Asset Purchase Agreement



 







EXHIBIT
10.18




ASSET PURCHASE AGREEMENT




by and between




RON FEE INC.




and




MIDDLETON PEST CONTROL, INC.




dated as of March 31, 2006





 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	1	 	Definitions	 	 	1	 
	 	 	 	 	 	 	 	 	 
	2	 	Basic Transaction	 	 	4	 
	 	 	(a)	 	Purchase and Sale
	 	 	4	 
	 	 	(b)	 	Excluded Assets
	 	 	6	 
	 	 	(c)	 	Transaction Consideration
	 	 	6	 
	 	 	(d)	 	Excluded Liabilities
	 	 	7	 
	 	 	(e)	 	Payment of Liabilities of Company
	 	 	8	 
	 	 	(f)	 	Assumption of Obligations
	 	 	9	 
	 	 	(g)	 	Collection of Accounts Receivable
	 	 	9	 
	 	 	(h)	 	Proration of Certain Items
	 	 	9	 
	 	 	(i)	 	Post Closing Adjustments
	 	 	10	 
	 	 	(j)	 	Allocation of Purchase Price
	 	 	11	 
	 	 	(k)	 	Assignment of Contracts
	 	 	11	 
	 	 	(l)	 	No Expansion of Third Party Rights
	 	 	12	 
	 	 	(m)	 	The Closing
	 	 	12	 
	 	 	(n)	 	Successor Liability
	 	 	12	 
	 	 	 	 	 	 	 	 	 
	3	 	Representations and Warranties Relating to the Company	 	 	12	 
	 	 	(a)	 	Noncontravention
	 	 	12	 
	 	 	(b)	 	Corporate Status
	 	 	13	 
	 	 	(c)	 	Good Title to and Condition of Purchased Assets
	 	 	13	 
	 	 	(d)	 	Power and Authority
	 	 	13	 
	 	 	(e)	 	Enforceability
	 	 	13	 
	 	 	(f)	 	Absence of Subsidiaries
	 	 	14	 
	 	 	(g)	 	Financial Statements
	 	 	14	 
	 	 	(h)	 	Absence of Certain Developments
	 	 	14	 
	 	 	(i)	 	Liens
	 	 	15	 
	 	 	(j)	 	Legal Compliance
	 	 	15	 
	 	 	(k)	 	Tax Matters
	 	 	15	 
	 	 	(l)	 	Real Properties
	 	 	16	 
	 	 	(m)	 	Intellectual Property
	 	 	16	 
	 	 	(n)	 	Contracts
	 	 	17	 
	 	 	(o)	 	Insurance and Risk of Loss
	 	 	17	 
	 	 	(p)	 	Litigation
	 	 	18	 
	 	 	(q)	 	Employees
	 	 	18	 
	 	 	(r)	 	Employee Benefits
	 	 	18	 
	 	 	(s)	 	Environmental Matters
	 	 	18	 
	 	 	(t)	 	Company Permits
	 	 	21	 
	 	 	(u)	 	Accounts Receivable; Inventory; Returns
	 	 	22	 
	 	 	(v)	 	Books and Records
	 	 	22	 
	 	 	(w)	 	Customers and Suppliers
	 	 	22	 
	 	 	(x)	 	Pest Treatment
	 	 	23	 






 









 






TABLE OF CONTENTS

(Continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 	 	(y)	 	Names; Prior Acquisitions; Business Locations
	 	 	23	 
	 	 	(z)	 	Brokers’ Fees
	 	 	23	 
	 	 	(aa)	 	Accuracy of Information Furnished by the Company
	 	 	23	 
	 	 	 	 	 	 	 	 	 
	4	 	Representations and Warranties of the Buyer	 	 	24	 
	 	 	(a)	 	Organization of the Buyer
	 	 	24	 
	 	 	(b)	 	Authorization of Transaction
	 	 	24	 
	 	 	(c)	 	Noncontravention
	 	 	24	 
	 	 	(d)	 	Brokers’ Fees
	 	 	24	 
	 	 	 	 	 	 	 	 	 
	5	 	Pre-Closing Covenants	 	 	24	 
	 	 	(a)	 	General
	 	 	24	 
	 	 	(b)	 	Notices and Consents
	 	 	24	 
	 	 	(c)	 	Access
	 	 	25	 
	 	 	(d)	 	Confidentiality
	 	 	25	 
	 	 	(e)	 	Due Diligence Review and Environmental Assessment
	 	 	25	 
	 	 	(f)	 	Trading in Parent Common Stock
	 	 	26	 
	 	 	(g)	 	No Shop
	 	 	26	 
	 	 	(h)	 	Preservation of Business
	 	 	26	 
	 	 	 	 	 	 	 	 	 
	6	 	Post-Closing Covenants	 	 	27	 
	 	 	(a)	 	Litigation Support; Access to Books and Records
	 	 	27	 
	 	 	(b)	 	Tax Matters
	 	 	27	 
	 	 	(c)	 	Restrictive Covenant
	 	 	28	 
	 	 	(d)	 	Certain Employee Matters
	 	 	28	 
	 	 	(e)	 	Credit Under Buyer Employee Benefit Plans
	 	 	29	 
	 	 	(f)	 	Leasing of Spring Hill Site and Odessa Site; Landlord Waiver
	 	 	29	 
	 	 	(g)	 	Transition Services
	 	 	30	 
	 	 	(h)	 	Name
	 	 	30	 
	 	 	(i)	 	Certification of the Company’s Financial Statements
	 	 	30	 
	 	 	(j)	 	Registration of Vehicles in Buyer’s Name
	 	 	30	 
	 	 	 	 	 	 	 	 	 
	7	 	Conditions to Obligation to Effect the Closing	 	 	31	 
	 	 	(a)	 	Conditions to Obligation of the Buyer
	 	 	31	 
	 	 	(b)	 	Conditions to Obligation of the Company
	 	 	33	 
	 	 	 	 	 	 	 	 	 
	8	 	Remedies for Breaches of this Agreement	 	 	33	 
	 	 	(a)	 	Survival
	 	 	33	 
	 	 	(b)	 	Indemnification
	 	 	34	 
	 	 	(c)	 	Limitations on Indemnity
	 	 	35	 
	 	 	(d)	 	Other Limitations
	 	 	36	 
	 	 	(e)	 	Offset Against Promissory Note
	 	 	37	 
	 	 	(f)	 	Arbitration
	 	 	37	 
	 	 	 	 	 	 	 	 	 
	9	 	Termination	 	 	38	 
	 	 	(a)	 	Termination of Agreement
	 	 	38	 
	 	 	(b)	 	Effect of Termination
	 	 	39	 






 -ii- 




 









 








TABLE OF CONTENTS

(Continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	10	 	Miscellaneous	 	 	39	 
	 	 	(a)	 	Press Releases and Public Announcements
	 	 	39	 
	 	 	(b)	 	Third-Party Beneficiaries
	 	 	39	 
	 	 	(c)	 	Entire Agreement
	 	 	39	 
	 	 	(d)	 	Succession and Assignment
	 	 	40	 
	 	 	(e)	 	Counterparts
	 	 	40	 
	 	 	(f)	 	Headings
	 	 	40	 
	 	 	(g)	 	Notices
	 	 	40	 
	 	 	(h)	 	Governing Law; Jurisdiction; Venue
	 	 	41	 
	 	 	(i)	 	Amendments and Waivers
	 	 	41	 
	 	 	(j)	 	Severability
	 	 	41	 
	 	 	(k)	 	Expenses
	 	 	41	 
	 	 	(l)	 	Construction
	 	 	41	 
	 	 	(m)	 	Business Day
	 	 	42	 
	 	 	(n)	 	Prevailing Party
	 	 	42	 
	 	 	(o)	 	Exhibits; Disclosure Schedule
	 	 	42	 
	 	 	(p)	 	Waiver of Jury Trial
	 	 	42	 






 -iii- 




 









 








ASSET PURCHASE AGREEMENT




     This Asset Purchase Agreement (this “Agreement”) is made as of March 31, 2006 (the
“Effective Date”), by and between Middleton Pest Control, Inc., a Florida corporation (the
“Buyer”), and Ron Fee Inc., a Florida corporation (the “Company”). The Buyer and the
Company are each referred to in this Agreement as a “Party” and collectively as the
“Parties.”



RECITALS




     The Company is engaged in the pest control services business which is operated from two
locations in Spring Hill and Odessa, Florida. The Buyer desires to purchase and the Company
desires to sell to the Buyer substantially all of the assets, properties and business of the
Company, upon the terms and conditions set forth in this Agreement for the consideration described
in Section 2 of this Agreement.



TERMS OF AGREEMENT




     NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in
consideration of the representations, warranties and covenants herein contained, the Parties agree
as follows:



1.   Definitions. In addition to the terms defined in the Preamble and other Sections of
this Agreement, the capitalized terms set forth below are defined as follows:



     “Advisors” means, with respect to any Person, such Person’s managers, directors,
officers, employees, accountants, lenders, agents, legal counsel, and financial, regulatory, Tax
and other advisors.



     “Affiliate” has the meaning set forth in Rule 12b-2 of the regulations promulgated
under the Securities Exchange Act.



     “Change of Control Payments” means any and all (i) bonuses or similar payments payable
by Company as a result of the transactions contemplated hereby, (ii) investment banking and other
fees payable by Company as a result of the transactions contemplated hereby and (iii) amounts
payable by Company to obtain any consents or approvals required to be listed on Section 3(a) of the
Disclosure Schedule, including without limitation, the payments described on Exhibit A,
attached hereto.



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



     “Company’s Knowledge” means the actual knowledge of any manager, executive officer or
director of the Company after a reasonably diligent inquiry and investigation.



     “Company Transaction Expenses” means any and all legal, accounting, consulting,
investment advisory and other fees, costs and expenses of Company and relating to the transaction
contemplated hereby.



 









 





     “Confidential Information” means any information concerning or relating to a
disclosing Party or its Affiliate or a disclosing Party’s or its Affiliate’s financial condition,
businesses, personnel, operations, customers and customer data, or prospects in the possession of
the receiving Party, its Affiliates or its Advisors or furnished or to be furnished to the
receiving Party, its Affiliates or its Advisors including, without limitation, any Trade Secrets
which should reasonably be deemed confidential to the disclosing Party; provided that the term
“Confidential Information” does not include information which (i) becomes generally available to
the public other than as a result of a disclosure of such information by the receiving Party, its
Affiliates or its Advisors in violation of this Agreement, (ii) was available to the receiving
Party, its Affiliates or its Advisors on a non-confidential basis prior to its disclosure by the
disclosing Party or its Advisors, or (iii) was or becomes available to the receiving Party, its
Affiliates or its Advisors on a non-confidential basis, from a source other than disclosing Party
or its Advisors, provided, that such source is or was (at the time of receipt of the relevant
information) not known to the receiving Party, to be bound by a confidentiality agreement with or
for the benefit of (or other confidentiality obligation to) the disclosing Party.



     “Consistently Applied” means the consistent and historically utilized application of
accounting principles and policies, and methods based on reasonably acceptable commercial standards
and prudent management determinations and estimates and judgments, utilized in the construct of the
Company’s Most Recent Financial Statements.



     “Customer Prepayments” means the prepayments for Company services made by customers
and for which the Company is obligated to provide services.



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



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



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



     “ERISA Affiliate” means any trade or business, whether or not incorporated, that
together with the Company would be deemed a “single employer” within the meaning of Section 4001 of
ERISA.



     “GAAP” means United States generally accepted accounting principles in effect at the
time the relevant financial statements were (or are) prepared.



     “Governmental Authority” means any foreign, federal, state or local governmental
entity or any department, agency, or political subdivision thereof or any court, judicial
authority, tribunal or quasi-judicial authority or tribunal including any arbitrator or arbitration
proceeding.



     “Income Tax” means any foreign, federal, state or local tax imposed on, or measured
by, net income.



     “Income Tax Return” means any return, declaration, report, claim for refund or
information return or statement relating to Income Taxes.



2









 





     “Indebtedness For Borrowed Money” means, with respect to any Person, (a) indebtedness
of such Person for borrowed money, (b) obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (c) obligations of such Person as lessee under leases
required to be capitalized pursuant to GAAP, (d) obligations of such Person for amounts drawn under
acceptances, letters of credit or similar facilities, (e) any purchase money indebtedness for goods
purchased from vendors and other trade payables and (f) guarantees and similar commitments relating
to any of the foregoing items.



     “Intellectual Property” means, with respect to the Company, all patents, patent
applications, patent disclosures and inventions; trademarks, service marks, trade dress, logos,
trade names, and Internet domain names; copyrights and copyrightable works; information systems,
databases and software; websites and web addresses; licenses, registrations, applications and
renewals for any of the foregoing; and Trade Secrets; and all derivations, modifications and
enhancements to any of the foregoing.



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



     “Material Adverse Effect” means either:




     (i) a material adverse effect on (or material adverse change in) the assets,
liabilities assumed by the Buyer, business or the financial condition of the Company; or




     (ii) any event, matter or circumstance which could reasonably be expected to result in
a material adverse effect on (or material adverse change in) the assets purchased and
liabilities assumed by the Buyer, the business or financial condition of the Company, other
than (for purposes of this clause (ii) only) changes in the following: (A) regional,
national or international political or economic conditions or financial markets; (B) any of
the industries in which the Company operates; (C) applicable laws or regulations; (D)
election results at the federal, state or local levels; (E) Consistently Applied accounting
principles; (F) acts of terrorism or war (whether or not declared); or (G) any adverse
change in or effect on the business of the Company that is cured to the reasonable
satisfaction of the Buyer, before the earlier of (1) the Closing Date and (2) the date on
which this Agreement is terminated pursuant to Section 9 hereof.



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



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



     “Ordinary Course of Business” means the ordinary course of business consistent with
commercially reasonable past practices.



     “Parent” means Sunair Services Corporation, a Florida corporation (f/k/a Sunair
Electronics, Inc.) and parent of Buyer.



     “Permitted Liens” means with respect to any assets of the Company (i) mechanic’s,
materialmen’s and similar liens with respect to amounts not past due, (ii) liens for Income Taxes



3









 







or other Taxes not yet due and payable or for Income Taxes or other Taxes that the taxpayer is
contesting in good faith pursuant to proceedings disclosed on the Disclosure Schedule, (iii)
purchase money liens arising by operation of law (including liens on inventory and other assets in
favor of vendors of the Company) and (iv) liens securing rental payments under capital lease
arrangements disclosed on the Disclosure Schedule or other Liens disclosed on the Disclosure
Schedule.



     “Person” means an individual, a partnership, a corporation, an association, a joint
stock company, a trust, a joint venture, an unincorporated organization, or a Governmental
Authority (or any department, agency, or political subdivision thereof).



     “Subsidiary” means, with respect to any Person, any corporation, association or other
entity of which either such Person or any Subsidiary of such Person (alone or together) owns or
controls (either directly or indirectly or through another Subsidiary) at least a majority of the
issued share capital or other ownership interest, in each case having ordinary voting power to
elect directors, managers or trustees of such corporation or other entity (whether or not any
capital stock or other ownership interests or any other class or classes of capital stock or other
ownership interests shall or might have voting power upon the occurrence of any contingency).



     “Taxes” means any and all taxes of any kind (together with any and all interest,
penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any
Governmental Authority including Income Taxes.



     “Tax Return” means any return (including any information return and Income Tax
Return), report, statement, schedule, notice, form, or other document or information filed with or
submitted to, or required to be filed with or submitted to, any Government Authority in connection
with the determination, assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of or compliance with any Tax law.



     “Trade Secrets” means technical or non-technical data, formulae, patterns,
compilations, programs, devices, business-related information, methods, know-how, techniques,
competitive information, drawings, processes, financial data, personnel data, financial plans,
product plans, or customer or supplier lists, in each case which (i) are material to the Company
and (ii) are or would be reasonably expected to be not commonly known by or available to the
public, or are defined as trade secrets pursuant to applicable law.



2.   Basic Transaction.



     (a) Purchase and Sale. At the Closing, upon the terms and subject to the conditions
of this Agreement, the Company shall sell, convey, transfer, assign and deliver to Buyer, free and
clear of any and all Liens or other restrictions of any kind, all of its assets, properties and
business of every kind and description, whether real, personal or mixed, tangible or intangible,
wherever located (except those assets of the Company which are specifically excluded as provided in
Section 2(b) hereof) as shall exist on the Closing Date (collectively, the “Purchased Assets”).
Without limiting the generality of the foregoing, the Purchased Assets shall include, but not be
limited to, the following:



4









 






     (i) Tangible Personal Property. All machinery, equipment, tools, leasehold
improvements (except those leasehold improvements pertaining to any leased real properties
where the Buyer is not assuming the lease obligations pertaining to such leased real
properties), construction in progress, containers, furniture and fixtures, trucks,
automobiles, vehicles, trailers, containers, calibrating and measuring equipment, purchased
parts, computer equipment, computer software and any other fixed assets owned by the Company
(collectively, the “Equipment”), as more particularly described on Schedule 2(a)(i)
attached hereto;




     (ii) Inventory. All items of inventory of the Company (“Inventory”) as more
particularly described on Schedule 2(a)(ii) attached hereto, provided, however, that
Buyer’s purchase of inventory shall not include, and Schedule 2(a)(ii) shall not
list, any items of inventory which are obsolete (which items of obsolete inventory the
Company shall dispose of at its expense);




     (iii) Customer Accounts. All of the Company’s residential and commercial
contract and non-contract customer accounts and customer contracts (the “Customer
Contracts”), Customer Prepayments and other rights to provide services or products to the
customers of the Company, as more particularly described on Schedule 2(a)(iii)
attached hereto, all inquiries, proposals, offers or correspondence to Persons that the
Company has had an interest in acquiring (that are legally permitted to be disclosed), also
set forth in Schedule 2(a)(iii), all lists, records and correspondence pertaining to
former customers of the Company who, prior to the Closing Date, terminated or had cancelled
accounts and contracts with the Company, also set forth in Schedule 2(a)(iii), and
all inquiries or correspondence from Persons received by the Company through the Closing
Date from potential customers, also set forth in Schedule 2(a)(iii), all of which
will be delivered at Closing; provided, however, the term “Customer Contracts”, as used in
this Agreement, may not, at Buyer’s discretion, include those Customer Contracts which are
not assignable by the Company to Buyer, unless Buyer’s decision not to include such Customer
Contracts would cause the Company to suffer material harm;




     (iv) Deposits. All prepaid items of the Company including, without limitation,
prepaid rentals, security deposits, advances, other deposits and prepayments by the Company
relating to the operations of the Company as described on Schedule 2(a)(iv) attached
hereto (the “Company Deposits”);




     (v) Receivables. All customer accounts receivables of the Company (the
“Receivables”), as more particularly described on Schedule 2(a)(v), which
Schedule 2(a)(v) shall also separately list, by customer, detailed information
pertaining to those Receivables of the business transferred to the Buyer as of the Closing
Date which are sixty (60) days or more outstanding from the date of billing as of the
Closing Date;




     (vi) Leasehold Interests. All of the interest of and the rights and benefits
accruing to the Company as lessee under any leases of Equipment;




     (vii) Proprietary Rights. All Intellectual Property of the Company; all of the
proprietary rights of the Company; all licenses of Intellectual Property or other intangible



5









 







property; computer software, source codes, object codes and other programming codes;
telephone and facsimile numbers for the business (which shall also include the Nextel cell
phone numbers of all of the Company’s employees, including the four (4) cell phone numbers
assigned to those Nextel cell phones used by Ronald J. Fee Sr., Ronald J. Fee Jr., Eileen
Triola and Bobby Triola); slogans; domain name rights; operating rights; all rights relating
to the business of the Company; all goodwill developed through the use of such Intellectual
Property and other proprietary rights; and all derivatives, modifications and enhancements
to any of the foregoing (“Proprietary Rights”) as more particularly described on
Schedule 2(a)(vii) attached hereto;




     (viii) Licenses and Permits. All permits, licenses, certificates of authority,
franchises, accreditations, variances, exemptions, registrations and other authorizations
issued or used in connection with the business of the Company (the “Permits”), to the extent
assignable;




     (ix) Non-Competition Agreements. All of the Company’s rights to enforce
non-competition or similar agreements against any current or prior employees of the Company
who executed any such agreement, and any and all other benefits accruing to the Company
under any such agreements; and




     (x) Books, Records and Other Assets. All data, files, books and records of the
Company, including without limitation, customer lists and records, financial, accounting and
credit records, correspondence, budgets, service and warranty records, equipment logs,
operating guides and manuals, copies of personnel records for employees of the business
hired by Buyer, all other similar documents and records, and the Company’s post office
boxes.



     (b) Excluded Assets. The Purchased Assets shall exclude the following assets of the
Company: (i) the Transaction Consideration (as defined in Section 2(c)) and other rights of the
Company under this Agreement; (ii) the corporate minute books and stock records of the Company;
(iii) any bank accounts or cash of the Company, (iv) any real estate or fixtures attached to the
real estate, including, but not limited to, the sign in front of the building on 306 Beverly Court
in Spring Hill, Florida and any phone or surveillance systems for any real estate, (v) the leased
Lexis and the leased Cadillac, (vi) 2005 Dodge Ram Truck, (vii) Toyota Avalon, (viii) John Deere
Mower, (ix) the data from the Quick Book System (the “Quick Book Data”) and (x) the assets listed
in Schedule 2(b) attached hereto. The Company understands that Buyer has agreed to the
Quick Book Data being an Excluded Asset based on representations from the Company that the Quick
Book Data is not needed in the operation of the Company’s business after Closing nor needed for the
preparation of any reports or returns that Buyer may need to prepare or file after Closing. In the
event Buyer determines that it has a need to use or access the Quick Book Data for legitimate
business purposes, the Company agrees to make such data available to Buyer upon reasonable notice.



     (c) Transaction Consideration. In consideration for the sale and delivery of the
Purchased Assets and the business of the Company to Buyer, (i) Buyer will assume and pay the
Assumed Liabilities (as defined in Section 2(f)); (ii) Buyer will pay to the Company (at the end of
the ninety (90) day post Closing adjustment period set forth in Section 2(i)) an amount equal



6









 







to one hundred percent (100%) of the value of the Receivables of the business transferred to
the Buyer as of the Closing Date which are less than sixty (60) days outstanding from the date of
billing as of the Closing Date, plus an additional amount equal to one hundred percent (100%) of
the amount actually collected and received by Buyer, during the ninety (90) day period immediately
following the Closing Date, from payments on those Receivables of the business transferred to the
Buyer as of the Closing Date which are sixty (60) days or more outstanding from the date of billing
as of the Closing Date (but zero percent (-0-%) of any amount actually collected and received by
Buyer after such ninety (90) day period immediately following the Closing Date); (iii) Buyer will
pay to the Company (at the end of the twenty (20) day “Inventory Settlement Period” set forth in
Section 2(i) or on such earlier date after Closing that the Parties have mutually agreed to
Inventory adjustments) the value of Inventory, which shall be valued at the Company’s historical
cost, transferred as of the Closing which Buyer reasonably determines is not obsolete, past its due
date or will be past its due date within 90 days of the Closing, and is reasonably likely to be
used in the business after Closing; (iv) Buyer will pay to the Company Four Million Dollars
($4,000,000), payable in cash by commencement on the Closing Date of a wire transfer of immediately
available funds to that account designated by the Company; and (v) Buyer will deliver to the
Company, at Closing, a Subordinated Promissory Note, executed by Parent and payable to the Company
in the original principal amount of One Million Two Hundred Thousand Dollars ($1,200,000) (the
“Promissory Note”), which Promissory Note shall bear interest at a fixed rate of six percent (6%)
per annum, with interest only payable semi-annually and with the entire principal balance paid in
one lump sum on the third anniversary date of the Promissory Note, and such Promissory Note shall
be substantially in the form attached to this Agreement as Exhibit D. All of the amounts
paid or payable by the Buyer to the Company pursuant to this Section 2(c), or other commitments of
the Buyer which benefit the Company as listed in this Section 2(c), are collectively herein
referred to as the “Transaction Consideration.” The term “Purchase Price” shall mean and refer to
the amount of Five Million Two Hundred Thousand Dollars ($5,200,000) in aggregate consideration
being delivered to Company pursuant to Sections 2(c)(iv) and 2(c)(v) hereof. The Company shall pay
to the Buyer, as part of the transfer of Purchased Assets: (1) an amount equal to the aggregate of
all Customer Prepayments which shall be reimbursed to Buyer during the post Closing adjustment
period as set forth in Section 2(i), including but not limited to reimbursement for that portion of
annual payments made by the Company’s customers prior to the Closing Date which are properly
allocated to termite and general household pest control services to be rendered to such customers
on and after the Closing Date (based on a formula which allocates, on a customer by customer basis,
67% of such annual payment to the first quarterly service visit and 11% each to the other three
quarterly service visits); and (2) an aggregate amount equal to the sum of the Company’s accrued
wages payable, accrued vacation days payable, accounts payable and Indebtedness for Borrowed Money
relating to Company’s business or any of its assets, but specifically not including the Assumed
Vehicle Indebtedness being assumed by Buyer pursuant to Section 2(f) hereof (collectively, the
“Unpaid Closing Liabilities”), to the extent any of the Unpaid Closing Liabilities have not been
paid and satisfied in full on or before the Closing Date, which aggregate amount shall be
reimbursed to the Buyer at the end of the ninety (90) day post Closing adjustment period set forth
in Section 2(i).



     (d) Excluded Liabilities. Notwithstanding anything to the contrary set forth in this
Agreement, the Parties hereto expressly agree that the Buyer shall not assume or otherwise become
liable for any obligation or liability of the Company or relating to the business, the



7









 







properties or any of the Purchased Assets, absolute or contingent, known or unknown, other
than the Assumed Liabilities (such obligations or liabilities other than the Assumed Liabilities
are hereinafter referred to as the “Excluded Liabilities”). Without limiting the foregoing, the
Excluded Liabilities shall be deemed to include any liability or obligation of the Company (i)
arising under this Agreement; (ii) relating to any default under any of the Assumed Liabilities to
the extent such default existed at or prior to the Closing; (iii) incurred in connection with any
breach of contract, breach of warranty, tort, violation of law, action, suit, or other legal or
administrative proceedings or governmental investigation arising as a result of events occurring or
facts or circumstances arising or existing on or prior to the Closing; (iv) for Taxes arising or
accruing prior to the Closing, including (a) any Taxes arising as a result of the operation of the
business, ownership of the Purchased Assets or use or occupancy of the properties of the Company on
or prior to the Closing, (b) except for those documentary stamp taxes and vehicle sales taxes
specifically assumed by the Buyer in this Agreement, any Taxes that will arise as a result of the
sale of the business and Purchased Assets pursuant to this Agreement, and (c) any deferred Taxes of
any nature; (v) under any contract that is not expressly an Assumed Liability or an Assumed
Contract (as defined below), provided, however, that notwithstanding anything in this Agreement to
the contrary, the Buyer expressly does not assume any liability for contract claims, customer
damage claims or warranty claims under any Assumed Liability or Assumed Contract which pertain to
the operation of the Company’s business prior to the Closing Date but which arise or are made known
to Buyer on or after the Closing Date; (vi) with respect to any employee of the Company (whether
arising before, on or after the Closing) relating to or arising out of, or in connection with their
employment by the Company at any time including, without limitation, any payroll or salary, any
employee benefit plan, deferred compensation plan, or any other plans or arrangements for the
benefit of any employees of the Company including but not limited to unfunded pension liabilities,
and accrued salary, payroll, vacation, and other accrued compensation and benefits owed to
employees; (vii) any Indebtedness For Borrowed Money (except for the Assumed Vehicle Indebtedness,
to the extent assumed pursuant to Section 2(f)(ii)); (viii) any and all expenses, costs, damages,
liabilities, or obligations (including, without limitation, fees and expenses of counsel) incurred
by, under or pursuant to any violation of Environmental Laws (as defined in Section 3(t)) or
related to the Discharge (as defined in Section 3(t)), Handling (as defined in Section 3(t)),
presence or clean up of Hazardous Substances (as defined in Section 3(t)) arising as a result of
events occurring or facts or circumstances arising or existing on or prior to the Closing (whether
or not in the Ordinary Course of Business and whether or not set forth on the Disclosure Schedule);
(ix) all payables of the business outstanding or arising prior to Closing; (x) all obligations
involving or related to the Excluded Assets; (xi) all Company Transaction Expenses and Change of
Control Payments; and (xii) any contract or payment liabilities pertaining to any Company-owned
cell phones, and related cell phone services, utilized by Ronald J. Fee Sr., Ronald J. Fee Jr.,
Eileen Triola and Bobby Triola.



     (e) Payment of Liabilities of Company. The Company shall be obligated to pay and
discharge, all of the Excluded Liabilities; provided, however, nothing contained in this Section
shall require Company to pay any liability or obligation before its due date other than
indebtedness secured by a Lien on the Purchased Assets, and which obligations shall be paid and
satisfied at Closing so that the Purchased Assets that are subject to any Liens shall be conveyed
to Buyer free and clear of any and all Liens as of the Closing.



8









 





     (f) Assumption of Obligations. At the Closing, Buyer shall only assume (i) those
obligations and liabilities of Company under those Contracts (as defined in Section 3(n)) expressly
assumed by the Buyer and solely with respect to obligations which arise by their terms on and after
the Closing Date and are specifically set forth on Schedule 2(f)(1), including, but not
limited to, all contracts with commercial or individual customers which are not in default, the
postage meter lease and Nextel phone contracts on Company-owned cell phones other than those
utilized by Ronald J. Fee, Sr., Ronald J. Fee, Jr., Eileen Triola and Bobby Triola (the “Assumed
Contracts”); (ii) any sales taxes arising from the transfer of any Company-owned vehicles to the
Buyer (the “Vehicle Sales Taxes”); and (iii) that certain indebtedness pertaining to those vehicles
described on, and in the amounts set forth on, Schedule 2(f)(2) (the “Assumed Vehicle
Indebtedness”), provided, however, Buyer expressly does not assume any indebtedness pertaining to
any vehicle described on Schedule 2(f)(2) to the extent such indebtedness is in excess of
the equity value of such vehicle, and the amount of such excess indebtedness shall be paid by
Company to Buyer promptly after written notice from Buyer that, based on equity values of such
vehicles as of the Closing Date, such excess indebtedness exists with respect to one or more of
such vehicles (the Assumed Contracts, the Vehicle Sales Taxes and Assumed Vehicle Indebtedness are
together herein referred to as the “Assumed Liabilities”).



     (g) Collection of Accounts Receivable. After the Closing, Company shall provide to
the Buyer reasonable assistance and cooperation to collect any Receivables. To the extent Company
receives payment on any such Receivables it shall promptly remit such amount to the Buyer in the
form received with any necessary endorsement. The Company shall not take any action in connection
with the collection of Receivables that interferes with the conduct of Buyer’s business or
adversely affects the relationship with any customers of the Buyer.



     (h) Proration of Certain Items. With respect to certain expenses incurred in the
operation of the business, the following prorations shall be made:




     (i) Operating Expenses. Company shall continue to be responsible for all costs
and expenses attributable to the operation of the business or the ownership of the Purchased
Assets up to the Closing Date, and the Buyer shall become responsible for all costs and
expenses attributable to the ownership of the Purchased Assets and conduct of the business
as conducted by Buyer from and after the Closing Date, provided, however, that with respect
to those employees of the Company being hired by Buyer on and after the Closing Date, the
Company shall pay the employer portion of any health insurance benefits for such employees
for the month of April 2006, and Buyer shall reimburse the Company in the amount of such
payment as a post Closing adjustment made pursuant to Section 2(i) hereof (such employees
shall continue to be responsible, before and after the Closing, for paying the “employee
portion” of such benefits).




     (ii) Taxes. Personal ad valorem property taxes shall be apportioned as of the
Closing Date, based on current tax bills if available; and if not available, based on the
most recent tax bills available with appropriate subsequent adjustment among the Parties
when bills for the current year are received. Notwithstanding the foregoing, the Buyer
shall pay the first $4,200 in documentary stamp taxes due the State of Florida as a result
of the execution and delivery of the Promissory Note, and the Company shall pay any



9









 







excess over $4,200, and the Buyer shall pay all sales taxes due on the transfer of any
vehicles to the Buyer.




     (iii) Utilities. In the event the Buyer decides to make use of the Company’s
facilities, utilities, water and sewer charges shall be paid directly to the applicable
utility by Company and Buyer based on meter readings as of the Closing Date and at the
prevailing rates, if possible; otherwise such charges shall be apportioned based on the
number of days occurring before and after the Closing Date during the billing period for
each such charge with appropriate subsequent adjustment among the Parties when bills are
received.




     (iv) Real and Personal Property Leases. The next payment due to lessors after
the Closing Date with respect to any leased real estate, vehicles or Equipment that are
assigned to and assumed by Buyer shall be apportioned between Company and Buyer based on the
time in such period before and after the Closing Date.




     (v) Deposits. Any Company Deposits which can be assigned to Buyer will be so
assigned and Buyer will pay Company the full amount thereof, subject to claims by the
particular utility or lessor for damages and other costs, expenses and charges accrued or
resulting from actions occurring prior to the Closing Date.




     (vi) Unearned Vacation Liability at Next Anniversary Date. The Company has a
contingent obligation to provide additional vacation days at the employment anniversary date
for its employees. As to those employees being hired by the Buyer, the Parties agree to
preserve such Company benefits, through the first employment anniversary date following the
Closing, by having the Buyer provide such additional vacation days on a one time basis
(i.e., through the first such anniversary date following Closing), but with the Company
reimbursing the Buyer for the prorated value of such contingent additional vacation days as
to that period of time for each employee measured from the last employment anniversary date
of each such employee through the Closing Date.



     Appropriate cash payments by Company or Buyer, as the case may require, shall be made from
time to time, as soon as practicable after the facts giving rise to the obligation for such
payments are known, to give effect to the prorations required by this Section. The obligations
imposed by this Section shall survive until all prorations are finally determined to be acceptable
to the Parties.



     (i) Post Closing Adjustments. During that period which commences on the Closing Date
and ends on that day which is twenty (20) days from the Closing Date (the “Inventory Settlement
Period”), the Parties shall mutually agree on any adjustments as of the Closing Date to the
Inventory and, after such adjustments are mutually agreed to, the Buyer shall make the payment for
Inventory required under Section 2(c)(iii) hereof. In order to complete any adjustments to the
Inventory by the end of the Inventory Settlement Period, the Company agrees to deliver to Buyer at
Closing or promptly thereafter, all current invoices for current on hand inventory, current count
on hand by item, and vendor detail information, which invoices, counts and other vendor information
is necessary for Buyer to compare the Company’s pre-close



10









 







Inventory count to Buyer’s post-close Inventory count. As of that date which is ninety (90)
days after the Closing Date, the Parties shall mutually agree on any adjustments as of the Closing
Date to (i) the Receivables, (ii) Customer Prepayments, (iii) Unpaid Closing Liabilities, and (iv)
any other adjustments related to the items contained in Section 2(h), and no later than fifteen
(15) days thereafter the Parties shall mutually prepare and execute a statement (the “Settlement
Statement”) setting forth any adjustments to the foregoing. Within five (5) days after completion
of the Settlement Statement, Buyer shall remit to the Company, in immediately available funds, the
balance of the consideration, or in the event of any overpayment of the consideration by Buyer, the
Company shall reimburse Buyer in the amount of such overpayment as follows: (A) if the amount of
such overpayment obligation is $500,000 or less, the Company shall deliver cash to Buyer in the
full amount of such overpayment obligation; (B) if the amount of such overpayment obligation is
greater than $500,000 but less than that amount equal to $500,000 plus the unpaid balance of the
Promissory Note, the Company shall deliver cash to Buyer in the amount of $500,000, with any
balance of such overpayment obligation satisfied through an offset against the unpaid balance owed
by Parent to Company under the Promissory Note; or (C) if the amount of such overpayment obligation
is greater than that amount equal to $500,000 plus the unpaid balance of the Promissory Note, the
overpayment reimbursements required under subsection (B) above shall first be made, with any
overpayment obligations still remaining unsatisfied then reimbursed by Company to Buyer through the
delivery by Company to Buyer of that amount of additional cash necessary to pay in full such
overpayment obligations. Within five (5) days after completion of the Settlement Statement, the
Parties shall prepare (or, if already prepared and agreed to, shall amend) an allocation of the
purchase price pursuant to Section 2(j) hereof (or, if already prepared and agreed to, to make such
allocation consistent with such adjustments). Each party hereto shall pay its own costs and
expenses incurred in connection with the Settlement Statement.



     (j) Allocation of Purchase Price. The Parties hereto acknowledge and agree that the
transactions contemplated by this Agreement shall be treated for tax purposes as a taxable
transaction under the Code. The Parties agree that the allocation of the Purchase Price shall be
mutually determined by the Parties and shall be allocated among the assets and the Restrictive
Covenants (set forth in Section 6(c)) in a manner consistent with the requirements set forth in
Section 1060 of the Code and the Treasury regulations promulgated thereunder. Such allocation will
be binding on the Parties for federal income tax purposes, and will be consistently reflected by
each Party on their respective federal income tax returns. The Parties agree to prepare and timely
file all applicable Internal Revenue Service forms reflecting such allocation, and to furnish each
other with a copy of such forms upon request.



     (k) Assignment of Contracts. Notwithstanding anything in this Agreement to the
contrary, this Agreement shall not constitute an assignment of any claim, contract, license,
franchise, lease, commitment, sales order, sales contract, supply contract, service agreement,
purchase order or purchase commitment if an attempted assignment thereof, without the consent of a
third party thereto (other than the Company), would constitute a breach thereof or in any way
adversely affect the rights of Buyer thereunder. If such consent is not obtained, the Company
shall cooperate with the Buyer to the extent necessary to provide for Buyer the benefits under such
claim, contract, license, franchise, lease, commitment, sales order, sales contract, supply
contract, service agreement, purchase order or purchase commitment, including enforcement for the
benefit of Buyer of any and all rights of the Company against a third party



11









 







thereto arising out of the breach or cancellation by such third party or otherwise; provided,
however, that the Company’s obligation to cooperate shall not impose on the Company any obligation
to take any actions which would result in a material violation by the Company of any of the
foregoing agreements.



     (l) No Expansion of Third Party Rights. The assumption by Buyer of the Assumed
Liabilities, and the transfer thereof by the Company, shall in no way expand the rights or remedies
of any third party against the Buyer as compared to the rights and remedies which such third party
would have had against the Company had the Buyer not assumed such liabilities. Without limiting
the generality of the preceding sentence, the assumption by Buyer of the Assumed Liabilities shall
not create any third party beneficiary rights.



     (m) The Closing. Subject to the terms and conditions of this Agreement, the closing
of the transactions contemplated by this Agreement (the “Closing”) shall take place at the
offices of Franklin & Company, L.L.C. in Spring Hill, Florida, as soon after all closing conditions
set forth in Section 7 hereof (other than those to be satisfied at the Closing or post-Closing)
have been satisfied or been waived in writing but in no event shall the Closing occur later than
March 31, 2006 or, in the event of unforeseen circumstances which result in the delay of the
Closing, no later than by April 7, 2006. The date of the Closing is herein referred to as the
“Closing Date.” The Company shall deliver to the Buyer a Bill of Sale and the Assignment
and Assumption of Contracts in the forms attached hereto as Exhibit B and Exhibit
C, respectively, and such other deeds, bills of sale, endorsements, assignments, releases and
other instruments, in such form as is satisfactory to the Buyer and as shall be sufficient to vest
in the Buyer good and marketable title to the Purchased Assets free and clear of all Liens and
shall deliver to the Buyer immediate possession of the Purchased Assets.



     (n) Successor Liability. The transaction contemplated by this Agreement is a purchase
and sale of assets and not a de facto merger of the Company and Buyer. Buyer is not a successor in
interest to Company, and neither the Company nor any owner, manager or officer of Company shall
have any participation in the ownership of Buyer following the Closing Date. Except as
specifically set forth in this Agreement, Company and Buyer agree that Buyer shall not assume or
become liable for any of the Company’s debts, liabilities, or obligations of any kind existing as
of the Closing Date or thereafter incurred by Company, whether known or unknown, absolute or
contingent, mature or unmatured, liquidated or unliquidated, or accrued or threatened, including,
without limitation, any accounts payable of the Company related to the business of the Company or
otherwise, other than the Assumed Liabilities.



3.   Representations and Warranties Relating to the Company. The Company hereby represents
and warrants to the Buyer that the statements contained in this Section 3 are true and correct as
of the date of this Agreement, except as set forth in the disclosure schedule accompanying this
Agreement (the “Disclosure Schedule”).



     (a) Noncontravention. Neither the execution and the delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, shall (i) violate any provision of the
Company’s articles of incorporation or other governing documents or to Company’s knowledge violate
any statute, regulation, rule, injunction, judgment, order, decree, approval, exemption, variance
or ruling of any Governmental Authority to which the Company is subject or (ii) except



12









 







as set forth on Section 3(a) of the Disclosure Schedule conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel, or require any notice under any agreement, contract,
lease, license, permit or instrument to which the Company is a party or by which the Company is
bound or to which any of its assets are subject. Except as set forth on Section 3(a) of the
Disclosure Schedule, the Company is not required to give any notice to, make any filing with, or
obtain any authorization, consent or approval of any Governmental Authority or third party in order
for the Company to consummate the transactions contemplated by this Agreement.



     (b) Corporate Status. The Company is a Florida corporation, duly organized, validly
existing and of active status under the laws of the State of Florida. The Company has full power
and authority to carry on the businesses in which it is engaged and to own and use the properties
owned and used by it. The Company is not qualified to transact business in any other jurisdiction,
and to the Company’s knowledge the nature of the Company’s properties and the conduct of its
business does not require such qualification. To the Company’s knowledge the Company has fully
complied with all of the requirements of any statute governing the use and registration of
fictitious names, and has the legal right to use the names under which it operates its business.
There is no pending or to the Company’s knowledge threatened proceeding for the dissolution,
liquidation, insolvency or rehabilitation of the Company.



     (c) Good Title to and Condition of Purchased Assets.




     (i) Except as set forth on Section 3(c) of the Disclosure Schedule, the Company has good and
marketable title to all of the Purchased Assets with full power to sell, transfer and assign the
same, free and clear of any Liens or restrictions on use and by delivery of the Bill of Sale and
Assignment as contemplated by Section 2 the Company will deliver to the Buyer title to the
Purchased Assets free and clear of any Liens. The Company covenants and agrees that it will
warrant and defend the property hereby sold to the Buyer, its successors and assigns, against the
lawful claims, demands and charges of all Persons whomsoever.




     (ii) The Purchased Assets currently in use or necessary for the business and operations of the
Company are in good operating condition, normal wear and tear excepted, and have been maintained in
substantial compliance with all applicable manufacturer’s specifications and warranties.



     (d) Power and Authority. The Company has the corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The Company has taken all action necessary to authorize the execution and
delivery of this Agreement, the performance of its obligations hereunder and the consummation of
the transactions contemplated hereby.



     (e) Enforceability. This Agreement has been duly executed and delivered by the Company
and constitutes its legal, valid and binding obligation enforceable against it in accordance with
its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights generally and general
equitable principles regardless of whether such enforceability is considered in a proceeding at law
or in equity.



13









 





     (f) Absence of Subsidiaries. The Company has no Subsidiaries.



     (g) Financial Statements. The Company has attached hereto as Section 3(g) of the
Disclosure Schedule, the following financial statements (collectively the “Financial
Statements”): (i) the Company’s consolidated unaudited balance sheet and statements of income
for the year ended December 31, 2005 (the “Most Recent Fiscal Year End”) and (ii) the
Company’s consolidated unaudited balance sheet and statements of income for the period beginning
January 1, 2005 and ending December 31, 2005 (and for the interim periods thereof) (the “Most
Recent Financial Statements”). Except as otherwise set forth on Section 3(g) of the Disclosure
Schedule, the Financial Statements have been prepared in accordance with Consistently Applied
accounting principles throughout the periods covered thereby and present fairly in all material
respects the financial condition of the Company and its assets and liabilities as of such dates and
the results of operations of the Company for such periods; provided, that, the Most Recent
Financial Statements are subject to normal year-end adjustments (which in the aggregate are not
material). Except as otherwise set forth on Section 3(g) of the Disclosure Schedule, there are no
extraordinary or material non-recurring items of income or expense (subject to fluctuations in the
Ordinary Course of Business) that have occurred during the periods covered by the Financial
Statements and the balance sheets included in the Financial Statements do not reflect any write-up
or revaluation increasing the book value of any assets, except as specifically disclosed in the
notes thereto and has occurred pursuant to allocations established in connection with any prior
purchases of pest, termite and lawn care businesses by the Company. For purposes of the
Consistently Applied accounting principles of the Company, except as otherwise set forth on Section
3(g) of the Disclosure Schedule, the Company recognizes revenues at the time it bills the customer
rather than when the services are rendered.



     (h) Absence of Certain Developments. Except as otherwise contemplated by this
Agreement or as set forth in Section 3(h) of the Disclosure Schedule, since the Most Recent
Financial Statements, the Company has been operated in the Ordinary Course of Business and the
Company has not:




     (i) borrowed any material amount or incurred any material liabilities affecting the
Purchased Assets;




     (ii) mortgaged, pledged or subjected to any Lien, any Purchased Assets, except for
Permitted Liens;




     (iii) sold, assigned, transferred or to the Company’s knowledge permitted the lapse of
any right relating to any of the Purchased Assets;




     (iv) made any capital expenditures or commitments therefor in excess of $25,000 in the
aggregate or failed to make any material budgeted capital expense concerning the Purchased
Assets;




     (v) suffered any theft, damage, destruction or casualty loss to the Purchased Assets in
excess of $5,000 not covered by insurance;




     (vi) granted any increase in the salaries, compensation or benefits of any of its
employees except increases in the Ordinary Course of Business;



14









 






     (vii) acquired any capital stock, equity interests or assets of any Person except
assets acquired in the Ordinary Course of Business;




     (viii) made any change in its accounting principles or Tax elections, written up or
written down any inventory (except in the Ordinary Course of Business), or materially
increased or decreased any accounting reserves, except as set forth in Section 3(h) of the
Disclosure Schedule;




     (ix) amended the articles of incorporation, bylaws, or other similar organizational
documents of the Company;




     (x) adopted a plan of complete or partial liquidation or authorized any liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other similar
transaction;




     (xi) entered into any lease of personal property or any renewals of the existing leases
that are being assumed by Buyer involving a term of more than one year or rental obligation
exceeding $10,000 per year in any single case, or exceeding $25,000 per year in the
aggregate in all such cases, outside the Ordinary Course of Business;




     (xii) taken any action or failed to take any action that results in the creation of any
Lien over the Purchased Assets;




     (xiii) waived, released or canceled any material claims against any customers; or




     (xiv) experienced any current customer warranty claims in excess of $500, other than as
scheduled herein.



     (i) Liens. Except as disclosed in Section 3(i) of the Disclosure Schedule, the
Company does not have any outstanding indebtedness which is secured by a Lien on the Purchased
Assets.



     (j) Legal Compliance. To the Company’s knowledge the Company is in compliance with
all statutes, laws, ordinances, rules, orders and regulations of Governmental Authorities
applicable to it, its business and operations (as conducted by it now and in the past), the
Purchased Assets, and the Leased Real Properties (as defined in Section 3(l)). Except as set forth
on Section 3(j) of the Disclosure Schedule, since January 1, 2004, the Company has not received any
written communication from any Governmental Authority that alleges that the Company is not in
compliance with any federal, state or local laws, rules or regulations.



     (k) Tax Matters.




     (i) The Company has filed all Tax Returns required to be filed by it and has paid all
Taxes shown as due on such Tax Returns. To the Company’s knowledge all such Tax Returns are
true and correct in all material respects. The Company has provided to the Buyer true and
correct copies of the federal Tax Returns filed to date of Closing. The Company is not
delinquent in the payment of any applicable Taxes.



15









 






     (ii) To the Company’s knowledge no Tax Return of the Company is under audit or
examination by any taxing authority, and no written notice of an audit or examination has
been received by the Company.




     (iii) To the Company’s knowledge the Company has withheld and paid all Taxes required
to have been withheld and paid in connection with any amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third party.



     (l) Real Properties. The Company does not own any real property nor has ever owned
any real property, except as described on Section 3(l) of the Disclosure Schedule. Section 3(l) of
the Disclosure Schedule sets forth the address of each parcel of real property leased by the
Company (collectively, the “Leased Real Properties”), and a list of all leases for such Leased Real
Properties. A copy of each such lease has been made available to Buyer. Except as set forth on
Section 3(l) of the Disclosure Schedule, with respect to each of the Leased Real Properties leases:




     A. To the Company’s knowledge neither the Company nor any other party to such
lease is in material breach or default under such lease;




     B. the Company enjoys peaceful and undisturbed possession of the Leased Real
Properties, and the Company has not subleased, licensed or otherwise granted any
Person the right to use or occupy such Leased Real Properties or any portion
thereof; and




     C. the Company has not collaterally assigned or granted any other Lien in such
lease or any interest therein other than to its secured lenders listed on Section
3(i) of the Disclosure Schedule.



     (m) Intellectual Property. Section 3(m)(i) of the Disclosure Schedule identifies: (A)
each patent, trademark or copyright registration that has been issued to the Company with respect
to any of the Intellectual Property; (B) each pending patent, trademark or copyright application
which the Company has made with respect to any of the Intellectual Property; (C) each material
license or agreement, that the Company has granted to any third party with respect to any of the
Intellectual Property; and (D) each material trade name, registered trademark, and service mark
owned by the Company. Copies of all such patents, copyrights, and trademark registrations and
applications, licenses and agreements (as amended to date) have been made available to Buyer.
Except as set forth on Section 3(m)(ii) of the Disclosure Schedule, with respect to each item of
Intellectual Property required to be identified in Section 3(m)(i) of the Disclosure Schedule: (A)
the item is not subject to any outstanding injunction, judgment, order, decree or ruling
prohibiting the Company’s use thereof; and (B) no action, suit or proceeding is pending which
challenges the legality, validity, enforceability, use, or ownership of the item. Section
3(m)(iii) of the Disclosure Schedule identifies each item of Intellectual Property that any third
party owns and that the Company uses pursuant to a written license or agreement. Copies of all such
material licenses and agreements (as amended to date) have been made available to Buyer. With
respect to each such item of Intellectual Property required to be identified in Section 3(m)(i) of
the Disclosure Schedule, to Company’s knowledge: (A) the license or agreement covering the item is
legal, valid, binding, enforceable against the Company, and in



16









 







full force and effect; and (B) the Company is not in breach or default of such license or
agreement; and (C) the Company has not granted any sublicense or similar right with respect to the
license or agreement and to Company’s knowledge the Intellectual Property owned by the Company and
the business methods and operations of the Company as in effect prior to Closing do not violate,
breach or infringe the patent, trademark, copyright or other intellectual property rights of any
other Person.



     (n) Contracts. Section 3(n) of the Disclosure Schedule lists the following agreements
to which the Company is a party:




     (i) any agreement for the lease of Equipment or other personal property to or from any
Person and all Leased Real Properties leases;




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




     (iii) any agreement under which it has created a Lien on any of the Purchased Assets;




     (iv) any agreement with any manager, officer or director of the Company or any
shareholder of the Company (or any Affiliate thereof);




     (v) any employment agreement which contains a non-compete;




     (vi) any agreement with any customer or Supplier that are expected to represent in
excess of $10,000 of the Company’s revenues or expenses for fiscal year 2005 or any annual
period thereafter; and




     (vii) any other agreement which involves consideration or benefits in excess of $10,000
or which is otherwise material to the Company.



     A copy of each written agreement required to be listed in Section 3(n) of the Disclosure
Schedule (and all amendments and modifications thereto) has been made available to Buyer (as well
as written descriptions of each oral agreement). With respect to each such agreement: (A) to
Company’s knowledge the agreement is legal, valid, binding, enforceable and in full force and
effect; (B) to the Company’s knowledge the Company is not, and the other party is not, in material
breach or default, and no event has occurred which with notice or lapse of time would constitute a
material breach or default, or permit termination, material modification, or acceleration, under
the agreement; (C) no party has repudiated in writing any material provision of the agreement; (D)
no amendment or waiver has been made since December 31, 2004 and no amendment or waiver is
currently being proposed by any party thereto; and (E) the Company is not aware of any pending or
threatened contract claims, customer damage claims or warranty claims under any contract which is
an Assumed Liability or Assumed Contract, except as expressly disclosed in detail on Schedule
2(f)(1) and Schedule 3(n) of the Disclosure Schedule.



     (o) Insurance and Risk of Loss . The Company has in place policies of insurance
insuring the business and the Purchased Assets (the “Insurance Policies”). Section 3(o) of the
Disclosure Schedule provides a detailed description of each pending claim under any of the
Insurance Policies and any claims filed after January 1, 2003 which has been resolved. The



17









 







Company shall assume all risk of loss of, damage to, or destruction of the business and
Purchased Assets occurring prior to Closing. On and after the Closing Date, the Company’s
Insurance Policies in effect at the Closing Date will continue to provide insurance coverage on
behalf of the Company with respect to any contract claims, customer damage claims or warranty
claims which pertain to the operation of the Company’s business prior to the Closing Date,
including but not limited to any such claims arising on and after the Closing Date which pertain to
any of the Assumed Contracts, and, in the event any of such Insurance Policies are renewed after
the Closing Date, the Company shall cause the Buyer to be added to such renewed Insurance Policies
as a “loss payee.”



     (p) Litigation. Section 3(p) of the Disclosure Schedule sets forth each instance in
which the Company (i) is subject to any outstanding injunction, judgment, order, decree or ruling
or (ii) is a party or, to the Company’s knowledge, has been threatened to be made a party, to any
action, suit, proceeding, hearing or investigation of, in or before any Governmental Authority.



     (q) Employees. Section 3 (q) of the Disclosure Schedule sets forth the name, address,
social security number and current rate of compensation of the employees of the Company
(“Employees”). Except as set forth in Section 3(q) of the Disclosure Schedule, there is no accrued
and unpaid vacation pay or other benefits for any employee. The Company is not a party to or bound
by any collective bargaining agreement or any other agreement with a labor union, and to the
Company’s knowledge there has been no effort by any labor union during the 24 months prior to the
date hereof to organize any employees of the Company into one or more collective bargaining units.
There is no pending or, to the Company’s knowledge, threatened, labor dispute, strike or work
stoppage which affects or which may affect the business of the Company or which may interfere with
its continued operations. To the Company’s knowledge there is no pending or threatened, charge or
complaint against the Company by or with the National Labor Relations Board or any representative
thereof. To the Company’s knowledge no key employee or group of employees has any plans to
terminate his, her or their employment with the Company as a result of the transactions
contemplated hereby. Section 3(n) of the Disclosure Schedule also identifies each employee of the
Company that has a non-compete agreement. Each employee non-compete agreement is assignable and is
being assigned to Buyer.



     (r) Employee Benefits. The Company shall be responsible for paying and shall pay all
employees of the Company all compensation and benefits arising or accruing prior to Closing
including, without limitation, vacation pay, overtime pay, retirement benefits, salaries,
commissions, bonuses and benefits under all Employee Pension Benefit Plans, Employee Welfare
Benefit Plans and all other employee benefits, fringe benefit plans and programs maintained or
contributed to by the Company, or any ERISA Affiliate with respect to current or former employees
of the Company and all severance and Change of Control Payments.



     (s) Environmental Matters.





     (i) To the Company’s knowledge, the Company is and has at all times been in compliance
in all material respects with all Environmental Laws (as defined below) governing its
business, operations, properties and assets, including, without limitation: (i) all
requirements relating to the Discharge (as defined below) and Handling (as defined



18









 







below) of Hazardous Substances (as defined below); (ii) to Company’s knowledge all
requirements relating to notice, record keeping and reporting; (iii) to Company’s knowledge
all requirements relating to obtaining and maintaining Licenses (as defined below) for the
ownership of its properties and assets and the operation of its business as presently
conducted, including Licenses relating to the Handling and Discharge of Hazardous
Substances; and (iv) to Company’s knowledge all applicable writs, orders, judgments,
injunctions, governmental communications, decrees, informational requests or demands issued
pursuant to, or arising under, any Environmental Laws (as defined below).




     (ii) There are no (and to Company’s knowledge there is no basis for any) non-compliance
orders, warning letters, notices of violation (collectively “Notices”), claims, suits,
actions, judgments, penalties, fines, or administrative or judicial investigations or
proceedings (collectively “Proceedings”) pending or to Company’s knowledge threatened
against or involving the Company, or its business, operations, properties or assets, issued
by any Governmental Authority or third party with respect to any Environmental Laws or
Licenses issued to the Company thereunder in connection with, related to or arising out of
the ownership by the Company of its properties or assets or the operation of its business,
which have not been resolved to the satisfaction of the issuing Governmental Authority or
third party in a manner that would not impose any material obligation, burden or continuing
material liability on the Buyer, the Purchased Assets, or the Company in the event that the
transactions contemplated by this Agreement are consummated, or which could have a Material
Adverse Effect on the Company, the Purchased Assets, or the Buyer, including, without
limitation: (i) Notices or Proceedings related to the Company being a potentially
responsible party for a federal or state environmental cleanup site or for corrective action
under any applicable Environmental Laws; (ii) Notices or Proceedings relating to the Company
being responsible to undertake any response or remedial actions or clean-up actions of any
kind; or (iii) Notices or Proceedings related to the Company being liable under any
Environmental Laws for personal injury, property damage, natural resource damage, or clean
up obligations.




     (iii) The Company has not Handled or Discharged, nor has it allowed or arranged for any
third party to Handle or Discharge, Hazardous Substances to, at or upon: (i) any location
other than a site lawfully permitted to receive such Hazardous Substances; (ii) any real
property currently or previously owned or leased by the Company (other than in the Ordinary
Course of Business in compliance in all material respects with applicable Environmental
Laws); or (iii) to the Company’s knowledge any site which, pursuant to any Environmental
Laws, (x) has been placed on the National Priorities List or its state equivalent, or (y)
the Environmental Protection Agency or the relevant state agency or other Governmental
Authority has notified the Company that such Governmental Authority has proposed or is
proposing to place on the National Priorities List or its state equivalent. To the Company’s
knowledge there has not occurred, nor is there presently occurring, a Discharge, or
threatened Discharge, of any Hazardous Substance on, into or beneath the surface of, or
adjacent to, any real properties currently or previously owned or leased by the Company in
an amount requiring a notice or report to be made to a Governmental Authority or in
violation of any applicable Environmental Laws.



19









 






     (iv) Section 3(s) of the Disclosure Schedule identifies the operations and activities,
and locations thereof, which have been conducted or are being conducted by the Company on
any real properties currently or previously owned or leased by the Company which involves
the Handling or Discharge of Hazardous Substances.




     (v) The Company does not use, nor has it used, any Aboveground Storage Tanks (as
defined below) or Underground Storage Tanks (as defined below), and there are not now nor to
Company’s knowledge have there ever been any Underground Storage Tanks beneath any real
properties currently or previously owned or leased by the Company that are required to be
registered under applicable Environmental Laws.




     (vi) Section 3(s) of the Disclosure Schedule identifies (i) all environmental audits,
assessments or occupational health studies undertaken by the Company or its agents or
undertaken by any Governmental Authority, or any third party, relating to or to the
Company’s knowledge affecting the Company or any real properties currently or previously
owned or leased by the Company; (ii) the results of any ground, water, soil, air or asbestos
monitoring undertaken by the Company or its agents or to the Company’s knowledge undertaken
by any Governmental Authority or any third party, relating to or affecting the Company or
any real properties currently or previously owned or leased by the Company which indicate
the presence of Hazardous Substances at levels requiring a notice or report to be made to a
Governmental Authority or in violation of any applicable Environmental Laws; (iii) all
material written communications between the Company and any Governmental Authority arising
under or related to Environmental Laws; and (iv) all outstanding citations issued under
OSHA, or similar state or local statutes, laws, ordinances, codes, rules, regulations,
orders, rulings, or decrees, relating to or to the Company’s knowledge affecting either the
Company or any real properties currently or previously owned or leased by the Company.




     (vii) For purposes of this Section 3(s), the following terms shall have the meanings
ascribed to them below:



     “Aboveground Storage Tank” shall have the meaning ascribed to such term in Section 6901
et seq., as amended, of RCRA (as defined in this clause (vii)), or any law
governing Aboveground Storage Tanks.



     “Discharge” means any manner of spilling, leaking, dumping, discharging, releasing or
emitting, as any of such terms may further be defined in any Environmental Law, into any medium
including, without limitation, ground water, surface water, soil or air.



     “Environmental Laws” means all federal, state, regional or local statutes, laws, rules,
regulations, codes, orders, plans, injunctions, decrees, rulings, and changes or ordinances or
judicial or administrative interpretations thereof, or similar laws of foreign jurisdictions where
the Company conducts business, currently in existence any of which govern or relate to pollution,
protection of the environment, public health and safety, air emissions, water discharges, hazardous
or toxic substances, solid or hazardous waste or occupational health and safety, as any of these
terms are or may be defined in such statutes, laws, rules, regulations, codes, orders, plans,
injunctions, decrees, rulings and ordinances, or judicial or administrative



20









 







interpretations thereof, including, without limitation: the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendment and
Reauthorization Act of 1986, 42 U.S.C. §9601, et seq. (collectively “CERCLA”); the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and
subsequent Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §6901 et seq.
(collectively “RCRA”); the Hazardous Materials Transportation Act, as amended, 49 U.S.C. §1801,
et seq.; the Clean Water Act, as amended, 33 U.S.C. §1311, et seq.;
the Clean Air Act, as amended (42 U.S.C. §7401-7642); the Toxic Substances Control Act, as amended,
15 U.S.C. §2601 et seq.; the Federal Insecticide, Fungicide, and Rodenticide Act as
amended, 7 U.S.C. §136-136y (“FIFRA”); the Emergency Planning and Community Right-to-Know Act of
1986 as amended, 42 U.S.C. §11001, et seq. (Title III of SARA) (“EPCRA”); and the
Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §651, et seq.
(“OSHA”); Chapters 115, 168.



     “Handle” means any manner of generating, accumulating, storing, treating, disposing of,
transporting, transferring, labeling, handling, manufacturing or using, as any of such terms may
further be defined in any Environmental Law, of any Hazardous Substances or Waste.



     “Hazardous Substances” shall be construed broadly to include any toxic or hazardous substance,
material, or waste, and any other contaminant, pollutant or constituent thereof, whether liquid,
solid, semi-solid, sludge and/or gaseous, including without limitation, chemicals, compounds,
by-products, pesticides, asbestos containing materials, petroleum or petroleum products, and
polychlorinated biphenyls, the presence of which requires investigation or remediation under any
Environmental Laws or which are or become regulated, listed or controlled by, under or pursuant to
any Environmental Laws, including, without limitation, RCRA, CERCLA, the Hazardous Materials
Transportation Act, the Toxic Substances Control Act, the Clean Air Act, the Clean Water Act,
FIFRA, EPCRA and OSHA, or any similar state statute, or any future amendments to, or regulations
implementing such statutes, laws, ordinances, codes, rules, regulations, orders, rulings, or
decrees, or which has been or shall be determined or interpreted at any time by any Governmental
Authority to be a hazardous or toxic substance regulated under any other statute, law, regulation,
code, rule, order, or decree.



     “License” means all certificates, permits, approvals and restrictions.



     “Underground Storage Tank” shall have the meaning ascribed to such term in Section 6901
et seq., as amended, of RCRA, or any applicable state or local statute, law,
ordinance, code, rule, regulation, order ruling, or decree governing Underground Storage Tanks.



     “Waste” shall be construed broadly to include agricultural wastes, biomedical wastes,
biological wastes, bulky wastes, construction and demolition debris, garbage, household waste,
industrial solid wastes, liquid wastes, recyclable materials, sludge solid wastes, special wastes,
used oils, white goods and yard trash as these are defined by any other statute law, regulation,
order, code, sale or decree.



     (t) Company Permits. To the Company’s knowledge, the Company holds all Permits of all
Governmental Authorities necessary for the lawful conduct for its businesses and operations,
including with respect to the operation of each of the Leased Real Properties, and



21









 







Section 3(t) of the Disclosure Schedule contains a true and complete list of all such Permits.
To the Company’s knowledge, the Company is in compliance in all material respects with the
respective requirements thereof and no proceeding is pending or to the Company’s knowledge
threatened to revoke or amend any Permit.



     (u) Accounts Receivable; Inventory; Returns.




     (i) Set forth on Schedule 2(a)(v) is a list of all Receivables of the Company. All
Receivables are valid and legally binding, and arose in the Ordinary Course of Business from
bona fide transactions. Except as set forth in Section 3(u)(i) of the Disclosure Schedule,
all Receivables are current and are expected to be collected within ninety (90) days of the
date of billing without setoff or counter claim.




     (ii) Set forth in Section 2(a)(ii) of the Disclosure Schedule is a list of all
Inventory of the Company. All Inventory is usable and saleable in the Ordinary Course of
Business. Except as set forth in Section 2(a)(ii) of the Disclosure Schedule, the
Inventory, taken as a whole, is valued on the Company’s books of account in accordance with
the Consistently Applied accounting principles at the Company’s historical cost.




     (iii) The Company has delivered to the Buyer a complete and accurate written summary of
the rights of the Company to return products to each of the Suppliers (as defined in Section
3(w)(i)), including all price protection rights and limitations on returns (the “Return
Policies”). None of the Return Policies have been amended or repudiated since December
31, 2004. To the Company’s knowledge, no Supplier intends to amend or repudiate its Return
Policy. The Company’s rights under each Return Policy will not be affected by the
transactions contemplated hereby.



     (v) Books and Records. The files, data, books and records of the Company relating to
the business and Purchased Assets, as previously made available to Buyer and its representatives,
are accurate in all material respects.



     (w) Customers and Suppliers.




     (i) Section 3(w)(i) of the Disclosure Schedule sets forth a true, accurate and complete
list:




     A. of the thirty (30) largest commercial customers and the thirty (30) largest
residential customers of the Company in terms of revenue earned during the most
recently completed fiscal year and the portion of the current fiscal year prior to
the date of this Agreement (collectively, the “Significant Customers”),
showing the total revenue earned in each such period from each such customer; and




     B. of the suppliers of the Company in terms of purchases during the most
recently completed fiscal year and the portion of current fiscal year prior to the
date of this Agreement (collectively, the “Suppliers”).



22









 






     (ii) Since December 31, 2004, except as set forth on Section 3(w)(ii) of the Disclosure
Schedule, there has not been any material dispute between the Company and any Significant
Customer or Supplier, and, no Significant Customer or Supplier has indicated to the Company
that such Significant Customer or Supplier intends to materially reduce its purchases from,
or sales to, or to otherwise materially reduce its business relationship with, the Company.




     (iii) The Company has kept its customer lists and customer agreements confidential and
has not provided the customer lists and customer agreements to any Person outside the
Company other than to the Company’s auditors, attorneys and lenders.



     (x) Pest Treatment. To Company’s knowledge the Company is in compliance with all
statutes, laws, ordinances, rules, orders and regulations of all Governmental Authorities and
manufacturer treatments and protocols applicable to it, its business and operations as conducted by
it now) relating to the pest control and termite control segment of the business and, except as set
forth in Section 3(x) of the Disclosure Schedule, there are no claims pending under any of the
Company’s pest control and/or termite warranties or guarantees, nor has the Company received notice
of any such claims and to the Company’s knowledge, no such claims are threatened. Except as set
forth on Section 3(x) of the Disclosure Schedule, since January 1, 2004, the Company has not
received any written communication from any Governmental Authority or manufacturer that alleges
that the Company is not in compliance with any applicable statutes, laws, rules or regulations or
manufacturer treatments and protocols.



     (y) Names; Prior Acquisitions; Business Locations. All names under which the Company
does business as of the date hereof are specified on Section 3(y) of the Disclosure Schedule.
Except as set forth on Section 3(y) of the Disclosure Schedule, the Company has not changed its
name or used any assumed or fictitious name, or been the surviving entity in a merger, acquired any
business or changed its principal place of business or chief executive office, within the past
three years. As of the date hereof, the Company has no office or place of business other than as
identified on Section 3(y) of the Disclosure Schedule and the Company’s principal places of
business and chief executive offices are indicated on Section 3(y) of the Disclosure Schedule, and,
except for equipment leased to customers in the ordinary course of business, all locations where
the Equipment, Inventory and books and records of the Company is located as of the date hereof are
fully identified on Section 3(y) of the Disclosure Schedule).



     (z) Brokers’ Fees. The Company does not have any liability or obligation to pay any
fees, expenses, or commissions to any broker, investment banker, finder or agent with respect to
the transactions contemplated by this Agreement for which the Buyer could become liable or
obligated.



     (aa) Accuracy of Information Furnished by the Company. No representation, statement
or information made or furnished by the Company to the Buyer or any of the Buyer’s representatives
contained in this Agreement and the various Disclosure Schedules attached hereto contains any
untrue statement of a material fact or omits any material fact necessary to make the information
contained herein not misleading. The Company has provided the Buyer with true, accurate and
complete copies of all documents listed or described in the various Disclosure Schedules attached
hereto. Notwithstanding the foregoing, the representation



23









 







contained in this Section 3(aa) does not supersede or modify the specific representations
contained in other sections herein.



4.   Representations and Warranties of the Buyer. The Buyer represents and warrants to the
Company that the statements contained in Section 4 are true and correct as of the date of this
Agreement, except as set forth in the Disclosure Schedule.



     (a) Organization of the Buyer. The Buyer is a Florida corporation, duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its incorporation.



     (b) Authorization of Transaction. The Buyer is a Florida corporation, duly organized,
validly existing and in good standing upon the laws of the State of Florida. Buyer has full power
and authority (including full corporate power and authority) to execute and deliver this Agreement
and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding
obligation of the Buyer, enforceable in accordance with its terms and conditions. There is
no pending or to the Buyer’s knowledge threatened proceeding for the dissolution, liquidation,
insolvency or rehabilitation of the Buyer.



     (c) Noncontravention. Neither the execution and the delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, shall (i) violate any statute,
regulation, rule, injunction, judgment, order, decree or ruling of any Governmental Authority to
which the Buyer is subject, or any provision of its charter or bylaws, or (ii) conflict with,
result in a breach of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify or cancel, or require any notice under any
material agreement, contract, lease, license or instrument to which the Buyer is a party or by
which it is bound or to which any of its assets are subject. The Buyer is not required to give any
notice to, make any filing with, or obtain any authorization, consent or approval of any
Governmental Authority or third party in order for the Buyer to consummate the transactions
contemplated by this Agreement.



     (d) Brokers’ Fees. The Buyer has no liability or obligation to pay any fees,
expenses, or commissions to any broker, investment banker, finder or agent with respect to the
transactions contemplated by this Agreement for which the Company or any of its directors or
shareholders could become liable or obligated.



5.   Pre-Closing Covenants. The Parties agree as follows with respect to the period prior to
the Closing.



     (a) General. Each of the Parties shall use its best commercial efforts to take all
action required of it and to do all things necessary, proper or advisable on its part in order to
consummate and make effective the transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the conditions set forth in Section 7 below).



     (b) Notices and Consents. Each of the Parties shall give any notices to, make any
filings with, and use their best commercial efforts to obtain any authorizations, consents and
approvals of Governmental Authorities and third parties which are required to be given, made or
obtained by it in connection with consummation of the transaction.



24









 





     (c) Access. Until the Closing Date, and on and after the Closing Date pursuant to the
terms of the Transition Services Agreement (as hereafter defined), the Company shall permit the
Buyer and/or Parent and their representatives to have access to the directors, officers, assets and
properties of the Company and each of its Subsidiaries and all relevant books, records and
documents of or relating to the Company and each of its Subsidiaries and each of their respective
businesses and assets during such times as Company and Buyer reasonably determine is appropriate
and will furnish to the Buyer such information, financial records and other documents relating to
the Company and each of its Subsidiaries and their respective business and assets as the Buyer
and/or Parent may reasonably request. Without limiting the foregoing, the Company shall permit the
Buyer’ and/or Parent’s representatives to meet with the officers of the Company and its
Subsidiaries responsible for its financial statements, the internal controls of the Company and its
Subsidiaries and the disclosure controls and procedures of the Company and its Subsidiaries to
discuss such matters as the Buyer and/or Parent may deem reasonably necessary or appropriate for
the Buyer to satisfy its obligations under Sections 302, 404 and 906 of the Sarbanes-Oxley Act of
2002 and any rules and regulations relating thereto.



     (d) Confidentiality. Company, on the one hand, and Buyer, on the other hand
acknowledges that it has or may have had in the past, currently has and in the future may have
access to Confidential Information of the other Parties hereto. Each of the Parties agrees that it
will keep confidential, for a period of three (3) years from the Closing Date, all such
Confidential Information furnished to it and, except with the specific prior written consent of the
other Party, will not disclose such Confidential Information to any Person except representatives
of such Party, provided that these representatives (other than counsel) agree to the
confidentiality provisions of this Section 5(d). In the event of a breach or threatened breach by
any Party of the provisions of this Section 5(d) with respect to any Confidential Information, the
other Party shall be entitled to an injunction restraining such Party from disclosing, in whole or
in part such Confidential Information. Nothing herein shall be construed as prohibiting a Party
from pursuing any other available remedy for such breach or threatened breach, including the
recovery of damages. Because of the difficulty of measuring economic losses as a result of the
breach of the covenants in this Section, and because of the immediate and irreparable damage that
would be caused to a Party as a result of such breach for which it would have no other adequate
remedy, each of the Parties agrees that a Party may enforce the provisions of Section by
injunctions and restraining orders against any Party which breaches any of those provisions. The
obligations of the Parties under this Section shall survive the termination of this Agreement.



     (e) Due Diligence Review and Environmental Assessment. The Buyer shall be entitled to
have conducted prior to Closing a due diligence review of all of the assets, properties, books and
records of the Company (the “Due Diligence Review”) and an environmental assessment (the
“Environmental Assessment”). The Environmental Assessment may include, but not be limited to, a
physical examination of the Company premises, and any structures, facilities, or equipment located
thereon, soil samples, ground and surface water samples, storage tank testing, review of pertinent
records, documents, and Permits of each of the Company and its Subsidiaries. The Company shall
provide the Buyer or its designated agents or consultants with the access to such properties which
the Buyer, its agents or consultants reasonably require to conduct the Due Diligence Review and
Environmental Assessment. Buyer shall not be deemed to waive any breaches of any representations
or warranties by virtue of any Due Diligence Review or Environmental Assessment.



25









 





     (f) Trading in Parent Common Stock. Except as otherwise expressly consented to by the
Buyer, until three (3) business days after the Closing Date, neither the Company nor any of its
Affiliates will directly or indirectly purchase or sell (including short sales) any shares of the
Parent’s capital stock in any transactions effected on the AMEX or otherwise, or sell, transfer,
pledge, dispose of or otherwise part with any interest in or with respect to or in any other manner
reduce their investment risk with respect to any shares of the Parent’s capital stock.



     (g) No Shop. Until the Closing Date, the Company and its management and Advisors
shall not (and will not permit any Affiliate, employee, manager, officer, director, stockholder,
agent or other Person acting on its behalf to) (i) solicit, encourage, consider or accept any
offers from any other Person to acquire all or any portion of the assets of or any interest in the
Company, (ii) participate in any discussions or negotiations with any other Person concerning the
sale of all or any portion of the assets of or any interest in the Company (an “Acquisition
Proposal”), (iii) provide any Confidential Information about the Company to any Person related to
an Acquisition Proposal, or (iv) otherwise cooperate in any way with, assist, facilitate or
encourage any effort by any other Person seeking to acquire all or any portion of the assets of or
any interest in the Company. The Company hereby confirms covenants and agrees that: (i) there is
no binding agreement, arrangement or understanding with any other third party with respect to any
Acquisition Proposal other than this Agreement, (ii) any and all discussions with third parties
regarding an Acquisition Proposal have been terminated, and (iii) it will promptly notify the Buyer
if any Acquisition Proposal, or any inquiry or contact with any Person with respect thereto, is
made and the terms thereof.



     (h) Preservation of Business. Prior to the Closing, the Company shall conduct its
businesses in the Ordinary Course of Business. Without limiting the foregoing, the Company
covenants and agrees that, except (i) as contemplated by this Agreement or (ii) with the prior
written consent of Buyer, after the date hereof and before the Closing Date, it shall not:




     (i) amend the articles of incorporation, bylaws, or other organizational documents of
the Company;




     (ii) except as may be permitted by this Agreement, acquire, sell, lease or dispose of
any assets of the businesses except purchases and sales of inventory in the Ordinary Course
of Business;




     (iii) acquire any business or Person or create any Subsidiary;




     (iv) change any of the accounting methods or Tax elections used by the Company, write
down any inventory (except in the Ordinary Course of Business), write up any inventory, or
change any accounting reserves;




     (v) transfer, issue, sell, pledge or dispose of any shares of capital stock or other
securities of, or ownership interests in, the Company;




     (vi) change the compensation or benefits payable to any employee except changes
affecting hourly employees in the Ordinary Course of Business;



26









 






     (vii) enter into any lease of personal property for property being purchased hereunder
or any renewals thereof involving a term of more than one year, or rental obligation or
capital investment exceeding $10,000 per year in any single case, or exceeding $25,000 per
year in the aggregate in all such cases concerning the Purchased Assets;




     (viii) permit the lapse of any right relating to any Intellectual Property or any other
material intangible asset used in the business;




     (ix) take any action or fail to take any action that results in the creation of any
Lien over any of the Purchased assets;




     (x) enter into any contract or transaction or any amendment or modification to any
contract or transaction or terminate any contract or transaction except in the Ordinary
Course of Business; or




     (xi) enter into any agreement or commitment to take any of the actions described in
this Section.



     Nothing herein shall prevent the Company from paying and settling existing obligations prior
to Closing.



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



     (a) Litigation Support; Access to Books and Records. In the event and for so long as
any Party actively is contesting or defending against any third-party action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with (i) any transaction
contemplated under this Agreement or (ii) any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction on or
prior to the Closing Date involving the Company, each of the other Parties shall cooperate with
such Party or its counsel in the defense or contest, make available their personnel, and provide
such testimony and access to their books and records as shall be necessary in connection with the
defense or contest, all at the sole cost and expense of the contesting or defending Party (except
as otherwise provided in Section 8). The Parties shall also provide each other access to any books
and records constituting Purchased Assets that either Party reasonably requests to prepare its tax
returns or for other reasonable business purposes.



     (b) Tax Matters.




     (i) The Company shall be solely responsible for filing all Tax Returns and paying all
Taxes incurred or accrued by the Company including in connection with the transactions
contemplated by this Agreement.




     (ii) The Buyer shall be solely responsible for filing all Tax Returns and paying all
Taxes related to the operation of the Purchased Assets and business conducted by the Buyer
for all periods after the Closing.



27









 






     (iii) The Buyer shall prepare or cause to be prepared and filed or cause to be filed,
and the Parties shall cooperate in the preparation, execution and filing of all returns,
questionnaires, applications, or other documents regarding any sales, use, transfer,
recording, registration and other fees, and any similar Taxes, which become payable in
connection with the transactions contemplated by this Agreement, with each Party paying
their respective Taxes, except as specifically provided elsewhere in this Agreement as to
documentary stamp taxes on the Promissory Note and sales taxes on the transfer of certain
vehicles.



     (c) Restrictive Covenant. In order to assure that the Buyer will realize the benefits
of the transactions contemplated hereby, the Company agrees that it will not:




     (i) for a period of five years from the Closing Date, within the State of Florida and
outside the State of Florida in any location in which the Parent, the Buyer and/or any of
their respective Affiliates, currently or hereafter do business in the lawn care, inside
pest control and/or termite control industries or any related businesses (collectively, the
“Restricted Area”), directly or indirectly, alone or as a partner, joint venturer, manager,
officer, director, employee, consultant, agent, independent contractor or owner of, or
lender to, assist, or become associated with any business directly or indirectly competitive
with the pest control, termite control, lawn care and other related businesses of the
Company conveyed to Buyer pursuant to this Agreement (the “Business”), provided,
however, that, the beneficial ownership of less than five percent (5%) of the shares
of stock of any Person (engaged in a business similar to the Business) having a class of
equity securities actively traded on a national securities exchange or over-the-counter
market shall not be deemed, in and of itself, to violate the prohibitions of this Section
6(c)(i);




     (ii) for a period of five years from the Closing Date, directly or indirectly induce
any Person in the Restricted Area that is a customer or supplier of the Parent, the Buyer
and/or any of their respective Affiliates, to patronize any business directly or indirectly
in competition with the Business in the Restricted Area, in a manner adverse to the Buyer or
solicit or accept from any Person that is a customer of the Parent, the Buyer and/or any of
their respective Affiliates in the Restricted Area, any such business which is competitive
with the Business in the Restricted Area; or request or advise any Person that is a customer
or supplier of the Parent, the Buyer and/or any of their respective Affiliates to curtail or
cancel any of such customer’s or supplier’s Business with the Parent, the Buyer and/or any
of their respective Affiliates in the Restrictive Area;




     (iii) for a period of five years from the Closing Date, directly or indirectly employ,
or knowingly permit any Person directly or indirectly controlled by it to solicit, or employ
or engage as a consultant or otherwise, any person who was employed by the Company at or
within six months prior to the Closing Date and employed by Buyer after the Closing Date or
in any other manner seek to induce any such person to leave his or her employment with the
Buyer;



28









 






     (iv) directly or indirectly, at any time following the Closing Date, in any way
utilize, disclose, copy, reproduce or retain in his, her or its possession any Company or
Buyer Confidential Information, except as required by law; and




     (v) criticize or make any disparaging remarks about the Parent, the Buyer, any of their
respective Affiliates or any of their respective directors, officers, shareholders, advisors
or other employees.



     The Company agrees and acknowledges that the restrictions contained in this Section 6(c) are
reasonable in scope and duration and are necessary to protect the Buyer after the Closing Date. If
any provision of this Section 6(c) as applied to any Party or to any circumstance is adjudged by a
court to be invalid or unenforceable, the same will in no way affect any other circumstance or the
validity or enforceability of this Agreement. If any such provision, or any part thereof, is held
to be unenforceable because of the duration of such provision or the area covered thereby, the
parties agree that the court making such determination shall have the power to reduce the duration
and/or area of such provision, and/or to delete specific words or phrases, and in its reduced form,
such provision shall then be enforceable and shall be enforced. The Parties agree and acknowledge
that any breach of this Section 6(c) will cause irreparable damage to the Buyer and upon breach of
any provision of this Section 6(c), the Buyer shall be entitled to injunctive relief, specific
performance or other equitable relief; provided, however, that, this shall in no way limit any
other remedies which the Buyer may have (including, without limitation, the right to seek monetary
damages). The Buyer agrees that it will not criticize or make any disparaging remarks about the
Company or any of its Affiliates or any of its directors, officers, shareholders, advisors or other
employees, provided, however, that the remedy for any violation of such agreement shall be the
taking of prompt action by the Buyer to reprimand and/or terminate the employment or services of
any person who makes such criticism or disparaging remarks, but there shall be no remedy available
to the Company beyond such reprimand or termination and, in particular, no financial or monetary
remedy of the Company against Buyer.



     (d) Certain Employee Matters. The Company shall cause each Company employee hired by
Buyer after the Closing to sign Buyer’s standard employment and non-solicitation agreement,
effective as of the Closing. Upon the Closing of the transaction contemplated by this Agreement,
the Buyer agrees to hire all Fee family members who presently work at the Company (with the
exception of the Company’s shareholders, i.e., Ronald J. Fee Sr., Grace C. Fee, Ronald J. Fee Jr.,
Debra L. Fee, Eileen M. Triola and Bobby Triola), at the same level of income and with similar
benefits (or comparable Buyer benefits) and job descriptions (or comparable Buyer job descriptions)
as currently provided by the Company, provided such Fee family members sign Buyer’s standard
employment and non-solicitation agreement, effective as of the Closing.



     (e) Credit Under Buyer Employee Benefit Plans. If and to the extent reasonably
permitted under Buyer’s existing employee benefit plans, Buyer shall use commercially reasonable
efforts to provide for credit under such plans for prior employment with the Company for those
Company employees hired by Buyer as of the Closing Date.



     (f) Leasing of Spring Hill Site and Odessa Site; Landlord Waiver. The Parties agree
to enter into, at Closing, mutually acceptable lease agreements (collectively, the “Lease



29









 







Agreements”) pursuant to which Buyer agrees to lease from the Company: (1) the Company’s
location in Spring Hill, Florida (the “Spring Hill Site”) for an initial term of three (3) years
and with an option to renew for an additional term of three (3) years; and (2) the Company’s
location in Odessa, Florida (the “Odessa Site”) on a month-to-month basis for a period not to
exceed four (4) months. At Closing, the Company shall execute and deliver to Buyer, and Buyer
shall thereafter promptly deliver to Wachovia Bank, National Association, Landlord Lien Waiver
Agreements, pertaining to both the Spring Hill Site and the Odessa Site, in the forms attached
hereto as Exhibit E.



     (g) Transition Services. For a period of six months following the Closing, the
Company shall use its reasonable best efforts to assist the Buyer in the transition to Buyer of:
(1) the Company’s customers purchased by Buyer under this Agreement; and (2) the Company’s
employees desired to be hired by the Buyer, including but not limited to reasonable efforts to
cause such customers and employees to remain with the Buyer after the Closing. In addition, both
prior to and following the Closing (and during those periods of time set forth in such Transition
Services Agreement), the Company shall use its reasonable best efforts, both on-site at the
Company’s offices and via remote access (i.e., phone, fax, e-mail, etc.), to assist the transfer to
Buyer of all of the customer Contracts, to assist Buyer in the retention of all customer Contracts
including but not limited to the Significant Customers, to assist the transfer to the Buyer, and
integration into Buyer’s systems, of all information pertaining to customer scheduling and billing,
and to make the Leased Real Properties available to the Buyer. In exchange for transition services
to be provided by Eileen M. Triola, such Transition Services Agreement shall provide that Buyer
agrees to pay Ms. Triola, $1,300.00 per week for a maximum of 24 weeks of transition services, and
also agrees to deliver to Ms. Triola, at the end of the transition services period, a stock
certificate representing 10,000 shares of the restricted common stock of Sunair Services
Corporation (securities law restrictions, including Rule 144 requirements, would apply). The
Transition Services Agreement shall also address transition services, to be provided by Ronald J.
Fee Jr. on a “week to week” basis for a period not to exceed four (4) weeks, involving the
transition of the Company’s large commercial accounts and related contracts.



     (h) Name “Ron Fee Inc.”. The Company shall cease using the corporate name “Ron Fee
Inc.” and shall execute and deliver to Buyer, within thirty (30) days after the Closing Date, any
and all documents reasonably necessary to transfer all of Company’s interest, right and title in
and to said name to the Buyer and to change its corporate name to another corporate name which will
not be confused with its existing corporate name.



     (i) Certification of the Company’s Financial Statements. Not later than that date
which is the first business day following the Closing Date, the chief accounting officer of the
Company and the Company’s outside accountant, shall each deliver to the Buyer, three (3) manually
executed originals of a statement or statements, wherein such chief accounting officer and such
outside accountant each make the following certification to Buyer: “To the best of my knowledge
and belief, the Company’s most recent Financial Statements, delivered as part of Schedule 3(g) of
that certain Asset Purchase Agreement dated as of March 31, 2006, between Middleton Pest Control,
Inc. and Ron Fee Inc., are complete and accurate accrual basis financial statements of the Company
as of the date of such financial statements, except that the depreciation in such financial
statements has not been presented in a GAAP format.”



30









 





     (j) Registration of Vehicles in Buyer’s Name. The Buyer agrees to register all
vehicles that it is purchasing in its own name as soon as practicable after the Closing but in any
event no later than that date which is forty-five (45) days after the Closing; provided, however,
that until the Buyer registers the vehicles in the Buyer’s name the Buyer shall name the Company as
an additional insured on its liability insurance covering the vehicles.



7.   Conditions to Obligation to Effect the Closing.



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




     (i) except for representations and warranties that by their terms speak only as of a
specified date, the representations and warranties set forth in Section 3 shall be true and
correct in all material respects at and as of the Closing Date as though made on and as of
the Closing Date;




     (ii) the Company shall have materially performed and complied with all of the covenants
hereunder required to be performed and complied with by Company at or prior to the Closing;




     (iii) there shall not be any injunction, judgment, order, decree, or ruling in effect
preventing consummation of any of the transactions contemplated by this Agreement nor shall
there have occurred any damage or loss to any of the Purchased Assets whether or not covered
by insurance which equals or exceeds ten percent (10%) of the Purchase Price;




     (iv) all material filings that are required to have been made by the Company with any
Governmental Authority in order to carry out the transactions contemplated by this Agreement
shall have been made; all material authorizations, consents, approvals and Permits from all
such Governmental Authorities required for the Company to carry out the transactions
contemplated by this Agreement shall have been received, and all statutory waiting periods
(or extensions thereof) in respect thereof shall have expired or otherwise been terminated;
all of the consents set forth in Schedule 7(a)(iv) shall have been obtained
(“Company Required Consents”); the Buyer shall have received from legal counsel to the
Company an opinion substantially in the form attached as Exhibit F hereto;




     (v) Company shall have delivered to the Buyer a certificate dated as of the Closing
stating that the conditions set forth in Sections 7(a)(i), 7(a)(ii), 7(a)(iii) and 7(a)(iv)
have been satisfied and attaching true and correct copies of all Equipment, Inventory,
Receivables and Customer Prepayments dated as of the Closing Date.




     (vi) Ronald J. Fee Sr., Grace C. Fee, Ronald J. Fee Jr., Debra L. Fee, Eileen M. Triola
and Edward J. Bunnell, shall have each executed and delivered to the Buyer non-competition
and non-solicitation agreements in form and substance satisfactory to Buyer, each of which
shall contain a non-compete provision comparable to the provisions of Section 6(c);



31









 






     (vii) At the Closing, the Company shall duly execute and deliver to the Buyer a Bill of
Sale and Assignment and Assumptions in the form attached hereto as Exhibits B and C
and such other instruments of transfer of title as are necessary to transfer to the Buyer
good and marketable title to the Purchased Assets free and clear of all Liens, and shall
deliver to the Buyer immediate possession of the Purchased Assets;




     (viii) Ronald J. Fee Sr., Grace C. Fee, Ronald J. Fee Jr., Debra L. Fee and Eileen M.
Triola shall have each executed and delivered to the Buyer Guaranty Agreements in the forms
attached hereto as Exhibit G;




     (ix) the Company shall have caused any Liens (other than Permitted Liens) in or on the
Purchased Assets to be released, including but not limited to making any payoffs of existing
debt necessary to release such Liens as described in those Payoff Letters attached hereto in
Exhibit H, including but not limited to the payoff of any debt owed by the Company
to Merrill Lynch Business Financial Services, Inc., secured by a blanket lien on the
Company’s personal property, and the termination of such blanket lien;




     (x) no Material Adverse Effect shall have occurred, nor shall there be (A) any material
dispute between the Company and any Significant Customer or Supplier or (B) any indication
from any Significant Customer or Supplier that such Significant Customer or Supplier, as the
case may be, intends to materially reduce its purchases from or sales to, or to otherwise
materially reduce its business relationship with, the Company;




     (xi) the Buyer shall have completed the Due Diligence Review and Environmental
Assessment to its satisfaction;




     (xii) the Company, Ronald J. Fee Jr. and Eileen M. Triola shall have executed a
Transition Services Agreement in form and substance acceptable to Buyer, and Edward J.
Bunnell shall have executed an Employment Agreement in form and substance acceptable to
Buyer;




     (xiii) Buyer shall have received a loan or other capital infusion sufficient to pay the
Transaction Consideration in full within five (5) business days prior to the Closing;




     (xiv) the Board of Directors of the Buyer shall have approved the transaction
contemplated by this Agreement and the related definitive documentation, and the Board of
Directors of Parent shall have approved the execution of the Promissory Note;




     (xv) any Schedules to this Agreement which are to be updated, revised or made current
through the Closing Date have been delivered to the Buyer and found to be in form and
substance satisfactory to the Buyer;




     (xvi) the Company shall have entered into the Lease Agreements; and




     (xvii) the Company shall have executed and/or delivered all such other documents
reasonably requested by Buyer or its counsel.



32









 





The Buyer may waive in writing any condition specified in this Section 7(a) at or prior to the
Closing or on the Closing Date.



     (b) Conditions to Obligation of the Company. The obligation of the Company to
consummate the transactions to be performed by them in connection with the Closing is subject to
satisfaction of the following conditions:




     (i) the representations and warranties set forth in Section 4 above shall be true and
correct in all material respects at and as of the Closing Date as though made on and as of
the Closing Date;




     (ii) the Buyer shall have materially performed and complied with all of its covenants
hereunder required to be performed and complied with by it at or prior to the Closing;




     (iii) there shall not be any injunction, judgment, order, decree or ruling in effect
preventing consummation of any of the transactions contemplated by this Agreement;




     (iv) Buyer shall deliver to Company a certificate dated as of the Closing certifying
that the conditions set forth in Sections 7(b)(i), 7(b)(ii) and 7(b)(iii) have been
satisfied;




     (v) Buyer shall have tendered to the Company the Purchase Price and delivered all
documents reasonably required hereunder to complete the sale and transfer of the Purchased
Assets;




     (vi) the Company’s Board of Directors and all of its shareholders shall have approved
the transaction contemplated by this Agreement;




     (vii) the Buyer shall have entered into the Lease Agreements; and




     (viii) Buyer shall have executed and/or delivered to Company all such other documents
reasonably requested by Company or its counsel.



     The Company may waive in writing any condition specified in this Section 7(b) at or prior to
the Closing or on the Closing Date.



8.   Remedies for Breaches of this Agreement.



     (a) Survival. The representations and warranties of the Company and the Buyer
contained in Sections 3 and 4 shall survive the Closing and continue in full force and effect
until the second anniversary of the Closing Date, except for those contained in Section 3(a), 3(b),
3(c) (other than as to good and marketable title to the Purchased Assets), 3(d), 3(e), 3(j), 3(k)
and 3(s), which shall survive until the expiration of the applicable statute of limitations, and
the representation in Section 3(c) on good and marketable title to the Purchased Assets, which
shall survive indefinitely. All covenants herein shall survive the Closing and continue in full
force and effect until performed, subject to any applicable statute of limitations and other
restrictions



33









 







or limitations in such covenants. Any claim for indemnification asserted with reasonable
specificity within the applicable survival period shall survive until finally determined.



     (b) Indemnification.




     (i) Subject to the limitations and conditions set forth in this Section 8, Company
shall indemnify, defend and hold Buyer and its Affiliates harmless from any and all
liabilities, obligations, claims, damages, fines, penalties, Taxes, costs and expenses,
including all court costs and reasonable attorneys’ fees and the costs, fees and expenses
incurred to collect or enforce any judgment or other relief granted (collectively,
“Losses”), which Buyer may suffer or incur as a result of or relating to: (a) the breach or
inaccuracy of any of the representations, warranties, covenants or agreements made by
Company in or pursuant to this Agreement or in or pursuant to any other agreement, document
or instrument delivered by Company pursuant to the terms of this Agreement or the
transactions contemplated by this Agreement; (b) any lawsuit, claim, or proceeding of any
nature arising on, prior to or after the Closing, relating to the Company’s business or the
Purchased Assets prior to the Closing, including but not limited to any contract claims,
customer damage claims or warranty claims pertaining to or arising under any of the Assumed
Contracts prior to the Closing (the liabilities described in this subsection (b) are
collectively referred to as the “Pre-Existing Claims”); (c) the acts or omissions of the
Company or its officers, directors, managers, members, employees, licensees, contractors or
agents occurring prior to the Closing (the liabilities described in this subsection (c) are
collectively referred to as the “Pre-Existing Company Specific Obligations”); or (d) any
obligation to pay, satisfy or perform any liabilities or obligations of the Company arising
prior to the Closing, and the Indebtedness For Borrowed Money of the Company, the Excluded
Liabilities, and any other liabilities not expressly assumed by Buyer (the liabilities
described in this subsection (d) are collectively referred to as the “Excluded
Obligations”).




     (ii) Subject to the limitations and conditions set forth in this Section 8, the Buyer
shall indemnify, defend and hold harmless the Company from, against and in respect of, any
Losses which the Company shall suffer or incur as a result of or relating to: (a) the
breach or inaccuracy of any of the representations, warranties, covenants or agreements made
by Buyer in or pursuant to this Agreement or in or pursuant to any other agreement, document
or instrument delivered by Buyer pursuant to the terms of this Agreement or the transactions
contemplated by this Agreement; (b) any lawsuit, claim, or proceeding of any nature relating
to the business or Purchased Assets operated by Buyer after the Closing; (c) the acts or
omissions of the Buyer or its officers, directors, managers, members, employees, licensees,
contractors or agents occurring on and after the Closing; or (d) any obligation to pay,
satisfy or perform the Assumed Liabilities or any other liabilities or obligations expressly
assumed by Buyer pursuant to this Agreement.




     (iii) Any claim for Losses will be set forth in a written notice providing reasonable
detail of the nature, scope and basis of such Losses along with any reasonably available
supporting documentation. To the extent any Losses are covered, without dispute, under an
applicable and enforceable insurance policy or policies, such Losses



34









 







shall be considered recoverable only to the extent not covered and not paid for
pursuant to such insurance policy or policies.




     (iv) Promptly after the assertion by any third party of any claim, demand or notice (a
“Third Party Claim”) against any Person or Persons entitled to indemnification under
this Section 8(b) (the “Indemnified Parties”) that results or may reasonably be
expected to result in the incurrence by such Indemnified Parties of any Losses for which
such Indemnified Parties would be entitled to indemnification pursuant to this Agreement,
such Indemnified Parties shall promptly notify the Parties from whom such indemnification
could be sought (the “Indemnifying Parties”) of such Third Party Claim
provided, however, that failure to notify the Indemnifying Party shall not
relieve the Indemnifying Party from any liability except to the extent the Indemnifying
Party is prejudiced thereby. Upon receipt of notice of the Third Party Claim, the
Indemnifying Parties shall have the right, upon written notice (the “Defense
Notice”) to the Indemnified Parties within 20 days after receipt by the Indemnifying
Parties of notice of the Third Party Claim (or sooner if such claim so requires) to conduct,
at their own expense, the defense against the Third Party Claim in their own names or, if
necessary, in the names of the Indemnified Parties; provided, however, that:




     A. the Indemnifying Parties must provide evidence reasonably satisfactory to
the Indemnified Parties that the Indemnifying Parties possess the financial
resources necessary to defend the Third Party Claim and to satisfy the Third Party
Claim, if adversely determined;




     B. the Third Party Claim involves only money damages and not injunctive or
other equitable relief; and




     C. the Indemnified Parties shall have the right to employ separate counsel in
any such Third Party Claim properly assumed by the Indemnifying Parties or to
participate (subject to the direction of counsel to the Indemnifying Parties) in the
defense thereof, but the fees and expenses of such counsel shall not be included as
part of any Losses incurred by the Indemnified Party.




     The Party or Parties conducting the defense of any Third Party Claim shall keep the
other Parties apprised of all significant developments and shall be authorized to enter into
any settlement, compromise or consent to judgment with respect to such Third Party Claim
only with the consent of the other Parties which shall not be unreasonably withheld. Any
claim for indemnification with respect to any matter that is not timely made pursuant to the
provisions of this Agreement may not be pursued and will be deemed to have been irrevocably
waived.



     (c) Limitations on Indemnity. The rights and remedies under this Section 8 shall be
the sole and exclusive rights and remedies of the Parties on account of any claims arising out of,
or in connection with, this Agreement or the transactions contemplated hereby other than claims for
injunctive or equitable relief. No special, punitive or consequential damages shall be imposed on
any Party to this Agreement. Notwithstanding anything herein to the contrary, the maximum
aggregate amount which an indemnitee may recover from an indemnitor in respect of



35









 







all claims under this Agreement, shall be an amount equal to Five Million Two Hundred Thousand
Dollars ($5,200,000).



     (d) Other Limitations. Anything to the contrary contained in the preceding provisions
of this Agreement notwithstanding, except for indemnification claims by Buyer against the Company
under Subsection 8(b)(i)(b) as to any Pre-Existing Claims if the Company had actual or constructive
knowledge of such Pre-Existing Claims prior to the Closing, under Subsection 8(b)(i)(c) as to any
Pre-Existing Company Specific Obligations if the Company had actual or constructive knowledge of
such Pre-Existing Company Specific Obligations prior to the Closing, and/or under Subsection
8(b)(i)(d) as to any Excluded Obligations if the Company had actual or constructive knowledge of
such Excluded Obligations prior to the Closing (collectively, the “Claims Not Subject to
Threshold”), (i) no indemnification under this Section 8 shall be made by the Company in favor of
the Buyer, or by Buyer in favor of the Company, as the case may be, unless the total of all such
claims (excluding Claims Not Subject to Threshold if the Company had actual or constructive
knowledge of such claims prior to the Closing) for indemnification exceed in the aggregate $104,000
(the “Indemnification Threshold”); provided, however, that once such threshold amount is exceeded
the Company shall indemnify the Buyer, or the Buyer shall indemnify the Company, as the case may
be, for the total amount of claims including the $104,000 Indemnification Threshold; and (ii) the
obligation of (A) the Company to indemnify the Buyer and (B) the obligation of the Buyer to
indemnify the Company, as the case may be, as to all indemnification claims (excluding Claims Not
Subject to Threshold) shall be extinguished upon the payment under this Section 8 by the Company to
the Buyer or the payment by the Buyer to the Company, as the case may be, of an amount in the
aggregate equal to $5,200,000 (provided however any payment by Buyer of amounts constituting
Excluded Liabilities shall not be included in the Indemnification Threshold or otherwise limit the
Company’s liability or be applied against the Company’s aggregate limit of liability).
Notwithstanding anything herein to the contrary, in no event shall the Buyer be required to exceed
the Indemnification Threshold before collecting from the Company any amount owed by the Company to
the Buyer as a post Closing adjustment pursuant to Section 2(i), and in no event shall the Company
be required to exceed the Indemnification Threshold before collecting from the Buyer any amount
owed by the Buyer to the Company as a post Closing adjustment pursuant to Section 2(i).
Notwithstanding anything in this Agreement to the contrary, the limitation imposed by the
Indemnification Threshold shall not be applicable to any of the Claims Not Subject to Threshold if
the Company had actual or constructive knowledge of such claims prior to the Closing, and in the
event any Claims Not Subject to Threshold for which the Company had actual or constructive
knowledge prior to the Closing become known to Buyer or otherwise arise on and after the Closing
Date, Buyer shall have the right to make an indemnification claim against the Company pursuant to
Section 8(b) hereof without first having to exceed any threshold amount and, if successful, shall
be able to collect from the Company the full amount of any Losses resulting from any such Claims
Not Subject to Threshold without reduction. Any indemnification claim that qualifies both as a
claim that could be asserted by Buyer under Subsection 8(b)(i)(a) and as a claim that could be
asserted by Buyer under Subsections 8(b)(i)(b), 8(b)(i)(c) and/or 8(b)(i)(d), shall be treated for
all purposes as a claim included within the definition of “Claims Not Subject to Threshold”. The
term “constructive knowledge”, as used in this subsection, shall mean and include such knowledge of
all of the facts and circumstances as would reasonably be known to any reasonably diligent and
prudent person carrying out the shareholder, director, officer and/or employee duties of any such
positions held by such person, with the Company deemed to have



36









 







such actual and constructive knowledge as is possessed by all of its shareholders, directors,
officers and employees.



     (e) Offset Against Promissory Note. In the event the Company becomes obligated to the
Buyer pursuant to an indemnification claim made by Buyer against Company under this Section 8 or
under any other sections of this Agreement (including but not limited any post Closing adjustments
under Section 2(i) which result in an additional payment obligation on the part of the Company),
Buyer shall have the right to cause Parent to make offset against amounts due Company from Parent
under the Promissory Note, provided, however, that the Company can avoid any such offset, at
Company’s election, by making payment to Buyer in cash of the full amount owed to Buyer within five
(5) days after receiving written notice from Buyer that Buyer intends to have Parent make such
offset (the “Offset Notice”). Notwithstanding the foregoing, other than with respect to an offset
intended to collect unpaid amounts owed by the Company to Buyer as a result of a post Closing
adjustment under Section 2(i) (which offset shall not be subject to dispute, objection or
arbitration), prior to Buyer causing Parent to make an offset against amounts due the Company from
Parent under the Promissory Note, Buyer shall first deliver an Offset Notice to the Company at
least forty-five (45) days prior to the effective date of any offset, which notice shall state the
effective date of such offset and provide a summary of the reasons why such offset is being made.
During the thirty (30) day period commencing on the date the Offset Notice is delivered to the
Company (the “Objection Period”), the Company shall be given the reasonable opportunity by Buyer,
if appropriate under the facts and circumstances, to make a reasonable attempt to cure the
situation giving rise to the offset claim and to state, in a writing delivered to Buyer prior to
the end of the Objection Period, the reasons why the Company objects to such offset (the “Offset
Objection Notice”). The Buyer in its reasonable discretion may also agree to have its
representatives meet with the Company’s representatives, during the Objection Period, to further
discuss the Company’s reasons set forth in the Offset Objection Notice. At the end of Objection
Period, the Buyer, in its sole discretion, may: (1) either accept or partially accept such reasons,
and modify or reverse its decision to cause an offset to be made, or (2) reject such reasons and
proceed with having the Parent make the offset as of the effective date set forth in the Offset
Notice but in any event will give the Company a response, provided, however, that in the event
Buyer causes Parent to make an offset to which the Company has timely objected by delivery of an
Offset Objection Notice to Buyer within the Objection Period, any such offset may be disputed by
the Company in an action commenced under Section 8(f) hereof, with such offset confirmed, modified
or reversed in accordance with the dispute resolution procedures set forth in Section 8(f) hereof.



     (f) Arbitration. In the event a dispute arises between Buyer and Company regarding
this Agreement or any document executed in connection herewith, the Parties shall submit their
dispute to non-binding mediation in Hillsborough County, Florida. If the dispute is not resolved
within thirty (30) days of submission of the dispute to non-binding mediation, then either Party,
may submit the dispute to binding arbitration in Hillsborough County, Florida and the arbitration
proceeding shall be subject to the following requirements:




     (i) Any controversy arbitrated by the Parties shall be arbitrated by a single
arbitrator if the amount of the controversy is less than or equal to One Hundred Thousand
Dollars ($100,000). If the amount of the controversy between the Company and Buyer is
greater than One Hundred Thousand Dollars ($100,000) then the arbitration shall be



37









 







conducted by a panel of three (3) arbitrators. Within fifteen (15) days after
submission of the dispute to binding arbitration, the Parties shall mutually agree on an
arbitrator if the controversy is to be arbitrated by a single arbitrator in accordance with
this paragraph. If no agreement on an arbitrator is reached within said fifteen (15) day
period, then the arbitrator shall be selected in accordance with the procedures of the
American Arbitration Association (“AAA”) and shall be from, if available, the “Commercial
Arbitration Panel” employed by the AAA. If more than one arbitrator is required to conduct
the arbitration, then the arbitrators shall be selected in accordance with the procedures of
the AAA, and shall be from, if available, the “Commercial Arbitration Panel” employed by the
AAA. The Parties intend that this agreement to arbitrate be valid, specifically enforceable
and irrevocable.




     (ii) Within ten (10) days of the presentation of the Parties claims to the arbitrator,
the arbitrator shall issue its written decision.




     (iii) In the absence of fraud, gross misconduct or an error in law appearing on the
face of the order or award issued by the arbitrator, the written decision of the arbitrator
shall be final and binding upon the parties.




     (iv) The arbitration proceeding shall be carried on and heard in accordance with the
Commercial Rules of Arbitration of the American Arbitration Association.




     (v) The prevailing party shall be entitled to have all of its costs and expenses
(including without limitation expert witness expenses and reasonable attorneys’ fees) of
investigating, preparing and presenting such arbitration claims or cause of action
(collectively, the “Prevailing Party Expenses”). The arbitrator shall approve the award to
the prevailing party of Prevailing Party Expenses but, rather than determine the amount of
the award in such arbitration proceeding commenced hereunder, shall instead ask that the
applicable court include in its judgment for the prevailing party an amount to fully
compensate the prevailing party for all of such Prevailing Party Expenses as determined by
such court.



9.   Termination.



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




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




     (ii) the Buyer may terminate this Agreement by giving written notice to the Company at
any time prior to the Closing (A) in the event that the Company has breached any
representation, warranty or covenant contained in this Agreement and such breach could
reasonably be expected to have a Material Adverse Effect, the Buyer has notified the Company
of the breach, and the breach has continued without cure for a period of 30 days after the
notice of breach or April 15, 2006, whichever is earlier; or (B) if the Closing shall not
have occurred on or before April 15, 2006, by reason of the failure of any condition
precedent to have occurred under Section 7(a) hereof (unless the failure



38









 







results primarily from the Buyer’s breach of any representation, warranty or covenant
contained in this Agreement); (C) if the Closing shall not have occurred on or before April
15, 2006, by reason of the failure of the Company to obtain any required governmental or
third party consent (unless the failure results primarily from the Buyer’s breach of any
representation, warranty or covenant contained in this Agreement (other than failure of the
Buyer to have received financing to pay the Transaction Consideration, the failure of such
conditions precedent shall be without liability to either Buyer or Seller)); or (D) there is
a loss, damage or destruction to the Purchased Assets which in the aggregate exceeds ten
percent (10%) of the Purchase Price; and




     (iii) the Company may terminate this Agreement by giving written notice to the Buyer at
any time prior to the Closing (A) in the event the Buyer has breached any representation,
warranty or covenant contained in this Agreement in any material respect, the Company has
notified the Buyer of the breach, and the breach has continued without cure for a period of
30 days after the notice of breach or April 15, 2006, whichever is earlier; (B) if the
Closing shall not have occurred on or before April 15, 2006, by reason of the failure of any
condition precedent to have occurred under Section 7(b) hereof, other than failure of the
Buyer to have received financing to pay the Transaction Consideration, the failure of such
conditions precedent shall be without liability to either Buyer or Seller (unless the
failure results primarily from the Company’s breach of any representation, warranty or
covenant contained in this Agreement); or (D) there is a loss, damage or destruction to the
Purchased Assets which in the aggregate exceeds ten percent (10%) of the Purchase Price.




     (iv) The Company may terminate this Agreement at any time if the Closing does not occur
by April 7, 2006.



     (b) Effect of Termination. No termination of this Agreement shall cause any Party
then in breach to be released of its obligations hereunder in the absence of an express written
release.



10.   Miscellaneous.



     (a) Press Releases and Public Announcements. No party shall issue any press release
or public announcement relating to the subject matter of this Agreement without the prior written
approval of the other party. Notwithstanding the foregoing, Parent shall be entitled to disclose
this Agreement and the transactions contemplated hereby to comply with the rules or regulations of
the U.S. Securities and Exchange Commission and the rules, regulations or requirements of any
exchange on which the Parent’s securities are listed.



     (b) Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies
upon any Person other than the Parties and their respective successors and permitted assigns.



     (c) Entire Agreement. This Agreement (including the Disclosure Schedules, Exhibits
and the documents, referred to herein) constitutes the entire agreement between the Parties with
respect to the subject matter hereof and supersedes any prior understandings, agreements, or



39









 







representations by the Parties, written or oral, to the extent they are related to the subject
matter of this Agreement including but not limited to that certain letter dated March 4, 2006
between the Company and Sunair Southeast Pest Holdings, Inc.



     (d) Succession and Assignment. This Agreement shall be binding upon and inure to the
benefit of the Parties named herein and their respective successors and permitted assigns. No
Party may assign either this Agreement or any of its rights, interests or obligations hereunder
without the prior written approval of the Buyer and the Company; provided, however,
that without the consent of any other Parties Buyer may (i) collaterally assign its rights
hereunder to one or more lenders, (ii) assign its rights and obligations hereunder after the
Closing to any Person who acquires all or a material portion of the assets or equity of the Buyer,
or (iii) assign its rights and obligations to an Affiliate. In the event Buyer assigns this
Agreement Buyer shall not be released from its obligations hereunder.



     (e) Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same
instrument.



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



     (g) Notices. All notices, requests, demands, claims and other communications
hereunder shall be in writing. Any notice, request, demand, claim or other communication hereunder
shall be deemed duly given if personally delivered or sent by registered or certified mail, return
receipt requested, postage prepaid, or by reputable overnight courier and addressed to the intended
recipient as set forth below:



	 	 	 
	If to the Company:

	 	Ron Fee Inc.
	 

	 	266 Gulf Port Lane
	 

	 	Spring Hill, FL 34608
	 

	 	Attention: Ronald J. Fee Sr.
	 
	 	 
	With a copy to:

	 	D. Michael O’Leary, Esq.
	 

	 	Trenam Kemker
	 

	 	2700 Bank of America Plaza
	 

	 	Tampa, FL 33602
	 
	 	 
	If to the Buyer:

	 	Middleton Pest Control, Inc.
	 

	 	c/o Sunair Southeast Pest Holdings, Inc.
	 

	 	3005 SW 3rd Ave
	 

	 	Fort Lauderdale, FL 33315-3312
	 

	 	Attention: Chief Executive Officer
	 
	 	 
	With a copy to (which shall not constitute notice to the Buyer):

	 	Thomas A. Simser, Jr., P.L.
	 

	 	c/o Shuffield, Lowman & Wilson, P.A.
	 

	 	1000 Legion Place, Suite 1700
	 

	 	Orlando, FL 32801
	 

	 	Attention: Thomas A. Simser, Jr., Esq.






     Any Party may send any notice, request, demand, claim or other communication hereunder to
the intended recipient at the address set forth above using any other means



40









 





(including messenger service, telecopy, telex, ordinary mail or electronic mail), but no such
notice, request, demand, claim, or other communication shall be deemed to have been duly given
unless and until it actually is received by the intended recipient. Any Party may change the
address to which notices, requests, demands, claims and other communications hereunder are to be
delivered by giving the other Party notice in the manner herein set forth.



     (h) Governing Law; Jurisdiction; Venue. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Florida (i.e., without giving effect
to any choice or conflict of law provision or rule (whether of the State of Florida or any other
jurisdiction) that would cause the application of the laws of any jurisdiction other than the State
of Florida). Each of the Parties submits to the exclusive jurisdiction of any federal or state
court sitting in Hillsborough County, Florida, in any action or proceeding arising out of or
relating to this Agreement and agrees that all claims in respect of the action or proceeding shall
be heard and determined in any such court. Each of the Parties waives any defense of inconvenient
forum to the maintenance of any action or proceeding so brought.



     (i) Amendments and Waivers. No amendment of any provision of this Agreement shall be
valid unless the same shall be in writing and signed by the Buyer and the Company.



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



     (k) Expenses. Except as otherwise provided in this Agreement, each of the Parties
shall bear its own fees, costs and expenses (including, without limitation, legal, accounting,
consulting and investment advisory fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.



     (l) Construction. The Parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption
or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any
of the provisions of this Agreement. Any reference to any federal, state, local or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise. When a reference is made in this Agreement to an article, Section,
paragraph, clause, schedule or exhibit, such reference shall be deemed to be to this Agreement
unless otherwise indicated. Whenever the words “include,” “includes,” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without limitation.” As used
herein, words in the singular will be held to include the plural and
vice versa (unless the context
otherwise requires), words of one gender shall be held to include the other gender (or the neuter)
as the context requires, and the terms “hereof,” “herein,” and “herewith” and words of similar
import will, unless otherwise stated, be construed to refer to this Agreement as a whole and not to
any particular provision of this Agreement. For the avoidance of doubt, all references to the
Company relating to financial matters shall be deemed to be the Company on a consolidated basis.



41









 





     (m) Business Day. If any time period set forth in this Agreement expires on other
than a business day in the City of Tampa, Florida; i.e. upon a Saturday, Sunday or legal or bank
holiday, such period shall be extended to and through the next succeeding business day in such
City.



     (n) Prevailing Party. In the event that attorneys’ fees or other costs are incurred
to secure performance of any obligation, or to establish damages for the breach of any obligation,
agreement or covenant, or to obtain any other appropriate relief, whether by way of prosecution or
defense, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and costs
and the costs, fees and expenses incurred to enforce or collect such judgment or award and any
other relief granted.



     (o) Exhibits; Disclosure Schedule. The Exhibits to this Agreement and the Disclosure
Schedules are incorporated herein by reference and made a part hereof. The inclusion of
information in the Disclosure Schedules shall not be construed as an admission that such
information is material to the Company. The Section numbers in the Disclosure Schedules will
correspond to the Section numbers in this Agreement.



     (p) Waiver of Jury Trial. EACH PARTY HERETO INDIVIDUALLY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, TRIAL BY JURY
IN ANY SUIT, ACTION OR PROCEEDING BASED ON THIS AGREEMENT OR, ARISING HEREUNDER OR RELATED HERETO.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO AND CONSUMMATE THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.



[signature page follows]




42









 








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



	 	 	 	 	 
	 	MIDDLETON PEST CONTROL, INC.

 	 
	 	By:  	/s/ Gregory A. Clendenin
 	 
	 	 	Name:  	Gregory A. Clendenin 	 
	 	 	Title:  	President & CEO 	 
	 
	 	RON FEE INC.

 	 
	 	By:  	/s/ Ronald J. Fee Sr.
 	 
	 	 	Name:  	Ronald J. Fee Sr. 	 
	 	 	Title:  	President & CEO 	 



43









 






	 	 	 	 	 



EXHIBITS AND SCHEDULES




	 	 	 
	EXHIBIT A	 	Change of Control Payments

	EXHIBIT B	 	Form of Bill of Sale

	EXHIBIT C	 	Form of Assignment and Assumption of Contracts

	EXHIBIT D	 	Form of Subordinated Promissory Note

	EXHIBIT E	 	Form of Landlord Lien Waiver Agreement

	EXHIBIT F	 	Form of Opinion of Company’s Counsel

	EXHIBIT G	 	Form of Guaranty Agreement

	EXHIBIT H	 	Payoff Letters

	 
	Schedule 2(a)(i)	 	Tangible Personal Property

	Schedule 2(a)(ii)	 	Inventory

	Schedule 2(a)(iii)	 	Customer Accounts and Customer Prepayments/Acquisition Targets/
Prior Customers and Customer Accounts/Prior Inquiries

	Schedule 2(a)(iv)	 	Company Deposits

	Schedule 2(a)(v)	 	Receivables

	Schedule 2(a)(vii)	 	Proprietary Rights

	Schedule 2(b)	 	Excluded Assets

	Schedule 2(f)(1)	 	Assumed Contracts

	Schedule 2(f)(2)	 	Assumed Vehicle Indebtedness

	Schedule 3(a)	 	Noncontravention

	Schedule 3(c)	 	Good Title to and Condition of Purchased Assets

	Schedule 3(g)	 	Financial Statements and Exceptions to Consistently Applied Accounting Principles

	Schedule 3(h)	 	Absence of Certain Developments

	Schedule 3(i)	 	Liens on Purchased Assets

	Schedule 3(j)	 	Legal Compliance

	Schedule 3(l)	 	Real Properties

	Schedule 3(m)(i)	 	Intellectual Property

	Schedule 3(m)(ii)	 	Claims Against Intellectual Property

	Schedule 3(m)(iii)	 	Licensed Intellectual Property

	Schedule 3(n)	 	Contracts

	Schedule 3(o)	 	Insurance Claims

	Schedule 3(p)	 	Litigation

	Schedule 3(r)	 	Employees

	Schedule 3(s)	 	Environmental Matters

	Schedule 3(t)	 	Company Permits

	Schedule 3(u)(i)	 	Uncollectible Receivables

	Schedule 3(w)(i)	 	Customers and Suppliers

	Schedule 3(w)(ii)	 	Disputes with Customers or Suppliers

	Schedule 3(x)	 	Pest Treatment Warranty Claims or Notices

	Schedule 3(y)	 	Names; Prior Acquisitions; Business Locations

	Schedule 7(a)(iv)	 	Company Required Consents








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