Exhibit 10.1

STOCK PURCHASE AGREEMENT,

dated as of April 27, 2007,

among

the Stockholders of Coffee Bean Holding Co., Inc.,

Coffee Bean Holding Co., Inc.

and

Farmer Bros. Co.

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TABLE OF CONTENTS

RECITALS

 

 

 

1

 

AGREEMENTS

 

 

 

1

 

ARTICLE I   DEFINITIONS

 

1

 

1.1

 

Definitions

 

1

 

1.2

 

Construction

 

10

 

ARTICLE II   PURCHASE AND SALE

 

10

 

2.1

 

Purchase and Sale

 

10

 

2.2

 

Purchase Price

 

10

 

2.3

 

Closing Date

 

11

 

2.4

 

Closing Deliveries

 

11

 

2.5

 

Net Working Capital Adjustment

 

14

 

2.6

 

Escrow

 

16

 

ARTICLE III   REPRESENTATIONS AND WARRANTIES AS TO THE COMPANY

 

17

 

3.1

 

Organization and Qualification

 

17

 

3.2

 

Authorization

 

18

 

3.3

 

No Violation

 

18

 

3.4

 

Capitalization

 

18

 

3.5

 

Subsidiaries and Equity Investments

 

19

 

3.6

 

Consents and Approvals

 

19

 

3.7

 

Financial Statements

 

19

 

3.8

 

Absence of Undisclosed Liabilities

 

20

 

3.9

 

Absence of Certain Changes

 

20

 

3.10

 

Employee Benefit Plans

 

22

 

3.11

 

Brokers’ Fees and Commissions; Sellers’ Transaction Costs

 

23

 

3.12

 

Contracts

 

24

 

3.13

 

Taxes

 

25

 

3.14

 

Title to Assets

 

25

 

3.15

 

No Violation, Litigation or Regulatory Action

 

26

 

3.16

 

Licenses

 

26

 

3.17

 

Environmental Matters

 

26

 

3.18

 

Other Activities

 

27

 

3.19

 

Availability of Assets

 

27

 

3.20

 

Real Property

 

28

 

3.21

 

Personal Property

 

28

 

3.22

 

Intellectual Property: Software

 

28

 

3.23

 

Accounts Receivable Inventories; Products

 

30

 

3.24

 

Employee Relations

 

31

 

3.25

 

Insurance

 

33

 

3.26

 

Customers and Suppliers

 

33

 

 

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ARTICLE IV   INDIVIDUAL REPRESENTATIONS AND WARRANTIES OF THE SELLERS

 

33

 

4.1

 

Organization and Qualification

 

33

 

4.2

 

Authorization

 

34

 

4.3

 

No Violation

 

34

 

4.4

 

Title to Shares

 

34

 

4.5

 

Consents and Approvals

 

34

 

ARTICLE V   REPRESENTATIONS AND WARRANTIES OF THE BUYER

 

34

 

5.1

 

Organization and Qualification

 

34

 

5.2

 

Authorization

 

35

 

5.3

 

No Violation

 

35

 

5.4

 

Consents and Approvals

 

35

 

5.5

 

Brokers’ Fees and Commissions

 

35

 

5.6

 

Purchase for Investment

 

35

 

ARTICLE VI   COVENANTS OF THE BUYER

 

36

 

6.1

 

Access to Books and Records

 

36

 

ARTICLE VII   COVENANTS OF THE BUYER AND THE SELLERS

 

36

 

7.1

 

Public Announcements

 

36

 

7.2

 

Further Assurances

 

36

 

7.3

 

Tax Matters

 

36

 

ARTICLE VIII   CONDITIONS TO CLOSING

 

40

 

8.1

 

Conditions to Obligation of the Buyer

 

40

 

8.2

 

Conditions to Obligation of the Sellers

 

41

 

ARTICLE IX   INDEMNIFICATION

 

42

 

9.1

 

Survival of Representations, Warranties and Covenants

 

42

 

9.2

 

Indemnification

 

43

 

9.3

 

Limitations on Liability

 

44

 

9.4

 

Notice of Claims

 

45

 

9.5

 

Third Party Claims

 

45

 

9.6

 

Scope of Liability

 

47

 

9.7

 

Characterization of Indemnity Payments

 

47

 

ARTICLE X   MISCELLANEOUS

 

47

 

10.1

 

Notices

 

47

 

10.2

 

Seller Representative

 

49

 

10.3

 

Amendments and Waivers

 

52

 

10.4

 

Expenses

 

52

 

10.5

 

Successors and Assigns

 

52

 

10.6

 

Governing Law

 

52

 

10.7

 

Waiver of Jury Trial

 

52

 

10.8

 

Counterparts

 

52

 

10.9

 

No Third Party Beneficiaries

 

53

 

 

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10.10

 

Entire Agreement

 

53

 

10.11

 

Captions

 

53

 

10.12

 

Severability

 

53

 

10.13

 

Interpretation

 

53

 

 

LIST OF SCHEDULES

Schedule 1             Sellers
Schedule 2             Closing Date Bonuses
Schedule 3             Sellers’ Transaction Costs
Schedule 4             Employment Agreements
Schedule 5             Closing Payment

LIST OF EXHIBITS

Exhibit A                Form of Escrow Agreement
Exhibit B                Form of Facility Lease
Exhibit C                Form of Nondisclosure, Non-Competition and
Non-Solicitation Agreement (SvoCo, Prairie)
Exhibit D                Form of Nondisclosure, Non-Competition and
Non-Solicitation Agreement (Crow, Criteser)

 

iii

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STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of April 27, 2007, is
by and between the Persons set forth on Schedule 1 hereto (individually, a
“Seller” and, collectively, the “Sellers”), Coffee Bean Holding Co., Inc., a
Delaware corporation (the “Company”), and Farmer Bros. Co., a Delaware
corporation (the “Buyer”).

RECITALS

1.             The Sellers are the owners of all of the issued and outstanding
shares of capital stock of the Company.

2.             The Sellers desire to sell, and the Buyer desires to purchase,
all of such shares on the terms and subject to the conditions set forth in this
Agreement.

AGREEMENTS

In consideration of the foregoing premises and the respective representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:

ARTICLE I
DEFINITIONS

1.1                     DEFINITIONS.  WHEN USED IN THIS AGREEMENT, THE FOLLOWING
TERMS SHALL HAVE THE MEANINGS ASSIGNED TO THEM IN THIS SECTION 1.1.

“2006 Audited Financial Statements” has the meaning ascribed thereto in Section
3.7.

“2007 Audited Financial Statements” has the meaning ascribed thereto in Section
2.5.

“Advisory Services Agreement” means that certain Advisory Services Agreement,
dated as of April 9, 2004, between Coffee Bean, Svoboda, Collins L.L.C., Daniels
& King Capital III, LLC, and WSG/CBI, L.L.C.

“Accountants” has the meaning ascribed thereto in Section 2.5.

“Affiliate” means, with respect to any specified Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such specified Person.

“Ancillary Agreements” means the Escrow Agreement, Employment Agreements,
Facility Lease, Non-Competition Agreements, and the other agreements,
instruments and documents delivered at the Closing pursuant to this Agreement.

“Associate” has the meaning ascribed thereto in Section 3.24.

“Authorization” means any authorization, approval, consent, certificate, waiver,
clearance, license, permit or franchise of or from any Person or Governmental
Body.

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“Authorized Action” has the meaning ascribed thereto in Section 10.2.

“Balance Sheet Date” has the meaning ascribed thereto in Section 3.7.

“Books and Records” means books of account, general, financial, warranty and
shipping records, invoices, customer lists, advertiser lists, exhibitor lists,
subscriber lists, circulation lists, sponsorship information, conference
attendee information, correspondence, engineering, maintenance, operating and
production records, advertising and promotional materials, credit records of
customers and other documents, records and files of the Company and each of its
Subsidiaries.

“Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks located in Los Angeles, California are authorized or required
by Law to close.

“Buyer” has the meaning ascribed thereto in the preamble.

“Buyer Indemnitee” means the Buyer and its Affiliates, including, without
limitation, the Company and its Subsidiaries from and after the Closing Date,
and their respective successors and assigns.

“Buyer Material Adverse Effect” means any circumstance, change or effect that
is, or is reasonably likely to be, Material in amount or otherwise materially
adverse to the business, operations, properties or condition (financial or
otherwise) of the Buyer and its Subsidiaries, taken as a whole.

“Cap” has the meaning ascribed thereto in Section 9.3.

“CBI Common Stock” has the meaning ascribed thereto in Section 3.4.

“CBI Shares” has the meaning ascribed thereto in Section 3.4.

“CERCLA” has the meaning ascribed thereto in Section 3.17.

“Certificate of Incorporation” means the Second Amended and Restated Certificate
of Incorporation of the Company, as amended or amended and restated from time to
time.

“Claim Notice” has the meaning ascribed thereto in Section 9.4.

“Closing” has the meaning ascribed thereto in Section 2.3.

“Closing Date” means the date on which the Closing occurs.

“Closing Date Balance Sheet” has the meaning ascribed thereto in Section 2.5.

“Closing Date Bonuses” means that portion of the Sale Bonuses payable at the
Closing pursuant to the Sale Bonus Letters to the Persons and in the amounts
listed on Schedule 2.

“Closing Net Purchase Price” has the meaning ascribed thereto in Section 2.4.

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“Closing Payment” has the meaning ascribed thereto in Section 2.4.

“Code” means the Internal Revenue Code of 1986, as amended through the Closing
Date, and the rules and regulations promulgated thereunder.

“Coffee Bean” means Coffee Bean International, Inc., an Oregon corporation.

“Company” has the meaning ascribed thereto in the preamble.

“Common Stock” means the Common Stock, par value $.01 per share, of the Company.

“Company Agreements” has the meaning ascribed thereto in Section 3.12.

“Company Group” means any “affiliated group” (as defined in Section 1504(a) of
the Code without regard to the limitations contained in Section 1504(b) of the
Code) that, at any time on or before the Closing Date, includes or has included
the Company or any Subsidiary or any predecessor of or successor to the Company
or any Subsidiary (or another such predecessor or successor), or any other group
of corporations that, at any time on or before the Closing Date, files or has
filed Tax Returns on a combined, consolidated or unitary basis with the Company
or any Subsidiary or any predecessor of or successor to the Company or any
Subsidiary (or another such predecessor or successor).

“Confidentiality Agreement” means, collectively, that certain Confidentiality
Agreement dated December 11, 2006, and paragraph 9 of that certain Letter of
Intent dated March 7, 2007.

“Contract” means any contract, agreement, indenture, note, bond, loan,
instrument, lease, conditional sales contract, mortgage, license, franchise,
insurance policy, binding commitment or other binding arrangement or agreement.

“Copyrights” means United States and foreign copyrights, copyrightable works,
and mask works, whether registered or unregistered, and pending applications to
register the same.

“Current Assets” means any and all current assets that should be reflected on
the balance sheet of the Company and its Subsidiaries on a consolidated basis,
prepared in accordance with GAAP using the same accounting methods, policies,
practices and procedures, with consistent classifications, judgments and
estimation methodology, as were used in the determination of the current assets
in the preparation of the 2006 Audited Financial Statements.

“Current Liabilities” means any and all current liabilities that should be
reflected on the balance sheet of the Company and its Subsidiaries on a
consolidated basis, prepared in accordance with GAAP using the same accounting
methods, policies, practices and procedures, with consistent classifications,
judgments and estimation methodology, as were used in the determination of the
current liabilities in the preparation of the 2006 Audited Financial Statements.

“Employee Benefit Plans” has the meaning ascribed thereto in Section 3.10.

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“Employment Agreement” has the meaning ascribed thereto in Section 2.4.

“Encumbrance” means any lien (statutory or other), claim, charge, security
interest, mortgage, deed of trust, pledge, hypothecation, assignment,
conditional sale or other title retention agreement, or other security agreement
of any kind or nature, and any easement, encroachment, covenant, restriction,
right of way, defect in title or other encumbrance of any kind.

“ERISA” has the meaning ascribed thereto in Section 3.10.

“Escrow Account” has the meaning ascribed thereto in Section 2.6.

“Escrow Agent” has the meaning ascribed thereto in Section 2.6.

“Escrow Agreement” has the meaning ascribed thereto in Section 2.4.

“Escrow Deposit” has the meaning ascribed thereto in Section 2.6.

“Escrow Fund” means (A) the Escrow Deposit, in whatever form from time to time
held or invested as provided in the Escrow Agreement, and (B) all amounts
received by the Escrow Agent (and not otherwise distributed under the Escrow
Agreement) on or in respect of the aforesaid funds in whatever form from time to
time held or invested as provided in the Escrow Agreement.

“Estimated Closing Date Balance Sheet” has the meaning ascribed thereto in
Section 2.5.

“Estimated Closing Net Working Capital” has the meaning ascribed thereto in
Section 2.5.  For the purposes of determining Estimated Closing Net Working
Capital, estimated Current Liabilities shall not include (i) any liability for
Indebtedness incurred or assumed by the Company or any of its Subsidiaries after
the Closing; (ii) any liability for Taxes resulting from the Section 338(g)
Election; (iii) any liability for Excluded Taxes; (iv) any liability for Sale
Bonuses and any related payroll and withholding Taxes; and (v) any liability
associated with the Transfer and Redemption including, without limitation, the
alternative minimum Tax associated therewith which shall be paid by the Sellers
in accordance with Section 7.3.

“Estimated Net Working Capital Statement” has the meaning ascribed thereto in
Section 2.5.

“Excluded Taxes” means any sales or use taxes, or personal property taxes on
coffee brewing equipment outside the State of Oregon, and all interest,
penalties, additions to tax or additional amounts imposed by any Governmental
Body with respect to such taxes.

“Facility” means the facility located at 2181 N.W. Nicolai Street, Portland,
Oregon.

“Facility Lease” has the meaning ascribed thereto in Section 2.4.

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“Facility LLC” means Nicolai Street Investment, LLC, a Delaware limited
liability company.

“Final Net Working Capital Statement” has the meaning ascribed thereto in
Section 2.5.

“Financial Statements” has the meaning ascribed thereto in Section 3.7.

“First Release Amount” has the meaning ascribed thereto in Section 2.6.

“First Release Date” has the meaning ascribed thereto in Section 2.6.

“GAAP” has the meaning ascribed thereto in Section 3.7.

“Governmental Body” means any foreign, federal, state, local or other
governmental authority or regulatory body.

“Hazardous Materials” has the meaning ascribed thereto in Section 3.17.

“Hazardous Waste” has the meaning ascribed thereto in Section 3.17.

“Indebtedness” means the sum of (i) all obligations of the Company and its
Subsidiaries for borrowed money (including the current portion thereof),
including principal, accrued interest, deferred financing costs, fees, charges,
prepayment premiums or penalties, and any other fees, expenses, indemnities or
other amounts payable as a result of the prepayment or discharge of any such
indebtedness; (ii) all obligations of the Company and its Subsidiaries under
leases which, in accordance with GAAP, are required to be classified as “capital
leases”; and (iii) all accrued and unpaid fees and expenses under the Advisory
Services Agreement; provided that, notwithstanding anything to the contrary
contained herein, in calculating the foregoing, no account shall be taken of,
and there shall be excluded from Indebtedness, the total amount of all of the
respective indebtedness of the Company and its Subsidiaries then outstanding or
arising under, or otherwise related to, trade payables, operating lease
obligations and other operating liabilities incurred by the Company or any of
its Subsidiaries which are included in Current Liabilities.

“Indebtedness Holders” has the meaning ascribed thereto in Section 2.4.

“Indemnified Party” has the meaning ascribed thereto in Section 9.4.

“Indemnitor” has the meaning ascribed thereto in Section 9.4.

“Intellectual Property” means Copyrights, Patent Rights, Trademarks and Trade
Secrets and all copies and tangible embodiments thereof (in whatever form or
medium).

“knowledge” means:  (i) in the case of the Company, the actual knowledge of
Margaret Crow, Patrick Criteser, Aaron Loreth or Andrew Kunkler without duty of
inquiry; (ii) in the case of each individual Seller, the actual knowledge of
such individual Seller without duty of inquiry; and (iii) in the case of each
Seller which is not an individual, the actual knowledge of the

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representative, agent or employee of such Seller having primary responsibility
for such Seller’s relationship with the Company without duty of inquiry.

“Laws” means any foreign, federal, state and local laws, statutes, regulations,
rules, codes or ordinances enacted, adopted, issued or promulgated by any
Governmental Body (including those pertaining to electrical, building, zoning,
subdivision, land use, environmental and occupational safety and health
requirements) or common law.

“Leased Real Property” has the meaning ascribed thereto in Section 3.20.

“Licenses” has the meaning ascribed thereto in Section 3.16.

“Losses” has the meaning ascribed thereto in Section 9.2.

“Material” means an amount, individually or in the aggregate, whether arising in
a single transaction or series of related transactions, or requiring a single
payment or series of related payments, involving more than $15,000.

“Material Adverse Effect” means any circumstance, change or effect that is, or
is reasonably likely to be, Material in amount or otherwise materially adverse
to the business, operations, properties or condition (financial or otherwise) of
the Company and its Subsidiaries, taken as a whole.

“Net Purchase Price” has the meaning ascribed thereto in Section 2.2.

“Net Working Capital” means the difference between the book value prepared in
accordance with GAAP of the Current Assets and the book value prepared in
accordance with GAAP of the Current Liabilities, in each case, as of the close
of business on the Closing Date. For the purposes of determining Net Working
Capital, Current Liabilities shall not include (i) any liability for Taxes
resulting from the Section 338(g) Election; (ii) any liability for Excluded
Taxes; (iii) any liability associated with the Transfer and Redemption
including, without limitation, the alternative minimum Tax associated therewith
which shall be paid by the Sellers in accordance with Section 7.3; (iv) any
liability for Indebtedness incurred or assumed by the Company or any of its
Subsidiaries after the Closing; and (v) any liability for Sale Bonuses and any
related payroll and withholding Taxes.

“Net Working Capital Statement” has the meaning ascribed thereto in Section 2.5.

“Non-Competition Agreements” has the meaning ascribed thereto in Section 2.4.

“Non-ERISA Plans” has the meaning ascribed thereto in Section 3.10.

“Order” means any award, injunction, judgment, decree, order, ruling, subpoena
or verdict or other decision issued, promulgated or entered by any Governmental
Body of competent jurisdiction.

“Organizational Documents” means, with respect to any entity, the certificate of
incorporation, articles of incorporation, by-laws, articles of organization,
partnership agreement,

6

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limited liability company agreement, formation agreement, joint venture
agreement, voting agreement and other similar organizational documents of such
entity (in each case, as amended through the date of this Agreement).

“Outstanding Sellers’ Transaction Costs” has the meaning ascribed thereto in
Section 2.4.

“Patent Rights” means United States and foreign patents, patent applications,
continuations, continuations-in-part, divisions, reissues, patent disclosures,
inventions (whether or not patentable or reduced to practice) and improvements
thereto.

“Pay-Off Letters” has the meaning ascribed thereto in Section 2.4.

“Permitted Encumbrances” means: (i) liens for Taxes and other governmental
charges and assessments arising in the ordinary course of business which are not
yet due and payable; (ii) liens of landlords and liens of carriers,
warehousemen, mechanics and materialmen and other like liens arising in the
ordinary course of business for sums not yet due and payable; and (iii) other
liens or imperfections on property which are not Material in amount, do not
interfere with, and are not violated by, the consummation of the transactions
contemplated by this Agreement, and do not impair the marketability of, or
materially detract from the value of or materially impair the existing use of,
the property affected by such lien or imperfection.

“Person” means an individual, a corporation, a partnership, a limited liability
company, a trust, an unincorporated association, a Governmental Body or any
agency, instrumentality or political subdivision of a Governmental Body, or any
other entity or body.

“Prairie Capital” means, collectively, Prairie Capital III, L.P., a Delaware
limited partnership, and Prairie Capital III QP, L.P., a Delaware limited
partnership.

“Pre-Closing Income Tax Returns” has the meaning ascribed thereto in Section
7.3.

“Preferred Stock” means the Series A Preferred Stock and the Series B Preferred
Stock.

“Protest Notice” has the meaning ascribed thereto in Section 2.5.

“Purchase Price” has the meaning ascribed thereto in Section 2.2.

“Sale Bonus Letters” means those certain Amendment and Restatement of Sale Bonus
Letters, each dated as of the date hereof, among Coffee Bean, Facility LLC, the
Seller Representative and each employee named therein.

“Sale Bonuses” means the aggregate sale bonuses payable pursuant to the Sale
Bonus Letters.

“Second Release Amount” has the meaning ascribed thereto in Section 2.6.

“Second Release Date” has the meaning ascribed thereto in Section 2.6.

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“Section 338(g) Election” has the meaning ascribed thereto in Section 7.3.

“Seller” or “Sellers” has the meaning ascribed thereto in the preamble.

“Seller Disclosure Schedule” means the disclosure schedules called for by the
representations and warranties set forth in Article III.

“Seller Indemnitee” means any Seller and its Affiliates, and their respective
successors and assigns.

“Seller Representative” has the meaning ascribed thereto in Section 10.2.

“Sellers’ Transaction Costs” means all expenses, costs and fees (excluding all
expenses, costs and fees of KPMG LLP associated with the audit of the Company’s
consolidated financial statements and preparation of the Company’s and its
Subsidiaries’ income Tax Returns for the fiscal year ended March 31, 2007)
incurred by or on behalf of any Seller at any time or the Company or any of its
Subsidiaries at any time at or prior to the Closing, in connection with the
preparation, negotiation, execution and delivery of this Agreement and the
Ancillary Agreements and the transactions contemplated hereby and thereby and
are set forth in Schedule 3 hereto.

“Series A Preferred Stock” means the Series A 12% Convertible Participating
Preferred Stock, par value $.01 per share, of the Company.

“Series B Preferred Stock” means the Series B Convertible Participating
Preferred Stock, par value $.01 per share, of the Company.

“Shares” has the meaning ascribed thereto in Section 3.4 and includes all rights
to accrued and unpaid dividends and distributions thereon.

“Shortfall” has the meaning ascribed thereto in Section 2.5.

“Software” means computer software programs and software systems, including all
databases, compilations, tool sets, compilers, higher level or “proprietary”
languages, and related documentation and materials, whether in source code,
object code or human readable form.

“Straddle Period” means any taxable year or period beginning before and ending
after the Closing Date.

“Subsidiary” or “Subsidiaries” means, with respect to any Person, any
corporation, partnership, limited liability company, joint venture or other
legal entity of any kind of which such Person (either alone or through or
together with one or more of its other Subsidiaries) owns, directly or
indirectly, more than 50% of the capital stock or other equity interests the
holders of which are (a) generally entitled to vote for the election of the
board of directors or other governing body of such legal entity or (b) generally
entitled to share in the profits or capital of such legal entity.

“SvoCo” means SvoCo, L.P., a Delaware limited partnership.

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“SvoCo/Prairie Non-Competition Agreements” has the meaning ascribed thereto in
Section 2.4.

“Target Net Working Capital” means Three Million One Hundred Thousand Dollars
($3,100,000).

“Tax” (and, with correlative meaning, “Taxes”) means: (i) any federal, state,
local or foreign net income, gross income, gross receipts, windfall profit,
severance, property, production, sales, use, license, excise, franchise,
employment, payroll, withholding, alternative or add-on minimum, ad valorem,
value-added, transfer, stamp, or environmental tax (including taxes under Code
Section 59A), or any other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or
penalty, addition to tax or additional amount imposed by any Governmental Body;
and (ii) any liability of the Company or any of its Subsidiaries for the payment
of amounts with respect to payments of a type described in clause (i) as a
result of being a member of an affiliated, consolidated, combined or unitary
group, or as a result of any obligation of the Company or any of its
Subsidiaries under any Tax Sharing Agreement or Tax indemnity arrangement;
provided, however, for purposes of this Agreement, “Taxes” shall not include any
Excluded Taxes.

“Tax Return” means any return, report or similar statement required to be filed
with respect to any Tax (including any attached schedules), including, without
limitation, any information return, claim for refund, amended return or
declaration of estimated Tax.

“Tax Sharing Agreement” means any written agreement for the allocation or
payment of Tax liabilities or payment for Tax benefits with respect to a
consolidated, combined or unitary Tax Return which Tax Return includes or
included the Company or any of its Subsidiaries.

“Third Party Notice” has the meaning ascribed thereto in Section 9.5.

“Third Release Amount” has the meaning ascribed thereto in Section 2.6.

“Third Release Date” has the meaning ascribed thereto in Section 2.6.

“Threshold” has the meaning ascribed thereto in Section 9.3.

“Trademarks” means United States, state and foreign trademarks, service marks,
Internet domain names, Internet and WorldWide Web URLs, logos, trade dress and
trade names (including all assumed or fictitious names under which the Company
or any of its Subsidiaries is conducting business or has within the previous
five (5) years conducted business), whether registered or unregistered, and
pending applications to register the foregoing.

“Trade Secrets” means all trade secrets and confidential business information
(including confidential ideas, research and development, know-how, methods,
formulae, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals).

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“Transfer and Redemption” mean the contribution of the Facility by Coffee Bean
to Facility LLC, the issuance of membership interests in Facility LLC to Coffee
Bean, the assignment of membership interests in Facility LLC by Coffee Bean to
the Company, and the transfer of membership interests in Facility LLC by the
Company to the holders of Series A Preferred Stock in partial redemption of
their shares of Series A Preferred Stock.

“Transfer Taxes” means sales, use, transfer, real property transfer, recording,
documentary, stamp, registration and stock transfer Taxes and any similar Taxes.

“Treasury Regulations” means the federal income Tax regulations promulgated
under the Code.

“Unaudited Balance Sheet” has the meaning ascribed thereto in Section 3.7.

“Unaudited Financial Statements” has the meaning ascribed thereto in Section
3.7.

“WARN” has the meaning ascribed thereto in Section 3.24.

1.2                     CONSTRUCTION.  FOR THE PURPOSES OF THIS AGREEMENT,
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN OR UNLESS THE CONTEXT OTHERWISE
REQUIRES:  (A) THE MEANING ASSIGNED TO EACH TERM DEFINED HEREIN SHALL BE EQUALLY
APPLICABLE TO BOTH THE SINGULAR AND THE PLURAL FORMS OF SUCH TERM AND VICE
VERSA, AND WORDS DENOTING EITHER GENDER SHALL INCLUDE BOTH GENDERS AS THE
CONTEXT REQUIRES; (B) WHERE A WORD OR PHRASE IS DEFINED HEREIN, EACH OF ITS
OTHER GRAMMATICAL FORMS SHALL HAVE A CORRESPONDING MEANING; (C) THE TERMS
“HEREOF,” “HEREIN,” “HEREUNDER,” “HEREBY” AND “HEREWITH” AND WORDS OF SIMILAR
IMPORT SHALL, UNLESS OTHERWISE STATED, BE CONSTRUED TO REFER TO THIS AGREEMENT
AS A WHOLE AND NOT TO ANY PARTICULAR PROVISION OF THIS AGREEMENT; (D) WHEN A
REFERENCE IS MADE IN THIS AGREEMENT TO AN ARTICLE, SECTION, PARAGRAPH, EXHIBIT
OR SCHEDULE, SUCH REFERENCE IS TO AN ARTICLE, SECTION, PARAGRAPH, EXHIBIT OR
SCHEDULE TO THIS AGREEMENT UNLESS OTHERWISE SPECIFIED; (E) THE WORD “INCLUDE,”
“INCLUDES,” AND “INCLUDING” WHEN USED IN THIS AGREEMENT SHALL BE DEEMED TO BE
FOLLOWED BY THE WORDS “WITHOUT LIMITATION,” UNLESS OTHERWISE SPECIFIED; AND (F)
ALL ACCOUNTING TERMS USED AND NOT DEFINED HEREIN HAVE THE RESPECTIVE MEANINGS
GIVEN TO THEM UNDER GAAP.

ARTICLE II
PURCHASE AND SALE

2.1                     PURCHASE AND SALE.  AT THE CLOSING, ON THE TERMS AND
SUBJECT TO THE CONDITIONS SET FORTH IN THIS AGREEMENT, AND IN RELIANCE ON THE
RESPECTIVE REPRESENTATIONS AND WARRANTIES OF THE PARTIES HERETO, THE SELLERS
SHALL SELL, TRANSFER, ASSIGN, CONVEY AND DELIVER TO THE BUYER, AND THE BUYER
SHALL PURCHASE FROM THE SELLERS, ALL RIGHT, TITLE AND INTEREST IN AND TO THE
SHARES.

2.2                     PURCHASE PRICE.  THE CONSIDERATION TO BE PAID BY THE
BUYER TO THE SELLERS FOR THE SHARES SHALL BE AN AGGREGATE AMOUNT EQUAL TO (X)
TWENTY TWO MILLION SEVENTY-FIVE THOUSAND DOLLARS ($22,075,000) (THE “PURCHASE
PRICE”), MINUS (Y) THE AGGREGATE INDEBTEDNESS OF THE COMPANY AND ITS
SUBSIDIARIES OUTSTANDING AS AT THE CLOSING DATE (SUCH AMOUNT, THE “NET PURCHASE
PRICE”), SUBJECT TO ADJUSTMENT AS PROVIDED IN SECTION 2.5.

 

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2.3                     CLOSING DATE.  THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT (THE “CLOSING”) SHALL TAKE PLACE AT THE OFFICES
OF ANGLIN, FLEWELLING, RASMUSSEN, CAMPBELL & TRYTTEN LLP, 199 S. LOS ROBLES
AVENUE, PASADENA, CALIFORNIA 91101, AT 10:00 A.M. (PACIFIC TIME) ON THE DATE
HEREOF.

2.4                     CLOSING DELIVERIES.

(A)           DELIVERIES BY THE SELLERS AT THE CLOSING.  AT THE CLOSING, THE
SELLERS SHALL DELIVER OR CAUSE TO BE DELIVERED TO THE BUYER THE FOLLOWING:

(I)          CERTIFICATES EVIDENCING THE SHARES, DULY ENDORSED IN BLANK OR
ACCOMPANIED BY DULY EXECUTED STOCK POWERS;

(II)         AN ESCROW AGREEMENT, IN THE FORM OF EXHIBIT A HERETO, DATED THE
CLOSING DATE (THE “ESCROW AGREEMENT”), DULY EXECUTED BY EACH OF THE PARTIES
THERETO (OTHER THAN THE BUYER);

(III)        A PAYOFF LETTER FROM EACH HOLDER OF INDEBTEDNESS OF THE COMPANY AND
EACH OF ITS SUBSIDIARIES (EACH, AN “INDEBTEDNESS HOLDER”), (A) INDICATING THAT
UPON PAYMENT OF A SPECIFIED AMOUNT, SUCH INDEBTEDNESS SHALL BE PAID IN FULL AND,
IF APPLICABLE, SUCH HOLDER SHALL RELEASE ITS SECURITY INTEREST AGAINST THE
ASSETS OF THE COMPANY OR ITS SUBSIDIARIES AND/OR AGAINST THE SHARES, AND (B)
AUTHORIZING THE BUYER TO FILE UNIFORM COMMERCIAL CODE TERMINATION STATEMENTS, OR
SUCH OTHER DOCUMENTS OR ENDORSEMENTS NECESSARY TO RELEASE OF RECORD SUCH
SECURITY INTERESTS OF ALL SUCH HOLDERS, AND EVIDENCE THE RELEASE OR DISCHARGE OF
SUCH FINANCING STATEMENTS, JUDGMENTS OR OTHER ENCUMBRANCES ON OR AGAINST THE
SHARES AND/OR THE ASSETS OF THE COMPANY OR ANY OF ITS SUBSIDIARIES (EACH, A
“PAY-OFF LETTER”);

(IV)        AN OPINION OF COUNSEL TO SVOCO AND THE COMPANY, IN A FORM REASONABLY
ACCEPTABLE TO BUYER, ADDRESSED TO THE BUYER AND DATED AS OF THE CLOSING DATE;

(V)         COPIES OF THE CERTIFICATE OF INCORPORATION (OR FORMATION) OF THE
COMPANY AND COFFEE BEAN CERTIFIED AS OF A RECENT DATE BY THE SECRETARY OF STATE
OF THE JURISDICTION OF EACH SUCH PERSON’S INCORPORATION (OR FORMATION);

(VI)        COPIES OF THE CERTIFICATE OF GOOD STANDING OF THE COMPANY AND COFFEE
BEEN ISSUED AS OF RECENT DATE BY THE SECRETARY OF STATE OF THE JURISDICTION OF
EACH SUCH PERSON’S ORGANIZATION AND OF EACH JURISDICTION IN WHICH SUCH PERSON IS
QUALIFIED TO DO BUSINESS;

(VII)       IN THE CASE OF EACH SELLER THAT IS AN ENTITY, A CERTIFICATE OF THE
SECRETARY OR AN ASSISTANT SECRETARY OF SUCH SELLER, DATED THE CLOSING DATE, IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE BUYER, AS TO: (A) THE
RESOLUTIONS OF THE BOARD OF DIRECTORS OR OTHER AUTHORIZING BODY (OR A DULY
AUTHORIZED COMMITTEE THEREOF) OF SUCH SELLER AUTHORIZING THE EXECUTION,
DELIVERY, AND PERFORMANCE OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY; AND (B) INCUMBENCY

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AND SIGNATURES OF THE OFFICERS OF SUCH SELLER EXECUTING THIS AGREEMENT OR ANY
OTHER AGREEMENT OR DOCUMENT EXECUTED BY SUCH SELLER CONTEMPLATED BY THIS
AGREEMENT;

(VIII)      A CERTIFICATE OF THE SECRETARY OR AN ASSISTANT SECRETARY OF EACH OF
THE COMPANY AND COFFEE BEAN, DATED THE CLOSING DATE, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO BUYER, AS TO: (A) THE CERTIFICATE OF INCORPORATION OF
SUCH PERSON; (B) THE BYLAWS OF SUCH PERSON; (C) ANY RESOLUTIONS OF THE BOARD OF
DIRECTORS (OR A DULY AUTHORIZED COMMITTEE THEREOF) OF SUCH PERSON AUTHORIZING
THE EXECUTION, DELIVERY, AND PERFORMANCE OF THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY; AND (D) INCUMBENCY AND SIGNATURES OF THE OFFICERS OF SUCH
PERSON EXECUTING THIS AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT EXECUTED BY
SUCH PERSON CONTEMPLATED BY THIS AGREEMENT;

(IX)         A FACILITY LEASE, IN THE FORM OF EXHIBIT B HERETO, DATED THE
CLOSING DATE, BETWEEN FACILITY LLC, AS LESSOR, AND COFFEE BEAN, AS LESSEE (THE
“FACILITY LEASE”), DULY EXECUTED BY THE PARTIES THERETO;

(X)          AN EMPLOYMENT AGREEMENT, DATED THE CLOSING DATE, BETWEEN COFFEE
BEAN AND EACH OF THE PERSONS SET FORTH IN SCHEDULE 4 HERETO (EACH, AN
“EMPLOYMENT AGREEMENT”), DULY EXECUTED BY THE PARTIES THERETO;

(XI)         A NONDISCLOSURE/NON-COMPETITION/NON-SOLICITATION AGREEMENT, IN THE
FORM OF EXHIBIT C HERETO, DATED THE CLOSING DATE, BETWEEN THE BUYER AND EACH OF
SVOCO AND PRAIRIE CAPITAL (THE “SVOCO/PRAIRIE NON-COMPETITION AGREEMENTS”), DULY
EXECUTED BY THE PARTIES THERETO;

(XII)        A NONDISCLOSURE/NON-COMPETITION/NON-SOLICITATION AGREEMENT, IN THE
FORM OF EXHIBIT D HERETO, DATED THE CLOSING DATE, BETWEEN THE BUYER AND EACH OF
MARGARET CROW AND PATRICK CRITESER (TOGETHER WITH THE SVOCO/PRAIRIE
NON-COMPETITION AGREEMENTS, THE “NON-COMPETITION AGREEMENTS”), DULY EXECUTED BY
THE PARTIES THERETO;

(XIII)       THE RESIGNATIONS, EFFECTIVE AS OF THE CLOSING DATE OF EACH DIRECTOR
AND OFFICER OF THE COMPANY AND COFFEE BEAN OTHER THAN THOSE WHOM THE BUYER SHALL
HAVE SPECIFIED IN WRITING PRIOR TO THE CLOSING;

(XIV)      ALL AUTHORIZATIONS OBTAINED BY ANY OF THE SELLERS, THE COMPANY OR
COFFEE BEAN WITH RESPECT TO THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT; AND

(XV)         EVIDENCE THAT ALL OUTSTANDING OPTIONS TO PURCHASE SHARES OF COMMON
STOCK SHALL HAVE BEEN CANCELLED IN ACCORDANCE WITH THE TERMS OF THE COFFEE BEAN
HOLDING CO., INC. 2004 STOCK OPTION PLAN.

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(B)           DELIVERIES BY THE BUYER AT THE CLOSING.  AT THE CLOSING, THE BUYER
SHALL DELIVER TO THE SELLERS THE FOLLOWING:

(I)          THE NET PURCHASE PRICE, ADJUSTED PURSUANT TO SECTION 2.5(A) (THE
“CLOSING NET PURCHASE PRICE”), LESS (W) THE ESCROW DEPOSIT TO BE PLACED IN
ESCROW PURSUANT TO SECTION 2.6, (X) THE AGGREGATE AMOUNT OF THE SELLERS’
TRANSACTION COSTS WHICH HAVE NOT BEEN PAID PRIOR TO THE CLOSING (THE
“OUTSTANDING SELLERS’ TRANSACTION COSTS”), (Y) THE AGGREGATE AMOUNT OF THE
CLOSING DATE BONUSES, AND (Z) THE AGGREGATE AMOUNT OF THE EMPLOYER’S PORTION OF
THE MEDICARE TAX WITH RESPECT TO THE CLOSING DATE BONUSES (THE RESULTING AMOUNT
BEING REFERRED TO HEREIN AS THE “CLOSING PAYMENT”), BY WIRE TRANSFER OF
IMMEDIATELY AVAILABLE FUNDS TO THE ACCOUNTS AND IN THE AMOUNTS SET FORTH IN
SCHEDULE 5;

(II)         A COPY OF THE CERTIFICATE OF INCORPORATION OF THE BUYER CERTIFIED
AS OF A RECENT DATE BY THE SECRETARY OF STATE OF THE STATE OF DELAWARE;

(III)        A COPY OF THE CERTIFICATE OF GOOD STANDING OF THE BUYER ISSUED AS
OF RECENT DATE BY THE SECRETARY OF STATE OF THE STATE OF DELAWARE;

(IV)        A CERTIFICATE OF THE SECRETARY OR AN ASSISTANT SECRETARY OF THE
BUYER, DATED THE CLOSING DATE, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE SELLERS, AS TO: (A) THE CERTIFICATE OF INCORPORATION OF THE BUYER; (B) THE
BYLAWS OF THE BUYER; (C) ANY RESOLUTIONS OF THE BOARD OF DIRECTORS (OR A DULY
AUTHORIZED COMMITTEE THEREOF) OF THE BUYER AUTHORIZING THE EXECUTION, DELIVERY,
AND PERFORMANCE OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY; AND
(D) INCUMBENCY AND SIGNATURES OF THE OFFICERS OF THE BUYER EXECUTING THIS
AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT EXECUTED BY THE BUYER CONTEMPLATED
BY THIS AGREEMENT;

(V)           THE ESCROW AGREEMENT, DULY EXECUTED BY THE BUYER; AND

(VI)          AN OPINION OF COUNSEL TO THE BUYER, IN A FORM REASONABLY
ACCEPTABLE TO SELLERS, ADDRESSED TO THE SELLERS AND DATED AS OF THE CLOSING
DATE.

(C)           PAY-OFF OF INDEBTEDNESS.  AT THE CLOSING, THE BUYER WILL DELIVER
TO EACH INDEBTEDNESS HOLDER A DOLLAR AMOUNT EQUAL TO THE “PAY-OFF” AMOUNT SET
FORTH IN THE PAY-OFF LETTER DELIVERED BY SUCH INDEBTEDNESS HOLDER, AND SUCH
PAYMENT WILL BE BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO THE ACCOUNTS
DESIGNATED BY SUCH INDEBTEDNESS HOLDER IN THE PAY-OFF LETTER.

(D)           OUTSTANDING SELLERS’ TRANSACTION COSTS AND CLOSING DATE BONUSES. 
THE SELLERS HEREBY INSTRUCT AND DIRECT THE BUYER, ON BEHALF OF EACH OF THE
SELLERS, TO PAY AT THE CLOSING, BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS,
OUT OF THE CLOSING NET PURCHASE PRICE, THE FOLLOWING: (I) TO THE SELLER
REPRESENTATIVE, AN AMOUNT EQUAL TO THE AGGREGATE OUTSTANDING SELLERS’
TRANSACTION COSTS; AND (II) TO COFFEE BEAN, AN AMOUNT EQUAL TO (A) THE AGGREGATE
CLOSING DATE BONUSES; AND (B) THE AGGREGATE AMOUNT OF THE EMPLOYER’S PORTION OF
THE MEDICARE TAX WITH RESPECT TO THE CLOSING DATE BONUSES.  UPON RECEIPT OF THE
FOREGOING, THE SELLER REPRESENTATIVE

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SHALL DISBURSE SUCH FUNDS IN PAYMENT OF THE OUTSTANDING SELLERS’ TRANSACTION
COSTS, AND THE BUYER SHALL CAUSE COFFEE BEAN TO PAY THE CLOSING DATE BONUSES,
NET OF ALL APPLICABLE WITHHOLDING AND PAYROLL TAXES.

2.5           NET WORKING CAPITAL ADJUSTMENT.

(A)           CLOSING ADJUSTMENT.  AT LEAST THREE (3) BUSINESS DAYS PRIOR TO THE
CLOSING DATE, THE SELLERS SHALL PREPARE IN GOOD FAITH AND DELIVER TO THE BUYER
AN ESTIMATED CONSOLIDATED BALANCE SHEET OF THE COMPANY AS OF THE CLOSE OF
BUSINESS ON THE CLOSING DATE (THE “ESTIMATED CLOSING DATE BALANCE SHEET”) AND A
STATEMENT (THE “ESTIMATED NET WORKING CAPITAL STATEMENT”) SETTING FORTH THE
ESTIMATED NET WORKING CAPITAL BASED ON THE ESTIMATED CLOSING DATE BALANCE SHEET
(THE “ESTIMATED CLOSING NET WORKING CAPITAL”).  THE ESTIMATED NET WORKING
CAPITAL STATEMENT AND THE CALCULATION OF ESTIMATED CLOSING NET WORKING CAPITAL
SHALL BE BASED ON THE BOOKS AND RECORDS, AND SHALL BE ACCOMPANIED BY (I) A
CERTIFICATE SIGNED BY THE SELLER REPRESENTATIVE ON BEHALF OF THE SELLERS
CERTIFYING THAT THE ESTIMATED CLOSING NET WORKING CAPITAL AND CLOSING NET
PURCHASE PRICE ADJUSTMENT CALCULATIONS WERE PREPARED IN GOOD FAITH BASED ON THE
BOOKS AND RECORDS AND THE FINANCIAL STATEMENTS AND IN ACCORDANCE WITH THE
DEFINITIONS OF CURRENT ASSETS, CURRENT LIABILITIES AND ESTIMATED CLOSING NET
WORKING CAPITAL, AND CONSISTENT WITH PAST PRACTICE OF THE COMPANY AND ITS
SUBSIDIARIES, AND (II) DETAILED SUPPORTING DOCUMENTS FOR THE CALCULATION OF THE
ESTIMATED CLOSING NET WORKING CAPITAL. THE CLOSING NET PURCHASE PRICE SHALL BE
INCREASED OR DECREASED, RESPECTIVELY, DOLLAR-FOR-DOLLAR BY THE AMOUNT THAT THE
ESTIMATED CLOSING NET WORKING CAPITAL IS MORE THAN OR LESS THAN THE TARGET NET
WORKING CAPITAL.

(B)           NET WORKING CAPITAL STATEMENT.  AS SOON AS PRACTICABLE, BUT NOT
LATER THAN THIRTY (30) DAYS FOLLOWING THE BUYER’S RECEIPT OF THE COMPANY’S
AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED MARCH 31,
2007 (THE “2007 AUDITED FINANCIAL STATEMENTS”), TOGETHER WITH AN UNQUALIFIED
OPINION THEREON, FROM KPMG LLP, THE COMPANY’S INDEPENDENT ACCOUNTANTS, THE BUYER
SHALL PREPARE IN GOOD FAITH AND DELIVER TO THE SELLER REPRESENTATIVE A
CONSOLIDATED BALANCE SHEET OF THE COMPANY AS OF THE CLOSE OF BUSINESS ON THE
CLOSING DATE (THE “CLOSING DATE BALANCE SHEET”) AND A STATEMENT (THE “NET
WORKING CAPITAL STATEMENT”) SETTING FORTH THE NET WORKING CAPITAL.  THE NET
WORKING CAPITAL STATEMENT AND THE CALCULATION OF NET WORKING CAPITAL SHALL BE
BASED ON THE BOOKS AND RECORDS, AND SHALL BE ACCOMPANIED BY (I) A CERTIFICATE
SIGNED BY THE CHIEF FINANCIAL OFFICER OF THE BUYER CERTIFYING THAT THE NET
WORKING CAPITAL WAS PREPARED IN GOOD FAITH BASED ON THE BOOKS AND RECORDS AND
THE 2007 AUDITED FINANCIAL STATEMENTS AND IN ACCORDANCE WITH THE DEFINITIONS OF
CURRENT ASSETS, CURRENT LIABILITIES AND NET WORKING CAPITAL, AND CONSISTENT WITH
PAST PRACTICE OF THE COMPANY AND ITS SUBSIDIARIES, AND (II) DETAILED SUPPORTING
DOCUMENTS FOR THE CALCULATION OF THE NET WORKING CAPITAL.  ALL EXPENSES, COSTS
AND FEES OF KPMG LLP ASSOCIATED WITH THE AUDIT OF THE COMPANY’S CONSOLIDATED
FINANCIAL STATEMENTS AND PREPARATION OF THE COMPANY’S AND ITS SUBSIDIARIES’
INCOME TAX RETURNS FOR THE FISCAL YEAR ENDED MARCH 31, 2007 SHALL BE BORNE BY
THE COMPANY AND SHALL BE ACCRUED AS A CURRENT LIABILITY ON THE ESTIMATED CLOSING
DATE BALANCE SHEET AND THE CLOSING DATE BALANCE SHEET; PROVIDED, THAT IF, AFTER
THE CLOSING DATE, THE BUYER REQUESTS THAT THE AUDITORS PERFORM ANY ADDITIONAL
SERVICES OUTSIDE THE SCOPE OF THOSE GENERALLY PERFORMED IN CONNECTION WITH THE
COMPANY’S ANNUAL AUDIT AND DELIVERY OF AN UNQUALIFIED OPINION, THE BUYER SHALL
BE LIABLE TO THE EXTENT OF ANY ADDITIONAL EXPENSES, COSTS AND FEES ASSOCIATED
WITH SUCH ADDITIONAL SERVICES.

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(C)           PROTEST NOTICE. WITHIN THIRTY (30) DAYS FOLLOWING DELIVERY OF THE
NET WORKING CAPITAL STATEMENT, THE SELLER REPRESENTATIVE MAY DELIVER WRITTEN
NOTICE (THE “PROTEST NOTICE”) TO THE BUYER OF ANY DISAGREEMENT THAT THE SELLERS
MAY HAVE AS TO THE NET WORKING CAPITAL STATEMENT.  SUCH PROTEST NOTICE SHALL SET
FORTH IN REASONABLE DETAIL THE AMOUNT(S) IN DISPUTE. THE FAILURE OF THE SELLER
REPRESENTATIVE TO DELIVER SUCH PROTEST NOTICE WITHIN THE PRESCRIBED TIME PERIOD
SHALL CONSTITUTE THE SELLERS’ ACCEPTANCE OF THE NET WORKING CAPITAL AS SET FORTH
IN THE NET WORKING CAPITAL STATEMENT DELIVERED BY THE BUYER.  UPON RECEIPT OF
THE NET WORKING CAPITAL STATEMENT, THE SELLER REPRESENTATIVE AND ITS
REPRESENTATIVES SHALL BE GIVEN REASONABLE ON-SITE ACCESS TO, AND THE BUYER SHALL
MAKE AVAILABLE, DURING REASONABLE BUSINESS HOURS, UPON REASONABLE ADVANCE
NOTICE, FOR THE PURPOSE OF VERIFYING THE NET WORKING CAPITAL STATEMENT: (I) ALL
OF THE BOOKS AND RECORDS, WORK PAPERS, TRIAL BALANCES AND SIMILAR MATERIALS
RELATING TO THE NET WORKING CAPITAL STATEMENT; AND (II) THE BUYER’S PERSONNEL
AND ACCOUNTANTS INVOLVED IN THE CALCULATION OF THE NET WORKING CAPITAL.  ANY
ITEM INCLUDED IN THE NET WORKING CAPITAL STATEMENT AND THE CALCULATION OF THE
NET WORKING CAPITAL THAT IS NOT OBJECTED TO BY THE SELLER REPRESENTATIVE IN THE
MANNER AND WITHIN THE TIME PERIOD SET FORTH IN THIS SECTION 2.5(C) SHALL BE
DEEMED TO BE ACCEPTED AND ANY AMOUNTS INCLUDED WITHIN SUCH ITEM SHALL BE DEEMED
TO BE FINAL, BINDING AND CONCLUSIVE ON ALL PARTIES.

(D)           RESOLUTION OF PROTEST. UPON RECEIPT OF THE PROTEST NOTICE, THE
BUYER AND THE SELLER REPRESENTATIVE SHALL USE GOOD FAITH EFFORTS TO RESOLVE ANY
DISPUTE INVOLVING THE DETERMINATION OF THE NET WORKING CAPITAL.  IF THE BUYER
AND THE SELLER REPRESENTATIVE ARE UNABLE TO RESOLVE ANY DISAGREEMENT AS TO THE
NET WORKING CAPITAL STATEMENT WITHIN THIRTY (30) DAYS FOLLOWING THE BUYER’S
RECEIPT OF THE PROTEST NOTICE, THEN THE DISPUTE WILL BE PROMPTLY REFERRED TO AN
INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM OF NATIONAL STANDING WHICH HAS NOT
REGULARLY PROVIDED SERVICES TO THE BUYER, SVOCO, PRAIRIE, THE COMPANY OR ANY OF
ITS SUBSIDIARIES IN THE LAST THREE (3) YEARS (THE “ACCOUNTANTS”) FOR FINAL
ARBITRATION WITHIN FORTY-FIVE (45) DAYS AFTER THE MATTER IS SUBMITTED TO THE
ACCOUNTANTS.  THE BUYER AND THE SELLERS AGREE THAT ARBITRATION SHALL TAKE PLACE
IN PORTLAND, OREGON, UNLESS AGREED OTHERWISE AT THE TIME OF ARBITRATION BY THE
BUYER AND THE SELLER REPRESENTATIVE. THE ACCOUNTANTS SHALL THEN DILIGENTLY
CONDUCT THE ARBITRATION PROCEEDING IN ACCORDANCE WITH RULES AND PROCEDURES
MUTUALLY AGREED UPON BY THE BUYER AND THE SELLER REPRESENTATIVE AND, IF THE
BUYER AND THE SELLER REPRESENTATIVE ARE UNABLE TO MUTUALLY AGREE UPON SUCH RULES
AND PROCEDURES, SUCH RULES AND PROCEDURES AS THE ACCOUNTANTS MAY DETERMINE.  THE
DECISION OF THE ACCOUNTANTS SHALL BE FINAL AND CONCLUSIVE UPON THE BUYER AND THE
SELLERS, AND A JUDGMENT UPON THE AWARD MAY BE ENTERED IN ANY COURT HAVING
JURISDICTION.  THE ACCOUNTANTS SHALL ACT AS AN ARBITRATOR TO DETERMINE, BASED
SOLELY ON PRESENTATIONS BY THE BUYER AND THE SELLER REPRESENTATIVE, AND NOT BY
INDEPENDENT REVIEW, ONLY THOSE AMOUNTS STILL IN DISPUTE.  THE BUYER AND THE
SELLERS AGREE TO EXECUTE, IF REQUESTED BY THE ACCOUNTANTS, A REASONABLE
ENGAGEMENT LETTER.  THE FEES AND EXPENSES OF THE ACCOUNTANTS SHALL BE DIVIDED
EQUALLY BETWEEN THE BUYER, ON THE ONE HAND, AND THE SELLERS, ON THE OTHER HAND. 
THE TERM “FINAL NET WORKING CAPITAL STATEMENT,” AS USED IN THIS AGREEMENT, SHALL
MEAN THE DEFINITIVE NET WORKING CAPITAL STATEMENT ACCEPTED BY THE SELLER
REPRESENTATIVE OR AGREED TO BY THE SELLER REPRESENTATIVE AND THE BUYER IN
ACCORDANCE WITH SECTION 2.5(C) OR THE DEFINITIVE NET WORKING CAPITAL STATEMENT
RESULTING FROM THE DETERMINATIONS MADE BY THE ACCOUNTANTS IN ACCORDANCE WITH
THIS SECTION 2.5(D).

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(E)           PAYMENT. WITHIN FIVE (5) BUSINESS DAYS OF THE DETERMINATION OF THE
FINAL NET WORKING CAPITAL STATEMENT:

(I)          IF THE ESTIMATED CLOSING NET WORKING CAPITAL IS GREATER THAN THE
NET WORKING CAPITAL SET FORTH ON THE FINAL NET WORKING CAPITAL STATEMENT (SUCH
DIFFERENCE BEING A “SHORTFALL”), THEN (A) THE AMOUNT OF SUCH SHORTFALL UP TO AND
INCLUDING $500,000 SHALL BE RELEASED FROM THE ESCROW ACCOUNT AND PAID TO THE
BUYER, BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO AN ACCOUNT DESIGNATED
BY THE BUYER (AND THE SELLER REPRESENTATIVE AGREES TO EXECUTE JOINT
INSTRUCTIONS, AND TAKE ALL OTHER ACTIONS, NECESSARY TO CAUSE SUCH RELEASE), AND
(B) THE AMOUNT OF SUCH SHORTFALL IN EXCESS OF $500,000, IF ANY, SHALL BE PAID
IMMEDIATELY BY THE SELLERS TO THE BUYER BY WIRE TRANSFER OF IMMEDIATELY
AVAILABLE FUNDS TO AN ACCOUNT DESIGNATED BY THE BUYER; OR

(II)         IF THE NET WORKING CAPITAL SET FORTH ON THE FINAL NET WORKING
CAPITAL STATEMENT IS GREATER THAN THE ESTIMATED CLOSING NET WORKING CAPITAL,
THEN THE BUYER SHALL PAY TO THE SELLER REPRESENTATIVE SUCH EXCESS, BY WIRE
TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO THE ACCOUNT DESIGNATED BY THE SELLER
REPRESENTATIVE.

2.6           ESCROW.

(A)           THERE SHALL BE DEPOSITED IN ESCROW WITH UNION BANK OF CALIFORNIA,
N.A. (THE “ESCROW AGENT”) AN AMOUNT EQUAL TO TWO MILLION ONE HUNDRED THOUSAND
DOLLARS ($2,100,000) (THE “ESCROW DEPOSIT”) AS PART OF THE CONSIDERATION FOR THE
SHARES.  THE ESCROW DEPOSIT SHALL BE DELIVERED BY THE BUYER TO THE ESCROW AGENT
AT THE CLOSING AND SHALL BE HELD AND DELIVERED BY THE ESCROW AGENT IN AN ACCOUNT
(THE “ESCROW ACCOUNT”) IN ACCORDANCE WITH THE TERMS AND PROVISIONS OF THE ESCROW
AGREEMENT.  ANY FEES AND EXPENSES PAYABLE TO THE ESCROW AGENT PURSUANT TO THE
ESCROW AGREEMENT SHALL BE DIVIDED EQUALLY BETWEEN THE BUYER, ON THE ONE HAND,
AND THE SELLERS, ON THE OTHER HAND.

(B)           THE ESCROW FUND SHALL BE RELEASED TO THE SELLER REPRESENTATIVE,
AND BUYER AGREES TO EXECUTE JOINT INSTRUCTIONS, AND TAKE ALL OTHER ACTIONS,
NECESSARY TO CAUSE ANY SUCH RELEASE, AS FOLLOWS:

(I)          FIRST, UPON DETERMINATION OF THE NET WORKING CAPITAL PURSUANT TO
SECTION 2.5 AND PAYMENT OF ANY SHORTFALL OR EXCESS AMOUNTS PAYABLE THEREUNDER
(THE DATE OF SUCH PAYMENT BEING REFERRED TO HEREIN AS THE “FIRST RELEASE DATE”),
AN AMOUNT (THE “FIRST RELEASE AMOUNT”) EQUAL TO (X) $500,000 LESS (Y) THE SUM OF
(A) THE AMOUNT OF ANY SHORTFALL PAID TO THE BUYER PURSUANT TO SECTION
2.5(E)(I)(A); (B) THE AGGREGATE DOLLAR AMOUNT OF ANY INDEMNIFICATION CLAIMS PAID
OUT OF THE ESCROW FUND ON OR PRIOR TO THE FIRST RELEASE DATE; AND (C) THE
AGGREGATE DOLLAR AMOUNT OF ANY INDEMNIFICATION CLAIMS (AS SHOWN IN THE NOTICES
OF SUCH CLAIMS PROVIDED UNDER THE ESCROW AGREEMENT) PENDING AS OF THE FIRST
RELEASE DATE, BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO AN ACCOUNT
DESIGNATED BY THE SELLER REPRESENTATIVE; PROVIDED, HOWEVER, THERE SHALL BE NO
RELEASE FROM THE ESCROW FUND TO THE SELLER REPRESENTATIVE ON THE FIRST RELEASE

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DATE IF (1) THE FIRST RELEASE AMOUNT IS A NEGATIVE NUMBER, OR (2) ANY BUYER
INDEMNITEE HAS GIVEN NOTICE OF A CLAIM UNDER THE ESCROW AGREEMENT WITH RESPECT
TO WHICH IT IS NOT REASONABLY ABLE TO SPECIFY THE AMOUNT OF LOSSES AND SUCH
CLAIM IS THEN PENDING;

(II)         SECOND, ON THE FIRST ANNIVERSARY OF THE CLOSING DATE (THE “SECOND
RELEASE DATE”), AN AMOUNT (THE “SECOND RELEASE AMOUNT”) EQUAL TO (X) $1,125,000
LESS (Y) THE SUM OF (A) THE FIRST RELEASE AMOUNT; (B) THE AGGREGATE DOLLAR
AMOUNT OF ANY INDEMNIFICATION CLAIMS PAID OUT OF THE ESCROW FUND ON OR PRIOR TO
THE SECOND RELEASE DATE; AND (C) THE AGGREGATE DOLLAR AMOUNT OF ANY
INDEMNIFICATION CLAIMS (AS SHOWN IN THE NOTICES OF SUCH CLAIMS PROVIDED UNDER
THE ESCROW AGREEMENT) PENDING AS OF THE SECOND RELEASE DATE, BY WIRE TRANSFER OF
IMMEDIATELY AVAILABLE FUNDS TO AN ACCOUNT DESIGNATED BY THE SELLER
REPRESENTATIVE; PROVIDED, HOWEVER, THERE SHALL BE NO RELEASE FROM THE ESCROW
FUND TO THE SELLER REPRESENTATIVE ON THE SECOND RELEASE DATE IF (1) THE SECOND
RELEASE AMOUNT IS A NEGATIVE NUMBER, OR (2) ANY BUYER INDEMNITEE HAS GIVEN
NOTICE OF A CLAIM UNDER THE ESCROW AGREEMENT WITH RESPECT TO WHICH IT IS NOT
REASONABLY ABLE TO SPECIFY THE AMOUNT OF LOSSES AND SUCH CLAIM IS THEN PENDING;
AND

(III)        THIRD, ON THE DATE WHICH IS EIGHTEEN (18) MONTHS AFTER THE CLOSING
DATE (THE “THIRD RELEASE DATE”), AN AMOUNT (THE “THIRD RELEASE AMOUNT”) EQUAL TO
(X) THE REMAINING ESCROW FUND, IF ANY, LESS (Y) THE AGGREGATE DOLLAR AMOUNT OF
ANY INDEMNIFICATION CLAIMS (AS SHOWN IN THE NOTICES OF SUCH CLAIMS PROVIDED
UNDER THE ESCROW AGREEMENT) PENDING AS OF THE THIRD RELEASE DATE, BY WIRE
TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO AN ACCOUNT DESIGNATED BY THE SELLER
REPRESENTATIVE; PROVIDED, HOWEVER, IF ANY BUYER INDEMNITEE HAS GIVEN NOTICE OF A
CLAIM UNDER THE ESCROW AGREEMENT WITH RESPECT TO WHICH IT IS NOT REASONABLY ABLE
TO SPECIFY THE AMOUNT OF LOSSES AND SUCH CLAIM IS THEN PENDING, THE ESCROW AGENT
SHALL RETAIN THE REMAINING ESCROW FUND UNTIL IT RECEIVES JOINT WRITTEN
INSTRUCTIONS OF THE BUYER AND THE SELLER REPRESENTATIVE OR A FINAL
NON-APPEALABLE ORDER OF A COURT OF COMPETENT JURISDICTION AS PROVIDED IN THE
ESCROW AGREEMENT, UPON WHICH THE ESCROW AGENT SHALL PAY THE REMAINING ESCROW
FUND, IF ANY, TO THE SELLER REPRESENTATIVE IN ACCORDANCE WITH THIS PARAGRAPH.

ARTICLE III
REPRESENTATIONS AND WARRANTIES
AS TO THE COMPANY

Each of the Sellers and the Company hereby represent and warrant to the Buyer as
follows:

3.1                     ORGANIZATION AND QUALIFICATION.

(A)           THE COMPANY IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND
IN GOOD STANDING UNDER THE LAWS OF THE STATE OF DELAWARE, WITH ALL REQUISITE
CORPORATE POWER AND AUTHORITY TO OWN, OPERATE AND LEASE ITS PROPERTIES AND TO
CARRY ON ITS BUSINESS AS IT IS NOW BEING

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conducted.  The Company is qualified or licensed to do business and is in good
standing in every jurisdiction where the nature of the business conducted by it
or the properties owned or leased by it requires qualification except where such
failure to be so qualified or licensed or in good standing would not have a
Material Adverse Effect.  The Sellers have made available to the Buyer complete
and correct copies of the Organizational Documents of the Company.

(B)           COFFEE BEAN IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND
IN GOOD STANDING UNDER THE LAWS OF THE STATE OF OREGON, WITH ALL REQUISITE
CORPORATE POWER AND AUTHORITY TO OWN, OPERATE AND LEASE ITS PROPERTIES AND TO
CARRY ON ITS BUSINESS AS IT IS NOW BEING CONDUCTED.  COFFEE BEAN IS QUALIFIED OR
LICENSED TO DO BUSINESS AND IS IN GOOD STANDING IN EVERY JURISDICTION WHERE THE
NATURE OF THE BUSINESS CONDUCTED BY IT OR THE PROPERTIES OWNED OR LEASED BY IT
REQUIRES QUALIFICATION EXCEPT WHERE SUCH FAILURE TO BE SO QUALIFIED OR LICENSED
OR IN GOOD STANDING WOULD NOT HAVE A MATERIAL ADVERSE EFFECT.  THE SELLERS HAVE
MADE AVAILABLE TO THE BUYER COMPLETE AND CORRECT COPIES OF THE ORGANIZATIONAL
DOCUMENTS OF COFFEE BEAN.

3.2           AUTHORIZATION.  THE COMPANY HAS THE REQUISITE LEGAL CAPACITY,
POWER AND AUTHORITY (INCLUDING FULL CORPORATE POWER AND AUTHORITY) TO EXECUTE
AND DELIVER THIS AGREEMENT AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED
HEREBY. THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY THE COMPANY, THE
PERFORMANCE BY THE COMPANY OF ITS OBLIGATIONS HEREUNDER, AND THE CONSUMMATION BY
THE COMPANY OF THE TRANSACTIONS CONTEMPLATED HEREBY, HAVE BEEN DULY AUTHORIZED
BY THE COMPANY.  NO OTHER ACTION (CORPORATE OR OTHERWISE) ON THE PART OF THE
COMPANY OR COFFEE BEAN IS NECESSARY TO AUTHORIZE THE EXECUTION AND DELIVERY OF
THIS AGREEMENT OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY. 
THIS AGREEMENT HAS BEEN DULY AND VALIDLY EXECUTED AND DELIVERED BY THE COMPANY
AND CONSTITUTES A VALID AND BINDING OBLIGATION OF THE COMPANY, ENFORCEABLE
AGAINST THE COMPANY IN ACCORDANCE WITH ITS TERMS, EXCEPT TO THE EXTENT THAT SUCH
ENFORCEMENT MAY BE SUBJECT TO APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION,
MORATORIUM OR OTHER SIMILAR LAWS NOW OR HEREAFTER IN EFFECT RELATING TO
CREDITORS’ RIGHTS GENERALLY, AND THE REMEDY OF SPECIFIC PERFORMANCE AND
INJUNCTIVE AND OTHER FORMS OF EQUITABLE RELIEF MAY BE SUBJECT TO EQUITABLE
DEFENSES AND TO THE DISCRETION OF THE COURT BEFORE WHICH ANY PROCEEDING THEREFOR
MAY BE BROUGHT.

3.3                     NO VIOLATION.  EXCEPT AS SET FORTH IN SCHEDULE 3.3,
NEITHER THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY THE COMPANY, THE
PERFORMANCE BY THE COMPANY OF ITS OBLIGATIONS HEREUNDER, NOR THE CONSUMMATION BY
THE COMPANY OF THE TRANSACTIONS CONTEMPLATED HEREBY WILL: (A) VIOLATE, CONFLICT
WITH OR RESULT IN ANY BREACH OF ANY PROVISION OF THE ORGANIZATIONAL DOCUMENTS OF
THE COMPANY OR COFFEE BEAN; (B) VIOLATE, CONFLICT WITH OR RESULT IN A VIOLATION
OR BREACH OF, OR CONSTITUTE A DEFAULT (WITH OR WITHOUT DUE NOTICE OR LAPSE OF
TIME OR BOTH) UNDER THE TERMS, CONDITIONS OR PROVISIONS OF ANY NOTE, BOND,
MORTGAGE, INDENTURE OR DEED OF TRUST, OR ANY MATERIAL LICENSE, LEASE OR
AGREEMENT TO WHICH ANY SELLER, THE COMPANY OR COFFEE BEAN ARE A PARTY; OR (C)
VIOLATE ANY ORDER, WRIT, JUDGMENT, INJUNCTION, DECREE, STATUTE, RULE OR
REGULATION OF ANY COURT OR GOVERNMENTAL BODY APPLICABLE TO THE COMPANY OR COFFEE
BEAN, EXCEPT, IN THE CASE OF CLAUSE (B), AS WOULD NOT, INDIVIDUALLY OR IN THE
AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT.

3.4           CAPITALIZATION.

(A)           THE AUTHORIZED CAPITAL STOCK OF THE COMPANY CONSISTS OF 101,250
SHARES OF SERIES A PREFERRED STOCK, 240,000 SHARES OF SERIES B PREFERRED STOCK,
AND 528,750 SHARES OF

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Common Stock.  As of the date hereof (after giving effect to the Transfer and
Redemption), the Company has 56,250 shares of Series A Preferred Stock, 80,000
shares of Series B Preferred Stock, and 111,000 shares of Common Stock issued
and outstanding (the “Shares”), all of which have been validly issued, are fully
paid and non-assessable and were not issued in violation of any preemptive
rights.  Except as set forth in Schedule 3.4(a), there are no options, warrants,
calls, subscriptions, conversion or other rights, agreements or commitments
obligating the Company to issue any additional shares of capital stock or any
other securities convertible into, exchangeable for or evidencing the right to
subscribe for any shares of capital stock of the Company.  No accrued and unpaid
dividends on the Shares have been stripped from the Shares and assigned or
transferred to any Person.

(B)           THE AUTHORIZED CAPITAL STOCK OF COFFEE BEAN CONSISTS OF 1,000
SHARES, ALL OF WHICH ARE DESIGNATED COMMON STOCK, NO PAR VALUE PER SHARE (“CBI
COMMON STOCK”).  AS OF THE DATE HEREOF, COFFEE BEAN HAS 100 SHARES OF CBI COMMON
STOCK ISSUED AND OUTSTANDING (THE “CBI SHARES”), ALL OF WHICH HAVE BEEN VALIDLY
ISSUED, ARE FULLY PAID AND NON-ASSESSABLE AND WERE NOT ISSUED IN VIOLATION OF
ANY PREEMPTIVE RIGHTS.  THERE ARE NO OPTIONS, WARRANTS, CALLS, SUBSCRIPTIONS,
CONVERSION OR OTHER RIGHTS, AGREEMENTS OR COMMITMENTS OBLIGATING COFFEE BEAN TO
ISSUE ANY ADDITIONAL SHARES OF CAPITAL STOCK OR ANY OTHER SECURITIES CONVERTIBLE
INTO, EXCHANGEABLE FOR OR EVIDENCING THE RIGHT TO SUBSCRIBE FOR ANY SHARES OF
CAPITAL STOCK OF COFFEE BEAN.  THE COMPANY IS THE SOLE RECORD AND BENEFICIAL
OWNER OF, AND HAS GOOD AND VALID TITLE TO, THE CBI SHARES, FREE AND CLEAR OF ALL
ENCUMBRANCES EXCEPT AS SET FORTH IN SCHEDULE 3.4(B).

3.5                     SUBSIDIARIES AND EQUITY INVESTMENTS.  EXCEPT FOR THE CBI
SHARES AND THE FACILITY LLC (THE MEMBERSHIP INTERESTS OF WHICH SHALL BE
TRANSFERRED TO THE HOLDERS OF SERIES A PREFERRED STOCK PURSUANT TO THE TRANSFER
AND REDEMPTION), NEITHER THE COMPANY NOR COFFEE BEAN HAS ANY SUBSIDIARIES OR ANY
DIRECT OR INDIRECT EQUITY OWNERSHIP IN ANY PERSON.

3.6                     CONSENTS AND APPROVALS.  EXCEPT AS SET FORTH IN SCHEDULE
3.6, NO FILING OR REGISTRATION WITH, NO NOTICE TO AND NO PERMIT, AUTHORIZATION,
CONSENT OR APPROVAL OF ANY THIRD PARTY OR ANY GOVERNMENTAL BODY IS NECESSARY FOR
THE CONSUMMATION BY THE COMPANY AND COFFEE BEAN OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT.

3.7           FINANCIAL STATEMENTS.

(A)           SCHEDULE 3.7(A) CONTAINS COPIES OF THE FOLLOWING FINANCIAL
STATEMENTS (COLLECTIVELY, THE “FINANCIAL STATEMENTS”):

(I)          THE AUDITED CONSOLIDATED BALANCE SHEET OF THE COMPANY AS OF MARCH
25, 2006, AND THE RELATED STATEMENTS OF INCOME, CHANGES IN STOCKHOLDERS’ EQUITY
AND CASH FLOWS FOR THE PERIODS THEN ENDED (THE “2006 AUDITED FINANCIAL
STATEMENTS”); AND

(II)         THE UNAUDITED CONSOLIDATED BALANCE SHEET (THE “UNAUDITED BALANCE
SHEET”) OF THE COMPANY AS OF MARCH 31, 2007 (THE “BALANCE SHEET DATE”) AND THE
RELATED STATEMENTS OF INCOME, CHANGES IN STOCKHOLDERS’ EQUITY AND CASH FLOWS FOR
THE PERIODS THEN ENDED (THE “UNAUDITED FINANCIAL STATEMENTS”).

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(B)           THE FINANCIAL STATEMENTS: (I) WERE PREPARED IN ACCORDANCE WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES APPLIED ON A CONSISTENT BASIS (“GAAP”)
THROUGHOUT THE PERIODS COVERED THEREBY, EXCEPT AS OTHERWISE NOTED THEREON OR
DISCLOSED IN SCHEDULE 3.7(B); AND (II) PRESENT FAIRLY IN ALL MATERIAL RESPECTS
THE CONSOLIDATED FINANCIAL POSITION AND RESULTS OF OPERATIONS OF THE COMPANY AS
OF SUCH DATES AND FOR THE PERIODS THEN ENDED.

3.8           ABSENCE OF UNDISCLOSED LIABILITIES.  EXCEPT FOR MATTERS RELATING
TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THERE ARE NO LIABILITIES OR
FINANCIAL OBLIGATIONS OF THE COMPANY OR ANY OF ITS SUBSIDIARIES OTHER THAN
LIABILITIES AND OBLIGATIONS: (A) PROVIDED FOR OR RESERVED AGAINST IN THE
FINANCIAL STATEMENTS; (B) ARISING AFTER THE BALANCE SHEET DATE IN THE ORDINARY
COURSE OF BUSINESS; (C) WHICH ARE NOT MATERIAL TO THE CONSOLIDATED FINANCIAL
POSITION OF THE COMPANY; OR (D) WHICH ARE DISCLOSED IN SCHEDULE 3.8.

3.9           ABSENCE OF CERTAIN CHANGES.

(A)           EXCEPT AS DISCLOSED IN SCHEDULE 3.9(A), AND EXCEPT FOR MATTERS
RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, SINCE THE BALANCE
SHEET DATE:

(I)          THERE HAS BEEN NO MATERIAL ADVERSE EFFECT; AND

(II)         NO MATERIAL DAMAGE, DESTRUCTION, LOSS OR CLAIM, WHETHER OR NOT
COVERED BY INSURANCE, OR CONDEMNATION OR OTHER TAKING ADVERSELY AFFECTING ANY OF
THE ASSETS, BUSINESS, OPERATIONS OR CONDITION OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES HAS OCCURRED.

(B)           EXCEPT AS SET FORTH IN SCHEDULE 3.9(B), SINCE THE BALANCE SHEET
DATE, EACH OF THE COMPANY AND ITS SUBSIDIARIES HAS CONDUCTED ITS BUSINESS ONLY
IN THE ORDINARY COURSE AND IN CONFORMITY WITH PAST PRACTICE AND, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, HAS NOT:

(I)          SOLD, LEASED (AS LESSOR), TRANSFERRED OR OTHERWISE DISPOSED OF, OR
MORTGAGED OR PLEDGED, OR IMPOSED OR SUFFERED TO BE IMPOSED ANY ENCUMBRANCE
(OTHER THAN A PERMITTED ENCUMBRANCE) ON, ANY OF THE ASSETS REFLECTED ON THE
UNAUDITED BALANCE SHEET OR ANY ASSETS ACQUIRED BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES AFTER THE BALANCE SHEET DATE, EXCEPT FOR INVENTORY AND NON-MATERIAL
AMOUNTS OF PERSONAL PROPERTY SOLD OR OTHERWISE DISPOSED OF IN THE ORDINARY
COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE;

(II)         CANCELED ANY MATERIAL DEBTS OWED TO OR CLAIMS HELD BY THE COMPANY
OR ANY OF ITS SUBSIDIARIES (INCLUDING THE SETTLEMENT OF ANY CLAIMS OR
LITIGATION) OR WAIVED ANY OTHER RIGHTS HELD BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES OTHER THAN IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST
PRACTICE;

(III)        PAID ANY CLAIMS AGAINST THE COMPANY OR ANY OF ITS SUBSIDIARIES
(INCLUDING THE SETTLEMENT OF ANY CLAIMS AND LITIGATION AGAINST THE COMPANY OR
ANY OF ITS SUBSIDIARIES OR THE PAYMENT OR SETTLEMENT OF ANY OBLIGATIONS OR
LIABILITIES OF THE COMPANY OR ANY OF ITS SUBSIDIARIES) OTHER THAN IN THE
ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE;

 

20

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(IV)        CREATED, INCURRED OR ASSUMED, OR AGREED TO CREATE, INCUR OR ASSUME,
ANY INDEBTEDNESS FOR BORROWED MONEY OR ENTERED INTO, AS LESSEE, ANY CAPITALIZED
LEASE OBLIGATIONS (AS DEFINED IN STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO.
13);

(V)         ACCELERATED OR DELAYED COLLECTION OF NOTES OR ACCOUNTS RECEIVABLE IN
ADVANCE OF OR BEYOND THEIR REGULAR DUE DATES OR THE DATES WHEN THE SAME WOULD
HAVE BEEN COLLECTED IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST
PRACTICE;

(VI)        DELAYED OR ACCELERATED PAYMENT OF ANY ACCOUNT PAYABLE OR OTHER
LIABILITY OF THE COMPANY OR ANY OF ITS SUBSIDIARIES BEYOND OR IN ADVANCE OF ITS
DUE DATE OR THE DATE WHEN SUCH LIABILITY WOULD HAVE BEEN PAID IN THE ORDINARY
COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE;

(VII)       ALLOWED THE LEVELS OF RAW MATERIALS, SUPPLIES, WORK-IN-PROCESS OR
OTHER MATERIALS INCLUDED IN THE INVENTORY OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES TO VARY IN ANY MATERIAL RESPECT FROM THE LEVELS CUSTOMARILY
MAINTAINED;

(VIII)      ACQUIRED ANY REAL PROPERTY OR UNDERTAKEN OR COMMITTED TO UNDERTAKE
CAPITAL EXPENDITURES EXCEEDING $50,000 IN THE AGGREGATE;

(IX)         MADE, OR AGREED TO MAKE, ANY PAYMENT OF CASH OR DISTRIBUTION OF
ASSETS TO THE COMPANY (IN THE CASE OF PAYMENTS OR DISTRIBUTIONS BY CBI), ANY
SELLER OR ANY SELLER’S AFFILIATES;

(X)          INSTITUTED ANY INCREASE IN (A) ANY ANNUAL COMPENSATION PAYABLE TO
ANY OFFICER OR EMPLOYEE OF THE COMPANY OR ANY OF ITS SUBSIDIARIES IN EXCESS OF
$15,000 (WHETHER PAYABLE IN A SINGLE PAYMENT OR SERIES OF RELATED PAYMENTS), OR
(B) ANY PROFIT-SHARING, BONUS, INCENTIVE, DEFERRED COMPENSATION, INSURANCE,
PENSION, RETIREMENT, MEDICAL, HOSPITAL, DISABILITY, WELFARE OR OTHER BENEFITS
MADE AVAILABLE TO OFFICERS OR EMPLOYEES OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES;

(XI)         MADE ANY CHANGE IN THE ACCOUNTING PRINCIPLES AND PRACTICES USED BY
THE COMPANY OR ANY OF ITS SUBSIDIARIES FROM THOSE APPLIED IN THE PREPARATION OF
THE FINANCIAL STATEMENTS;

(XII)        ENTERED INTO OR BECOME COMMITTED TO ENTER INTO ANY OTHER MATERIAL
TRANSACTION EXCEPT IN THE ORDINARY COURSE OF BUSINESS; OR

(XIII)       PREPARED OR FILED ANY TAX RETURN INCONSISTENT WITH PAST PRACTICE
OR, ON ANY SUCH TAX RETURN, TAKEN ANY POSITION, MADE ANY ELECTION, OR ADOPTED
ANY METHOD THAT IS INCONSISTENT WITH POSITIONS TAKEN, ELECTIONS MADE OR METHODS
USED IN PREPARING OR FILING SIMILAR TAX RETURNS IN PRIOR PERIODS (INCLUDING,
WITHOUT LIMITATION, INCONSISTENT POSITIONS, ELECTIONS OR METHODS WHICH WOULD
HAVE THE EFFECT OF DEFERRING INCOME TO PERIODS FOR WHICH THE BUYER IS LIABLE
PURSUANT TO

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SECTION 7.3 OR ACCELERATING DEDUCTIONS TO PERIODS FOR WHICH THE SELLERS ARE
LIABLE PURSUANT TO SECTION 7.3).

3.10                   EMPLOYEE BENEFIT PLANS.

(A)           SCHEDULE 3.10(A) SETS FORTH A TRUE AND COMPLETE LIST OF EACH
“EMPLOYEE BENEFIT PLAN” (WITHIN THE MEANING OF SECTION 3(3) OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), APPLIED WITHOUT
REGARD TO THE EXCEPTIONS FROM COVERAGE CONTAINED IN SECTIONS 4(B)(4) OR 4(B)(5)
OF ERISA), AND ANY RELATED TRUST, AS TO WHICH THE COMPANY OR ANY OF ITS
SUBSIDIARIES HAS ANY OBLIGATION OR LIABILITY, CONTINGENT OR OTHERWISE
(COLLECTIVELY, “EMPLOYEE BENEFIT PLANS”).  EXCEPT AS DISCLOSED ON SCHEDULE
3.10(A), NONE OF THE EMPLOYEE BENEFIT PLANS LISTED ON SCHEDULE 3.10(A) IS A
“MULTIEMPLOYER PLAN” AS DEFINED IN SECTION 3(37) OF ERISA.  TRUE, CORRECT AND
COMPLETE COPIES OF THE FOLLOWING DOCUMENTS, TO THE EXTENT APPLICABLE, WITH
RESPECT TO EACH OF THE EMPLOYEE BENEFIT PLANS HAVE BEEN MADE AVAILABLE TO THE
BUYER BY THE SELLERS: (I) THE EMPLOYEE BENEFIT PLAN AND RELATED TRUST DOCUMENTS,
AND ALL AMENDMENTS THERETO; (II) THE MOST RECENT FORM 5500 AND ACCOMPANYING
SCHEDULES; (III) THE LAST INTERNAL REVENUE SERVICE DETERMINATION LETTER; AND
(IV) THE CURRENT SUMMARY PLAN DESCRIPTIONS AND MODIFICATIONS THERETO.

(B)           EACH EMPLOYEE BENEFIT PLAN LISTED ON SCHEDULE 3.10(A) WHICH IS
INTENDED TO QUALIFY UNDER SECTION 401(A) OF THE CODE HAS RECEIVED A FAVORABLE
DETERMINATION OR OPINION LETTER FROM THE INTERNAL REVENUE SERVICE (OR A REQUEST
FOR A DETERMINATION LETTER HAS BEEN SUBMITTED WITHIN THE APPLICABLE REMEDIAL
AMENDMENT PERIOD UNDER SECTION 410(B) OF THE CODE AND IS PENDING) THAT SUCH
EMPLOYEE BENEFIT PLAN IS SO QUALIFIED UNDER THE CODE, AND, TO THE KNOWLEDGE OF
THE SELLERS AND THE COMPANY, NO CIRCUMSTANCE EXISTS WHICH MIGHT REASONABLY BE
EXPECTED TO CAUSE SUCH EMPLOYEE BENEFIT PLAN TO CEASE BEING SO QUALIFIED.  EACH
EMPLOYEE BENEFIT PLAN LISTED ON SCHEDULE 3.10(A) COMPLIES AND HAS BEEN
MAINTAINED, IN ALL MATERIAL RESPECTS, WITH ITS TERMS AND ALL REQUIREMENTS OF LAW
AND REGULATIONS APPLICABLE THERETO, AND THERE HAS BEEN NO NOTICE ISSUED BY ANY
GOVERNMENTAL BODY QUESTIONING OR CHALLENGING SUCH COMPLIANCE.  THERE ARE NO
ACTIONS, SUITS OR CLAIMS (OTHER THAN ROUTINE CLAIMS FOR BENEFITS) PENDING OR, TO
THE KNOWLEDGE OF THE SELLERS AND THE COMPANY, THREATENED INVOLVING SUCH EMPLOYEE
BENEFIT PLANS OR THE ASSETS OF SUCH EMPLOYEE BENEFIT PLANS.  NEITHER THE COMPANY
NOR ANY OF ITS SUBSIDIARIES HAS ANY OBLIGATIONS UNDER ANY WELFARE PLAN OR
OTHERWISE TO PROVIDE HEALTH OR DEATH BENEFITS TO OR IN RESPECT OF FORMER
EMPLOYEES OF THE COMPANY OR ANY OF ITS SUBSIDIARIES, EXCEPT AS SPECIFICALLY
REQUIRED BY THE HEALTH CARE CONTINUATION REQUIREMENTS OF PART 6 OF SUBTITLE B OF
TITLE I OF ERISA OR COMPARABLE APPLICABLE STATE LAW.  NEITHER THE COMPANY NOR
ANY OF ITS SUBSIDIARIES MAINTAINS ANY PENSION PLAN WHICH IS SUBJECT TO TITLE IV
OF ERISA AND WHICH, IF TERMINATED ON THE CLOSING DATE, WOULD IMPOSE ANY
LIABILITY ON THE COMPANY OR ANY OF ITS SUBSIDIARIES.  NEITHER THE COMPANY NOR
ANY OF ITS SUBSIDIARIES HAS ANY MATERIAL LIABILITY, WHETHER DIRECT, INDIRECT,
CONTINGENT OR OTHERWISE: (I) ON ACCOUNT OF ANY VIOLATION OF THE HEALTH CARE
REQUIREMENTS OF PART 6 OF SUBTITLE B OF TITLE I OF ERISA OR SECTION 4980B OF THE
CODE; (II) UNDER SECTION 502(1) OF ERISA OR SECTION 4975 OF THE CODE; (III)
UNDER SECTION 302 OF ERISA OR SECTION 412 OF THE CODE; OR (IV) UNDER TITLE IV OF
ERISA.

(C)           SCHEDULE 3.10(C) SETS FORTH A TRUE AND COMPLETE LIST OF EACH OF
THE FOLLOWING PURSUANT TO WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES MAY BE
REQUIRED TO MAKE PAYMENTS TO OR FOR THE BENEFIT OF EMPLOYEES OR FORMER EMPLOYEES
OF THE COMPANY OR ANY OF ITS

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Subsidiaries that, singly or in the aggregate for each arrangement, are
reasonably expected to exceed $15,000, other than the Employee Benefit Plans
listed in Schedule 3.10(a): all employee benefit programs, arrangements, or
payroll practices, including those involving: retirement or savings; bonus,
incentive, equity or equity-based compensation; consulting, deferred
compensation or other compensation agreements; sick leave, vacation pay, or
salary continuation arrangements; hospitalization or other medical, disability,
life or other insurance; stock ownership, stock purchase, or stock option
programs; scholarships; severance pay; tuition reimbursement; each employee
collective bargaining agreement and each other agreement, commitment, policy or
arrangement, whether written or oral, with or for the benefit of any current or
former officer, director, employee or consultant, including, without limitation,
each employment, supplemental pension, termination or consulting agreement or
arrangement and any agreements or arrangements associated with a change in
control (“Non-ERISA Plans”). True and complete copies of all written Non-ERISA
Plans and of all related insurance and annuity policies and contracts and other
documents with respect to each Non-ERISA Plan have been made available to the
Buyer by the Sellers. Schedule 3.10(c) contains a true and complete description
of all oral Non-ERISA Plans. No amounts will become payable under any Non-ERISA
Plan as a result of the Closing for which the Buyer will bear any liability.

(D)           SCHEDULE 3.10(D) SETS FORTH A TRUE AND COMPLETE LIST OF ALL
COMPENSATION, WHETHER IN CASH, EQUITY (INCLUDING THE ACCELERATION OF ANY EQUITY
INSTRUMENTS SUBJECT TO VESTING RESTRICTIONS) OR OTHERWISE, THAT IS PAID OR WILL
BECOME PAYABLE TO ANY EMPLOYEE OF THE COMPANY OR ANY OF ITS SUBSIDIARIES
(WHETHER SUCH AMOUNTS ARE PAYABLE BY THE COMPANY OR SUCH SUBSIDIARIES) AS A
RESULT OF, OR IN CONNECTION WITH, THE TRANSACTIONS CONTEMPLATED HEREBY.  IN
ADDITION, SCHEDULE 3.10(D) SETS FORTH A TRUE AND COMPLETE LIST OF ALL EQUITY
(INCLUDING ANY EQUITY-RELATED INSTRUMENTS SUCH AS OPTIONS, WARRANTS OR STOCK
APPRECIATION RIGHTS) OF THE COMPANY AND ITS SUBSIDIARIES BENEFICIALLY OWNED BY
ANY EMPLOYEE OF THE COMPANY OR ANY OF ITS SUBSIDIARIES.

3.11                   BROKERS’ FEES AND COMMISSIONS; SELLERS’ TRANSACTION
COSTS.

(A)           EXCEPT FOR LINCOLN INTERNATIONAL, WHOSE FEES WILL BE PAID BY THE
SELLERS, NONE OF THE SELLERS, THE COMPANY OR ANY OF ITS SUBSIDIARIES, OR ANY OF
THEIR RESPECTIVE DIRECTORS, OFFICERS, PARTNERS, MEMBER, EMPLOYEES OR AGENTS HAS
EMPLOYED ANY INVESTMENT BANKER, BROKER OR FINDER IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED HEREBY.

(B)           EXCEPT FOR FEES AND EXPENSES PAYABLE PURSUANT TO THAT CERTAIN
EXCLUSIVE LISTING AGREEMENT, DATED JUNE 22, 2006, BETWEEN CUSHMAN & WAKEFIELD OF
OREGON, INC. AND COFFEE BEAN, AS AMENDED, WHICH AGREEMENT SHALL BE ASSIGNED TO
AND ALL LIABILITIES AND OBLIGATIONS THEREUNDER ASSUMED BY THE LLC PURSUANT TO
THE TRANSFER AND REDEMPTION AND FOR WHICH NEITHER THE COMPANY NOR ANY OF ITS
SUBSIDIARIES SHALL HAVE ANY LIABILITY OR OBLIGATION UPON SUCH ASSIGNMENT, NONE
OF THE SELLERS, THE COMPANY OR ANY OF ITS SUBSIDIARIES, OR ANY OTHER PERSON ON
BEHALF OF ANY OF THE SELLERS, THE COMPANY OR ANY OF ITS SUBSIDIARIES, HAS ANY
LIABILITY OR OBLIGATION TO PAY ANY FEES OR COMMISSIONS TO ANY BROKER, FINDER, OR
AGENT, OR ANY LIABILITY OR OTHER OBLIGATION TO ANY OTHER PERSON, WITH RESPECT TO
THE SALE, TRANSFER, OR LISTING FOR SALE OR TRANSFER, OF THE FACILITY.

(C)           EXCEPT FOR THE OUTSTANDING SELLERS’ TRANSACTION COSTS WHICH WILL
BE PAID AT CLOSING IN ACCORDANCE WITH SECTION 2.4(D), NONE OF THE SELLERS, THE
COMPANY OR ANY OF ITS

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Subsidiaries, or any other Person on behalf of any of the Sellers, the Company
or any of its Subsidiaries has incurred any expenses, costs of fees in
connection with the preparation, negotiation, execution and delivery of this
Agreement and the Ancillary Agreements and the transactions contemplated hereby
and thereby.

3.12                   CONTRACTS.

(A)           SCHEDULE 3.12(A) HERETO SETS FORTH A LIST OF ALL CONTRACTS TO
WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES IS A PARTY OR BY WHICH IT IS BOUND,
EXCEPT: (A) ANY CONTRACT THAT DOES NOT REQUIRE PAYMENT BY ANY PARTY THERETO OF
MORE THAN $15,000 IN ANY SINGLE PAYMENT OR SERIES OF RELATED PAYMENTS; (B) ANY
CONTRACT THAT IS TERMINABLE BY THE COMPANY OR SUCH SUBSIDIARY UPON THIRTY (30)
DAYS’ NOTICE OR LESS WITHOUT THE PAYMENT OF ANY MATERIAL PENALTY OR MATERIAL
TERMINATION FEE; (C) ANY CONTRACT ENTERED INTO PRIOR TO CLOSING WITH THE BUYER
OR WITH ANY OTHER PERSON IN CONNECTION WITH ANY TRANSACTION CONTEMPLATED BY THIS
AGREEMENT; (D) PURCHASE AND SALES ORDERS FOR GOODS AND SERVICES ENTERED INTO IN
THE ORDINARY COURSE OF BUSINESS (OTHER THAN CONTRACTS OR OTHER ARRANGEMENTS
ASSOCIATED WITH LIMITING COMMODITY PRICE RISK WHICH SHALL BE SET FORTH IN
SCHEDULE 3.12(A)); AND (E) ANY CONTRACT SPECIFICALLY LISTED IN ANY OTHER
SCHEDULE TO THIS AGREEMENT.

(B)           SCHEDULE 3.12(B) SETS FORTH A LIST OF ALL CONTRACTS BETWEEN THE
COMPANY OR ANY OF ITS SUBSIDIARIES AND ANY SELLER OR ANY SELLER’S AFFILIATES.

(C)           EXCEPT AS SET FORTH IN SCHEDULE 3.12(C) OR IN ANY OTHER SCHEDULE
HERETO, EACH OF THE LEASES, CONTRACTS AND OTHER AGREEMENTS LISTED IN SCHEDULES
3.10(A), 3.10(C), 3.12(A), 3.12(B), 3.20(B), 3.21(B), 3.22(A), 3.22(B) AND
3.22(C) (COLLECTIVELY, THE “COMPANY AGREEMENTS”) CONSTITUTES A VALID AND BINDING
OBLIGATION OF THE COMPANY OR ITS SUBSIDIARY THAT IS A PARTY THERETO AND IS IN
FULL FORCE AND EFFECT AND (EXCEPT FOR THOSE COMPANY AGREEMENTS WHICH SHALL BE
TERMINATED ON THE CLOSING DATE IN ACCORDANCE WITH THE PROVISIONS HEREOF) WILL
CONTINUE IN FULL FORCE AND EFFECT AFTER THE CLOSING, IN EACH CASE WITHOUT
BREACHING THE TERMS THEREOF OR RESULTING IN THE FORFEITURE OR IMPAIRMENT OF ANY
RIGHTS THEREUNDER AND WITHOUT THE CONSENT, APPROVAL OR ACT OF, OR THE MAKING OF
ANY FILING WITH, ANY OTHER PARTY.  EACH OF THE COMPANY AND ITS SUBSIDIARIES HAS
FULFILLED AND PERFORMED ITS MATERIAL OBLIGATIONS UNDER EACH OF THE COMPANY
AGREEMENTS, AND NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES IS IN, OR TO THE
SELLERS’ AND THE COMPANY’S KNOWLEDGE ALLEGED TO BE IN, BREACH OR DEFAULT UNDER,
NOR IS THERE OR TO THE SELLERS’ AND THE COMPANY’S KNOWLEDGE IS THERE ALLEGED TO
BE ANY BASIS FOR TERMINATION OF, ANY OF THE COMPANY AGREEMENTS AND TO THE
SELLERS’ AND THE COMPANY’S KNOWLEDGE NO OTHER PARTY TO ANY OF THE COMPANY
AGREEMENTS HAS BREACHED OR DEFAULTED THEREUNDER, AND NO EVENT HAS OCCURRED AND
NO CONDITION OR STATE OF FACTS EXISTS WHICH, WITH THE PASSAGE OF TIME OR THE
GIVING OF NOTICE OR BOTH, WOULD CONSTITUTE SUCH A DEFAULT OR BREACH BY THE
COMPANY, ANY OF ITS SUBSIDIARIES OR, TO THE SELLERS’ AND THE COMPANY’S
KNOWLEDGE, BY ANY SUCH OTHER PARTY.  NEITHER THE COMPANY NOR ANY OF ITS
SUBSIDIARIES IS CURRENTLY RENEGOTIATING ANY OF THE COMPANY AGREEMENTS OR PAYING
LIQUIDATED DAMAGES IN LIEU OF PERFORMANCE THEREUNDER.  COMPLETE AND CORRECT
COPIES OF EACH OF THE COMPANY AGREEMENTS HAVE HERETOFORE BEEN MADE AVAILABLE TO
THE BUYER BY THE SELLERS.

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3.13         TAXES.

(A) (I) EACH OF THE COMPANY AND ITS SUBSIDIARIES HAS FILED ALL TAX RETURNS
REQUIRED TO BE FILED; (II) ALL SUCH TAX RETURNS ARE COMPLETE AND ACCURATE AND
DISCLOSE ALL TAXES REQUIRED TO BE PAID BY THE COMPANY AND ITS SUBSIDIARIES FOR
THE PERIODS COVERED THEREBY AND ALL TAXES SHOWN TO BE DUE ON SUCH TAX RETURNS
HAVE BEEN TIMELY PAID; (III) NONE OF THE COMPANY OR ANY OF ITS SUBSIDIARIES IS
CURRENTLY THE BENEFICIARY OF ANY EXTENSION OF TIME WITHIN WHICH TO FILE ANY TAX
RETURN; (IV) ALL TAXES (WHETHER OR NOT SHOWN ON ANY TAX RETURN) OWED BY THE
COMPANY OR ANY OF ITS SUBSIDIARIES HAVE BEEN TIMELY PAID; (V) NONE OF THE
COMPANY OR ANY OF ITS SUBSIDIARIES HAS WAIVED OR BEEN REQUESTED TO WAIVE ANY
STATUTE OF LIMITATIONS IN RESPECT OF TAXES WHICH WAIVER CURRENTLY IS IN EFFECT;
(VI) THERE IS NO ACTION, SUIT, INVESTIGATION, AUDIT, CLAIM OR ASSESSMENT PENDING
OR, TO THE SELLERS’ AND THE COMPANY’S KNOWLEDGE, PROPOSED OR THREATENED WITH
RESPECT TO TAXES OF THE COMPANY OR ANY OF ITS SUBSIDIARIES, AND NO BASIS EXISTS
THEREFOR; (VII) ALL DEFICIENCIES ASSERTED OR ASSESSMENTS MADE AS A RESULT OF ANY
EXAMINATION OF THE TAX RETURNS REFERRED TO IN CLAUSE (I) HAVE BEEN PAID IN FULL;
(VIII) ALL TAX INDEMNITY ARRANGEMENTS RELATING TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES (OTHER THAN THIS AGREEMENT) WILL TERMINATE PRIOR TO THE CLOSING
DATE, AND NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES WILL HAVE ANY
LIABILITY THEREUNDER ON OR AFTER THE CLOSING DATE; AND (IX) THERE ARE NO LIENS
FOR TAXES UPON THE ASSETS OF THE COMPANY OR ANY OF ITS SUBSIDIARIES EXCEPT LIENS
RELATING TO CURRENT TAXES NOT YET DUE.

(B)           AS A DIRECT OR INDIRECT RESULT OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT, NO PAYMENT OR OTHER BENEFIT INCLUDING ANY PAYMENT UNDER A
NON-ERISA PLAN, AND NO ACCELERATION OF THE VESTING OF ANY OPTIONS, PAYMENTS OR
OTHER BENEFITS, WILL BE, AN “EXCESS PARACHUTE PAYMENT” TO A “DISQUALIFIED
INDIVIDUAL” AS THOSE TERMS ARE DEFINED IN SECTION 280G OF THE CODE AND THE
TREASURY REGULATIONS THEREUNDER. EXCEPT AS SET FORTH ON SCHEDULE 3.13(B), AS A
DIRECT OR INDIRECT RESULT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, NO
PAYMENT OR OTHER BENEFIT, AND NO ACCELERATION OF THE VESTING OF ANY OPTIONS,
PAYMENTS OR OTHER BENEFITS WILL BE (OR UNDER SECTION 280G OF THE CODE AND THE
TREASURY REGULATIONS THEREUNDER BE PRESUMED TO BE) A “PARACHUTE PAYMENT” TO A
“DISQUALIFIED INDIVIDUAL” AS THOSE TERMS ARE DEFINED IN SECTION 280G OF THE CODE
AND THE TREASURY REGULATIONS THEREUNDER, WITHOUT REGARD TO WHETHER SUCH PAYMENT
OR ACCELERATION IS REASONABLE COMPENSATION FOR PERSONAL SERVICES PERFORMED OR TO
BE PERFORMED IN THE FUTURE.

(C) NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES IS A MEMBER OF A COMPANY
GROUP OTHER THAN A COMPANY GROUP OF WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES
IS THE COMMON PARENT.

(D)           SCHEDULE 3.13(D) ACCURATELY REFLECTS THE FOLLOWING: (I) THE
FEDERAL AND STATE NET OPERATING LOSSES AS DEFINED IN SECTION 172(C) OF THE CODE
(OR ANY COMPARABLE PROVISION OF STATE LAW) OF THE COMPANY AND ITS SUBSIDIARIES
FOR THE TAX YEARS ENDED MARCH 26, 2005 AND MARCH 25, 2006; AND (II) THE NET LOSS
FOR BOOK PURPOSES OF THE COMPANY AND ITS SUBSIDIARIES FOR THE TWELVE MONTHS
ENDED MARCH 31, 2007.

3.14                   TITLE TO ASSETS.  EXCEPT AS SET FORTH IN SCHEDULE 3.14
HERETO, EACH OF THE COMPANY AND ITS SUBSIDIARIES HAS GOOD AND MARKETABLE TITLE
TO ALL OF ITS ASSETS AND PROPERTIES FREE AND CLEAR OF ALL ENCUMBRANCES, OTHER
THAN PERMITTED ENCUMBRANCES.

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3.15                   NO VIOLATION, LITIGATION OR REGULATORY ACTION.  EXCEPT AS
SET FORTH IN SCHEDULE 3.15 AND EXCEPT AS TO THOSE LAWS WHICH ARE THE SUBJECT OF
SPECIFIC REPRESENTATIONS ELSEWHERE IN THIS ARTICLE III:

(A)           THE ASSETS OF EACH OF THE COMPANY AND ITS SUBSIDIARIES AND THEIR
USES COMPLY IN ALL MATERIAL RESPECTS WITH ALL APPLICABLE LAWS AND ORDERS;

(B)           EACH OF THE COMPANY AND ITS SUBSIDIARIES HAS COMPLIED IN ALL
MATERIAL RESPECTS WITH ALL LAWS AND ORDERS WHICH ARE APPLICABLE TO ITS ASSETS OR
BUSINESS;

(C)           THERE ARE NO LAWSUITS, SUITS, PROCEEDINGS OR INVESTIGATIONS
PENDING OR, TO THE KNOWLEDGE OF THE SELLERS AND THE COMPANY, THREATENED AGAINST
THE COMPANY OR ANY OF ITS SUBSIDIARIES, AND THERE ARE NO LAWSUITS, SUITS OR
PROCEEDINGS PENDING IN WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES IS THE
PLAINTIFF OR CLAIMANT; AND

(D)           THERE IS NO ACTION, SUIT OR PROCEEDING PENDING OR, TO THE
KNOWLEDGE OF THE SELLERS AND THE COMPANY, THREATENED AGAINST ANY SELLER, THE
COMPANY OR ANY OF ITS SUBSIDIARIES WHICH QUESTIONS THE LEGALITY OR PROPRIETY OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

3.16                   LICENSES. EXCEPT AS SET FORTH IN SCHEDULE 3.16, EACH OF
THE COMPANY AND ITS SUBSIDIARIES HOLDS EACH MATERIAL LICENSE, PERMIT OR OTHER
GOVERNMENTAL AUTHORIZATION (HEREINAFTER REFERRED TO AS “LICENSES”) WHICH IS
REQUIRED FOR THE OPERATION OF ITS BUSINESS, AND ALL SUCH LICENSES ARE IN FULL
FORCE AND EFFECT AND WILL REMAIN IN FULL FORCE AND EFFECT NOTWITHSTANDING THE
CLOSING OF THE TRANSACTIONS CONTEMPLATED HEREBY.

3.17         ENVIRONMENTAL MATTERS.

(A) EXCEPT AS SET FORTH IN SCHEDULE 3.17(A), THERE ARE NOT NOW PENDING, NOR HAVE
THERE BEEN, ANY PRIVATE OR GOVERNMENTAL CLAIMS, CITATIONS, COMPLAINTS, NOTICES
OF VIOLATION OR LETTERS MADE, ISSUED TO OR, TO THE KNOWLEDGE OF THE SELLERS AND
THE COMPANY, THREATENED AGAINST THE COMPANY OR ANY OF ITS SUBSIDIARIES BY ANY
GOVERNMENTAL BODY OR PRIVATE OR OTHER PARTY RELATED TO ANY RELEASE OF HAZARDOUS
WASTE OR HAZARDOUS MATERIALS, ANY NONCOMPLIANCE WITH ENVIRONMENTAL LAWS AND
REGULATIONS, OR FOR THE IMPAIRMENT OR DIMINUTION OF, OR DAMAGE, PERSONAL INJURY,
PROPERTY DAMAGES OR OTHER ADVERSE EFFECTS TO THIRD PARTIES, THE ENVIRONMENT OR
PUBLIC HEALTH RESULTING FROM THE COMPANY’S OR ANY OF ITS SUBSIDIARIES’
OWNERSHIP, USE OR OPERATION OF ITS FACILITIES OR THE CONDUCT OF ITS BUSINESS. 
WITH RESPECT TO THE FACILITY, THE COMPANY HAS: (I) PROVIDED ALL LEGALLY REQUIRED
NOTICES UNDER APPLICABLE ENVIRONMENTAL LAWS; (II) MATERIALLY COMPLIED WITH ALL
SUCH LAWS WITH RESPECT TO ANY HAZARDOUS WASTE OR HAZARDOUS MATERIALS; (III)
PROVIDED ANY LEGALLY REQUIRED ACCESS TO THE FACILITY FOR ANY RESPONSE ACTIONS BY
GOVERNMENT AGENCIES; (IV) COMPLIED WITH ANY APPLICABLE LAND USE RESTRICTIONS AND
INSTITUTIONAL CONTROLS; AND (V) COMPLIED WITH ANY INFORMATION REQUEST OR
ADMINISTRATIVE SUBPOENA UNDER CERCLA OR COMPARABLE STATE LAW.

(B)           NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES HAS USED ANY OF
ITS PROPERTIES FOR THE DISPOSAL OF “HAZARDOUS WASTE” OR “HAZARDOUS MATERIALS” AS
THOSE TERMS ARE DEFINED BELOW, AND THERE HAVE BEEN NO MATERIAL SPILLS OR
RELEASES OF HAZARDOUS WASTES OR HAZARDOUS MATERIALS BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES, OR TO THE KNOWLEDGE OF THE SELLERS AND THE COMPANY, ANY OTHER
PERSON, ON ANY PROPERTY CURRENTLY OR FORMERLY OWNED, LEASED

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or operated by the Company or any of its Subsidiaries.  As used in this
Agreement, the term “Hazardous Materials” or “Hazardous Waste” means any
hazardous or toxic substances, materials, and wastes listed in the United States
Department of Transportation Hazardous Materials Table (49 CFR 172.101) or by
the Environmental Protection Agency as a hazardous substance (40 CFR Part 302),
or such substances, materials and wastes which are regulated or for which
liability or standards of care are imposed under any applicable local, state or
federal law, including, without limitation, any material, waste or substance
which is (i) petroleum, (ii) asbestos, (iii) polychlorinated biphenyls, (iv)
defined as a “hazardous waste,” “extremely hazardous waste” or “restricted
hazardous waste” or “hazardous material” under applicable state laws and
regulations, (v) designated as a “hazardous substance” pursuant to Section 311
of the Clean Water Act, 33 U.S.C. § 1251, et seq. (33 U.S.C. § 1321) or U.S.C. §
1317, (vi) defined as a “hazardous waste” pursuant to Section 1004 of the
Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq. (42 U.S.C.
§6903) or (vii) defined as a “hazardous substance” pursuant to Section 101 of
the Comprehensive Environmental Response, Compensation, and Liability Act, 42
U.S.C. § 9601, et seq. (42 U.S.C. § 9601) (“CERCLA”).

(C)           EACH OF THE COMPANY AND ITS SUBSIDIARIES POSSESSES ALL REQUIRED
FEDERAL, STATE AND LOCAL PERMITS, LICENSES, CERTIFICATES AND APPROVALS WITH
RESPECT TO ITS PROPERTIES RELATING TO (I) AIR EMISSIONS, (II) DISCHARGES TO
SURFACE WATER OR GROUNDWATER, (III) NOISE EMISSIONS, (IV) SOLID OR LIQUID WASTE
DISPOSAL, (V) THE USE, GENERATION, STORAGE, TRANSPORTATION OR DISPOSAL OF
HAZARDOUS MATERIALS OR HAZARDOUS WASTES, OR (VI) OTHER ENVIRONMENTAL, HEALTH OR
SAFETY MATTERS, SUCH PERMITS ARE IN GOOD STANDING, AND EACH OF THE COMPANY AND
ITS SUBSIDIARIES IS OPERATING IN MATERIAL COMPLIANCE WITH SUCH PERMITS AND ALL
APPLICABLE ENVIRONMENTAL LAWS AND REGULATIONS.

3.18                   OTHER ACTIVITIES.  EXCEPT AS SET FORTH IN SCHEDULE 3.18,
NONE OF THE SELLERS, THE COMPANY, ANY OF ITS SUBSIDIARIES, OR ANY OFFICER,
DIRECTOR, PARTNER OR MEMBER OF ANY OF THE FOREGOING OWNS, DIRECTLY OR
INDIRECTLY, ANY INTEREST OR HAS ANY INVESTMENT OR PROFIT PARTICIPATION IN ANY
PERSON WHICH, AS OF THE CLOSING DATE, IS A COMPETITOR OR, TO THE KNOWLEDGE OF
THE SELLERS AND THE COMPANY, IS CONSIDERING BECOMING A POTENTIAL COMPETITOR, OF
OR WHICH OTHERWISE, DIRECTLY OR INDIRECTLY, DOES BUSINESS WITH THE COMPANY OR
ANY OF ITS SUBSIDIARIES.

3.19                   AVAILABILITY OF ASSETS.

(A)           EXCEPT AS SET FORTH IN SCHEDULE 3.19: THE ASSETS OWNED OR LEASED
BY EACH OF THE COMPANY AND ITS SUBSIDIARIES CONSTITUTE ALL THE ASSETS AND
PROPERTIES USED IN, OR NECESSARY FOR, THE OPERATION OF THE BUSINESS OF THE
COMPANY AND ITS SUBSIDIARIES (INCLUDING ALL BOOKS, RECORDS, COMPUTERS AND
COMPUTER PROGRAMS AND DATA PROCESSING SYSTEMS) AS PRESENTLY CONDUCTED AND ARE IN
REASONABLY GOOD AND SERVICEABLE CONDITION (SUBJECT TO NORMAL WEAR AND TEAR) FOR
THEIR AGE AND PAST USAGE AND ARE SUITABLE FOR THE USES FOR WHICH INTENDED.

(B)           SCHEDULE 3.19 SETS FORTH A DESCRIPTION OF ALL MATERIAL SERVICES
PROVIDED BY ANY SELLER OR ANY SELLER’S AFFILIATES TO THE COMPANY OR COFFEE BEAN
UTILIZING EITHER (I) ASSETS NOT OWNED OR LEASED BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES OR (II) EMPLOYEES NOT LISTED IN SCHEDULE 3.24(A) (OTHER THAN THOSE
EMPLOYEES NOT LISTED BY REASON OF CLAUSE (I) OF SECTION 3.24(A)) AND THE MANNER
IN WHICH THE COSTS OF PROVIDING SUCH SERVICES HAVE BEEN ALLOCATED TO THE COMPANY
AND ITS SUBSIDIARIES.

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3.20                   REAL PROPERTY.

(A) EXCEPT AS SET FORTH ON SCHEDULE 3.20(A), NEITHER THE COMPANY NOR ANY OF ITS
SUBSIDIARIES OWN ANY REAL PROPERTY.

(B)           SCHEDULE 3.20(B) SETS FORTH A LIST AND BRIEF DESCRIPTION OF EACH
LEASE OR SIMILAR AGREEMENT (SHOWING THE PARTIES THERETO, ANNUAL RENTAL,
EXPIRATION DATE, RENEWAL AND PURCHASE OPTIONS, IF ANY, AND THE LOCATION OF THE
REAL PROPERTY COVERED BY SUCH LEASE OR OTHER AGREEMENT) UNDER WHICH (I) THE
COMPANY OR ANY OF ITS SUBSIDIARIES IS LESSEE OF, OR HOLDS, USES OR OPERATES, ANY
REAL PROPERTY OWNED BY ANY THIRD PERSON (THE “LEASED REAL PROPERTY”). EXCEPT AS
SET FORTH IN SUCH SCHEDULE, EACH OF THE COMPANY AND ITS SUBSIDIARIES HAS THE
RIGHT TO QUIET ENJOYMENT OF ALL THE LEASED REAL PROPERTY DESCRIBED IN SUCH
SCHEDULE FOR THE FULL TERM OF EACH SUCH LEASE OR SIMILAR AGREEMENT (AND ANY
RENEWAL OPTION) RELATING THERETO, AND THE LEASEHOLD OR OTHER INTEREST OF THE
COMPANY AND ITS SUBSIDIARIES IN SUCH LEASED REAL PROPERTY IS NOT SUBJECT OR
SUBORDINATE TO ANY ENCUMBRANCE EXCEPT FOR PERMITTED ENCUMBRANCES. EXCEPT FOR
PERMITTED ENCUMBRANCES AND THE LEASES PERTAINING TO THE LEASED REAL PROPERTY,
THERE ARE NO AGREEMENTS OR OTHER DOCUMENTS GOVERNING OR AFFECTING THE OCCUPANCY
OR TENANCY OF ANY OF THE LEASED REAL PROPERTY BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES.

(C) NEITHER THE WHOLE NOR ANY PART OF ANY REAL PROPERTY LEASED, USED OR OCCUPIED
BY THE COMPANY OR ANY OF ITS SUBSIDIARIES IS SUBJECT TO ANY PENDING SUIT FOR
CONDEMNATION OR OTHER TAKING BY ANY PUBLIC AUTHORITY, AND, TO THE KNOWLEDGE OF
THE SELLERS AND THE COMPANY, NO SUCH CONDEMNATION OR OTHER TAKING IS THREATENED
OR CONTEMPLATED.

3.21                   PERSONAL PROPERTY.

(A) SCHEDULE 3.21(A) CONTAINS A LIST OF ALL MACHINERY, EQUIPMENT, VEHICLES,
FURNITURE AND OTHER PERSONAL PROPERTY OWNED BY EACH OF THE COMPANY AND ITS
SUBSIDIARIES HAVING AN ORIGINAL COST OF $10,000 OR MORE.

(B)           SCHEDULE 3.21(B) CONTAINS A BRIEF DESCRIPTION OF EACH LEASE OR
OTHER AGREEMENT OR RIGHT, WHETHER WRITTEN OR ORAL (INCLUDING IN EACH CASE THE
ANNUAL RENTAL, THE EXPIRATION DATE THEREOF AND A BRIEF DESCRIPTION OF THE
PROPERTY COVERED), UNDER WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES IS LESSEE
OF, OR HOLDS OR OPERATES, ANY MACHINERY, EQUIPMENT, VEHICLE OR OTHER TANGIBLE
PERSONAL PROPERTY OWNED BY A THIRD PERSON, EXCEPT FOR ANY SUCH LEASE, AGREEMENT
OR RIGHT THAT IS TERMINABLE BY THE COMPANY OR SUCH SUBSIDIARY WITHOUT PENALTY OR
PAYMENT ON NOTICE OF THIRTY (30) DAYS OR LESS, OR WHICH INVOLVES THE PAYMENT BY
THE COMPANY OR ANY OF ITS SUBSIDIARIES OF RENTALS OF LESS THAN $15,000 PER YEAR.

3.22                   INTELLECTUAL PROPERTY: SOFTWARE.

(A)           SCHEDULE 3.22(A) CONTAINS A LIST AND DESCRIPTION (SHOWING, WHERE
APPLICABLE, THE REGISTERED OR OTHER OWNER, EXPIRATION DATE AND NUMBER, IF ANY)
OF ALL OF THE FOLLOWING INTELLECTUAL PROPERTY OWNED BY, LICENSED TO OR USED BY
THE COMPANY AND/OR ANY OF ITS SUBSIDIARIES:  (I) ACTIVE COPYRIGHT REGISTRATIONS
AND PENDING COPYRIGHT REGISTRATION APPLICATIONS; (II) ACTIVE PATENTS AND PENDING
PATENT APPLICATIONS; (III) TRADEMARK AND SERVICE MARK REGISTRATIONS AND PENDING
TRADEMARK AND SERVICE MARK REGISTRATION APPLICATIONS; (IV) MATERIAL UNREGISTERED
TRADEMARKS AND SERVICE MARKS; (V) TRADE NAMES; AND (VI) DOMAIN NAMES AND PENDING
DOMAIN

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name applications.  Schedule 3.22(a) additionally contains a list of (A) all
Internet and World Wide Web URLs of websites owned or operated by or on behalf
of the Company or any of its Subsidiaries; and (B) all 800- or 888- prefix phone
numbers (or similar toll-free phone numbers) assigned to the Company or any of
its Subsidiaries and used in connection with the conduct of its business.

(B)           SCHEDULE 3.22(B) CONTAINS A LIST (SHOWING IN EACH CASE ANY OWNER,
LICENSOR OR LICENSEE) OF ALL SOFTWARE OWNED BY, LICENSED TO OR USED BY THE
COMPANY AND/OR ANY OF ITS SUBSIDIARIES, EXCEPT SOFTWARE LICENSED TO THE COMPANY
OR ANY OF ITS SUBSIDIARIES THAT IS AVAILABLE IN CONSUMER RETAIL STORES AND
SUBJECT TO “SHRINK-WRAP” LICENSE AGREEMENTS.

(C) SCHEDULE 3.22(C) CONTAINS A LIST (SHOWING IN EACH CASE THE PARTIES THERETO)
OF ALL CONTRACTS WHICH LICENSE, SUBLICENSE OR ASSIGN, OR OTHERWISE GRANT
PERMISSION TO USE, TO OR BY THE COMPANY OR ANY OF ITS SUBSIDIARIES (I) ANY
INTELLECTUAL PROPERTY LISTED IN SCHEDULE 3.22(A), (II) ANY TRADE SECRETS (AS
DEFINED UNDER APPLICABLE LAW) OWNED BY, LICENSED TO OR USED BY THE COMPANY OR
ANY OF ITS SUBSIDIARIES OR (III) ANY SOFTWARE LISTED IN SCHEDULE 3.22(B).

(D)           EXCEPT AS DISCLOSED IN SCHEDULE 3.22(D), EACH OF THE COMPANY AND
ITS SUBSIDIARIES EITHER: (I) OWNS THE ENTIRE RIGHT, TITLE AND INTEREST IN AND TO
THE INTELLECTUAL PROPERTY AND SOFTWARE NECESSARY FOR THE CONDUCT OF ITS BUSINESS
AS CONDUCTED AS OF THE CLOSING, FREE AND CLEAR OF ANY ENCUMBRANCE OTHER THAN
PERMITTED ENCUMBRANCES; OR (II) HAS THE PERPETUAL, ROYALTY-FREE RIGHT TO USE THE
SAME.

(E)           EXCEPT AS DISCLOSED IN SCHEDULE 3.22(E): (I) ALL REGISTRATIONS FOR
COPYRIGHTS, PATENT RIGHTS AND TRADEMARKS IDENTIFIED IN SCHEDULE 3.22(A) AS BEING
OWNED BY THE COMPANY OR ITS SUBSIDIARIES ARE VALID AND IN FORCE, AND ALL
APPLICATIONS TO REGISTER ANY UNREGISTERED COPYRIGHTS, PATENT RIGHTS AND
TRADEMARKS SO IDENTIFIED ARE PENDING AND IN GOOD STANDING, ALL WITHOUT CHALLENGE
OF ANY KIND; (II) THE INTELLECTUAL PROPERTY OWNED BY EACH OF THE COMPANY AND ITS
SUBSIDIARIES IS VALID AND ENFORCEABLE; (III) EACH OF THE COMPANY AND ITS
SUBSIDIARIES HAS THE SOLE AND EXCLUSIVE RIGHT TO BRING ACTIONS FOR INFRINGEMENT
OR UNAUTHORIZED USE OF THE INTELLECTUAL PROPERTY AND SOFTWARE OWNED BY THE
COMPANY AND ITS SUBSIDIARIES, AND, TO THE KNOWLEDGE OF THE SELLERS AND THE
COMPANY, THERE IS NO BASIS FOR ANY SUCH ACTION; (IV) EACH OF THE COMPANY AND ITS
SUBSIDIARIES HAS TAKEN ALL ACTIONS REASONABLY NECESSARY TO PROTECT, AND WHERE
NECESSARY REGISTER, THE COPYRIGHTS, TRADEMARKS, SOFTWARE, PATENT RIGHTS OR TRADE
SECRETS; AND (V) NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES IS IN BREACH OF
ANY AGREEMENT AFFECTING THE INTELLECTUAL PROPERTY, AND HAS NOT TAKEN ANY ACTION
WHICH WOULD IMPAIR OR OTHERWISE ADVERSELY AFFECT ITS RIGHTS IN THE INTELLECTUAL
PROPERTY. CORRECT AND COMPLETE COPIES OF: (X) REGISTRATIONS FOR ALL REGISTERED
COPYRIGHTS, PATENT RIGHTS AND TRADEMARKS IDENTIFIED IN SCHEDULE 3.22 AS BEING
OWNED BY THE COMPANY OR ANY OF ITS SUBSIDIARIES; AND (Y) ALL PENDING
APPLICATIONS TO REGISTER UNREGISTERED COPYRIGHTS, PATENT RIGHTS AND TRADEMARKS
IDENTIFIED IN SCHEDULE 3.22(A) AS BEING OWNED BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES (TOGETHER WITH ANY SUBSEQUENT CORRESPONDENCE, NOTICES OR FILINGS
RELATING TO THE FOREGOING) HAVE HERETOFORE BEEN MADE AVAILABLE BY THE SELLERS TO
THE BUYER.

(F)            EXCEPT AS SET FORTH IN SCHEDULE 3.22(F): (I) TO THE KNOWLEDGE OF
THE SELLERS AND THE COMPANY, NO INFRINGEMENT OF ANY INTELLECTUAL PROPERTY OF ANY
OTHER PERSON HAS OCCURRED OR RESULTED IN ANY WAY FROM THE OPERATIONS,
ACTIVITIES, PRODUCTS, SOFTWARE, EQUIPMENT, MACHINERY

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or processes used in the Company’s and its Subsidiaries’ business; (ii) to the
knowledge of the Sellers and the Company, no claim of any infringement of any
Intellectual Property of any other Person has been made or asserted in respect
of the operations of the Company’s and its Subsidiaries’ business; (iii) to the
knowledge of the Sellers and the Company, no claim of invalidity of any
Copyright, Trademark or Patent Right, Software or Trade Secret owned by or
licensed to the Company or any Subsidiary has been made; (iv) no proceedings are
pending or, to the knowledge of the Sellers and the Company, threatened which
challenge the validity, ownership or use by the Company or any Subsidiary of any
Intellectual Property; and (v) none of the Sellers, the Company or any of its
Subsidiaries has had notice of a claim against the Company or any of its
Subsidiaries that the operations, activities, products, software, equipment,
machinery or processes of the Company or any of its Subsidiaries infringe any
Intellectual Property of any other Person.

3.23                   ACCOUNTS RECEIVABLE INVENTORIES; PRODUCTS.

(A)           ALL ACCOUNTS RECEIVABLE OF THE COMPANY AND ITS SUBSIDIARIES HAVE
ARISEN FROM BONA FIDE TRANSACTIONS BY THE COMPANY AND ITS SUBSIDIARIES IN THE
ORDINARY COURSE OF BUSINESS.  ALL ACCOUNTS RECEIVABLE REFLECTED IN THE UNAUDITED
BALANCE SHEET ARE GOOD AND COLLECTIBLE IN THE ORDINARY COURSE OF BUSINESS AT THE
AGGREGATE RECORDED AMOUNTS THEREOF, NET OF ANY ALLOWANCE FOR DOUBTFUL ACCOUNTS
SHOWN ON THE FACE OF THE ESTIMATED CLOSING DATE BALANCE SHEET AND THE CLOSING
DATE BALANCE SHEET, AND SUCH ALLOWANCE WAS ESTABLISHED IN THE ORDINARY COURSE OF
BUSINESS CONSISTENT WITH PAST PRACTICE.

(B)           THE INVENTORIES NET OF RELATED RESERVES OF THE COMPANY AND ITS
SUBSIDIARIES (INCLUDING RAW MATERIALS, SUPPLIES, WORK-IN PROCESS, FINISHED GOODS
AND OTHER MATERIALS) (I) ARE IN GOOD, MERCHANTABLE AND USEABLE CONDITION, (II)
ARE REFLECTED IN THE UNAUDITED BALANCE SHEET AND WILL BE REFLECTED IN THE
ESTIMATED CLOSING DATE BALANCE SHEET AND CLOSING DATE BALANCE SHEET AT THE LOWER
OF COST OR MARKET IN ACCORDANCE WITH GAAP, (III) ARE, IN THE CASE OF FINISHED
GOODS, OF A QUALITY AND QUANTITY SALEABLE IN THE ORDINARY COURSE OF BUSINESS
AND, IN THE CASE OF ALL OTHER INVENTORIES ARE OF A QUALITY AND QUANTITY USEABLE
IN THE ORDINARY COURSE OF BUSINESS AND (IV) ARE NEITHER ADULTERATED NOR
MISBRANDED WITHIN THE MEANING OF, AND IN COMPLIANCE WITH, THE FEDERAL FOOD DRUG
AND COSMETIC ACT OF 1938, AS AMENDED, THE FEDERAL FAIR PACKAGING AND LABELING
ACT OF 1966, AS AMENDED, THE NUTRITION LABELING AND EDUCATION ACT OF 1990, THE
PUBLIC HEALTH SECURITY AND BIOTERRORISM PREPAREDNESS AND RESPONSE ACT OF 2002,
AND ANY OTHER STATE OR FEDERAL LEGAL REQUIREMENTS APPLICABLE THERETO.  THE
INVENTORY OBSOLESCENCE POLICIES OF THE COMPANY AND ITS SUBSIDIARIES ARE
APPROPRIATE FOR THE NATURE OF THE PRODUCTS SOLD AND THE MARKETING METHODS USED
BY THE COMPANY AND ITS SUBSIDIARIES, THE RESERVE FOR INVENTORY OBSOLESCENCE
CONTAINED IN THE UNAUDITED BALANCE SHEET FAIRLY REFLECTS THE AMOUNT OF OBSOLETE
INVENTORY AS OF THE BALANCE SHEET DATE, AND THE RESERVE FOR INVENTORY
OBSOLESCENCE TO BE CONTAINED IN THE ESTIMATED CLOSING DATE BALANCE SHEET AND
CLOSING DATE BALANCE SHEET WILL FAIRLY REFLECT THE AMOUNT OF OBSOLETE INVENTORY
AS OF THE CLOSING DATE. THE SELLERS HAVE HERETOFORE MADE AVAILABLE TO THE BUYER
A LIST OF PLACES WHERE MATERIAL INVENTORIES OF EACH OF THE COMPANY AND ITS
SUBSIDIARIES WERE LOCATED AS OF THE DATE HEREOF.  NEITHER THE COMPANY NOR ANY OF
ITS SUBSIDIARIES HAS MADE ANY SALES ON CONSIGNMENT OR GRANTED RETURN PRIVILEGES
TO ANY PURCHASER OF ITS FINISHED GOODS OTHER THAN NORMAL SPOILAGE, DEFECT OR
DAMAGE ALLOWANCES.

 

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(C)           THE PRODUCTS PREVIOUSLY SOLD OR DELIVERED BY THE COMPANY AND ITS
SUBSIDIARIES WERE IN COMPLIANCE WITH ANY SPECIFICATIONS THEREFOR ESTABLISHED BY
THE CUSTOMERS OF THE COMPANY AND ITS SUBSIDIARIES AND ARE FIT FOR THEIR INTENDED
PURPOSE AND NEITHER ADULTERATED NOR MISBRANDED WITHIN THE MEANING OF, AND IN
COMPLIANCE WITH, THE FEDERAL FOOD DRUG AND COSMETIC ACT OF 1938, AS AMENDED, THE
FEDERAL FAIR PACKAGING AND LABELING ACT OF 1966, AS AMENDED, THE NUTRITION
LABELING AND EDUCATION ACT OF 1990, THE PUBLIC HEALTH SECURITY AND BIOTERRORISM
PREPAREDNESS AND RESPONSE ACT OF 2002, AND ANY OTHER STATE OR FEDERAL LEGAL
REQUIREMENTS APPLICABLE THERETO.

(D)           THE MANUFACTURING PRACTICES, INGREDIENTS, COMPOSITION AND LABELING
FOR EACH OF THE PRODUCTS OF THE COMPANY AND ITS SUBSIDIARIES ARE IN COMPLIANCE
WITH, AND EACH OF THE COMPANY AND ITS SUBSIDIARIES MAY PRODUCE, DISTRIBUTE AND
SELL EACH OF ITS PRODUCTS ON AND AFTER THE CLOSING DATE WITHOUT VIOLATING ANY
FEDERAL, STATE OR LOCAL FOOD AND DRUG, CONSUMER SAFETY, CONSUMER PROTECTION OR
HAZARDOUS AND TOXIC SUBSTANCE LAWS OR REGULATIONS (INCLUDING, WITHOUT
LIMITATION, THE FEDERAL FOOD DRUG AND COSMETIC ACT OF 1938, AS AMENDED, THE
FEDERAL FAIR PACKAGING AND LABELING ACT OF 1966, AS AMENDED, THE NUTRITION
LABELING AND EDUCATION ACT OF 1990, AND THE PUBLIC HEALTH SECURITY AND
BIOTERRORISM PREPAREDNESS AND RESPONSE ACT OF 2002).

3.24                   EMPLOYEE RELATIONS.

(A)           SCHEDULE 3.24(A) CONTAINS: (I) A LIST OF ALL EMPLOYEES OR
COMMISSION SALESPERSONS OF EACH OF THE COMPANY AND ITS SUBSIDIARIES AS OF MARCH
31, 2007; (II) THE THEN CURRENT ANNUAL COMPENSATION OF, AND A DESCRIPTION OF THE
FRINGE BENEFITS (OTHER THAN THOSE GENERALLY AVAILABLE TO EMPLOYEES OF THE
COMPANY AND ITS SUBSIDIARIES) PROVIDED BY THE COMPANY AND ITS SUBSIDIARIES TO
ANY SUCH EMPLOYEES OR COMMISSION SALESPERSONS; (III) A LIST OF ALL PRESENT OR
FORMER EMPLOYEES OR COMMISSION SALESPERSONS OF EACH OF THE COMPANY AND ITS
SUBSIDIARIES PAID (ON AN ANNUALIZED BASIS) IN EXCESS OF $75,000 IN CALENDAR YEAR
2006 WHO HAVE TERMINATED OR GIVEN NOTICE OF THEIR INTENTION TO TERMINATE THEIR
RELATIONSHIP WITH THE COMPANY OR ANY OF ITS SUBSIDIARIES SINCE THE BALANCE SHEET
DATE; (IV) A LIST OF ANY INCREASE, EFFECTIVE AFTER THE BALANCE SHEET DATE, IN
THE RATE OF COMPENSATION OF ANY EMPLOYEES OR COMMISSION SALESPERSONS; AND (V) A
LIST OF ALL SUBSTANTIAL CHANGES AFTER THE BALANCE SHEET DATE IN JOB ASSIGNMENTS
OF, OR ARRANGEMENTS WITH, OR PROMOTIONS OR APPOINTMENTS OF, ANY EMPLOYEES OR
COMMISSION SALESPERSONS WHOSE COMPENSATION AS OF THE BALANCE SHEET DATE WAS IN
EXCESS OF $50,000 PER ANNUM.

(B)           EXCEPT AS SET FORTH IN SCHEDULE 3.24(B), (I) TO THE KNOWLEDGE OF
THE SELLERS AND THE COMPANY, NONE OF THE SELLERS, THE COMPANY OR ANY OF ITS
SUBSIDIARIES IS A PARTY TO ANY TRANSACTION WITH ANY SELLER, ANY EMPLOYEE,
OFFICER, DIRECTOR, PARTNER, MEMBER OR AFFILIATE OF ANY SELLER, OR ANY OFFICER OR
DIRECTOR OF THE COMPANY OR ANY OF ITS SUBSIDIARIES, WHICH MAY BE GENERALLY
CHARACTERIZED AS A “CONFLICT OF INTEREST,” INCLUDING, BUT NOT LIMITED TO, DIRECT
OR INDIRECT INTERESTS IN THE BUSINESS OF COMPETITORS, SUPPLIERS OR CUSTOMERS OF
THE COMPANY OR ANY OF ITS SUBSIDIARIES, AND (II) NEITHER THE COMPANY NOR ANY OF
ITS SUBSIDIARIES HAS ENGAGED IN ANY OF THE FOLLOWING: (A) THE USE OF ANY
CORPORATE FUNDS FOR UNLAWFUL CONTRIBUTIONS, GIFTS, ENTERTAINMENT OR OTHER
UNLAWFUL EXPENSES RELATED TO POLITICAL ACTIVITY, (B) THE MAKING OF ANY DIRECT OR
INDIRECT UNLAWFUL PAYMENTS TO GOVERNMENT OFFICIALS OR OTHERS FROM CORPORATE
FUNDS OR THE ESTABLISHMENT OR MAINTENANCE OF ANY UNLAWFUL OR UNRECORDED FUNDS,
(C) THE VIOLATION OF ANY OF THE PROVISIONS OF THE FOREIGN CORRUPT PRACTICES ACT
OF 1977, OR ANY RULES OR REGULATIONS PROMULGATED THEREUNDER OR (D) THE RECEIPT
OF ANY ILLEGAL DISCOUNTS OR REBATES OR ANY OTHER VIOLATION OF THE ANTITRUST
LAWS.

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(C)           EXCEPT AS SET FORTH IN SCHEDULE 3.24(C), SINCE MARCH 26, 2006,
NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES HAS, DIRECTLY OR INDIRECTLY,
PURCHASED, LEASED FROM OTHERS OR OTHERWISE ACQUIRED ANY MATERIAL PROPERTY OR
OBTAINED ANY MATERIAL SERVICES FROM, OR SOLD, LEASED TO OTHERS OR OTHERWISE
DISPOSED OF ANY MATERIAL PROPERTY OR FURNISHED ANY MATERIAL SERVICES TO (EXCEPT
WITH RESPECT TO REMUNERATION FOR SERVICES RENDERED AS A DIRECTOR, OFFICER OR
EMPLOYEE OF THE COMPANY OR ANY OF ITS SUBSIDIARIES), IN THE ORDINARY COURSE OF
BUSINESS OR OTHERWISE, (I) ANY SELLER, (II) ANY AFFILIATE OF ANY SELLER, (III)
ANY PERSON WHO IS AN OFFICER OR DIRECTOR OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES OR (IV) ANY ASSOCIATE OF ANY PERSON REFERRED TO IN CLAUSE (I), (II)
OR (III) ABOVE.  EXCEPT AS SET FORTH IN SCHEDULE 3.24(C), NEITHER THE COMPANY
NOR ANY OF ITS SUBSIDIARIES OWES ANY AMOUNT IN EXCESS OF $15,000 TO, OR HAS ANY
CONTRACT WITH OR COMMITMENT TO, ANY DIRECTOR, OFFICER OR EMPLOYEE OF THE COMPANY
OR ANY OF ITS SUBSIDIARIES (OTHER THAN FOR COMPENSATION FOR CURRENT SERVICES NOT
YET DUE AND PAYABLE AND REIMBURSEMENT OF EXPENSES ARISING IN THE ORDINARY COURSE
OF BUSINESS) AND NONE OF SUCH PERSONS OWES ANY AMOUNT IN EXCESS OF $15,000 TO
THE COMPANY OR ANY OF ITS SUBSIDIARIES. AN “ASSOCIATE” OF ANY PERSON MEANS (I) A
CORPORATION OR ORGANIZATION OF WHICH SUCH PERSON IS AN OFFICER, PARTNER OR
MEMBER OR IS, DIRECTLY OR INDIRECTLY, THE BENEFICIAL OWNER OF TEN PERCENT (10%)
OR MORE OF ANY CLASS OF EQUITY SECURITIES, (II) ANY TRUST OR OTHER ESTATE IN
WHICH SUCH PERSON HAS A SUBSTANTIAL BENEFICIAL INTEREST OR AS TO WHICH SUCH
PERSON SERVES AS TRUSTEE OR IN A SIMILAR FIDUCIARY CAPACITY AND (III) ANY
RELATIVE OR SPOUSE OF SUCH PERSON, OR ANY RELATIVE OF SUCH SPOUSE, WHO HAS THE
SAME HOME AS SUCH PERSON OR WHO IS A DIRECTOR OR OFFICER OF THE PERSON OR ANY OF
ITS PARENTS OR SUBSIDIARIES.

(D)           NONE OF THE COMPANY, ANY OF ITS SUBSIDIARIES OR ANY OFFICER,
EMPLOYEE OR AGENT OR OTHER PERSON ACTING ON ITS BEHALF HAS, DIRECTLY OR
INDIRECTLY, GIVEN OR AGREED TO GIVE ANY GIFT OR SIMILAR BENEFIT (OTHER THAN WITH
RESPECT TO BONA FIDE PAYMENTS FOR WHICH ADEQUATE CONSIDERATION HAS BEEN GIVEN)
TO ANY CUSTOMER, SUPPLIER, GOVERNMENTAL EMPLOYEE OR OTHER PERSON WHO IS OR MAY
BE IN A POSITION TO HELP OR HINDER THE BUSINESS OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES (OR ASSIST THE COMPANY OR ANY OF ITS SUBSIDIARIES IN CONNECTION
WITH ANY ACTUAL OR PROPOSED TRANSACTION) (I) WHICH COULD REASONABLY BE EXPECTED
TO SUBJECT THE COMPANY OR ANY OF ITS SUBSIDIARIES TO ANY DAMAGE OR PENALTY IN
ANY CIVIL, CRIMINAL OR GOVERNMENTAL LITIGATION OR PROCEEDING, (II) WHICH, IF NOT
CONTINUED IN THE FUTURE, WOULD SUBJECT THE COMPANY OR ANY OF ITS SUBSIDIARIES TO
SUIT OR PENALTY IN ANY PRIVATE OR GOVERNMENTAL LITIGATION OR PROCEEDING, (III)
FOR ANY OF THE PURPOSES DESCRIBED IN SECTION 162(C) OF THE CODE, OR (IV) FOR
ESTABLISHMENT OR MAINTENANCE OF ANY CONCEALED FUND OR CONCEALED BANK ACCOUNT.

(E)           EXCEPT AS SET FORTH IN SCHEDULE 3.24(E), EACH OF THE COMPANY AND
ITS SUBSIDIARIES HAS COMPLIED WITH ALL APPLICABLE LAWS, RULES AND REGULATIONS
WHICH RELATE TO PRICES, WAGES, HOURS, DISCRIMINATION IN EMPLOYMENT AND
COLLECTIVE BARGAINING AND IS NOT LIABLE FOR ANY ARREARS OF WAGES OR ANY TAXES OR
PENALTIES FOR FAILURE TO COMPLY WITH ANY OF THE FOREGOING.  EACH OF THE COMPANY
AND ITS SUBSIDIARIES IS IN COMPLIANCE WITH THE REQUIREMENTS OF THE WORKERS
ADJUSTMENT AND RETRAINING NOTIFICATION ACT (“WARN”) AND HAS NO LIABILITIES
PURSUANT TO WARN.  EACH OF THE SELLERS AND THE COMPANY BELIEVES THAT EACH OF THE
COMPANY’S AND ITS SUBSIDIARIES’ RELATIONS WITH THEIR RESPECTIVE EMPLOYEES ARE
SATISFACTORY. NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES IS A PARTY TO, AND
NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES IS AFFECTED BY OR TO THE
SELLERS’ AND THE COMPANY’S KNOWLEDGE THREATENED WITH, ANY DISPUTE OR CONTROVERSY
WITH A UNION OR WITH RESPECT TO UNIONIZATION OR COLLECTIVE BARGAINING INVOLVING
THE EMPLOYEES OF THE COMPANY OR ANY OF ITS SUBSIDIARIES.  TO THE SELLERS’ AND
THE COMPANY’S KNOWLEDGE, NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES IS
MATERIALLY AFFECTED BY ANY DISPUTE

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or controversy with a union or with respect to unionization or collective
bargaining involving any supplier or customer of the Company or any of its
Subsidiaries.  Schedule 3.24(e) sets forth a description of any union organizing
or election activities involving any non-union employees of the Company and its
Subsidiaries which have occurred since January 1, 2004 or, to the knowledge of
the Sellers and the Company, are threatened as of the date hereof.

3.25                   INSURANCE.  SCHEDULE 3.25 SETS FORTH A LIST AND BRIEF
DESCRIPTION (INCLUDING NATURE OF COVERAGE, LIMITS, DEDUCTIBLES AND PREMIUMS WITH
RESPECT TO EACH TYPE OF COVERAGE) OF ALL POLICIES OF INSURANCE MAINTAINED, OWNED
OR HELD BY OR FOR THE BENEFIT OF THE COMPANY AND ITS SUBSIDIARIES ON THE DATE
HEREOF.  THE COMPANY SHALL (AND SHALL CAUSE ITS SUBSIDIARIES TO) KEEP OR CAUSE
SUCH INSURANCE OR COMPARABLE INSURANCE TO BE KEPT IN FULL FORCE AND EFFECT
THROUGH THE CLOSING DATE. THE COMPANY AND ITS SUBSIDIARIES HAVE COMPLIED WITH
EACH OF SUCH INSURANCE POLICIES IN ALL MATERIAL RESPECTS AND NEITHER THE COMPANY
NOR ANY OF ITS SUBSIDIARIES HAS FAILED TO GIVE ANY NOTICE OR PRESENT ANY CLAIM
THEREUNDER IN A DUE AND TIMELY MANNER. THE COMPANY HAS MADE AVAILABLE TO THE
BUYER CORRECT AND COMPLETE COPIES OF THE MOST RECENT INSPECTION REPORTS, IF ANY,
RECEIVED FROM INSURANCE UNDERWRITERS AS TO THE CONDITION OF THE ASSETS AND
PROPERTIES OF THE COMPANY AND ITS SUBSIDIARIES.

3.26                   CUSTOMERS AND SUPPLIERS.  SCHEDULE 3.26 SETS FORTH (I) A
LIST OF NAMES AND ADDRESSES OF THE TEN LARGEST CUSTOMERS AND THE TEN LARGEST
SUPPLIERS (MEASURED IN EACH CASE BY DOLLAR VOLUME OF PURCHASES OR SALES DURING
THE FISCAL YEAR ENDED MARCH 31, 2007) OF THE COMPANY AND ITS SUBSIDIARIES AND
THE DOLLAR AMOUNT OF PURCHASE OR SALES WHICH EACH SUCH CUSTOMER OR SUPPLIER
REPRESENTED DURING EACH OF THE FISCAL YEARS ENDED MARCH 31, 2006 AND 2005; AND
(II) COPIES OF THE FORMS OF PURCHASE ORDER FOR INVENTORY AND OTHER SUPPLIES AND
SALES CONTRACTS FOR FINISHED GOODS USED BY THE COMPANY AND ITS SUBSIDIARIES. 
EXCEPT AS SET FORTH IN SCHEDULE 3.26, THERE EXISTS NO ACTUAL OR, TO THE
KNOWLEDGE OF THE SELLERS AND THE COMPANY, THREATENED TERMINATION, CANCELLATION
OR LIMITATION OF, OR ANY MODIFICATION OR CHANGE IN, THE BUSINESS RELATIONSHIP OF
THE COMPANY OR ANY OF ITS SUBSIDIARIES WITH ANY CUSTOMER OR GROUP OF CUSTOMERS
LISTED IN SCHEDULE 3.26, OR WHOSE PURCHASES INDIVIDUALLY OR IN THE AGGREGATE ARE
MATERIAL TO THE COMPANY AND ITS SUBSIDIARIES, TAKEN AS A WHOLE, OR THE OPERATION
OF THEIR BUSINESS, OR WITH ANY SUPPLIER OR GROUP OF SUPPLIERS LISTED IN SCHEDULE
3.26, OR WHOSE SALES INDIVIDUALLY OR IN THE AGGREGATE ARE MATERIAL TO THE
COMPANY AND ITS SUBSIDIARIES, TAKEN AS A WHOLE, OR THE OPERATION OF THEIR
BUSINESS.  EXCEPT AS SET FORTH IN SCHEDULE 3.26, ALL FOREIGN SUPPLIERS ARE
REGISTERED FACILITIES AS REQUIRED UNDER THE PUBLIC HEALTH SECURITY AND
BIOTERRORISM PREPAREDNESS AND RESPONSE ACT OF 2002.

ARTICLE IV
INDIVIDUAL REPRESENTATIONS AND WARRANTIES OF THE SELLERS

Each of the Sellers, severally and not jointly, and solely with respect to
itself, hereby represents and warrants to the Buyer as follows:

4.1                     ORGANIZATION AND QUALIFICATION.  SUCH SELLER (IF A
CORPORATION OR OTHER ENTITY) IS DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS INCORPORATION (OR OTHER
FORMATION).

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4.2           AUTHORIZATION.  SUCH SELLER HAS THE REQUISITE LEGAL CAPACITY,
POWER AND AUTHORITY (INCLUDING FULL CORPORATE POWER AND AUTHORITY) TO EXECUTE
AND DELIVER THIS AGREEMENT AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED
HEREBY.  THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY SUCH SELLER, THE
PERFORMANCE BY SUCH SELLER OF ITS OBLIGATIONS HEREUNDER, AND THE CONSUMMATION BY
SUCH SELLER OF THE TRANSACTIONS CONTEMPLATED HEREBY, HAVE BEEN DULY AUTHORIZED
BY SUCH SELLER.  NO OTHER ACTION (CORPORATE OR OTHERWISE) ON THE PART OF SUCH
SELLER IS NECESSARY TO AUTHORIZE THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY.  THIS AGREEMENT HAS
BEEN DULY AND VALIDLY EXECUTED AND DELIVERED BY SUCH SELLER AND CONSTITUTES A
VALID AND BINDING OBLIGATION OF SUCH SELLER, ENFORCEABLE AGAINST SUCH SELLER IN
ACCORDANCE WITH ITS TERMS, EXCEPT TO THE EXTENT THAT SUCH ENFORCEMENT MAY BE
SUBJECT TO APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR
OTHER SIMILAR LAWS NOW OR HEREAFTER IN EFFECT RELATING TO CREDITORS’ RIGHTS
GENERALLY, AND THE REMEDY OF SPECIFIC PERFORMANCE AND INJUNCTIVE AND OTHER FORMS
OF EQUITABLE RELIEF MAY BE SUBJECT TO EQUITABLE DEFENSES AND TO THE DISCRETION
OF THE COURT BEFORE WHICH ANY PROCEEDING THEREFOR MAY BE BROUGHT.

4.3                     NO VIOLATION.  NEITHER THE EXECUTION AND DELIVERY OF
THIS AGREEMENT BY SUCH SELLER, THE PERFORMANCE BY SUCH SELLER OF ITS OBLIGATIONS
HEREUNDER, NOR THE CONSUMMATION BY SUCH SELLER OF THE TRANSACTIONS CONTEMPLATED
HEREBY WILL: (A) VIOLATE, CONFLICT WITH OR RESULT IN ANY BREACH OF ANY PROVISION
OF THE ORGANIZATIONAL DOCUMENTS OF SUCH SELLER; (B) VIOLATE, CONFLICT WITH OR
RESULT IN A VIOLATION OR BREACH OF, OR CONSTITUTE A DEFAULT (WITH OR WITHOUT DUE
NOTICE OR LAPSE OF TIME OR BOTH) UNDER THE TERMS, CONDITIONS OR PROVISIONS OF
ANY NOTE, BOND, MORTGAGE, INDENTURE OR DEED OF TRUST, OR ANY MATERIAL LICENSE,
LEASE OR AGREEMENT TO WHICH SUCH SELLER IS A PARTY; OR (C) VIOLATE ANY ORDER,
WRIT, JUDGMENT, INJUNCTION, DECREE, STATUTE, RULE OR REGULATION OF ANY COURT OR
GOVERNMENTAL BODY APPLICABLE TO SUCH SELLER.

4.4                     TITLE TO SHARES.  SUCH SELLER IS THE SOLE RECORD AND
BENEFICIAL OWNER OF, AND HAS GOOD AND VALID TITLE TO, THE SHARES SET FORTH
OPPOSITE SUCH SELLER’S NAME IN SCHEDULE 3.4(A) HERETO, FREE AND CLEAR OF ALL
ENCUMBRANCES, SUCH SELLER HAS FULL RIGHT, POWER AND AUTHORITY TO TRANSFER SUCH
SHARES TO BUYER, FREE AND CLEAR OF ANY ENCUMBRANCES, AND SUCH SELLER IS NOT A
PARTY TO ANY VOTING TRUST, PROXY OR OTHER AGREEMENT WITH RESPECT TO THE VOTING
OF SUCH SHARES.

4.5                     CONSENTS AND APPROVALS.  NO FILING OR REGISTRATION WITH,
NO NOTICE TO AND NO PERMIT, AUTHORIZATION, CONSENT OR APPROVAL OF ANY THIRD
PARTY OR ANY GOVERNMENTAL BODY IS NECESSARY FOR THE CONSUMMATION BY SUCH SELLER
OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer hereby represents and warrants to the Sellers as follows:

5.1                     ORGANIZATION AND QUALIFICATION. THE BUYER IS A
CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS
OF THE JURISDICTION OF ITS INCORPORATION, WITH ALL REQUISITE CORPORATE POWER AND
AUTHORITY TO OWN, LEASE AND OPERATE ITS PROPERTIES AND TO CARRY ON ITS
BUSINESSES AS NOW BEING CONDUCTED.

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5.2                     AUTHORIZATION. THE BUYER HAS FULL CORPORATE POWER AND
AUTHORITY TO EXECUTE AND DELIVER THIS AGREEMENT AND TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED HEREBY.  THE EXECUTION AND DELIVERY OF THIS AGREEMENT
BY THE BUYER, THE PERFORMANCE BY THE BUYER OF ITS OBLIGATIONS HEREUNDER, AND THE
CONSUMMATION BY THE BUYER OF THE TRANSACTIONS CONTEMPLATED HEREBY, HAVE BEEN
DULY AUTHORIZED BY THE BUYER.  NO OTHER CORPORATE PROCEEDING ON THE PART OF THE
BUYER IS NECESSARY TO AUTHORIZE THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR
TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY.  THIS AGREEMENT HAS BEEN
DULY AND VALIDLY EXECUTED AND DELIVERED BY THE BUYER AND CONSTITUTES A VALID AND
BINDING OBLIGATION OF THE BUYER, ENFORCEABLE AGAINST IT IN ACCORDANCE WITH ITS
TERMS, EXCEPT TO THE EXTENT THAT SUCH ENFORCEMENT MAY BE SUBJECT TO APPLICABLE
BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR OTHER SIMILAR LAWS NOW OR
HEREAFTER IN EFFECT RELATING TO CREDITORS’ RIGHTS GENERALLY, AND THE REMEDY OF
SPECIFIC PERFORMANCE AND INJUNCTIVE AND OTHER FORMS OF EQUITABLE RELIEF MAY BE
SUBJECT TO EQUITABLE DEFENSES AND TO THE DISCRETION OF THE COURT BEFORE WHICH
ANY PROCEEDING THEREFOR MAY BE BROUGHT.

5.3                     NO VIOLATION. NEITHER THE EXECUTION AND DELIVERY OF THIS
AGREEMENT BY THE BUYER, THE PERFORMANCE BY THE BUYER OF ITS OBLIGATIONS
HEREUNDER NOR THE CONSUMMATION BY THE BUYER OF THE TRANSACTIONS CONTEMPLATED
HEREBY WILL: (A) VIOLATE, CONFLICT WITH OR RESULT IN ANY BREACH OF ANY PROVISION
OF THE ORGANIZATIONAL DOCUMENTS OF THE BUYER; (B) VIOLATE, CONFLICT WITH OR
RESULT IN A VIOLATION OR BREACH OF, OR CONSTITUTE A DEFAULT (WITH OR WITHOUT DUE
NOTICE OR LAPSE OF TIME OR BOTH) UNDER THE TERMS, CONDITIONS OR PROVISIONS OF
ANY NOTE, BOND, MORTGAGE, INDENTURE OR DEED OF TRUST, OR ANY MATERIAL LICENSE,
LEASE OR AGREEMENT TO WHICH THE BUYER OR ANY OF THE BUYER’S SUBSIDIARIES IS A
PARTY; OR (C) VIOLATE ANY ORDER, WRIT, JUDGMENT, INJUNCTION, DECREE, STATUTE,
RULE OR REGULATION OF ANY COURT OR GOVERNMENTAL BODY APPLICABLE TO THE BUYER OR
ANY OF THE BUYER’S SUBSIDIARIES, EXCEPT, IN THE CASE OF CLAUSE (B), AS WOULD
NOT, INDIVIDUALLY OR IN THE AGGREGATE, HAVE A BUYER MATERIAL ADVERSE EFFECT.

5.4                     CONSENTS AND APPROVALS. NO FILING OR REGISTRATION WITH,
NO NOTICE TO AND NO PERMIT, AUTHORIZATION, CONSENT OR APPROVAL OF ANY THIRD
PARTY OR ANY GOVERNMENTAL BODY IS NECESSARY FOR THE CONSUMMATION BY THE BUYER OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

5.5                     BROKERS’ FEES AND COMMISSIONS. EXCEPT FOR KERLIN CAPITAL
GROUP, WHOSE FEES WILL BE PAID BY THE BUYER, NEITHER THE BUYER NOR ANY OF ITS
SUBSIDIARIES, DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS HAS EMPLOYED ANY
INVESTMENT BANKER, BROKER OR FINDER IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREBY.

5.6                     PURCHASE FOR INVESTMENT. THE BUYER IS ACQUIRING THE
SHARES FOR ITS OWN ACCOUNT FOR INVESTMENT PURPOSES AND NOT WITH A VIEW OF THE
DISTRIBUTION OF THE SHARES.  THE BUYER HAS SUCH KNOWLEDGE AND EXPERIENCE IN
FINANCIAL AND BUSINESS MATTERS SO AS TO BE CAPABLE OF EVALUATING THE MERITS AND
RISKS OF ITS INVESTMENT IN THE SHARES.  THE BUYER IS AN “ACCREDITED INVESTOR” AS
DEFINED IN RULE 501 OF THE SHARES ACT OF 1933, AS AMENDED.  THE BUYER WILL NOT,
DIRECTLY OR INDIRECTLY, DISPOSE OF THE SHARES EXCEPT IN COMPLIANCE WITH
APPLICABLE FEDERAL AND STATE SECURITIES LAWS.

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ARTICLE VI
COVENANTS OF THE BUYER

6.1                     ACCESS TO BOOKS AND RECORDS.  AFTER THE CLOSING DATE,
UPON REASONABLE NOTICE AND AT REASONABLE TIMES WITHOUT SIGNIFICANT DISRUPTION TO
THE BUSINESS OF THE COMPANY AND ITS SUBSIDIARIES, THE BUYER WILL CAUSE THE
COMPANY AND ITS SUBSIDIARIES TO GIVE THE SELLER REPRESENTATIVE UPON THE SELLER
REPRESENTATIVE’S REASONABLE REQUEST AND ITS AUTHORIZED REPRESENTATIVES
REASONABLE ACCESS TO ALL BOOKS AND RECORDS OF THE COMPANY AND WILL CAUSE ITS
OFFICERS TO FURNISH THE SELLER REPRESENTATIVE UPON THE SELLER REPRESENTATIVE’S
REASONABLE REQUEST SUCH FINANCIAL AND OPERATING DATA AND OTHER INFORMATION WITH
RESPECT TO THE BUSINESSES AND PROPERTIES OF THE COMPANY AND ITS SUBSIDIARIES AS
MAY BE NECESSARY FOR (I) THE SELLERS TO PREPARE THEIR RESPECTIVE TAX RETURNS FOR
ANY PERIOD ENDING BEFORE OR INCLUDING THE CLOSING DATE OR (II) THE DEFENSE OF
ANY MATTER CONTEMPLATED UNDER ARTICLE IX.  THE BUYER SHALL MAKE AVAILABLE, ON A
MUTUALLY CONVENIENT BASIS, ITS EMPLOYEES AND AGENTS FOR THE PURPOSE OF
EXPLAINING ANY INFORMATION PROVIDED UNDER THIS SECTION 6.1.

ARTICLE VII
COVENANTS OF THE BUYER AND THE SELLERS

7.1                     PUBLIC ANNOUNCEMENTS.  THE PARTIES SHALL COOPERATE WITH
EACH OTHER IN CONNECTION WITH THE ISSUANCE OF ANY PRESS RELEASE OR OTHERWISE
MAKING ANY PUBLIC STATEMENT WITH RESPECT TO THE CONTENTS OF THIS DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, AND NONE OF THE PARTIES HERETO SHALL ISSUE ANY
SUCH PRESS RELEASE OR MAKE ANY SUCH PUBLIC STATEMENT PRIOR TO SUCH CONSULTATION,
EXCEPT AS MY BE REQUIRED BY LAW OR APPLICABLE STOCK EXCHANGE OR NASDAQ
REGULATIONS.  THE FOREGOING SHALL NOT RESTRICT THE DISSEMINATION OF INFORMATION
FOLLOWING THE CLOSING BY ANY SELLER TO ITS AFFILIATES, LIMITED PARTNERS,
LENDERS, INVESTORS, OR PROSPECTIVE LENDERS OR INVESTORS, WHICH DISSEMINATION
SHALL BE GOVERNED BY THE TERMS OF THE CONFIDENTIALITY AGREEMENT.

7.2                     FURTHER ASSURANCES.  THE PARTIES HERETO SHALL EXECUTE
SUCH DOCUMENTS AND OTHER INSTRUMENTS AND TAKE SUCH FURTHER ACTIONS AS MAY
REASONABLY BE REQUIRED BY THE OTHER PARTY AND AT SUCH OTHER PARTY’S EXPENSE TO
CARRY OUT THE PROVISIONS HEREOF AND CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT.

7.3                     TAX MATTERS.

(A)           LIABILITY FOR TAXES.

(I)          EXCEPT TO THE EXTENT REFLECTED AS A CURRENT LIABILITY IN THE FINAL
NET WORKING CAPITAL STATEMENT, THE SELLERS SHALL BE LIABLE FOR AND PAY, AND
PURSUANT TO ARTICLE IX SHALL INDEMNIFY AND HOLD HARMLESS THE BUYER FROM AND
AGAINST ANY AND ALL LOSSES INCURRED BY ANY BUYER INDEMNITEE IN CONNECTION WITH
OR ARISING FROM (A) ALL TAXES IMPOSED ON THE COMPANY OR ANY OF ITS SUBSIDIARIES,
OR FOR WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES MAY OTHERWISE BE LIABLE, AS
A RESULT OF HAVING BEEN A MEMBER OF A COMPANY GROUP OF WHICH THE COMPANY OR ANY
OF ITS SUBSIDIARIES IS NO LONGER A MEMBER (INCLUDING, WITHOUT LIMITATION, TAXES
FOR WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES MAY BE LIABLE PURSUANT TO
TREAS.

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REG. § 1.1502-6 OR SIMILAR PROVISIONS OF STATE, LOCAL OR FOREIGN LAW AS A RESULT
OF HAVING BEEN A MEMBER OF A COMPANY GROUP AND ANY TAXES RESULTING FROM THE
COMPANY OR ANY OF ITS SUBSIDIARIES CEASING TO BE A MEMBER OF ANY COMPANY GROUP)
FOR PERIODS ENDING ON OR BEFORE THE CLOSING DATE, AND (B) ALL TAXES (OTHER THAN
ANY TAXES IMPOSED ON THE COMPANY OR ANY OF ITS SUBSIDIARIES RESULTING FROM THE
SECTION 338(G) ELECTION) IMPOSED ON THE COMPANY OR ANY OF ITS SUBSIDIARIES, OR
FOR WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES MAY OTHERWISE BE LIABLE, FOR
ANY TAXABLE YEAR OR PERIOD THAT ENDS ON OR BEFORE THE CLOSING DATE, INCLUDING,
WITHOUT LIMITATION, ALL TAXES IN CONNECTION WITH, ARISING OUT OF OR RESULTING
FROM THE TRANSFER AND REDEMPTION, INCLUDING ANY ALTERNATIVE MINIMUM TAX, AND,
WITH RESPECT TO ANY STRADDLE PERIOD, THE PORTION OF SUCH STRADDLE PERIOD ENDING
ON AND INCLUDING THE CLOSING DATE (INCLUDING, WITHOUT LIMITATION, ANY
OBLIGATIONS TO CONTRIBUTE TO THE PAYMENT OF A TAX DETERMINED ON A CONSOLIDATED,
COMBINED OR UNITARY BASIS WITH RESPECT TO ANY COMPANY GROUP). FINAL PAYMENT
REQUIRED BY THIS INDEMNIFICATION SHALL BE TREATED AS A PURCHASE PRICE
ADJUSTMENT.

(II)         FOR PURPOSES OF SECTION 7.3(A)(I), WHENEVER IT IS NECESSARY TO
DETERMINE THE LIABILITY FOR TAXES OF THE COMPANY OR ANY OF ITS SUBSIDIARIES FOR
A STRADDLE PERIOD, THE DETERMINATION OF THE TAXES OF THE COMPANY OR SUCH
SUBSIDIARY FOR THE PORTION OF THE STRADDLE PERIOD ENDING ON AND INCLUDING THE
CLOSING DATE SHALL BE DETERMINED BY ASSUMING THAT THE STRADDLE PERIOD CONSISTED
OF TWO TAXABLE YEARS OR PERIODS, ONE WHICH ENDED AT THE CLOSE OF THE CLOSING
DATE AND THE OTHER WHICH BEGAN AT THE BEGINNING OF THE DAY FOLLOWING THE CLOSING
DATE AND ITEMS OF INCOME, GAIN, DEDUCTION, LOSS OR CREDIT OF THE COMPANY AND ITS
SUBSIDIARIES FOR THE STRADDLE PERIOD SHALL BE ALLOCATED BETWEEN SUCH TWO TAXABLE
YEARS OR PERIODS ON A “CLOSING OF THE BOOKS BASIS” BY ASSUMING THAT THE BOOKS OF
THE COMPANY AND ITS SUBSIDIARIES WERE CLOSED AT THE CLOSE OF THE CLOSING DATE;
PROVIDED, HOWEVER, THAT EXEMPTIONS, ALLOWANCES, DEDUCTIONS OR TAXES THAT ARE
CALCULATED ON AN ANNUAL BASIS, SUCH AS THE DEDUCTION FOR DEPRECIATION, SHALL BE
APPORTIONED BETWEEN SUCH TWO TAXABLE YEARS OR PERIODS ON A DAILY BASIS. 
ESTIMATED TAX PAYMENTS MADE BY THE SELLERS, THE COMPANY OR ITS SUBSIDIARIES
PRIOR TO THE CLOSING DATE REFLECTED IN THE FINAL NET WORKING CAPITAL STATEMENT
ATTRIBUTABLE TO STRADDLE PERIODS SHALL REDUCE ANY LIABILITY FOR TAXES OWED BY
THE SELLERS TO THE BUYER UNDER THIS SECTION 7.3. IF SUCH ESTIMATED TAX PAYMENTS
EXCEED THE TAXES OWED BY THE SELLERS TO THE BUYER UNDER THIS SECTION 7.3, THE
BUYER SHALL PROMPTLY REFUND SUCH EXCESS TO THE SELLER REPRESENTATIVE ON BEHALF
OF THE SELLERS.

(III)        ALL TRANSFER TAXES, SALES TAXES, USE TAXES, REAL ESTATE TRANSFER OR
GAINS TAXES, OR OTHER SIMILAR TAXES IMPOSED ON, ARISING OUT OF OR OTHERWISE
RELATING TO (I) THE SALE OF THE SHARES BY THE SELLERS TO THE BUYER AND (II) THE
TRANSFER AND REDEMPTION, SHALL BE BORNE AND PAID BY THE SELLERS.

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(B)                           TAX RETURNS.

(I)          THE SELLERS SHALL PREPARE OR CAUSE TO BE PREPARED AT THE SELLERS’
EXPENSE (WHICH SHALL BE ACCRUED AS A CURRENT LIABILITY) ALL TAX RETURNS RELATING
TO, OR REQUIRED TO BE FILED IN CONNECTION WITH, ANY AND ALL TAXES BASED UPON OR
MEASURED IN WHOLE OR IN PART BY NET INCOME (REGARDLESS OF WHETHER DENOMINATED AS
AN “INCOME TAX,” “FRANCHISE TAX” OR OTHERWISE AND INCLUDING ANY TAX IMPOSED ON
ALTERNATIVE BASES, ONE OF WHICH IS NET INCOME), THAT ARE REQUIRED TO BE FILED
AFTER THE CLOSING DATE BY OR WITH RESPECT TO THE COMPANY AND ITS SUBSIDIARIES
FOR TAXABLE YEARS OR PERIODS ENDING ON OR BEFORE THE CLOSING DATE THAT ARE NOT
DUE ON OR BEFORE THE CLOSING DATE (“PRE-CLOSING INCOME TAX RETURNS”), AND
DELIVER THEM TO THE BUYER FOR FILING IN ACCORDANCE WITH SECTION 7.3(C)(I). THE
BUYER SHALL PAY, OR REIMBURSE THE SELLERS FOR, THE COST OF THE PREPARATION OF
PRE-CLOSING INCOME TAX RETURNS TO THE EXTENT SUCH COST IS REFLECTED AS A CURRENT
LIABILITY IN THE FINAL NET WORKING CAPITAL STATEMENT.  THE BUYER SHALL REMIT (OR
CAUSE TO BE REMITTED) ANY TAXES DUE IN RESPECT OF PRE-CLOSING INCOME TAX
RETURNS; AND THE SELLERS SHALL REIMBURSE THE BUYER THE TAXES FOR WHICH THE
SELLERS ARE LIABLE PURSUANT TO PARAGRAPH (A)(I) OF THIS SECTION 7.3 BUT WHICH
ARE EITHER REMITTED BY THE BUYER IN RESPECT OF ANY PRE-CLOSING INCOME TAX RETURN
PURSUANT TO THIS PARAGRAPH (B)(I) OR OTHERWISE WITH RESPECT TO ANY TAX RETURN
RELATING TO ANY TAXABLE PERIOD ENDING ON OR BEFORE THE CLOSING DATE, UPON THE
WRITTEN REQUEST OF THE BUYER SETTING FORTH IN DETAIL THE COMPUTATION OF THE
AMOUNT OWED BY THE SELLERS, BUT IN NO EVENT EARLIER THAN TEN (10) DAYS PRIOR TO
THE DUE DATE FOR PAYING SUCH TAXES.

(II)         THE BUYER SHALL FILE OR CAUSE TO BE FILED WHEN DUE (TAKING INTO
ACCOUNT ALL EXTENSIONS PROPERLY OBTAINED) ALL TAX RETURNS THAT ARE REQUIRED TO
BE FILED BY OR WITH RESPECT TO THE COMPANY AND ITS SUBSIDIARIES FOR TAXABLE
YEARS OR PERIODS ENDING AFTER THE CLOSING DATE.  THE BUYER SHALL REMIT (OR CAUSE
TO BE REMITTED) ANY TAXES DUE IN RESPECT OF SUCH TAX RETURNS; AND THE SELLERS
SHALL REIMBURSE THE BUYER THE TAXES FOR WHICH THE SELLERS ARE LIABLE PURSUANT TO
PARAGRAPH (A)(I) OF THIS SECTION 7.3 BUT WHICH ARE REMITTED IN RESPECT OF ANY
TAX RETURN TO BE FILED BY THE BUYER PURSUANT TO THIS PARAGRAPH (B) UPON THE
WRITTEN REQUEST OF THE BUYER SETTING FORTH IN DETAIL THE COMPUTATION OF THE
AMOUNT OWED BY THE SELLERS, BUT IN NO EVENT EARLIER THAN TEN (10) DAYS PRIOR TO
THE DUE DATE FOR PAYING SUCH TAXES.

(III)        ALL TAX RETURNS WHICH THE SELLERS ARE REQUIRED TO PREPARE OR CAUSE
TO BE PREPARED AND THE BUYER IS REQUIRED TO FILE OR CAUSE TO BE FILED IN
ACCORDANCE WITH PARAGRAPH (B)(I) OF THIS SECTION 7.3 SHALL BE PREPARED AND FILED
IN A MANNER CONSISTENT WITH PAST PRACTICE OF THE COMPANY AND ITS SUBSIDIARIES IN
PREPARING AND FILING THEIR TAX RETURNS AND, ON SUCH TAX RETURNS, NO POSITION
SHALL BE TAKEN, ELECTION MADE OR METHOD ADOPTED THAT IS INCONSISTENT WITH
POSITIONS TAKEN, ELECTIONS MADE OR METHODS USED IN PREPARING AND FILING SIMILAR
TAX RETURNS IN PRIOR PERIODS (INCLUDING, BUT NOT LIMITED TO, POSITIONS,
ELECTIONS OR METHODS WHICH WOULD HAVE THE EFFECT OF DEFERRING INCOME TO PERIODS
FOR WHICH THE BUYER IS

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LIABLE UNDER THIS SECTION 7.3 OR ACCELERATING DEDUCTIONS TO PERIODS FOR WHICH
THE SELLERS ARE LIABLE UNDER THIS SECTION 7.3).

(C)           ASSISTANCE AND COOPERATION.  AFTER THE CLOSING DATE, EACH OF THE
SELLERS AND THE BUYER SHALL (AND SHALL CAUSE THEIR RESPECTIVE AFFILIATES TO):

(I)          ASSIST THE OTHER PARTY IN PREPARING AND FILING AS NECESSARY
(INCLUDING, BY HAVING THE BUYER CAUSE THE COMPANY AND ITS SUBSIDIARIES TO SIGN
AND FILE OR CAUSE TO BE FILED WHEN DUE ANY PRE-CLOSING INCOME TAX RETURN
PREPARED BY THE SELLERS PURSUANT TO SECTION 7.3(B)(I), WHICH PRE-CLOSING INCOME
TAX RETURN SHALL BE MADE AVAILABLE TO THE BUYER AT LEAST THIRTY (30) DAYS PRIOR
TO THE APPLICABLE FILING DUE DATE, AND ANY UNRESOLVED DISPUTE REGARDING SUCH
PRE-CLOSING INCOME TAX RETURN SHALL BE RESOLVED USING THE SAME PROCEDURES AND
SAME ALLOCATION OF EXPENSES AS THE RESOLUTION OF A PROTEST NOTICE UNDER SECTION
2.5(D); PROVIDED IF THE BUYER AND THE SELLER REPRESENTATIVE ARE UNABLE TO
RESOLVE SUCH DISPUTE PRIOR TO THE APPLICABLE FILING DUE DATE (INCLUDING ANY
PROPERLY OBTAINED EXTENSIONS THEREOF), THE BUYER SHALL TIMELY FILE OR CAUSE TO
BE FILED SUCH PRE-CLOSING INCOME TAX RETURN AND, UPON FINAL RESOLUTION OF SUCH
DISPUTE IN ACCORDANCE WITH SECTION 2.5(D), SHALL FILE OR CAUSE TO BE FILED ANY
AMENDMENT TO SUCH PRE-CLOSING INCOME TAX RETURN REQUIRED TO REFLECT SUCH
RESOLUTION) ANY TAX RETURNS WHICH SUCH OTHER PARTY IS RESPONSIBLE FOR PREPARING
AND FILING IN ACCORDANCE WITH PARAGRAPH (B) OF THIS SECTION 7.3, AND IN
CONNECTION THEREWITH PROVIDE THE OTHER PARTY NECESSARY POWERS OF ATTORNEY;

(II)         COOPERATE FULLY IN PREPARING FOR AND CONDUCTING ANY AUDITS OF, OR
DISPUTES WITH TAXING AUTHORITIES REGARDING, ANY TAX RETURNS OF THE COMPANY AND
ANY OF ITS SUBSIDIARIES;

(III)        MAKE AVAILABLE TO THE OTHER AND TO ANY TAXING AUTHORITY AS
REASONABLY REQUESTED ALL INFORMATION, RECORDS, AND DOCUMENTS RELATING TO TAXES
OF THE COMPANY AND ITS SUBSIDIARIES;

(IV)        FURNISH THE OTHER WITH COPIES OF ALL CORRESPONDENCE RECEIVED FROM
ANY TAXING AUTHORITY IN CONNECTION WITH ANY TAX AUDIT OR INFORMATION REQUEST
WITH RESPECT TO ANY SUCH TAXABLE PERIOD;

(V)         THE BUYER AND THE SELLERS AGREE TO RETAIN ALL BOOKS AND RECORDS WITH
RESPECT TO TAX MATTERS PERTAINING TO THE COMPANY AND ITS SUBSIDIARIES RELATING
TO PERIODS PRIOR TO THE CLOSING FOR SIX (6) YEARS;

(VI)        TO THE EXTENT THE SELLERS WILL BE REQUIRED TO REIMBURSE THE BUYER
PURSUANT TO PARAGRAPH (B)(II) OF THIS SECTION 7.3, THE BUYER AGREES TO ALLOW THE
SELLER REPRESENTATIVE TO REVIEW ALL STRADDLE PERIOD TAX RETURNS PRIOR TO THEIR
FILING, WHICH STRADDLE PERIOD TAX RETURNS SHALL BE MADE AVAILABLE TO THE SELLER
REPRESENTATIVE AT LEAST THIRTY (30) DAYS PRIOR TO THE APPLICABLE FILING DUE
DATE, AND ANY UNRESOLVED DISPUTE REGARDING ANY SUCH STRADDLE TAX RETURN SHALL BE
RESOLVED USING THE SAME PROCEDURES AND SAME ALLOCATION OF EXPENSES AS THE
RESOLUTION OF A

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PROTEST NOTICE UNDER SECTION 2.5(D); PROVIDED IF THE BUYER AND THE SELLER
REPRESENTATIVE ARE UNABLE TO RESOLVE SUCH DISPUTE PRIOR TO THE APPLICABLE FILING
DUE DATE (INCLUDING ANY PROPERLY OBTAINED EXTENSIONS THEREOF), THE BUYER SHALL
TIMELY FILE OR CAUSE TO BE FILED SUCH STRADDLE TAX RETURN AND, UPON FINAL
RESOLUTION OF THE DISPUTE IN ACCORDANCE WITH SECTION 2.5(D), SHALL FILE OR CAUSE
TO BE FILED ANY AMENDMENT TO SUCH STRADDLE PERIOD TAX RETURN REQUIRED TO REFLECT
SUCH RESOLUTION;

(VII)       THE BUYER AGREES TO ALLOW THE SELLERS TO CONTROL ANY TAX AUDIT OR
PROCEEDING RELATING TO ANY TAXABLE PERIODS ENDING ON OR BEFORE THE CLOSING DATE
AND THE SELLERS AGREE TO ALLOW THE BUYER TO CONTROL ANY TAX AUDIT OR PROCEEDING
RELATING TO ANY PERIOD ENDING AFTER THE CLOSING DATE; PROVIDED, HOWEVER, THAT IN
THE CASE OF A STRADDLE PERIOD, THE SELLERS SHALL BE ENTITLED TO PARTICIPATE AT
THEIR EXPENSE IN ANY TAX AUDIT OR PROCEEDING RELATING (IN WHOLE OR IN PART) TO
TAXES  ATTRIBUTABLE TO THE PORTION OF SUCH STRADDLE PERIOD ENDING ON AND
INCLUDING THE CLOSING DATE; AND

(VIII)      NEITHER THE BUYER OR THE SELLERS, NOR ANY OF THEIR RESPECTIVE
AFFILIATES, SHALL FILE (OTHER THAN PRE-CLOSING INCOME TAX RETURNS OR ANY OTHER
TAX RETURNS NOT DUE BEFORE THE CLOSING DATE FILED IN ACCORDANCE WITH THIS
SECTION 7.3) RE-FILE OR AMEND ANY TAX RETURN OF THE COMPANY OR ITS SUBSIDIARIES
THAT INCLUDES ANY PERIOD ENDING ON OR BEFORE THE CLOSING DATE EXCEPT AS A RESULT
OF ANY AUDIT BY ANY GOVERNMENTAL BODY, IN WHICH CASE THE FILING, RE-FILING OR
AMENDMENT OF ANY SUCH TAX RETURN SHALL BE SUBJECT TO THE REVIEW AND DISPUTE
RESOLUTION PROVISIONS OF THIS SECTION 7.3.

(D)           SECTION 338(G) ELECTION.  THE BUYER MAY, AT ITS ELECTION, MAKE AN
ELECTION UNDER SECTION 338(G) OF THE CODE (OR ANY COMPARABLE PROVISION OF STATE,
LOCAL OR FOREIGN LAW) (TOGETHER, THE “SECTION 338(G) ELECTION”) WITH RESPECT TO
THE PURCHASE OF THE COMPANY’S STOCK AS PROVIDED HEREIN. THE SELLERS SHALL MAKE
SUCH FILINGS, COOPERATE WITH THE BUYER AND TAKE ANY SUCH OTHER ACTIONS AS ARE
REASONABLY NECESSARY OR APPROPRIATE TO ACCOMPLISH SUCH ELECTION.  IN THE EVENT
THE BUYER MAKES SUCH ELECTION, THE BUYER SHALL BE RESPONSIBLE FOR AND SHALL PAY
ALL ADDITIONAL TAXES, IF ANY, IMPOSED ON THE COMPANY AND ITS SUBSIDIARIES
RESULTING FROM THE SECTION 338(G) ELECTION, ASSUMING THAT ANY ITEMS OF INCOME OR
GAIN RESULTING FROM THE SECTION 338(G) ELECTION ARE THE LAST ITEMS OF INCOME OR
GAIN RECOGNIZED BY THE COMPANY OR ITS SUBSIDIARIES IN THE RELEVANT TAX PERIOD,
IT BEING UNDERSTOOD THAT THE FOREGOING SHALL IN NO EVENT RELIEVE THE SELLERS OF
LIABILITY FOR LOSSES RESULTING FROM THE BREACH OF ANY REPRESENTATION OR WARRANTY
CONTAINED HEREIN.

ARTICLE VIII
CONDITIONS TO CLOSING

8.1                     CONDITIONS TO OBLIGATION OF THE BUYER.  THE OBLIGATION
OF THE BUYER TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT IS
SUBJECT TO THE SATISFACTION (OR WAIVER BY THE BUYER IN ITS SOLE DISCRETION) OF
THE FOLLOWING FURTHER CONDITIONS:

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(A)           ALL AUTHORIZATIONS AND ORDERS OF, DECLARATIONS AND FILINGS WITH,
AND NOTICES TO, ANY GOVERNMENTAL BODY OR OTHER PERSON REQUIRED TO BE OBTAINED OR
MADE BY ANY SELLER, THE COMPANY OR ANY OF ITS SUBSIDIARIES TO PERMIT THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL HAVE BEEN
OBTAINED OR MADE AND SHALL BE IN FULL FORCE AND EFFECT.

(B)           NO TEMPORARY RESTRAINING ORDER, PRELIMINARY OR PERMANENT
INJUNCTION OR OTHER ORDER PREVENTING THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT SHALL BE IN EFFECT AGAINST ANY SELLER, THE
COMPANY OR ANY OF ITS SUBSIDIARIES.  NO LAW SHALL HAVE BEEN ENACTED OR SHALL BE
DEEMED APPLICABLE TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT WHICH MAKES
THE CONSUMMATION OF SUCH TRANSACTIONS BY ANY SELLER, THE COMPANY OR ANY OF ITS
SUBSIDIARIES ILLEGAL.

(C)           EACH OF THE REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND THE
COMPANY SET FORTH IN THIS AGREEMENT THAT IS QUALIFIED BY MATERIALITY OR
MATERIALITY SHALL BE TRUE AND CORRECT AT AND AS OF THE CLOSING DATE AND EACH OF
SUCH REPRESENTATIONS AND WARRANTIES THAT IS NOT SO QUALIFIED SHALL BE TRUE AND
CORRECT IN ALL MATERIAL RESPECTS AT AND AS OF THE CLOSING DATE, EXCEPT IN EACH
CASE (I) TO THE EXTENT THAT SUCH REPRESENTATIONS AND WARRANTIES REFER
SPECIFICALLY TO AN EARLIER DATE, IN WHICH CASE SUCH REPRESENTATIONS AND
WARRANTIES SHALL HAVE BEEN TRUE AND CORRECT AS OF SUCH EARLIER DATE OR (II) FOR
CHANGES CONTEMPLATED BY THIS AGREEMENT.

(D)           THE COMPANY AND EACH SELLER SHALL HAVE PERFORMED OR COMPLIED IN
ALL MATERIAL RESPECTS WITH ALL OBLIGATIONS AND COVENANTS REQUIRED BY THIS
AGREEMENT TO BE PERFORMED OR COMPLIED WITH BY THE COMPANY OR SUCH SELLER AT OR
PRIOR TO THE CLOSING DATE.

(E)           THE SELLERS AND THE OTHER RELEVANT PARTIES THERETO SHALL HAVE
DELIVERED TO THE BUYER ALL AGREEMENTS AND OTHER DOCUMENTS REQUIRED TO BE
DELIVERED BY THE SELLER AND SUCH OTHER RELEVANT PARTIES TO THE BUYER PURSUANT TO
SECTION 2.4(A) AND THE SAME SHALL BE IN FULL FORCE AND EFFECT.

(F)            ALL OUTSTANDING OPTIONS TO PURCHASE SHARES OF COMMON STOCK SHALL
HAVE BEEN CANCELLED IN ACCORDANCE WITH THE TERMS OF THE COFFEE BEAN HOLDING CO.,
INC. 2004 STOCK OPTION PLAN, AND AS OF THE CLOSING NO SUCH OPTIONS SHALL BE
OUTSTANDING.

(G)           PRIOR TO CLOSING, THE SELLERS SHALL CAUSE ALL CONTRACTS BETWEEN
THE COMPANY OR ANY OF ITS SUBSIDIARIES AND ANY SELLER OR ANY SELLER’S AFFILIATES
TO BE TERMINATED AND BE OF NO FURTHER FORCE OR EFFECT, NOTWITHSTANDING ANY TERMS
THEREOF TO THE CONTRARY.

(H)           THE TRANSFER AND REDEMPTION SHALL HAVE BEEN COMPLETED.

8.2                     CONDITIONS TO OBLIGATION OF THE SELLERS.  THE OBLIGATION
OF THE SELLERS TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT IS
SUBJECT TO THE SATISFACTION (OR WAIVER BY THE SELLERS IN THEIR SOLE DISCRETION)
OF THE FOLLOWING FURTHER CONDITIONS:

(A)           ALL AUTHORIZATIONS AND ORDERS OF, DECLARATIONS AND FILINGS WITH,
AND NOTICES TO, ANY GOVERNMENTAL BODY OR OTHER PERSON REQUIRED TO BE OBTAINED OR
MADE BY THE BUYER TO PERMIT THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT SHALL HAVE BEEN OBTAINED OR MADE AND SHALL BE IN FULL FORCE AND
EFFECT.

 

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(B)           NO TEMPORARY RESTRAINING ORDER, PRELIMINARY OR PERMANENT
INJUNCTION OR OTHER ORDER PREVENTING THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT SHALL BE IN EFFECT AGAINST THE BUYER.  NO LAW
SHALL HAVE BEEN ENACTED OR SHALL BE DEEMED APPLICABLE TO THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT WHICH MAKES THE CONSUMMATION OF SUCH TRANSACTIONS
BY THE BUYER ILLEGAL.

(C)           EACH OF THE REPRESENTATIONS AND WARRANTIES OF THE BUYER SET FORTH
IN THIS AGREEMENT THAT IS QUALIFIED BY MATERIALITY SHALL BE TRUE AND CORRECT AT
AND AS OF THE CLOSING DATE AND EACH OF SUCH REPRESENTATIONS AND WARRANTIES THAT
IS NOT SO QUALIFIED SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AT AND AS
OF THE CLOSING DATE, EXCEPT IN EACH CASE (I) TO THE EXTENT THAT SUCH
REPRESENTATIONS AND WARRANTIES REFER SPECIFICALLY TO AN EARLIER DATE, IN WHICH
CASE SUCH REPRESENTATIONS AND WARRANTIES SHALL HAVE BEEN TRUE AND CORRECT AS OF
SUCH EARLIER DATE, OR (II) FOR CHANGES CONTEMPLATED BY THIS AGREEMENT.

(D)           THE BUYER SHALL HAVE PERFORMED OR COMPLIED IN ALL MATERIAL
RESPECTS WITH ALL OBLIGATIONS AND COVENANTS REQUIRED BY THIS AGREEMENT TO BE
PERFORMED OR COMPLIED WITH BY THE BUYER AT OR PRIOR TO THE CLOSING DATE.

(E)           THE SELLERS SHALL HAVE BEEN RELEASED FROM ANY AND ALL GUARANTEES
UNDER, AND SIMILAR OBLIGATIONS WITH RESPECT TO, ANY INDEBTEDNESS OF THE COMPANY
AND EACH OF ITS SUBSIDIARIES.

(F)            THE BUYER SHALL HAVE DELIVERED TO THE SELLERS ALL AGREEMENTS AND
OTHER DOCUMENTS REQUIRED TO BE DELIVERED BY THE BUYER TO THE SELLERS PURSUANT TO
SECTION 2.4(B).

(G)           THE TRANSFER AND REDEMPTION SHALL HAVE BEEN COMPLETED.

ARTICLE IX
INDEMNIFICATION

9.1                     SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. 
THE REPRESENTATIONS AND WARRANTIES MADE IN THIS AGREEMENT SHALL SURVIVE FOR A
PERIOD OF EIGHTEEN (18) MONTHS AFTER THE CLOSING DATE; PROVIDED, HOWEVER, THAT:
(I) THE REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 3.13 SHALL SURVIVE
UNTIL THE EXPIRATION OF THE APPLICABLE STATUTE OF LIMITATIONS; (II) THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTIONS 3.1, 3.2, 3.4, 3.5, 4.1,
4.2 AND 4.4 SHALL SURVIVE INDEFINITELY; AND (III) THE REPRESENTATIONS AND
WARRANTIES SET FORTH IN SECTION 3.17 SHALL SURVIVE FOR A PERIOD OF THIRTY-SIX
(36) MONTHS AFTER THE CLOSING DATE.  THE COVENANTS AND AGREEMENTS CONTAINED
HEREIN SHALL SURVIVE THE CLOSING WITHOUT LIMITATION AS TO TIME UNLESS THE
COVENANT OR AGREEMENT SPECIFIES A TERM, IN WHICH CASE SUCH COVENANT OR AGREEMENT
SHALL SURVIVE FOR SUCH SPECIFIED TERM.  ANY CLAIMS UNDER THIS AGREEMENT WITH
RESPECT TO ANY INACCURACY OF ANY REPRESENTATION OR WARRANTY OR THE BREACH OF ANY
COVENANT, UNDERTAKING OR OTHER AGREEMENT CONTAINED IN THIS AGREEMENT MUST BE
ASSERTED BY WRITTEN NOTICE DELIVERED PRIOR TO 5:00 P.M., PACIFIC TIME, ON THE
LAST BUSINESS DAY OF THE APPLICABLE SURVIVAL PERIOD SET FORTH ABOVE, AND IF SUCH
A CLAIM NOTICE IS GIVEN IN COMPLIANCE WITH SECTION 9.4(A) OR A THIRD PARTY
NOTICE IS GIVEN IN COMPLIANCE WITH SECTION 9.5(A), AS APPLICABLE, PRIOR TO SUCH
TIME, THE SURVIVAL PERIOD FOR SUCH CLAIM SHALL CONTINUE UNTIL SUCH CLAIM IS
FULLY RESOLVED.  NOTWITHSTANDING ANYTHING IN THIS ARTICLE IX TO THE CONTRARY, IF
ANY REPRESENTATION MADE BY THE SELLERS OR THE COMPANY BASED ON FACTS IN

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existence as of the Closing Date is rendered incorrect solely because of a
change in Law or regulation subsequent to the Closing Date, such representation
shall not be deemed to have been incorrect as of the Closing Date.

9.2                     INDEMNIFICATION.

(A)           SUBJECT TO THE LIMITATIONS SET FORTH IN THIS ARTICLE IX,
SUBSEQUENT TO THE CLOSING, THE SELLERS SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS
EACH BUYER INDEMNITEE FROM AND AGAINST, ANY AND ALL CLAIMS, DEMANDS,
OBLIGATIONS, DEFICIENCIES, ASSESSMENTS, JUDGMENTS, LOSSES, DAMAGES, LIABILITIES,
PENALTIES, INTEREST, COSTS AND EXPENSES, INCLUDING REASONABLE ATTORNEYS’ FEES
AND DISBURSEMENTS (“LOSSES”), INCURRED BY SUCH BUYER INDEMNITEE IN CONNECTION
WITH, ARISING OUT OF OR RESULTING FROM:

(I)          ANY BREACH OR INACCURACY OF ANY REPRESENTATION OR WARRANTY MADE BY
THE SELLERS AND THE COMPANY CONTAINED IN ARTICLE III OF THIS AGREEMENT;

(II)         ANY BREACH OR NON-PERFORMANCE BY THE COMPANY OF ANY OF ITS
COVENANTS OR AGREEMENTS CONTAINED IN THIS AGREEMENT; OR

(III)        THE SALE OR TRANSFER OF THE FACILITY TO, OR THE LISTING OF THE
FACILITY FOR SALE WITH, ANY PERSON, INCLUDING, WITHOUT LIMITATION, THE TRANSFER
AND REDEMPTION.

(B)           SUBJECT TO THE LIMITATIONS SET FORTH IN THIS ARTICLE IX,
SUBSEQUENT TO THE CLOSING, EACH SELLER SHALL, SEVERALLY AND NOT JOINTLY,
INDEMNIFY, DEFEND AND HOLD HARMLESS EACH BUYER INDEMNITEE FROM AND AGAINST, ANY
AND ALL LOSSES INCURRED BY SUCH BUYER INDEMNITEE IN CONNECTION WITH, ARISING OUT
OF OR RESULTING FROM:

(I)          ANY BREACH OR INACCURACY OF ANY REPRESENTATION OR WARRANTY MADE BY
SUCH SELLER CONTAINED IN ARTICLE IV OF THIS AGREEMENT; OR

(II)         ANY BREACH OR NON-PERFORMANCE BY SUCH SELLER OF ANY OF ITS
COVENANTS OR AGREEMENTS CONTAINED IN THIS AGREEMENT.

(C)           SUBSEQUENT TO THE CLOSING, SUBJECT TO THE LIMITATIONS SET FORTH IN
THIS ARTICLE IX, THE BUYER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS EACH SELLER
INDEMNITEE FROM AND AGAINST ANY AND ALL LOSSES INCURRED BY SUCH SELLER
INDEMNITEE IN CONNECTION WITH, ARISING OUT OF OR RESULTING FROM:

(I)          ANY BREACH OR INACCURACY OF ANY REPRESENTATION OR WARRANTY MADE BY
THE BUYER CONTAINED IN THIS AGREEMENT;

(II)         ANY BREACH OR NON-PERFORMANCE BY THE BUYER OF ANY OF ITS COVENANTS
OR AGREEMENTS CONTAINED IN THIS AGREEMENT; OR

(III)        ANY EXCLUDED TAXES IMPOSED ON THE COMPANY OR ITS SUBSIDIARIES.

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9.3                     LIMITATIONS ON LIABILITY.

(A)           NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SECTION 9.2, (I) NO
INDEMNITOR SHALL HAVE ANY OBLIGATION TO INDEMNIFY A BUYER INDEMNITEE OR SELLER
INDEMNITEE, AS THE CASE MAY BE, HEREUNDER FOR ANY LOSSES UNLESS AND UNTIL THE
AGGREGATE OF ALL LOSSES SUFFERED BY ALL BUYER INDEMNITEES OR SELLER INDEMNITEES,
AS THE CASE MAY BE, HEREUNDER EXCEEDS $112,500 (THE “THRESHOLD”), WHEREUPON,
PROVIDED THE OTHER REQUIREMENTS OF THIS ARTICLE IX HAVE BEEN COMPLIED WITH AND
SUBJECT TO THE OTHER LIMITATIONS OF THIS ARTICLE IX, THE INDEMNITOR SHALL BE
LIABLE TO INDEMNIFY THE BUYER INDEMNITEE OR SELLER INDEMNITEE, AS THE CASE MAY
BE, FOR ONLY THE EXCESS OF LOSSES OVER THE AMOUNT OF THE THRESHOLD; (II) IN NO
EVENT SHALL THE AGGREGATE OF ALL INDEMNIFICATION PAID BY THE SELLERS, ON THE ONE
HAND, OR THE BUYER, ON THE OTHER HAND, EXCEED $4,000,000 (THE “CAP”); AND (III)
NO INDEMNITOR SHALL HAVE ANY OBLIGATION TO INDEMNIFY A BUYER INDEMNITEE FOR ANY
LOSSES UNDER ANY PROVISION OF THIS AGREEMENT RELATING TO OR ARISING OUT OF THE
FAILURE BY THE COMPANY OR ANY OF ITS SUBSIDIARIES TO PAY EXCLUDED TAXES OR TO
FILE ANY TAX RETURNS RELATING TO EXCLUDED TAXES.

(B)           NOTWITHSTANDING SECTION 9.3(A), NEITHER THE THRESHOLD NOR THE CAP
SHALL APPLY TO (I) ANY BREACH OF THE REPRESENTATIONS AND WARRANTIES SET FORTH IN
SECTIONS 3.2, 3.4, 3.11, 3.13, 4.2, 4.4 OR 5.2, (II) THE BREACH OF (OR A FAILURE
TO COMPLY WITH) ANY COVENANT OR OBLIGATION THAT BY ITS TERMS REQUIRES ANY ACTION
OR CONTAINS ANY OBLIGATION TO BE PERFORMED AFTER THE CLOSING, OR (III) ANY
LOSSES INDEMNIFIABLE UNDER SECTION 9.2(A)(III).

(C)           IF ANY LOSSES SUSTAINED BY AN INDEMNIFIED PARTY ARE COVERED BY AN
INSURANCE POLICY, SUCH INDEMNIFIED PARTY SHALL USE REASONABLE EFFORTS TO COLLECT
SUCH INSURANCE PROCEEDS.  IF THE INDEMNIFIED PARTY RECEIVES SUCH INSURANCE
PROCEEDS PRIOR TO BEING INDEMNIFIED WITH RESPECT TO SUCH LOSSES UNDER SECTION
9.2, THE PAYMENT UNDER THIS ARTICLE IX WITH RESPECT TO SUCH LOSSES SHALL BE
REDUCED BY THE AMOUNT OF SUCH INSURANCE PROCEEDS TO THE EXTENT RELATED TO SUCH
LOSSES, LESS REASONABLE ATTORNEY’S FEES AND OTHER EXPENSES INCURRED IN
CONNECTION WITH SUCH RECOVERY.  IF THE INDEMNIFIED PARTY RECEIVES SUCH INSURANCE
PROCEEDS AFTER BEING INDEMNIFIED AND HELD HARMLESS WITH RESPECT TO SUCH LOSSES,
THEN SUCH INDEMNIFIED PARTY SHALL PAY TO THE INDEMNITOR THE AMOUNT OF SUCH
INSURANCE PROCEEDS TO THE EXTENT RELATED TO SUCH LOSSES, LESS REASONABLE
ATTORNEY’S FEES AND OTHER EXPENSES INCURRED IN CONNECTION WITH SUCH RECOVERY.

(D)           THE PARTIES AGREE THAT THE ESCROW FUND SHALL SERVE AS THE INITIAL
AND PRIMARY SOURCE OF FUNDING FOR ANY PAYMENT OBLIGATIONS OF EACH OF THE SELLERS
UNDER SECTION 2.5 (SUBJECT TO THE $500,000 CAP SET FORTH THEREIN) AND THE
INDEMNIFICATION OBLIGATIONS OF EACH OF THE SELLERS UNDER THIS ARTICLE IX, AND
ANY AMOUNTS UP TO $500,000 PAYABLE UNDER SECTION 2.5 AND ANY INDEMNITY PAYMENT
DUE TO THE BUYER UNDER THIS ARTICLE IX SHALL BE MADE FIRST FROM THE ESCROW FUND
IN ACCORDANCE WITH THE TERMS OF THE ESCROW AGREEMENT.  BUYER AGREES AND
ACKNOWLEDGES THAT IT SHALL NOT MAKE ANY CLAIM FOR, OR SEEK TO RECOVER, ANY
AMOUNTS PAYABLE UNDER SECTION 2.5 (EXCEPT IN EXCESS OF THE $500,000 CAP) AND ANY
INDEMNITY PAYMENT DUE TO THE BUYER UNDER THIS ARTICLE IX FROM ANY SELLER UNTIL
AND UNLESS EITHER NO FUNDS REMAIN IN THE ESCROW FUND OR THE AMOUNT OF THE
PROPOSED CLAIM EXCEEDS THE REMAINING ESCROW FUND.

(E)           FOR THE AVOIDANCE OF DOUBT, ANY PAYMENT OF A NET WORKING CAPITAL
ADJUSTMENT PURSUANT TO SECTION 2.5 SHALL NOT COUNT TOWARDS THE THRESHOLD OR THE
CAP.

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(F)            THE AMOUNT OF LOSSES RECOVERABLE BY ANY INDEMNIFIED PARTY
PURSUANT TO SECTION 9.2 SHALL BE REDUCED BY AN AMOUNT EQUAL TO ANY TAX BENEFITS
ATTRIBUTABLE TO SUCH LOSSES.

(G)           IN NO EVENT SHALL ANY PARTY BE ENTITLED TO RECOVER OR MAKE A CLAIM
FOR ANY AMOUNTS IN RESPECT OF, AND IN NO EVENT SHALL “LOSSES” BE DEEMED TO
INCLUDE INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOST PROFITS, BUSINESS
INTERRUPTION, SPECIAL OR PUNITIVE DAMAGES AND, IN PARTICULAR, NO “MULTIPLE OF
PROFITS” OR “MULTIPLE OF CASH FLOW” OR SIMILAR VALUATION METHODOLOGY SHALL BE
USED IN CALCULATING THE AMOUNT OF ANY LOSSES.

9.4                     NOTICE OF CLAIMS.

(A)           ANY BUYER INDEMNITEE OR SELLER INDEMNITEE SEEKING INDEMNIFICATION
HEREUNDER (THE “INDEMNIFIED PARTY”) SHALL, WITHIN THE RELEVANT LIMITATION PERIOD
PROVIDED FOR IN SECTION 9.1, GIVE TO THE PARTY FROM WHOM IDENTIFICATION IS
SOUGHT (THE “INDEMNITOR”) A NOTICE IN WRITING (A “CLAIM NOTICE”) DESCRIBING IN
REASONABLE DETAIL ANY CLAIM FOR INDEMNIFICATION HEREUNDER AND THE FACTS GIVING
RISE TO SUCH CLAIM FOR INDEMNIFICATION.  THE INDEMNIFIED PARTY SHALL INCLUDE IN
SUCH CLAIM NOTICE THE AMOUNT OR THE METHOD OF COMPUTATION OF THE AMOUNT OF SUCH
CLAIM, AND A REFERENCE TO THE PROVISION(S) OF THIS AGREEMENT PURSUANT TO WHICH
SUCH CLAIM FOR INDEMNIFICATION IS MADE INCLUDING, IF APPLICABLE, THE
REPRESENTATION OR WARRANTY WITH RESPECT TO WHICH SUCH CLAIM IS BEING MADE.

(B)           AN INDEMNITOR SHALL HAVE THIRTY (30) CALENDAR DAYS AFTER THE
RECEIPT OF ANY CLAIM NOTICE PURSUANT HERETO TO EITHER (I) AGREE THAT IT HAS AN
INDEMNIFICATION OBLIGATION UNDER ARTICLE IX, AGREE TO THE AMOUNT OR METHOD OF
DETERMINATION SET FORTH IN THE CLAIM NOTICE AND TO PAY SUCH AMOUNT TO SUCH
INDEMNIFIED PARTY IN IMMEDIATELY AVAILABLE FUNDS OR (II) PROVIDE SUCH
INDEMNIFIED PARTY WITH NOTICE THAT IT DISAGREES WITH THE ASSERTION THAT IT HAS
AN INDEMNIFICATION OBLIGATION UNDER ARTICLE IX OR THE AMOUNT OR METHOD OF
DETERMINATION SET FORTH IN THE CLAIM NOTICE.  IF THE INDEMNITOR SENDS SUCH A
NOTICE, THEN THE INDEMNIFIED PARTY AND THE INDEMNITOR SHALL ATTEMPT IN GOOD
FAITH TO RESOLVE ANY DISPUTED CLAIM WITHIN THIRTY (30) CALENDAR DAYS THEREAFTER.

(C)           NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE
CONTRARY, THE PROVISIONS OF THIS SECTION 9.4 SHALL NOT APPLY (I) IN THE CASE OF
CLAIMS MADE BY ANY BUYER INDEMNITEE PRIOR TO TERMINATION OF THE ESCROW
AGREEMENT, WHICH CLAIMS SHALL BE GOVERNED BY THE NOTICE AND RESOLUTION
PROVISIONS SET FORTH IN THE ESCROW AGREEMENT; AND (II) IN THE CASE OF A CLAIM
NOTICE PROVIDED IN CONNECTION WITH A CLAIM BY A THIRD PERSON MADE AGAINST AN
INDEMNIFIED PARTY, WHICH CLAIMS SHALL BE GOVERNED BY SECTION 9.5.

9.5                     THIRD PARTY CLAIMS.

(A)           IF A CLAIM BY A THIRD PERSON IS MADE AGAINST AN INDEMNIFIED PARTY,
AND IF SUCH INDEMNIFIED PARTY INTENDS TO SEEK INDEMNITY WITH RESPECT THERETO IN
ACCORDANCE WITH THIS ARTICLE IX, SUCH INDEMNIFIED PARTY SHALL PROMPTLY NOTIFY
THE INDEMNITOR IN WRITING OF SUCH CLAIM, SETTING FORTH IN REASONABLE DETAIL THE
CLAIM, THE FACTS GIVING RISE TO SUCH CLAIM AND REFERENCES TO THE PROVISIONS OF
THIS AGREEMENT PURSUANT TO WHICH SUCH CLAIM FOR INDEMNIFICATION WAS MADE,
INCLUDING, IF APPLICABLE, THE REPRESENTATION OR WARRANTY WITH RESPECT TO WHICH
SUCH CLAIM IS MADE (THE “THIRD PARTY NOTICE”); PROVIDED, HOWEVER, THAT THE
FAILURE OF THE INDEMNIFIED PARTY TO GIVE

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such notice shall not excuse the Indemnitor’s obligation to indemnify under this
Article IX except to the extent that the Indemnitor has suffered damage or
prejudice by reason of the Indemnified Party’s failure to give or delay in
giving such notice.  After providing such written notice to the Indemnitor, the
Indemnified Party shall initially control the defense of such claim through
counsel of its choice at its own expense, subject to reimbursement by the
Indemnitor (i) upon receipt of an Acknowledgement (as defined below) from the
Indemnitor with respect to such claim or (ii) when it is determined that the
Indemnified Party is entitled to be indemnified with respect to such claim,
whether by agreement of the parties or otherwise.  The Indemnitor shall, at its
expense, have the right, but not the obligation, to participate in the
Indemnified Party’s defense of such claim and no such claim shall be settled by
the Indemnified Party without the written consent of the Indemnitor, which
consent shall not be unreasonably withheld, conditioned or delayed.

(B)           EXCEPT AS PROVIDED IN SECTION 9.5(C), IN THE EVENT THAT AT ANY
TIME AFTER RECEIVING NOTICE OF A CLAIM UNDER SECTION 9.5(A) ABOVE THE INDEMNITOR
ACKNOWLEDGES IN WRITING (THE “ACKNOWLEDGEMENT”) ITS OBLIGATIONS TO (I) INDEMNIFY
THE INDEMNIFIED PARTY AGAINST ANY LOSSES (SUBJECT TO THE THRESHOLD AND CAP AND
OTHER LIMITATIONS SET FORTH IN THIS ARTICLE IX, IF APPLICABLE) THAT MAY RESULT
FROM SUCH CLAIM AND (II) REIMBURSE THE INDEMNIFIED PARTY FOR THE COSTS AND
EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES) INCURRED BY
THE INDEMNIFIED PARTY IN DEFENDING SUCH CLAIM PRIOR TO RECEIVING SUCH
ACKNOWLEDGEMENT (SUBJECT TO THE THRESHOLD AND CAP AND OTHER LIMITATIONS SET
FORTH IN THIS ARTICLE IX, IF APPLICABLE), THE INDEMNITOR SHALL HAVE THE RIGHT TO
CONTROL THE DEFENSE OF SUCH CLAIM THROUGH COUNSEL OF ITS CHOICE AT ANY TIME
AFTER THE RECEIPT OF THE ACKNOWLEDGEMENT BY THE INDEMNIFIED PARTY.  IN THE EVENT
THAT THE INDEMNITOR DELIVERS THE ACKNOWLEDGEMENT TO THE INDEMNIFIED PARTY, THE
INDEMNIFIED PARTY SHALL, AT ITS EXPENSE, HAVE THE RIGHT TO PARTICIPATE IN THE
DEFENSE OF SUCH CLAIM AND, IN ANY CASE, NO SUCH CLAIM SHALL BE SETTLED BY THE
INDEMNITOR WITHOUT THE WRITTEN CONSENT OF THE INDEMNIFIED PARTY, WHICH CONSENT
SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED.  SHOULD THE
INDEMNITOR ELECT TO ASSUME THE DEFENSE OF A CLAIM BY DELIVERING THE
ACKNOWLEDGEMENT, THE INDEMNITOR SHALL NOT BE LIABLE TO THE INDEMNIFIED PARTY FOR
LEGAL EXPENSES SUBSEQUENTLY INCURRED BY THE INDEMNIFIED PARTY IN CONNECTION WITH
THE DEFENSE THEREOF.

(C)           NOTWITHSTANDING SECTION 9.5(B), IF IN THE REASONABLE JUDGMENT OF
THE INDEMNIFIED PARTY THE CLAIM (IF ADVERSELY DETERMINED) WITH RESPECT TO WHICH
AN ACKNOWLEDGEMENT HAS BEEN DELIVERED (X) SEEKS AN ORDER, INJUNCTION OR OTHER
EQUITABLE RELIEF AGAINST THE BUSINESS OF THE INDEMNIFIED PARTY WHICH, IF
SUCCESSFUL, COULD REASONABLY BE EXPECTED TO MATERIALLY INTERFERE WITH THE
BUSINESS OF THE INDEMNIFIED PARTY OR (Y) CLAIMS FOR MONEY DAMAGES THAT COULD
REASONABLY BE EXPECTED TO EXCEED THE CAP (IF APPLICABLE), THEN THE INDEMNIFIED
PARTY SHALL BE ENTITLED TO CONTROL THE DEFENSE OF SUCH CLAIM THROUGH COUNSEL OF
ITS CHOICE, WITH THE REASONABLE FEES AND EXPENSES OF ANY SUCH COUNSEL TO BE
BORNE BY THE INDEMNITOR (SUBJECT TO THE THRESHOLD AND CAP AND OTHER LIMITATIONS
SET FORTH IN THIS ARTICLE IX, IF APPLICABLE).  WITH RESPECT TO ANY SUCH CLAIM
THAT THE INDEMNIFIED PARTY ELECTS TO CONTROL, THE INDEMNITOR SHALL, AT ITS
EXPENSE, HAVE THE RIGHT TO PARTICIPATE IN THE DEFENSE OF SUCH CLAIM AND, IN ANY
CASE, NO SUCH CLAIM SHALL BE SETTLED BY THE INDEMNIFIED PARTY WITHOUT THE
WRITTEN CONSENT OF THE INDEMNITOR, WHICH CONSENT SHALL NOT BE UNREASONABLY
WITHHELD, CONDITIONED OR DELAYED.

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9.6                     SCOPE OF LIABILITY.

(A)           THE BUYER ACKNOWLEDGES AND AGREES THAT EXCEPT IN THE CASE OF ANY
SELLER’S FRAUD OR INTENTIONAL MISREPRESENTATION, (I) THE BUYER’S SOLE REMEDY
AGAINST THE SELLERS FOR ANY MATTER ARISING OUT OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT IS SET FORTH IN ARTICLE IX HEREOF, AND (II) EXCEPT TO THE
EXTENT BUYER HAS ASSERTED A CLAIM FOR INDEMNIFICATION PRIOR TO THE APPLICABLE
SURVIVAL PERIODS SET FORTH IN SECTION 9.1, THE BUYER SHALL HAVE NO REMEDY
AGAINST THE SELLERS FOR ANY BREACH OF ANY PROVISION OF THIS AGREEMENT.  IN NO
EVENT SHALL THE SELLERS HAVE ANY LIABILITY FOR LOSSES ARISING FROM THE CONDUCT
OF THE COMPANY’S AND ITS SUBSIDIARIES’ BUSINESS AFTER THE CLOSING.

(B)           EACH SELLER ACKNOWLEDGES AND AGREES THAT EXCEPT IN THE CASE OF THE
BUYER’S FRAUD OR INTENTIONAL MISREPRESENTATION, SUCH SELLER’S SOLE REMEDY
AGAINST THE BUYER FOR ANY MATTER ARISING OUT OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT IS SET FORTH IN ARTICLE IX HEREOF AND THAT, EXCEPT TO THE EXTENT
SUCH SELLER HAS ASSERTED A CLAIM FOR INDEMNIFICATION PRIOR TO THE APPLICABLE
SURVIVAL PERIODS SET FORTH IN SECTION 9.1, THE SELLERS SHALL HAVE NO REMEDY
AGAINST THE BUYER FOR ANY BREACH OF ANY PROVISION OF THIS AGREEMENT.

9.7                     CHARACTERIZATION OF INDEMNITY PAYMENTS.  EXCEPT AS
OTHERWISE REQUIRED BY APPLICABLE LAW, ANY PAYMENT MADE PURSUANT TO THIS ARTICLE
IX SHALL BE TREATED, FOR TAX PURPOSES, AS AN ADJUSTMENT TO THE PURCHASE PRICE.

9.8                     SELLERS’ OBLIGATIONS.  EACH SELLER SHALL BE LIABLE ONLY
FOR SUCH SELLER’S PROPORTIONAL SHARE OF ANY LIABILITY OR OBLIGATION HEREUNDER OR
UNDER ANY ANCILLARY AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE LIABILITIES
AND OBLIGATIONS OF THE SELLERS UNDER SECTIONS 2.5, 2.6 AND 7.3, AND ARTICLE IX
HEREOF, AND SECTION 5 OF THE ESCROW AGREEMENT, EXCEPT (I) WITH RESPECT TO THE
ESCROW FUND, WHICH SHALL BE AVAILABLE TO SATISFY INDEMNIFICATION CLAIMS MADE
PURSUANT TO THIS ARTICLE IX BY ANY BUYER INDEMNITEE WITHOUT REGARD TO WHICH
SELLER IS LIABLE OR SUCH SELLER’S PROPORTIONAL SHARE THEREOF; AND (II) WITH
RESPECT TO INDEMNIFICATION CLAIMS BY ANY BUYER INDEMNITEE UNDER SECTION 9.2(B)
AND WHICH ARE NOT PAID OUT OF THE ESCROW FUND, FOR WHICH SUCH BREACHING SELLER
SHALL BE ENTIRELY LIABLE.  FOR PURPOSES OF THIS AGREEMENT, THE “PROPORTIONAL
SHARE” OF ANY LIABILITY OR OBLIGATION OF ANY SELLER BE DETERMINED BASED ON SUCH
SELLER’S PROPORTIONAL SHARE OF THE CLOSING PAYMENT.

ARTICLE X
MISCELLANEOUS

10.1                   NOTICES.  ANY NOTICE, REQUEST, DEMAND, WAIVER, CONSENT,
APPROVAL OR OTHER COMMUNICATION WHICH IS REQUIRED OR PERMITTED HEREUNDER SHALL
BE IN WRITING AND SHALL BE DEEMED GIVEN: (A) ON THE DATE ESTABLISHED BY THE
SENDER AS HAVING BEEN DELIVERED PERSONALLY, (B) ON THE DATE DELIVERED BY A
PRIVATE COURIER AS ESTABLISHED BY THE SENDER BY EVIDENCE OBTAINED FROM THE
COURIER, (C) ON THE DATE SENT BY FACSIMILE, WITH CONFIRMATION OF TRANSMISSION,
IF SENT DURING NORMAL BUSINESS HOURS OF THE RECIPIENT, IF NOT, THEN ON THE NEXT
BUSINESS DAY, OR (D) ON THE FIFTH BUSINESS DAY AFTER THE DATE MAILED, BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID.  SUCH
COMMUNICATIONS, TO BE VALID, MUST BE ADDRESSED AS FOLLOWS:

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If to the Buyer, to:

Farmer Bros. Co.
20333 South Normandie Avenue
Torrance, California 90502
Attention:  Chief Executive Officer
Facsimile:  (310) 320-2436

with a copy (which shall not constitute notice) to:

Anglin, Flewelling, Rasmussen, Campbell & Trytten LLP
199 S. Los Robles Avenue, Suite 600
Pasadena, California 91101
Attention:  John M. Anglin, Esq.
Facsimile:  (626) 577-7764

If to the Seller Representative, to:

SvoCo. L.P.
One North Franklin Street, Suite 1500
Chicago, Illinois  60606
Attention:  Alex R. Miller
Facsimile:  (312) 267-6025

with a copy (which shall not constitute notice) to:

Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, Illinois 60661-3693
Attention:  Kenneth W. Miller, Esq.
Facsimile:  (312) 902-1061

If to any Seller, to the address set forth with respect to such Seller on
Schedule 1 hereto, with a copy (which shall not constitute notice) to:

Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, Illinois 60661-3693
Attention:  Kenneth W. Miller, Esq.
Facsimile:  (312) 902-1061

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If to the Company, to:

Coffee Bean Holding Co., Inc.
2181 NW Nicolai Street
Portland, Oregon 97210
Attention:  President
Facsimile:  (503) 225-9604

with a copy (which shall not constitute notice) to:

Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, Illinois 60661-3693
Attention:  Kenneth W. Miller, Esq.
Facsimile:  (312) 902-1061

or to such other address or to the attention of such Person or Persons as the
recipient party has specified by prior written notice to the sending party (or
in the case of counsel, to such other readily ascertainable business address as
such counsel may hereafter maintain).  If more than one method for sending
notice as set forth above is used, the earliest notice date established as set
forth above shall control.

10.2                   SELLER REPRESENTATIVE.

(A)           EXCEPT AS OTHERWISE PROVIDED HEREIN, SVOCO IS HEREBY IRREVOCABLY
CONSTITUTED AND APPOINTED AS THE SOLE, EXCLUSIVE, TRUE AND LAWFUL AGENT,
REPRESENTATIVE AND ATTORNEY-IN-FACT OF ALL OF THE SELLERS AND EACH OF THEM (THE
“SELLER REPRESENTATIVE”), WITH RESPECT TO ANY AND ALL MATTERS RELATING TO,
ARISING OUT OF, OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY, INCLUDING FOR PURPOSES OF TAKING ANY ACTION ON BEHALF OF
ANY OF THE SELLERS OR ANY OF THEM UNDER THIS AGREEMENT AND THE ESCROW AGREEMENT,
AS FULLY TO ALL INTENTS AND PURPOSES AS SUCH PERSON MIGHT OR COULD DO IN PERSON,
INCLUDING, WITHOUT LIMITATION:

(I)          DETERMINING ANY MATTERS REQUIRED TO BE DETERMINED PURSUANT TO
SECTION 2.5, AND TAKING ANY AND ALL ACTION ON BEHALF OF THE SELLERS FROM TIME TO
TIME AS THE SELLER REPRESENTATIVE MAY DEEM NECESSARY OR DESIRABLE TO DEFEND,
PURSUE, RESOLVE AND/OR SETTLE DISPUTES PURSUANT TO SECTION 2.5;

(II)         DETERMINING THE PRESENCE (OR ABSENCE) AND DIRECTING PAYMENT OF
PROCEEDS OF CLAIMS FOR INDEMNIFICATION AGAINST THE BUYER PURSUANT TO ARTICLE IX;

(III)        DELIVERING ALL NOTICES REQUIRED TO BE DELIVERED BY THE SELLERS OR
ANY OF THEM UNDER THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY PROTEST
NOTICE UNDER SECTION 2.5 OR A CLAIM FOR WHICH INDEMNIFICATION IS SOUGHT UNDER
ARTICLE IX;

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(IV)        RECEIVING ALL NOTICES REQUIRED TO BE DELIVERED TO THE SELLERS OR ANY
OF THEM UNDER THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY NOTICE OF A
CLAIM FOR WHICH INDEMNIFICATION IS SOUGHT UNDER ARTICLE IX;

(V)         RECEIVING FROM THE BUYER AND THE ESCROW AGENT ANY PAYMENTS AND
DISBURSEMENTS UNDER THIS AGREEMENT, THE ESCROW AGREEMENT OR ANY ANCILLARY
AGREEMENT ON BEHALF OF THE SELLERS, AND MAKING PAYMENTS AND DISBURSEMENTS OF
SAME, INCLUDING, WITHOUT LIMITATION, ANY PAYMENTS AND DISBURSEMENTS PURSUANT TO
THE SALE BONUS LETTERS;

(VI)        INCURRING COSTS OR EXPENSES, INCLUDING, BUT NOT LIMITED TO, TAX
OBLIGATIONS, ON BEHALF OF ALL SELLERS IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREBY AND THE OBLIGATIONS OF THE SELLERS HEREUNDER;

(VII)       PAYING (OR ESTABLISHING ONE OR MORE RESERVES TO PAY), OUT OF FUNDS
RECEIVED ON BEHALF OF THE SELLERS PURSUANT TO THIS AGREEMENT OR THE ESCROW
AGREEMENT, OBLIGATIONS OF THE SELLERS UNDER THIS AGREEMENT AND THE ESCROW
AGREEMENT, COSTS AND EXPENSES INCURRED ON BEHALF OF THE SELLERS IN CONNECTION
WITH THE TRANSACTIONS CONTEMPLATED HEREBY AND THE OBLIGATIONS OF THE SELLERS
HEREUNDER, AND THE PAYMENT OF ANY ADDITIONAL AMOUNTS PAYABLE UNDER THE SALE
BONUS LETTERS, AS DETERMINED BY SELLER REPRESENTATIVE IN ITS SOLE DISCRETION;

(VIII)      EXECUTING ANY ANCILLARY AGREEMENT ON BEHALF OF THE SELLERS OR ANY
SELLER;

(IX)         TAKING ANY AND ALL ACTION ON BEHALF OF THE SELLERS OR ANY OF THEM
FROM TIME TO TIME AS THE SELLER REPRESENTATIVE MAY DEEM NECESSARY OR DESIRABLE
TO DEFEND, PURSUE, RESOLVE AND/OR SETTLE DISPUTES OR CLAIMS UNDER THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, CLAIMS FOR INDEMNIFICATION UNDER
ARTICLE IX;

(X)          CONSENTING ON BEHALF OF THE SELLERS OR ANY OF THEM WITH RESPECT TO
MATTERS UNDER THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY;

(XI)         ENGAGING AND EMPLOYING AGENTS AND REPRESENTATIVES (INCLUDING
ACCOUNTANTS, LEGAL COUNSEL AND OTHER PROFESSIONALS) AND INCURRING SUCH OTHER
EXPENSES AS HE DEEMS NECESSARY OR PRUDENT IN CONNECTION WITH THE ADMINISTRATION
OF THE FOREGOING; AND

(XII)        TAKING ANY AND ALL ACTION ON BEHALF OF THE SELLERS OR ANY OF THEM
TO CONVEY TO THE BUYER ALL OF THE SHARES AND TO EVIDENCE ANY SUCH CONVEYANCE,
INCLUDING WITHOUT LIMITATION EXECUTION AND, IF NECESSARY, FILING WITH THE PROPER
GOVERNMENTAL BODIES DOCUMENTS EVIDENCING SUCH CONVEYANCE OF THE SHARES.

All actions, notices, communications and determinations by or on behalf of the
Sellers or any of them shall be given or made by the Seller Representative and
all such actions, notices, communications and determinations by the Seller
Representative shall conclusively be deemed

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to have been authorized by, and shall be binding upon, the Sellers or any of
them.  Execution of this Agreement by the Sellers shall constitute ratification
and approval of such appointment.

(B)           NONE OF THE SELLERS MAY REVOKE THE AUTHORITY OF THE SELLER
REPRESENTATIVE.  EACH SELLER HEREBY RATIFIES AND CONFIRMS, AND HEREBY AGREES TO
RATIFY AND CONFIRM, ANY ACTION TAKEN BY THE SELLER REPRESENTATIVE IN THE
EXERCISE OF THE POWER-OF-ATTORNEY GRANTED TO THE SELLER REPRESENTATIVE PURSUANT
TO THIS SECTION 10.2, WHICH POWER-OF-ATTORNEY, BEING COUPLED WITH AN INTEREST,
IS IRREVOCABLE AND SHALL SURVIVE AND NOT BE AFFECTED BY THE SUBSEQUENT
DISSOLUTION, TERMINATION, BANKRUPTCY, DEATH, DISABILITY, INCAPACITY OR
INCOMPETENCE OF SUCH SELLER.

(C)           THE SELLER REPRESENTATIVE SHALL NOT HAVE BY REASON OF THIS
AGREEMENT A FIDUCIARY RELATIONSHIP IN RESPECT OF ANY SELLER, EXCEPT IN RESPECT
OF AMOUNTS RECEIVED ON BEHALF OF SUCH SELLER.  THE SELLER REPRESENTATIVE SHALL
NOT BE LIABLE TO ANY SELLER FOR ANY ACTION TAKEN OR OMITTED BY HIM OR ANY AGENT
EMPLOYED BY HIM HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT, OR IN
CONNECTION THEREWITH, EXCEPT THAT THE SELLER REPRESENTATIVE SHALL NOT BE
RELIEVED OF ANY LIABILITY IMPOSED BY LAW FOR GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.  THE SELLER REPRESENTATIVE SHALL NOT BE LIABLE TO ANY OF THE SELLERS
FOR ANY APPORTIONMENT OR DISTRIBUTION OF PAYMENTS MADE BY HIM IN GOOD FAITH, AND
IF ANY SUCH APPORTIONMENT OR DISTRIBUTION IS SUBSEQUENTLY DETERMINED TO HAVE
BEEN MADE IN ERROR THE SOLE RECOURSE OF ANY SELLER TO WHOM PAYMENT WAS DUE, BUT
NOT MADE, SHALL BE TO RECOVER FROM OTHER SELLERS ANY PAYMENT IN EXCESS OF THE
AMOUNT TO WHICH THEY ARE DETERMINED TO HAVE BEEN ENTITLED.  THE SELLER
REPRESENTATIVE SHALL NOT BE REQUIRED TO MAKE ANY INQUIRY CONCERNING EITHER THE
PERFORMANCE OR OBSERVANCE OF ANY OF THE TERMS, PROVISIONS OR CONDITIONS OF THIS
AGREEMENT.

(D)           IN THE EVENT THAT THE SELLER REPRESENTATIVE RESIGNS FOR ANY
REASON, THE SELLER REPRESENTATIVE SHALL (IN CONSULTATION WITH THE SELLERS)
SELECT ANOTHER REPRESENTATIVE TO FILL SUCH VACANCY.  ANY SUBSTITUTED
REPRESENTATIVE SHALL BE DEEMED THE SELLER REPRESENTATIVE FOR ALL PURPOSES OF
THIS AGREEMENT AND THE OTHER ANCILLARY AGREEMENTS.  IF AT ANY TIME THERE SHALL
NOT BE A SELLER REPRESENTATIVE, THEN BUYER MAY HAVE A COURT OF COMPETENT
JURISDICTION APPOINT A SELLER REPRESENTATIVE HEREUNDER.

(E)           EACH SELLER AGREES THAT THE BUYER SHALL BE ENTITLED TO RELY ON ANY
ACTION TAKEN BY THE SELLER REPRESENTATIVE, ON BEHALF OF THE SELLERS, PURSUANT TO
SECTION 9.2(A) ABOVE (EACH, AN “AUTHORIZED ACTION”), AND THAT EACH AUTHORIZED
ACTION SHALL BE BINDING ON EACH SELLER AS FULLY AS IF SUCH SELLER HAD TAKEN SUCH
AUTHORIZED ACTION.  THE BUYER AGREES THAT THE SELLER REPRESENTATIVE SHALL HAVE
NO LIABILITY TO THE BUYER FOR ANY AUTHORIZED ACTION, EXCEPT TO THE EXTENT THAT
SUCH AUTHORIZED ACTION IS FOUND BY A FINAL ORDER OF A COURT OF COMPETENT
JURISDICTION TO HAVE CONSTITUTED FRAUD OR WILLFUL MISCONDUCT.

(F)            THE BUYER SHALL BE ENTITLED TO RELY ON THE FULL POWER AND
AUTHORITY OF THE SELLER REPRESENTATIVE TO ACT HEREUNDER AND UNDER ANY EXHIBIT OR
SCHEDULE HERETO OR ANY ANCILLARY AGREEMENT ON BEHALF OF THE SELLERS, AND SHALL
NOT BE LIABLE IN ANY WAY WHATSOEVER FOR ANY ACTION THE BUYER TAKES OR OMITS TO
TAKE IN RELIANCE UPON SUCH POWER AND AUTHORITY.  NO PARTY HEREUNDER SHALL HAVE
ANY CAUSE OF ACTION AGAINST THE BUYER FOR ANY ACTION TAKEN BY THE BUYER IN
RELIANCE UPON THE INSTRUCTIONS OR DECISIONS OF THE SELLER REPRESENTATIVE.

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10.3                   AMENDMENTS AND WAIVERS.

(A)           ANY PROVISION OF THIS AGREEMENT MAY BE AMENDED OR WAIVED IF, AND
ONLY IF, SUCH AMENDMENT OR WAIVER IS IN WRITING AND IS SIGNED, IN THE CASE OF AN
AMENDMENT, BY EACH PARTY TO THIS AGREEMENT, OR IN THE CASE OF A WAIVER, BY THE
PARTY AGAINST WHOM THE WAIVER IS TO BE EFFECTIVE.

(B)           NO FAILURE OR DELAY BY ANY PARTY IN EXERCISING ANY RIGHT OR
PRIVILEGE HEREUNDER SHALL OPERATE AS A WAIVER THEREOF, NOR SHALL ANY SINGLE OR
PARTIAL EXERCISE THEREOF PRECLUDE ANY OTHER OR FURTHER EXERCISE THEREOF OR THE
EXERCISE OF ANY OTHER RIGHT, POWER OR PRIVILEGE.

10.4                   EXPENSES.  EXCEPT AS OTHERWISE PROVIDED IN THIS
AGREEMENT, EACH PARTY SHALL BEAR ITS OWN COSTS AND EXPENSES IN CONNECTION WITH
THIS AGREEMENT, THE ANCILLARY AGREEMENTS AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY, INCLUDING ALL LEGAL, ACCOUNTING, FINANCIAL ADVISORY,
CONSULTING AND ALL OTHER FEES AND EXPENSES OF THIRD PARTIES, WHETHER OR NOT THE
TRANSACTION CONTEMPLATED HEREBY IS CONSUMMATED.

10.5                   SUCCESSORS AND ASSIGNS.  THIS AGREEMENT MAY NOT BE
ASSIGNED BY ANY PARTY HERETO WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER
PARTIES; PROVIDED THAT, WITHOUT SUCH CONSENT, THE BUYER MAY TRANSFER OR ASSIGN,
IN WHOLE OR IN PART OR FROM TIME TO TIME, TO ONE OR MORE OF ITS AFFILIATES, THE
RIGHT TO PURCHASE ALL OR A PORTION OF THE SHARES, BUT NO SUCH TRANSFER OR
ASSIGNMENT WILL RELIEVE THE BUYER OF ITS OBLIGATIONS HEREUNDER.  SUBJECT TO THE
FOREGOING, ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT SHALL INURE TO THE
BENEFIT OF AND BE BINDING UPON THE PARTIES HERETO AND THEIR RESPECTIVE
EXECUTORS, HEIRS, LEGAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS.

10.6                   GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAWS RULES OR
PROVISIONS (WHETHER OF THE STATE OF CALIFORNIA OR ANY OTHER JURISDICTION) THAT
WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE
OF CALIFORNIA.

10.7                   WAIVER OF JURY TRIAL.  EACH PARTY HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF SUCH
PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORM­ANCE AND ENFORCEMENT HEREOF.

10.8                   COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN
COUNTERPARTS, AND ANY PARTY HERETO MAY EXECUTE ANY SUCH COUNTERPART, EACH OF
WHICH WHEN EXECUTED AND DELIVERED SHALL BE DEEMED TO BE AN ORIGINAL AND ALL OF
WHICH COUNTERPARTS TAKEN TOGETHER SHALL CONSTITUTE BUT ONE AND THE SAME
INSTRUMENT.  THIS AGREEMENT SHALL BECOME EFFECTIVE WHEN EACH PARTY HERETO SHALL
HAVE RECEIVED A COUNTERPART HEREOF SIGNED BY THE OTHER PARTY HERETO.  IN THE
EVENT THAT ANY SIGNATURE TO THIS AGREEMENT OR ANY AMENDMENT HERETO IS DELIVERED
BY FACSIMILE TRANSMISSION OR BY E-MAIL DELIVERY OF A “.PDF” FORMAT DATA FILE,
SUCH SIGNATURE SHALL CREATE A VALID AND BINDING OBLIGATION OF THE PARTY
EXECUTING (OR ON WHOSE BEHALF SUCH SIGNATURE IS EXECUTED) WITH THE SAME

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force and effect as if such facsimile or “.pdf” signature page were an original
thereof.  No party hereto shall raise the use of a facsimile machine or e-mail
delivery of a “.pdf” format data file to deliver a signature to this Agreement
or any amendment hereto or the fact that such signature was transmitted or
communicated through the use of a facsimile machine or e-mail delivery of a
“.pdf” format data file as a defense to the formation or enforceability of a
contract and each party hereto forever waives any such defense.

10.9                   NO THIRD PARTY BENEFICIARIES.  NO PROVISION OF THIS
AGREEMENT IS INTENDED TO CONFER UPON ANY PERSON OTHER THAN THE PARTIES HERETO
ANY RIGHTS OR REMEDIES HEREUNDER.

10.10                 ENTIRE AGREEMENT.  THIS AGREEMENT, THE ANCILLARY
AGREEMENTS, THE SELLER DISCLOSURE SCHEDULES, THE EXHIBITS AND SCHEDULES, AND THE
OTHER DOCUMENTS, INSTRUMENTS AND AGREEMENTS SPECIFICALLY REFERRED TO HEREIN OR
THEREIN OR DELIVERED PURSUANT HERETO OR THERETO SET FORTH THE ENTIRE
UNDERSTANDING OF THE PARTIES HERETO WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.  ALL SCHEDULES, INCLUDING THE SELLER DISCLOSURE
SCHEDULES, REFERRED TO HEREIN ARE INTENDED TO BE AND HEREBY ARE SPECIFICALLY
MADE A PART OF THIS AGREEMENT.  ANY AND ALL PREVIOUS AGREEMENTS AND
UNDERSTANDINGS BETWEEN OR AMONG THE PARTIES REGARDING THE SUBJECT MATTER HEREOF,
WHETHER WRITTEN OR ORAL, ARE SUPERSEDED BY THIS AGREEMENT, EXCEPT FOR THE
CONFIDENTIALITY AGREEMENT WHICH SHALL CONTINUE IN FULL FORCE AND EFFECT IN
ACCORDANCE WITH ITS TERMS.

10.11                 CAPTIONS.  ALL CAPTIONS CONTAINED IN THIS AGREEMENT ARE
FOR CONVENIENCE OF REFERENCE ONLY, DO NOT FORM A PART OF THIS AGREEMENT AND
SHALL NOT AFFECT IN ANY WAY THE MEANING OR INTERPRETATION OF THIS AGREEMENT.

10.12                 SEVERABILITY.  ANY PROVISION OF THIS AGREEMENT WHICH IS
INVALID OR UNENFORCEABLE IN ANY JURISDICTION SHALL BE INEFFECTIVE TO THE EXTENT
OF SUCH INVALIDITY OR UNENFORCEABILITY WITHOUT INVALIDATING OR RENDERING
UNENFORCEABLE THE REMAINING PROVISIONS HEREOF, AND ANY SUCH INVALIDITY OR
UNENFORCEABILITY IN ANY JURISDICTION SHALL NOT INVALIDATE OR RENDER
UNENFORCEABLE SUCH PROVISION IN ANY OTHER JURISDICTION.

10.13                 INTERPRETATION.  THE PARTIES HERETO HAVE PARTICIPATED
JOINTLY IN THE NEGOTIATION AND DRAFTING OF THIS AGREEMENT, AND ANY RULE OF
CONSTRUCTION OR INTERPRETATION OTHERWISE REQUIRING THIS AGREEMENT TO BE
CONSTRUED OR INTERPRETED AGAINST ANY PARTY BY VIRTUE OF THE AUTHORSHIP OF THIS
AGREEMENT SHALL NOT APPLY TO THE CONSTRUCTION AND INTERPRETATION HEREOF.

[SIGNATURE PAGE FOLLOWS]

 

53

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

Buyer:

FARMER BROS. CO.,

 

a Delaware corporation

 

 

 

 

 

 

 

By:

/S/ GUENTER W. BERGER

 

Name:

Guenter W. Berger

 

Title:

Chairman and Chief Executive Officer

 

 

 

 

 

 

 

By:

/S/ ROGER M. LAVERTY III

 

Name:

Roger M. Laverty III

 

Title:

President and Chief Operating Officer

 

 

 

 

 

 

Company:

COFFEE BEAN HOLDING CO., INC.,

 

a Delaware corporation

 

 

 

 

 

 

 

By:

/S/ ALEX R. MILLER

 

Name:

Alex R. Miller

 

Title:

Chairman

 

 

 

 

 

 

Sellers:

SVOCO, L.P.,

 

a Delaware limited partnership

 

 

 

 

By:

SvoCo, G.P.

 

Its:

General Partner

 

 

 

 

By:

SvoCo, Inc.

 

Its:

Managing General Partner

 

 

 

 

 

 

 

By:

/S/ JOHN SVOBODA

 

Name:

John Svoboda

 

Title:

President

 

 

 

 

[SIGNATURES OF SELLERS CONTINUED ON THE FOLLOWING PAGE]

[SIGNATURE PAGE 1 OF 2 TO STOCK PURCHASE AGREEMENT]

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Sellers (cont.):

PRAIRIE CAPITAL III, L.P.,

 

a Delaware limited partnership

 

 

 

 

By:

Daniels & King Capital III, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

/S/ STEVE GROYA

 

Name:

Steve Groya

 

Title:

Managing Director

 

 

 

 

PRAIRIE CAPITAL III QP, L.P.,

 

a Delaware limited partnership

 

 

 

 

By:

Daniels & King Capital III, LLC

 

Its:

General Partner

 

 

 

 

By:

/S/ STEVE GROYA

 

Name:

Steve Groya

 

Title:

Managing Director

 

 

 

 

WSG/CBI, L.L.C.,

 

a New Jersey limited liability company

 

 

 

 

 

 

 

By:

/S/ WILLIAM GREEN

 

Name:

William Green

 

Title:

Managing Member

 

 

 

 

 

 

 

/S/ MARGARET R. CROW

 

Margaret R. Crow

 

 

 

 

 

 

 

/S/ PATRICK CRITESER

 

Patrick Criteser

 

 

 

 

 

 

 

[SIGNATURE PAGE 2 OF 2 TO STOCK PURCHASE AGREEMENT]

 

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