made by an
authority in a jurisdiction where Purchaser does not file Tax Returns that
Purchaser or its Subsidiaries is or may be subject to taxation by that
jurisdiction. There are no Liens for Taxes (other than Taxes not yet due and
payable) upon any of the assets of Purchaser and its Subsidiaries.

(xix) Employee Benefits. Except for Latin Node, Inc. and AST Telecom, LLC,
neither Purchaser nor any of its Subsidiaries has any Employee Benefit Plans.

Section 4. Representations and Warranties Concerning Seller, the Company and its
Subsidiaries. Each of Seller, the Company and the Responsible Party, jointly and
severally, represent and warrant to Purchaser that the following statements
contained in this Section 4 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 4), except as set forth in the disclosure
schedule delivered by the Company to Purchaser on the date hereof and initialed
by the Parties (the “Disclosure Schedule”). Nothing in the Disclosure Schedule
shall be deemed adequate to disclose an exception to a representation or
warranty made herein, however, unless the Disclosure Schedule identifies the
exception with particularity and describes the relevant facts in detail. Without
limiting the generality of the foregoing, the mere listing (or inclusion of a
copy) of a document or other item shall not be deemed adequate to disclose an
exception to a representation or warranty made herein (unless the representation
or warranty pertains to the existence of the document or other item itself). The
Disclosure Schedule will be arranged in paragraphs corresponding to the lettered
and numbered paragraphs contained in this Section 4.

(a) Organization, Qualification, and Power and Authority. Seller is a limited
liability company duly organized, validly existing, and in good standing under
the laws of the State of Delaware. The Company is a limited liability company
duly organized, validly existing, and in good standing under the laws of the
State of Delaware. Each of the Subsidiaries are the types of entities organized,
validly existing, and in good standing under the laws of the jurisdiction of
their incorporation or organization as set forth on Section 4(f) of the
Disclosure Schedule. Each of Seller, the Company and its Subsidiaries is duly
authorized to conduct business and is in good standing under the laws of each
jurisdiction where such qualification is required. Each of Seller, the Company
and its Subsidiaries has full power and authority and all licenses, permits, and
authorizations necessary to carry on the business which it conducts and to own
and use the properties owned and used by it. Section 4(a) of the Disclosure
Schedule lists the managers, directors and/or officers, as the case may be, of
each of Seller, the Company and its Subsidiaries. The Company has delivered to
Purchaser a correct and complete copy of the Company’s certificate of formation
and limited liability company agreement and the organizational documents for
each of the Subsidiaries (as amended to date). The minute books (containing the
records of meetings of the members, the managers, and any committees of the
managers) and the membership certificate book for each of the Company and its
Subsidiaries are correct and complete and have been maintained in accordance
with sound corporate practices. Neither Seller, nor the

 

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Company nor any of its Subsidiaries is in default under or in violation of any
provision of its organizational documents, bylaws or limited liability company
agreements, as the case may be. This Agreement, the LLC Agreement, the
Employment Agreement, the Non-Compete Agreement, and the Escrow Agreement
(collectively, the “Primary Company Documents”), and the transactions
contemplated hereby and thereby, have been duly and validly authorized by Seller
and the Company. The Primary Company Documents will be duly executed and
delivered by Seller and, when executed and delivered by Seller, each of the
Primary Company Documents will be a valid and binding obligation of Seller,
enforceable in accordance with their respective terms, except to the extent that
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws now or hereafter in
effect relating to creditors’ rights generally and to general principles of
equity.

(b) Capitalization.

(i) On the date hereof, the authorized membership interest units of the Company
consists of 100 Common Units, of which 100 units are issued and outstanding. All
of the issued and outstanding units have been duly authorized, are validly
issued, fully paid, and non-assessable, and are held of record by the
Responsible Party. There are no outstanding rights, agreements, arrangements or
understandings to which the Company is a party (written or oral) which would
obligate the Company to issue any equity interest, option, warrant, convertible
note, or other types of securities. There is no obligation by the Company to
register any units in a registration statement filed with the Commission. There
is no agreement, arrangement or understanding between or among any entities or
individuals which affects, restricts or relates to voting, giving of written
consents, distribution rights or transferability of units with respect to any
voting units of the Company, including, without limitation, any voting trust
agreement or proxy. There are no outstanding obligations of the Company to
repurchase, redeem or otherwise acquire for value any outstanding units or other
ownership interests of the Company or to provide funds to or make any investment
(in the form of a loan, capital contribution or otherwise) in any other Person.
There are no anti-dilution or price adjustment provisions regarding any security
issued by the Company (or in any agreement providing rights to security holders)
that will be triggered by the issuance of the Securities.

(ii) On the date hereof, the authorized membership interest units of Seller
consists of (i) 25,000,000 Common Units, of which 4,274,788 Common Units are
issued to the Responsible Party, and (ii) 15,000,000 Preferred Units, of which
7,000,000 shall be designated as Series A Convertible Preferred Units. After the
partial redemption of the Responsible Party’s Common Units under the LLC
Agreement, 3,000,000 Common Units will be held in the name of the Responsible
Party and 7,000,000 Series A Preferred Units will have been issued to Purchaser.
There are no outstanding rights, agreements, arrangements or understandings to
which Seller is a party (written or oral) which would obligate Seller to issue
any equity interest, option, warrant, convertible note, or other types of
securities. There is no obligation by Seller to register any units in a
registration statement filed with the Commission. There is no agreement,
arrangement or understanding between or among any entities or individuals which
affects, restricts or relates to voting, giving of written consents,
distribution rights or transferability of units with respect to any voting units
of Seller, including, without limitation, any voting trust agreement or proxy.
There are no

 

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outstanding obligations of Seller to repurchase, redeem or otherwise acquire for
value any outstanding units or other ownership interests of Seller or to provide
funds to or make any investment (in the form of a loan, capital contribution or
otherwise) in any other Person. There are no anti-dilution or price adjustment
provisions regarding any security issued by Seller (or in any agreement
providing rights to security holders) that will be triggered by the issuance of
the Securities.

(iii) The Series A Preferred Units, and the Common Units issuable upon
conversion of the Series A Preferred Units, shall be duly and validly issued,
fully paid and non-assessable and will not subject the holder thereof to
personal liability by reason of being a holder thereof.

(iv) Seller shall have available a sufficient number of authorized and unissued
Common Units as may be necessary to effect conversion of the Series A Preferred
Units. Each of Seller and the Responsible Party understands and acknowledges the
dilutive effect to the Common Units after the issuance of Common Units upon the
conversion of the Series A Preferred Units. Seller further acknowledges that its
obligation to issue Common Units upon conversion of the Series A Preferred Units
is absolute and unconditional regardless of the dilutive effect that such
issuance may have on the ownership interests of other members Seller.

(c) Non-contravention. Neither the execution and the delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, will (i) violate
any constitution, statute, regulation, rule, injunction, and judgment, order,
decree, ruling, charge, or other restriction of any government, governmental
agency, or court to which any of Seller, the Company or its Subsidiaries is
subject or any provision of its certificate of formation, limited liability
company agreement, or other governing documents, or (ii) conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel, or
require any notice and/or consent under any Contract to which any of Seller, the
Company or its Subsidiaries is a party or by which it is bound or to which any
of its assets is subject (or result in the imposition of any Lien upon any of
its assets). Neither Seller, nor the Company nor any of its Subsidiaries needs
to give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order for the
Parties to consummate the transactions contemplated by this Agreement.

(d) Brokers’ Fees. Neither Seller, nor the Company nor any of its Subsidiaries
has any Liability to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement.

(e) Title to Assets. The Company and its Subsidiaries have good and marketable
title to, or a valid leasehold interest in, the respective properties and assets
used by them, located on their premises, or shown on the Most Recent Balance
Sheet or acquired after the date thereof, free and clear of all Liens, except
for properties and assets disposed of in the Ordinary Course of Business since
the date of the Most Recent Balance Sheet.

 

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(f) Subsidiaries. Section 4(f) of the Disclosure Schedule sets forth for each
Subsidiary of the Company (i) its name and jurisdiction of incorporation or
organization, (ii) the number of authorized shares for each class of its capital
stock or its equity interests, (iii) the number of issued and outstanding shares
of each class of its capital stock or its equity interests, the names of the
holders thereof, and the number of shares or other equity interest held by each
such holder, and (iv) the number of shares of its capital stock or equity
interest held in treasury. All of the issued and outstanding shares of capital
stock or other equity interests of each Subsidiary of the Company have been duly
authorized and are validly issued, fully paid, and non-assessable. Except as set
forth on Section 4(f) of the Disclosure Schedule, the Company or one or more of
its Subsidiaries holds of record and owns beneficially all of the outstanding
shares of each Subsidiary of the Company, free and clear of any restrictions on
transfer (other than restrictions under the Securities Act and state securities
laws), Taxes, Liens, options, warrants, purchase rights, contracts, commitments,
equities, claims, and demands. There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, anti-dilution
rights, exchange rights, or other contracts or commitments that could require
any of the Company and its Subsidiaries to sell, transfer, or otherwise dispose
of any capital stock of any of its Subsidiaries or that could require any
Subsidiary of the Company to issue, sell, or otherwise cause to become
outstanding any of its own capital stock or equity interests. There are no
outstanding stock appreciation, phantom stock, profit participation, or similar
rights with respect to any Subsidiary of the Company. There are no voting
trusts, proxies, or other agreements or understandings with respect to the
voting of any capital stock of any Subsidiary of the Company. Except as set
forth on Section 4(f) of the Disclosure Schedule, neither the Company nor any of
its Subsidiaries controls directly or indirectly or has any direct or indirect
equity participation in any corporation, partnership, trust, or other business
association that is not a Subsidiary of the Company. Neither the Company nor any
of its Subsidiaries owns or has any right to acquire, directly or indirectly,
any outstanding capital stock of, or other equity interests in, any Person.

(g) Financial Statements. Attached hereto as Exhibit C are the following
financial statements (collectively the “Financial Statements”): (i) unaudited
consolidated balance sheets and statements of income, changes in members’
equity, and cash flow as of and for the fiscal year ended December 31, 2004 for
the Company and its Subsidiaries; (ii) unaudited consolidated balance sheets and
statements of income, changes in members’ equity, and cash flow as of and for
the fiscal year ended December 31, 2005 for the Company and its Subsidiaries,
(iii) audited consolidated balance sheets and statements of income, changes in
members’ equity, and cash flow as of and for the fiscal year ended December 31,
2006 for the Company and its Subsidiaries (the “Most Recent Fiscal Year End”)
with the unqualified report thereon of the Accounting Firm; and (iv) unaudited
consolidated balance sheets and statements of income, changes in members’
equity, and cash flow (the “Most Recent Financial Statements”) as of and for the
six months ended June 30, 2007 for the Company and its Subsidiaries (the “Most
Recent Fiscal Month End”). To the extent available, the Company has furnished,
and will provide Purchaser with all management letters of the Company’s outside
independent certified public accountants relating to audits performed in
connection with the Financial Statements, including the Accounting Firm. Each of
the Financial Statements, including, in each case, any related notes: (i) is
true, complete, and correct as of its respective date, (ii) is in accordance
with and supported by and consistent with the books and records of the Company
and its Subsidiaries, including, without limitation, a general ledger and
detailed trial balances, which books and records have been made available to
Purchaser, are

 

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correct and complete, in all material respects, and have been maintained in
accordance with the Company’s and its Subsidiaries’ past practices, (iii) has
been prepared in accordance with GAAP consistently applied during the periods
involved (except as otherwise disclosed in the notes thereto), and (iv) presents
fairly the consolidated financial position and the consolidated results of
operations, changes in members’ equity, and statements of cash flows of the
Company and its Subsidiaries as of the dates and for the periods indicated
subject, in the case of interim financial statements, to normal year-end
adjustments.

(h) Independent Accountants. To the Company’s Knowledge, Grant Thornton LLP (the
“Accounting Firm”), which has audited the Company’s Financial Statements for the
fiscal year ended December 31, 2006, are “independent” with respect to the
Company and its Subsidiaries within the meaning of Regulation S-X, as
promulgated under the Securities Act.

(i) Events Subsequent to Most Recent Fiscal Year End. Since the Most Recent
Fiscal Year End, there has not been any Material Adverse Change. Without
limiting the generality of the foregoing, and except as set forth in
Section 4(i) of the Disclosure Schedule, since that date:

(i) Neither the Company nor any of its Subsidiaries has sold, leased,
transferred, or assigned any of its assets, tangible or intangible, other than
for a fair consideration in the Ordinary Course of Business;

(ii) Neither the Company nor any of its Subsidiaries has entered into any
Material Contract;

(iii) No Person (including the Company and its Subsidiaries) has accelerated,
terminated, modified, or cancelled any Material Contract;

(iv) Neither the Company nor any of its Subsidiaries has imposed any Liens upon
any of its assets, tangible or intangible;

(v) Neither the Company nor any of its Subsidiaries has made any capital
expenditure (or series of related capital expenditures) either involving more
than $500,000 or outside the Ordinary Course of Business;

(vi) Neither the Company nor any of its Subsidiaries has made any capital
investment in, any loan to, or any acquisition of the securities or assets of,
any other Person (or series of related capital investments, loans, and
acquisitions) outside the Ordinary Course of Business;

(vii) Neither the Company nor any of its Subsidiaries has issued any note, bond,
or other debt security or created, incurred, assumed, or guaranteed any
indebtedness for borrowed money or capitalized lease obligation involving more
than $100,000 in the aggregate;

 

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(viii) Neither the Company nor any of its Subsidiaries has delayed or postponed
the payment of accounts payable and other Liabilities outside the Ordinary
Course of Business;

(ix) Neither the Company nor any of its Subsidiaries has written off as
uncollectible, or established any extraordinary reserve with respect to, any
account receivable or other indebtedness (except for accounts receivable or
other indebtedness not exceeding $50,000 individually or $100,000 in the
aggregate);

(x) Neither the Company nor any of its Subsidiaries has written down the value
of any inventory, except for write-downs in the Ordinary Course of Business,
none of which is material;

(xi) Neither the Company nor any of its Subsidiaries has cancelled, compromised,
waived, or released any right or claim (or series of related rights and claims)
either involving more than $100,000 or outside the Ordinary Course of Business;

(xii) Neither the Company nor any of its Subsidiaries has transferred, assigned,
or granted any license or sublicense of any rights under or with respect to any
Intellectual Property, except for sales of software to customers in the Ordinary
Course of Business;

(xiii) There has been no change made or authorized in the operating agreement,
the certificate of formation or any other document governing the organization or
operations of the Company or any of its Subsidiaries;

(xiv) Neither the Company nor any of its Subsidiaries has issued, sold, or
otherwise disposed of any of its membership or equity interests, or granted any
options, warrants, or other rights to purchase or obtain (including upon
conversion, exchange, or exercise) any of its membership or equity interests;

(xv) Neither the Company nor any of its Subsidiaries has declared, set aside, or
paid any dividend or made any distribution with respect to its membership or
equity interests (whether in cash or in kind) or redeemed, purchased, or
otherwise acquired any of its membership or equity interests;

(xvi) Neither the Company nor any of its Subsidiaries has experienced any
damage, destruction, or loss (whether or not covered by insurance) to its
property involving more than $100,000 in the aggregate;

(xvii) Neither the Company nor any of its Subsidiaries has made any loan to, or
entered into any other transaction with, any of its managers, members, officers,
and employees outside the Ordinary Course of Business;

(xviii) Neither the Company nor any of its Subsidiaries has entered into any
employment contract or collective bargaining agreement, written or oral, or
modified the terms of any existing such contract or agreement, except for any
Contract listed in Section 4(q) of the Disclosure Schedule;

 

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(xix) Neither the Company nor any of its Subsidiaries has granted any increase
in the base compensation of any of its managers, officers, and employees outside
the Ordinary Course of Business;

(xx) Neither the Company nor any of its Subsidiaries has adopted, amended,
modified, or terminated any bonus, profit sharing, incentive, severance, or
other plan, contract, or commitment for the benefit of any of its managers,
officers, and employees (or taken any such action with respect to any other
Employee Benefit Plan);

(xxi) Neither the Company nor any of its Subsidiaries has made any other change
in employment terms for any of its managers, officers, and employees outside the
Ordinary Course of Business;

(xxii) Neither the Company nor any of its Subsidiaries has made or pledged to
make any charitable or other capital contribution outside the Ordinary Course of
Business;

(xxiii) There has not been any other occurrence, event, incident, action,
failure to act, or transaction outside the Ordinary Course of Business involving
the Company or any of its Subsidiaries;

(xxiv) Neither the Company nor any of its Subsidiaries has discharged a material
Liability or Lien outside the Ordinary Course of Business;

(xxv) Neither the Company nor any of its Subsidiaries has made any loans or
advances of money;

(xxvi) Neither the Company nor any of its Subsidiaries has guarantied the
obligations (financial or otherwise) of any third party;

(xxvii) Neither the Company nor any of its Subsidiaries has disclosed any
Confidential Information nor does the Company or any of its Subsidiaries have
Knowledge of the disclosure of Confidential Information by any of its officers,
managers or employees; and

(xxviii) Neither the Company nor any of its Subsidiaries has committed to any of
the foregoing.

(j) Undisclosed Liabilities. Except as set forth in Section 4(j) of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries has any
Liabilities (and, to the Company’s Knowledge, there is no Basis for any present
or future action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against it giving rise to any Liability), except for
(i) Liabilities set forth on the face of the Most Recent Balance Sheet (rather
than in any notes thereto) and (ii) Liabilities that have arisen after the Most
Recent Fiscal Month End in the Ordinary Course of Business (none of which
results from, arises out of, relates to, is in the nature of, or was caused by
any breach of contract, breach of warranty, tort, infringement, or violation of
law).

 

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(k) Legal Compliance. The Company and its Subsidiaries have complied with all
material applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder) of
federal, state, local, and foreign governments (and all agencies thereof), and
no action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them alleging any
failure so to comply, except where the failure to comply would not have a
Material Adverse Effect on the Company or its Subsidiaries.

(l) Permits. The Company and its Subsidiaries have all permits, licenses and any
similar authority necessary for the conduct of their respective businesses as
now conducted and as presently proposed to be conducted, except where the
failure to have such permits, licenses or similar authority would not have a
Material Adverse Effect on the Company or its Subsidiaries. Neither the Company
nor any of its Subsidiaries is in default in any respect under any of such
permits, licenses or similar authority, except for such defaults that would not
have a Material Adverse Effect on the Company or its Subsidiaries. Each of the
Company and its Subsidiaries currently holds all foreign, federal, state and
local permits, licenses, authorizations, certificates, exemptions and approvals
of governmental bodies or other Persons necessary to conduct the businesses in
which they are engaged and to own and use the facilities and properties owned
and used by them (collectively, “Permits”), except where the failure to have
such permits, licenses or similar authority would not have a Material Adverse
Effect on the Company or its Subsidiaries. Each such Permit is valid and in good
standing with the issuer of the Permit and is not subject to any proceedings for
suspension, modification or revocation. Without limiting the generality of the
foregoing: (A) neither the Company nor any of its Subsidiaries has received any
written notice from any governmental body revoking, canceling, rescinding,
materially modifying or refusing to renew any Permit and (B) each of the Company
and its Subsidiaries is in material compliance with the requirements of all
Permits.

(m) Tax Matters. Except as set forth in Section 4(m) of the Disclosure Schedule:

(i) The Subsidiaries have filed all Tax Returns that they were required to file
under applicable laws and regulations and have reported all of their net income,
if any, including their applicable portion of rebates paid to the Company by
Cisco, on their Tax Returns. The Responsible Party has reported all of the net
income, if any, of the Company on his Tax Returns through December 31, 2006. All
such Tax Returns were correct and complete in all material respects and were
prepared in substantial compliance with all applicable laws and regulations. All
Taxes due and owing by the Company and its Subsidiaries (whether or not shown on
any Tax Return) have been paid. Neither the Company nor any of its Subsidiaries
is currently the beneficiary of any extension of time within which to file any
Tax Return. No claim has ever been made by an authority in a jurisdiction where
the Company or any of its Subsidiaries does not file Tax Returns that the
Company or any of its Subsidiaries is or may be subject to taxation by that
jurisdiction. There are no Liens for Taxes (other than Taxes not yet due and
payable) upon any of the assets of the Company or its Subsidiaries.

 

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(ii) The Company and its Subsidiaries have withheld and paid all Taxes required
to have been withheld and paid in connection with any amounts paid or owing to
any employee, independent contractor, creditor, member, or other third party.

(iii) Neither the Responsible Party nor any manager or officer (or employee
responsible for Tax matters) of the Company and its Subsidiaries expects any
authority to assess any additional Taxes for any period for which Tax Returns
have been filed. No foreign, federal, state, or local tax audits or
administrative or judicial Tax proceedings are pending or being conducted with
respect to the Company or its Subsidiaries. Neither the Company nor any of its
Subsidiaries has received from any foreign, federal, state, or local taxing
authority (including jurisdictions where the Company and its Subsidiaries has
not filed Tax Returns) 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 of its Subsidiaries. The Company has delivered to Purchaser correct and
complete copies of all income Tax Returns of the Company and its Subsidiaries,
including all examination reports, and statements of deficiencies assessed
against or agreed to by the Company or any of its Subsidiaries, filed or
received since December 31, 2004, and none of such Tax Returns have been audited
or are currently the subject of an audit.

(iv) Neither the Company nor any of its Subsidiaries has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency.

(v) Neither the Company nor any of its Subsidiaries is a party to any Contract
or plan 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
Section 280G (or any corresponding provision of state, local or foreign Tax law)
and (ii) any amount that will not be fully deductible as a result of Code
Section 162(m) (or any corresponding provision of state, local or foreign Tax
law). Neither the Company nor any of its Subsidiaries has been a United States
real property holding corporation within the meaning of Code Section 897(c)(2)
during the applicable period specified in Code Section 897(c)(1)(A)(ii). The
Company and its Subsidiaries have disclosed on their 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 Section 6662. Neither the
Company nor any of its Subsidiaries is a party to or bound by any Tax allocation
or sharing agreement. Neither the Company nor any of its Subsidiaries (A) has
been a member of an Affiliated Group filing a consolidated federal income Tax
Return (other than a group the common parent of which was the Company) or
(B) has Liability for the Taxes of any Person (other than the Company or any of
its Subsidiaries) under Reg. Section 1.1502-6 (or any similar provision of
state, local, or foreign law), as a transferee or successor, by contract, or
otherwise.

(vi) Intentionally Omitted.

 

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(vii) The unpaid Taxes of the Company and its Subsidiaries (A) did not, as of
the Most Recent Fiscal Month End, exceed the reserve for Tax Liability (rather
than any reserve for deferred Taxes established to reflect timing differences
between book and Tax income) set forth on the face of the Most Recent Balance
Sheet (rather than in any notes thereto) and (B) do not exceed that reserve as
adjusted for the passage of time through the Closing Date in accordance with the
past custom and practice of the Company and its Subsidiaries in filing its Tax
Returns. Since the date of the Most Recent Balance Sheet, neither the Company
nor any of its Subsidiaries has incurred any Liability for Taxes arising from
extraordinary gains or losses (as that term is used in GAAP) outside the
Ordinary Course of Business.

(viii) Neither the Company nor any of its Subsidiaries will be required to
include any item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Closing Date
as a result of any:

(A) change in method of accounting for a taxable period ending on or prior to
the Closing Date;

(B) “closing agreement” as described in Code Section 7121 (or any corresponding
or similar provision of state, local or foreign income Tax law) executed on or
prior to the Closing Date;

(C) intercompany transaction or excess loss account described in Treasury
Regulations under Code Section 1502 (or any corresponding or similar provision
of state, local or foreign income Tax law);

(D) installment sale or open transaction disposition made on or prior to the
Closing Date; or

(E) prepaid amount received on or prior to the Closing Date.

(ix) Neither the Company nor any of its Subsidiaries has distributed stock of
another Person, or has not had its membership or equity interests or any portion
thereof distributed by another Person, in a transaction that was purported or
intended to be governed in whole or in part by Code Section 355 or Code
Section 361.

(n) Real Property.

(i) Neither the Company nor any of its Subsidiaries has any Owned Real Property.

(ii) Section 4(n)(ii) of the Disclosure Schedule sets forth the address of each
parcel of Leased Real Property, and a true and complete list of all Leases for
each such Leased Real Property (including the date and name of the parties to
such Lease document). Each of the Company and its Subsidiaries have delivered to
Purchaser a true and complete copy of each such Lease document, and in the case
of any oral Lease, a written summary of the material terms of such Lease. Except
as set forth in Section 4(n)(ii) of the Disclosure Schedule, with respect to
each of the Leases:

(A) such Lease is legal, valid, binding, enforceable and in full force and
effect;

 

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(B) the transactions contemplated by this Agreement do not require the consent
of any other party to such Lease, will not result in a breach of or default
under such Lease, and will not otherwise cause such Lease to cease to be legal,
valid, binding, enforceable and in full force and effect on identical terms
following the Closing;

(C) neither the Company’s nor any of its Subsidiaries’ possession and quiet
enjoyment of the Leased Real Property under such Lease has been disturbed and
there are no disputes with respect to such Lease;

(D) neither the Company nor any of its Subsidiaries, nor any other party to the
Lease is in breach of or default under such Lease, and no event has occurred or
circumstance exists that, with the delivery of notice, the passage of time or
both, would constitute such a breach or default, or permit the termination,
modification or acceleration of rent under such Lease;

(E) no security deposit or portion thereof deposited with respect to such Lease
has been applied in respect of a breach of or default under such Lease that has
not been redeposited in full;

(F) neither the Company nor any of its Subsidiaries owes, or will owe in the
future, any brokerage commissions or finder’s fees with respect to such Lease;

(G) the other party to such Lease is not an Affiliate of, and otherwise does not
have any economic interest in, the Company or any of its Subsidiaries;

(H) neither the Company nor any of its Subsidiaries has subleased, licensed or
otherwise granted any Person the right to use or occupy the Leased Real Property
or any portion thereof;

(I) neither the Company nor any of its Subsidiaries has collaterally assigned or
granted any other Lien in such Lease or any interest therein; and

(J) there are no Liens on the estate or interest created by such Lease.

(iii) The Leased Real Property identified in Section 4(n)(ii) of the Disclosure
Schedule (collectively, the “Real Property”), comprises all of the real property
used or intended to be used in, or otherwise related to, the Company’s and its
Subsidiaries’ business; and neither the Company nor any of its Subsidiaries is a
party to any agreement or option to purchase any real property or interest
therein.

 

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(iv) All buildings, structures, and fixtures included in the Real Property (the
“Improvements”) are in good condition and repair and sufficient for the
operation of the Company’s and its Subsidiaries’ business.

(v) All certificates of occupancy, permits, licenses, franchises, approvals and
authorizations (collectively, the “Real Property Permits”) of all governmental
authorities, boards of fire underwriters, associations or any other entity
having jurisdiction over the Real Property that are required or appropriate to
use or occupy the Real Property or operate the Company’s or its Subsidiaries’
business as currently conducted thereon, have been issued and are in full force
and effect. Neither the Company nor any of its Subsidiaries has received any
notice from any governmental authority or other entity having jurisdiction over
the Real Property threatening a suspension, revocation, modification or
cancellation of any Real Property Permit and, to the Company’s Knowledge, there
is no Basis for the issuance of any such notice or the taking of any such
action. No disclosure, filing or other action by the Company or any of its
Subsidiaries is required in connection with the consummation of the transactions
contemplated hereby as it relates to the Real Property Permits.

(o) Intellectual Property.

(i) The Company and its Subsidiaries own or possess or have the right to use
pursuant to a valid and enforceable written license, sublicense, agreement, or
permission all Intellectual Property necessary or desirable for the operation of
the business of the Company and its Subsidiaries as presently conducted. Each
item of Intellectual Property owned or used by the Company or any of its
Subsidiaries immediately prior to the Closing will be owned or available for use
by Purchaser on identical terms and conditions immediately subsequent to the
Closing hereunder.

(ii) Neither the Company nor any of its Subsidiaries has interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties, and no director or officer (or
employee with responsibility for Intellectual Property matters) of the Company
or any of its Subsidiaries has ever received any charge, complaint, claim,
demand, or notice alleging any such interference, infringement,
misappropriation, or violation (including any claim that the Company or any of
its Subsidiaries must license or refrain from using any Intellectual Property
rights of any third party). To the Knowledge of any manager, director or officer
(or employee with responsibility for Intellectual Property matters) of the
Company or any of its Subsidiaries, no third party has interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of the Company or any of its Subsidiaries.

(iii) Section 4(o)(iii) of the Disclosure Schedule identifies each patent and/or
registration that has been issued to the Company or any of its Subsidiaries with
respect to any of its Intellectual Property, identifies each pending patent
application and/or application for registration that the Company or any of its
Subsidiaries has made with respect to any of its Intellectual Property, and
identifies each license, sublicense, agreement, or other permission that the
Company or any of its Subsidiaries has granted to any third party with respect
to any of its Intellectual Property (together with any exceptions). The Company
has

 

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delivered to Purchaser correct and complete copies of all such patents,
registrations, applications, licenses, sublicenses, agreements, and permissions
(as amended to date) and has made available to Purchaser correct and complete
copies of all other written documentation evidencing ownership and prosecution
(if applicable) of each such item. Section 4(o)(iii) of the Disclosure Schedule
also identifies each unregistered trademark, service mark, trade name, corporate
name or Internet domain name, computer software item (other than commercially
available off-the-shelf software purchased or licensed for less than a total
cost of $1,000 in the aggregate) and each material unregistered copyright used
by the Company or any of its Subsidiaries in connection with their respective
businesses. With respect to each item of Intellectual Property required to be
identified in Section 4(o)(iii) of the Disclosure Schedule:

(A) the Company and its Subsidiaries own and possess all right, title, and
interest in and to the item, free and clear of any Lien, license, or other
restriction or limitation regarding use or disclosure;

(B) the item is not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge;

(C) no action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand is pending or, to the Knowledge of any manager, director or
officer (or employee with responsibility for Intellectual Property matters) of
the Company or its Subsidiaries, is threatened that challenges the legality,
validity, enforceability, use, or ownership of the item, and there are no
grounds for the same;

(D) neither the Company nor any of its Subsidiaries has ever agreed to indemnify
any Person for or against any interference, infringement, misappropriation, or
other conflict with respect to the item; and

(E) no loss or expiration of the item is threatened, pending, or reasonably
foreseeable, except for patents expiring at the end of their statutory terms
(and not as a result of any act or omission by the Company or its Subsidiaries,
including without limitation, a failure by the Company or its Subsidiaries to
pay any required maintenance fees).

(iv) Section 4(o)(iv) of the Disclosure Schedule identifies each item of
Intellectual Property that any third party owns and that the Company or any of
its Subsidiaries uses pursuant to license, sublicense, agreement, or permission.
The Company has delivered to Purchaser correct and complete copies of all such
licenses, sublicenses, agreements, and permissions (as amended to date). With
respect to each item of Intellectual Property required to be identified in
Section 4(o)(iv) of the Disclosure Schedule:

(A) the license, sublicense, agreement, or permission covering the item is
legal, valid, binding, enforceable, and in full force and effect;

 

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(B) the license, sublicense, agreement, or permission will continue to be legal,
valid, binding, enforceable, and in full force and effect on identical terms
following consummation of the transactions contemplated hereby;

(C) no party to the license, sublicense, agreement, or permission is in breach
or default, and no event has occurred that with notice or lapse of time would
constitute a breach or default or permit termination, modification, or
acceleration thereunder;

(D) no party to the license, sublicense, agreement, or permission has repudiated
any provision thereof;

(E) with respect to each sublicense, the representations and warranties set
forth in subsections (A) through (D) above are true and correct with respect to
the underlying license;

(F) the underlying item of Intellectual Property is not subject to any
outstanding injunction, judgment, order, decree, ruling, or charge;

(G) no action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand is pending or, to the Knowledge of any manager, director or
officer (or employee with responsibility for Intellectual Property matters) of
the Company or its Subsidiaries, is threatened that challenges the legality,
validity, or enforceability of the underlying item of Intellectual Property, and
there are no grounds for the same; and

(H) neither the Company nor any of its Subsidiaries has granted any sublicense
or similar right with respect to the license, sublicense, agreement, or
permission.

(v) To the Knowledge of the Company or its Subsidiaries: (A) neither the Company
nor any of its Subsidiaries has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with, any Intellectual Property
rights of third parties as a result of the continued operation of its business
as presently conducted; (B) there are no facts that indicate a likelihood of any
of the foregoing; and (C) no notices regarding any of the foregoing (including,
without limitation, any demands or offers to license any Intellectual Property
from any third party) have been received.

(vi) To the Knowledge of the Company and its Subsidiaries, the Company and its
Subsidiaries have taken all necessary and desirable actions to maintain and
protect all of the Intellectual Property of the Company and its Subsidiaries and
will continue to maintain and protect all of the Intellectual Property of the
Company and its Subsidiaries prior to Closing so as not to adversely affect the
validity or enforceability thereof. To the Knowledge of the Company and its
Subsidiaries, the owners of any of the Intellectual Property licensed to the
Company and its Subsidiaries have taken all necessary and desirable actions to
maintain and protect the Intellectual Property covered by such license.

 

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(vii) The Company and its Subsidiaries have complied with and are presently in
compliance with all foreign, federal, state, local, governmental (including, but
not limited to, the Federal Trade Commission and State Attorneys General),
administrative or regulatory laws, regulations, guidelines and rules applicable
to any Intellectual Property and the Company shall take all steps necessary to
ensure such continued compliance.

(p) Tangible Assets. The Company and its Subsidiaries own or lease all
buildings, machinery, equipment, and other tangible assets necessary for the
conduct of their respective businesses as presently conducted. Each such
tangible asset has been maintained in accordance with normal industry practice,
is in good operating condition and repair (subject to normal wear and tear), and
is suitable for the purposes for which it presently is used.

(q) Contracts. Section 4(q) of the Disclosure Schedule lists the following
contracts and other agreements to which the Company or any of its Subsidiaries
is a party:

(i) any agreement with a state, federal or foreign government or any
governmental agency thereof;

(ii) any agreement concerning a partnership or joint venture;

(iii) any Material Contract;

(iv) any agreement (or group of related agreements) under which it has created,
incurred, assumed, or guaranteed any indebtedness for borrowed money, or any
capitalized lease obligation in excess of $50,000 or, or under which it has
imposed a Lien on any of its assets, tangible or intangible;

(v) any confidentiality, non-solicitation or non-competition agreement;

(vi) any agreement with the Responsible Party or any Person related to the
foregoing;

(vii) any profit sharing, stock or unit option, stock or unit purchase, stock or
membership interest appreciation right, deferred compensation, severance, or
other plan or arrangement for the benefit of its current or former managers,
directors, officers, and employees;

(viii) any collective bargaining agreement;

(ix) any agreement for the employment of any individual on a full-time,
part-time, consulting, or other basis providing annual compensation in excess of
$75,000 or providing material severance benefits;

 

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(x) any agreement under which it has advanced or loaned any amount to any of its
managers, directors, officers, and employees outside the Ordinary Course of
Business;

(xi) any agreement under which the consequences of a default or termination
could have a Material Adverse Effect;

(xii) any agreement under which it has granted any Person any registration
rights (including, without limitation, demand and piggyback registration
rights);

(xiii) any settlement, conciliation or similar agreement, the performance of
which will involve payment after the Most Recent Fiscal Month End of
consideration in excess of $50,000;

(xiv) any agreement under which the Company or any of its Subsidiaries has
advanced or loaned any other Person amounts in the aggregate exceeding $250,000;
or

(xv) any other agreement (or group of related agreements) the performance of
which involves consideration in excess of $250,000.

The Company has delivered to Purchaser a correct and complete copy of each
written agreement (as amended to date) listed in Section 4(q) of the Disclosure
Schedule and a written summary setting forth the terms and conditions of each
oral agreement referred to in Section 4(q) of the Disclosure Schedule. With
respect to each such agreement: (A) the agreement is legal, valid, binding,
enforceable, and in full force and effect; (B) the agreement will continue to be
legal, valid, binding, enforceable, and in full force and effect on identical
terms following the consummation of the transactions contemplated hereby, unless
otherwise amended at the Closing; (C) no party is in breach or default, and no
event has occurred that with notice or lapse of time would constitute a breach
or default, or permit termination, modification, or acceleration, under the
agreement; and (D) no party has repudiated any provision of the agreement.

(r) Accounts Receivable and other Indebtedness. All accounts receivable and
other indebtedness of the Company and its Subsidiaries are reflected properly in
the Company’s and its Subsidiaries’ books and records. All accounts receivable
have been incurred in the Ordinary Course of Business and represent the valid
and enforceable obligations of the debtors subject to no setoffs or
counterclaims. All such accounts receivable are current and are collectible in
accordance with their terms at their recorded amounts, subject only to the
reserve for bad debts set forth on the face of the Most Recent Balance Sheet
(rather than in any notes thereto), as adjusted for operations and transactions
through the Closing Date in accordance with the past custom and practice of the
Company and its Subsidiaries, and which such reserve is adequate for the
business of the Company and its Subsidiaries as presently conducted and as
presently proposed to be conducted.

(s) Inventory. Section 4(s) of the Disclosure Schedule sets forth a true and
complete list of all of the inventory of the Company and its Subsidiaries as of
the date of this Agreement. The inventory of the Company and its Subsidiaries
consists only of items usable and salable in the Ordinary Course of Business,
all of which is merchantable and fit for the purpose for which it was

 

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procured or manufactured, and none of which is slow-moving, obsolete, damaged,
or defective, subject only to the reserve for inventory write-down set forth on
the face of the Most Recent Balance Sheet (rather than in any notes thereto) as
adjusted for operations and transactions through the Closing Date in accordance
with the past custom and practice of the Company and its Subsidiaries. The value
of the inventory is based on quantities determined by physical count or
measurement, and has been determined at the lower of cost or current replacement
cost.

(t) Powers of Attorney. There are no outstanding powers of attorney executed on
behalf of the Company or any of the Subsidiaries.

(u) Insurance. Section 4(u) of the Disclosure Schedule sets forth the following
information with respect to each insurance policy (including policies providing
property, casualty, liability, and workers’ compensation coverage and bond and
surety arrangements) to which the Company or any of its Subsidiaries has been a
party, a named insured, or otherwise the beneficiary of coverage at any time
within the past 10 years:

(i) the name, address, and telephone number of the agent;

(ii) the name of the insurer, the name of the policyholder, and the name of each
covered insured;

(iii) the policy number and the period of coverage;

(iv) the scope (including an indication of whether the coverage was on a claims
made, occurrence, or other basis) and amount (including a description of how
deductibles and ceilings are calculated and operate) of coverage; and

(v) a description of any retroactive premium adjustments or other loss-sharing
arrangements.

With respect to each such insurance policy: (A) the policy is legal, valid,
binding, enforceable, and in full force and effect; (B) the policy will continue
to be legal, valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions contemplated
hereby; (C) neither the Company, nor any of its Subsidiaries, nor any other
party to the policy is in breach or default (including with respect to the
payment of premiums or the giving of notices), and no event has occurred that,
with notice or the lapse of time, would constitute such a breach or default, or
permit termination, modification, or acceleration, under the policy; and (D) no
party to the policy has repudiated any provision thereof. Section 4(u) of the
Disclosure Schedule describes any self-insurance arrangements affecting the
Company or any of its Subsidiaries.

(v) Litigation. Section 4(v) of the Disclosure Schedule sets forth each instance
in which the Company or any of its Subsidiaries (i) is subject to any
outstanding injunction, judgment, order, decree, ruling, or charge or (ii) is a
party or is threatened to be made a party to any action, suit, proceeding,
hearing, or investigation of, in, or before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator. None of the actions, suits, proceedings, hearings,

 

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and investigations set forth in Section 4(v) of the Disclosure Schedule could
result in any Material Adverse Change. None of the managers, directors and
officers (and employees with responsibility for litigation matters) of the
Company or any of its Subsidiaries has any reason to believe that any such
action, suit, proceeding, hearing, or investigation may be brought or threatened
against the Company or any of its Subsidiaries or that there is any Basis for
the foregoing.

(w) Product Warranty. Each product manufactured, sold, leased, licensed or
delivered by the Company or any of its Subsidiaries has been in conformity with
all applicable contractual commitments and all express and implied warranties,
except where the failure to conform would not have a Material Adverse Effect on
the Company and its Subsidiaries; and neither the Company nor any of its
Subsidiaries has any Liability (and there is no Basis for any present or future
action or proceeding against any of them giving rise to any Liability) for
replacement or repair thereof or other damages in connection therewith, subject
only to the reserve for product warranty claims set forth on the face of the
Most Recent Balance Sheet (rather than in any notes thereto) as adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of the Company and its Subsidiaries. Section 4(w) of the Disclosure
Schedule includes copies of the standard terms and conditions of sale, lease or
license for each of the Company and its Subsidiaries (containing applicable
guaranty, warranty, and indemnity provisions). No product manufactured, sold,
leased, licensed or delivered by the Company or any of its Subsidiaries is
subject to any guaranty, warranty, or other indemnity beyond the applicable
standard terms and conditions of sale or lease set forth in Section 4(w) of the
Disclosure Schedule.

(x) Product Standards. The products offered for sale by the Company and its
Subsidiaries are fully compliant with any applicable law (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder), standards and certifications described in Section 4(x) of
the Disclosure Schedule, except where the failure to comply would not have a
Material Adverse Effect on the Company and its Subsidiaries. There is no action,
suit, proceeding or investigation pending or, to the Knowledge of Purchaser,
threatened, by any governmental authority or other Person, that has resulted or
could reasonably be expected to result in any of the products of the Company or
any of its Subsidiaries being determined not to comply with any of such laws,
standards or certifications or in the revocation, material modification or
termination of any of the certifications described in Section 4(x) of the
Disclosure Schedule. None of the products of the Company or any of its
Subsidiaries is or, has been recalled, withdrawn, suspended or discontinued or
considered for recall, withdrawal, suspension or discontinuation other than for
commercial or other business reasons unrelated to the failure of such products
to comply with applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder),
standards and certifications by the Company or any of its Subsidiaries in the
United States or outside the United States (whether voluntarily or otherwise).

(y) Employees.

(i) With respect to the business of the Company and its Subsidiaries:

(A) there is no collective bargaining agreement or relationship with any labor
organization;

 

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(B) no labor organization or group of employees has filed any representation
petition or made any written or oral demand for recognition;

(C) no union organizing or decertification efforts are underway or threatened
and no other question concerning representation exists;

(D) no labor strike, work stoppage, slowdown, or other material labor dispute
has occurred, and none is underway or, to the Knowledge of the Company,
threatened;

(E) there is no workers’ compensation liability or matter that could have a
Material Adverse Effect;

(F) there is no employment-related charge, complaint, grievance, investigation,
inquiry or obligation of any kind, pending or, to the Knowledge of the Company,
threatened in any forum, relating to an alleged violation or breach by the
Company or any of its Subsidiaries (or their respective officers or managers) of
any law, regulation or contract;

(G) to the Knowledge of the Company, no employee or agent of the Company or any
of its Subsidiaries has committed any act or omission giving rise to material
liability for any violation or breach identified in subsection (F) above;

(H) each Subsidiary is in compliance with non-U.S. labor laws applicable to it,
except where the failure to comply would not have a Material Adverse Effect on
the Company and its Subsidiaries; and

(I) each of the Company and its Subsidiaries is in compliance with all
applicable federal, state, local and foreign laws, rules, directives and
regulations relating to the employment authorization of their respective
employees, except where the failure to comply would not have a Material Adverse
Effect on the Company and its Subsidiaries, and neither the Company nor any of
its Subsidiaries has employed nor is any such entity currently employing any
unauthorized aliens (as such term is defined under 8 CFR 274a.1(a) and under the
laws of each country in which the Subsidiaries operate).

(ii) There are no (A) employment contracts or severance agreements with any
employees of the Company or any of its Subsidiaries, (B) employment contracts or
severance agreements containing provisions that would become operative upon a
change of ownership or control of the Company or any of its Subsidiaries, or
(C) written personnel policies, rules or procedures applicable to employees of
the Company or any of its Subsidiaries.

 

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(iii) With respect to this transaction, any notice required under any law or
collective bargaining agreement has been given, and all bargaining obligations
with any employee representative have been, or prior to the Closing Date will
be, satisfied. Within the past three (3) years, neither the Company nor any of
its Subsidiaries has implemented any layoff of employees that could implicate
the Worker Adjustment and Retraining Notification Act of 1988, as amended, or
any similar foreign, state, or local law, regulation, or ordinance
(collectively, the “WARN Act”), and no such action will be implemented without
advance notification to Purchaser.

(z) Employee Benefits.

(i) Section 4(z) of the Disclosure Schedule lists each Employee Benefit Plan
that the Company or any of its Subsidiaries maintains, to which the Company or
any of its Subsidiaries contributes or has any obligation to contribute, or with
respect to which the Company or any of its Subsidiaries has any Liability.

(A) Each such Employee Benefit Plan (and each related trust, insurance contract,
or fund) has been maintained, funded and administered in accordance with the
terms of such Employee Benefit Plan and the terms of any applicable collective
bargaining agreement and complies in form and in operation in all respects with
the applicable requirements of ERISA, the Code, and other applicable laws,
including such laws in the countries of each Subsidiary’s operations.

(B) All required reports and descriptions (including Form 5500 annual reports,
summary annual reports, and summary plan descriptions) have been timely filed
and or distributed in accordance with the applicable requirements of ERISA and
the Code with respect to each such Employee Benefit Plan. The requirements of
COBRA have been met with respect to each such Employee Benefit Plan and each
Employee Benefit Plan maintained by an ERISA Affiliate that is an Employee
Welfare Benefit Plan subject to COBRA.

(C) All contributions (including all employer contributions and employee salary
reduction contributions) that are due have been made within the time periods
prescribed by ERISA, the Code and all applicable laws to each such Employee
Benefit Plan that is an Employee Pension Benefit Plan or similar vehicle in the
countries of each Subsidiary’s operations and all contributions for any period
ending on or before the Closing Date that are not yet due have been made to each
such Employee Pension Benefit Plan or vehicle or accrued in accordance with the
past custom and practice of the Company and reflected on the Most Recent
Balance. Such accruals are adequate for the for the operation of the business of
the Company and its Subsidiaries as presently conducted and as presently
proposed to be conducted. All premiums or other payments for all periods ending
on or before the Closing Date have been paid with respect to each such Employee
Benefit Plan that is an Employee Welfare Benefit Plan.

 

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(D) Each such Employee Benefit Plan that is intended to meet the requirements of
a “qualified plan” under Code Section 401(a) has received a determination from
the Internal Revenue Service that such Employee Benefit Plan is so qualified,
and nothing has occurred since the date of such determination that could
adversely affect the qualified status of any such Employee Benefit Plan. All
such Employee Benefit Plans have been or will be timely amended for the
requirements of the Tax legislation commonly known as “GUST” and “EGTRRA” and
have been or will be submitted to the Internal Revenue Service for a favorable
determination letter on the GUST requirements within the remedial amendment
period prescribed by GUST.

(E) There have been no Prohibited Transactions with respect to any such Employee
Benefit Plan or any Employee Benefit Plan maintained by an ERISA Affiliate. No
Fiduciary has any Liability for breach of fiduciary duty or any other failure to
act or comply in connection with the administration or investment of the assets
of any such Employee Benefit Plan. No action, suit, proceeding, hearing, or
investigation with respect to the administration or the investment of the assets
of any such Employee Benefit Plan (other than routine claims for benefits) is
pending or threatened. To the Company’s Knowledge, there is no Basis for any
such action, suit, proceeding, hearing, or investigation.

(F) The Company has delivered to Purchaser correct and complete copies of the
plan documents and summary plan descriptions, the most recent determination
letter received from the Internal Revenue Service, the most recent annual report
(Form 5500, with all applicable attachments), and all related trust agreements,
insurance contracts, and other funding arrangements that implement each such
Employee Benefit Plan.

(ii) With respect to each Employee Benefit Plan that any of the Company, its
Subsidiaries or any ERISA Affiliate maintains, to which any of them contributes
or has any obligation to contribute, or with respect to which any of them has
any Liability:

(A) No such Employee Benefit Plan that is an Employee Pension Benefit Plan
(other than any Multiemployer Plan) has been completely or partially terminated
or been the subject of a Reportable Event. No proceeding by the PBGC to
terminate any such Employee Pension Benefit Plan (other than any Multiemployer
Plan) has been instituted or threatened. The market value of assets under each
such Employee Benefit Plan that is an Employee Pension Benefit Plan equals or
exceeds the present value of all vested and non-vested Liabilities thereunder
determined in accordance with PBGC methods, factors, and assumptions applicable
to an Employee Pension Benefit Plan terminating on the date for determination.

(B) Neither the Company nor any of its Subsidiaries has incurred, and neither
any of the managers, directors and officers (and employees with responsibility
for employee benefits matters) of the Company has any reason to expect

 

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that the Company or any of its Subsidiaries will incur, any Liability to the
PBGC (other than with respect to PBGC premium payments not yet due) or otherwise
under Title IV of ERISA or under the Code with respect to any such Employee
Benefit Plan that is an Employee Pension Benefit Plan.

(iii) Neither the Company, nor any of its Subsidiaries, nor any ERISA Affiliate
contributes to, has any obligation to contribute to, or has any Liability under
or with respect to any Employee Pension Benefit Plan that is a “defined benefit
plan” (as defined in ERISA Section 3(35)). No asset of the Company or any of its
Subsidiaries is subject to any Lien under ERISA or the Code.

(iv) Neither the Company, nor any of its Subsidiaries, nor any ERISA Affiliate
contributes to, has any obligation to contribute to, or has any Liability
(including withdrawal liability as defined in ERISA Section 4201) under or with
respect to any Multiemployer Plan.

(aa) Guaranties. Neither the Company nor any of its Subsidiaries is a guarantor
or otherwise liable for any Liability (including indebtedness) of any other
Person.

(bb) Environmental, Health, and Safety Matters.

(i) Each of the Company, its Subsidiaries and their respective predecessors and
their Affiliates, if any, have complied and are in compliance with all
Environmental, Health, and Safety Requirements.

(ii) Without limiting the generality of the foregoing, each of the Company, its
Subsidiaries and their predecessors and their Affiliates have obtained and
complied with, and are in compliance with, all permits, licenses and other
authorizations that are required pursuant to Environmental, Health, and Safety
Requirements for the occupation of their facilities and the operation of their
respective businesses; and a list of all such permits, licenses and other
authorizations is set forth on Section 4(bb) of the Disclosure Schedule.

(iii) Neither the Company, nor any of its Subsidiaries, nor their respective
predecessors or Affiliates has received any written or oral notice, report or
other information regarding any actual or alleged violation of Environmental,
Health, and Safety Requirements, or any Liabilities, including any
investigatory, remedial or corrective obligations, relating to any of them or
their facilities arising under Environmental, Health, and Safety Requirements.

(iv) To the Company’s Knowledge, none of the following exists at the Real
Property: (A) underground storage tanks, (B) asbestos-containing material in any
form or condition, (C) materials or equipment containing polychlorinated
biphenyls, or (D) landfills, surface impoundments, or disposal areas.

(v) Neither the Company, nor any of its Subsidiaries, nor their respective
predecessors or Affiliates has treated, stored, disposed of, arranged for or
permitted the disposal of, transported, handled, manufactured, distributed, or
released any

 

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substance, including, without limitation, any hazardous substance, or owned or
operated any property or facility (and no such property or facility is
contaminated by any such substance) so as to give rise to any current or future
Liabilities, including any Liability for fines, penalties, response costs,
corrective action costs, personal injury, property damage, natural resources
damages or attorney’s fees, pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Solid Waste
Disposal Act, as amended, or any other Environmental, Health, and Safety
Requirements.

(vi) Neither the Company, nor any of its Subsidiaries, nor their respective
predecessors or Affiliates has assumed, or otherwise become subject to, any
Liability, including, without limitation, any obligation for corrective or
remedial action of any other Person relating to Environmental, Health, and
Safety Requirements.

(vii) No facts, events or conditions relating to the past or present facilities,
properties or operations of the Company, its Subsidiaries, or their respective
predecessors or Affiliates will prevent, hinder or limit continued compliance
with Environmental, Health, and Safety Requirements, give rise to any
investigatory, remedial or corrective obligations pursuant to Environmental,
Health, and Safety Requirements, or give rise to any other Liabilities pursuant
to Environmental, Health, and Safety Requirements, including, without
limitation, any relating to on-site or off-site releases or threatened releases
of hazardous materials, substances or wastes, personal injury, property damage
or natural resources damage.

(viii) The Company has furnished to Purchaser all environmental audits, reports
and other material environmental documents relating to the Company’s, its
Subsidiaries’ or their respective predecessors’ or Affiliates’ past or current
properties, facilities, operations or the Real Property that are in their
possession or under their control.

(cc) Indebtedness to Officers, Directors, Managers and Equity Holders. Neither
the Company nor any of its Subsidiaries is indebted to any of the Company’s or
its Subsidiaries’ equity holders, officers, directors or managers, or their
respective Affiliates in any amount whatsoever (including, without limitation,
any deferred compensation, salaries or rent payable).

(dd) Business Continuity. Without limiting the generality of the foregoing, none
of the software, computer hardware (whether general or special purpose),
telecommunications capabilities (including all voice, data and video networks)
and other similar or related items of automated, computerized, and/or software
systems and any other networks or systems and related services that are used by
or relied on by the Company or any of its Subsidiaries in the conduct of their
respective businesses (collectively, the “Systems”) have experienced bugs,
failures, breakdowns, or continued substandard performance in the past 12 months
that has caused any substantial disruption or interruption in or to the use of
any such Systems by the Company or any of its Subsidiaries.

 

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(ee) Customers and Suppliers.

(i) Section 4(ee)(i) of the Disclosure Schedule contains a complete and accurate
list of each customer of the Company (on a consolidated basis) that accounted
for more than five percent (5%) of revenue on a per country basis of the
Subsidiary operating in such country in each of the last two (2) fiscal years of
the Company and in the last fiscal period included in the Financial Statements,
and sets forth the total revenues derived from each such customer during each of
such fiscal periods (such customers being called “Material Customers”).

(ii) Section 4(ee)(ii) of the Disclosure Schedule contains a complete and
accurate list of each supplier to the Company (on a consolidated basis) to whom
the Company or its Subsidiaries paid an amount equal to or greater than five
percent (5%) of the total revenues on a per country basis of the Subsidiary
operating in such country in each of the last two (2) fiscal years of the
Company and in the last fiscal period included in the Financial Statements, and
sets forth the total amount paid to each such supplier during each of such
fiscal periods (such suppliers being called “Material Suppliers”).

(iii) Since the Balance Sheet Date, neither the Company nor any of its
Subsidiaries has suffered any adverse change in the relationship with any of its
Material Customers or Material Suppliers. None of the Company or any of its
Subsidiaries is involved in any controversy with any of its Material Customers
or Material Suppliers. Neither the Company nor any of its Subsidiaries has been
advised by any Material Customer or Material Supplier that such customer or
supplier was or is intending to terminate or materially reduce its relationship
with either of the Company or any of its Subsidiaries or would not continue to
purchase or supply, as the case may be, goods and services from or to either of
the Company or any of its Subsidiaries for future periods.

(ff) Ethical Practices; Foreign Corrupt Practices and International Trade
Sanctions. Neither the Company nor any of its Subsidiaries has offered or given,
and the Company is not aware of any Person that has offered or given, on the
Company’s or Subsidiaries’ behalf, anything of value to, in violation of any
law, including the Foreign Corrupt Practices Act of 1977, as amended: (i) any
official of a governmental body, any political party or official thereof or any
candidate for political office; (ii) any customer or member of any governmental
body; or (iii) any other Person, for the purpose of any of the following:
(x) influencing any action or decision of such Person in such Person’s official
capacity, including a decision to fail to perform such Person’s official
function; (y) inducing such Person to use such Person’s influence with any
governmental body to affect or influence any act or decision of such
governmental body to assist the Company or any of its Subsidiaries in obtaining
or retaining business for, with, or directing business to, any Person; or
(z) where such payment would constitute a bribe, kickback or illegal or improper
payment to assist the Company or any of its Subsidiaries in obtaining or
retaining business for, with, or directing business to, any Person, except for
an immaterial political contribution (in an amount which was less than $1,000)
by a political action committee which was fully disclosed to the appropriate
governmental body (without any resulting fine or penalty to the Company or any
of its Subsidiaries).

(gg) Relationships with Related Persons. Except as set forth on Section 4(gg) of
the Disclosure Schedule, no officer, director, manager or principal equity
holder of the Company or any of its Subsidiaries nor any Related Person of any
of the foregoing has had, any interest in any property (whether real, personal,
or mixed and whether tangible or intangible) used in or pertaining

 

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to the business of the Company or any of its Subsidiaries. Except as set forth
on Section 4(gg) of the Disclosure Schedule, no officer, director, manager or
equity holder of the Company or any of its Subsidiaries nor any Related Person
of the any of the foregoing is, or has owned an equity interest or any other
financial or profit interest in, a Person that has (i) had business dealings or
a material financial interest in any transaction with the Company or any of its
Subsidiaries, or (ii) engaged in competition with the Company or its
Subsidiaries with respect to any line of the merchandise or services of such
company (a “Competing Business”) in any market presently served by such company
except for ownership of less than one percent of the outstanding capital stock
of any Competing Business that is publicly traded on any recognized exchange or
in the over-the-counter market. Except as set forth on Section 4(gg) of the
Disclosure Schedule, no officer, director, manager or equity holder of the
Company or any of its Subsidiaries nor any Related Person of any of the
foregoing is a party to any contract with, or has claim or right against, the
Company.

(hh) Private Offering. Subject to the accuracy of Purchaser’s representations
and warranties set forth in Section 3(b) hereof, (i) the offer, sale and
issuance of the Series A Preferred Units and (ii) the issuance of Common Units
pursuant to the conversion of the Series A Preferred Units into Common Units,
are exempt from the registration requirements of the Securities Act and any
applicable state securities laws and are in compliance with all federal and
state securities laws and regulations. Seller agrees that neither Seller nor
anyone acting on its behalf will offer any of the Series A Preferred Units, or
any similar securities for issuance or sale, or solicit any offer to acquire any
of the same from anyone so as to render the issuance and sale of such securities
subject to the registration requirements of the Securities Act. Seller has not
offered or sold the Series A Preferred Units by any form of general solicitation
or general advertising, as such terms are used in Rule 502(c) under the
Securities Act.

Section 5. Pre-Closing Covenants. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing:

(a) General. Each of the Parties will use its reasonable best efforts to take
all actions and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including but not limited to satisfaction, but not waiver, of the Closing
conditions set forth in Section 7 below).

(b) Notices and Consents. Each of the Parties will give any notices to third
parties, and will use its reasonable best efforts to obtain any third-party
consents, if any, referred to in Section 3(a)(ii), Section 4(c) and Section 5(b)
of the Disclosure Schedule. Each of the Parties will give any notices to, make
any filings with, and use its reasonable best efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters referred to in Section 3(a), Section 4(c) above
and Section 5(b) of the Disclosure Schedule.

(c) Operation of Business. Neither Seller nor the Company will engage in any
practice, take any action, or enter into any transaction outside the Ordinary
Course of Business without the prior written consent of Purchaser. Without
limiting the generality of the foregoing, neither Seller nor the Company will
(i) declare, set aside, or pay any dividend or make any distribution with
respect

 

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to Seller’s, the Company’s or any of its Subsidiaries’ membership or equity
interests or redeem, purchase, or otherwise acquire any of its membership or
equity interests, or (ii) otherwise engage in any practice, take any action, or
enter into any transaction of the kind described in Section 4(i) above.

(d) Preservation of Business. The Company will keep its and its Subsidiaries’
businesses and properties substantially intact, including its present
operations, physical facilities, working conditions, insurance policies, and
relationships with lessors, licensors, suppliers, customers, and employees.

(e) Full Access; Delivery of Company Information. Pending the Closing Date, each
of the Company and the Responsible Party shall:

(i) Ensure that Purchaser and its representatives are given reasonable access
during normal business hours to all of the employees (including appropriate
experts and other knowledgeable personnel), attorneys, accountants, agents,
independent contractors, properties, books and records of the Company and its
Subsidiaries and that Purchaser and its representatives are furnished with such
information concerning the Company and its Subsidiaries as Purchaser may
reasonably require; and

(ii) From time to time, furnish to Purchaser such additional information
(financial or otherwise) concerning the Company and its Subsidiaries as
Purchaser may reasonably request (which right to request information shall not
be exercised in any way which would unreasonably interfere with the normal
operations, business or activities of the Company).

(f) Notice of Developments. The Company will give prompt written notice to
Purchaser of any material adverse development causing a breach of any of the
representations and warranties contained in Section 4 above. Each Party will
give prompt written notice to the others of any material adverse development
causing a breach of any of its own representations and warranties contained in
Section 3 above. No disclosure by any Party pursuant to this Section 5(f),
however, shall be deemed to amend or supplement Annex I, Annex II, or the
Disclosure Schedule or to prevent or cure any misrepresentation, breach of
warranty, or breach of covenant; provided, however, that if a Party discloses a
material adverse development causing a breach of its representations and
warranties in Section 3 or 4 above, and such material adverse development
occurred after the date of this Agreement but prior to Closing, the other
Party’s or Parties’ remedies for such breach shall be to either: (i) terminate
this Agreement pursuant to Section 9, or (ii) waive the breach and proceed to
close; after such a disclosure, the non-breaching Party or Parties many not
close and then sue the breaching party for indemnification after Closing.

(g) Exclusivity. Neither Seller, the Company nor the Responsible Party will (and
the Responsible Party and the Company will not cause or permit any of its
Subsidiaries or Representatives to) (i) solicit, initiate, encourage or
facilitate the initiation, submission, making or announcement of any expression
of interest, inquiry, proposal or offer from or by any Person (other than
Purchaser) relating to a possible Acquisition Transaction, (ii) participate in
any discussions or negotiations or enter into any agreement with, or provide any
non-public information to, any Person (other than Purchaser) relating to or in
connection with a

 

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possible Acquisition Transaction; or (iii) entertain, consider or accept any
proposal or offer from any Person (other than Purchaser) relating to a possible
Acquisition Transaction. The Responsible Party will not vote his units in favor
of any Acquisition Transaction (other than as contemplated by this Agreement).
Each of the Responsible Party and the Company shall, and shall cause each of its
Representatives to, immediately discontinue any ongoing discussions or
negotiations (other than any ongoing discussions with Purchaser) relating to a
possible Acquisition Transaction, and shall promptly provide the Purchaser with
the identity of the Person and an oral and a written description of any
expression of interest, inquiry, proposal or offer relating to a possible
Acquisition Transaction that is received by the Responsible Party and the
Company or by any of the Responsible Party’s or the Company’s respective
Representatives from any Person (other than Purchaser). This Section 5(g) shall
terminate and be of no further force and effect upon the termination of this
Agreement.

(h) Maintenance of Real Property. The Company and its Subsidiaries will maintain
the Real Property in substantially the same condition as existed on the date of
this Agreement, ordinary wear and tear excepted, and shall not demolish or
remove any of the existing Improvements, or erect new improvements on the Real
Property or any portion thereof, without the prior written consent of Purchaser.

(i) Leases. Neither the Company nor any of its Subsidiaries will cause or permit
any of the Company’s or Subsidiaries’ Leases to be amended, modified, extended,
renewed or terminated, nor shall the Company or any of its Subsidiaries enter
into any new lease, sublease, license or other agreement for the use or
occupancy of any Real Property, without the prior written consent of Purchaser.

(j) Tax Matters. Without the prior written consent of Purchaser, neither Seller,
the Company nor any Subsidiary shall make or change any election, change an
annual accounting period, adopt or change any accounting method, file any
amended Tax Return, enter into any closing agreement, settle any Tax claim or
assessment relating to Seller, the Company or any of its Subsidiaries, surrender
any right to claim a refund of Taxes, consent to any extension or waiver of the
limitation period applicable to any Tax claim or assessment relating to Seller,
the Company or any of its Subsidiaries, or take any other similar action
relating to the filing of any Tax Return or the payment of any Tax, if such
election, adoption, change, amendment, agreement, settlement, surrender, consent
or other action would have the effect of increasing the Tax liability of Seller,
the Company or any of its Subsidiaries for any period ending after the Closing
Date or decreasing any Tax attribute of Seller, the Company or any of its
Subsidiaries existing on the Closing Date.

(k) Reservation of Common Units. Seller will at all times have authorized and
reserved for the purpose of issuance a sufficient number of Common Units to
provide for the conversion of the Series A Preferred Units.

(l) LLC Agreement. On the Closing Date, Seller, the Responsible Party and
Purchaser shall execute the LLC Agreement.

 

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(m) Employment Agreement. On the Closing Date, Seller and the Responsible Party
shall execute an employment agreement in the form attached hereto as Exhibit D
(the “Employment Agreement”).

(n) Non-Compete and Non-Solicitation Agreement. On the Closing Date, Seller and
the Responsible Party shall execute a non-compete and non-solicitation agreement
in the form attached hereto as Exhibit E (the “Non-Compete Agreement”).

(o) Intentionally Omitted.

(p) Escrow Agreement. At the Closing, (i) Seller, the Responsible Party and
Purchaser shall execute the Escrow Agreement, and (ii) the Responsible Party
shall deposit all of his Common Units with the Escrow Agent to held pursuant to
the terms of the Escrow Agreement (collectively, the “Escrowed Units”).

(q) Opinion of Counsel of the Company. Purchaser shall have received from
Shutts & Bowen, LLP, counsel to the Company, an opinion dated the Closing Date,
in the form attached hereto as Exhibit G (“Company Legal Opinion”).

(r) Opinion of Counsel of the Subsidiaries. Purchaser shall have received from
each in-country counsel to the Company’s Subsidiaries, an opinion dated the
Closing Date, in the form and substance acceptable to Purchaser.

(s) Purchaser Stock Options. Purchaser shall reserve 400,000 shares of its
common stock under Purchaser’s stock option plan for the purpose of granting
stock options to Seller’s employees in such amounts and upon such terms as
determined by Purchaser’s compensation committee, in its sole and absolute
discretion.

(t) Magna Consult. The Company, as well as some of its Subsidiaries, Affiliates
and officers, owns a minority interest in Magna Consult, a Venezuela-based IT
consulting company. Prior to the Closing, Seller board of managers shall agree
to a schedule of payments under the Company’s consulting agreement with Magna
Consult. Any extension of additional services under this consulting agreement
shall be considered a related party transaction and shall be subject to the
Approval Policy.

(u) Books and Records. The Company and its Subsidiaries shall keep proper books
of record and account in which true and complete entries will be made of all
transactions in accordance with GAAP applied on a basis consistent with prior
periods.

(v) Cisco Estoppel and Waiver Letter. The Company shall obtain an estoppel and
waiver letter (the “Cisco Estoppel and Waiver”), in the form and content
acceptable to Purchaser, from Cisco Systems, Inc. (“Cisco”), which shall include
(i) consent to the transactions contemplated by this Agreement, (ii) a waiver of
Cisco’s right to terminate that certain LATAM Systems Integrator Agreement dated
as of February 14, 2005 by and between Cisco and the Company (the “Cisco
Agreement”) upon the occurrence of a change in control of the Company, and
(iii) a representation that the Company and its Subsidiaries are not in breach
or default of the terms and conditions of the Cisco Agreement.

 

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(w) Certain Pre-Closing Contributions. At the Closing, the Responsible Party
shall (A) contribute all of his ownership interests in the Company to Seller,
and (B) contribute all of his ownership interests in Desca Colombia to Seller.

(x) Intentionally Omitted.

(y) Updated Financial Statements. If the Closing occurs on or after November 1,
2007, at or prior to the Closing, the Company shall deliver to Purchaser
unaudited consolidated balance sheets and statements of income, changes in
members’ equity, and cash flow as of and for the nine months ended September 30,
2007 for the Company and its Subsidiaries (the “Updated Company Financials”).

Section 6. Post-Closing Covenants. The Parties agree as follows with respect to
the period following the Closing:

(a) General. In case at any time after the Closing any further actions are
necessary or desirable to carry out the purposes of this Agreement, each of the
Parties will take such further actions (including the execution and delivery of
such further instruments and documents) as any other Party may reasonably
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Section 8 below).

(b) Financial Disclosure and Accounting Controls.

(i) The Company shall take such actions as are requested in writing by Purchaser
to establish, prior to the Closing, “disclosure controls and procedures” (as
defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act)
that are reasonably designed to ensure that material information (both financial
and non-financial) relating to the Company and its Subsidiaries, that would be
required to be disclosed by the Company in the reports that it would be required
to file or submit under the Exchange Act if the Company were a reporting company
under the Exchange Act, is communicated to the Company’s Principal Executive
Officer and Principal Financial Officer, or persons performing similar
functions, as appropriate to allow timely decisions regarding
required disclosure.

(ii) The Company shall take such actions as are reasonably requested by
Purchaser to establish, prior to the Closing, a system
of internal accounting controls relating to the Company and its Subsidiaries
designed to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. At Purchaser’s written request, the
Company shall adopt and make available to Purchaser accurate and complete copies
of all material policies, manuals and other documents promulgating such internal
accounting controls. The Company shall use its best efforts to eliminate any
“material weaknesses” (as defined by the PCAOB)) and any “significant
deficiencies” (as defined by the PCAOB) identified by Purchaser that are
reasonably likely to collectively represent a “material weakness” in the

 

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design or operation of the Company’s internal controls and procedures. The
Company shall use its best efforts to follow Purchaser’s reasonable directions
as necessary to ensure that there shall be no significant deficiencies in the
design or operation of the Company’s internal controls and procedures.

(iii) All out-of-pocket expenses incurred by the Company in complying with this
subsection (b), and subsection (c) below (including the cost of third party
accountants and consultants) shall be paid by Purchaser.

(c) Audited or Reviewed Financial Statements. To the extent Purchaser requires
audited or reviewed financial statements of the Company and its Subsidiaries in
order to comply with the reporting requirements of the Commission set forth in
Regulations S-K and S-X, the Company shall permit Purchaser to obtain the
required audited or reviewed financial statements of the Company and its
Subsidiaries covering the years ended December 31, 2006, 2005 and 2004 and each
subsequent fiscal quarter, and to the extent the Closing shall not have occurred
prior to the end thereof, the fiscal year ending December 31, 2007 (and each
fiscal quarter thereof), reasonably sufficient and timely enough to permit
Purchaser reasonably to satisfy such obligations, including, without limitation,
providing reasonable access as stated under clause (f)(i) above to any auditors
engaged by Purchaser for such purpose and delivering one or more representation
letters from the Company to any such auditors as may be reasonably requested by
Purchaser to allow such auditors to complete any such audit or review and to
issue an opinion on such financial statements acceptable to the Commission.

(d) Intentionally Omitted.

(e) Transfer Restrictions. Purchaser acknowledges that (i) neither the Series A
Preferred Units, nor the Common Units issuable upon conversion of the Series A
Preferred Units have been registered under the Securities Act, and such
securities may not be transferred unless (A) subsequently registered thereunder
or (B) they are transferred pursuant to an exemption from such registration, and
(ii) any sale of the Securities made in reliance upon Rule 144 may be made only
in accordance with the terms of Rule 144. The provisions of this Section 6,
together with the rights of Purchaser under this Agreement and the other Primary
Company Documents, shall be binding upon any subsequent transferee of the Series
A Preferred Units.

(f) Restrictive Legend. Purchaser acknowledges and agrees that, until such time
as the Securities shall have been registered under the Securities Act or
Purchaser demonstrates to the reasonable satisfaction of Seller and its counsel
that such registration shall no longer be required, such Securities may be
subject to a stop-transfer order placed against the transfer of such Securities,
and such Securities shall bear a restrictive legend in substantially the
following form:

THESE SECURITIES (INCLUDING ANY UNDERLYING SECURITIES) HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE

 

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REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF
COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION SHALL NO LONGER BE REQUIRED.

(g) Filings. Seller undertakes and agrees that it will make all required filings
in connection with the sale of the Securities to Purchaser as required by U.S.
federal and state laws and regulations, or by any domestic securities exchange
or trading market, and if applicable, the filing of a notice on Form D (at such
time and in such manner as required by the rules and regulations of the
Commission), and to provide copies thereof to Purchaser promptly after such
filing or filings.

(h) Return of Certificates on Conversion. Upon any conversion by Purchaser of
less than all of the Series A Preferred Units pursuant to the terms of the LLC
Agreement, Seller shall issue and deliver to Purchaser, within seven
(7) Business Days of the date of conversion, a new certificate or certificates
for, as applicable, the total number Series A Preferred Units, which Purchaser
has not yet elected to convert (with the number of and denomination of such new
certificate(s) designated by Purchaser).

(i) Replacement Certificates and Warrants. The certificate(s) representing the
Series A Preferred Units held by Purchaser shall be exchangeable, at the option
of Purchaser at any time and from time to time at the office of Seller, for
certificates with different denominations representing, as applicable, an equal
aggregate number of Series A Preferred Units as requested by Purchaser upon
surrendering the same. No service charge will be made for such registration or
transfer or exchange.

(j) Escrow Fund. The Parties agree that in the event that the Put or Call is
exercised pursuant to Section 11.13 or 11.14, respectively, of the LLC Agreement
during the Put Term or Call Term, as the case may be, and within three (3) years
after the Closing Date, all consideration paid in the form of Elandia Shares to
the Responsible Party in connection therewith, or if the consideration is paid
entirely in the form of cash, 85% of such consideration (“Put/Call
Consideration”), shall be deposited into escrow with the Escrow Agent and held
pursuant to the terms of the Escrow Agreement. If (i) the Responsible Party is
eligible under the Securities Laws (as defined in the LLC Agreement) to transfer
his Common Units, (ii) such transfer is permitted under the LLC Agreement, and
(iii) the transferee or transferees agree in writing to have such units continue
to be held in escrow and subject to the terms of this Agreement, the Escrow
Agreement and the LLC Agreement, then (A) the Escrow Agent will release such
units from escrow in order to effectuate the transfer, (B) the transferee or
transferees will deposit the certificates representing such units into escrow to
be held with the Escrow Agent pursuant to the terms of the Escrow Agreement, and
(C) the Responsible Party may retain all consideration received in connection
with the transfer of such units. The Put/Call Consideration deposited into
escrow with the Escrow Agent, together with the Escrowed Units, shall be
referred to collectively as the “Escrow Fund.”

(k) General Release. The Responsible Party, for good and valuable consideration
the receipt and sufficiency of which hereby are acknowledged, both in the name
and right of the Responsible Party and also for and on behalf of the Responsible

 

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Party’s predecessors, successors, agents, employees, successors, personal
representatives, heirs and assigns, jointly and severally (collectively,
“Releasor”), does hereby and by these presents, and for anyone claiming by or
through or under Releasor, fully remise, release, acquit, and forever discharge
Seller, the Company and its Subsidiaries and their respective members,
shareholders, employees, agents, representatives, heirs, successors and assigns,
jointly and severally, (collectively, the “Released Parties”) by reason of any
matter, cause, happening, or thing, from the beginning of time, occurring prior
to and including the date of this Agreement. It is intended by Releasor by this
general release to forever remise, acquit, waive, release, and forever discharge
Released Parties of and from all claims, demands, losses, injuries, and damages,
rights known or unknown, direct or indirect, fixed or contingent, it being
understood that all rights which Releasor or any person who claims by, through,
or under Releasor may have against any Released Party, as of the date of the
signing of this Agreement, shall be forever released, remised, and acquitted,
and Releasor and such persons shall be forever barred from bringing or asserting
the same in their own name or names, jointly with or through any person, natural
or corporate, for or upon or by reason of any act, matter, transaction, cause or
thing whatsoever.

(l) Form 8832 Election. Promptly following the Closing, Purchaser and the
Responsible Party will elect to treat the E.T.V.E. as a disregarded entity by
filing, retroactively to a date that precedes the Closing Date, Form 8832 with
the United States Internal Revenue Service.

(m) Certain Post-Closing Contributions. Promptly after Closing, the Company
shall (A) contribute all of its ownership interests in each of its foreign
Subsidiaries (except Desca Panama) to an E.T.V.E. formed in the jurisdiction of
Spain or a similar entity organized in jurisdiction chosen by Purchaser in its
sole discretion and wholly-owned by Seller (“E.T.V.E.”), and (B) contribute all
of its ownership interests in Desca USA and Desca Panama to Seller.

Section 7. Conditions to Obligation to Close.

(a) Conditions to Purchaser’s Obligation. Purchaser’s obligation to consummate
the transactions to be performed by it in connection with the Closing is subject
to satisfaction of the following conditions:

(i) the representations and warranties set forth in Section 3(a) and Section 4
above shall be true and correct in all material respects at and as of the
Closing Date, except to the extent that such representations and warranties are
qualified by the term “material,” or contain terms such as “Material Adverse
Effect” or “Material Adverse Change,” in which case such representations and
warranties (as so written, including the term “material” or “Material”) shall be
true and correct in all respects at and as of the Closing Date;

(ii) each of Seller, the Company and the Responsible Party shall have performed
and complied with all of their covenants hereunder in all material respects
through the Closing, except to the extent that such covenants are qualified by
the term “material,” or contain terms such as “Material Adverse Effect” or
“Material Adverse Change,” in which case the Company shall have performed and
complied with all of such covenants (as so written, including the term
“material” or “Material”) in all respects through the Closing;

 

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(iii) the Company shall have procured all of the third-party consents specified
in Section 5(b) above, including, without limitation, all consents and waivers
from the other shareholders or equity holders of Desca Mexico, Desca Costa Rica,
Desca Colombia, Desca Ecuador and Desca Panama that are required to allow the
Company to transfer its ownership interests in such entities to the E.T.V.E.;

(iv) no action, suit, or proceeding shall be pending or threatened before any
court or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (A) prevent
consummation of any of the transactions contemplated by this Agreement,
(B) cause any of the transactions contemplated by this Agreement to be rescinded
following consummation, (C) adversely affect the right of Purchaser to own the
Series A Preferred Units, or (D) adversely affect the right of Seller, the
Company or any of its Subsidiaries to own its respective assets and to operate
its respective business (and no such injunction, judgment, order, decree,
ruling, or charge shall be in effect);

(v) each of Seller, the Company and the Responsible Party shall have delivered
to Purchaser a certificate to the effect that each of the conditions specified
above in Section 7(a)(i)-(iv) is satisfied in all respects;

(vi) all actions to be taken by Seller, the Company and the Responsible Party in
connection with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby shall be satisfactory in form and substance to
Purchaser;

(vii) the Responsible Party shall have contributed all of his ownership
interests in the Company and Desca Colombia to Seller;

(viii) the Company shall have contributed all of its ownership interests in its
Subsidiaries (other than Desca USA and Desca Panama) to the E.T.V.E.;

(ix) the Company shall have contributed all of its ownership interests in Desca
USA and Desca Panama to the Seller;

(x) Seller and the Responsible Party shall have executed and delivered to
Purchaser the LLC Agreement;

(xi) Seller and the Responsible Party shall have executed and delivered to
Purchaser the Escrow Agreement;

(xii) Seller and the Responsible Party shall have executed and delivered to
Purchaser the Employment Agreement;

 

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(xiii) Seller and the Responsible Party shall have executed and delivered to
Purchaser the Non-Compete Agreement;

(xiv) Intentionally Omitted;

(xv) Seller and the Company shall have delivered to Purchaser the Cisco Estoppel
and Waiver, executed by Cisco;

(xvi) Gerardo Guarino shall have executed and delivered to Seller and Purchaser
the Guarino Stock Purchase Agreement and all deliverables thereunder;

(xvii) Shutts & Bowen, the Company’s legal counsel, shall have executed and
delivered to Purchaser the Company Legal Opinion;

(xviii) each of the in-country counsel to the Company’s Subsidiaries shall have
executed and delivered to Purchaser the legal opinions as set forth in
Section 5(q);

(xix) Intentionally Omitted;

(xx) Purchaser shall have concluded an investigation of a possible violation of
the Foreign Corrupt Practices Act of 1977, as amended (“FCPA”), arising from the
operations of the Honduran Subsidiary of Latin Node, Inc., which is a Subsidiary
of Purchaser (the “FCPA Matter”), and Purchaser shall have disclosed the
completion of the investigation in a Form 8-K filed with the Commission (the
“Completed FCPA Matter Form 8-K”);

(xxi) Purchaser shall have consummated its preferred stock financing transaction
with Stanford International Bank, Ltd., an Antiguan banking corporation (“SIBL”)
and shall have received $29,000,000 (inclusive of the proceeds of the Bridge
Loan) in financing from SIBL (the “SIBL Financing”);

(xxii) Purchaser shall have received a fairness opinion, in form and content
acceptable to Purchaser, on the terms and conditions of the SIBL Financing;

(xxiii) if the Closing occurs on or after November 1, 2007, the Company shall
have delivered to Purchaser the Updated Company Financials;

(xxiv) the Company shall have delivered to Purchaser copies of the certificate
of formation of the Company certified on or within five (5) Business Days before
the Closing Date by the Secretary of State of Delaware;

(xxv) the Company shall have delivered to Purchaser copies of a certificate of
good standing of Seller and the Company issued on or within five (5) Business
Days before the Closing Date by the Secretary of State of Delaware;

(xxvi) the Company shall have delivered to Purchaser copies of certificates of
good standing (or equivalent document) of each Subsidiary issued on or within
five (5) Business Days before the Closing Date by the jurisdiction of such
Subsidiary’s incorporation or organization;

 

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(xxvii) the Company shall have delivered to Purchaser a certificate of the
manager or managing-member or secretary or an assistant secretary of each of
Seller, the Company and Desca USA, dated the Closing Date, in form and substance
reasonably satisfactory to Purchaser, as to: (i) any amendments to the
certificate of formation of such Person since the date of this Agreement;
(ii) the limited liability company agreement of such Person; and (iii) any
resolutions of the managers and members or other authorizing body (or a duly
authorized committee thereof) of such Person authorizing the execution,
delivery, and performance of this Agreement and the transactions contemplated
hereby; and (iv) incumbency and signatures of the manager or officers of Seller
and the Company executing this Agreement or any other agreement contemplated by
this Agreement; and

(xxviii) the Company shall have delivered to Purchaser a certificate of the
manager or managing-member or secretary or an assistant secretary of each of the
Company’s Subsidiaries, dated the Closing Date, in form and substance reasonably
satisfactory to Purchaser, as to: (i) any amendments to the certificate of
incorporation (or other governing document) of such Person since the date of
this Agreement; and (ii) the bylaws or limited liability company agreement (or
other governing documents) of such Person.

Purchaser may waive any condition specified in this Section 7(a) if it delivers
a writing so stating to the Company at or prior to the Closing.

(b) Conditions to Seller’s, the Company’s and the Responsible Party’s
Obligation. The obligation of Seller, the Company and the Responsible Party to
consummate the transactions to be performed by him or it in connection with the
Closing is subject to satisfaction of the following conditions:

(i) the representations and warranties set forth in Section 3(b) above shall be
true and correct in all material respects at and as of the Closing Date, except
to the extent that such representations and warranties are qualified by the term
“material,” or contain terms such as “Material Adverse Effect” or “Material
Adverse Change,” in which case such representations and warranties (as so
written, including the term “material” or “Material”) shall be true and correct
in all respects at and as of the Closing Date;

(ii) Purchaser shall have performed and complied with all of its covenants
hereunder in all material respects through the Closing, except to the extent
that such covenants are qualified by the term “material,” or contain terms such
as “Material Adverse Effect” or “Material Adverse Change,” in which case
Purchaser shall have performed and complied with all of such covenants (as so
written, including the term “material” or “Material”) in all respects through
the Closing;

(iii) no action, suit, or proceeding shall be pending before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction wherein an unfavorable injunction, judgment, order, decree, ruling,
or charge would (A) prevent consummation of any of the transactions contemplated
by this Agreement or (B) cause any of the transactions

 

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contemplated by this Agreement to be rescinded following consummation (and no
such injunction, judgment, order, decree, ruling, or charge shall be in effect);

(iv) Purchaser shall have delivered to the Company a certificate to the effect
that each of the conditions specified above in Section 7(b)(i)-(iii) is
satisfied in all respects;

(v) the Parties shall have received all authorizations, consents, and approvals
of governments and governmental agencies referred to in Section 3(a) and
Section 4(c) above;

(vi) Purchaser shall have executed and delivered to Seller and the Responsible
Party the LLC Agreement;

(vii) Purchaser shall have executed and delivered to Seller and the Responsible
Party the Escrow Agreement;

(viii) Intentionally Omitted;

(ix) all actions to be taken by Purchaser in connection with consummation of the
transactions contemplated hereby and all certificates, opinions, instruments,
and other documents required to effect the transactions contemplated hereby will
be satisfactory in form and substance to the Company; and

(x) subject to the terms of Section 7(c) below, the outcome of the FCPA Matter
(as disclosed in the Completed FCPA Matter Form 8-K) shall not have a Purchaser
Material Adverse Effect (“FCPA Material Adverse Effect”); provided, however,
that each of the Seller, the Company and the Responsible Party acknowledges and
agrees that the occurrence of one or more of the following outcomes arising out
of the FCPA Matter shall not constitute a FCPA Material Adverse Effect: (A) the
termination of employment of one or more employees of Purchaser or any of its
Subsidiaries, (B) the filing of civil or criminal charges, or the imposition of
fines, against one or more employees of Purchaser or any of its Subsidiaries, or
(C) the interruption, shutdown or discontinuation of Latin Node, Inc. and/or the
Honduran operations of Latin Node, Inc., a Subsidiary of Purchaser.

Each of Seller, the Company and the Responsible Party may waive any condition
specified in this Section 7(b) if he or it delivers to Purchaser a writing so
stating at or prior to the Closing.

(c) Provisions Applicable to a FCPA Material Adverse Effect.

(i) If, in the reasonable judgment of the Responsible Party, the outcome of the
FCPA Matter as disclosed in the Completed FCPA Matter Form 8-K has a FCPA
Material Adverse Effect, the Responsible Party promptly (but in any event within
ten (10) days after the filing of the Completed FCPA Matter Form 8-K by
Purchaser) shall provide written notice of his

 

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determination to Purchaser (the “Responsible Party MAE Notice”). Within ten
(10) days of Purchaser’s receipt of the Responsible Party MAE Notice (the
“Purchaser Election Period”), Purchaser may irrevocably elect to substitute cash
for the Elandia Shares (as defined in the LLC Agreement) required to be issued
to the Responsible Party pursuant to Sections 11.13 or 11.14 of the LLC
Agreement (the “Purchaser Irrevocable Cash Election”) and shall provide written
notice of same to the Responsible Party within such ten (10) day period (the
“Purchaser Irrevocable Cash Election Notice”).

(ii) Notwithstanding anything to the contrary set forth in this Agreement, in
the event that Purchaser receives the Responsible Party MAE Notice and Purchaser
delivers to the Responsible Party the Purchaser Irrevocable Cash Election
Notice, the FCPA Material Adverse Effect shall, for purposes of this Agreement,
be deemed cured and of no further force and effect, and none of Seller, the
Company or the Responsible Party shall seek to terminate this Agreement or be
entitled to fail or refuse to close the transactions contemplated by this
Agreement on the basis that (A) the closing condition set forth in
Section 7(b)(x) above is not satisfied, (B) the existence of, outcomes
(potential or otherwise) arising out of, or resolution of, the FCPA Matter
constitute a Material Adverse Effect for which Seller, the Company and/or the
Responsible Party should be entitled to relief, (C) any of Seller, the Company
or the Responsible Party is entitled to the remedy of rescission or to otherwise
cancel or terminate this Agreement under federal or state securities laws,
(D) any of Seller, the Company or the Responsible Party has been fraudulently
induced to enter into this Agreement and that such party would not have entered
into this Agreement had such party known more about the FCPA Matter or the
outcomes arising out of the investigation thereof and/or the recommendations
related thereto, (E) Purchaser did not provide Seller, the Company or the
Responsible Party accurate or complete information regarding the FCPA Matter
(unless Seller, the Company or the Responsible Party can show that Purchaser’s
disclosure with respect to the FCPA Matter as of the date hereof is, on balance,
materially inaccurate or misleading), or (F) claims or arguments similar to
those set forth in any of the foregoing clauses (A) through (F) exist
(collectively, the “FCPA Matter Claims”).

(iii) If Purchaser (A) receives the Responsible Party MAE Notice, and
(B) (1) fails to deliver the Purchaser Irrevocable Cash Election Notice to the
Responsible Party within the Purchaser Election Period, or (2) delivers written
notice to the Responsible Party that Purchaser does not wish to make any
election with respect to the type of consideration it would deliver pursuant to
Sections 11.13 or 11.14 of the LLC Agreement (the “No Election Notice”), then,
Seller, the Company and the Responsible Party shall be deemed to have waived all
FCPA Matter Claims unless the Responsible Party shall have delivered written
notice to Purchaser, within ten (10) days of the expiration of the Purchaser
Election Period or the date on which the Purchaser is deemed to have delivered
the No Election Notice, that it will not waive the closing condition set forth
in Section 7(b)(x) above.

(iv) Notwithstanding anything to the contrary set forth in this Agreement, any
determination by Seller, the Company or the Responsible Party that the FCPA
Matter or any outcomes related thereto constitute a FCPA Material Adverse Effect
is subject to challenge by Purchaser and the mere determination thereof by
Seller, the Company or the Responsible Party shall not be dispositive.

 

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(v) The provisions of this Section 7(c) supersede any contrary provisions
contained in the LLC Agreement.

Section 8. Remedies for Breaches of this Agreement.

(a) Survival of Representations and Warranties. The representations and
warranties of the Responsible Party, Seller and the Company contained in
Section 3(a) and Section 4 above shall survive the Closing hereunder (even if
Purchaser knew or had reason to know of any misrepresentation or breach of
warranty at the time of Closing) and continue in full force and effect for a
period of three (3) years thereafter; provided, however that the representations
and warranties set forth in Sections 3(a)(i)-(iii) and Section 4(a) shall
survive indefinitely and the representations and warranties set forth in
Sections 4(m), 4(x) and 4(aa) shall survive for the applicable statute of
limitations (after giving effect to any extensions or waivers) plus sixty
(60) calendar days. The representations and warranties of Purchaser contained in
Section 3(b) above shall survive the Closing hereunder (even if the Company knew
or had reason to know of any misrepresentation or breach of warranty at the time
of Closing) and continue in full force and effect for a period of three
(3) years thereafter; provided, however that the representations and warranties
set forth in Sections 3(b)(i), (iii), (viii) and (ix) shall survive
indefinitely.

(b) Indemnification Provisions for Purchaser’s Benefit. Subject to the
limitations on indemnification set forth in this Section 8, the Responsible
Party agrees to indemnify Purchaser and its officers, directors, employees,
agents, partners, stockholders and Affiliates and, following the Closing,
Seller, the Company and its Subsidiaries (collectively, the “Purchaser
Indemnified Parties”) for, and hold each Purchaser Indemnified Party harmless
from and against: (x) any Adverse Consequences (without any rights of
contribution or indemnification from Seller, the Company or any Subsidiary
whether arising under any charter documents, contracts between the Company
and/or Subsidiaries and the Responsible Party or otherwise), in each case,
arising out of or suffered or incurred in connection with any of the following,
whether or not involving a third party claim:

(i) any misrepresentation or any breach of any warranty made by Seller, the
Company or the Responsible Party herein or in any of the other Primary Company
Documents;

(ii) any breach or non-fulfillment of any covenant or agreement made by Seller,
the Company or the Responsible Party herein or in any of the other Primary
Company Documents, including, without limitation, any breach by the Responsible
Party under the Non-Compete Agreement;

(iii) any claim relating to or arising out of a violation of applicable federal
or state securities laws by Seller in connection with the sale or issuance of
the Series A Preferred Units by Seller to Purchaser;

 

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(iv) except for (1) the Liabilities set forth on the face of the Most Recent
Balance Sheet (rather than in any notes thereto) and (2) the Liabilities that
have arisen after the Most Recent Fiscal Month End in the Ordinary Course of
Business (none of which results from, arises out of, relates to, is in the
nature of, or was caused by any breach of contract, breach of warranty, tort,
infringement, or violation of law):

(A) any Liability of the Company or any of its Subsidiaries under any
Environmental, Health, and Safety Requirements arising prior to the Closing;

(B) any Liability arising out of the ownership or operation of any of the assets
or businesses of the Company or any of its Subsidiaries prior to the Closing;

(C) any Liability of the Company or any of its Subsidiaries arising prior to the
Closing under ERISA or under any Employee Benefit Plan, Employee Pension Benefit
Plan or Employee Welfare Benefit Plan; or

(D) any successor liability attributable to the acts, omissions, business or
operations of the Company, any of its Subsidiaries or any of their respective
managers, officers, employees, agents or independent contractors prior to the
Closing; or

(v) any lawsuit, claim, proceeding or investigation pending or threatened
against Seller, the Company or any of its Subsidiaries prior to the Closing.

To the extent that the foregoing undertaking by the Responsible Party may be
unenforceable for any reason, the Responsible Party shall make the maximum
contribution to the payment and satisfaction of each of Purchaser’s Adverse
Consequences which is permissible under applicable law, subject to the
limitations on indemnification set forth in this Section 8. The Responsible
Party agrees that with respect to the payment of the Purchaser Indemnified
Parties’ Adverse Consequences to the Purchaser Indemnified Parties, Purchaser
shall, in addition to other remedies, be entitled to offset as payment for such
Adverse Consequences any portion or all of any payment due pursuant to the LLC
Agreement.

(c) Indemnification Provisions for the Responsible Party’s Benefit. Subject to
the limitations on indemnification set forth in this Section 8, Purchaser agrees
to indemnify the Responsible Party, Seller, the Company and their respective
officers, directors, employees, agents, partners, shareholders, members and
Affiliates (collectively, the “Company Indemnified Parties”) for, and hold each
Company Indemnified Party harmless from and against any and all Adverse
Consequences (all of which expenses periodically shall be reimbursed as
incurred), in each case, arising out of or suffered or incurred in connection
with any of the following, whether or not involving a third party claim:

(i) any misrepresentation or any breach of any warranty made by Purchaser herein
or in any of the other Primary Company Documents;

 

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(ii) any breach or non-fulfillment of any covenant or agreement made by
Purchaser herein or in any of the other Primary Company Documents; or

(iii) any claim relating to or arising out of a violation of applicable federal
or state securities laws by Purchaser in connection with the sale or issuance of
the Series A Preferred Units by Seller to Purchaser.

To the extent that the foregoing undertaking by Purchaser may be unenforceable
for any reason, Purchaser shall make the maximum contribution to the payment and
satisfaction of each of the Company’s Adverse Consequences which is permissible
under applicable law, subject to the applicable limitations set forth in this
Section 8.

(d) Matters Involving Third Parties.

(i) If any third party notifies any Party (the “Indemnified Party”) with respect
to any matter (a “Third-Party Claim”) that may give rise to a claim for
indemnification against any other Party (the “Indemnifying Party”) under this
Section 8, then the Indemnified Party shall promptly notify each Indemnifying
Party thereof in writing; provided, however, that no delay on the part of the
Indemnified Party in notifying any Indemnifying Party shall relieve the
Indemnifying Party from any obligation hereunder unless (and then solely to the
extent) the Indemnifying Party is thereby prejudiced.

(ii) Any Indemnifying Party will have the right to defend the Indemnified Party
against the Third-Party Claim with counsel of his or its choice satisfactory to
the Indemnified Party so long as (A) the Indemnifying Party notifies the
Indemnified Party in writing within twenty (20) days after the Indemnified Party
has given notice of the Third-Party Claim that the Indemnifying Party will
indemnify the Indemnified Party from and against the entirety of any Adverse
Consequences the Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third-Party Claim, (B) the
Indemnifying Party provides the Indemnified Party with evidence acceptable to
the Indemnified Party that the Indemnifying Party will have the financial
resources to defend against the Third-Party Claim and fulfill its
indemnification obligations hereunder, (C) the Third-Party Claim involves only
money damages and does not seek an injunction or other equitable relief,
(D) settlement of, or an adverse judgment with respect to, the Third-Party Claim
is not, in the good faith judgment of the Indemnified Party, likely to establish
a precedential custom or practice adverse to the continuing business interests
or the reputation of the Indemnified Party, and (E) the Indemnifying Party
conducts the defense of the Third-Party Claim actively and diligently.

(iii) So long as the Indemnifying Party is conducting the defense of the
Third-Party Claim in accordance with Section 8(d)(ii) above, (A) the Indemnified
Party may retain separate co-counsel at his or its sole cost and expense and
participate in the defense of the Third-Party Claim, (B) the Indemnified Party
will not consent to the entry of any judgment on or enter into any settlement
with respect to the Third-Party Claim without the prior written consent of the
Indemnifying Party (not to be unreasonably withheld), and (C) the Indemnifying
Party will not consent to the entry of any judgment on or enter into any
settlement with respect to the Third-Party Claim without the prior written
consent of the Indemnified Party (not to be unreasonably withheld).

 

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(iv) In the event any of the conditions in Section 8(d)(ii) above is or becomes
unsatisfied, however, (A) the Indemnified Party may defend against, and consent
to the entry of any judgment on or enter into any settlement with respect to,
the Third-Party Claim in any manner he or it may deem appropriate (and the
Indemnified Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith), (B) the Indemnifying Parties will
reimburse the Indemnified Party promptly and periodically for the costs of
defending against the Third-Party Claim (including attorneys’ fees and
expenses), and (C) the Indemnifying Parties will remain responsible for any
Adverse Consequences the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third-Party Claim to the
fullest extent provided in this Section 8.

(e) Limitations on Indemnification Obligations. Notwithstanding anything to the
contrary contained in this Agreement, the obligation of the Parties to indemnify
each other under Sections 8(b) and 8(c), respectively, will be subject to the
following limitations:

(i) Limitation on Responsible Party’s Indemnification Obligations.

(A) The Responsible Party shall not have any obligation to indemnify the
Purchaser Indemnified Parties from or against any Adverse Consequences resulting
from any matter for which indemnification exists as provided in Section 8(b)(i)
and 8(b)(iii) through (v) above, until the Purchaser Indemnified Parties have
suffered Adverse Consequences in excess of US $317,500 in the aggregate (after
which amount the Responsible Party will be obligated to indemnify and hold the
Purchaser Indemnified Parties harmless with respect to only those Adverse
Consequences in excess of US $317,500)(the “Alvarado Indemnification
Deductible”). Further, in determining Adverse Consequences for purposes of the
Alvarado Indemnification Deductible, any qualifications of any representation or
warranty with respect to “materiality,” “material,” “Material Adverse Change,”
“Material Adverse Effect” or any similar qualification, shall be disregarded.
Notwithstanding any of the preceding provisions of this Section 8(e)(i), the
Alvarado Indemnification Deductible shall not apply to any breach (or alleged
breach) of any representation or warranty contained in Sections 3(a)(i),
3(a)(ii), 4(a), 4(b), 4(c) and 4(e) or any fraudulent or intentional
misrepresentation or omission with respect to any of the representations and
warranties contained in Sections 3(a) and 4, and the Responsible Party shall
indemnify and hold the Purchaser Indemnified Parties harmless against all
Adverse Consequences (from the first dollar) that the Purchaser Indemnified
Parties may suffer resulting from, arising out of, relating to, in the nature
of, or caused by any one or more of such breaches.

(B) The maximum amount for which the Responsible Party shall be required to
indemnify and hold Purchaser harmless for breaches of representations and
warranties under Sections 8(b)(i) and 8(b)(iii) through (v) above (other than

 

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any breach (or alleged breach) of any representation or warranty contained in
Sections 3(a)(i), 3(a)(ii), 4(a), 4(b), 4(c) and 4(e) or any fraudulent or
intentional misrepresentation or omission with respect to any of the
representations and warranties contained in Sections 3 and 4) shall be US
$10,750,000 (the “Alvarado Indemnification Cap”). For the purposes of this
Section 8(e)(i), the Parties agree that the value of the Common Units shall be
$3.53 per Common Unit.

(C) The Parties acknowledge and agree that the neither the Alvarado
Indemnification Deductible nor the Alvarado Indemnification Cap shall apply to
any Adverse Consequences incurred by the Purchaser Indemnified Parties under
Section 8(b)(ii).

(ii) Limitation on Purchaser’s Indemnification Obligations.

(A) Purchaser shall not have any obligation to indemnify the Company Indemnified
Parties from or against any Adverse Consequences resulting from any matter for
which indemnification exists as provided in Sections 8(c)(i) and 8(c)(iii)
above, until the Company Indemnified Parties have suffered Adverse Consequences
in excess of US $57,500 in the aggregate (after which amount Purchaser will be
obligated to indemnify and hold the Company Indemnified Parties harmless with
respect to only those Adverse Consequences in excess of US $57,500)(the
“Purchaser Indemnification Deductible”). Further, in determining Adverse
Consequences for purposes of the Purchaser Indemnification Deductible, any
qualifications of any representation or warranty with respect to “materiality,”
“material,” “material adverse change,” “material adverse effect” or any similar
qualification, shall be disregarded. Notwithstanding any of the preceding
provisions of this Section 8(e)(ii), the Purchaser Indemnification Deductible
shall not apply to any breach (or alleged breach) of any representation or
warranty contained in Sections 3(b)(i), 3(b)(iii), 3(b)(viii) and 3(b)(ix) or
any fraudulent or intentional misrepresentation or omission with respect to any
of the representations and warranties contained in Section 3(b), and Purchaser
shall indemnify and hold the Company Indemnified Parties harmless against all
Adverse Consequences (from the first dollar) that the Company Indemnified
Parties may suffer resulting from, arising out of, relating to, in the nature
of, or caused by any one or more of such breaches.

(B) The maximum amount for which Purchaser shall be required to indemnify and
hold the Company Indemnified Parties harmless for breaches of representations
and warranties under Sections 8(c)(i) and 8(c)(iii) above (other than any breach
(or alleged breach) of any representation or warranty contained in Sections
3(b)(i), 3(b)(iii), 3(b)(viii) and 3(b)(ix) or any fraudulent or intentional
misrepresentation or omission with respect to any of the representations and
warranties contained in Section 3(b)) shall be equal to US $5,750,000 (the
“Purchaser Indemnification Cap”).

 

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(C) The Parties acknowledge and agree that the neither the Purchaser
Indemnification Deductible nor the Purchaser Indemnification Cap shall apply to
any Adverse Consequences incurred by the Company Indemnified Parties under
Section 8(c)(ii) above.

(f) Purchaser Indemnification Procedure. Subject to the limitations contained in
this Section 8, any claim (a “Claim”) for indemnification by Purchaser under
this Section 8 shall be resolved in the manner set forth in this Section 8(f),
as follows:

(i) Promptly on becoming aware of any circumstances which have given or could
give rise to a Claim, Purchaser shall provide the Responsible Party and the
Escrow Agent with a certificate in writing (a “Claim Certificate”) setting forth
in reasonable detail the basis of such Claim in respect of which payment
pursuant to this Section 8 is then being sought and the amount to be paid in
respect thereof.

(ii) Following receipt of the Claim Certificate, the Responsible Party shall
have 30 days to make such investigation of the Claim as is considered necessary
or desirable. For the purpose of that investigation, Purchaser shall make
available to the Responsible Party the information relied on by Purchaser to
substantiate the Claim, together with such information as the Responsible Party
may reasonably request.

(iii) If the Parties agree at or prior to the expiration of such 30-day period
(or agree to any extension of this period) to the validity and amount of the
Claim, then the Parties will instruct the Escrow Agent to disburse the agreed
amount to be paid with respect to such Claim (the “Agreed Amount”) from the
Escrow Fund in the priority set forth in Section 8(g).

(iv) In the event the Responsible Party does not dispute a Claim within 30 days
after the delivery of the Claim Certificate, then the Claim will be deemed to be
accepted by each of the Responsible Party. In such event the Escrow Agreement
will provide that the Escrow Agent is authorized to disburse the amount of such
Claim from the Escrow Fund, in the priority set forth in Section 8(g).

(v) In the event the Responsible Party disputes all or a portion of a Claim and
the Parties are unable to reach an agreement regarding within 30 days after the
Responsible Party’s receipt of the Claim Certificate, then the Claim will be
submitted to binding arbitration as provided in Section 10(t) of this Agreement.
Upon receipt by either the Responsible Party or Purchaser of the final written
determination of such claim by the arbitrator (the “Final Decision”), the
Responsible Party or Purchaser (as the case may be) shall deliver the Final
Decision to Escrow Agent, with instructions to disburse the amount specified in
the Final Decision from the Escrow Fund, in the priority set forth in
Section 8(g). In any arbitration, the arbiters will take into consideration the
amount of any limitations on indemnification set forth in this Section 8.

 

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(g) Payment of Purchaser Claims.

(i) In the event that Purchaser is entitled to any payment with respect to any
Claim pursuant to the provisions of Section 8(f) (a “Required Payment”) then
such payment will be made from the Escrow Fund in the following order of
priority:

(A) First, by either (1) delivering to Purchaser certificates evidencing such
number of Elandia Shares constituting the Put/Call Consideration as are equal in
value to the amount of the Required Payment, or (2) pursuant to and in
accordance with Section 11.4 of the LLC Agreement, offsetting the amount of the
Required Payment against the 1,150,000 Elandia Shares required to be issued to
the Responsible Party under the LLC Agreement. For the purpose of this
Section 8(g)(i)(A), the value of an Elandia Share shall be the fair market value
of the Elandia Shares as of the date hereof, which the Parties agree is $5.00 on
a per Elandia Share basis;

(B) Second, by delivering to Purchaser certificates evidencing such number of
Common Units beneficially owned by the Responsible Party or his transferees as
are equal in value to the amount of the Required Payment, less the amounts paid
to Purchaser for any Claims under Section 8(g)(i)(A) above. For the purpose of
this Section 8(g)(i)(B), the value of a Common Unit shall be the fair market
value of the Common Units as of the date hereof, which the Parties agree is
$3.53 on a per Common Unit basis; provided, that if any of the Common Units has
been sold in a manner permitted by the terms of the Escrow Agreement, then the
Required Payment will be paid from the Common Units evidenced by the unit
certificates issued in the name of the transferee or transferees and held by the
Escrow Agent as required under Section 6(j) hereof; and

(C) Third, by delivering to Purchaser cash in the amount of the Required
Payment, less the amounts paid to Purchaser for any Claims under
Section 8(g)(i)(A) and (B) above.

(ii) In the event that the Escrow Fund is insufficient to cover the full amount
of any Required Payment, and subject to the limitations set forth in
Section 8(e) above, the Responsible Party shall be liable for, and obligated to
pay, the balance of the Required Payment.

(iii) Notwithstanding the foregoing, (i) if all or any portion of the Escrowed
Units have been transferred to a third party in violation of the terms of the
Escrow Agreement, the portion of the Required Payment exceeding the value of the
Common Units shall be paid by the Responsible Party in cash, and
(ii) notwithstanding Section 8(g) to the contrary, the Responsible Party shall
be entitled (at his option) to pay any Required Payment hereunder in cash.

(h) Release of Escrow Fund. Notwithstanding anything to the contrary contained
herein, the Escrow Agreement will provide that the Escrow Agent shall release
from escrow the Escrow Fund (including all Common Units and all cash
consideration held in connection with the sale of such units), which is not
subject to any pending Claims by Purchaser, on the third anniversary of the
Closing Date.

 

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(i) Exclusive Remedies; Other Indemnification Provisions. Notwithstanding
anything to the contrary contained in this Agreement:

(i) The remedies provided in this Article 8 constitute the sole and exclusive
remedies available to each Party hereto for recoveries against another Party
hereto for breaches or failures to comply with or non-fulfillment of the
representations, warranties, covenants and agreements in this Agreement, except
that nothing in this Agreement shall limit the right of any Party to pursue any
appropriate remedy at equity (including, without limitation, specific
performance pursuant to Section 10(o)) or any appropriate remedy based upon
allegations of fraud in connection with this Agreement.

(ii) The Responsible Party agrees that he will not make any claim for
indemnification against the Company by reason of the fact that he was a manager
or managing-member of the Company or any of its Subsidiaries or was serving at
the request of the Company or any of its Subsidiaries as a partner, trustee,
manager or agent of another entity (whether such claim is for judgments,
damages, penalties, fines, costs, amounts paid in settlement, losses, expenses,
or otherwise and whether such claim is pursuant to any statute, charter
document, operating agreement, bylaw, agreement, or otherwise) with respect to
any action, suit, proceeding, complaint, claim, or demand brought by Purchaser
against Seller, the Company or the Responsible Party (whether such action, suit,
proceeding, complaint, claim, or demand is pursuant to this Agreement,
applicable law, or otherwise). Any indemnification payable in accordance with
this Section 8 shall be net of cash amounts actually recovered (after deducting
related costs and expenses) by the indemnified party for Adverse Consequences
for which such indemnification payment is made under any insurance policy,
warranty or indemnity from any person other than a party to this Agreement.

(iii) Each Party agrees to use, and to cause Seller, Purchaser, the Company and
its Subsidiaries to use, commercially reasonable efforts to obtain the benefits
of any insurance coverage, warranty or indemnity from any other party with
respect to any matter that might give rise to a claim for indemnification under
this Agreement, and all costs and expenses incurred by the indemnified party in
connection therewith, whether or not such claim is ultimately paid by any such
third party pursuant to insurance, warranty or indemnity, shall be added to the
indemnification claim.

Section 9. Termination.

(a) Termination of Agreement. Certain of the Parties may terminate this
Agreement as provided below:

(i) Purchaser and the Company may terminate this Agreement by mutual written
consent at any time prior to the Closing;

(ii) Purchaser may terminate this Agreement by giving written notice to the
Company at any time prior to the Closing: (A) in the event the Company or the
Responsible Party has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, Purchaser has
notified the Company of the breach, and the breach has

 

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continued without cure for a period of 30 days after the notice of breach, or
(B) if the Closing shall not have occurred on or before December 15, 2007, by
reason of the failure of any condition precedent under Section 7(a) hereof
(unless the failure results primarily from Purchaser itself breaching any
representation, warranty, or covenant contained in this Agreement); and

(iii) the Company may terminate this Agreement by the Company giving written
notice to Purchaser at any time prior to the Closing: (A) in the event Purchaser
has breached any material representation, warranty, or covenant contained in
this Agreement in any material respect, the Company has notified Purchaser of
the breach, and the breach has continued without cure for a period of 30 days
after the notice of breach, or (B) if the Closing shall not have occurred on or
before December 15, 2007, by reason of the failure of any condition precedent
under Section 7(b) hereof (unless the failure results primarily from the Company
or the Responsible Party breaching any representation, warranty, or covenant
contained in this Agreement).

(b) Effect of Termination. If any Party terminates this Agreement pursuant to
Section 9(a) above, all rights and obligations of the Parties hereunder shall
terminate without any Liability of any Party to any other Party, except for any
Liability of any Party then in breach and for the rights set forth in Sections
9(c) and (d) below.

(c) Purchaser’s Right of First Refusal.

(i) If (A) this Agreement fails to close by December 15, 2007, and is terminated
under Section 9(a)(iii)(B) above, as a result of Seller, the Company and the
Responsible Party choosing not to close the transactions contemplated by this
Agreement as a result of the FCPA Material Adverse Effect, and (B) during the
Purchaser ROFR Period, the Company, the Company’s Subsidiaries, the Responsible
Party or any of their respective Representatives entertain, solicit or consider
any proposal or offer from or to any Person relating to a possible Acquisition
Transaction, and decide to accept such offer or proposal, then Purchaser shall
have a right of first refusal (the “Purchaser ROFR”) to enter into such
Acquisition Transaction with the Company, the Company’s Subsidiaries or the
Responsible Party upon the same economic terms and conditions set forth in the
Purchaser ROFR Notice (as defined below).

(ii) If the Company, the Company’s Subsidiaries, the Responsible Party or any of
their respective Representatives entertain, solicit or consider any proposal or
offer from or to any Person relating to a possible Acquisition Transaction
during the Purchaser ROFR Period, and determine to accept any such proposal or
offer, the Company shall deliver to Purchaser a written notice containing the
exact terms of such offer or proposal (the “Purchaser ROFR Notice”). If
Purchaser desires to exercise its Purchaser ROFR, Purchaser shall send written
notice to the Company and the Responsible Party (the “Purchaser ROFR Exercise
Notice”) within twenty (20) days following Purchaser’s receipt of the Purchaser
ROFR Notice.

(iii) The closing of the proposed Acquisition Transaction between Purchaser and
the Company, the Company’s Subsidiaries and/or the Responsible Party pursuant to
the terms of the Purchaser ROFR Notice shall be subject to the completion

 

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of due diligence by Purchaser and the negotiation and execution of a definitive
agreement in form and content acceptable to Purchaser and the Company and/or the
Responsible Party; provided, however, that all such due diligence and
negotiations shall be completed, and such closing shall take place, no later
than ninety (90) days following the Company’s or the Responsible Party’s receipt
of the Purchaser ROFR Exercise Notice.

(iv) If Purchaser notifies the Company or the Responsible Party of its election
not to proceed with the Acquisition Transaction, or Purchaser fails to deliver
to the Company and the Responsible Party the Purchaser ROFR Exercise Notice
within the required 45-day period, the Company and the Responsible Party shall
be entitled to enter into the Acquisition Transaction with the Person that made
or received such original offer or proposal. If for any reason the Acquisition
Transaction with such Person fails to close within ninety (90) days following
such 45-day period, then the Company and the Responsible Party shall remain
subject to this Section 9(c) and the Purchaser ROFR shall attach to any further
proposal or offer related to an Acquisition Transaction which the Company and/or
the Responsible Party decides to accept. This Section 9(c) shall survive the
termination of this Agreement.

(d) Termination Fee.

(i) If (A) Seller, the Company and the Responsible Party have fulfilled (or are
ready, able and willing to fulfill at Closing) all of their respective
conditions precedent under Section 7(a), except for Section 7(a)(xx), (xxi) or
(xxii), and (B) Purchaser terminates this Agreement under Section 9(a)(ii)(B)
above as a result of the non-fulfillment of one or more of the conditions
precedent set forth in Section 7(a)(xx), (xxi) or (xxii), then Purchaser shall
pay to the Company on the Maturity Date the non-refundable amount of Two Hundred
Fifty Thousand Dollars (US $250,000), payable at the sole option of Purchaser,
(i) in cash by wire transfer of immediately available funds, or (ii) as an
offset against the interest that has accrued and is payable to Purchaser under
the Bridge Loan.

(ii) Purchaser acknowledges and agrees that, solely for purposes of this
Section 9(d), Seller, the Company and the Responsible Party shall be deemed to
have satisfied all of their respective conditions precedent unless they (or any
of them) shall have breached, in any material respect, any material
representation, warranty or covenant, or failed to satisfy any material
condition precedent.

(e) Confidentiality.

(i) Neither Party will at any time on or after the date hereof, directly or
indirectly, without the prior written consent of the other Party, disclose any
Confidential Information involving or relating to the other Party or the other
Party’s Subsidiaries or business, or use such Confidential Information for any
purpose other than the evaluation of the transaction contemplated by this
Agreement. Notwithstanding anything to the contrary contained herein, the
obligations set forth in this Section 9(d) shall (a) automatically terminate and
become null and void with respect to both Parties upon the consummation of the
Closing, and

 

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(b) survive and remain in effect after the termination of this Agreement. As
used herein, “Confidential Information” means all confidential or proprietary
information of either Party and its Subsidiaries, including: (1) customer and
supplier information, including lists of names and addresses of customers and
suppliers of such Party, its Subsidiaries or its Affiliates, (2) business plans
and strategies, compensation plans, compensation information, sales plans and
strategies, pricing and other terms applicable to transactions between existing
and prospective customers, suppliers or business associates, (3) market research
and data bases, sources of leads and methods of obtaining new business, and
methods of purchasing, marketing, selling, performing and pricing products and
services employed by such Party or any of its Affiliates or Subsidiaries,
(4) information concerning the configuration and architecture, technical data,
networks, methods, practices, standards and capacities, software or technology
of such Party and (5) information identified as confidential and/or proprietary
in internal documents of such Party; provided, however, that Confidential
Information shall not include any information generally available to, or known
by, the public (other than as a result of disclosure in violation hereof).

Section 10. General Provisions.

(a) Investigation. All of the representations, warranties, covenants and
agreements of Seller, the Company and the Responsible Party, on the one hand,
and Purchaser, on the other hand, contained or incorporated herein shall remain
effective in accordance with their respective terms notwithstanding any
investigation at any time made by or on behalf of Purchaser or the Company (as
the case may be) or of any information or facts discovered by or on behalf of
Purchaser or the Company (as the case may be) in connection with such
investigation. Any such investigation shall not constitute a waiver or
relinquishment on the part of any Party of such Party’s right to rely on any of
the warranties, representations, covenants and agreements of the Company or
Purchaser (as the case may be) in or pursuant to this Agreement.

(b) Press Releases and Public Announcements. No Party shall issue any press
release or make any public announcement relating to the subject matter of this
Agreement without the prior written approval of Purchaser and the Company.

(c) No Third-Party Beneficiaries. This Agreement shall not confer any rights or
remedies upon any Person other than the Parties and their respective successors
and permitted assigns.

(d) Entire Agreement. This Agreement (including the Primary Company Documents,
any certificate, schedule, exhibit or other document delivered pursuant to its
terms herein) constitutes the entire agreement among the Parties and supersedes
any prior understandings, agreements, or representations by or among the
Parties, written or oral, to the extent they relate in any way to the subject
matter hereof.

(e) Succession and Assignment. This Agreement shall be binding upon and inure to
the benefit of the Parties named herein and their respective successors and
permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of Purchaser and the Company; provided, however, that Purchaser may

 

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(i) assign any or all of its rights and interests hereunder to one or more of
its Affiliates, and (ii) designate one or more of its Affiliates to perform its
obligations hereunder (in any or all of which cases Purchaser nonetheless shall
remain responsible for the performance of all of its obligations hereunder),
without the consent of the other Parties hereto.

(f) Counterparts. This Agreement may be executed in one or more counterparts
(including by means of facsimile and electronic transmission), each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.

(g) Headings. The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.

(h) Notices. All notices, requests, demands, claims, and other communications
hereunder shall be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given (i) when delivered personally
to the recipient, (ii) two (2) Business Days after being sent to the recipient
by a reputable internationally recognized overnight courier service (charges
prepaid), (iii) upon receipt of confirmation of an error-free facsimile
transmission after being sent to the recipient by facsimile; provided, that a
copy of such confirmation is mailed by certified mail, return receipt requested
(postage prepaid), or (iv) upon receipt of electronic mail; provided, that a
copy thereof is sent by mail (as aforesaid) within 24 hours of such electronic
mail, and addressed to the intended recipient as set forth below:

 

  (i) If to Seller or the Company:

Bella Durmiente, LLC

8200 N.W. 52nd Terrace, Suite 110

Miami, Florida 33166

Attn: Jorge Alvarado, Chief Executive Officer

Telephone: (305) 406-1091 Ext. 58923

Facsimile: (305) 402-3128

Email: jalvarado@desca.com

with a copy to:

Shutts & Bowen LLP

1500 Miami Center

201 South Biscayne Boulevard

Miami, Florida 33131

Attn: Luis de Armas, Esq.

Telephone: (305) 379-9114

Facsimile: (305) 347-7814

Email: ldearmas@shutts.com

 

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  (ii) If to the Responsible Party, to:

Jorge Alvarado

13601 SW 84th Court

Miami, Florida 33158

Telephone: (786) 201-2421

Email: jalvarado@desca.com

with a copy to:

Shutts & Bowen LLP

1500 Miami Center

201 South Biscayne Boulevard

Miami, Florida 33131

Attn: Luis de Armas, Esq.

Telephone: (305) 379-9114

Facsimile: (305) 347-7814

Email: ldearmas@shutts.com

 

  (iii) if to Purchaser, to

Elandia, Inc.

1500 Cordova Road, Suite 312

Ft. Lauderdale, Florida 33316

Attn: Harry Hobbs, Chief Executive Officer

Telephone: (954) 728-9090 Ext. 225

Facsimile: (954) 728-9090

Email: hghobbs@elandiainc.com

with a copy to:

Elandia, Inc.

1500 Cordova Road, Suite 312

Ft. Lauderdale, Florida 33316

Attn: Laura Janke Jaeger, General Counsel

Telephone: (954) 728-9090

Facsimile: (954) 728-9090

Email: ljjaeger@elandiainc.com

 

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and

Carlton Fields, P.A.

4000 International Place

100 Southeast Second Street

Miami, Florida 33131

Attn: Seth P. Joseph, Esq.

Telephone: (305) 530-0050

Facsimile: (305) 530-0055

Email: sjoseph@carltonfields.com

Any Party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
Parties notice in the manner herein set forth.

(i) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Florida without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Florida or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Florida.

(j) Amendments and Waivers. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by Purchaser, the
Company and the Responsible Party. No waiver by any Party of any provision of
this Agreement or any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be valid unless the same
shall be in writing and signed by the Party making such waiver nor shall such
waiver be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any prior or subsequent such default,
misrepresentation, or breach of warranty or covenant.

(k) Severability. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.

(l) Fees, Costs and Expenses. Each of the Company and Purchaser shall bear its
own costs, including attorney’s fees, incurred in the negotiation of this
Agreement and consummating of the transactions contemplated herein and the
corporate proceedings of the Company in contemplation hereof and thereof.

(m) Construction. The Parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word “including” shall
mean including without limitation. The Parties intend that each representation,
warranty, and covenant contained herein shall have independent significance.

 

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If any Party has breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter (regardless of the
relative levels of specificity) that the Party has not breached shall not
detract from or mitigate the fact that the Party is in breach of the first
representation, warranty, or covenant. Words of any gender shall include each
other gender. Words in the singular shall include the plural and words in the
plural shall include the singular.

(n) Incorporation of Exhibits, Annexes, and Disclosure Schedule. The Exhibits,
Annexes, and Disclosure Schedule identified in this Agreement are incorporated
herein by reference and made a part hereof.

(o) Specific Performance. Each Party acknowledges and agrees that the other
Parties would be damaged irreparably in the event any provision of this
Agreement is not performed in accordance with its specific terms or otherwise is
breached, so that a Party shall be entitled to injunctive relief to prevent
breaches of this Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in addition to any other remedy to which such Party
may be entitled, at law or in equity. In particular, the Parties acknowledge
that the business of the Company is unique and recognize and affirm that in the
event the Company or the Responsible Party breaches this Agreement, money
damages would be inadequate and Purchaser would have no adequate remedy at law,
so that Purchaser shall have the right, in addition to any other rights and
remedies existing in its favor, to enforce its rights and the other Parties’
obligations hereunder not only by action for damages but also by action for
specific performance, injunctive, and/or other equitable relief.

(p) Submission to Jurisdiction. Each of the Parties irrevocably consents to the
non-exclusive jurisdiction of the courts of the State of Florida located in the
County of Miami-Dade, and of the United States District Courts for the Southern
District of Florida for the purposes of any suit, action, or proceeding relating
to or arising out of this Agreement (a “Related Proceeding”) and irrevocably
waives, to the fullest extent it may effectively do so, (i) any objection it may
have to the laying of venue of any Related Proceeding in any such court, and
(ii) the defense of forum nonconveniens to the maintenance of any Related
Proceeding in any such court. Each of the Parties acknowledge that Stanford does
not agree to submit to jurisdiction hereunder and each Party agrees and
acknowledges that Stanford is not and shall not be a necessary or indispensable
party to any Related Proceeding. Each Party further agrees not to join Stanford
in any Related Proceeding and hereby waives the right to file any action or
proceeding against Stanford arising out of, related to or in connection with the
Agreement or any transaction arising from this Agreement.

(q) Recordation. This Agreement may not be recorded by any Party hereto without
the prior written consent of the other Party hereto, which such consent may be
withheld by any Party in its sole and absolute discretion.

(r) Attorneys’ Fees. If any action should arise between the Parties hereto to
enforce or interpret the provisions of this Agreement, the prevailing party in
such action shall be reimbursed for all reasonable expenses incurred in
connection with such action, including reasonable attorneys’ fees.

 

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(s) Waiver of Jury Trial. THE PARTIES, BY THEIR EXECUTION OF THIS AGREEMENT,
WAIVE TRIAL BY JURY IN ANY RELATED PROCEEDING. THIS WAIVER IS KNOWINGLY,
WILLINGLY AND VOLUNTARILY MADE BY THE PARTIES, AND THE PARTIES HEREBY REPRESENT
THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON TO
INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS
EFFECT.

(t) Arbitration.

(i) Except as otherwise specifically provided in this Agreement, if any
controversy or dispute arises under, out of or in relation to any of the
provisions hereof which cannot be settled by the Parties within sixty
(60) calendar days after the same shall arise (the Parties hereby agreeing to
use best efforts to communicate in person, by telephone or by letter to discuss
any such controversy or dispute) such controversy or dispute shall be resolved
solely and exclusively by binding arbitration to be conducted before the
American Arbitration Association or its successor (“AAA”). The arbitration shall
be held in Miami, Florida before a panel of three arbitrators with each Party
selecting one and the two selected arbitrators selecting the third and shall be
conducted in accordance with the rules and regulations promulgated by AAA unless
specifically modified therein.

(ii) The Parties covenant and agree that the arbitration shall commence within
one hundred eighty (180) calendar days of the date on which a written demand for
arbitration is filed by any Party hereto. In connection with the arbitration
proceeding, the arbitrator shall have the power to order the production
documents by each Party and any third-party witnesses. In addition, each Party
may take up to three depositions as of right, and the arbitrator may in his or
her discretion allow additional depositions upon good cause shown by the moving
Party. However, the arbitrator shall not have the power to order the answering
of interrogatories or the response to requests for admission. In connection with
any arbitration, each Party shall provide to the other, no later than seven
(7) Business Days before the date of the arbitration, the identity of all
persons that may testify at the arbitration and a copy of all documents that may
be introduced at the arbitration or considered or used by a Party’s witness or
expert. The arbitrator’s decisions and award shall be made and delivered within
six (6) months of the selection of the arbitrator.

(iii) The arbitrator’s decisions shall set forth a reasoned basis for any award
of damages or finding of liability. The arbitrator shall not have power to award
damages in excess of actual compensatory damages and shall not multiply actual
damages or award punitive damages or any other damages that are specifically
excluded under this Agreement, and each Party hereby irrevocably waives any
claim to such damages.

 

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(iv) The Parties covenant and agree that they will participate in the
arbitration in good faith. The arbitrator shall assess costs and expenses
(including the reasonable legal fees and expenses of the prevailing party)
against the non-prevailing party to any proceeding. Any Party unsuccessfully
refusing to comply with an order of the arbitrators shall be liable for costs
and expenses, including attorneys’ fees, incurred by the other Party in
enforcing the award. This Section 10(t) applies equally to requests for
temporary, preliminary or permanent injunctive relief, except that in the case
of temporary or preliminary injunctive relief of any Party may proceed in court
without prior arbitration for the limited purposes of avoiding immediate and
irreparable harm.

(v) The provisions of this Section 10(t) shall be enforceable in any court of
competent jurisdiction. Each of the Parties hereto irrevocably and
unconditionally consents to the exclusive jurisdiction of AAA to resolve all
disputes, claims or controversies arising out of or relating to this Agreement
or the negotiation, validity or performance hereof, and further consents to the
jurisdiction of the courts of the State of Florida for the purposes of enforcing
the arbitration provisions of this Section 10(t). Each Party further irrevocably
waives any objection to proceeding before AAA based upon lack of personal
jurisdiction or to the laying of venue and further irrevocably and
unconditionally waives and agrees not to make a claim in any court that
arbitration before AAA has been brought in an inconvenient forum. Each of the
Parties hereto hereby consents to service of process by registered mail at the
address to which notices are to be given. Each of the Parties hereto agrees that
its or his submission to jurisdiction and its or his consent to service of
process by mail is made.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.

 

SELLER:

BELLA DURMIENTE, LLC,

a Delaware limited liability company

By:

 

/s/ Jorge Alvarado

Name:

  Jorge Alvarado

Title:

  Manager

THE COMPANY:

DESCA HOLDING, LLC,

a Delaware limited liability company

By:

 

/s/ Jorge Alvarado

Name:

  Jorge Alvarado

Title:

  Manager

PURCHASER:

ELANDIA, INC.,

a Delaware corporation

By:

 

/s/ Harley L. Rollins

Name:

  Harley L. Rollins

Title:

  Chief Financial Officer

THE RESPONSIBLE PARTY:

/s/ Jorge Alvarado

Jorge Alvarado, an individual