EX 10.1


    
      

      

    

    EXHIBIT
      10.1

    


     

     

     

    AGREEMENT
      OF PURCHASE AND SALE

     

    Dated
      as
      of April 3, 2006

     

    


    


     

    YSIS
      INCORPORATED

     

     

    
       

       

       

       

      
         

        
        

        
          

          

        

      

      
         

      

    

     

    TABLE
      OF CONTENTS 

    


    
      	 	 
	
              ARTICLE
                I DEFINITIONS

            	
              1

            
	
              Section
                1.1 Definitions

            	
              1

            
	
              Section
                1.2 Construction and Interpretation.

            	
              9

            
	 	 
	
              ARTICLE
                II SALE AND TRANSFER OF SHARES; CLOSING

            	
              10

            
	
              Section
                2.1 Shares

            	
              10

            
	
              Section
                2.2 Purchase Price.

            	
              10

            
	
              Section
                2.3 Closing

            	
              10

            
	
              Section
                2.4 Closing Obligations

            	
              10

            
	 	 
	
              ARTICLE
                III REPRESENTATIONS AND WARRANTIES OF PARENT SELLER

            	
              12

            
	
              Section
                3.1 Organization and Good Standing.

            	
              12

            
	
              Section
                3.2 Authority; No Conflict.

            	
              12

            
	
              Section
                3.3 Capitalization.

            	
              13

            
	
              Section
                3.4 Financial Statements

            	
              14

            
	
              Section
                3.5 Books and Records

            	
              15

            
	
              Section
                3.6 Real Property; Title to Properties.

            	
              15

            
	
              Section
                3.7 Condition and Sufficiency of Assets.

            	
              17

            
	
              Section
                3.8 Accounts Receivable

            	
              17

            
	
              Section
                3.9 Inventory

            	
              18

            
	
              Section
                3.10 No Undisclosed Liabilities

            	
              18

            
	
              Section
                3.11 Tax Matters.

            	
              18

            
	
              Section
                3.12 No Material Adverse Change

            	
              21

            
	
              Section
                3.13 Employee Benefit Plans.

            	
              21

            
	
              Section
                3.14 Compliance with Legal Requirements; Governmental
                Authorizations.

            	
              23

            
	
              Section
                3.15 Legal Proceedings; Orders.

            	
              25

            
	
              Section
                3.16 Absence of Certain Changes and Events

            	
              26

            
	
              Section
                3.17 Contracts; No Defaults.

            	
              27

            
	
              Section
                3.18 Insurance.

            	
              30

            
	
              Section
                3.19 Environmental Matters.

            	
              31

            
	
              Section
                3.20 Employees.

            	
              34

            
	
              Section
                3.21 Labor Relations; Compliance

            	
              34

            
	
              Section
                3.22 Intellectual Property.

            	
              35

            
	
              Section
                3.23 Certain Payments

            	
              36

            
	
              Section
                3.24 Relationships with Related Persons

            	
              36

            
	
              Section
                3.25 Brokers or Finders

            	
              36

            
	
              Section
                3.26 Disclosure

            	
              36

            
	 	 
	
              ARTICLE
                IV REPRESENTATIONS AND WARRANTIES OF BUYER

            	
              37

            
	
              Section
                4.1 Organization And Good Standing

            	
              37

            
	
              Section
                4.2 Authority; No Conflict.

            	
              37

            
	
              Section
                4.3 Investment Intent

            	
              38

            
	
              Section
                4.4 Certain Proceedings

            	
              38

            
	
              Section
                4.5 Brokers or Finders

            	
              38

            
	
              Section
                4.6 Buyer's Knowledge of Breach

            	
              38

            


    

     

     

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

     

    
      	 	 
	
              ARTICLE
                V COVENANTS OF PARENT SELLER PRIOR TO CLOSING DATE

            	
              38

            
	
              Section
                5.1 Retention Bonus Agreements

            	
              38

            
	
              Section
                5.2 Access and Investigation

            	
              38

            
	
              Section
                5.3 Operation of the Business of the Company

            	
              39

            
	
              Section
                5.4 Negative Covenant

            	
              39

            
	
              Section
                5.5 Required Approvals

            	
              39

            
	
              Section
                5.6 Notification

            	
              39

            
	
              Section
                5.7 No Negotiation

            	
              40

            
	
              Section
                5.8 Best Efforts

            	
              40

            
	
              Section
                5.9 Tax Matters

            	
              40

            
	 	 
	
              ARTICLE
                VI COVENANTS OF BUYER PRIOR TO CLOSING DATE

            	
              40

            
	
              Section
                6.1 Best Efforts

            	
              40

            
	
              Section
                6.2 Required Approvals

            	
              40

            
	
              Section
                6.3 Notification

            	
              40

            
	 	 
	
              ARTICLE
                VII CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE

            	
              41

            
	
              Section
                7.1 Accuracy Of Representations

            	
              41

            
	
              Section
                7.2 Parent Seller’s Performance.

            	
              41

            
	
              Section
                7.3 Consents

            	
              41

            
	
              Section
                7.4 Additional Documents

            	
              41

            
	
              Section
                7.5 No Proceedings

            	
              42

            
	
              Section
                7.6 No Claim Regarding Stock Ownership or Sale Proceeds

            	
              42

            
	
              Section
                7.7 No Prohibition

            	
              42

            
	
              Section
                7.8 Certified Resolutions

            	
              42

            
	
              Section
                7.9 Contemporaneous Transaction

            	
              42

            
	
              Section
                7.10 Consents

            	
              42

            
	
              Section
                7.11 Environmental Permits

            	
              42

            
	
              Section
                7.12 No Material Adverse Change

            	
              43

            
	
              Section
                7.13 FIRPTA Affidavits

            	
              43

            
	
              Section
                7.14 Resignation of Directors and Officers of the Company

            	
              43

            
	 	 
	
              ARTICLE
                VIII CONDITIONS PRECEDENT TO PARENT SELLER’S OBLIGATION TO
                CLOSE

            	
              43

            
	
              Section
                8.1 Accuracy Of Representations

            	
              43

            
	
              Section
                8.2 Buyer’s Performance.

            	
              43

            
	
              Section
                8.3 Additional Documents

            	
              43

            
	
              Section
                8.4 No Proceedings

            	
              44

            
	
              Section
                8.5 No Claim Regarding Stock Ownership or Sale Proceeds

            	
              44

            
	
              Section
                8.6 No Prohibition

            	
              44

            
	
              Section
                8.7 Certified Resolutions

            	
              44

            
	 	 
	
              ARTICLE
                IX TERMINATION

            	
              44

            
	
              Section
                9.1 Termination Events

            	
              44

            
	
              Section
                9.2 Effect of Termination

            	
              45

            


    

     

     

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

     

    
      	 	 
	
              ARTICLE
                X INDEMNIFICATION; REMEDIES

            	
              45

            
	
              Section
                10.1 Survival; Right to Indemnification Not Affected by
                Knowledge

            	
              45

            
	
              Section
                10.2 Indemnification and Payment of Damages by Parent
                Seller

            	
              45

            
	
              Section
                10.3 Environmental Matters

            	
              46

            
	
              Section
                10.4 Indemnification and Payment of Damages by Buyer

            	
              48

            
	
              Section
                10.5 Time Limitations

            	
              48

            
	
              Section
                10.6 Limitations on Amount - Parent Seller

            	
              48

            
	
              Section
                10.7 Limitations on Amount - Buyer

            	
              49

            
	
              Section
                10.8 Procedure For Indemnification - Third Party Claims.

            	
              49

            
	
              Section
                10.9 Procedure for Indemnification - Other Claims

            	
              50

            
	 	 
	
              ARTICLE
                XI WORKING CAPITAL STATEMENTS

            	
              50

            
	
              Section
                11.1 Pro Forma Working Capital Statement

            	
              50

            
	
              Section
                11.2 Closing Working Capital Statement.

            	
              51

            
	
              Section
                11.3 Purchase Price Adjustments

            	
              51

            
	 	 
	
              ARTICLE
                XII CERTAIN POST-CLOSING MATTERS

            	
              52

            
	
              Section
                12.1 Election Under Treasury Regulation Section
                1.33(h)(10)-1.

            	
              52

            
	
              Section
                12.2 Effective Time Balance Sheet

            	
              53

            
	
              Section
                12.3 Taxes.

            	
              53

            
	
              Section
                12.4 Name Change

            	
              57

            
	
              Section
                12.5 Noncompetition

            	
              57

            
	 	 
	
              ARTICLE
                XIII GENERAL PROVISIONS

            	
              58

            
	
              Section
                13.1 Expenses

            	
              58

            
	
              Section
                13.2 Public Announcements

            	
              58

            
	
              Section
                13.3 Confidentiality.

            	
              59

            
	
              Section
                13.4 Notices

            	
              60

            
	
              Section
                13.5 Jurisdiction; Service of Process

            	
              61

            
	
              Section
                13.6 Further Assurances

            	
              61

            
	
              Section
                13.7 Waiver

            	
              61

            
	
              Section
                13.8 Entire Agreement and Modification

            	
              61

            
	
              Section
                13.9 Disclosure Schedule.

            	
              62

            
	
              Section
                13.10 Assignments, Successors, and No Third-Party Rights

            	
              62

            
	
              Section
                13.11 Certain Claims by Parent Seller

            	
              62

            
	
              Section
                13.12 Severability

            	
              62

            
	
              Section
                13.13 Headings

            	
              62

            
	
              Section
                13.14 Governing Law

            	
              62

            
	
              Section
                13.15 Counterparts

            	
              62

            
	 	 
	
              Annex
                1 Wire Instructions of Parent Seller

            	 


    

    


    LIST
      OF EXHIBITS

     

    Exhibit
      2.4(a)(ii) - Form
      of
      Parent Seller Release

    Exhibit
      2.4(a)(iii) - Form
      of
      Transition Services Agreement

    Exhibit
      2.4(a)(iv) -
      Form of
      Supply Agreement

    Exhibit
      2.4(a)(v) - Form
      of
      Trademark License

    Exhibit
      2.4(a)(vi) - Form
      of
      Building License

    Exhibit
      7.4(a) - Form
      of
      Opinion of Counsel to Parent Seller

    Exhibit
      7.4(b) - Form
      of
      Employment Agreement

    Exhibit
      8.3(a) - Form
      of
      Opinion of Counsel to Buyer

     

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    


    AGREEMENT
      OF PURCHASE AND SALE

     

    


    This
      AGREEMENT OF PURCHASE AND SALE (the “Agreement”)
      is
      made as of April 3, 2006 by and among MEASUREMENT SPECIALTIES, INC., a New
      Jersey corporation (the “Buyer”),
      and
      YSI INCORPORATED, an Ohio corporation (the “Parent
      Seller”)
      and
      sole stockholder of the Company (as hereinafter defined). 

     

    W
      I T
      N E S S E T H:

    


    WHEREAS,
      the Parent Seller desires to sell, and the Buyer desires to purchase, all of
      the
      issued and outstanding shares (the “Shares”)
      of
      capital stock of YSIS INCORPORATED, an Ohio corporation (the “Company”),
      for
      the consideration and on the terms and conditions set forth in this
      Agreement.

     

    NOW,
      THEREFORE, in consideration of the mutual promises and covenants hereinafter
      contained, and intending to be legally bound, the parties to this Agreement
      hereby agree as follows:

     

    ARTICLE
      I

     

    DEFINITIONS

     

    Section
      1.1  Definitions.
      For
      purposes of this Agreement, the following terms have the following
      meanings:

     

    “Accounts
      Receivable”
-
      as
      defined in Section 3.8.

     

    “Affiliate”
-
      with
      respect to any Person, another Person that directly or indirectly, through
      one
      or more intermediaries, controls, is controlled by, or is under common control
      with, such first Person, where “control”
means
      the possession, directly or indirectly, of the power to direct or cause the
      direction of the management policies of a Person, whether through the ownership
      of voting securities, by contract, as trustee or executor, or otherwise;
provided,
      that
      (x) any investment account advised or managed by such Person or one of its
      Subsidiaries or Affiliates on behalf of third parties, or (y) any partnership,
      limited liability company, or other similar investment vehicle or entity engaged
      in the business of making investments of which such Person acts as the general
      partner, managing member, manager, investment advisor, principal underwriter
      or
      the equivalent shall not be deemed an Affiliate of such Person.

     

    “Allocation
      Statement”
-
      as
      defined in Section 12.1(b)

     

    “Applicable
      Contract”
-
      any
      Contract (a) under which the Company has any rights, (b) under which the Company
      is subject to any obligation or liability, or (c) by which the Company or any
      of
      the assets owned or used by it is bound.

     

    “Balance
      Sheets”
-
      as
      defined in Section 3.4(a)(i).

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    “Baseline
      Working Capital”
-
      as
      defined in Section 11.1.

     

    “Benefit
      Plans”
-
      as
      defined in Section 3.13(a).

     

    “Best
      Efforts”
-
      the
      efforts that a prudent Person desirous of achieving a result would use in
      similar circumstances to achieve a result as expeditiously as
      possible.

     

    “Breach”
-
      Breach of a representation, warranty, covenant, obligation, or other provision
      of this Agreement or any instrument delivered pursuant to this Agreement will
      be
      deemed to have occurred if there is or has been any inaccuracy in or breach
      of,
      or any failure to perform or comply with, such representation, warranty,
      covenant, obligation, or other provision, and the term “Breach” means any such
      inaccuracy, breach or failure.

     

    “Building
      License”
-
      as
      defined in Section 2.4(a)(vi)

     

    “Buyer”
-
      as
      defined in the first paragraph of this Agreement.

     

    “Buyer’s
      Advisors”
-
      as
      defined in Section 5.2.

     

    “CERCLA”
-
      the
      United States Comprehensive Environmental Response, Compensation, and Liability
      Act, 42 U.S.C. § 9601 et seq., as amended, or any successor law, and the rules
      and regulations thereunder or under any successor law.

     

    “Cleanup”
-
      as
      defined in the definition of Environmental, Health, and Safety Liabilities
      below.

     

    “Closing”
-
      as
      defined in Section 2.3.

     

    “Closing
      Date”
-
      as
      defined in Section 2.3.

     

    “Closing
      Date Purchase Price Payment”
-
      as
      defined in Section 2.2(b).

     

    “Closing
      Working Capital Statement”
-
      as
      defined in Section 11.2.

     

    “Code”
-
      the
      Internal Revenue Code of 1986, as amended, or any successor law, and the rules
      and regulations thereunder or under any successor law.

     

    “Company”
-
      as
      defined in the Recitals of this Agreement.

     

    “Company’s
      Proprietary Rights”
-
      as
      defined in Section 3.22(a).

     

    “Competing
      Business”
-
      as
      defined in Section 3.24.

     

    “Consent”
-
      any
      approval, consent, ratification, waiver, or other authorization (including
      any
      Governmental Authorization).

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    “Contemplated
      Transactions”
-
      all
      of the transactions contemplated by this Agreement, including:

     

    (i) the
      sale
      of the Shares by the Parent Seller to the Buyer;

     

    (ii) the
      execution, delivery, and performance of the Parent Seller Release, the
      Transition Services Agreement, the Supply Agreement, the Trademark License,
      the
      Building License and the Employment Agreements;

     

    (iii) the
      performance by the Buyer and the Parent Seller of their respective covenants
      and
      obligations under this Agreement; and

     

    (iv) the
      Buyer’s acquisition and ownership of the Shares.

     

    “Contract”
-
      any
      agreement, contract, obligation, promise, or undertaking (whether written or
      oral and whether express or implied) that is legally binding.

     

    “Damages”
-
      as
      defined in Section 10.2.

     

    “Defined
      Benefit Plan”
-
      as
      defined in Section 3.13(i).

     

    “Disclosure
      Schedule”
-
      the
      disclosure schedule delivered by the Parent Seller to the Buyer concurrently
      with the execution and delivery of this Agreement.

     

    “Effective
      Time”
-
      as
      defined in Section 2.3.

     

    “Effective
      Time Balance Sheet”
-
      as
      defined in Section 12.2

     

    “Election
      Form”
-
      as
      defined in Section 12.1(a).

     

    “Employment
      Agreements”
-
      as
      defined in Section 7.4(b).

     

    “Encumbrance
      “-
      any
      charge, claim, community property interest, condition, equitable interest,
      mortgage, lien, option, pledge, security interest, right of first refusal,
      or
      other charge or restriction of any kind, including any restriction on use,
      voting, transfer, receipt of income, or exercise of any other attribute of
      ownership.

     

    “Environment”
-
      soil,
      land surface or subsurface strata, surface waters (including navigable waters,
      ocean waters, streams, ponds, drainage basins, and wetlands), groundwaters,
      drinking water supply, stream sediments, ambient air (including indoor air),
      plant and animal life, and any other environmental medium or natural
      resource.

     

    “Environmental
      Authority”
-
      any
      federal, state, regional, county, or local government, agency or authority
      or
      any court in each case having judicial, regulatory, or administrative authority
      under Environmental Laws.

     

    “Environmental
      Conditions”
-
      any
      environmental contamination or pollution, or threatened contamination or
      pollution, of, or the Release or threatened Release of Hazardous Materials
      into,
      the Environment.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    “Environmental,
      Health, and Safety Liabilities”
-
      any
      cost, damages, expense, liability, obligation, or other responsibility arising
      from or under any Environmental Law or Occupational Safety and Health Law and
      consisting of or relating to:

     

    (a)  any
      environmental, health, or safety matters or conditions (including Environmental
      Conditions, occupational safety and health, and regulation of chemical
      substances or products);

     

    (b)  fines,
      penalties, judgments, awards, settlements, legal or administrative proceedings,
      damages, losses, claims, demands and investigative, inspection, assessment,
      response, removal or remedial costs and expenses arising under any Environmental
      Law or Occupational Safety and Health Law;

     

    (c)  financial
      responsibility under Environmental Law or Occupational Safety and Health Law
      for
      cleanup costs or corrective action, including any investigation, cleanup,
      removal, abatement, containment, or other remediation or response actions
      (“Cleanup”)
      required by any applicable Environmental Law or Occupational Safety and Health
      Law (whether or not such Cleanup has been required or requested by any
      Governmental Body or any other Person) and for any restoration of or damages
      or
      injury to natural resources; or

     

    (d)  any
      other
      compliance, corrective, investigative, removal or remedial measures or response
      action required under any Environmental Law or Occupational Safety and Health
      Law.

     

    The
      terms
“removal,” “remedial,” and “response action,” include the types of activities
      defined in, required by or covered by CERCLA.

     

    “Environmental
      Laws”
-
      all
      Legal Requirements relating to public health or safety, pollution, damage to
      or
      protection of the environment, Environmental Conditions, Releases or threatened
      Releases of Hazardous Materials into the Environment, or the use, manufacture,
      processing, distribution, treatment, storage, generation, disposal, transport,
      or handling of Hazardous Materials, whether existing in the past or present.
      Environmental Laws shall include, but are not limited to, the following laws,
      and the regulations promulgated thereunder, as the same have been amended from
      time to time: CERCLA; the Resource Conservation and Recovery Act (42 U.S.C.
      6901
et seq.)
      (“RCRA”);
      the
      Clean Air Act (42 U.S.C. 7401 et seq.);
      and
      the Clean Water Act (33 U.S.C. 1251 et seq.).

     

    “Environmental
      Permits”
-
      all
      permits, authorizations, registrations, certificates, licenses, approvals or
      consents required under or issued pursuant to Environmental Laws.

     

    “ERISA”
-
      as
      defined in Section 3.13(a).

     

    “ERISA
      Affiliate”
-
      as
      defined in Section 3.13(a).

     

    “ERISA
      Plans”
-
      as
      defined in Section 3.13(a).

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    “Estimated
      Working Capital Deficiency”
-
      as
      defined in Section 11.1.

     

    “Facilities”
-
      any
      real property, leaseholds, or other interests currently or formerly owned,
      operated, leased, occupied or used by the Company and any buildings, plants,
      structures, or equipment (including motor vehicles, tank cars, and rolling
      stock) currently or formerly owned, operated, leased, occupied or used by the
      Company.

     

    “Financial
      Statements”
-
      as
      defined in Section 3.4(a).

     

    “GAAP”
-
      generally accepted accounting principles in the United States.

     

    “Governmental
      Authorization“
-
      any
      approval, consent, license, permit, waiver, or other authorization issued,
      granted, given, or otherwise made available by or under the authority of any
      Governmental Body or pursuant to any Legal Requirement.

     

    “Governmental
      Body”
-
      any:

     

    (a)  nation,
      state, county, city, town, village, district, or other jurisdiction of any
      nature;

     

    (b)  federal,
      state, local, municipal, foreign, or other government;

     

    (c)  governmental
      or quasi-governmental authority of any nature (including any governmental
      agency, branch, department, official, or entity and any court or other
      tribunal); or

     

    (d)  body
      exercising, or entitled to exercise, any self-regulatory, judicial, legislative,
      police, regulatory, or taxing authority or power of any nature.

     

    “Hazardous
      Activity”
-
      the
      distribution, generation, handling, importing, management, manufacturing,
      processing, production, refinement, Release into the Environment, storage,
      transfer, transportation, treatment, or use (including any withdrawal or other
      use of groundwater) of Hazardous Materials in, on, under, about, or from the
      Facilities or any part thereof, and any other act, business, operation, or
      thing
      that increases the danger, or risk of danger, or poses an unreasonable risk
      of
      harm to persons or property on or off the Facilities, or that may materially,
      adversely affect the value of the Facilities or the Company.

     

    “Hazardous
      Materials”
-
      any
      substance, material, or waste and any pollutant or contaminant, or infectious
      or
      radioactive substance or material, listed in, defined by or regulated under
      any
      Environmental Laws, including asbestos, asbestos-containing material, petroleum,
      polychlorinated biphenyls, and urea formaldehyde.

     

    “Indemnified
      Persons”
-
      as
      defined in Section 10.2.

     

    “IRS”
-
      the
      United States Internal Revenue Service or any successor agency, and, to the
      extent relevant, the United States Department of the Treasury.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    “Joint
      Venture Shares”
-
      as
      defined in Section 3.3(b).

     

    “Knowledge”
      - An
      individual will be deemed to have “Knowledge” of a particular fact or other
      matter if such individual is actually aware of such fact or other matter. A
      Person (other than an individual) will be deemed to have “Knowledge” of a
      particular fact or other matter if any individual who is serving as a director,
      officer, member, partner, executor, or trustee of such Person (or in any similar
      capacity) has Knowledge of such fact or other matter, except that for the Parent
      Seller and the Company such individuals shall be limited to Richard J. Omlor,
      Leon R. Erdman, Robert Hurst, Brian Ream, Brian Code and Chris
      Kowal.

     

    “Lease”
-
      as
      defined in Section 3.6(a).

     

    “Leased
      Real Property”
-
      as
      defined in Section 3.6(a).

     

    “Legal
      Requirement”
-
      any
      federal, state, provincial, regional, local, municipal, foreign, or other
      governmental or self-regulatory constitution, treaty, law, statute, code,
      ordinance, regulation, order, decree, judgment or directive.

     

    “Nikkiso-YSI
      Joint Venture”
-
      as
      defined in Section 3.3(b).

     

    “Occupational
      Safety and Health Law”
-
      any
      Legal Requirement designed to provide safe and healthful working conditions
      and
      to reduce occupational safety and health hazards.

     

    “Order”
-
      any
      award, decision, injunction, judgment, order, ruling, subpoena, or verdict
      entered, issued, made, or rendered by any court, administrative agency, or
      other
      Governmental Body or by any arbitrator.

     

    “Ordinary
      Course of Business”
-
      an
      action taken by a Person will be deemed to have been taken in the “Ordinary
      Course of Business” only if:

     

    (a)  such
      action is consistent with the past practices of such Person and is taken in
      the
      ordinary course of the normal day-to-day operations of such Person;

     

    (b)  such
      action is not required to be authorized by the board of directors of such Person
      (or by any Person or group of Persons exercising similar authority) and is
      not
      required to be specifically authorized by the parent company (if any) of such
      Person; and

     

    (c)  such
      action is similar in nature and magnitude to actions customarily taken, without
      any authorization by the board of directors (or by any Person or group of
      Persons exercising Similar authority) or parent company (if any), in the
      ordinary course of the normal day-to-day operations of such Person.

     

    “Organizational
      Documents”
-
      (a)
      the articles of incorporation and the bylaws (or similar document) of a
      corporation; (b) the certificate of formation and operating agreement (or
      similar document) of a limited liability company; (c) the partnership agreement
      and any statement of partnership of a general partnership; (d) the limited
      partnership agreement and the certificate of limited partnership of a limited
      partnership; (e) any charter or similar document adopted or filed in connection
      with the creation, formation, or organization of a Person; and (f) any amendment
      to any of the foregoing.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    “Other
      Seller Consolidated Tax Returns”
-
      any
      consolidated, combined, or unitary Tax Returns (other than the federal
      consolidated income Tax Return of Parent Seller) which includes both (x) Parent
      Seller (or at least one Subsidiary of Parent Seller that is not the Company)
      and
      (y) the Company.

     

    “Person”
-
      any
      individual, corporation (including any non-profit corporation), general or
      limited partnership, limited liability company, joint venture, estate, trust,
      association, organization, labor union, or other entity or Governmental
      Body.

     

    “Pre-Closing
      Tax Period”
-
      as
      defined in Section 10.2(e).

     

    “Proceeding”
-
      any
      action, arbitration, audit, hearing, investigation, litigation, or suit (whether
      civil, criminal, administrative, investigative, or informal) commenced, brought,
      conducted, or heard by or before, or otherwise involving, any Governmental
      Body
      or arbitrator.

     

    “Proprietary
      Rights”
-
      (i)
      all patents and patent applications (including all provisional, divisions,
      continuations, continuations in part and reissues), patentable inventions,
      and
      business methods; (ii) all registered and unregistered fictional business names,
      trade names, trademarks, service marks and applications and registered domain
      names; (iii) registered and unregistered copyrights in both published works
      and
      unpublished works and copyrightable subject matter, including, but not limited
      to, software; and (iv) all know-how, trade secrets, customer lists, confidential
      information, software, technical information, data, process technology, plans,
      drawings and blueprints.

     

    “Proprietary
      Rights Agreement”
-
      as
      defined in Section 3.20(b).

     

    “Related
      Person”
-
      With
      respect to a particular individual: (a) each other member of such individual’s
      Family; (b) any Person that is directly or indirectly controlled by such
      individual or one or more members of such individual’s Family; (c) any Person in
      which such individual or members of such individual’s Family hold (individually
      or in the aggregate) a Material Interest; and (d) any Person with respect to
      which such individual or one or more members of such individual’s Family serves
      as a director, officer, partner, executor, or trustee (or in a similar
      capacity). With respect to a specified Person other than an individual: (a)
      any
      Person that directly or indirectly controls, is directly or indirectly
      controlled by, or is directly or indirectly under common control with such
      specified Person; (b) any Person that holds a Material Interest in such
      specified Person; (c) each Person that serves as a director, officer, partner,
      executor, or trustee of such specified Person (or in a similar capacity); (d)
      any Person in which such specified Person holds a Material Interest; (e) any
      Person with respect to which such specified Person serves as a general partner
      or a trustee (or in a similar capacity); and (f) any Related Person of any
      individual described in clause (b) or (c) of this sentence. For purposes of
      this
      definition: (a) the “Family”
of
      an
      individual includes (i) the individual, (ii) the individual’s spouse and former
      spouses, (iii) any other natural person who is related to the individual or
      the
      individual’s spouse within the second degree, and (iv) any other natural person
      who resides with such individual; and (b) “Material
      Interest”
means
      direct or indirect beneficial ownership (as defined in Rule 13d-3 under the
      Securities Exchange Act of 1934) of voting securities or other voting interests
      representing at least 10% of the outstanding voting power of a Person or equity
      securities or other equity interests representing at least 10% of the
      outstanding equity securities or equity interests in a Person.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    “Release”
-
      any
      intentional or unintentional release, discharge, spill, leaking, pumping,
      pouring, emitting, emptying, injection, disposal, or dumping.

     

    “Representative”
-
      with
      respect to a particular Person, any director, officer, member, manager,
      employee, agent, consultant, advisor, or other representative of such Person,
      including legal counsel, accountants, and financial advisors.

     

    “Securities
      Act”
-
      the
      Securities Act of 1933, as amended, or any successor law, and the rules and
      regulations issued thereunder or under any successor law.

     

    “Section
      338 Elections”
-
      as
      defined in Section 12.1(a).

     

    “Parent
      Seller”
-
      as
      defined in the first paragraph of this Agreement.

     

    “Parent
      Seller Release”
-
      as
      defined in Section 2.4(a)(ii).

     

    “Shares”
-
      as
      defined in the Recitals of this Agreement.

     

    “Stay
      Bonus Pool”
-
      as
      defined in Section 5.1.

     

    “Straddle
      Period”
-
      as
      defined in Section 12.3(b).

     

    “Subsidiary”
-
      with
      respect to any Person (the “Owner”),
      any
      corporation or other Person of which securities or other interests having the
      power to elect a majority of that corporation’s or other Person’s board of
      directors or similar governing body, or otherwise having the power to direct
      the
      business and policies of that corporation or other Person (other than securities
      or other interests having such power only upon the happening of a contingency
      that has not occurred) are held by the Owner or one or more of its Subsidiaries;
      when used without reference to a particular Person, “Subsidiary” means a
      Subsidiary of the Company.

     

    “Supply
      Agreement”
-
      as
      defined in Section 2.4(a)(iv).

     

    “Tax”
-
      as
      defined in Section 3.11(a)(i).

     

    “Taxable”
-
      as
      defined in Section 3.11(a)(i).

     

    “Taxes”
-
      as
      defined in Section 3.11(a)(i).

     

    “Taxing”
-
      as
      defined in Section 3.11(a)(i).

    
       

    

    “Tax
      Claim”-
      as
      defined in Section 12.3(d).

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    “Tax
      Return”
-
      as
      defined in Section 3.11(a)(ii).

     

    “Threat
      of Release”
-
      a
      substantial likelihood of a Release that may require action in order to prevent
      or mitigate damage to the Environment that may result from such
      Release.

     

    “Threatened”
-
      a
      claim, Proceeding, dispute, action, or other matter will be deemed to have
      been
“Threatened” if any demand or statement has been made (orally or in writing) or
      any notice has been given (orally or in writing).

     

    “Trademark
      License”
-
      as
      defined in Section 2.4(a)(v).

     

    “Transition
      Services Agreement”
-
      as
      defined in Section 2.4(a)(iii).

     

    “Working
      Capital Deficiency”
-
      as
      defined in Section 11.2(b).

     

    Section
      1.2  Construction
      and Interpretation.

     

    (a)  The
      parties have participated jointly in the negotiation and drafting of this
      Agreement. If 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.

     

    (b)  Each
      definition in this Agreement includes the singular and the plural, and
      references to any gender include the other genders where
      appropriate.

     

    (c)  Any
      reference to any federal, state, local, or foreign statute or law shall be
      deemed to also refer to all rules and regulations promulgated under such statute
      or law, unless the context requires otherwise. References to any statute or
      regulation mean such statute or regulation as amended at the time and include
      any successor legislation or regulation.

     

    (d)  The
      word
“including”
means
      “including without limitation”. The word “or”
is
      not
      exclusive.

     

    (e)  References
      to Articles, Sections, Exhibits and Schedules mean the Articles, Sections,
      Exhibits, Annexes and Schedules of this Agreement (unless otherwise indicated).
      The Exhibits, Annexes and Schedules (including the Disclosure Schedule) are
      incorporated by reference into and shall be deemed a part of this
      Agreement.

     

    (f)  The
      captions appearing herein are for the convenience of the parties only and shall
      not be construed to affect the meaning of the provisions of this
      Agreement.

     

    (g)  Any
      and
      all accounting terms utilized in this Agreement shall, unless the context
      otherwise requires, be construed in accordance with GAAP.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (h)  All
      references to dollar amounts in this Agreement shall be references to United
      States Dollars unless otherwise provided.

     

    (i)  In
      computing any time period provided for in this Agreement, the first day of
      the
      time period shall not be counted but the last day of the time period shall
      be
      counted. Any action required to be taken on a particular day must be taken
      before 5:00 pm, Eastern Time, on that day. For example, if an action were
      required to be taken within ten (10) days after the Closing Date, and the
      Closing Date were March 31, 2006, the first day to be counted would be April
      1,
      2006 and the action would be required to be taken before 5:00 pm, Eastern
      Daylight Time, on April 10, 2006.

     

    ARTICLE
      II

     

    SALE
      AND
      TRANSFER OF SHARES; CLOSING

     

    Section
      2.1  Shares.
      Subject
      to the terms and conditions of this Agreement, at the Closing, the Parent Seller
      will sell and transfer the Shares to the Buyer, and the Buyer will purchase
      the
      Shares from the Parent Seller.

     

    Section
      2.2  Purchase
      Price.

     

    (a)  The
      purchase price for the Shares shall be equal to $14,000,000, as adjusted
      downwards, by any Working Capital Deficiency (the “Purchase
      Price”).

     

    (b)  At
      the
      Closing, in payment for the Shares, the Buyer shall pay $14,000,000, as adjusted
      downwards by any Estimated Working Capital Deficiency, to the Parent Seller,
      the
      foregoing payment to be made by wire transfer of immediately available funds
      to
      the account designated by the Parent Seller as set forth on Annex
      1
      (the
“Closing
      Date Purchase Price Payment”).

     

    Section
      2.3  Closing.
      The
      purchase and sale (the “Closing”)
      provided for in this Agreement will take place at the offices of McCarter &
English, LLP at Four Gateway Center, 100 Mulberry Street, Newark, New Jersey
      07102 at 10:00 a.m. (local time) on the second (2nd)
      business day following the satisfaction of the conditions set forth in Articles
      VII and VIII or at such other time and place as the parties may agree (the
      “Closing
      Date”),
      but
      in no event later than April 3, 2006 or such other date as the parties hereto
      may mutually agree. For
      financial, accounting and tax purposes, the Closing shall be deemed to have
      occurred as of 12:01 a.m. on April 1, 2006 or such other time and date as the
      parties hereto may mutually agree (the “Effective
      Time”). 

     

    Section
      2.4  Closing
      Obligations.
      At the
      Closing:

     

    (a)  The
      Parent Seller will deliver to the Buyer:

     

    (i)  certificates
      representing the Shares, duly endorsed (or accompanied by duly executed stock
      powers);

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (ii)  a
      release
      in the form of Exhibit
      2.4(a)(ii)
      executed
      by the Parent Seller (the “Parent
      Seller Release”);

     

    (iii)  a
      Transition Services Agreement in the form of Exhibit
      2.4(a)(iii),
      executed by the Parent Seller (the “Transition
      Services Agreement”);

     

    (iv)  a
      Supply
      Agreement in the form of Exhibit
      2.4(a)(iv),
      executed by the Parent Seller (the “Supply
      Agreement”);

     

    (v)  a
      Trademark License Agreement in the form of Exhibit
      2.4(a)(v),
      executed by the Parent Seller (the “Trademark
      License”);

     

    (vi)  a
      Building License Agreement in the form of Exhibit
      2.4(a)(vi),
      executed by the Parent Seller (the “Building
      License”);
      and

     

    (vii)  a
      certificate, dated the Closing Date, executed by the Parent Seller representing
      and warranting to the Buyer that, except as may be otherwise stated in such
      certificate:

     

    (A)  the
      Parent Seller’s representations and warranties in this Agreement are accurate in
      all respects as of the date of this Agreement and as if made on the Closing
      Date;

     

    (B)  the
      Parent Seller has complied with all of its covenants and agreements as required
      as of the Closing under this Agreement; and

     

    (C)  the
      Parent Seller has performed all of its obligations required to be performed
      by
      it on or prior to the Closing Date hereunder.

     

    (b)  The
      Buyer
      will deliver to the Parent Seller:

     

    (i)  the
      Closing Date Purchase Price Payment by wire transfer of immediately available
      funds to the account designated in Annex
      1;

     

    (ii)  the
      Transition Services Agreement, executed by the Buyer;

     

    (iii)  the
      Supply Agreement, executed by the Buyer;

     

    (iv)  the
      Trademark License, executed by the Buyer;

     

    (v)  the
      Building License, executed by the Buyer; and

     

    (vi)  a
      certificate executed by the Buyer to the effect that, except as may be otherwise
      stated in such certificate:

     

    (A)  each
      of
      the Buyer’s representations and warranties in this Agreement is accurate in all
      respects as of the date of this Agreement and as if made on the Closing
      Date;

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (B)  The
      Buyer
      has complied with all of its covenants and agreements contained in this
      Agreement; and

     

    (C)  The
      Buyer
      has performed all of its obligations required to be performed by it on or prior
      to the Closing Date hereunder.

     

    ARTICLE
      III

     

    REPRESENTATIONS
      AND WARRANTIES OF PARENT SELLER

     

    The
      Parent Seller represents and warrants to the Buyer as follows:

     

    Section
      3.1  Organization
      and Good Standing.

     

    (a)  Section
      3.1 of the Disclosure Schedule contains a complete and accurate list for the
      Company of its name, its jurisdiction of incorporation, other jurisdictions
      in
      which it is authorized to do business, and its capitalization (including the
      identity of each stockholder and the number of shares held by each). The Company
      is a corporation duly organized, validly existing, and in good standing under
      the laws of its jurisdiction of incorporation, with full corporate power and
      authority to conduct its business as it is now being conducted, to own or use
      the properties and assets that it purports to own or use, and to perform all
      its
      obligations under Applicable Contracts. The Company is duly qualified to do
      business as a foreign corporation and is in good standing under the laws of
      each
      state or other jurisdiction in which either the ownership or use of the
      properties owned or used by it, or the nature of the activities conducted by
      it,
      requires such qualification, except to the extent any failure to so qualify
      will
      not be reasonably likely to materially adversely affect the Company's business,
      assets or liabilities.

     

    (b)  The
      Parent Seller has delivered to the Buyer copies of the Organizational Documents
      of the Company, as currently in effect.

     

    Section
      3.2  Authority;
      No Conflict.

     

    (a)  This
      Agreement constitutes the legal, valid, and binding obligation of the Parent
      Seller, enforceable against the Parent Seller in accordance with its terms,
      except insofar as enforcement may be limited by bankruptcy, insolvency, or
      other
      laws affecting generally the enforceability of creditors’ rights and by
      limitations on the availability of equitable remedies. Upon the execution and
      delivery by the Parent Seller of the Parent Seller Release, the Transition
      Services Agreement, the Trademark License, the Building License and the Supply
      Agreement (collectively, the “Parent
      Seller Closing Documents”),
      the
      Parent Seller Closing Documents will constitute the legal, valid, and binding
      obligations of the Parent Seller, enforceable against the Parent Seller in
      accordance with their respective terms, except insofar as enforcement may be
      limited by bankruptcy, insolvency, or other laws affecting generally the
      enforceability of creditors’ rights and by limitations on the availability of
      equitable remedies. The Parent Seller has the absolute and unrestricted right,
      power, authority, and capacity to execute and deliver this Agreement and each
      of
      the Parent Seller Closing Documents to which it is a party and to perform its
      obligations under this Agreement and each of the Parent Seller Closing Documents
      to which it is a party.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    (b)  Except
      as
      set forth in Section 3.2 of the Disclosure Schedule, neither the execution
      and
      delivery of this Agreement nor the consummation or performance of any of the
      Contemplated Transactions by the Parent Seller will, directly or indirectly
      (with or without notice or lapse of time):

     

    (i)  contravene,
      conflict with, or result in a violation of (A) any provision of the
      Organizational Documents of the Company or the Parent Seller, or (B) any
      resolution adopted by the board of directors or the stockholders of the Company
      or the Parent Seller;

     

    (ii)  contravene,
      conflict with, or result in a violation of, or give any Governmental Body or
      other Person the right to challenge any of the Contemplated Transactions or
      to
      exercise any remedy or obtain any relief under, any Legal Requirement or any
      Order to which the Company, or any of the assets or properties owned or used
      by
      the Company, may be subject;

     

    (iii)  contravene,
      conflict with, or result in a violation of any of the terms or requirements
      of,
      or give any Governmental Body the right to revoke, withdraw, suspend, cancel,
      terminate, or modify, any Governmental Authorization that is held by the Company
      or that otherwise relates to the business of, or any of the assets owned or
      used
      by, the Company;

     

    (iv)  contravene,
      conflict with, or result in a violation or breach of any provision of, or give
      any Person the right to declare a default or exercise any remedy under, or
      to
      accelerate the maturity or performance of, or to cancel, terminate, or modify,
      any Applicable Contract; or

     

    (v)  result
      in
      the imposition or creation of any Encumbrance upon or with respect to any of
      the
      assets or properties owned or used by the Company.

     

    (c)  Except
      as
      set forth in Section 3.2 of the Disclosure Schedule, the Company or the Parent
      Seller is not or will not be required to give any notice to or obtain any
      Consent from any Person in connection with the execution and delivery of this
      Agreement or the consummation or performance of any of the Contemplated
      Transactions, except such Consents as have been obtained prior to the Closing
      Date.

     

    Section
      3.3  Capitalization. 

     

    (a)  The
      Company.
      The
      authorized equity securities of the Company consist of 1,000 shares of common
      stock, no par value per share, of which 200 shares are issued and outstanding
      and constitute the Shares. Parent Seller is and will be on the Closing Date
      the
      record and beneficial owner and holder of the Shares, free and clear of all
      Encumbrances. No legend or other reference to any purported Encumbrance appears
      upon any certificate representing equity securities of the Company. All of
      the
      outstanding equity securities of the Company have been duly authorized and
      validly issued and are fully paid and nonassessable. There are no Contracts
      relating to the issuance, sale, or transfer of any equity securities or other
      securities of the Company. None of the outstanding equity securities or other
      securities of the Company was issued in violation of the Securities Act or
      any
      other Legal Requirement. The Company does not own, or have any Contract to
      acquire, any equity securities or other securities of any Person or any direct
      or indirect equity or ownership interest in any other business.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    (b)  Nikkiso-YSI
      Company, Limited.
      The
      authorized equity securities of Nikkiso-YSI Company, Limited (the “Nikkiso-YSI
      Joint Venture”)
      consist of 3,200 shares of capital stock, par value of 50,000 yen per share,
      of
      which 800 common shares are issued and outstanding. The Company is and will
      be
      on the Closing Date the record and beneficial owner of 400 common shares which
      constitutes a 50% ownership interest of the Nikkiso-YSI Joint Venture (the
      “Joint
      Venture Shares”)
      free
      and clear of all Encumbrances. Except as disclosed on Section 3.3(b) of the
      Disclosure Schedule, no legend or other reference to any purported Encumbrance
      appears upon any certificate representing the equity securities of the
      Nikkiso-YSI Joint Venture. All of the outstanding equity securities of the
      Nikkiso-YSI Joint Venture have been duly authorized and validly issued and
      are
      fully paid and nonassessable. Except as disclosed on Section 3.3(b) of the
      Disclosure Schedule, to the Knowledge of the Parent Seller and the Company,
      there are no Contracts relating to the issuance, sale, or transfer of any equity
      securities or other securities of the Nikkiso-YSI Joint Venture. To the
      Knowledge of the Parent Seller and the Company, none of the outstanding equity
      securities or other securities of the Nikkiso-YSI Joint Venture was issued
      in
      violation of the Securities Act or any other Legal Requirement. To the Knowledge
      of the Parent Seller and the Company, the Nikkiso-YSI Joint Venture does not
      own, or have any Contract to acquire, any equity securities or other securities
      of any Person or any direct or indirect equity or ownership interest in any
      other business.

     

    Section
      3.4  Financial
      Statements.
      The
      Parent Seller has delivered to the Buyer the following financial statements
      which are contained in Section 3.4(a) of the Disclosure Schedule, certified
      by
      the Chief Financial Officer of the Parent Seller as being in compliance with
      the
      representations made in this Section 3.4 and including in each case the related
      schedules and notes to the extent same exist (collectively, the “Financial
      Statements”):

     

    (i)  the
      unaudited consolidated balance sheets of the Company at and as of December
      31,
      2003, 2004, and 2005 (the “Balance
      Sheets”);
      and

     

    (ii)  the
      related unaudited statements of income for each of the three consecutive
      calendar years ended December 31, 2005.

     

    To
      the
      Knowledge of Parent Seller the Financial Statements are true, correct and
      complete in all material respects and have been prepared in conformity with
      GAAP
      consistently applied throughout the periods to which the Financial Statements
      relate. The Financial Statements fully and fairly present, in all material
      respects in relation to the Parent Seller, the financial position and results
      of
      operations of the Company at the dates shown and for the periods therein
      specified. The Balance Sheets constituting a part of the Financial Statements
      fully and fairly present, in all material respects in relation to the Parent
      Seller, all liabilities of the Company of the types which are required to be
      set
      forth therein as at the date thereof. All normal year-end adjustments necessary
      to present fully and fairly the financial position and results of operations
      of
      the Company for the periods covered by the Financial Statements have been made
      and are reflected therein.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    


    Section
      3.5  Books
      and Records.
      The
      books of account, minute books, stock record books, and other records of the
      Company, all of which have been made available to the Buyer, have been
      maintained in accordance with sound business practices, including the
      maintenance of a system of internal controls adequate for Parent Seller's
      historical accounting practices through December 31, 2005. The minute books
      of
      the Company contain accurate and complete records of all meetings held of,
      and
      corporate action taken by, the stockholders, the Boards of Directors, and
      committees of the Boards of Directors of the Company, and no meeting of any
      such
      stockholders, Board of Directors, or committee has been held for which minutes
      have not been prepared and are not contained in such minute books. At the
      Closing, all books and records of the Company will be in the possession of
      the
      Company.

     

    Section
      3.6  Real
      Property; Title to Properties. 

     

    (a)  Real
      Property.
      

     

    (i)  The
      Company does not own any real property. 

     

    (ii)  With
      respect to the Company, Section 3.6(a) of the Disclosure Schedule lists all
      of
      the real property and interests therein leased, subleased, or otherwise occupied
      or used by the Company (with all easements and other rights appurtenant to
      such
      property, such property, excluding that portion located at 1700/1725 Brannum
      Lane, Yellow Springs, Ohio, which is the subject of the Building License, being
      hereinafter referred to as the “Leased
      Real Property”).
      For
      each item of Leased Real Property, Section 3.6(a) of the Disclosure Schedule
      also lists the lessor and the lease, sublease, or other agreement pursuant
      to
      which the Company holds a possessory interest in the Leased Real Property and
      all amendments, renewals, or extensions thereto (each, a “Lease”).
      The
      Parent Seller has provided the Buyer with a true and correct copy of each Lease.
      Each Lease is in full force and effect and constitutes a legal, valid, and
      binding obligation of the respective parties thereto, except as may be limited
      by bankruptcy, insolvency, or other laws affecting generally the enforceability
      of creditors’ rights and by limitations on the availability of equitable
      remedies. To the Knowledge of the Parent Seller and the Company, neither the
      Parent Seller nor the Company nor any other party to any Lease is in default
      thereunder; and, to the Knowledge of the Parent Seller or the Company, no event
      has occurred, or is alleged to have occurred, which constitutes (or with lapse
      of time or giving of notice or both would constitute) a default or a basis
      for a
      claim of force majeure or other claim of excusable delay or non-performance
      thereunder. Except as set forth in Section 3.6(a) of the Disclosure Schedule,
      the leasehold interest of the Company with respect to each item of Leased Real
      Property is free and clear of any Encumbrances. The Company is not a sublessor
      of, and has not assigned any lease covering, any item of Leased Real Property.
      Leasing commissions or other brokerage fees due from or payable by the Company
      with respect to any Lease have been paid in full. Except as set forth on Section
      3.6 of the Disclosure Schedule, the Leased Real Property constitutes all
      interests in real property currently used in connection with the Company’s
      business. To the Parent Seller’s Knowledge, the Leased Real Property is not
      subject to any rights of way, building use restrictions, exceptions, variances,
      reservations, or limitations of any kind or nature, except: (y) those that
      in
      the aggregate do not impair the current use or occupancy of the Leased Real
      Property; and (z) as set forth in the lease relating to such item; and the
      Company has not received written notice of any such claim. To the Parent
      Seller’s Knowledge, all buildings, plants, structures, and other improvements
      owned or used by the Company lie wholly within the boundaries of the Leased
      Real
      Property, except as stated on Section 3.6 of the Disclosure Schedule, and do
      not
      encroach upon the property, or otherwise conflict with the property rights,
      of
      any other Person; and the Company has not received written notice of any such
      claim. Except as set forth in Section 3.6 of the Disclosure Schedule, and to
      the
      Parent Seller’s Knowledge, the Leased Real Property complies with all applicable
      Legal Requirements of any Governmental Entity or boards of insurance
      underwriters issuing insurance on the Leased Real Property requiring
      improvements to the Leased Real Property or any other actions relative to the
      Leased Real Property.

     

    
      
         

      

      
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    (iii)  The
      Company is not a party to or bound by any contract or other agreement (including
      any option) for the purchase or sale of any real estate interest or any contract
      or other agreement for the lease to or from the Company of any real estate
      interest not currently in possession of the Company.

     

    (b)  Title
      to Tangible Property.
      Except
      as set forth on Section 3.6 of the Disclosure Schedule, the Company has good
      and
      marketable title to all of its tangible assets and properties, in each case
      free
      and clear of all Encumbrances. Except as set forth in Section 3.6(b) of the
      Disclosure Schedule, the Company leases or owns all tangible properties and
      assets necessary for the operation of its business as currently conducted,
      and
      such assets and wherever located, which are utilized by the Company in the
      conduct of its business; and all of such tangible properties and assets are
      located on the Leased Real Property, except for those assets located at the
      Parent Seller's premises and listed on Schedule 3.6(b) of the Disclosure
      Schedule. The Company has not received notice of any violation of, or default
      under, any Legal Requirement or contractual requirement relating to its owned
      or
      leased tangible properties and assets which remains uncured or has not been
      dismissed. All leases and licenses pursuant to which the Company leases or
      licenses tangible property from others are in good standing, valid, and
      effective in accordance with their respective terms, and there is not, with
      respect to the Company, and to the Parent Seller’s Knowledge with respect to any
      other party, under any of such leases or licenses, any existing material default
      or event of default (or event which with notice or lapse of time, or both,
      would
      constitute a material default, or would constitute a basis for a claim of force
      majeure or other claim of excusable delay or non-performance).

     

    
      
         

      

      
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    Section
      3.7  Condition
      and Sufficiency of Assets. 

     

    (a)  To
      the
      Knowledge of Company and Parent Seller, without investigation or special inquiry
      and except as otherwise may be disclosed on the Disclosure Schedule, the
      buildings, plants and structures located on the Leased Real Property are
      structurally sound, are in good operating condition and repair, and are adequate
      for the uses to which they are being put, and none of such buildings, plants
      or
      structures equipment is in need of maintenance or repairs except for ordinary,
      routine maintenance and repairs that are not material in nature or cost. The
      buildings, plants and structures of the Company are sufficient for the continued
      conduct of the Company’s business after the Closing in substantially the same
      manner as conducted prior to the Closing.

     

    (b)  To
      the
      Knowledge of Company and Parent Seller, without investigation or special inquiry
      and except as otherwise may be disclosed on Section 3.7 of the Disclosure
      Schedule, the equipment owned by the Company is in good operating condition
      and
      repair, and is adequate for the uses to which it is being put, and none of
      such
      equipment is in need of maintenance or repairs except for ordinary, routine
      maintenance and repairs that are not material in nature or cost. The equipment
      is sufficient for the continued conduct of the Company’s business after the
      Closing in substantially the same manner as conducted prior to the Closing.
      Except as disclosed on the Disclosure Schedule, all of such equipment is located
      on the Leased Real Property.

     

    Section
      3.8  Accounts
      Receivable.
      All
      accounts receivable of the Company that are reflected on the Balance Sheets
      or
      on the accounting records of the Company as of the Closing Date (collectively,
      the “Accounts
      Receivable”)
      represent or will represent valid obligations arising from sales actually made
      or services actually performed in the Ordinary Course of Business. Unless paid
      prior to the Closing Date, the Accounts Receivable are or will be as of the
      Closing Date current and collectible net of the respective reserves shown on
      the
      Balance Sheets or on the accounting records of the Company as of the Closing
      Date (which reserves are adequate and calculated consistent with past practice).
      Subject to such reserves, each of the Accounts Receivable either has been or
      will be collected in full, without any set-off, within ninety days after the
      day
      on which it first becomes due and payable, provided, however, that in the event
      Parent Seller compensates Buyer or the Company for the value of any such Account
      Receivable not collected within such ninety-day period, such Account Receivable
      will be assigned to Parent Seller or, if later collected by the Company, the
      Company shall pay the amount collected to the Parent Seller or otherwise credit
      such amount against any amount then owed by Parent Seller to the Company or
      Buyer. To the Knowledge of the Company and Parent Seller, there is no contest,
      claim, or right of set-off, other than returns in the Ordinary Course of
      Business, under any Contract with any obligor of an Accounts Receivable relating
      to the amount or validity of such Accounts Receivable. Section 3.8 of the
      Disclosure Schedule contains a complete and accurate summary of the amount
      of
      Accounts Receivable as of the date of the 2005 Balance Sheet, which summary
      sets
      forth the aging of such Accounts Receivable.

     

    
      
         

      

      
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    Section
      3.9  Inventory.
      All
      inventory of the Company, as reflected in the Balance Sheets, consisted of
      a
      quality and quantity usable and salable in the Ordinary Course of Business
      (based on historical sales and currently forecast demand), except for obsolete
      items and items of below-standard quality, all of which were written off or
      written down to net realizable value in the Balance Sheets or on the accounting
      records of the Company as of the Closing Date, as the case may be. All
      inventories not written off have been priced at cost on a last in, first out
      basis.

     

    Section
      3.10  No
      Undisclosed Liabilities.
      Except
      as set forth on the Disclosure Schedule and except for other contractual Legal
      Requirements and other obligations which are not required to be reflected or
      reserved on the Balance Sheets under GAAP and are not required to be disclosed
      on the Disclosure Schedule under the terms of this Agreement, to the Knowledge
      of the Company and Parent Seller, the Company has no liabilities or obligations
      of any nature whether absolute, accrued, contingent, or otherwise except for
      liabilities or obligations reflected or reserved against in the Balance Sheets
      and current liabilities incurred in the Ordinary Course of Business since the
      respective dates thereof.

     

    Section
      3.11  Tax
      Matters.

     

    (a)  For
      purposes of this Agreement:

     

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

     

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

     

    (b)  Except
      as
      set forth in Section 3.11(b) of the Disclosure Schedule:

     

    (i)  All
      Tax
      Returns required to be filed by or on behalf of the Company (including any
      combined, consolidated or unitary group of which the Company is or was a member
      prior to the Closing Date), either have been properly prepared and duly and
      timely filed with all appropriate Taxing authorities or, if not filed,
      applicable penalties and interest caused by such failure to file have been
      paid
      or accrued for. All such Tax Returns were true, complete and correct in all
      material respects. All Taxes payable by or on behalf of the Company, either
      directly, as part of the consolidated, combined or unitary Tax Return of another
      taxpayer, or otherwise, have been fully and timely paid, except where any such
      failure to pay would not have a material adverse effect on the Company or its
      assets or operations.

     

    
      
         

      

      
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    (ii)  Section
      3.11(b)(ii)
      of the
      Disclosure Schedule lists all types of Taxes paid and types of Tax Returns
      filed
      by or on behalf of the Company since December 31, 1999 and indicates those
      Taxes
      with respect which the Company is or was a member of a consolidated, combined
      or
      unitary group. To the Knowledge of the Company and the Parent Seller, except
      as
      listed on Schedule 3.11(b)(ii), no claim has been made by a Taxing authority
      in
      a jurisdiction where the Company does not file a Tax Return such that it is
      or
      may be subject to Tax by that jurisdiction.

     

    (iii)  All
      deficiencies asserted or assessments made as a result of any examination by
      the
      IRS or any other Taxing authority of the Tax Returns of or including the Company
      have been fully paid and, except as stated on Section 3.11(b)(iii) of the
      Disclosure Schedule, there are no other audits or investigations by any Taxing
      authorities in progress, nor have the Parent Seller nor the Company received
      any
      notices from any Taxing authority that it intends to conduct such an audit
      or
      investigation. The Parent Seller has delivered (or caused the Company to
      deliver) to Buyer any deficiencies or examination reports relating to the
      Company and issued since December 31, 1999. 

     

    (iv)  No
      agreement, waiver or other document or arrangement extending or having the
      effect of extending the period for assessment or collection of Taxes (including,
      but not limited to, any applicable statute of limitations), has been executed
      or
      filed with the IRS or any other Taxing authority by or on behalf of the Company.
      

     

    (v)  There
      are
      no Encumbrances for Taxes (other than Taxes not yet due and payable) upon any
      of
      the assets of the Company.

     

    (vi)  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.

     

    (vii)  Neither
      the Company (nor any other Person on the Company’s behalf) has filed a consent
      under Code Section 341(f) concerning collapsible corporations as in effect
      prior
      to the enactment of the Jobs and Growth Tax Reconciliation Act of 2003. The
      Company is not a party to any agreement, contract, arrangement, or plan that
      has
      resulted or would result, separately or in the aggregate, in the payment of
      (i) any “excess parachute payment” within the meaning of Code Section 280G
      (or any corresponding provision of state, local, or foreign Tax law) or
      (ii) any amount that will not be fully deductible as a result of Code
      Section 162(m) (or any corresponding provision of state, local, or foreign
      Tax
      law). The Company has not been a United States real property holding corporation
      within the meaning of Code Section 897(c)(2) during the applicable period
      specified in Code Section 897(c)(1)(A)(ii). The Company is not a party to or
      bound by any Tax allocation or sharing agreement. The Company (i) has not been
      a
      member of an affiliated group (within the meaning Code Section 1504(a) or any
      similar provision of state, local, or foreign law) filing a consolidated income
      Tax Return (other than a group the common parent of which was the Parent Seller)
      and (ii) does not have any liability for the Taxes of any person under Treasury
      Regulations Section 1.1502-6 (or any similar provision of state, local, or
      foreign law), as a transferee or successor, by contract, or
      otherwise.

     

    
      
         

      

      
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    (viii)  The
      unpaid Taxes of the Company are adequately provided for on the face of the
      2005
      Balance Sheet, and there will be no material adverse change thereto through
      the
      Closing Date. 

     

    (ix)  To
      the
      Knowledge of the Company or Parent Seller, the Company will not be required
      to
      include any item of income in, or exclude any item of deduction from, Taxable
      income for any Taxable period (or portion thereof) ending after the Closing
      Date
      as a result of any (i) change in method of accounting by the Company or Parent
      Seller (or any of their respective subsidiaries) for a taxable period ending
      on
      or prior to the Closing Date; (ii) “closing agreement” as described in Code
      Section 7121 (or any corresponding or similar provision of state, local, or
      foreign income Tax law) executed on or prior to the Closing Date; (iii) prior
      to
      the Closing Date, any intercompany transactions or excess loss account described
      in Treasury Regulations under Code Section 1502 (or any corresponding or similar
      provision of state, local, or foreign income Tax law), in each case, relating
      to
      transactions or events occurring on or before the Closing Date; (iv) installment
      sale or open transaction disposition made on or prior to the Closing Date;
      or
      (v) prepaid amount received on or prior to the Closing Date.

     

    (x)  The
      Company has not distributed stock of another person, or has had its stock
      distributed by another person, in a transaction that was purported or intended
      to be governed in whole or in part by Code Section 355 or Code Section
      361.

     

    (xi)  Neither
      the Company nor any other Person (including Parent Seller) has requested any
      extension of time within which to file a Tax Return of or including the Company,
      which Tax Return has not since been filed, except for the Parent Seller's 2005
      tax returns.

     

    (xii)  No
      property owned by the Company is (i) property required to be treated as being
      owned by another Person pursuant to the provisions of Section 168(f)(8) of
      the
      Internal Revenue Code of 1954, as amended and in effect prior to the enactment
      of the Tax Reform Act of 1986, (ii) “tax exempt use property” within the meaning
      of Section 168(h)(1) of the Code, (iii) “tax exempt bond finance property”
within the meaning of Section 168(g) of the Code, or (iv) “limited use property”
within the meaning of Rev. Proc. 76-30.

     

    
      
         

      

      
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    (xiii)  The
      Company has not participated in a “reportable transaction” within the meaning of
      Treasury Regulations Section 1.6011-4(b). 

     

    (xiv)  Nikkiso-YSI
      Joint Venture is taxable as a corporation for U.S. federal income tax purposes.
      Nikkiso-YSI Joint Venture is not, nor has ever been, (i) a “passive foreign
      investment company” as defined in Section 1297 of the Code, (ii) a “control
      foreign corporation” as defined in Section 957 of the Code, (ii) a “foreign
      personal holding company” as defined in Section 552 of the Code prior to its
      repeal by the American Jobs Creation Act of 2004, or (iv) a “foreign investment
      company” as defined in Section 1246 of the Code prior to its repeal by the
      American Jobs Creation Act of 2004.

     

    


    Section
      3.12  No
      Material Adverse Change.
      Since
      the date of the 2005 Balance Sheet, excluding general economic and industry
      conditions, (i) there has not been any material adverse change in the business,
      operations, properties, prospects, assets, liabilities, or condition (financial
      or otherwise) of the Company, and (ii) to the Knowledge of the Company and
      the
      Parent Seller, no event has occurred or circumstance exists that is reasonably
      likely to result in such a material adverse change.

     

    Section
      3.13  Employee
      Benefit Plans.

     

    (a)  Section
      3.13(a) of the Disclosure Schedule contains a true and complete list of each
      bonus, deferred compensation, incentive compensation, stock purchase, stock
      option, severance or termination pay, hospitalization or other medical, life,
      or
      other insurance, supplemental unemployment benefits, profit-sharing, 401(k)
      pension, or retirement plan, program, agreement, or arrangement, and each other
      employee benefit plan, program, agreement, or arrangement, sponsored,
      maintained, or contributed to or required to be contributed to by the Company
      or
      by any trade or business, whether or not incorporated (an “ERISA
      Affiliate”),
      that
      together with the Company would be deemed a “single employer” within the meaning
      of Section 4001(b) (l) of the Employee Retirement Income Security Act of 1974,
      as amended, and the rules and regulations promulgated thereunder (“ERISA”),
      within the past six years for the benefit of any employee or former employee
      of
      the Company in connection with any such employee's or former employee's service
      with the Company, whether formal or informal and whether legally binding or
      not
      (the “Benefit
      Plans”).
      Section 3.13(a) of the Disclosure Schedule identifies each of the Benefit Plans
      that is an “employee welfare benefit plan” or “employee pension benefit plan” as
      such terms are defined in Sections 3(1) and 3(2) of ERISA (such plans being
      hereinafter referred to collectively as the “ERISA
      Plans”).

     

    (b)  None
      of
      the Company, any ERISA Affiliate, any of the ERISA Plans, any trust created
      thereunder, any trustee or administrator thereof nor the Parent Seller has
      engaged in a transaction or has taken or failed to take action during the past
      six years in connection with which the Company, any ERISA Affiliate, any of
      the
      ERISA Plans, any such trust, any trustee or administrator thereof, or any party
      dealing with the ERISA Plans or any such trust could be subject to either a
      civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or a tax
      imposed pursuant to Section 4975 or 4980B of the Code.

     

    
      
         

      

      
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    (c)  Each
      of
      the Benefit Plans has been during the past six years and currently is operated
      and administered in accordance with its terms and in material compliance with
      applicable requirements of the Code and ERISA.

     

    (d)  Each
      ERISA Plan intended to qualify under Section 401(a) of the Code has received
      a
      favorable determination letter as to its qualification under the Code, and
      to
      the Knowledge of the Parent Seller and the Company, no such determination letter
      has been revoked and nothing has occurred, whether action or failure to act,
      which would cause the loss of such qualification or which would result in costs
      to the Company under the IRS’s Employee Plans Compliance Resolution System. All
      ERISA Plans have been amended to comply with the recent tax legislation commonly
      known as “GUST” and have been or will be amended to comply with the tax
      legislation commonly known as “EGTRRA” within the applicable remedial amendment
      period and each ERISA Plan will file for a favorable determination letter with
      the IRS covering the changes required by EGTRRA within the applicable remedial
      amendment period.

     

    (e)  None
      of
      the Company nor any ERISA Affiliate contributes, is obligated to contribute,
      or
      has ever been obligated to contribute to a “multiemployer plan” within the
      meaning of Section 3(37) of ERISA.

     

    (f)  The
      Company and each ERISA Plan which is a “group health plan” (as such term is
      defined in Section 5000(b)(1) of the Code and Section 607(1) of ERISA) comply
      and have complied with the applicable requirements of Section 4980B of the
      Code,
      Sections 601-609 of ERISA, and the applicable provisions of the Social Security
      Act. The Company does not maintain, contribute to, or have any liability or
      obligation with respect to an employee welfare benefit plan that provides health
      or life insurance or other benefits for current or future retired or terminated
      employees or directors (or any spouse or dependents thereof), except as required
      under Code Section 4980 and ERISA Section 601.

     

    (g)  Except
      for any payments, rights or benefits arising in the ordinary course with respect
      to any Benefit Plans or as set forth in the Disclosure Schedule, no plans,
      agreements, understandings, or arrangements exist that could result in the
      payment to any employee of the Company of any money or other property rights
      or
      accelerate or provide any other rights or benefits to any such employee as
      a
      result of (i) the transaction contemplated by this Agreement (whether or not
      such payment, acceleration, or provision would constitute a “parachute payment”
(within the meaning of Section 280G of the Code) or whether or not some other
      subsequent action or event would be required to cause such payment,
      acceleration, or provision to be triggered) other than benefit distributions
      under Benefit Plans that are terminated in connection with or following such
      transaction, or (ii) the severance, termination, or resignation of any such
      employee other than as provided in a Benefit Plan.

     

    
      
         

      

      
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    (h)  No
      Benefit Plan is a “defined benefit plan” (within the meaning of Section 3(35) of
      ERISA) (the “Defined
      Benefit Plans”);

     

    (i)  None
      of
      the Company nor any ERISA Affiliate has ever withdrawn (partially or totally
      within the meaning of ERISA) from any Defined Benefit Plan; and, without
      limitation by reference to any other provision of the Agreement or any Schedule
      annexed hereto, neither the execution and delivery of this Agreement nor the
      consummation of the transactions contemplated herein will result in any
      withdrawal or other liability of any nature to any of the Company, any ERISA
      Affiliate, or Buyer under any Defined Benefit Plan;

     

    (j)  There
      are
      no unpaid contributions which are, or hereafter will be, required to have been
      made to trusts in connection with “defined contribution plans” (within the
      meaning of section 3(34) of ERISA) with respect to services rendered by
      employees of the Company prior to the date hereof; and

     

    (k)  Other
      than claims in the ordinary course for benefits with respect to the Benefit
      Plans, there are (i) no actions, suits, or claims pending with respect to any
      Benefit Plan or Multiemployer Plan, or (ii) to the Knowledge of Parent Seller
      or
      the Company, any circumstances which might give rise to any liability of the
      Company under any such action, suit, or claims.

     

    Section
      3.14  Compliance
      with Legal Requirements; Governmental Authorizations.

     

    (a)  Except
      as
      set forth on the Disclosure Schedule:

     

    (i)  The
      Company is, and at all times since January 1, 2003, has been, in material
      compliance with each Legal Requirement that is or was applicable to it and
      is
      material to the conduct or operation of its business or the ownership or use
      of
      any of its assets or properties;

     

    (ii)  to
      the
      Knowledge of the Parent Seller and the Company, the Restriction of Hazardous
      Substances (RoHS), as mandated by the Directive 2002/95/EC of the European
      Parliament and of the Council of January 27, 2003, as it relates to the
      restriction of the use of certain hazardous substances in the manufacturing
      and
      distribution of electrical and electronic equipment in the European Union,
      will
      not have a material adverse effect on the current sales or inventory of the
      Company; 

     

    (iii)  to
      the
      Knowledge of the Parent Seller and the Company, no event has occurred or
      circumstance exists that (with or without notice or lapse of time): (A) may
      constitute or result in a violation by the Company of, or a failure on the
      part
      of the Company to comply with, any Legal Requirement; or (B) may give rise
      to
      any obligation on the part of the Company to undertake, or to bear all or any
      portion of the cost of, any remedial action concerning any Legal Requirement;
      and

     

    
      
         

      

      
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    (iv)  The
      Company has not received, at any time since January 1, 2003, any written notice
      or other written communication or, to the Knowledge of the Company and Parent
      Seller, any oral notice or communication, from any Governmental Body or any
      other Person regarding: (A) any actual, alleged, possible, or potential
      violation of, or failure to comply with, any Legal Requirement; or (B) any
      actual, alleged, possible, or potential obligation on the part of the Company
      to
      undertake, or to bear all or any portion of the cost of, any remedial action
      of
      any nature.

     

    (b)  Section
      3.14(b) of the Disclosure Schedule contains a complete and accurate list of
      each
      Governmental Authorization that is held by the Company or that otherwise relates
      to the business of, or to any of the assets or properties owned or used by,
      the
      Company. Each Governmental Authorization listed or required to be listed in
      Section 3.14(b) of the Disclosure Schedule is valid and in full force and
      effect. Except as set forth on the Disclosure Schedule:

     

    (i)  The
      Company is, and at all times since January 1, 2003 has been, in full compliance
      with all of the terms and requirements of each Governmental Authorization
      identified or required to be identified in Section 3.14(b) of the Disclosure
      Schedule;

     

    (ii)  to
      the
      Knowledge of the Company and the Parent Seller, no event has occurred or
      circumstance exists that may (with or without notice or lapse of time): (A)
      constitute or result directly or indirectly in a violation of or a failure
      to
      comply with any term or requirement of any Governmental Authorization listed
      or
      required to be listed in Section 3.14(b) of the Disclosure Schedule; or (B)
      result directly or indirectly in the revocation, withdrawal, suspension,
      cancellation, or termination of, or any modification to, any Governmental
      Authorization listed or required to be listed in Section 3.14(b) of the
      Disclosure Schedule;

     

    (iii)  The
      Company has not received, at any time since January 1, 2003, any written notice
      or other written communication or, to the Knowledge of the Company and Parent
      Seller, any oral notice or communication from any Governmental Body or any
      other
      Person regarding: (A) any actual, alleged, possible, or potential violation
      of
      or failure to comply with any term or requirement of any Governmental
      Authorization; or (B) any actual, proposed, possible, or potential revocation,
      withdrawal, suspension, cancellation, termination of, or modification to any
      Governmental Authorization; and

     

    (iv)  all
      applications required to have been filed for the renewal of the Governmental
      Authorizations listed or required to be listed in Section 3.14(b) of the
      Disclosure Schedule have been duly filed on a timely basis with the appropriate
      Governmental Bodies, and all other filings required to have been made with
      respect to such Governmental Authorizations have been duly made on a timely
      basis with the appropriate Governmental Bodies.

     

    
      
         

      

      
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    The
      Governmental Authorizations listed in Section 3.14(b) of the Disclosure Schedule
      collectively constitute all of the Governmental Authorizations necessary to
      permit the Company to lawfully conduct and operate its business in the manner
      it
      currently conducts and operates such business and to permit the Company to
      own
      and use its assets and properties in the manner in which it currently owns
      and
      uses such assets.

    


    Section
      3.15  Legal
      Proceedings; Orders.

     

    (a)  Except
      as
      set forth in Section 3.15(a) of the Disclosure Schedule, there is no pending
      Proceeding:

     

    (i)  that
      has
      been commenced by or against the Company or that, to the Knowledge of the
      Company or Parent Seller, otherwise relates to or may affect the business of,
      or
      any of the assets or properties owned or used by, the Company; or

     

    (ii)  that
      challenges, or that may have the effect of preventing, delaying, making illegal,
      or otherwise interfering with, any of the Contemplated
      Transactions.

     

    To
      the
      Knowledge of the Parent Seller and the Company, (1) no such Proceeding has
      been
      Threatened, and (2) no event has occurred or circumstance exists that may give
      rise to or serve as a basis for the commencement of any such Proceeding. The
      Parent Seller has delivered to the Buyer copies of all pleadings,
      correspondence, and other documents relating to each Proceeding listed in
      Section 3.15(a) of the Disclosure Schedule. The Proceedings listed in Section
      3.15(a) of the Disclosure Schedule will not have a material adverse effect
      on
      the business, operations, properties, assets, condition (financial or
      otherwise), or prospects of the Company.

    


    (b)  Except
      as
      set forth in Section 3.15(b) of the Disclosure Schedule:

     

    (i)  there
      is
      no Order to which the Company, or any of the assets or properties owned or
      used
      by the Company, is subject;

     

    (ii)  The
      Parent Seller is not subject to any Order that relates to the business of,
      or
      any of the assets or properties owned or used by, the Company; and

     

    (iii)  to
      the
      Knowledge of the Parent Seller and the Company, no officer, director, agent,
      or
      employee of the Company is subject to any Order that prohibits such officer,
      director, agent, or employee from engaging in or continuing any conduct,
      activity, or practice relating to the business of the Company.

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

     

    (c)  Except
      as
      set forth in Section 3.15(c) of the Disclosure Schedule:

     

    (i)  The
      Company is, and at all times since January 1, 2003 has been, in material
      compliance with all of the terms and requirements of each Order to which it,
      or
      any of the assets or properties owned or used by it, is or has been
      subject;

     

    (ii)  to
      the
      Knowledge of the Company and the Parent Seller, no event has occurred or
      circumstance exists that may constitute or result in (with or without notice
      or
      lapse of time) a violation of or failure to comply with any term or requirement
      of any Order to which the Company, or any of the assets or properties owned
      or
      used by the Company, is subject; and

     

    (iii)  The
      Company has not received, at any time since January 1, 2003, any written notice
      or communication or, to the Knowledge of the Company and Parent Seller, any
      oral
      notice or communication from any Governmental Body or any other Person regarding
      any actual, alleged, possible, or potential violation of, or failure to comply
      with, any term or requirement of any Order to which the Company, or any of
      the
      assets or properties owned or used by the Company, is or has been
      subject.

     

    Section
      3.16  Absence
      of Certain Changes and Events.
      Except
      as set forth in Section 3.16 of the Disclosure Schedule, since the date of
      the
      2005 Balance Sheet, the Company has conducted its business only in the Ordinary
      Course of Business and there has not been any:

     

    (a)  change
      in
      the Company’s authorized or issued capital stock; grant of any stock option or
      right to purchase shares of capital stock of the Company; issuance of any
      security convertible into such capital stock; grant of any registration rights;
      purchase, redemption, retirement, or other acquisition by the Company of any
      shares of any such capital stock; or declaration or payment of any dividend
      or
      other distribution or payment in respect of shares of capital
      stock;

     

    (b)  amendment
      to the Organizational Documents of the Company;

     

    (c)  payment
      or increase by the Company of any bonuses, salaries, or other compensation
      to
      any stockholder, director, officer, or employee (except in the Ordinary Course
      of Business) or entry into any employment, severance, or similar Contract with
      any director, officer, or employee;

     

    (d)  adoption
      of, or increase in the payments to or benefits under, any profit sharing, bonus,
      deferred compensation, savings, insurance, pension, retirement, or other
      employee benefit plan for or with any employees of the Company, except for
      vesting or acceleration of benefits under any Benefit Plan resulting from the
      Contemplated Transactions for which the Company shall have no
      liability;

     

    (e)  damage
      to
      or destruction or loss of any asset or property of the Company, whether or
      not
      covered by insurance, materially and adversely affecting the properties, assets,
      business, financial condition, or prospects of the Company, taken as a
      whole;

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    (f)  entry
      into, termination of, or receipt of notice of termination of (i) any license,
      distributorship, dealer, sales representative, joint venture, credit, or similar
      agreement, or (ii) any Contract or transaction involving a total remaining
      commitment by or to any Company of at least $10,000;

     

    (g)  sale
      (other than sales of inventory in the Ordinary Course of Business), lease,
      or
      other disposition of any material asset or property of the Company or mortgage,
      pledge, or imposition of any lien or other encumbrance on any material asset
      or
      property of the Company, including the sale, lease, or other disposition of
      any
      of the Company’s Proprietary Rights;

     

    (h)  cancellation
      or waiver of any claims or rights with a value to any Company in excess of
      $10,000;

     

    (i)  change
      in
      the accounting or tax reporting principles, methods or policies used by the
      Company;

     

    (j)  written
      agreement or, to the Knowledge of the Company and Parent Seller, oral agreement,
      by the Company to do any of the foregoing; or

     

    (k)  settlement
      of any Tax audit or filing of any amended Tax Return.

     

    Section
      3.17  Contracts;
      No Defaults.

     

    (a)  Section
      3.17 of the Disclosure Schedule contains a complete and accurate list, and
      the
      Parent Seller has delivered to the Buyer true and complete copies,
      of:

     

    (i)  each
      Applicable Contract that involves performance of services or delivery of goods
      or materials by the Company of an amount or value in excess of
      $10,000.

     

    (ii)  each
      Applicable Contract that involves performance of services or delivery of goods
      or materials to the Company of an amount or value in excess of
      $10,000.

     

    (iii)  each
      Applicable Contract that was not entered into in the Ordinary Course of Business
      and that involves expenditures or receipts by the Company in excess of
      $10,000.

     

    (iv)  each
      lease, rental or occupancy agreement, license, installment and conditional
      sale
      agreement, and other Applicable Contract affecting the ownership of, leasing
      of,
      title to, use of, or any leasehold or other interest in, any real or personal
      property (except personal property leases and installment and conditional sales
      agreements having a value per item or aggregate payments of less than $1,000
      and
      with terms of less than one year);

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

     

    (v)  each
      licensing agreement or other Applicable Contract with respect to patents,
      trademarks, service marks, copyrights, or other intellectual property, including
      agreements with current or former employees, consultants, or contractors
      regarding the appropriation or the non-disclosure of any of the Company’s
      Proprietary Rights;

     

    (vi)  each
      collective bargaining agreement and other Applicable Contract to or with any
      labor union or other employee representative of a group of
      employees;

     

    (vii)  each
      joint venture, partnership, and other Applicable Contract (however named)
      involving a sharing of profits, losses, costs, or liabilities by the Company
      with any other Person;

     

    (viii)  each
      Applicable Contract containing covenants that in any way purport to restrict
      the
      business activity of the Company or limit the freedom of the Company to engage
      in any line of business or to compete with any Person;

     

    (ix)  each
      Applicable Contract providing for payments to or by any Person based on sales,
      purchases, or profits, other than direct payments for goods;

     

    (x)  each
      power of attorney that is currently effective and outstanding;

     

    (xi)  each
      Applicable Contract entered into other than in the Ordinary Course of Business
      that contain an express undertaking which legally obligates the Company to
      pay
      consequential damages;

     

    (xii)  each
      Applicable Contract for capital expenditures in excess of $10,000;

     

    (xiii)  each
      written warranty, guaranty, and or other similar undertaking, with respect
      to
      contractual performance by any third party, extended by the Company other than
      in the Ordinary Course of Business; and

     

    (xiv)  each
      amendment, supplement, and modification (whether oral or written) in respect
      of
      any of the foregoing.

     

    Section
      3.17 of the Disclosure Schedule sets forth the dates of and parties to such
      Contracts.

    


    (b)  Except
      as
      set forth on the Disclosure Schedule:

     

    (i)  the
      Parent Seller (and each Related Person of the Parent Seller) has not acquired
      any rights under, and the Parent Seller is not subject to any obligation or
      liability under, any Contract that relates to the business of, or any of the
      assets or properties owned or used by, the Company; and

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

     

    (ii)  to
      the
      Knowledge of the Parent Seller and the Company, no officer, director, agent,
      employee, consultant, or contractor of the Company is bound by any Contract
      that
      purports to limit the ability of such officer, director, agent, employee,
      consultant, or contractor to: (A) engage in or continue any conduct, activity,
      or practice relating to the business of the Company; or (B) assign to the
      Company or to any other Person any rights to any invention, improvement, or
      discovery.

     

    (c)  Except
      as
      set forth in Section 3.17 of the Disclosure Schedule, to the Knowledge of the
      Company and Parent Seller, each Contract identified or required to be identified
      in Section 3.17 of the Disclosure Schedule is in full force and effect and
      is
      valid and enforceable in accordance with its terms.

     

    (d)  Except
      as
      set forth in Section 3.17 of the Disclosure Schedule:

     

    (i)  the
      Company and each Related Person of the Company is, and at all times since
      January 1, 2003 has been, in full compliance with all applicable terms and
      requirements of each Contract under which the Company has or had any obligation
      or liability or by which the Company or any of the assets or properties owned
      or
      used by the Company is or was bound;

     

    (ii)  to
      the
      Knowledge of the Company and Parent Seller, each other Person that has or had
      any obligation or liability under any Contract under which the Company has
      or
      had any rights is, and at all times since January 1, 2003 has been, in full
      compliance with all applicable terms and requirements of such
      Contract;

     

    (iii)  no
      event
      has occurred or circumstance exists that (with or without notice or lapse of
      time) may contravene, conflict with, or result in a violation or breach of,
      or
      give any other Person, or to the Knowledge of the Company, the Company, the
      right to declare a default or exercise any remedy under, or to accelerate the
      maturity or performance of, or to cancel, terminate, or modify, any Applicable
      Contract; and 

     

    (iv)  the
      Company has not given to or received from any other Person, at any time since
      January 1, 2003, any written notice or communication or, to the Knowledge of
      the
      Company or Parent Seller, any oral notice or communication regarding any actual,
      alleged, possible, or potential violation or breach of, or default under, any
      Contract.

     

    (e)  There
      are
      no renegotiations of, or current or pending attempts to renegotiate any material
      amounts paid or payable to the Company under current or completed Contracts
      with
      any Person and, to the Knowledge of the Parent Seller and the Company, no such
      Person has made written demand for such renegotiation.

     

    (f)  The
      Contracts relating to the sale, design, manufacture, or provision of products
      or
      services by the Company have been entered into in the Ordinary Course of
      Business and, to the Knowledge of the Company and Parent Seller, have been
      entered into without the commission of any act alone or in concert with any
      other Person, or any consideration having been paid or promised, that is or
      would be in violation of any Legal Requirement.

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

     

    Section
      3.18  Insurance.

     

    (a)  The
      Parent Seller has delivered to the Buyer:

     

    (i)  true
      and
      complete copies of all policies of insurance to which the Company is a party
      or
      under which the Company, or any director of the Company, is or has been covered
      at any time within the three (3) years preceding the date of this
      Agreement;

     

    (ii)  true
      and
      complete copies of all pending applications for policies of insurance relating
      to the Company; and

     

    (iii)  any
      statement by the auditor of the Company’s financial statements with regard to
      the adequacy of such entity’s coverage or of the reserves for
      claims.

     

    (b)  Section
      3.18(b) of the Disclosure Schedule describes:

     

    (i)  any
      self-insurance arrangement by or affecting the Company, including any reserves
      established thereunder;

     

    (ii)  any
      contract or arrangement, other than a policy of insurance, for the transfer
      or
      sharing of any risk by the Company; and

     

    (iii)  all
      obligations of the Company to third parties with respect to insurance (including
      such obligations under leases and service agreements) and identifies the policy
      under which such coverage is provided.

     

    (c)  Section
      3.18(c) of the Disclosure Schedule sets forth, by year, for the current policy
      year and each of the preceding policy years:

     

    (i)  a
      summary
      of the loss experience under each policy relating to the Company;

     

    (ii)  a
      statement describing each claim under an insurance policy for an amount in
      excess of $1,000 relating to the Company, which sets forth:

     

    (A)  the
      name
      of the claimant;

     

    (B)  a
      description of the policy by insurer, type of insurance, and period of coverage;
      and

     

    (C)  the
      amount and a brief description of the claim; and

     

    
      
         

      

      
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    (iii)  a
      statement describing the loss experience for all claims that were self-insured,
      including the number and aggregate cost of such claims.

     

    (d)  Except
      as
      set forth in Section 3.18(d) of the Disclosure Schedule:

     

    (i)  All
      policies to which the Company is a party or that provide coverage to the Parent
      Seller, the Company, or any director or officer of the Company:

     

    (A)  are,
      to
      the Knowledge of the Company and the Parent Seller, valid, outstanding, and
      enforceable;

     

    (B)  taken
      together, provide adequate insurance coverage for the assets and the operations
      of the Company for all risks to which the Company is normally
      exposed;

     

    (C)  are
      sufficient for compliance with all Legal Requirements and Contracts to which
      the
      Company is a party or by which any of them is bound; and

     

    (D)  do
      not
      provide for any retrospective premium adjustment or other experienced-based
      liability on the part of the Company.

     

    (ii)  Neither
      the Parent Seller nor the Company has received:

     

    (A)  any
      written refusal of coverage or any written notice that a defense will be
      afforded with reservation of rights concerning any pending or outstanding claims
      involving the Company or any of its assets or operations; or

     

    (B)  any
      written notice of cancellation that any insurance policy covering the Company
      or
      any of its assets or operations is no longer in full force or effect or will
      not
      be renewed or that the issuer of any policy is not willing or able to perform
      its obligations thereunder.

     

    (iii)  The
      Company has paid all premiums due, and has otherwise performed all of their
      respective obligations, under each policy to which the Company is a party or
      that provides coverage to the Company or any director thereof.

     

    (iv)  The
      Company has given notice to the appropriate insurer of all claims against it
      that may be covered by insurance provided by such insurer.

     

    Section
      3.19  Environmental
      Matters.

     

    (a)  Environmental
      Permits.
      The
      Company possesses all Environmental Permits required or necessary in order
      to
      conduct its business and to own, lease or operate its assets and Facilities
      (including the Leased Real Property) as the same are now being conducted, owned,
      leased or operated. Section 3.19(a) of the Disclosure Schedule lists all of
      the
      Environmental Permits issued to or held by the Company. A true and complete
      copy
      of each Environmental Permit issued to the Company has been made available
      for
      review by the Buyer. Each Environmental Permit issued to the Company is in
      full
      force and effect. The Company is in compliance with all material requirements,
      terms, and provisions of the Environmental Permits issued to the Company and
      has
      filed on a timely basis (and updated as required) all reports, notices,
      applications, or other documents required to be filed pursuant to the
      Environmental Permits.

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

     

    (b)  Compliance
      With Environmental Laws.
      The
      Company is, and at all times has been, in compliance with all Environmental
      Permits and Environmental Laws applicable to its business, assets, and the
      Facilities (including the Leased Real Property) except where the failure to
      be
      in compliance would not, individually or in the aggregate, reasonably be
      expected to result in a material adverse effect on the business, properties,
      assets, liabilities, operations, condition (financial or otherwise), results
      of
      operations, or prospects of the Company.

     

    (c)  Reports,
      Disclosures and Notifications.
      Since
      January 1, 2003, the Company has filed on a timely basis (and updated as
      required) all reports, disclosures, notifications, applications, pollution
      prevention, stormwater management or discharge prevention or response plans
      or
      other emergency or contingency plans required to be filed under Environmental
      Laws, including Title III of the Superfund Amendments and Reauthorization Act,
      42 U.S.C. §11001 et seq.,
      except
      where such failure to do so would not, individually or in the aggregate, result
      in, or reasonably be expected to result in, a material adverse effect on the
      business, assets, Facilities, liabilities, operations, condition (financial
      or
      otherwise), results of operations, or prospects of the Company. Section 3.19(c)
      of the Disclosure Schedule lists all such reports, disclosures, notifications,
      applications, and plans filed by the Company under Environmental Laws. All
      such
      reports, disclosures, notifications, applications, and plans are true, accurate,
      and complete in all material respects.

     

    (d)  Notices.
      The
      Company has not received any written notice or, to the Knowledge of the Company
      or Parent Seller, any oral notice from any Governmental Body that the Company
      or
      any of the Leased Real Property:

     

    (i)  is
      in
      violation of the requirements of any Environmental Permit or Environmental
      Laws;

     

    (ii)  is
      the
      subject of any suit, claim, proceeding, demand, order, investigation, or request
      or demand for information arising under any Environmental Permit or
      Environmental Laws; or

     

    (iii)  has
      actual or potential liability under any Environmental Laws, including CERCLA,
      RCRA, or any comparable state or local Environmental Laws.

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

     

    (e)  No
      Reporting or Remediation Obligations.
      To the
      Knowledge of the Parent Seller and the Company, there are no Environmental
      Conditions arising out of or relating to the Company, any of its businesses,
      or
      the use, operation or occupancy by the Company of the Facilities (including
      the
      Leased Real Property) that result or reasonably could be expected to result
      in:
      (i) any obligation of the Company to conduct any investigation, sampling or
      monitoring, or to effect any Cleanup, whether on-site or offsite; or (ii)
      liability, either to Governmental Bodies, including Environmental Authorities,
      or third parties, for damages (whether to person, property or natural
      resources), cleanup costs, or remedial costs of any kind or nature
      whatsoever.

     

    (f)  Encumbrances.
      The
      Company has not received any written notice or, to the Knowledge of the Company
      or Parent Seller, any oral notice from any Governmental Body that a federal,
      state, local, or municipal governmental agency or authority, including any
      Environmental Authority, has obtained or asserted an Encumbrance upon any of
      the
      Facilities (including the Leased Real Property) as a result of any Release,
      use,
      or Cleanup of any Hazardous Material for which the Company is legally
      responsible, nor has any such Release, use, or Cleanup occurred which would
      be
      likely to result in the assertion or creation of such an
      Encumbrance.

     

    (g)  Storage,
      Transport or Disposal of Hazardous Materials.

     

    (i)  Except
      as
      described on Section 3.19(g)(i) of the Disclosure Schedule and as covered by
      any
      Environmental Permits, there is not now located on any of the Leased Real
      Property any areas or vessels used or intended for the treatment, storage,
      or
      disposal of Hazardous Materials, including drum storage areas, surface
      impoundments, incinerators, landfills, tanks, lagoons, ponds, waste piles,
      or
      deep well injection systems.

     

    (ii)  With
      respect to the Company, Section 3.19(g)(ii) of the Disclosure Schedule sets
      forth a list of all arrangements by such Company since January 1, 2003 relating
      to transport for storage, treatment or disposal, by contract, agreement, or
      otherwise, of any Hazardous Material at or to any location, including any
      location used for the treatment, storage, or disposal of Hazardous Materials.
      None of the locations identified in Section 3.19(g)(ii) of the Disclosure
      Schedule is listed on the National Priorities List or the Comprehensive
      Environmental Response Compensation and Liability Information System list or
      any
      equivalent or analogous federal or state list of contaminated
      properties.

     

    (h)  Future
      Laws.
      To the
      Knowledge of the Parent Seller and the Company, there
      are
      no Environmental Laws currently enacted or promulgated, but as to which
      compliance is not yet required, that would require the Company or the Buyer
      to
      take any action at any of the Leased Real Property within one (1) year from
      the
      effective date of this Agreement in order to bring the Company’s businesses or
      the operations at the Leased Real Property as presently conducted into
      compliance with such Environmental Laws.

     

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

     

    Section
      3.20  Employees.

     

    (a)  Section
      3.20 of the Disclosure Schedule contains a complete and accurate list of the
      following information for each employee of the Company, including each employee
      on leave of absence or layoff status: name; employer; job title; current
      compensation paid or payable and vacation accrued; and service credited for
      purposes of vesting and eligibility to participate under any of the Company’s
      Benefit Plans, or any other employee, executive, or director benefit
      plan.

     

    (b)  To
      the
      Knowledge of the Company and Parent Seller, no employee or director of the
      Company is a party to, or is otherwise bound by, any agreement or arrangement,
      including any confidentiality, noncompetition, or proprietary rights agreement,
      between such employee or director and any other Person (“Proprietary
      Rights Agreement”)
      that
      in any way adversely affects or will adversely affect (i) the performance of
      his
      duties as an employee or director of the Company, or (ii) the ability of the
      Company to conduct its business, including any Proprietary Rights Agreement
      with
      the Parent Seller or the Company by any such employee or director. To the
      Knowledge of the Parent Seller and the Company, no director, officer, or other
      key employee of the Company intends to terminate his employment with the
      Company.

     

    (c)  Section
      3.20 of the Disclosure Schedule also contains a complete and accurate list
      of
      the following information for each retired employee or director of the Company,
      or their dependents, receiving benefits or scheduled to receive benefits in
      the
      future from the Company: name; pension benefit; pension option election; retiree
      medical insurance coverage; retiree life insurance coverage; and other
      benefits.

     

    Section
      3.21  Labor
      Relations; Compliance.
      Since
      January 1, 2003, the Company has not been or is not a party to any collective
      bargaining or other labor Contract. Since January 1, 2003, there has not been,
      there is not presently pending or existing, and there is not Threatened, (a)
      any
      strike, slowdown, picketing, work stoppage, or employee grievance process,
      (b)
      except as disclosed in Section 3.21 of the Disclosure Schedule, any Proceeding
      (except that oral threats and investigations are to the Knowledge of Parent
      Seller and the Company) against or affecting the Company relating to the alleged
      violation of any Legal Requirement pertaining to labor relations or employment
      matters, including any charge or complaint filed by an employee or union with
      the National Labor Relations Board, the Equal Employment Opportunity Commission,
      or any comparable Governmental Body, organizational activity, or other labor
      or
      employment dispute against or affecting any of the Company or their premises,
      or
      (c) any application for certification of a collective bargaining agent. No
      event
      has occurred or circumstance exists that could provide the basis for any work
      stoppage or other labor dispute. There is no lockout of any employees by the
      Company, and no such action is contemplated by the Company. The Company has
      complied in all material respects with all Legal Requirements relating to
      employment, equal employment opportunity, nondiscrimination, immigration, wages,
      hours, benefits, collective bargaining, the payment of social security and
      similar taxes, occupational safety and health, and plant closing. The Company
      is
      not liable for the payment of any compensation, damages, taxes, fines,
      penalties, or other amounts, however designated, for failure to comply with
      any
      of the foregoing Legal Requirements, except as disclosed in the Disclosure
      Schedule.

     

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

     

    Section
      3.22  Intellectual
      Property.

     

    (a)  Section
      3.22 of the Disclosure Schedule contains a complete and correct list and brief
      description of all material Proprietary Rights owned by the Company (the
“Company’s
      Proprietary Rights”).
      The
      Company owns the entire right, title and interest in and to all of the Company’s
      Proprietary Rights, provided, however, that the Parent Seller makes no
      representation or warranty regarding the validity or enforceability of any
      of
      the Company's Proprietary Rights. Except as set forth on the Disclosure
      Schedule, the Company is not a party to any agreement by which it is granted
      a
      license or by which it grants a license under any Company Proprietary Rights
      or
      by which it agrees to maintain the secrecy or confidentiality of any Company
      Proprietary Rights. The Company’s Proprietary Rights and the agreements listed
      on the Disclosure Schedule are all proprietary rights material to the operation
      and conduct of the business of the Company as currently operated and conducted.
      None of the Company’s Proprietary Rights set forth in such Section 3.22 of the
      Disclosure Schedule are subject to any pending or threatened challenge by any
      third party nor has the Company directly received any notice from or otherwise
      been advised by any third party that the foregoing are invalid or conflict
      with
      or infringe the asserted rights of others. For the avoidance of doubt, the
      prosecution of patent applications directed to any Proprietary Rights does
      not
      constitute any such pending or threatened challenge. To the Knowledge of the
      Parent Seller and the Company, no third party is infringing upon the Company’s
      Proprietary Rights relating to any products which the Company currently
      commercializes. Except as disclosed on the Disclosure Schedule, to the Knowledge
      of the Company and Parent Seller, the Company does not have any liability for,
      has not given indemnification for, patent infringement as to any equipment,
      materials, or supplies manufactured, used, or sold by it, other than in the
      Ordinary Course of Business. To the Knowledge of the Parent Seller and the
      Company, the Company has not caused or allowed any of its material trade
      secrets, know-how, or other confidential intellectual or intangible property
      rights to enter into the public domain, except as may be involved in the filing
      and publication of its patent applications.

     

    (b)  The
      Company has good and marketable title to all intangible property described
      in
      Section 3.22 of the Disclosure Schedule, subject to no Encumbrances except
      as
      noted in Section 3.22 of the Disclosure Schedule.

     

    (c)  Except
      as
      disclosed on the Disclosure Schedule, the Company has not granted
      to
      any
      other
      persons or businesses the right to use any trademarks or service marks set
      forth
      in Section 3.22 of the Disclosure Schedule, or any variant thereof, singly
      or in
      combination with any other term,
      and
      no
      persons or businesses otherwise using any such trademark or service mark, or
      any
      variant thereof, singly or in combination with any other term, has ever
      attempted to restrain the Company from using such trademark or service mark
      or
      any variant thereof, singly or in combination with any other term.

     

    
      
         

      

      
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    Section
      3.23  Certain
      Payments.
      Since
      January 1, 2003, neither the Company nor any director, officer, agent, or
      employee of the Company, or any other Person associated with or acting for
      or on
      behalf of the Company, has directly or indirectly:

     

    (a)  made
      any
      contribution, gift, bribe, rebate, payoff, influence payment, kick-back, or
      other payment to any Person, private or public, regardless of form, for or
      in
      respect of the Company or any Affiliate of the Company, whether in money,
      property, or services in violation of any Legal Requirement; or

     

    (b)  established
      or maintained any fund or asset related to the Company that has not been
      recorded in the books and records of the Company in accordance with applicable
      Legal Requirements and GAAP.

     

    Section
      3.24  Relationships
      with Related Persons.
      Except
      as disclosed in Section 3.24 of the Disclosure Schedule, neither the Parent
      Seller nor any Related Person of the Parent Seller or of the Company has, or
      since January 1, 2003 has had, any interest in any property (whether real,
      personal, or mixed and whether tangible or intangible), used in or pertaining
      to
      the Company’s business. Except as disclosed in Section 3.24 of the Disclosure
      Schedule, neither the Parent Seller nor any Related Person of the Parent Seller
      or of the Company is, or since January 1, 2003 has owned (of record or as a
      beneficial owner) an equity interest or any other financial or profit interest
      in, a Person that has (i) had business dealings or a material financial interest
      in any transaction with the Company other than business dealings or transactions
      conducted in the Ordinary Course of Business with the Company at substantially
      prevailing market prices and on substantially prevailing market terms, or (ii)
      engaged in competition with the Company with respect to any line of the products
      or services of the Company (a “Competing
      Business”)
      in any
      market presently served by the Company (except for the ownership of less than
      one percent of the outstanding capital stock of any Competing Business that
      is
      publicly traded on any recognized exchange or in the over-the-counter market).
      Except as set forth in the Disclosure Schedule, neither the Parent Seller nor
      any Related Person of the Parent Seller or of the Company is a party to any
      Contract with, or has any claim or right against, the Company.

     

    Section
      3.25  Brokers
      or Finders.
      Except
      as disclosed in Section 3.25 of the Disclosure Schedule, the Company and its
      agents have incurred no obligation or liability, contingent or otherwise, for
      any brokerage or finders’ fees, agents’ commissions, or any other similar
      payment in connection with this Agreement.

     

    Section
      3.26  Disclosure.
      To the
      Parent Seller's Knowledge, there is no fact that has specific application to
      the
      Parent Seller or the Company (other than general economic) and that materially
      adversely affects the assets, business, prospects, condition (financial or
      otherwise), or results of operations of the Company that has not been set forth
      in this Agreement or the Disclosure Schedule.

     

    
      
         

      

      
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    ARTICLE
      IV

     

    REPRESENTATIONS
      AND WARRANTIES OF BUYER

     

    The
      Buyer
      represents and warrants to the Parent Seller as follows:

     

    Section
      4.1  Organization
      And Good Standing.
      The
      Buyer is a corporation duly organized, validly existing, and in good standing
      under the laws of the State of New Jersey.

     

    Section
      4.2  Authority;
      No Conflict.

     

    (a)  This
      Agreement constitutes the legal, valid, and binding obligation of the Buyer,
      enforceable against the Buyer in accordance with its terms, except insofar
      as
      enforcement may be limited by bankruptcy, insolvency, or other laws affecting
      generally the enforceability of creditors’ rights and by limitations on the
      availability of equitable remedies. Upon the execution and delivery by the
      Buyer
      of the Transition Services Agreement, the Supply Agreement, the Trademark
      License, the Building License and the Employment Agreements (collectively,
      the
“Buyer’s
      Closing Documents”),
      the
      Buyer’s Closing Documents will constitute the legal, valid, and binding
      obligations of the Buyer, enforceable against the Buyer in accordance with
      their
      respective terms, except insofar as enforcement may be limited by bankruptcy,
      insolvency, or other laws affecting generally the enforceability of creditors’
rights and by limitations on the availability of equitable remedies. The Buyer
      has the absolute and unrestricted right, power, authority and capacity to
      execute and deliver this Agreement and the Buyer’s Closing Documents and to
      perform its obligations under this Agreement and the Buyer’s Closing
      Documents.

     

    (b)  Neither
      the execution and delivery of this Agreement by the Buyer nor the consummation
      or performance of any of the Contemplated Transactions by the Buyer
      will:

     

    (i)  contravene,
      conflict with, or result in a violation of (A) any provision of the
      Organizational Documents of the Buyer, or (B) any resolution adopted by the
      board of directors or the stockholders of the Buyer;

     

    (ii)  contravene,
      conflict with, or result in a violation of, or give any Governmental Body or
      other Person the right to challenge any of the Contemplated Transactions or
      to
      exercise any remedy or obtain any relief under, any Legal Requirement or any
      Order to which the Buyer may be subject;

     

    (iii)  contravene,
      conflict with, or result in a violation of any of the terms or requirements
      of,
      or give any Governmental Body the right to revoke, withdraw, suspend, cancel,
      terminate, or modify, any Governmental Authorization that is held by the Buyer
      or that otherwise relates to the business of, or any of the assets owned or
      used
      by, the Buyer; or

     

    (iv)  contravene,
      conflict with, or result in a violation or breach of any provision of, or give
      any Person the right to declare a default or exercise any remedy under, or
      to
      accelerate the maturity or performance of, or to cancel, terminate, or modify,
      any contract, commitment or agreement to which the Buyer is bound or
      affected.

     

    
      
         

      

      
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    (c)  The
      Buyer
      is not and will not be required to give notice to or obtain any Consent from
      any
      Person in connection with the execution and delivery of this Agreement or the
      consummation or performance of any of the Contemplated Transactions, except
      such
      Consents as have been obtained prior to the date hereof.

     

    Section
      4.3  Investment
      Intent.
      The
      Buyer is acquiring the Shares for its own account and not with a view to their
      distribution within the meaning of Section 2(11) of the Securities Act. Buyer
      has no present or contemplated agreement, undertaking, arrangement, obligation
      or commitment providing for the sale or other disposition of any
      Shares.

     

    Section
      4.4  Certain
      Proceedings.
      There
      is no pending Proceeding that has been commenced against the Buyer and that
      challenges, or may have the effect of preventing, delaying, making illegal,
      or
      otherwise interfering with, any of the Contemplated Transactions. To the Buyer’s
      Knowledge, no such Pro-ceeding has been Threatened, and no event has occurred
      and no circumstance exists that may give rise to or serve as a basis for the
      commencement of any such Proceeding.

     

    Section
      4.5  Brokers
      or Finders.
      The
      Buyer and its officers and agents have incurred no obligation or liability,
      contingent or otherwise, for brokerage or finders’ fees, agents’ commissions, or
      any other similar payment in connection with this Agreement.

     

    Section
      4.6  Buyer's
      Knowledge of Breach.
      Buyer
      has no Knowledge of any fact or circumstance evidencing an inaccuracy of any
      representation or warranty by Parent Seller under Article III of this
      Agreement.

     

    ARTICLE
      V

     

    COVENANTS
      OF PARENT SELLER PRIOR TO CLOSING DATE

     

    Section
      5.1  Retention
      Bonus Agreements.
      Between
      the date of this Agreement and the Closing Date, the Parent Seller and the
      Company will cause each of the Retention Bonus Agreements dated December 6,
      2005
      by and between the Company and each of Brian Ream, Robert Hurst, Brian Code,
      Chris Kowal, Ron Johnson, Phil Metz, John Davis, Marilyn Capper, and Catherine
      Tetrick, respectively, to remain in full force and effect without any further
      modification or amendment thereto.

     

    Section
      5.2  Access
      and Investigation.
      Between
      the date of this Agreement and the Closing Date, the Parent Seller will, and
      will cause the Company and its Representatives to (a) afford the Buyer and
      its
      Representatives and prospective lenders and their Representatives (collectively,
      the “Buyer’s
      Advisors”)
      full
      and free access to the Company’s personnel, Facilities, contracts, books and
      records, and other documents and data, (b) furnish the Buyer and the Buyer’s
      Advisors with copies of all such contracts, books and records, and other
      existing documents and data as the Buyer may reasonably request, relating to
      the
      Company or its business, and (c) furnish the Buyer and the Buyer’s Advisors with
      such additional financial, operating, and other data and information as the
      Buyer may reasonably request, relating to the Company or its
      business.

     

    
      
         

      

      
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    Section
      5.3  Operation
      of the Business of the Company.
      Between
      the date of this Agreement and the Closing Date, the Parent Seller will, and
      will cause the Company to:

     

    (a)  conduct
      the business of the Company only in the Ordinary Course of
      Business;

     

    (b)  use
      their
      Best Efforts to preserve intact the current business organization of the
      Company, keep available the services of the current officers, employees, and
      agents of the Company, and maintain the current relations and good will with
      suppliers, customers, landlords, creditors, employees, agents, and others having
      business relationships with the Company;

     

    (c)  confer
      with the Buyer concerning operational matters of a material nature;
      and

     

    (d)  otherwise
      report periodically to the Buyer concerning the status of the business,
      operations, and finances of the Company as reasonably requested by
      Buyer.

     

    Section
      5.4  Negative
      Covenant.
      Except
      as otherwise expressly permitted by this Agreement, between the date of this
      Agreement and the Closing Date, the Parent Seller will not, and will cause
      the
      Company not to, without the prior consent of the Buyer, take any affirmative
      action, or fail to take any reasonable action within their or its control,
      as a
      result of which any of the changes or events listed in Section 3.16 is likely
      to
      occur.

     

    Section
      5.5  Required
      Approvals.
      As
      promptly as practicable after the date of this Agreement, the Parent Seller
      will, and will cause the Company to, make all filings required by Legal
      Requirements to be made by them in order to consummate the Contemplated
      Transactions. Between the date of this Agreement and the Closing Date, the
      Parent Seller will, and will cause the Company to (a) reasonably cooperate
      with
      the Buyer with respect to all filings that the Buyer elects to make or is
      required by Legal Requirements to make in connection with the Contemplated
      Transactions, and (b) cooperate with the Buyer in obtaining any consents
      necessary in connection with the Contemplated Transactions.

     

    Section
      5.6  Notification.
      Between
      the date of this Agreement and the Closing Date, the Parent Seller will promptly
      notify the Buyer in writing if the Parent Seller or the Company becomes aware
      of
      any fact or condition that causes or constitutes a Breach of any of the Parent
      Seller’s representations and warranties as of the date of this Agreement, or if
      the Parent Seller or the Company becomes aware of the occurrence after the
      date
      of this Agreement of any fact or condition that would (except as expressly
      contemplated by this Agreement) cause or constitute a Breach of any such
      representation or warranty had such representation or warranty been made as
      of
      the time of occurrence or discovery of such fact or condition. Should any such
      fact or condition require any change in the Disclosure Schedule if the
      Disclosure Schedule were dated the date of the occurrence or discovery of any
      such fact or condition, the Parent Seller will promptly deliver to the Buyer
      a
      supplement to the Disclosure Schedule specifying such change. During the same
      period, the Parent Seller will promptly notify the Buyer of the occurrence
      of
      any Breach of any covenant of the Parent Seller in this Article V or of the
      occurrence of any event that may make the satisfaction of the conditions in
      Article VII impossible or unlikely.

     

    
      
         

      

      
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    Section
      5.7  No
      Negotiation.
      Until
      such time, if any, as this Agreement is terminated pursuant to Article IX,
      the
      Parent Seller will not, and will cause the Company and each of their
      Representatives not to, directly or indirectly solicit, initiate, or encourage
      any inquiries or proposals from, discuss or negotiate with, provide any
      non-public information to, or consider the merits of any unsolicited inquiries
      or proposals from, any Person (other than the Buyer) relating to any transaction
      involving the sale of the business or assets (other than in the Ordinary Course
      of Business) of the Company, or any of the capital stock of the Company, or
      any
      merger, consolidation, business combination, or similar transaction involving
      the Company.

     

    Section
      5.8  Best
      Efforts.
      Between
      the date of this Agreement and the Closing Date, the Parent Seller will use
      their Best Efforts to cause the conditions in Articles VII to be
      satisfied.

     

    Section
      5.9  Tax
      Matters.
      Without
      the prior written consent of the Buyer, the Parent Seller will not cause the
      Company to make or change any election, change an annual accounting period,
      adopt or change any accounting method, file any amended Tax Return, enter into
      any closing agreement, settle any Tax Claim or assessment relating to the
      Company, surrender any right to claim a refund of Taxes, consent to any
      extension or waiver of the limitation period applicable to any Tax Claim or
      assessment relating to the Company, or take any other similar action relating
      to
      the filing of any Tax Return or the payment of any Tax, if such election,
      adoption, change, amendment, agreement, settlement, surrender, consent, or
      other
      action would have the effect of increasing the Tax liability of the Company
      for
      any period ending after the Closing Date or decreasing any Tax attribute of
      the
      Company existing on the Closing Date.

     

    ARTICLE
      VI

     

    COVENANTS
      OF BUYER PRIOR TO CLOSING DATE

     

    Section
      6.1  Best
      Efforts.
      Between
      the date of this Agreement and the Closing Date, the Buyer will use its Best
      Efforts to cause the conditions in Articles VIII to be satisfied.

     

    Section
      6.2  Required
      Approvals.
      As
      promptly as practicable after the date of this Agreement, the Buyer will make
      all filings required by Legal Requirements to be made by the Buyer in order
      to
      consummate the Contemplated Transactions. Between the date of this Agreement
      and
      the Closing Date, the Buyer will (a) reasonably cooperate with the Company
      and
      Parent Seller with respect to all filings that the Company and Parent Seller
      elect to make or are required by Legal Requirements to make in connection with
      the Contemplated Transactions, and (b) reasonably cooperate with the Company
      and
      Parent Seller in obtaining any consents necessary in connection with the
      Contemplated Transactions.

     

    Section
      6.3  Notification.
      Between
      the date of this Agreement and the Closing Date, the Buyer will promptly notify
      the Company and Parent Seller in writing if the Buyer becomes aware of any
      fact
      or condition that causes or constitutes a Breach of any of the Buyer’s
      representations and warranties as of the date of this Agreement, or if the
      Buyer
      becomes aware of the occurrence after the date of this Agreement of any fact
      or
      condition that would (except as expressly contemplated by this Agreement) cause
      or constitute a Breach of any such representation or warranty had such
      representation or warranty been made as of the time of occurrence or discovery
      of such fact or condition. During the same period, the Buyer will promptly
      notify the Company and Parent Seller of the occurrence of any Breach of any
      covenant of the Buyer in this Article VI or of the occurrence of any event
      that
      may make the satisfaction of the conditions in Article VIII impossible or
      unlikely.

     

    
      
         

      

      
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    ARTICLE
      VII

     

    CONDITIONS
      PRECEDENT TO BUYER’S OBLIGATION TO CLOSE

     

    The
      Buyer’s obligation to purchase the Shares and to take the other actions required
      to be taken by the Buyer at the Closing is subject to the satisfaction, at
      or
      prior to the Closing, of each of the following conditions (any of which may
      be
      waived by Buyer, in whole or in part):

     

    Section
      7.1  Accuracy
      Of Representations.
      All of
      the Parent Seller’s representations and warranties in this Agreement must be
      accurate in all material respects as of the date of this Agreement and as if
      made on the Closing Date.

     

    Section
      7.2  Parent
      Seller’s Performance.

     

    (a)  All
      of
      the covenants and obligations that the Parent Seller is required to perform
      or
      to comply with pursuant to this Agreement at or prior to the Closing (considered
      collectively), and each of these covenants and obligations (considered
      individually), must have been duly performed and complied with in all material
      respects.

     

    (b)  Each
      document required to be delivered pursuant to Section 2.4(a) must have been
      delivered as required.

     

    Section
      7.3  Consents.
      All
      consents, approvals, permits, and orders necessary or desirable for the
      consummation of the transactions contemplated by this Agreement or to ensure
      that, subsequent to the Closing, the Buyer shall continue to realize in all
      material respects the benefits of the assets and properties of the Company,
      shall have been obtained, and all applicable mandated waiting periods in respect
      of the transactions contemplated hereby, if any, shall have expired without
      adverse action.

     

    Section
      7.4  Additional
      Documents.
      Each of
      the following documents must have been delivered to the Buyer:

     

    (a)  an
      opinion of Dinsmore & Shohl LLP, counsel to the Parent Seller, dated the
      Closing Date, in the form of Exhibit
      7.4(a);

     

    (b)  employment
      agreements, which shall include mutually agreed upon non-competition provisions,
      in the form of Exhibit
      7.4(b),
      executed by each of Brian Ream and Brian Code, respectively, and the Buyer
      (collectively, the “Employment
      Agreements”);
      and

     

    
      
         

      

      
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    Section
      7.5  No
      Proceedings.
      There
      must not have been commenced or Threatened against the Buyer, or against any
      Person affiliated with the Buyer, any Proceeding:

     

    (a)  involving
      any challenge to, or seeking damages or other relief in connection with, any
      of
      the Contemplated Transactions; or

     

    (b)  that
      may
      have the effect of preventing, delaying, making illegal, or otherwise
      interfering with any of the Contemplated Transactions.

     

    Section
      7.6  No
      Claim Regarding Stock Ownership or Sale Proceeds.
      There
      must not have been made or Threatened by any Person any claim asserting that
      such Person:

     

    (a)  is
      the
      holder or the beneficial owner of, or has the right to acquire or to obtain
      beneficial ownership of, any shares of, or any other voting, equity, or
      ownership interest in, the Company; or

     

    (b)  is
      entitled to all or any portion of the Purchase Price payable for the
      Shares.

     

    Section
      7.7  No
      Prohibition.
      Neither
      the consummation nor the performance of any of the Contemplated Transactions
      will, directly or indirectly (with or without notice or lapse of time),
      materially contravene, or conflict with, or result in a material violation
      of,
      or cause the Buyer or any Person affiliated with the Buyer to suffer any
      material adverse consequence under:

     

    (a)  any
      applicable Legal Requirement or Order; or

     

    (b)  any
      Legal
      Requirement or Order that has been published, introduced, or otherwise proposed
      by or before any Governmental Body.

     

    Section
      7.8  Certified
      Resolutions.
      The
      Buyer shall have received certificates of the Secretary of the Parent Seller
      and
      the Company, respectively, in form and substance satisfactory to the Buyer,
      with
      respect to all corporate proceedings and authorizations with respect to this
      Agreement and the Contemplated Transactions, their respective Organizational
      Documents, and the incumbency of the officers executing this Agreement or any
      certificate or document contemplated hereby.

     

    Section
      7.9  Contemporaneous
      Transaction.
      All of
      the Shares shall contemporaneously be purchased hereunder.

     

    Section
      7.10  Consents.
      Each of
      the Consents identified in Section 3.2 of the Disclosure Schedule must have
      been
      obtained and must be in full force and effect.

     

    Section
      7.11   Environmental
      Permits.
      The
      Parent Seller and the Company shall have utilized their Best Efforts to have
      any
      Environmental Permits that will expire or otherwise become ineffective on or
      before or by reason of the Closing Date be renewed or reissued prior to the
      Closing Date so as to allow the Buyer to continue the Business without
      interruption after the Closing Date.

     

    
      
         

      

      
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    Section
      7.12  No
      Material Adverse Change.
      Excluding any change in general economic conditions, there shall not have
      occurred any material adverse change in businesses, properties, assets,
      liabilities, operations, condition (financial or otherwise), results of
      operations, or prospects of the Company, taken as a whole.

     

    Section
      7.13  FIRPTA
      Affidavits.
      The
      Parent Seller shall deliver to the Buyer a non-foreign affidavit dated as of
      the
      Closing Date, sworn under penalty of perjury and in form and substance required
      under the Treasury Regulations issued pursuant to Code Section 1445 stating
      that
      the Parent Seller is not a “Foreign Person” as defined in Code Section
      1445.

     

    Section
      7.14  Resignation
      of Directors and Officers of the Company.
      Each
      director and officer of the Company shall tender a resignation notice of their
      respective positions in the Company which shall be effective as of the Closing
      Date.

     

    ARTICLE
      VIII

     

    CONDITIONS
      PRECEDENT TO PARENT SELLER’S OBLIGATION TO CLOSE

     

    The
      Parent Seller’s obligation to sell the Shares and to take the other actions
      required to be taken by the Parent Seller at the Closing is subject to the
      satisfaction, at or prior to the Closing, of each of the following conditions
      (any of which may be waived by the Parent Seller, in whole or in
      part):

     

    Section
      8.1  Accuracy
      Of Representations.
      All of
      the Buyer’s representations and warranties in this Agreement must be accurate in
      all material respects as of the date of this Agreement and as if made on the
      Closing Date.

     

    Section
      8.2  Buyer’s
      Performance.

     

    (a)  All
      of
      the covenants and obligations that the Buyer is required to perform or to comply
      with pursuant to this Agreement at or prior to the Closing (considered
      collectively), and each of these covenants and obligations (considered
      individually), must have been performed and complied with in all material
      respects.

     

    (b)  The
      Buyer
      must have delivered each of the documents required to be delivered by the Buyer
      pursuant to Section 2.4(b).

     

    (c)  The
      Buyer
      must have made the cash payment(s) required to be made by the Buyer pursuant
      to
      Section 2.2(b).

     

    Section
      8.3  Additional
      Documents.
      The
      Buyer must have caused the following documents to be delivered to the Parent
      Seller:

     

    
      
         

      

      
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    (a)  an
      opinion of McCarter & English, LLP, counsel to the Buyer, dated as of the
      Closing Date, in the form of Exhibit
      8.3(a):

     

    Section
      8.4  No
      Proceedings.
      There
      must not have been commenced or Threatened against the Parent Seller or the
      Company, or against any Person affiliated with either of them, any
      Proceeding:

     

    (a)  involving
      any challenge to, or seeking damages or other relief in connection with, any
      of
      the Contemplated Transactions; or

     

    (b)  that
      may
      have the effect of preventing, delaying, making illegal, or otherwise
      interfering with any of the Contemplated Transactions.

     

    Section
      8.5  No
      Claim Regarding Stock Ownership or Sale Proceeds.
      There
      must not have been made or Threatened by any Person any claim asserting that
      such Person:

     

    (a)  is
      the
      holder or the beneficial owner of, or has the right to acquire or to obtain
      beneficial ownership of, any shares of, or any other voting, equity, or
      ownership interest in, the Company; or

     

    (b)  is
      entitled to all or any portion of the Purchase Price payable for the
      Shares.

     

    Section
      8.6  No
      Prohibition.
      Neither
      the consummation nor the performance of any of the Contemplated Transactions
      will, directly or indirectly (with or without notice or lapse of time),
      materially contravene, or conflict with, or result in a material violation
      of,
      or cause the Company or Parent Seller or any Person affiliated with either
      of
      them to suffer any material adverse consequence under:

     

    (a)  any
      applicable Legal Requirement or Order; or

     

    (b)  any
      Legal
      Requirement or Order that has been published, introduced, or otherwise proposed
      by or before any Governmental Body.

     

    Section
      8.7  Certified
      Resolutions.
      The
      Parent Seller shall have received certificates of the Secretary of the Buyer,
      in
      form and substance satisfactory to the Parent Seller, with respect to all
      corporate proceedings and authorizations with respect to this Agreement and
      the
      Contemplated Transactions, its Organizational Documents, and the incumbency
      of
      the officers executing this Agreement or any certificate or document
      contemplated hereby.

     

    ARTICLE
      IX

     

    TERMINATION

     

    Section
      9.1  Termination
      Events.
      This
      Agreement may, by notice given prior to or at the Closing, be
      terminated:

     

    
      
         

      

      
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    (a)  by
      either
      the Buyer or the Parent Seller if a material Breach of any provision of this
      Agreement has been committed by the other party and such Breach has not been
      waived, provided that the terminating party has given the party in Breach
      written notice of such Breach ten (10) days prior to any such termination and
      such party has failed to cure such Breach during such ten-day notice
      period;

     

    (b)  (i)
      by
      the Buyer if any of the conditions in Article VII has not been satisfied as
      of
      the Closing Date or if satisfaction of such a condition is or becomes impossible
      (other than through the failure of the Buyer to comply with its obligations
      under this Agreement) and the Buyer has not waived such condition on or before
      the Closing Date; or (ii) by Parent Seller, if any of the conditions in Article
      VIII has not been satisfied of the Closing Date or if satisfaction of such
      a
      condition is or becomes impossible (other than through the failure of the Parent
      Seller to comply with its obligations under this Agreement) and the Parent
      Seller has not waived such condition on or before the Closing Date;

     

    (c)  by
      mutual
      consent of the Buyer and the Parent Seller.

     

    Section
      9.2  Effect
      of Termination.
      Each
      party’s right of termination under Section 9.1 is in addition to any other
      rights it may have under this Agreement or otherwise, and the exercise of a
      right of termination will not be an election of remedies. If this Agreement
      is
      terminated pursuant to Section 9.1, all further obligations of the parties
      under
      this Agreement will terminate, except that the obligations in Sections 13.1
      and
      13.3 will survive; provided,
      however,
      that if
      this Agreement is terminated by a party because of the Breach of this Agreement
      by the other party or because one or more of the conditions to the terminating
      party’s obligations under this Agreement is not satisfied as a result of the
      other party’s failure to comply with its obligations under this Agreement, and
      if such Breach or failure is not due to any cause beyond such party's control,
      the terminating party’s right to pursue all legal remedies will survive such
      termination unimpaired.

     

    ARTICLE
      X

     

    INDEMNIFICATION;
      REMEDIES

     

    Section
      10.1  Survival;
      Right to Indemnification Not Affected by Knowledge.
      All
      representations, warranties, covenants, and obligations in this Agreement,
      the
      Disclosure Schedule, the supplements to the Disclosure Schedule, the certificate
      delivered pursuant to Section 2.4(a)(vii), and any other certificate or document
      delivered pursuant to this Agreement will survive the Closing. The right to
      indemnification, payment of Damages or other remedy based on any Breach of
      any
      such representations, warranties, covenants, and obligations will not be
      affected by any investigation conducted with respect to the Company, its assets,
      liabilities or business.

     

    Section
      10.2  Indemnification
      and Payment of Damages by Parent Seller.
      The
      Parent Seller will indemnify and hold harmless the Buyer, the Company, and
      their
      respective Representatives, stockholders, controlling persons, and affiliates
      (collectively, the “Indemnified
      Persons”)
      for,
      and will pay to the Indemnified Persons the amount of, any incurred loss,
      liability, claim, damage (including incidental and consequential damages),
      expense (including costs of investigation and defense and reasonable attorneys’
fees) or diminution of value, whether or not involving a third party claim
      (collectively, “Damages”),
      caused by and attributable to:

     

    
      
         

      

      
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    (a)  any
      Breach of any representation or warranty made by the Parent Seller in this
      Agreement, the Disclosure Schedule, or any other certificate or document
      delivered by the Parent Seller pursuant to this Agreement;

     

    (b)  any
      Breach by the Parent Seller of any covenant or obligation of the Parent Seller
      in this Agreement;

     

    (c)  any
      product shipped or manufactured by, or any services provided by, the Company
      prior to the Closing Date, excluding any product warranty claims which are
      not,
      in the aggregate, in excess of the Company's product warranty reserves as of
      the
      Closing Date;

     

    (d)  any
      claim
      by any Person for brokerage or finder’s fees or commissions or similar payments
      based upon any agreement or understanding alleged to have been made by any
      such
      Person with the Parent Seller or the Company (or any Person acting on their
      behalf) in connection with any of the Contemplated Transactions; or

     

    (e)  (i)
      all
      Taxes (or the non-payment thereof) of the Company for all Taxable periods ending
      on or before the Closing Date and the portion through the end of the Closing
      Date for any Straddle Period (“Pre-Closing
      Tax Period”),
      (ii) all Taxes of any member of an affiliated, consolidated, combined, or
      unitary group of which the Company (or any predecessor of any of the foregoing)
      is or was a member on or prior to the Closing Date, including pursuant to
      Treasury Regulation Section 1.1502-6 or any analogous or similar state, local,
      or foreign law or regulation, and (iii) any and all Taxes of any Person
      (other than the Company) imposed on the Company as a transferee or successor,
      by
      contract or pursuant to any law, rule or regulation, which Taxes relate to
      an
      event or transaction occurring before the Closing; provided,
      however,
      that in
      the case of clauses (i), (ii), and (iii) above, the Parent Seller shall be
      liable only to the extent that such Taxes exceed the amount, if any,
      specifically reserved for such Taxes (excluding any reserve for deferred Taxes
      established to reflect timing differences between book and Tax income) on the
      face of the Closing Working Capital Statement. Notwithstanding any other
      provision of this Agreement to the contrary, the obligation of the Parent Seller
      set forth in this Section 10.2(e) shall remain in effect without limitation
      as
      to amount, in accordance with its terms.

     

    The
      remedies provided in this Section 10.2 will not be exclusive of or limit any
      other remedies unrelated to the Agreement that may be available to the Buyer
      or
      the
      other Indemnified Persons.

    


    Section
      10.3  Environmental
      Matters.
      Excluding any Environmental, Health and Safety Liabilities or other Damages
      caused by or attributable to any act or omission by Buyer or the Company after
      the Closing, in addition to the provisions of Section 10.2, the Parent Seller
      will indemnify and hold harmless the Buyer, the Company, and the other
      Indemnified Persons for, and will pay to the Buyer, the Company, and the other
      Indemnified Persons the amount of, any Damages (including costs of cleanup,
      containment, or other remediation) arising, directly or indirectly, from or
      in
      connection with:

     

    
      
         

      

      
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    (a)  any
      Environmental, Health, and Safety Liabilities arising out of or relating
      to:

     

    (i)  (A)
      the
      ownership, operation, or condition at any time on or prior to the Closing Date
      of the Facilities or any other properties and assets (whether real, personal,
      or
      mixed and whether tangible or intangible) in which the Parent Seller or the
      Company has or had an interest, or (B) any Hazardous Materials or other
      contaminants that were present on the Facilities or such other properties and
      assets at any time on or prior to the Closing Date; or

     

    (ii)  (A)
      any
      Hazardous Materials or other contaminants, wherever located, that were, or
      were
      allegedly, generated, transported, stored, treated, Released, or otherwise
      handled by the Parent Seller or the Company or by any other Person for whose
      conduct they are or may be held responsible at any time on or prior to the
      Closing Date, or (B) any Hazardous Activities that were, or were allegedly,
      conducted by the Parent Seller or the Company or by any other Person for whose
      conduct they are or may be held responsible on or prior to the Closing Date;
      or

     

    (b)  any
      bodily injury (including illness, disability, and death, and regardless of
      when
      any such bodily injury occurred, was incurred, or manifested itself), personal
      injury, property damage (including trespass, nuisance, wrongful eviction,
      deprivation of the use of or diminution in value of real property or damage
      to
      natural resources), or other damage of or to any Person, including any employee
      or former employee of the Parent Seller or the Company or any other Person
      for
      whose conduct they are or may be held responsible, in any way arising from
      or
      allegedly arising from any Hazardous Activity conducted or allegedly conducted
      with respect to the Facilities or the operation of the Company prior to the
      Closing Date, or from Hazardous Material that was (i) present or suspected
      to be
      present on or before the Closing Date on or at the Facilities (or present or
      suspected to be present on any other property, if such Hazardous Material
      emanated or allegedly emanated from any of the Facilities and was present or
      suspected to be present on any of the Facilities on or prior to the Closing
      Date) or (ii) Released or allegedly Released by the Parent Seller or the Company
      or any other Person for whose conduct they are or may be held responsible,
      at
      any time on or prior to the Closing Date.

     

    The
      Parent Seller will be entitled to control any Cleanup (provided, however, that
      any such Cleanup shall be reasonably satisfactory to Buyer and shall satisfy
      the
      requirements of the Environmental Laws and any Environmental Authority
      exercising jurisdiction over such Cleanup and shall not unreasonably interfere
      with the Buyer’s or the Company’s use of or operations at any of the Facilities,
      including the Lease of Real Property), any related Proceeding, and, except
      as
      provided in the following sentence, any other Proceeding with respect to which
      indemnity may be sought under this Section 10.3. The procedure described in
      Section 10.8 will apply to any claim solely for monetary damages relating to
      a
      matter covered by this Section 10.3.

     

    
      
         

      

      
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    Section
      10.4  Indemnification
      and Payment of Damages by Buyer.
      The
      Buyer will indemnify and hold harmless the Parent Seller, and its
      Representatives, stockholders, controlling persons and affiliates for, and
      will
      pay to the Parent Seller the amount of any Damages caused by and attributable
      to:

     

    (a)  any
      Breach of any representation or warranty made by the Buyer in this Agreement
      or
      in any certificate or document delivered by the Buyer pursuant to this
      Agreement;

     

    (b)  any
      Breach by the Buyer of any covenant or obligation of the Buyer in this
      Agreement;

     

    (c)  any
      claim
      by any Person for brokerage or finder’s fees or commissions or similar payments
      based upon any agreement or understanding alleged to have been made by such
      Person with the Buyer (or any Person acting on its behalf) in connection with
      any of the Contemplated Transactions; or

     

    (d)  any
      product shipped or manufactured by, or any services provided by, the Company
      or
      any other act or failure to act by the Company after the Closing, unless
      expressly covered by the Parent Seller's indemnity under Section
      10.2.

     

    Section
      10.5  Time
      Limitations.
      The
      Parent Seller will have no liability (for indemnification or otherwise) with
      respect to any representation or warranty other than those in Section 3.3 and
      3.11, unless on or before the second anniversary of the Closing Date the Buyer
      notifies the Parent Seller of a claim specifying the factual basis of that
      claim
      in reasonable detail to the extent then known by Buyer. A claim with respect
      to
      Section 3.3 and 3.11, or a claim for indemnification or reimbursement not based
      upon any representation or warranty, may be made at any time, subject to any
      limitation based on the express terms of this Agreement. The Buyer will have
      no
      liability (for indemnification or otherwise) with respect to any representation
      or warranty, unless on or before the third anniversary of the Closing Date
      the
      Parent Seller notifies the Buyer of a claim specifying the factual basis of
      that
      claim in reasonable detail to the extent then known by the Parent
      Seller.

     

    Section
      10.6  Limitations
      on Amount - Parent Seller.
      The
      Parent Seller will have no liability (for indemnification or otherwise) with
      respect to the matters described in Section 10.2(a) (except for representations
      and warranties set forth in Section 3.11) until the total of all Damages with
      respect to such matters exceeds $100,000, after which the Parent Seller will
      be
      liable for the total of all Damages. Except with respect to any and all Damages
      resulting or arising from or in connection with the breach of any of the
      representations and warranties set forth in Section 3.11 and 3.19 (for which
      there will be no limit), the aggregate amount of all Damages for breaches of
      representations and warranties for which Buyer shall be entitled to be
      indemnified under this Article X shall not exceed the sum of $3,000,000.
      However, this Section 10.6 will not apply to (a) any Breach of any of Parent
      Seller’ representations and warranties of which the Parent Seller or the Company
      had Knowledge at any time prior to the date on which such representation and
      warranty is made or (b) any intentional Breach by the Parent Seller of any
      covenant or obligation.

     

    
      
         

      

      
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    Section
      10.7  Limitations
      on Amount - Buyer.
      The
      Buyer will have no liability (for indemnification or otherwise) with respect
      to
      the matters described in Section 10.4(a) until the total of all Damages with
      respect to such matters exceeds $100,000, after which the Buyer will be liable
      for the total of all Damages. The aggregate amount of all Damages for breaches
      of representations and warranties for which Parent Seller shall be entitled
      to
      be indemnified under this Article X shall not exceed the sum of $3,000,000.
      However, this Section 10.7 will not apply to (a) any Breach of any of the
      Buyer’s representations and warranties of which the Buyer had Knowledge at any
      time prior to the date on which such representation and warranty is made or
      (b)
      any intentional Breach by the Buyer of any covenant or obligation.

     

    Section
      10.8  Procedure
      For Indemnification - Third Party Claims.

     

    (a)  Promptly
      after receipt by an indemnified party under Section 10.2, 10.4, or (to the
      extent provided in the last sentence of Section 10.3) Section 10.3 of notice
      of
      the commencement of any Proceeding against it, such indemnified party will,
      if a
      claim is to be made against an indemnifying party under such Section, give
      notice to the indemnifying party of the commencement of such claim, but the
      failure to notify the indemnifying party will not relieve the indemnifying
      party
      of any liability that it may have to any indemnified party, except to the extent
      that the indemnifying party demonstrates that the defense of such action is
      actually and materially prejudiced by the indemnifying party’s failure to give
      such notice.

     

    (b)  If
      any
      Proceeding referred to in Section 10.8(a) is brought against an indemnified
      party and it gives notice to the indemnifying party of the commencement of
      such
      Proceeding, the indemnifying party will, unless the claim involves Taxes, be
      entitled to participate in such Proceeding and, to the extent that it wishes
      (unless (i) the indemnifying party is also a party to such Proceeding and the
      indemnified party determines in good faith that joint representation would
      be
      inappropriate, or (ii) the indemnifying party fails to provide rea-sonable
      assurance to the indemnified party of its financial capacity to defend such
      Proceeding and provide indemnification with respect to such Proceeding), to
      assume the defense of such Proceeding with counsel reasonably satisfactory
      to
      the indemnified party and, after notice from the indemnifying party to the
      indemnified party of its election to assume the defense of such Proceeding,
      the
      indemnifying party will not, as long as it diligently conducts such defense,
      be
      liable to the indemnified party under this Article X for any fees of other
      counsel or any other expenses with respect to the defense of such Proceeding,
      in
      each case subsequently incurred by the indemnified party in connection with
      the
      defense of such Proceeding, other than reasonable costs of investigation. If
      the
      indemnifying party assumes the defense of a Proceeding: (i) it will be presumed
      as long as such defense continues for purposes of this Agreement that the claims
      made in that Proceeding are within the scope of and subject to indemnification;
      (ii) no compromise or settlement of such claims may be effected by the
      indemnifying party without the indemnified party’s consent which will not be
      unreasonably withheld unless (A) there is no finding or admission of any
      violation of Legal Requirements or any violation of the rights of any Person
      and
      no effect on any other claims that may be made against the indemnified party,
      and (B) the sole relief provided is monetary damages that are paid in full
      by
      the indemnifying party; and (iii) the indemnified party will have no liability
      with respect to any compromise or settlement of such claims effected without
      its
      consent. If notice is given to an indemnifying party of the commencement of
      any
      Proceeding and the indemnifying party does not, within ten days after the
      indemnified party’s notice is given, give notice to the indemnified party of its
      election to assume the defense of such Proceeding, the indemnifying party will
      be bound by any determination made in such Proceeding or any compromise or
      settlement effected by the indemnified party, unless the claim involves Taxes,
      in which case any such compromise or settlement shall require such indemnifying
      party's prior consent, which will not be unreasonably withheld.

     

    
      
         

      

      
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    (c)  Notwithstanding
      the foregoing, if an indemnified party determines in good faith that there
      is a
      reasonable probability that a Proceeding may adversely affect it or its
      affiliates other than as a result of monetary damages for which it would be
      entitled to indemnification under this Agreement, the indemnified party may,
      by
      notice to the indemnifying party, assume the exclusive right to defend,
      compromise, or settle such Proceeding, but the indemnifying party will not
      be
      bound by any determination of a Proceeding so defended or any compromise or
      settlement effected without its consent (which may not be unreasonably
      withheld).

     

    Section
      10.9  Procedure
      for Indemnification - Other Claims.
      A claim
      for indemnification for any matter not involving a third-party claim may be
      asserted by written notice to the party from whom indemnification is
      sought.

     

    ARTICLE
      XI

     

    WORKING
      CAPITAL STATEMENTS

     

    Section
      11.1  Pro
      Forma Working Capital Statement.
      No
      earlier than five (5) business days prior to Closing, the Parent Seller shall
      prepare, based upon their good faith estimates and assumptions and in accordance
      with GAAP consistently applied and using the same practices, principles and
      methodologies used in preparing the Financial Statements (except for vacation
      accruals to recognize vacation obligations to Company employees as of January,
      2006), a statement showing thereon calculation of the amount (“Estimated
      Working Capital”)
      projected as of the Closing for the Company obtained by subtracting: (i) the
      amount of the consolidated current liabilities of the Company, from (ii) the
      amount of the consolidated current assets of the Company; it being acknowledged
      that no amount outstanding from the Company to any Affiliate of the Company,
      or
      from any Affiliate of the Company to the Company, shall in any manner enter
      into
      the foregoing calculation, except for intercompany accounts arising from the
      sale of products by the Company to Affiliates of the Company. The foregoing
      statement shall, consistent with this Agreement, be reasonably acceptable to
      the
      Buyer and is referred to herein as the “Pro
      Forma Working Capital Statement”.
      If
      Estimated Working Capital is less than $3,049,000 (the “Baseline
      Working Capital”),
      the
      amount by which the Baseline Working Capital exceeds the Estimated Working
      Capital shall be referred to herein as the “Estimated
      Working Capital Deficiency”.
      The
      Parent Seller shall afford the Buyer the opportunity to receive and review
      any
      information and any calculation relating to the preparation of the Pro Forma
      Working Capital Statement.

     

    
      
         

      

      
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    Section
      11.2  Closing
      Working Capital Statement.

     

    (a)  Within
      sixty (60) days from and after the Closing, the Buyer shall prepare, in
      accordance with GAAP, and shall deliver to the Parent Seller, a statement
      showing thereon calculation of the amount (“Closing
      Working Capital”)
      at
      Closing obtained by subtracting: (i) the amount of the consolidated current
      liabilities of the Company, from (ii) the amount of the consolidated current
      assets of the Company; it being acknowledged that no amount outstanding from
      the
      Company to any Affiliate, or from any Affiliate of the Company to the Company,
      shall in any manner enter into the foregoing calculation, except for
      intercompany accounts arising from the sale of products by the Company to
      Affiliates of the Company.

     

    (b)  Within
      thirty (30) days after its receipt of such statement, the Parent Seller shall
      examine such statement, and any determinations, computations, and decisions
      made
      in the preparation thereof. In the event the Parent Seller shall disagree with
      any of the determinations, computations or decisions relating to the preparation
      of such statement, the Parent Seller shall, within thirty (30) days after
      delivery of such statement, serve notice of such disputed item or items upon
      the
      Buyer, and the Parent Seller and the Buyer shall thereupon endeavor to reach
      agreement with respect thereto. Any failure by the Parent Seller to deliver
      such
      notice within such period with respect to any item or items shall be deemed
      conclusive acceptance by the Parent Seller of such item or items. If such
      agreement with respect to any item identified in a notice as aforesaid shall
      not
      be reached within ten (10) days of the date of such notice of disagreement,
      such
      disputed item or items shall be submitted for determination to a firm of
      independent public accountants reasonably acceptable to both the Parent Seller
      and the Buyer (which shall not be an accounting firm retained on a regular
      basis
      by the Buyer, or any Affiliate of the Buyer, or the Parent Seller, or any
      Affiliate of the Parent Seller, unless consented to by both parties), the cost
      of which shall be pro-rated between the Parent Seller and the Buyer, based
      on
      the final resolution of any disputed amount in relation to the final positions
      of both parties. The determination of such independent public accountants with
      respect to any item or items shall be conclusive and binding upon the parties.
      The foregoing statement, completed as aforesaid, is referred to herein as the
      “Closing
      Working Capital Statement”.
      If
      Closing Working Capital is less than Baseline Working Capital, the amount by
      which Baseline Working Capital exceeds Closing Working Capital shall be referred
      to herein as the “Working
      Capital Deficiency”.

     

    Section
      11.3  Purchase
      Price Adjustments.
      Within
      ten (10) days after the determination under Section 11.2 hereof of all disputed
      items contained in the Closing Working Capital Statement and the calculation
      of
      the Working Capital Deficiency (if any), the parties shall recalculate the
      Purchase Price and effectuate such payments as shall be required appropriately
      to adjust any payment theretofore made under Section 2.2(b) for any Working
      Capital Deficiency so that if the Closing Date Purchase Price Payment exceeds
      the Purchase Price, the amount of such excess shall be repaid to the Buyer
      by
      the Parent Seller within ten (10) days of such recalculation.

     

    
      
         

      

      
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    ARTICLE
      XII

     

    CERTAIN
      POST-CLOSING MATTERS

     

    Section
      12.1  Election
      Under Treasury Regulation Section 1.33(h)(10)-1.

     

    (a)  Parent
      Seller and Buyer agree that they shall jointly make or cause to be made the
      election under Section 338(h)(10) of the Code and Treasury Regulations Section
      1.338(h)(10)-1(c) and any corresponding election under state, local or foreign
      Tax law (the “Section
      338 Elections”)
      with
      respect to the purchase and sale of the Shares.  The Buyer shall prepare
      IRS Form 8023 (or any successor form) and any similar state, local or foreign
      Tax forms (together with any required attachments and schedules) required to
      make the Section 338 Elections (each an “Election
      Form”
and
      collectively, the “Election
      Forms”). 
      Parent Seller shall properly execute (or cause to be executed) any such Election
      Forms and promptly return such properly executed forms to Buyer. 


     

    (b)  Parent
      Seller, Buyer, and Company agree that the Purchase Price and the liabilities
      of
      the Company (plus other relevant items required under Section 338(h)(10) of
      the
      Code) will be allocated for Tax purposes among the assets of the Company and
      the
      complete satisfaction of all intercompany debt obligations between Parent Seller
      and the Company existing immediately prior to the Closing as set forth on a
      written statement in a form reasonably acceptable to Buyer (the “Allocation
      Statement”)
      which
      shall be delivered by Buyer to Parent Seller within a reasonable time period
      after the Closing Date.    In the event that any of the
      allocations set forth in the Allocation Statement are disputed by a Tax
      authority, the party receiving notice of such dispute shall use reasonable
      efforts to notify the other parties, and the Parent Seller and Buyer shall
      cooperate in good faith in responding to such challenge to preserve the
      effectiveness of such allocation, Buyer to be solely responsible for both its
      own and Parent Seller's reasonable costs and expenses incurred in connection
      therewith.  

     

    (c)  Parent
      Seller, Buyer, and Company agree to file, and shall cause their Affiliates
      to
      file, all Tax Returns in a manner consistent with the Section 338 Elections
      and
      the Allocation Statement and shall take no position contrary thereto, unless
      otherwise required by law.  Parent Seller, Buyer and Company shall
      cooperate in the preparation and filing of any Election Forms and shall take
      all
      such actions as are necessary and appropriate to effectuate the Section 338
      Elections.

     

    
      
         

      

      
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    (d)  If
      Buyer
      elects to make the Section 338(h)(l0) Elections, Buyer shall pay to Parent
      Seller, at the time and in the amounts set forth below, an amount equal to
      excess of (i) the amount of federal, state and local income Taxes which Parent
      Seller is required to pay with respect to the sale of the Shares, over (ii)
      the
      amount of federal, state and local income Taxes which Parent Seller would have
      been required to pay if the Section 338(h)(10) Elections were not made in
      connection with the sale of the Shares (the “Election
      Tax Cost”).  
      Buyer agrees to reimburse Parent Seller for all reasonable third party expenses
      incurred in order to complete an analysis of Parent's Seller's U.S. federal
      income tax basis in the Shares of the Company as of the Closing Date as well
      as
      an analysis of its federal income tax basis in the assets of the Company as
      of
      the Closing Date (the “Tax
      Basis Study”),
      and
      for any other reasonable out-of-pocket costs incurred by Parent Seller in
      connection with any of the provisions of this Section 12.6, regardless of
      whether or not Buyer elects under Section 338(h)(10).  Parent Seller and
      Buyer agree to use commercially reasonable efforts to cause the Tax Basis Study
      to be completed as soon as practicable after the Closing Date, and in any event
      no later than October 15, 2007. By October 15, 2007, Parent Seller shall deliver
      a statement to Buyer setting forth in good faith the Election Tax Cost. 
Buyer shall have 30 days to object to the Election Tax Cost.  If Buyer
      fails to object in such 30 day period, the Election Tax Cost determined by
      Parent Seller shall be the final Election Tax Cost.  If Buyer so objects,
      Buyer and Parent Seller shall negotiate in good faith to resolve any disputes
      and reach an agreement as to the final Election Tax Cost.  If Buyer and
      Parent Seller can not resolve their disputes within 30 days of Buyer’s initial
      objection, the disputes will be submitted to an independent accounting firm
      mutually acceptable to Buyer and Parent Seller.  The independent accounting
      firm shall resolve all disputed issues, which resolution will be binding on
      Buyer and Parent Seller.  The fees and expenses of such accounting firm
      shall be borne equally by Buyer and Parent Seller.  The Election Tax Cost
      shall be paid to Parent Seller no later than 10 days after all disputes are
      resolved with respect to the Election Tax Cost, and the final Election Tax
      Cost
      is determined. 

     

    Section
      12.2  Effective
      Time Balance Sheet.
      Within
      ten (10) days after the Closing, Parent Seller shall deliver to Buyer an
      unaudited, consolidated balance sheet of the Company at and as of the Effective
      Time (the “Effective
      Time Balance Sheet”)
      which
      Parent Seller covenants and agrees shall reflect that as of the date thereof
      the
      Company had no outstanding debt obligations, whether intercompany in nature
      or
      otherwise, other than normal
      trade working capital liabilities, such as accounts payable and routine
      accruals.

     

    Section
      12.3  Taxes.

     

    (a)  Tax
      Indemnification.
      The
      indemnification obligations of the Parent Seller with respect to Taxes are
      provided in Article X of this Agreement.

     

    (b)  Straddle
      Period.
      For
      purposes of this Agreement, in the case of any Taxes (excluding the Election
      Tax
      Cost) that are payable for a taxable period that includes (but does not end
      on)
      the Closing Date (a “Straddle
      Period”),
      the
      portion of such Tax which relates to the portion of such Taxable period ending
      on the Closing Date will (i) in the case of any Taxes other than Taxes based
      upon or related to income or receipts of the Company, be deemed to be the amount
      of such Tax for the entire Taxable period multiplied by a fraction, the
      numerator of which will be the number of days in the Taxable period ending
      on
      the Closing Date and the Denominator of which will be the number of days in
      the
      entire Taxable period, and (ii) in the case of any Taxes based upon or related
      to income or receipts, be deemed equal to the amount that would be payable
      if
      the relevant Taxable period ended at the close of business on the Closing Date
      (and for such purpose, the Taxable period of any partnership or other
      pass-through entity in which the Company holds an interest will be deemed to
      end
      at such time).

     

    
      
         

      

      
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    (c)  Responsibility
      for Filing Tax Returns.

     

    (i)  Parent
      Seller shall include the Company in, and shall file or cause to be filed, (A)
      the United States consolidated federal income Tax Return of Parent Seller for
      all taxable periods of the Company ending on or prior to the Closing Date and
      (B) where applicable, Parent Seller shall include the Company or cause the
      Company to be included in, and shall file or cause to be filed all Other Seller
      Consolidated Tax Returns for all Taxable periods of the Company ending on or
      prior to the Closing Date, and shall pay (or cause to be paid) any and all
      Taxes
      due with respect to the Tax Returns referred to in clause (A) or (B) of this
      Section 12.3(c)(i). Parent Seller shall file (or cause to be filed) all other
      Tax Returns of the Company required to be filed prior to the Closing Date,
      and
      pay (or cause to be paid) any and all Taxes due with respect to such Tax
      Returns. Any Tax Returns which Parent Seller files (or causes to be filed)
      pursuant to this Section 12.3(c)(i) after the date of this Agreement shall
      be
      prepared in a manner consistent with past practice, unless a contrary treatment
      is required by the applicable Tax laws. Subsequent to Closing, neither Parent
      Seller nor the Buyer shall amend any combined, consolidated or unitary Taxes
      Return which includes the Company or make a claim for refund which respect
      to
      such Tax Return without the other party’s consent (which will not be
      unreasonably withheld), if such amendment or refund claim could have an material
      adverse affect on the other party or any of their respective Affiliates for
      any
      Taxable period.

     

    (ii)  Following
      the Closing, Buyer shall prepare (or cause to be prepared) and file (or cause
      to
      be filed) all Tax Returns (other than consolidated, combined or unitary Tax
      Returns described in Section 12.3(c)(i)) which are required to be filed pursuant
      to any Legal Requirement with respect to the Company after the Closing Date
      (including any separate Company Tax Returns which Parent Seller failed to
      properly file, or cause to be filed, prior to the Closing Date), and, subject
      to
      the right to receive payment from the Parent Seller under Section 12.3(c)(iii),
      pay or cause to be paid all Taxes shown to be due thereon. To the extent that
      Buyer will seek a payment from Parent Seller under Section 12.3(c)(iii) with
      respect to any such Tax Return (for which the Parent Seller shall be liable
      only
      to the extent that such Taxes exceed the amount, if any, specifically reserved
      for such Taxes (excluding any reserve for deferred Taxes established to reflect
      timing differences between book and Tax income) on the face of the Closing
      Working Capital Statement), Buyer shall cause the Company to provide Parent
      Seller with a copy of such Tax Return (or in the case of a consolidated,
      combined, or unitary Tax Return including the Company, the portion of such
      Tax
      Return relating to the Company) prior to filing for Parent Seller’s review and
      approval (which approval will not be unreasonably withheld). Parent Seller
      and
      Buyer shall attempt in good faith to resolve any disagreements regarding such
      Tax Return prior to the due date for filing such Tax Return. In the event that
      the Parent Seller and Buyer are unable to resolve any dispute with respect
      to
      such Tax Return prior to the due date for filing, such dispute shall be resolved
      in accordance with Section 12.3(j).

     

    
      
         

      

      
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    (iii)  To
      the
      extent that any Taxes shown due on a Tax Return which Buyer is required to
      file
      (or cause to be filed) under Section 12.3(c)(ii) relate to a Pre-Closing Tax
      Period (and were not reserved for on the Closing Working Capital Statement)
      or
      are otherwise the responsibility of the Parent Seller under Article X of this
      Agreement, Parent Seller shall make a payment to Buyer in amount of such Taxes
      no later than ten (10) days after Buyer provides Parent Seller with a copy
      of
      such Tax Return (or in the case of a consolidated, combined or unitary Tax
      Return, the portion relating to the Company) and a statement setting forth
      the
      amount Parent Seller owes to the Buyer. 
      If a
      dispute arises with respect to the underlying Tax Return or the amount of Taxes
      for which the Parent Seller is responsible, Parent Seller and Buyer shall
      attempt in good faith to resolve any such disagreement prior to the due date
      of
      the Tax Return. If such dispute is not resolved prior to the due date of the
      Tax
      Return, the Parent Seller shall pay to Buyer the amount that Parent Seller
      believes in good faith is due and owing (and the Tax Return shall be filed
      in
      the manner that Buyer deems correct); provided,
      however,
      if the
      independent accounting firm resolving the dispute in accordance with Section
      12.3(j) determines that amount of Taxes as being the responsibility of the
      Parent Seller differs from the amount paid to Buyer, the Parent Seller shall
      pay
      to the Buyer, or the Buyer shall pay to the Parent Seller, the amount necessary
      to reflect the independent accounting firm’s determination (plus interest
      determined at the federal underpayment rate described in Section 6621(a)(2)
      of
      the Code). No payment pursuant to this Section 12.3(c)(iii) shall excuse the
      Parent Seller from its indemnification obligations pursuant to Article X if
      the
      amount of Taxes as ultimately determined (on audit or otherwise) for the periods
      covered by such Tax Return exceeds the amount of the Parent Seller’s payment
      pursuant to this Section 12.3(c)(iii). 

     

    (d)  Tax
      Audits.

     

    (i)  If
      notice
      of any Proceeding with respect to Taxes of the Company (a “Tax
      Claim”)
      shall
      be received by either party for Taxes which the other party may reasonably
      be
      expected to be responsible, the notified party shall notify such other party
      in
      writing of such Tax Claim; provided, however, that the failure of the notified
      party to give the other party notice as provided herein shall not relieve such
      failing party of its obligations under this Agreement, except to the extent
      that
      the other party is actually or materially prejudiced thereby.

     

    (ii)  Parent
      Seller shall have the right (at its expense) to control any Tax Claim with
      respect to the Company for Taxable periods ending on or prior to the Closing
      Date; provided, however, that if the Parent Seller elects to control the
      contest, the Company and the Buyer shall have the right, at their expense,
      to
      participate in such contest. Buyer shall have the right to control any Tax
      Claim
      with respect to the Company for any Taxable period ending after the Closing
      Date, including any Straddle Period, provided, however, that Parent Seller,
      at
      its own expense, shall have the right to participate in any Tax Claims with
      respect to a Straddle Period.

     

    
      
         

      

      
        55

        
          

        

      

      
         

      

    

     

    (iii)  Notwithstanding
      anything to the contrary contained in this Agreement, neither party shall enter
      into any compromise or agree to settle any Tax Claim if the resolution of the
      issue involved in the settlement could have an adverse effect on the liability
      for Taxes of other party (or their Affiliates) for such Taxable year or a
      subsequent of earlier Taxable year without the consent of the other party (which
      consent will not be unreasonably withheld or delayed).

     

    (e)  Cooperation
      on Tax Matters.

     

    (i)  The
      parties hereto shall cooperate fully, as and to the extent reasonably requested
      by the other party, in connection with the filing of Tax Returns pursuant to
      Section 12.3(c) above and any audit, litigation, or other proceeding with
      respect to Taxes relating to the Company. Such cooperation shall include the
      retention and (upon the other party’s request) the provision of records and
      information which are reasonably relevant to any such audit, litigation, or
      other proceeding and making employees available on a mutually convenient basis
      to provide additional information and explanation of any material provided
      hereunder. The Buyer and the Parent Seller agree (A) to (or cause the
      Company to) retain all books and records with respect to Tax matters pertinent
      to the Company relating to any Pre-Closing Tax Period until the expiration
      of
      the statute of limitations (and, to the extent notified by the Buyer or the
      Parent Seller, any extensions thereof), and to abide by all record retention
      agreements entered into with any Taxing authority, and (B) to give the
      other party reasonable written notice prior to transferring, destroying, or
      discarding any such books and records and, if the other party so requests,
      the
      Buyer or the Parent Seller, as the case may be, shall allow the other party
      to
      take possession of such books and records.

     

    (ii)  The
      Buyer
      and the Parent Seller further agree, upon request, to provide the other party
      with all information that any party may be required to report pursuant to Code
      Section 6043 and all Treasury Regulations promulgated thereunder.

     

    (f)  Tax
      Sharing Agreements.
      All Tax
      sharing agreements, if any, or similar agreements with respect to or involving
      the Company shall be terminated as of the Closing Date and, after the Closing
      Date, the Company shall not be bound thereby or have any liability
      thereunder.

     

    (g)  Certain
      Taxes and Fees.
      All
      transfer, documentary, sales, use, stamp, registration, and other such Taxes,
      and all conveyance fees, recording charges, and other fees and charges
      (including any penalties and interest) incurred in connection with consummation
      of the transactions contemplated by this Agreement shall be paid by the Parent
      Seller when due, and the Parent Seller will, at its own expense, file all
      necessary Tax Returns and other documentation with respect to all such Taxes,
      fees, and charges, and, if required by applicable law, the Buyer will pay such
      Taxes, and will cause its Affiliates to, join in the execution of any such
      Tax
      Returns and other documentation.

     

    
      
         

      

      
        56

        
          

        

      

      
         

      

    

     

    (h)  Survival
      of Obligations.
      Notwithstanding any other provision in this Agreement to the contrary, the
      obligations of the parties set forth in this Section 12.3 (or Article X to
      the
      extent such relates to Taxes) shall be unconditional and absolute and shall
      remain in effect without limitation as to time or amount.

     

    (i)  Treatment
      of Indemnification Payments.
      The
      Buyer and the Parent Seller agree to treat all indemnification payments to
      made
      under this Agreement (including any payments made pursuant to Section 12.3(c))
      as an adjustment to the Purchase Price for Tax purposes, unless otherwise
      required by law. 

     

    (j)  Disputes.
      Any
      dispute as to any matter covered by Section 12.3(c)(ii) and (iii) shall be
      resolved by an independent accounting firm mutually acceptable to Parent Seller
      and Buyer. The resolution by such accounting firm shall be binding on the
      parties. The fees and expenses of such accounting firm shall be borne equally
      by
      Parent Seller, on one hand, and Buyer on the other. If any dispute with respect
      to a Tax Return is not resolved prior to the due date of such Tax Return, such
      Tax Return shall be filed in the manner in which Buyer deems is correct,
      provided, however, that Buyer will file any amended Tax Returns permitted by
      law
      to reflect the independent accounting firms resolution of the
      dispute.

     

    Section
      12.4  Name
      Change.
      As
      further provided in the Trademark License, no later than eighteen (18) months
      after the Closing Date, Buyer shall cause the Company and the Company's Japanese
      joint venture, Nikkiso-YSI Co., Ltd., to change each of their respective
      corporate names to eliminate any reference to the YSI name.

     

    Section
      12.5  Noncompetition.
      As an
      inducement for Buyer to enter into this Agreement and for other good and
      valuable consideration to be paid to Parent Seller under this Agreement, the
      receipt and sufficiency of which are hereby acknowledged, Parent Seller agrees
      that:

     

    (a)  For
      a
      period of five years after the Closing Date:

     

    (i)  Parent
      Seller will not, directly or indirectly, engage or invest in, own, manage,
      operate, finance, control or participate in the ownership, management,
      operation, financing, or control of, be associated with, lend Parent Seller’s
      name or any similar name to, lend Parent Seller’s credit to, or render services
      or advices to, any business whose products or services compete in whole or
      in
      part with the products or services of the Company as of the Closing Date,
      anywhere in the world; provided, however, that Parent Seller may purchase
      temperature sensors from third parties and incorporate such sensors into systems
      sold or provided by YSI and may also sell such sensors as replacement sensors
      for YSI systems, and provided further, however, that Parent Seller may purchase
      or acquire up to (but no more than) one percent of any class of securities
      of
      any enterprise (but without otherwise participating in the activities of such
      enterprise) if such securities are listed on any national or regional securities
      exchange or have been registered under Section 12(g) of the Securities and
      Exchange Act of 1934. Parent Seller agrees that this covenant is reasonable
      with
      respect to its duration, geographic area, and scope;

     

    
      
         

      

      
        57

        
          

        

      

      
         

      

    

     

    (ii)  Parent
      Seller will not, directly or indirectly, either for himself or any other Person,
      (A) induce or attempt to induce any employee of the Company to leave the employ
      of the Company, (B) induce or attempt to induce any customer, supplier,
      licensee, or business relation of the Company to cease doing any business with
      the Company concerning products or services provided by the Company as of the
      Closing Date, or in any way interfere with the relationship between any
      customer, supplier, licensee, or business relationship of the Company concerning
      products or services provided by the Company as of the Closing
      Date;

     

    (iii)  Parent
      Seller will not, directly or indirectly, either for himself or any other Person,
      solicit the business of any Person known to the Parent Seller to be a customer
      of the Company, whether or not Parent Seller had personal contact with such
      Person, with respect to products or services which compete in whole or in part
      with the products or services of the Company as of the Closing Date;


     

    Section
      12.6  Telephone
      Contracts.
      Buyer
      shall reimburse, or cause the Company to reimburse, Parent Seller for the costs
      of any telephones or telephone services utilized by the Company after the
      Closing under any contracts maintained by Parent Seller, promptly upon receipt
      of Parent Seller's invoice for such costs.

     

    ARTICLE
      XIII

     

    GENERAL
      PROVISIONS

     

    Section
      13.1  Expenses.
      Except
      as otherwise expressly provided in this Agreement, each party to this Agreement
      will bear its respective expenses incurred in connection with the preparation,
      execution, and performance of this Agreement and the Contemplated Transactions,
      including all fees and expenses of agents, representatives, counsel, and
      accountants. The Parent Seller will not cause the Company to incur any
      out-of-pocket expenses in connection with this Agreement. In the event of
      termination of this Agreement, the obligation of each party to pay its own
      expenses will be subject to any rights of such party arising from a breach
      of
      this Agreement by another party.

     

    Section
      13.2  Public
      Announcements.
      Any
      public announcement or similar publicity with respect to this Agreement or
      the
      Contemplated Transactions will be issued, if at all, at such time and in such
      manner as the Buyer and the Parent Seller shall mutually agree upon, except
      as
      may otherwise be required by Legal Requirements, including, but not limited
      to,
      the public disclosure requirements of the Securities and Exchange Commission
      to
      which the Buyer is subject to. Unless consented to by each party in advance
      or
      required by Legal Requirements, prior to the Closing, both parties shall, and
      shall cause the Company to, keep this Agreement strictly confidential and not
      make any disclosure of this Agreement to any Person. The Parent Seller and
      the
      Buyer will consult with each other concerning the means by which the Company’s
      employees, customers, and suppliers and others having dealings with the Company
      will be informed of the Contemplated Transactions, and the Buyer will have
      the
      right to be present for any such communication.

     

    
      
         

      

      
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    Section
      13.3  Confidentiality.

     

    (a)  Between
      the date of this Agreement and the Closing Date, the Buyer and the Parent Seller
      will maintain in confidence, and will cause the directors, officers, employees,
      agents, and advisors of the Buyer and the Company to maintain in confidence,
      and
      not use to the detriment of another party or the Company, any written, oral,
      or
      other information obtained in confidence from another party or the Company
      in
      connection with this Agreement or the Contemplated Transactions, unless (a)
      such
      information is already known to such party or to others not bound by a duty
      of
      confidentiality or such information becomes publicly available through no fault
      of such party, (b) the use of such information is necessary or appropriate
      in
      making any filing or obtaining any consent or approval required for the
      consummation of the Contemplated Transactions, or (c) the furnishing or use
      of
      such information is required by any Order.

     

    (b)  If
      the
      Contemplated Transactions are not consummated, each party will return or destroy
      as much of such written information as the other party may reasonably
      request.

     

    (c)  The
      authorization described in Section 12.3(c) is not intended to permit disclosure
      of any other information, including:

     

    (i)  any
      portion of any materials to the extent not related to the tax treatment or
      tax
      structure of the transaction contemplated by this Agreement;

     

    (ii)  the
      identities of participants or potential participants;

     

    (iii)  the
      existence or status of any negotiations;

     

    (iv)  any
      pricing or financial information (except to the extent such pricing or financial
      information is related to the tax treatment or tax structure of the transaction
      contemplated by this Agreement); or

     

    (v)  any
      other
      term or detail not relevant to the tax treatment or the tax structure of the
      transaction contemplated by this Agreement.

     

    
      
         

      

      
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    Section
      13.4  Notices.
      All
      notices, consents, waivers, and other communications under this Agreement must
      be in writing and will be deemed to have been duly given when (a) delivered
      by
      hand (with written confirmation of receipt), (b) sent by telecopier (with
      written confirmation of receipt), provided that a copy is mailed by registered
      mail, return receipt requested, or (c) when received by the addressee, if sent
      by a nation-ally recognized overnight delivery service (receipt requested),
      in
      each case to the appropriate addresses and telecopier numbers set forth below
      (or to such other addresses and telecopier numbers as a party may designate
      by
      notice to the other parties):

     

    If
      to
      Buyer, to:

    


    Measurement
      Specialties, Inc.

    1000
      Lucas Way

    Hampton,
      Virginia 23666

    Attention:
      Frank Guidone, Chief Executive Officer 

    Telephone:
      (757) 766-4400

    Fax:
      (757) 766-4347

    Email:
      frank.guidone@meas-spec.com

    


    With
      a
      copy to:

    


    McCarter
      & English, LLP

    Four
      Gateway Center

    100
      Mulberry Street

    P.O.
      Box
      652

    Newark,
      NJ 07101-0652

    Attention:
      Kenneth E. Thompson, Esq.

    Telephone:
      973-622-4444

    Fax:
      973-624-7070

    Email:
      kthompson@mccarter.com

    


    or
      to
      such other Person or at such other place as the Buyer shall furnish to the
      Parent Seller in writing; and 

    


    If
      to the
      Parent Seller, to:

    


    YSI
      Incorporated

    725
      Brannum Lane

    Yellow
      Springs, OH 5387 

    Attention:
      Richard J. Omlor, President & CEO 

    Telephone:
      937-767-7241, Ext. 459

    Fax:
      937-767-9320

    Email:
      romlor@ysi.com

     

    
      
         

      

      
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    with
      a
      copy to:

    


    Dinsmore
      & Shohl LLP

    One
      Dayton Centre

    One
      South
      Main Street, Suite 1300 

    Attention:
      Richard J. Beckmann, Esq.

    Telephone:
      937-449-6410

    Fax:
      937-449-6405

    Email:
      richard.beckmann@dinslaw.com

    


    or
      to
      such other Person or at such other place as the Parent Seller shall furnish
      to
      the Buyer in writing.

     

    Section
      13.5  Jurisdiction;
      Service of Process.
      Any
      action or proceeding seeking to enforce any provision of, or based on any right
      arising out of, this Agreement may be brought against any of the parties in
      the
      courts of the State of New Jersey, County of Essex or the State of Ohio, County
      of Greene, or, if it has or can acquire jurisdiction, in the United States
      District Court for the District of New Jersey or the Southern District of Ohio,
      and each of the parties consents to the exclusive jurisdiction of such courts
      (and of the appropriate appellate courts) in any such action or proceeding
      and
      waives any objection to venue laid therein. Process in any action or proceeding
      referred to in the preceding sentence may be served on any party anywhere in
      the
      world.

     

    Section
      13.6  Further
      Assurances.
      The
      parties agree (a) to furnish upon request to each other such further
      information, (b) to execute and deliver to each other such other documents,
      and
      (c) to do such other acts and things, all as the other party may reasonably
      request for the purpose of carrying out the intent of this Agreement and the
      documents referred to in this Agreement.

     

    Section
      13.7  Waiver.
      The
      rights and remedies of the parties to this Agreement are cumulative and not
      alternative. Neither the failure nor any delay by any party in exercising any
      right, power, or privilege under this Agreement or the documents referred to
      in
      this Agreement will operate as a waiver of such right, power, or privilege,
      and
      no single or partial exercise of any such right, power, or privilege will
      preclude any other or further exercise of such right, power, or privilege or
      the
      exercise of any other right, power, or privilege. To the maximum extent
      permitted by applicable law, (a) no claim or right arising out of this Agreement
      or the documents referred to in this Agreement can be discharged by one party,
      in whole or in part, by a waiver or renunciation of the claim or right unless
      in
      writing signed by the other party; (b) no waiver that may be given by a party
      will be applicable except in the specific instance for which it is given; and
      (c) no notice to or demand on one party will be deemed to be a waiver of any
      obligation of such party or of the right of the party giving such notice or
      demand to take further action without notice or demand as provided in this
      Agreement or the documents referred to in this Agreement.

     

    Section
      13.8  Entire
      Agreement and Modification.
      This
      Agreement supersedes all prior agreements between the parties with respect
      to
      its subject matter (including the Letter of Intent between the Buyer and the
      Parent Seller dated January 30, 2006) and constitutes (along with the documents
      referred to in this Agreement) a complete and exclusive statement of the terms
      of the agreement between the parties with respect to its subject matter. This
      Agreement may not be amended except by a written agreement executed by the
      party
      to be charged with the amendment.

     

    
      
         

      

      
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    Section
      13.9  Disclosure
      Schedule.

     

    (a)  In
      the
      event of any inconsistency between the statements in the body of this Agreement
      and those in the Disclosure Schedule (other than an exception expressly set
      forth as such in the Disclosure Schedule with respect to a specifically
      identified representation or warranty), the statements in the body of this
      Agreement will control.

     

    Section
      13.10  Assignments,
      Successors, and No Third-Party Rights.
      No
      party may assign any of its rights under this Agreement without the prior
      written consent of the other parties, except that the Buyer may assign any
      of
      its rights under this Agreement to any Subsidiary of the Buyer and any existing
      or future lender of the Buyer. Subject to the preceding sentence, this Agreement
      will apply to, be binding in all respects upon, and inure to the benefit of
      the
      successors and permitted assigns of the parties. Nothing expressed or referred
      to in this Agreement will be construed to give any Person other than the parties
      to this Agreement any legal or equitable right, remedy, or claim under or with
      respect to this Agreement or any provision of this Agreement. This Agreement
      and
      all of its provisions and conditions are for the sole and exclusive benefit
      of
      the parties to this Agreement and their successors and assigns.

     

    Section
      13.11  Certain
      Claims by Parent Seller.
      Effective upon the Closing, the Company shall have no liability or obligation
      whatsoever to the Parent Seller, except as provided in any written agreement
      disclosed to the Buyer in the Disclosure Schedule.

     

    Section
      13.12  Severability.
      If any
      provision of this Agreement is held invalid or unenforceable by any court of
      competent jurisdiction, the other provisions of this Agreement will remain
      in
      full force and effect. Any provision of this Agreement held invalid or
      unenforceable only in part or degree will remain in full force and effect to
      the
      extent not held invalid or unenforceable.

     

    Section
      13.13  Headings.
      The
      headings of the Articles and Sections in this Agreement are provided for
      convenience only and will not affect its construction or interpretation. All
      references in this Agreement to “Article”, “Articles”, “Section”, or “Sections”
refer to the corresponding Article, Articles, Section, or Sections,
      respectively, of this Agreement.

     

    Section
      13.14  Governing
      Law.
      This
      Agreement will be governed by the laws of the State of New Jersey without regard
      to its conflicts of laws principles.

     

    Section
      13.15  Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which will be
      deemed to be an original copy of this Agreement and all of which, when taken
      together, will be deemed to constitute one and the same agreement.

     

    


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        62

        
          

        

      

      
         

      

    

     

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

     

    BUYER:

     

    MEASUREMENT
      SPECIALTIES, INC.

     

     

    By:________________________________

    Name:

    Title:

     

     

    PARENT
      SELLER:

     

    YSI
      INCORPORATED

     

    By:________________________________

    Name:

    Title:

    


    


    
      [Signature
        Page to Agreement of Purchase and Sale]

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

Annex
      1

    


    Wire
      Instructions of Parent Seller

     

    
      	
              Parent
                Seller

            	
              Wire
                Instructions

            
	
              YSI
                Incorporated

            	
              ABA
                Number: 044 000 024

              Bank
                Name: The Huntington National Bank

              Account
                Name: YSI Incorporated

              Account
                Number: 01451106866 

              Reference:
                YSIS Incorporated