**Exhibit10.22**

**STOCK PURCHASE AGREEMENT**

 

**Byand Among**

 

**SYMMETRYMEDICAL USA INC.(the Purchaser)**

**and**

**EDWARD D. RILEY and RUSSELL P. HOLMES**

**(collectively, the Seller)**

 

**DATED:MAY 1, 2006**

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**STOCKPURCHASE AGREEMENT**

**THIS STOCK PURCHASE AGREEMENT** (this “**Agreement**”)is made and entered into effective as of 12:01 a.m. on the 1st day of May,2006, by and between **SYMMETRY MEDICAL USAINC.**, a duly organized Delaware Corporation with a principal placeof business in Warsaw, Indiana (“Purchaser”), Edward D. Riley, of Portland,Maine, and Russell P. Holmes, of Dover, Massachusetts (hereinafter Riley andHolmes are referred to collectively as the “**Seller**”).

**RECITALS**

A.            The Seller owns all ofthe issued and outstanding Class A and Class B shares of capital stock (the “**Stock**”) of **RILEY MEDICAL, INC.**, a Massachusetts corporation with aprincipal place of business in Auburn, Maine (the “**Company**”).

B.            The Company, EdwardD. Riley and Dr. Hans-Rudolf Staiger and Dr. Michael Hamm own all of the issuedand outstanding shares of capital stock of its subsidiary corporation, **RILEY MEDICAL EUROPE SA**, a Société anonymeorganized under the laws of Switzerland with a registered place of business inGrand-Rue 34, CH-2606 Corgémont, Switzerland (the “**Subsidiary**”).

C.            The Seller owns allof the equity of **RILEY REAL ESTATE, LLC**a duly organized Maine limited liability company (**“Affiliate”**), which owns all the real property from which theCompany conducts its business (“**Owned RealEstate**”), (except for a certain leased warehouse facility in Auburn,Maine (“Leased Real Estate”).

D.            The Purchaser desiresto purchase the Stock and Owned Real Estate held by the Seller and the Sellerdesires to sell the Stock and Owned Real Estate to the Purchaser on the termsand subject to the conditions set forth in this Agreement and the Real EstatePurchase and Sale Agreement attached as Exhibit A (“Real Estate PurchaseAgreement”).

E.             Uponconsummation of the purchase and sale of the Stock pursuant to this Agreement,the Purchaser will own all of the issued and outstanding capital stock of theCompany, all of the Owned Real Estate and the Company will own 97 of the 100issued and outstanding shares of the capital stock of the Subsidiary.

**AGREEMENT**

In consideration of the foregoing Recitals andthe mutual promises contained in this Agreement, and other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged andintending to be legally bound, the Purchaser and the Seller agree as follows:

**ARTICLE 1DEFINITIONS**

For purposes of this Agreement, the following terms have the meaningsspecified:

“*Affiliate*” when used inreference to a specified Person, means any Person that, directly or indirectly,through one or more intermediaries, controls, or is controlled by, or is undercommon control with the specified Person. With respect to the Seller, expresslyit shall mean Riley Real Estate, LLC, the Owned Real Estate of which shall besold herewith to the Purchaser in accordance with the separate Real EstatePurchase Agreement.

“*Agreement*” has themeaning set forth in the introductory paragraph of this Agreement.

“*Ancillary Documents*” areall documents, instruments and agreements to be executed and delivered by thePurchaser, Seller, Company, Subsidiary and Affiliate pursuant to this Agreementincluding the Exhibits.

“*Applicable Laws*” meansany and all laws, ordinances, constitutions, regulations, statutes, treaties,rules, codes, licenses, certificates, franchises, Permits, requirements andInjunctions adopted, enacted, implemented, promulgated, issued, entered ordeemed applicable by or under the authority of any Governmental Body havingjurisdiction over a specified Person or any of such Person’s properties orassets. Applicable Laws include any laws, regulations, ordinances,constitutions, regulations, statutes, treaties, rules, codes, licenses,certificates, franchises, Permits, or other legal requirements governing theSubsidiary, its properties, assets and operations.

“*Balance Sheets*” has themeaning set forth in Section 3.11(a) of this Agreement.

“*Balance Sheet Date*” hasthe meaning set forth in Section 3.11(a) of this Agreement.

“*Benefit Plan*” means anyand all bonus, stock option, restricted stock, stock purchase, stockappreciation, phantom stock, profit participation, profit-sharing,deferred compensation, severance, retention, pension, retirement, health,disability, life or other insurance, death 

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benefit, incentive compensation, welfare, or anyother employee benefit plan, policy or arrangement maintained, sponsored orcontributed to by the Company or Subsidiary for the benefit of any Employee.

“*Business*” means theownership and/or operation of facilities which formulate and manufacturehigh-quality engineering plastics and metal trays and packaging for medicaldevices.

“*Cash Adjustment*” has themeaning set forth in Section 2.2(c) of this Agreement.

“*Cash*” means all cash (inUnited States currency) and prepaid taxes deposited with the IRS in order tomaintain an S Corporation non-permitted year-end, as shown on the BalanceSheets of the Company, Subsidiary and Affiliate as either in-hand or accrued asof the Closing Date, expressly including, without limitation, the United Statescurrency equivalent of the Swiss francs carried on the Subsidiary’s BalanceSheet, as determined in accordance with the exchange rate as of April 29, 2006,as published by the Wall Street Journal.

“*Cash-Free*” means that allCash shall be added, as an addition, to the Interim Purchase Price and FinalPurchase Price payable to the Seller, as applicable, unless withdrawn by Sellerfrom the accounts of the Company, Subsidiary, or Affiliate prior to Closing.

“*CERCLA*” means theComprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.§ 9601 etseq.).

“*Closing*” has the meaningset forth in Section 2.5(a) of this Agreement.

“*Closing Date*” has themeaning set forth in Section 2.5(a) of this Agreement.

“*Code*” means the InternalRevenue Code of 1986, as amended.

“*Company*” has the meaningset forth in the Recitals to this Agreement.

“*Company and Subsidiary Welfare Plans*”has the meaning set forth in Section 8.2(c) of this Agreement.

“*Confidential Information*”means any information or compilation of information not generally known to thepublic or the industry or which the Company or the Subsidiary have notdisclosed to third parties without a written obligation of confidentiality,which is proprietary to the Company or the Subsidiary, relating to the Company’sor the Subsidiary’s procedures, techniques, methods, concepts, ideas, affairs,products, processes and services, including, but not limited to, informationrelating to marketing, merchandising, selling, research, development,manufacturing, purchasing, accounting, engineering, financing, costs,customers, plans, pricing, billing, needs of customers and products andservices used by customers, all lists of customers and their addresses,prospects, sales calls, products, services, prices and the like as well as anyspecifications, formulas, plans, drawings, accounts or sales records, salesbrochures, code books, manuals, trade secrets, knowledge, know-how,pricing strategies, operating costs, sales margins, methods of operations,invoices or statements and the like. Confidential Information shall not includeinformation which (i) becomes generally available to the public other than as aresult of a disclosure by a party to this Agreement, (ii) was available on anon-confidential basis prior to its disclosure, or (iii) is independentlydeveloped as evidenced by written records without making use of the ConfidentialInformation.

“*Contract*” means anyagreement, lease of personal or mixed property, license, contract, obligation,promise, commitment, arrangement, understanding or undertaking, instrument,document (whether written or oral and whether express or implied) of any type,nature or description, but excluding leases of Leased Real Estate. As usedherein, the word “Contract” shall be limited in scope if modified by anadjective specifying the type of contract to which this Agreement or a Section hereofrefers.

“*Damages*” has the meaningset forth in Section 6.1(e) of this Agreement.

*“Debt*” means: (i) any long-term or short-term interest-bearing indebtednessof the Company, the Subsidiary, or the Affiliate, owed to third parties; (ii) anyinter-company indebtedness; (iii) any Seller guarantees outstanding, issued tosecure obligations of the Company, Subsidiary, or Affiliate; (iv) any capitalleases; and (v) any letters of credit.

“*Debt Adjustment*” has themeaning set forth in Section 2.2(c) of this Agreement.

*“Debt-Free”* means that all Debt (excluding the current portion of the long-termdebt), shall be deducted from the Interim Purchase Price and Final PurchasePrice payable to Seller determined as due as of the Closing Date.

“*Director Indemnified Party*”or “*Director Indemnified Parties*”has the meaning set forth in Section 8.3(a) of this Agreement.

“*Disclose*” means toreveal, deliver, divulge, disclose, publish, copy, communicate, show orotherwise make known or available to any other Person, or in any way to copy,any of the Confidential Information of the Company, the Subsidiary or theAffiliate.

“*Employees*” has themeaning set forth in Section 3.20(a) of this Agreement.

“*Encumbrance*”means and includes:

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(i)            with respect to anypersonal property, any intangible property or any property other than realproperty, any security or other property interest or right, claim, lien,pledge, option, charge, security interest, contingent or conditional sale, orother title claim or retention agreement or lease or use agreement in thenature thereof whether voluntarily incurred or arising by operation of law, andincluding any agreement to grant or submit to any of the foregoing in thefuture; and

(ii)           with respect to any realproperty (whether and including Owned Real Estate or Leased Real Estate), anymortgage, lien, easement, interest, right-of-way, condemnation oreminent domain proceeding, encroachment, any building, use or other form ofrestriction, encumbrance or other claim (including adverse or prescriptive) orright of third parties (including any Governmental Body), any lease orsublease, boundary dispute, and agreements with respect to any real propertyincluding: purchase, sale, right of first refusal, option, construction,building or property service, maintenance, property management, conditional orcontingent sale, use or occupancy, franchise or concession, whether voluntarilyincurred or arising by operation of law, and including any agreement to grantor submit to any of the foregoing in the future.

“*Environmental Laws*” meansany and all Applicable Laws, all court orders, decrees, arbitration awards, andapplicable common law which pertain to environmental matters or contaminationof any type whatsoever, including, but not limited to, those (i) regulating themanufacturing process, use, treatment, generation, transportation, storage,control, management, recycling or disposal of any Hazardous Material,including, but not limited to, CERCLA, SARA, the Resource Conservation andRecovery Act (42 U.S.C. § 6901 etseq.), the Hazardous MaterialsTransportation Act (49 U.S.C. § 1801 etseq.), the Federal WaterPollution Control Act (33 U.S.C. § 1251 etseq.), the Clean WaterAct (33 U.S.C. § 1251 etseq.), the Clean Air Act (42 U.S.C. §7401 etseq.), the Toxic Substances Control Act (15 U.S.C. § 2601etseq.), the Safe Drinking Water Act (42 U.S.C. § 300F etseq.), and/or (ii) relating to the protection, preservation orconservation of the environment, or protection of wildlife, endangered species,wetlands or national resources.

“*ERISA*” means the EmployeeRetirement Income Security Act of 1974, as amended.

“*Escrowed Funds*” has themeaning set forth in Section 2.3(e) of this Agreement.

*“Facility”* means any facility as defined in CERCLA.

“*Final Closing Statement*” hasthe meaning set forth in Section 2.3(c) of this Agreement.

“*Final Purchase Price*” hasthe meaning set forth in Section 2.3(b) of this Agreement.

“*GAAP*” means generallyaccepted accounting principles in the United States.

“*Governmental Body*” meansany:

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

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

(iii)          governmental or quasi-governmentalauthority of any nature (including any governmental agency, branch, board,commission, department, instrumentality, office or other entity, and any courtor other tribunal);

(iv)          multinationalorganization or body; and/or

(v)           body exercising, orentitled or purporting to exercise, any administrative, executive, judicial,legislative, police, regulatory or taxing authority or power of any nature.

“*Hazardous Materials*”means any and all (i) dangerous, toxic or hazardous pollutants, contaminants,chemicals, wastes, materials or substances listed or identified in, or directlyor indirectly regulated by, any Environmental Laws, and (ii) any of thefollowing, whether or not included in the foregoing: polychlorinated biphenyls,asbestos in any form or condition, urea-formaldehyde, petroleum(including crude oil or any fraction thereof), natural gas, natural gasliquids, liquefied natural gas, synthetic gas usable for fuel or mixturesthereof, nuclear fuels or materials, chemical wastes, man-made radioactivematerials, explosives and known possible carcinogens.

“*IRS*” means the UnitedStates Internal Revenue Service.

*“Indemnification Threshold”* has the meaning set forth in Section 6.3(a) ofthis Agreement.

“*Indemnified Party*” hasthe meaning set forth in Section 6.5 of this Agreement.

“*Indemnifying Party*” hasthe meaning set forth in Section 6.5 of this Agreement.

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“*Injunction*” means any andall writs, rulings, awards, directives, injunctions (whether temporary,preliminary or permanent), judgments, decrees or orders (whether executive,judicial or otherwise) adopted, enacted, implemented, promulgated, issued,entered or deemed applicable by or under the authority of any GovernmentalBody.

“*Intellectual Property*”means any and all: (i) inventions (whether patentable or unpatentable andwhether or not reduced to practice), all improvements thereto, and all patents,patent applications and patent disclosures, together with all reissuances,continuations, continuations in part, revisions, extensions and reexaminationsthereof; (ii) trademarks, service marks, trade dress, logos, trade names,assumed names and corporate names, together with all translations, adaptations,derivations and combinations thereof and including all goodwill associatedtherewith, and all applications, registrations and renewals in connectiontherewith; (iii) copyrightable works, all copyrights and all applications,registrations and renewals in connection therewith; (iv) mask works and allapplications, registrations and renewals in connection therewith; (v) tradesecrets and confidential business information (including ideas, research anddevelopment, know-how, technology, formulas, compositions, manufacturingand production processes and techniques, technical data, designs, drawings,specifications, customer and supplier lists, pricing and cost information andbusiness and marketing plans and proposals); (vi) computer software and allrelated and necessary licenses (including data and related software programdocumentation in computer-readable and hard-copy forms other thanfor so-called off-the-shelf product); (vii) other intellectual property andproprietary rights of any kind, nature or description, including web sites, website domain names and other e-commerce assets and resources of any kind ornature; and (viii) copies of tangible embodiments thereof (in whatever form ormedium).

“*Interim Purchase Price*”has the meaning set forth in Section 2.2(a) of this Agreement.

“*Leased Real Estate*” hasthe meaning set forth in the Recitals and in Section 3.17 of this Agreement.

“*Leases*” has the meaningset forth in Section 3.17(a) of this Agreement.

“*Liability*” or “*Liabilities*” means any and all debts,liabilities and/or obligations of any type, nature or description (whetherknown or unknown, asserted or unasserted, secured or unsecured, absolute orcontingent, accrued or unaccrued, liquidated or unliquidated and whether due orto become due).

“*Material Adverse Effect*”or “*Material Adverse Change*”means, in connection with the Company, the Subsidiary, and the Affiliate withdue consideration to the size and complexity of the Business and transactionscontemplated by this Agreement, any event, change or effect that is materiallyadverse, individually or in the aggregate, to the condition (financial orotherwise), properties, assets, Liabilities, revenues, income, Business,operations, results of operations of such Persons, taken as a whole; provided,however, that in no event shall any of the following constitute aMaterial Adverse Change, or be deemed to have a Material Adverse Effect, in theBusiness, operations, assets, results of operations or condition of theCompany, the Subsidiary or Affiliate: (i) any change or effect resulting fromconditions affecting the industry in which the Company or Subsidiary operate orfrom changes in general business or economic conditions, (ii) any change oreffect resulting from the announcement or pendency of any of the transactionscontemplated by this Agreement, (iii) any change or effect resulting fromcompliance by the Company and/or the Subsidiary with the terms of, or the takingof any action contemplated or permitted by, this Agreement and any AncillaryDocument, or (iv) any change or effect resulting from any change in ApplicableLaw. In furtherance of the foregoing, and notwithstanding anything to thecontrary set forth in this Agreement, any Material Adverse Effect or anyMaterial Adverse Change with respect to the Company and/or the Subsidiary shallbe evaluated on the basis of the Company and the Subsidiary individually ortaken as a whole (in the aggregate).

*“Offsite Facility”* means any Facility which is notpresently, and has not heretofore been, owned, leased or occupied by theSeller, Company, Subsidiary or Affiliate.

“*Ordinary Course of Business*”means an action taken by a Person only if:

(i)            such action isconsistent with the past practices of such Person and is taken in the ordinarycourse of the normal day-to-day operations of such Person; and

(ii)           such action is notrequired to be authorized by the board of directors of such Person (or by anyPerson or group of Persons constituting a governing body of a Person exercisingsimilar authority).

“*Overlap Period*” has themeaning set forth in Section 7.2(a) of this Agreement.

“*Owned Real Estate*” hasthe meaning set forth in Section 3.17 of this Agreement.

“*PBGC*”means the Pension Benefit Guaranty Corporation.

“*Permits*” means allpermits, licenses, consents, declarations, franchises, orders, certifications,registrations, certificates of authority, variances, approvals, local sittingapprovals, qualifications and other authorizations obtained from, or filingwith any Governmental Body or other Person, or other similar rights, including,without limitation, those listed on **Schedule3.31** of the Schedules.

“*Permitted Encumbrances*”has the meaning set forth in Section 3.17(c) of this Agreement.

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“*Person*” means anyindividual, corporation (including any non-profit corporation), general,limited or limited liability partnership, limited liability company, jointventure, estate, trust, association, organization, or other entity or GovernmentalBody.

“*Pre-Closing Period*” hasthe meaning set forth in Section 3.8(b) of this Agreement.

“*Proceeding*” means anysuit, litigation, arbitration, hearing, audit, investigation, order, or otheraction (whether civil, criminal, administrative or investigative) noticed,commenced, brought, conducted, or heard by or before, or otherwise involving,any Governmental Body or arbitrator.

“*Purchase Price Escrow Agreement*”has the meaning set forth in Section 2.3(e) of this Agreement.

“*Purchaser*” has the meaningset forth in the introductory paragraph of this Agreement.

“*Purchaser Welfare Plans*”has the meaning set forth in Section 8.2(c) of this Agreement.

“*Real Estate*” has themeaning set forth in Section 3.17 of this Agreement.

*“Release”* means any spill, discharge, leak, emission, escape, leaching,disposing, emptying, pouring, pumping, injection, dumping, or other release orthreatened release of any Hazardous Materials into the environment, whether ornot notification or reporting to any governmental agency was or is required,including any Release which is subject to CERCLA.

“*Rights*” means any and alloutstanding subscriptions, warrants, options, or other arrangements orcommitments obligating or which may obligate (with or without notice or passageof time or both) the Company or the Subsidiary to issue or dispose of any oftheir respective (as opposed to third party) securities.

“§*338(h)(10) Election*” hasthe meaning set forth in Section 7.5 of this Agreement.

“*SARA*” means the SuperfundAmendments and Reauthorization Act (42 U.S.C. § 9601 etseq.).

“*Seller*” has the meaningset forth in the introductory paragraph of this Agreement.

*“Seller’s Knowledge”* means the actual knowledge of Edward D. Rileyor Russell P. Holmes or of any officer, director or Senior Management Employeesof the Company, Subsidiary or Affiliate.

“*Senior Management Employees*”means the chief executive officer, president, any vice president, the chieffinancial officer, treasurer, controller, secretary, director, general manager,manager, environmental manager, or health and safety manager of the Company,Subsidiary or Affiliate.

“*Stock*” has the meaningset forth in the Recitals to this Agreement.

“*Subsidiary*” has themeaning set forth in the Recitals to this Agreement.

“*Survival Period*” has themeaning set forth in Section 6.1(a) of this Agreement.

*“Swiss Tax Agreement”* means that certain decision of the Governmentof the Canton of Bern, Switzerland, dated March 22, 2000, providing income andcapital Tax relief to Subsidiary.

“*Target Working Capital*”means Working Capital equal to the average of the month-end Net Working Capitalfor the following six month-ends February 2006; January 2006; December 2005; November2005; October 2005; and September 2005**.**TheTarget Working Capital is $4,456,858.

“*Tax*” or “*Taxes*” means any and all net income, grossincome, gross revenue, gross receipts, net receipts, ad valorem, franchise,profits, deferred, transfer, sales, use, social security, employment,unemployment, disability, license, withholding, payroll, privilege, excise,value-added, severance, stamp, occupation, property, customs, duties,real estate and/or other taxes, assessments, levies, fees or charges of anykind whatsoever imposed by any Governmental Body, together with any interest orpenalty relating thereto.

“*Tax Adjustment”* has themeaning set forth in Section 2.4 of this Agreement.

“*Tax Matter*” has themeaning set forth in Section 7.2(a) of this Agreement.

“*Tax Return*” or “*Tax Returns*” means any return,declaration, report, claim for refund or information return or statementrelating to Taxes, including, without limitation, any schedule or attachmentthereto, any amendment thereof, and any estimated report or statement.

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“*Threatened*” means aclaim, Proceeding, dispute, action, or other matter for which any demand orstatement has been made, orally or in writing, or any oral or written noticehas been given, that would lead a reasonably prudent Person to conclude thatsuch a claim, Proceeding, dispute, action, or other matter may be asserted,commenced, taken or otherwise pursued in the future.

“*Use*” means to appropriateany of the Confidential Information of the Company and/or the Subsidiary forthe benefit of oneself or any other Person other than the Company.

“*WARN Acts*” has themeaning set forth in Section 3.9(k) of this Agreement.

*“Working Capital”* means “Current Assets” less “CurrentLiabilities”. “Current Assets” means the sum of accounts receivable (net ofallowances), prepaid expenses, and other current assets of Company (excludingany cash, tax refunds, and refund of the monies deposited in escrow with theIRS as required in connection with Subchapter S corporations having anon-conforming fiscal year) as determined in accordance with GAAP consistentlyapplied. “Current Liabilities” means the sum of accounts payable and accruedexpenses of Company, excluding accrued interest defined as Debt and asdetermined in accordance with GAAP consistently applied.

*“Working Capital Adjustment”* has the meaning set forth in Section 2.3(b) ofthis Agreement.

**ARTICLE 2PURCHASE OF STOCK; PURCHASE PRICE**

## **2.1.         Purchase and Sale of Stock.**In reliance uponthe representations, warranties and covenants contained in this Agreement as ofthe date hereof and on the Closing Date, the Purchaser agrees to purchase theStock from the Seller, and the Seller agrees to sell, transfer, convey, assignand deliver the Stock to the Purchaser on the terms and conditions set forth inthis Agreement. Such sale, transfer, conveyance, assignment and delivery of theStock shall convey good and marketable title to the Stock, free and clear ofany and all Rights and Encumbrances, and at such time the Stock will be fullypaid and non-assessable. At the Closing the Seller will deliver to thePurchaser certificate(s) evidencing the Stock duly endorsed in blank or withstock powers duly executed by the Seller.

## **2.2.         Purchase Price.**

### (a)           The purchase price tobe paid to the Seller by the Purchaser for the Stock and Owned Real Estateshall be Forty-Five Million United States Dollars ($45,000,000.00) of which thepurchase price for the Stock shall be Forty Three Million United States Dollars($43,000,000.00) and the purchase price for the Owned Real Estate shall be TwoMillion United States Dollars ($2,000,000.00), each as may be adjusted at theClosing Date, and post-closing as provided by this Agreement. The purchaseprice for the Owned Real Estate shall be due and payable in full at Closing,subject only to such adjustments, if any, contained in the Real Estate PurchaseAgreement. The purchase price solely for the Stock shall be referred to as the “**Interim****PurchasePrice**”. The Interim PurchasePrice shall be adjusted to determine the Final Purchase Price, as provided inthis Section 2.2 and Sections 2.3 and 2.4. The Interim Purchase Price and thepurchase price for the Owned Real Estate shall be paid on the Closing Date bywire transfer of immediately available funds to an account (or accounts)designated by the Seller at least two (2) calendar days prior to the Closing.

### (b)           The Interim PurchasePrice has been based on the assumption that the Company and the Subsidiaryshall be Cash-Free (including any Subsidiary or Affiliate Cash) as of theClosing Date. To the extent that the (i) Company has Cash on its books as ofthe Closing Date, the Interim Purchase Price shall be increased on the ClosingDate by a corresponding amount, and (ii) Subsidiary has Cash on its books as ofthe Closing Date, the Interim Purchase Price shall be increased on the ClosingDate by 92.5% of such amount of Cash (the “**Cash Adjustment**”).

### (c)           The Interim PurchasePrice has been based on the assumption that the Company and the Subsidiaryshall be Debt-Free (including any Subsidiary or Affiliate Debt) as of theClosing Date. To the extent that the Company, Subsidiary or Affiliate haveDebt, exclusive of the current portion of long-term debt, as of the ClosingDate, the Interim Purchase Price shall be reduced on the Closing Date by acorresponding amount (the “**DebtAdjustment**”) and such DebtAdjustment shall be paid directly by the Purchaser to such creditor orcreditors, but may be paid from Closing proceeds.

## **2.3.         Working Capital Adjustment.**

### (a)           The Interim PurchasePrice shall also be adjusted after the Closing Date by an amount of dollars,positive or negative, as the case may be, equal to the difference between theTarget Working Capital and the Working Capital as shown on the audited BalanceSheets, which will be used to determine the Final Purchase Price.

### (b)           If the****Working Capital on the audited Balance Sheetsis:

#### (i)            less than the TargetWorking Capital, an amount equal to the deficit shall be payable from theSeller to the Purchaser;

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#### (ii)           greater than theamount shown on the Target Working Capital, an amount equal to the surplusshall be payable from the Purchaser to the Seller;

#### (iii)          equal to the amountshown on the Target Working Capital, no amount shall be due to either party.

The adjustment provided forin this Section 2.3(a) shall be known as the **“WorkingCapital Adjustment**”. The Interim Purchase Price, after applicationof the Working Capital Adjustment, shall constitute the “**Final Purchase Price**”.

### (c)           Within seventy-five(75) calendar days****following the Closing Date, the Seller andPurchaser, as applicable, shall cause the Company and its auditor to prepareand deliver to the Purchaser and Seller, in good faith, an audited finalbalance sheet and closing statement setting forth the Working CapitalAdjustment in accordance with this Section 2.3 (the “**Final Closing Statement**”). This audited final balance sheet and FinalClosing Statement shall be prepared by the Seller’s Auditors, Berry, Dunn,McNeill & Parker, the cost of which shall be a Company expense, notchargeable back to Seller and the statutory auditors of the Subsidiary ActonRevisions AG. Within thirty (30) calendar days following the Purchaser’s andSeller’s receipt of the Final Closing Statement, the Purchaser or Seller mayobject in good faith to the Working Capital Adjustment in writing. In the eventof any such objection, the Purchaser and the Seller shall attempt to resolvetheir differences by negotiation. If such parties are unable to do so withinthirty (30) calendar days following receipt of the objecting party’s objection,the Seller and the Purchaser shall appoint a nationally recognized accountingfirm mutually acceptable to each of the Seller and the Purchaser, which shall,at the Seller’s and the Purchaser’s joint expense, review the Final ClosingStatement and determine the Working Capital Adjustment, if any, within thirty(30) calendar days of such appointment. The Seller and the Purchaser agree tocooperate with such accounting firm and provide it with such information as itreasonably requests to enable it to make such determination. The finding ofsuch accounting firm shall be binding on the parties hereto.

### (d)           Any amounts owedhereunder shall be paid to the party owed the same by the party owing the sameby wire transfer of immediately available funds to an account designated by theparty owed the same no later than five (5) business days following thedetermination by agreement of the Seller and the Purchaser or by bindingdetermination of said accounting firm of the Working Capital Adjustment, andsuch payment shall be accompanied by an additional payment of interest,calculated with a 4% annual interest rate from the Closing Date to the date ofpayment pursuant to this Section 2.3.

### (e)           The Seller agrees andauthorizes the Purchaser to retain from the Interim Purchase Price and depositin escrow, with Sovereign Bank (“**Escrow Agent**”) actingas an independent authorized escrow agent in an interest bearing account, thesum of Three Million United States Dollars ($3,000,000.00) (the “**Escrowed Funds**”) as collateral security and to be used asthe initial source of funds for any breach of the representations, warranties,covenants and obligations of the Seller under this Agreement, in accordancewith an escrow agreement in substantially the form set forth in **Exhibit B** attached hereto (the “**Purchase Price Escrow Agreement**”). The Escrowed Funds shall not be used inany way for purposes of the Working Capital Adjustment.

### (f)            The term of thePurchase Price Escrow Agreement shall be two (2) years. After one year, theEscrowed Funds shall be reduced from $3,000,000, plus any accrued interest, to$1,500,000.

### (g)           In accordance withthe terms of the Purchase Price Escrow Agreement and Article 6 of thisAgreement, the Purchaser shall promptly notify the Seller of the amount of anyDamages sustained by the Purchaser for which the Seller is obligated toindemnify the Purchaser under Article 6 hereof (and which have not theretoforebeen fully satisfied by the Seller), including Damages sustained as a result ofany breach of any representation or warranty by the Seller as provided undersaid Article 6. In the event the Seller fails to direct the Escrow Agent toreimburse the Purchaser the full amount of the Damages suffered by thePurchaser within thirty (30) calendar days of the receipt of the Purchaser’snotice, the provisions of Article 6 and the Purchase Price Escrow Agreementshall apply.

**2.4.         Tax Adjustment.**The Interim Purchase Price shall also beincreased after the Closing Date by the amount necessary to cause Seller’safter-Tax net proceeds from the sale of Stock hereunder with the §338(h)(10) Electionor any other election under Code §338 (collectively, the “§338 Elections”) ineffect to be equal to the after-Tax net proceeds that Seller would havereceived had the §338 Elections not been made, taking into account allappropriate state, federal, local and foreign Tax implications (the “**Tax Adjustment”**). Seller shall providePurchaser with a schedule computing the amount of the Tax Adjustment within 20days after the Allocation Schedule (required under Section 7.6 hereof) iscompleted. The amount of each Seller’s pro-rata portion of the Tax Adjustmentshall be paid to each Seller at the time each Seller signs Form 8023 to makethe federal §338(h)(10) Election, or promptly and timely upon any other §338Election being made.

**2.5          Closing and Closing Deliveries.**

### (a)           Closing andClosing Date. The closing of the transactions contemplated by thisAgreement (the “**Closing**”) shall be held on May 2, 2006 at the officesof Burns & Levinson LLP, 125 Summer Street, 8th Floor, Boston,Massachusetts 02110.

### (b)           Closing Deliveriesby the Seller. At the Closing, each Seller shall execute, where necessaryor appropriate, and deliver to the Purchaser each and all of the following:

#### (i)            The certificatesevidencing the Stock duly endorsed by each Seller in blank or accompanied bystock powers duly executed by each Seller. With respect to the Subsidiary thesame and/or such other documents as may be required under Swiss law to completethe transfer of control or ownership, as applicable;

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#### (ii)           The corporate minutebooks, the corporate seals, and stock books for the Company and Subsidiary;

#### (iii)          A duly executedwritten opinion letter by counsel for the Seller, dated as of the Closing Date,addressed to the Purchaser;

#### (iv)          Duly executedresignations of (A) the officers of the Company and the Subsidiary who aredesignated by the Purchaser, and (B) the directors of the Company and theSubsidiary who are the Seller, or who otherwise are designated by thePurchaser, all effective as of the Closing Date;

#### (v)           Certificates of goodstanding for the Company, Subsidiary and Affiliate issued by the Secretary ofState (or the equivalent office) of their respective places of incorporation ororganization;

#### (vi)          The non-foreignperson affidavit required by Section 1445 of the Code;

#### (vii)         Non-Disclosure and Non-CompetitionAgreements for Edward D. Riley and Russell P. Holmes;

#### (viii)        Confidentiality andNon-Compete Agreements for Martin Moore, Harold Engberg, Jr., Richard Campbell,Pierre Louis-Beaud and Chris Melino; with executed agreement from Mr. Beaud.

#### (ix)           Retention BonusAgreements for Martin Moore, Harold Engberg, Jr., Richard Campbell, ChrisMelino and Pierre Louis-Beaud; with executed Employment Agreement from Mr. Beaud.

#### (x)            the Purchase PriceEscrow Agreement executed by each Seller;

#### (xi)           a statement executedby the Company pursuant to Treas. Reg. §1.897-2(h), dated no more thanthirty (30) days prior to Closing, certifying that (i) the Shares do notconstitute a U.S. real property interest, or (ii) none of the holders ofcapital stock of the Company is a foreign person;

#### (xi)           all necessarythird-party consents necessary to operate the Business;

#### (xi)           the Real EstatePurchase Agreement executed by Riley Real Estate, LLC;

#### (xii)          Such documentation as is required toconvey all right, title and interest in and to the Owned Real Estate to thePurchaser or Purchaser’s nominee together with any additional deliveriesrelated thereto as set forth in the Real Estate Purchase Agreement;

#### (xiii)         Waiver and Release executed by eachSeller and each director of Company, Subsidiary and Affiliate;

#### (xiv)        Such other documents and items as arereasonably necessary or appropriate to effect the consummation of thetransactions contemplated hereby; and

#### (xv)         Memorandum of Understanding between thePurchaser and Edward D. Riley regarding future employment with Purchaser.

#### (xvi)        Board of Directors’ Consents for theCompany; Secretary’s Certificate; and Shareholder’s Consents for the Company.

### (c)           Closing Deliveriesby the Purchaser. At the Closing, the Purchaser shall execute, where necessaryor appropriate, and deliver to the Seller each and all of the following:

#### (i)            Payment of theInterim Purchase Price and payment of the purchase price for the Affiliate’sOwned Real Estate in the manner set forth in Section 2.2 of this Agreement;

#### (ii)           the Real EstatePurchase Agreement executed****by the****Purchaser or anaffiliate of Purchaser;

#### (iii)          A copy certified bythe Secretary of the Purchaser of the duly adopted resolutions of the Board ofDirectors of the Purchaser approving this Agreement, including the AncillaryDocuments, and authorizing the execution and delivery of this Agreement and theAncillary Documents, and the consummation of the transactions contemplatedhereby and thereby.

#### (iv)          A duly executedwritten opinion letter by counsel for the Purchaser, dated as of the ClosingDate, addressed to the Seller;

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#### (v)           A certificate of goodstanding of the Purchaser issued by the Secretary of State of the Purchaser’sstate of incorporation or the equivalent; and

#### (vi)          Such other documentsand items as are reasonably necessary or appropriate to effect the consummationof the transactions contemplated hereby or which may be customary under locallaw.

**ARTICLE 3REPRESENTATIONS AND WARRANTIES OF THE SELLER**

As an inducement for the Purchaser to enter into this Agreement and toconsummate the transactions contemplated hereby, each Seller jointly andseverally represents and warrants to the Purchaser that each and all of thefollowing representations and warranties are true and correct as of the date ofthis Agreement and at Closing. The Schedules shall be arranged in paragraphscorresponding to the sections and subsections contained in this Article 3.

## **3.1.         Organization and Good Standing.**

(a)           **Schedule 3.1**contains a complete and accurate list for the Company, Subsidiary and Affiliateof its jurisdiction of incorporation (or other formation). The Company,Subsidiary and Affiliate are duly organized, validly existing, and in goodstanding under the laws of its jurisdiction of incorporation (or otherformation), with full power and authority to conduct their respectivebusinesses as same are now being conducted, to own or use the properties andassets that each purports to own, lease, operate or use in the conduct of theirrespective businesses, and to perform all their respective obligations underany Contracts. The Company, Subsidiary and Affiliate are licensed or qualifiedto transact business and are in good standing as a foreign corporation in eachjurisdiction (including European jurisdiction) in which, because of itsbusiness conducted there or the nature of its assets or properties there, itcould be required to be so licensed or qualified, unless the lack ofregistration does not have a Material Adverse Effect on the Business. Each suchforeign jurisdiction is set forth in **Schedule3.1**.

(b)           Seller has deliveredto Purchaser copies of the organizational documents of the Company, Subsidiaryand Affiliates, as currently in effect.

## **3.2.         Authority; No Conflict.**

### (a)           ThisAgreement constitutes the legal, valid, and binding obligation of the Seller,enforceable against each Seller in accordance with its terms. The documentsdelivered by the Seller will constitute the legal, valid, and bindingobligations of each Seller, enforceable against each Seller in accordance withtheir respective terms. Each Seller has the right, power, authority, andcapacity to execute and deliver this Agreement and the Ancillary Documents towhich he is a party, and to perform his obligations hereunder and thereunder. Theexecution, delivery and performance of this Agreement and the AncillaryDocuments to which any Seller is or shall be a party have been duly authorizedby all necessary action on the part of such Seller. This Agreement and theAncillary Documents have been duly executed and delivered by each Seller whichis a party thereto.

### (b)           Exceptas set forth on **Schedule3.2(b)**, neither theexecution nor delivery of this Agreement and the Ancillary Documents nor theconsummation or performance of any of the contemplated transactions will, directlyor indirectly:

#### (i)            contravene, conflictwith, or result in a violation of (A) any provision of the organizationaldocuments of the Company, Subsidiary or Affiliate, or (B) any resolutionadopted by the board of directors, the shareholders, members of the Company,Subsidiary or Affiliate, as the case may be;

#### (ii)           contravene, conflictwith, or result in a breach or violation of, or constitute a default under (oran event which, with or without notice, lapse of time or both, could constitutea default) or result in the invalidity of, or accelerate the performancerequired by or cause or give rise to any right of acceleration or terminationof any right or obligation pursuant to any agreement or commitment to which anySeller, the Company, Subsidiary or Affiliate is a party or by which any Seller,the Company or Subsidiary (or any of their respective assets or properties) issubject or bound;

(iii)          contravene, conflict with, or result in a breach orviolation of, or constitute a default under (or an event which, with or withoutnotice, lapse of time or both, could constitute a default) or result in theinvalidity of the Swiss Tax Agreement;

#### (iv)          result in thecreation of, or give any third party the right to create, any Encumbrance uponthe Stock or any assets or properties of any Seller, the Company, Subsidiary orAffiliate;

#### (v)           conflict with anyApplicable Laws to which any Seller, the Company, Subsidiary or Affiliate orany assets or properties of any of the foregoing are subject;

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#### (vi)          terminate or modify,or give any third party the right to terminate or modify, the provisions orterms of any contract or agreement to which any Seller, the Company, Subsidiaryor Affiliate is a party or by which any Seller, the Company, Subsidiary orAffiliate (or any of their respective assets or properties) is subject orbound;

#### (vii)         require any Seller,the Company, Subsidiary or Affiliate to obtain any Consent; or

#### (viii)        result in or give toany Person any additional rights or entitlement to increased, additional,accelerated or guaranteed payments under any contract or agreement to which anySeller, the Company, Subsidiary or Affiliate or any Subsidiary is a party or bywhich any of their respective assets or Properties is subject or bound.

## **3.3.         Capitalization.**

### The capitalization and identity of each shareholder or member of each ofthe Company, the Subsidiary and the Affiliate, is as follows:

### (a)           The authorizedcapital stock of the Company consists solely of 300,000 shares of common votingstock, One Cent ($0.01) par value, of which 200,000 shares are issued andoutstanding on the date hereof, and are owned beneficially and of record by theSeller, free and clear of all Rights and Encumbrances. Said shares are dividedas follows: 102,000 designated as Class A are owned by Edward Riley and 98,000designated as Class B are owned by Russell Holmes. The Stock is validly issued,fully paid and nonassessable and was issued in compliance with Applicable Laws.The Company is the sole legal, beneficial and equitable shareholder of 97 ofthe 100 issued and outstanding equity interests in and with respect to theSubsidiary. None of the Stock has been issued in violation of the rights of anyPerson. As of the date hereof, (i) there are no Rights outstanding, and (ii) thereare no agreements, understandings or commitments relating to the Rights of theSeller to vote or dispose of the Stock.

### (b)           The authorized sharecapital of the Subsidiary consists solely of One Hundred Thousand Swiss Francs(CHF 100,000.-), with one hundred (100) registered shares of stock, each havinga nominal value of One Thousand Swiss Francs (CHF 1,000.-), with one hundredshares of stock issued and outstanding on the date hereof, and 97 of said 100shares owned beneficially and of record by the Company, free and clear of allliens and Encumbrances. Of the remaining three shares, the three directors ofthe Subsidiary, Dr. Hans-Rudolf Staiger and Dr. Michael Hamm (each in afiduciary capacity as trustee for the benefit of the Company pursuant to TrustAgreements with the Company dated April 12, 1999) and Edward Riley, each holdone share in trust on behalf of the Company in accordance with applicable Swisslaw, which provides that each director of a Swiss company must also be ashareholder and that a majority of such directors must be Swiss or EU citizens,domiciled in Switzerland. The outstanding stock of the Subsidiary is validlyissued, fully paid and nonassessable and was issued in compliance withApplicable Laws. None of the outstanding stock of the Subsidiary has beenissued in violation of the rights of any Person. As of the date hereof, (i) thereare no Rights outstanding, and (ii) there are no agreements, understandings orcommitments relating to the rights of the Company to vote or dispose of thestock of the Subsidiary.

### (c)           The Affiliate is aMaine Limited Liability Company and sole owner of the Owner Real Estate. Theequity of the Affiliate is owned 51% by Edward Riley and 49% by Russell Holmes.

## **3.4.         Clear Title.** Except as otherwise set forth in **Schedule 3.4** or the leasedproperty disclosed in **Schedule 3.15(d)** hereto,on the Closing Date, (i) the Company, Subsidiary and Affiliate hold good title(or valid and enforceable leasehold interests) to their respective personalproperty, and (ii) such personal property is and shall be free and clear of anyand all Encumbrances of any kind, nature and description whatsoever, except forEncumbrances which are disclosed, reflected or reserved for or against in theBalance Sheets, or are beingreleased by payment from Closing proceeds.

## **3.5.         Condition of Assets.** All of the properties and assets of the Company,Subsidiary and Affiliate are the assets used to operate their respectivebusinesses as currently conducted, (ii) such properties and assets have beenproperly maintained, consistent with past practices, and are in good operatingcondition, normal wear and tear excepted, and (iii) all leased property is inthe condition received by the Company and Subsidiary at the time of the lease,normal wear and tear excepted.

## **3.6.         Legal Proceedings**. Except as set forth on **Schedule 3.6(a)**, there has notbeen in the twenty-four (24) months prior to the date hereof any claims,actions, suits, inquiries, proceedings, orders or investigations of any kind ornature whatsoever, at law or in equity, by or before any court or GovernmentalBody. Except as set forth on **Schedule 3.6(b)**, there are no claims, actions, suits,inquiries, proceedings, orders or investigations of any kind or naturewhatsoever, at law or in equity, by or before any court or Governmental Body,or to the Seller’s Knowledge, Threatened against or involving or potentiallyinvolving:

### (a)           the Company,Subsidiary, Affiliate or Business, assets, properties, officers or directors,or which questions or challenges the validity of this Agreement, any AncillaryDocument or any action taken or to be taken by Seller pursuant to thisAgreement, the Ancillary Document or in connection with the contemplatedtransactions; and, to the Seller’s Knowledge, there is no valid basis for anysuch claim, action, suit, inquiry, proceeding or investigation; or

### (b)           any Seller, whichcould adversely affect the consummation of the contemplated transactions.

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(c)           Neither the Company,Subsidiary nor Affiliate is subject to any judgment, order, decree or legalrequirement which involves more than $25,000. The Company has delivered toPurchaser copies of all pleadings, correspondence, and other documents relatingto any of the foregoing.

## **3.7.         Labor Matters.** Except as set forth in **Schedule 3.7** hereto, the Companyand the Subsidiary, individually or collectively, have never been a party toany collective bargaining agreement or other labor Contract and there is notpresently pending or existing, and to the Seller’s Knowledge, the Company orthe Subsidiary, there is not Threatened (i) any strike, slowdown, walkout,picketing, work stoppage, labor arbitration or other Proceeding in respect ofthe grievance of any employee, (ii) any application or complaint filed by anyemployee or union with the National Labor Relations Board, the Equal EmploymentOpportunity Commission, the Occupational Safety and Health Administration orany comparable Governmental Body, (iii) any other employee claim under anyApplicable Laws; or (iv) any organizational activity or other labor disputeagainst or affecting the Company or the Subsidiary, and no application forcertification of a collective bargaining agreement is pending or, to the Seller’sKnowledge, the Company or the Subsidiary, is Threatened. There is no lockout ofany employees by the Company or the Subsidiary and no such action iscontemplated by either the Company or the Subsidiary. Except as set forth in **Schedule 3.7** hereto, there isno Proceeding pending or, to the Seller’s Knowledge, the Company or theSubsidiary, Threatened by any Person against the Company or the Subsidiary orany of their current or former officers, directors or employees relating toemployment, equal employment opportunity, discrimination, harassment, wrongfuldischarge, unfair labor practices, immigration, wages, hours, benefits,collective bargaining, the payment of social security or similar Taxes,occupational safety and health or plant closing. Except as disclosed in **Schedule 3.7**, there are noworker’s compensation claims pending against the Company or Subsidiary, and theSeller have no Knowledge of any basis for any such claim.

## **3.8.         Tax Matters.**

### (a)           Tax Returns. TheCompany, Subsidiary and Affiliate have timely filed, or caused to be timelyfiled, with the appropriate taxing authorities, all Tax Returns that arerequired to be filed by, or with respect to, the Company, Subsidiary andAffiliate on or prior to the Closing Date. The Returns have accuratelyreflected and will accurately reflect all Liability for Taxes of the Company,Subsidiary and Affiliate for the periods covered thereby. **Schedule 3.8(a)**lists all income Tax Returns filed with anyGovernmental Body with respect to the Company, Subsidiary and Affiliate for thetaxable periods ended on or after September 30, 2001.

### (b)           Payment of Taxes.All Taxes and Tax Liabilities of the Company, Subsidiary and Affiliate for alltaxable years or periods that end on or before the Closing Date and, withrespect to any taxable year or period beginning before and ending after theClosing Date, the portion of such taxable year or period ending on the dayimmediately preceding the Closing Date (“**Pre-Closing Period**”)have been timely paid to the extent due and/or adequate provisions have beenmade for taxes which have accrued and/or become due or become due through theClosing Date and there are no further liabilities for any Taxes, except asreflected in **Schedule3.8(b)**.

### (c)           Other Tax Matters.Except as set forth in **Schedule3.8(c)**:

#### (i)            the Company,Subsidiary and Affiliate have not been the subject of a dispute or claim or anaudit or other examination of Taxes by the Tax authorities of any GovernmentalBody, nor have the Company, Subsidiary or Affiliate received any notices fromany such taxing authority relating to any issue which could have a MaterialAdverse Effect.

#### (ii)           the Seller, theCompany, Subsidiary and Affiliate have not (A) entered into an agreement orwaiver or been requested to enter into an agreement or waiver extending anystatute of limitations relating to the payment or collection of Taxes of theCompany or the Subsidiary, or (B) contested the Tax Liability of the Company,Subsidiary or Affiliate before any Governmental Body.

#### (iii)          the Company,Subsidiary or Affiliate have not been included in any “consolidated,” “unitary”or “combined” Tax Return provided for under Applicable Law with respect toTaxes for any taxable period for which the statute of limitations has notexpired other than the consolidated group the parent of which is the Company.

#### (iv)          all Taxes which theCompany, Subsidiary and Affiliate are (or have been) required by law towithhold or collect have been duly withheld or collected, and have been timelypaid over to the proper authorities to the extent due and payable.

#### (v)           there are no Taxsharing, allocation, indemnification or similar agreements in effect as betweenthe Company and/or the Subsidiary or any predecessor or Affiliate thereof andany other party (including the Seller and any predecessors or Affiliatesthereof) under which the Purchaser, the Company, Subsidiary or Affiliate couldbe liable for any Taxes or other claims of any Person.

#### (vi)          the Company is and has been a validlyelecting S Corporation within the meaning of Code §§1361 and 1362 at all timessince September 11, 1992.

(vii)         theSubsidiary is not, and has never been treated as, a “qualified subchapter Ssubsidiary” within the meaning of Code §1361(b)(3)(B).

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#### (viii)        the Company will notbe liable for any Tax under Code §1374 in connection with the deemed sale ofthe Company’s assets caused by the Code §338(h)(10) Election. Within the pastten (10) years, the Company has not (A) acquired assets from another corporationin a transaction in which the Company’s tax basis for the acquired assets wasdetermined, in whole or in part, by reference to the Tax basis of the acquiredassets (or any other property) in the hands of the transferor or (B) acquiredthe stock of any corporation that is or was a qualified subchapter Ssubsidiary.

(ix)           The Subsidiary is not in breach or default, and there isno basis for any claim of breach or default, under the Swiss Tax Agreement andthere exists no event or condition which (whether with or without notice, lapseof time, or both) could constitute a breach or default thereunder, give rise toa right to assess or impose additional Taxes on the Subsidiary, retroactivelyor otherwise, or give rise to any Encumbrance on its property or assets, exceptas specified on Schedule 3.8(c)(ix).

#### (x)            there is no action,suit, taxing authority proceeding, audit, or investigation now in progress,pending or, to the Seller’s Knowledge, Threatened against or with respect tothe Company, Subsidiary or Affiliate with respect to any Tax.

#### (xi)           the Company,Subsidiary or Affiliate do not reasonably expect any taxing authority to claimor assess any additional Tax against them for any period ending on or prior tothe Closing Date, and to the Seller’s Knowledge, there is no basis for any suchclaim or assessment.

#### (xii)          neither the Company,Subsidiary or Affiliate has distributed stock of another Person, or had itsstock distributed by another Person, in a transaction that purported or wasintended to be governed in whole or in part by IRC Section 355 or Section 361.

#### (xiii)         neither the Company, Subsidiary orAffiliate has been a member of an affiliated or similar group filing aconsolidated, combined, unitary or similar income tax return other than theconsolidated group of which the Company is the common parent or has anyliability for the Taxes of any Person (other than the Company and Subsidiary)under Treas. Reg. §1.1502-6 (or any similar provision of state, local orforeign law), as a transferee or successor, by agreement, or otherwise.

## **3.9.         Employee Benefits.**

### (a)           **Schedule 3.9 (a)**is a complete list of each “Benefit Plan”(within the meaning of Section 3(3) of ERISA) and each other employee benefitplan, agreement, policy, trust fund or arrangement (whether written orunwritten, insured or self-insured) maintained or contributed to (or withrespect to which any obligation to contribute has been undertaken) by theCompany or Subsidiary on behalf of any employee or other service provider ofthe Company or Subsidiary (whether current, former, or retired) or theirbeneficiaries or with respect to which the Company or Subsidiary has or mayhave any obligation or liability (contingent or otherwise) (each **“Benefit Plan**”). With respect to each Benefit Plan, Sellerhas delivered to Purchaser (1) current, accurate and complete copies of eachsuch Benefit Plan and all contracts relating thereto (including withoutlimitation all trust agreements, insurance or annuity contracts, investmentmanagement agreements, record keeping agreements and other material documentsor instruments relating thereto), and in the case of any Benefit Plan that isnot in written form, an accurate description of all material aspects of thatBenefit Plan; (2) copies of the most recent Internal Revenue Servicedetermination letter (including copies of any outstanding requests fordetermination letters) or opinion letter with respect to each such Benefit Planwhich is an “employee pension benefit plan” (within the meaning of Section 3(2)of ERISA) intended to qualify under Section 401(a) of the IRC; and (3) copiesof the most recent Forms 5500 annual report and accompanying schedules, and themost recent summary plan descriptions.

### (b)           Subsidiary meets therequirements of Applicable Law with regard to the quantity and quality ofBenefit Plans provided, and all Benefit Plans, including both mandatorygovernmental plans have been maintained, are fully funded and administered inaccordance with Applicable Law, and comply in form and in operation in all materialrespects with the requirements of Applicable Law.

### (c)           Each Benefit Plan hasbeen maintained, funded and administered in accordance with the terms of suchBenefit Plan and complies in form and in operation in all material respectswith the requirements of Applicable Law, including ERISA and the IRC.

### (d)           All contributions(including all inter-company charges, employer contributions and employeesalary reduction contributions) that are due have been made to each BenefitPlan that is an “employee pension benefit plan” (within the meaning of Section 3(2)of ERISA). All premiums or other payments (including all inter-company charges)that are due have been paid with respect to each such Benefit Plan that is an “employeewelfare benefit plan” (within the meaning of Section 3(1) of ERISA).

### (e)           Each Benefit Planthat is intended to meet the requirements of a “qualified plan” under Section 401(a)of the IRC has received a determination letter from the IRS to the effect thatit meets the requirements of Section 401(a) of the IRC.

### (f)            Neither the Company,Subsidiary, any ERISA Affiliate or any of their respective predecessors hasever contributed to, contributes to, has ever been required to contribute to,or otherwise participated in or maintains sponsors or in any way, directly orindirectly, has any liability with respect to any plan subject to Section 412of the IRC, Section 302 of ERISA or Title IV of 

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### ERISA,including, without limitation, any employee pension benefit plan that is a “definedbenefit plan” (as defined in ERISA §3(35), any “multiemployer plan” (within themeaning of Sections 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the IRC)or any single employer pension plan (within the meaning of Section 4001(a)(15)of ERISA) which is subject to Sections 4063, 4064 or 4069 of ERISA.

### (g)           No non-exempt “prohibitedtransaction,” within the meaning of Section 4975 of the IRC and Section 406 ofERISA, has occurred or is reasonably expected to occur with respect to theEmployee Benefit Plans.

### (h)           No Benefit Plan isunder, and neither Seller, Company or Subsidiary has received any notice of, anaudit or investigation by the IRS, Department of Labor or any otherGovernmental Entity and no such completed audit, if any, has resulted in theimposition of any tax or penalty.

### (i)            The Company,Subsidiary or any ERISA Affiliate has no unfunded liabilities pursuant to anyBenefit Plan that is not intended to be qualified under Section 401(a) of theIRC and is an employee pension benefit plan within the meaning of Section 3(2) ofERISA, a nonqualified deferred compensation plan or an excess benefit plan. **Schedule 3.9(i)**of the Disclosure Schedule sets forth a true,correct and complete list of each Benefit Plan which is a nonqualified deferredcompensation plan. Each such nonqualified compensation plan, whetherdeferred or otherwise, is not subject to IRC 409A.

### (j)            The consummation ofthe contemplated transactions alone, or in combination with a termination ofany employee, officer, director, other service provider or stockholder of theCompany or Subsidiary (whether current, former or retired): i) will not giverise to any liability under any Benefit Plan, including, without limitation,liability for severance pay, unemployment compensation, termination pay orwithdrawal liability, or accelerate the time of payment or vesting or increasethe amount of compensation or benefits due to any employee, officer, director,other service provider or stockholder of the Company or Subsidiary (whethercurrent, former or retired) or their beneficiaries; and ii) will not cause anyBenefit Plan or contract of insurance or other ancillary agreement to becomevoid or voidable or cause any increase in cost, other than cost increases ordecreases attributable to annual renewal. No amount that could be received(whether in cash or property or the vesting of property), as a result of theconsummation of the contemplated transactions, by any employee, stockholder orother service provider of the Companies who is a “disqualified individual” (assuch term is defined in Treas. Reg. §1.280G—1) under any Benefit Plan orotherwise could be characterized as an “excess parachute payment” (as definedin Sections 280G(b)(1) and 280G(b)(5) of the IRC).

### (k)           Any individual whoperforms services for the Company or Subsidiary and who is not treated as anemployee for federal income tax purposes by the Company or Subsidiary is not anemployee under applicable law or for any purpose including, without limitation,for tax withholding purposes or Employee Benefit Plan purposes.

### (l)            **WARN Compliance**. The Company has complied in all respectswith the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 etseq., and its corresponding regulations, and any similar state law, rule orregulation or local ordinance, rule or regulation, in each case in effect as ofthe date hereof, providing for notification to employees affected by closing,relocation, sale of business, mass layoff or similar event (collectively, the “**WARN Acts**”) on account of closings, relocations, salesof businesses, mass layoffs or similar events occurring on or prior to theClosing and all related notices, payments, fines or assessments due to anyGovernment Body pursuant to such WARN Acts. The Company and Subsidiary havecomplied with European/Swiss equivalents of the WARN Acts.

## **3.10.       Guarantees.** Except as set forth in **Schedule 3.10**, (i) none of theobligations of the Company, Subsidiary or Affiliate is guaranteed by, orsubject to a similar contingent Liability to, any Person, and (ii) neither theCompany, Subsidiary nor Affiliate has, individually or collectively,guaranteed, or otherwise become contingently liable for, any Liability of anyPerson.

## **3.11.       Financial Statements.**

### (a)           The Seller has causedthe Company, Subsidiary and Affiliate to furnish true and correct copies of thefinancial statements (and the respective audit reports) identified in **Schedule 3.11** hereto to the Purchaser. All of saidfinancial statements, including any notes thereto, fairly present theconsolidated financial position and condition of the Company, Subsidiary andAffiliate as of their respective dates and the results of their operations forthe periods covered in accordance with GAAP applied by the Company, Subsidiaryand Affiliate on a consistent basis throughout the periods covered thereby andon a basis consistent with that of prior years and periods; provided, however,that any unaudited financial statements listed on such **Schedule 3.11** are subject to year-end adjustments andlack footnotes and other required presentation items and have not been preparedin accordance with GAAP. Except for Liabilities (i) reflected or reservedagainst in the consolidated balance sheets of the Company and the Subsidiary asof March 31, 2006 (the “**BalanceSheet Date**”) or in the notesthereto (collectively, the “**BalanceSheets**”), (ii) incurred inthe Ordinary Course of Business since the Balance Sheet Date (none of whichresulted from, arose out of, is related to, or was caused by any breach ofContract), and/or (iii) set forth in **Schedule 3.11**hereto, the Company and the Subsidiary do not have any Liabilities.

### (b)           As of the BalanceSheet Date, and except as set forth in **Schedule 3.11**hereto, the Company, the Subsidiary and Affiliate have no material Liabilitiesor obligations secured or unsecured (whether accrued, absolute, contingent) ofwhich, under GAAP, should have been, but which were not reflected or reservedagainst in the Balance Sheets.

### (c)           Since the BalanceSheet Date, the Company, the Subsidiary and the Affiliate, have not incurredany Liabilities or obligations including, without limitation, any items oflitigation of a type, kind or nature not reflected or reserved against in theBalance Sheets.

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### (d)           The prepaid expenseson the Balance Sheets have been incurred solely for the benefit of the Company,Subsidiary or Affiliate, and the Company, Subsidiary or Affiliate, will retainthe benefits of such prepaid expenses after the Closing Date.

### (e)           The inventories ofthe Company and the Subsidiary (including, without limitation, raw materials,supplies, manufactured and processed parts, containers, work in process andfinished goods) are not damaged, or defective, and consist of items which areusable or salable in the Ordinary Course of Business, and, if salable, aresalable at values no less than the book value amounts, subject only to thereserve for inventory write-down set forth on the face of the Balance Sheets inaccordance with past custom and practice of Seller, provided such customs andpractices were consistent with GAAP. To Seller’s Knowledge, the Inventory isnot obsolete.

## **3.12.       Absence of Certain Developments.** Except for the transactions contemplated by thisAgreement or as otherwise set forth on **Schedule 3.12** hereto, since the Balance Sheet Date, (i) therehas not been any development or combination of developments affecting theCompany, Subsidiary or Affiliate of which the Seller’s Knowledge has had, or islikely to have, a Material Adverse Effect, and (ii) the Company, Subsidiary andAffiliate have conducted the Business in the Ordinary Course of Business andsince the Balance Sheet Date there has not been:

### (a)           a change in theCompany’s or Subsidiary’s authorized or issued capital; grant of any stockoption or right to purchase shares of capital stock or other securities of theCompany, Subsidiary or Affiliate; issuance of any security convertible intosuch capital stock or other securities; grant of any registration rights;purchase, redemption, retirement, or other acquisition by the Company orSubsidiary of any shares of any such capital stock or other securities; ordeclaration or payment of any dividend or other distribution or payment inrespect of shares of capital stock or other securities;

### (b)           payment or increaseby the Company or Subsidiary of any bonuses, salaries, or other compensation toany stockholder, member, partner, director, manager, officer, or employee,except payments or increases granted or agreed to be made in the OrdinaryCourse of Business consistent with past practices;

### (c)           adoption of, orincrease in the payments to or benefits under, any profit sharing, bonus,deferred compensation, savings, insurance, pension, retirement, or otheremployee Benefit Plan for or with any employees of the Company or anySubsidiary;

### (d)           loss of theemployment, services or benefits of any officers or management level employees;

### (e)           a loan to, orentering into any other transaction with, any of the directors, officers, andemployees of the Company or Subsidiary except in the Ordinary Course ofBusiness consistent with past practice;

### (f)            damage to,destruction or other loss of, condemnation, taking or other proceeding against,any asset or property of the Company or any Subsidiary, whether or not coveredby insurance;

### (g)           incurrence of anyindebtedness or other liability (whether known or unknown, absolute, accrued,fixed, contingent, liquidated, unliquidated or otherwise, and whether due or tobecome due), except for liabilities reflected in the Balance Sheets or incurredafter the date of the Balance Sheets in the Ordinary Course of Businessconsistent with past practice;

### (h)           disposal of,abandonment or permitted lapse of any rights to the use of any IntellectualProperty, or disposal of or disclosure, or permitted disclosure (except asnecessary in the conduct of its business), to any Person other thanRepresentatives of Purchaser, any trade secret, formula, or similar informationnot theretofore a matter of public knowledge;

### (i)            cancellation of anydebts or waiver of any claims or rights other than in the Ordinary Course ofBusiness consistent with past practice;

### (j)            payment, dischargeor satisfaction of any claim, Liability or obligation other than the payment,discharge or satisfaction of claims, Liabilities and obligations incurred inthe Ordinary Course of Business and consistent with past practice;

### (k)           (i) prepayment of anyobligation having a fixed maturity of more than ninety (90) days from the datesuch obligation was issued or incurred, or (ii) failure to pay when due, anyaccount payable, or sought the extension of the payment date of any accountpayable;

### (l)            a writing off asuncollectible any notes or accounts receivable;

### (m)          entry into,termination of, amendment of, or receipt of notice of termination of anyContract or transaction involving a total commitment by or to the Company orSubsidiary of at least $25,000;

### (n)           a sale, lease, orother disposition of any asset or property of the Company or any Subsidiary(except the sale of inventory in the Ordinary Course of Business consistentwith past practice);

### (o)           creation of anEncumbrance on any asset or property of the Company or Subsidiary;

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### (p)           execution of anyagreement that materially limits or restricts the Company or Subsidiary fromengaging or competing in any line of business or in any geographic area or location;

### (q)           execution of anyemployment contract or collective bargaining agreement, written or oral, ormodified the terms of any existing employment contract or agreement or adopted,amended, modified or terminated any Benefit Plan;

### (r)            any change or amendmentin its articles of incorporation or bylaws;

### (s)           an issuance or saleof any securities; acquired, directly or indirectly, by redemption orotherwise; or a grant or arrangement regarding any options, warrants, calls orcommitments of any kind with respect thereto;

### (t)            any capitalexpenditure exceeding $25,000;

### (u)           any Liabilities,except Liabilities incurred in the Ordinary Course of its Business, to whichthe Company, Subsidiary and/or Affiliate have incurred or become subject to, orhave agreed to incur or become subject to,

### (v)           a sale, assignment,transfer, conveyance, lease or other disposition of any material assets orproperties of the Company or the Subsidiary, except in the Ordinary Course ofBusiness;

### (w)          execution of any othermaterial transaction, contract or commitment outside of the Ordinary Course ofBusiness, except with respect to the transactions contemplated by thisAgreement;

### (x)            any work stoppage withrespect to the Business or obtained Knowledge of any threatened or anticipatedwork stoppage;

### (y)           any material damageor loss to its Business that would have a Material Adverse Effect;

### (z)            any change in itsmethod of accounting;

### (aa)         any Proceedingsinstituted or settled; or

### (bb)         either directly orindirectly, a performance, or failure to perform, any act which would result inthe creation or imposition of any Encumbrance on any of the properties orassets of the Company or Subsidiary, or otherwise adversely affect themarketability of the Company’s or Subsidiary’s title to any of its propertiesor assets, outside of the Ordinary Course of Business.

## **3.13.       Intellectual Property.****Schedule3.13** hereto contains a list and description of all Intellectual Propertyowned or licensed by the Company or Subsidiary or used by the Company orSubsidiary in the operation of the Business. Except as set forth in **Schedule 3.13**, the Company andSubsidiary have all rights necessary to use such Intellectual Property, andeach Seller, the Company and Subsidiary have no Knowledge of any asserted orThreatened claim to the effect that the operation of the Business (or thepossession or use in the Business of any of the Intellectual Property listedand set forth in **Schedule 3.13** hereto) infringes the Intellectual Propertyrights of any other Person or that such Intellectual Property rights have beenterminated. Except as set forth in **Schedule 3.13**, the Seller has no Knowledge of any claimthat any of the Intellectual Property set forth in **Schedule 3.13** is invalid; and,except as set forth in **Schedule 3.13** hereto, neither the Company nor theSubsidiary is obligated under any Contract or otherwise to pay royalties, feesor other payments with respect to any of the Intellectual Property listed andset forth in **Schedule 3.13** hereto. Except as set forth in **Schedule 3.13**, the consummationof the transactions contemplated by this Agreement will not adversely affectthe use by the Company or Subsidiary of any of the Intellectual Property setforth in **Schedule3.13** hereto.

## **3.14.       Compliance with Laws.** The Business (i) has been operated and theCompany, Subsidiary and Affiliate are in compliance in all respects with therequirements of Applicable Laws to which the Business, the Company, Subsidiaryand Affiliate are subject, and (ii) neither the Company nor the Subsidiary orAffiliate have received any notice of, and the Seller has no Knowledge of, anyviolation of any Applicable Laws respecting the Company, Subsidiary orAffiliate. The Company, Subsidiary and Affiliate have obtained and complied, inall material respects, with all Permits set forth in **Schedule 3.31** and otherapprovals necessary to conduct the Business and be in compliance withApplicable Laws, including, but not limited to, all permits and other approvalsrequired to treat, transport, store, dispose of and otherwise handle HazardousMaterials.

## **3.15.       Contracts.** Except for Benefit Plans which are set forth on **Schedule 3.9**, **Schedule3.15** contains a complete and accurate list of all material Contracts, andthe Company has delivered to Purchaser true, correct and complete copies of allmaterial Contracts including:

### (a)           each Contract thatinvolves performance of services or delivery of goods or materials by theCompany, Subsidiary or Affiliate of an amount or value in excess of $25,000after the Closing Date;

### (b)           each Contract thatinvolves performance of services or delivery of goods or materials to theCompany, Subsidiary or Affiliate of an amount or value in excess of $25,000after the Closing Date;

### (c)           each Contract thatinvolves expenditures or receipts of the Company or Subsidiary in excess of$25,000;

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### (d)           each lease, rental oroccupancy agreement, license, installment and conditional sale agreement, andother material Contract affecting the ownership of, leasing of, title to, useof, or any leasehold or other interest in, any real or personal property(except personal property leases and installment and conditional salesagreements having a value per item or aggregate payments of less than $25,000and with terms of less than one (1) year);

### (e)           each Contractcontaining covenants that purport to restrict the business activity of theCompany, Subsidiary or Affiliate or limit the freedom of the Company orSubsidiary to engage in any line of business or to compete with any Person;

### (f)            each partnership orjoint venture agreement between the Company, Subsidiary or Affiliate and athird party whether or not a separate legal entity is created thereby;

### (g)           each Contract with anemployee, independent contractor or subcontractor of the Company, Subsidiaryand Affiliate, including contracts for employment, severance, consulting,deferred compensation or benefit plans or agreements.

### (h)           each collectivebargaining agreement or union agreement, with respect to employees of theCompany or Subsidiary;

### (i)            each bonus, profitsharing, retirement or other form of deferred compensation plan of the Companyor Subsidiary;

### (j)            each equitypurchase, option or similar plan;

### (k)           each Contractpertaining to any Intellectual Property (other than off-the-shelf software);

### (l)            each Contractpursuant to which the Company or Subsidiary has guaranteed any obligations ofother Persons or made any agreements to acquire or guarantee any obligations ofor indemnify or hold harmless other Persons;

### (m)          each Contract relatingto the lease or similar arrangement of any machinery, equipment, motorvehicles, furniture, fixture or similar property of an amount or value inexcess of $25,000 and;

### (n)           each Contract towhich any Governmental Body is a party;

### (o)           each Contractrelating to the sale or other disposition of any of assets or property or otherrights of the Company or Subsidiary, other than with respect to obsoleteequipment;

### (p)           each Contract thatcould obligate the Company or Subsidiary to repair, replace, accept the returnof or make any refund in respect of any service performed by the Company orSubsidiary;

### (q)           each Contractpursuant to which the Company or any Subsidiary is or may be obligated to makepayments, contingent or otherwise, on account of or arising out of prioracquisitions or sales of businesses, assets or stock of other Persons;

### (r)            each Contract whichprovides for contingent payments or earn-outs;

### (s)           each Contract whichprovides for termination, acceleration or other similar rights with respect toany direct or indirect change of control of the Company or any Subsidiary;

### (t)            each Contract with arelated person;

### (u)           each Contract thatinvolves any outstanding loan or advance to any Person.

### (v)           each other Contractnot made in the Ordinary Course of Business of the Company and Subsidiary.

## **3.16.       Contracts; Compliance.**

### (a)           The Company,Subsidiary and/or Affiliate are not in breach or default, and there is no basisfor any claim or breach or default, under any Contract (whether written ororal) to which the Company, Subsidiary or Affiliate is a party or by which theCompany or any Subsidiary or any of its assets or properties are bound and,there exists no event or condition which (whether with or without notice, lapseof time, or both) could constitute a default thereunder, give rise to a rightto accelerate, modify or terminate any provision thereof or give rise to anyEncumbrance on its property or assets or a right to any additional orguaranteed payments; and to the Seller’s Knowledge, no other party to any suchContract is in breach or default thereof.

### (b)           Each Contract listedon **Schedule3.15** is valid and in fullforce and effect and constitutes a legal, valid and binding obligation of theCompany, Subsidiary or Affiliate, and, to the Seller’s Knowledge, the otherparties thereto, enforceable in 

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### accordancewith its terms, and will not cease to be valid and in full force and effectafter the Closing Date; accurate and complete copies thereof, together with allamendments thereto, have been heretofore delivered to Purchaser.

## **3.17.       Real Estate.** Owned Real Estate and Leased Real Estate shallcollectively be referred to herein as “**Real Estate**” with respect to the Real Estate:

### (a)           **Schedule 3.17(a)**contains a description segregated by theCompany, Subsidiary, and Affiliate for each parcel of Owned Real Estate and alisting and description (including the parties, term, expiration date(s),address, and the general use description of the leased premises) of eachwritten or oral lease regarding Leased Real Estate (the leases of Leased RealEstate described in **Schedule3.17(a)**are collectively,the “**Leases**”);

### (b)           Except as set forthin **Schedule3.17(b)**hereto, there areno deferred property Taxes or assessments with respect to the Real Estate whichmay or will become due and payable as a result of the consummation of thetransaction contemplated hereby;

### (c)           The Affiliate is thesole owner in fee simple title of each parcel of Owned Real Estate and eachsuch parcel is free and clear of any and all Encumbrances, except (A) thoseparcels of Owned Real Estate with encumbrances as set forth in **Schedule 3.17(d)**, and (B) (i) those encumbrances set forth in **Schedule 3.17(c)**hereto, including (ii) municipal zoningordinances, recorded or platted easements for public utilities and recordedbuilding and use restrictions and covenants, (iii) general Real Estate Taxesand installments of special assessments payable in the year of Closing, and (iv)licenses, easements or reservations of, or rights of others for, water lines,sewers, electric lines, telephone lines, and other similar public utilitypurposes, or zoning or other restrictions on the use of real property(collectively the “**PermittedEncumbrances**”). The PermittedEncumbrances and those Encumbrances set forth in **Schedule 3.17(d)**heretodo not individually or in the aggregate materially impair or prohibit thecurrent use or operation of the Owned Real Estate by the Company or Subsidiary.The Affiliate will sell, transfer, and convey said Owned Real Estate to thePurchaser, or its nominee, pursuant to the terms of a separate Real EstatePurchase Agreement;

### (d)           Except for thePermitted Encumbrances and those Encumbrances set forth in **Schedule 3.17(d)**hereto, there are no Encumbrances whichmaterially and adversely affect the use or occupancy of all or any part of anyparcel of Owned Real Estate or any easements;

### (e)           Except as set forthin **Schedule3.17(e)**hereto, theimprovements located on each parcel of Real Estate, including fences, drivewaysand other structures occupied, used or claimed by the Company, Subsidiary orAffiliate, are wholly within the boundary lines of such parcels of Real Estateand such improvements and the present uses thereof by the Company, Subsidiaryor Affiliate, as applicable, do not infringe upon the rights of any otherPerson;

### (f)            Except as set forth in**Schedule 3.17(f)**hereto, no buildings, fences, driveways orother structures of any adjoining owner encroach, in any material respect whichinterferes with the operation of the Business, upon any part of any parcel ofReal Estate or any easements;

### (g)           Except as set forthin **Schedule3.17(g)**, the Company,Subsidiary and Affiliate, as applicable, have all easements (or access throughpublic utility easements) on to private property, construction permits, highwayencroachment agreements and permits (and other similar licenses and permits)and right-of-way-licenses reasonably necessary to conduct theBusiness and to use and operate the Real Estate in the manner it is currentlybeing used and operated by the Company, Subsidiary and Affiliate;

### (h)           Neither the Company,Subsidiary nor Affiliate are in default in the performance of any materialobligation under the Leases or easements, and, to the Seller’s Knowledge, noneof the other parties to the Leases or easements are in default in performanceof their material obligations thereunder, the Leases and easements are in fullforce and effect, and neither the Company, Subsidiary or Affiliate haveassigned their rights under the Leases or easements;

### (i)            Except as set forthin **Schedule3.17(i)**neither theCompany, Subsidiary or Affiliate have leased or granted to any other Person orentity the right to use or occupy all or any portion of the Owned Real Estate,and the Owned Real Estate is not subject to an option or right to purchase infavor of any Person or entity; and

### (j)            Except as set forthin **Schedule3.17(j)**, each of theparcels of Owned Real Estate constitutes a separate tax parcel, and is nottaxed with any other real property.

## **3.18.       Accounts Receivable.****Scheduled3.18** sets forth a list of aged accounts receivable which is true, correctand complete as of the indicated thereon. All of the accounts, notes and otherreceivables of the Company and Subsidiary represent sales actually made in theOrdinary Course of Business consistent with past practice for goods or servicesdelivered or rendered in bona fide arm’s-length transactions, constitute onlyvalid, undisputed claims, have not been extended or rolled over in order tomake them current and should be collectible at their recorded amounts net ofreserves for non-collectibility reflected on the Financial Statements inaccordance with GAAP. Except as set forth in **Schedule 3.18**, no such account,note or other receivable has been assigned or pledged to any Person or, to theSeller’s Knowledge, is subject to counterclaims or setoffs or any otherdefenses.

## **3.19.       Books and Records; Bank Accounts.** All of the books of account and other financialand corporate records of the Company and the Subsidiary (including minute booksand stock records) have been made available to the Purchaser and itsrepresentatives (or 

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## will be so made available prior to theClosing Date). Such books of account and records are current and complete inall material respects. All such books and records are consistent with thefinancial statements set forth in **Schedule 3.11** hereto. All such books and records are keptin a proper order and in the possession of the Company and the Subsidiary (asthe case may be).

## **3.20.       Employees.**

### (a)           **Schedule 3.20(a)**sets forth a complete and accurate list of allthe employees of the Company and the Subsidiary as of the date hereof (the “**Employees**”), together with the following informationfor each such Employee: name, position held, current salary, and bonusentitlement/arrangement.

### (b)           None of the Employeeshave informed the Company or the Subsidiary that he/she intends to terminateemployment with the Company or the Subsidiary, as applicable. **Schedule 3.20(b)(ii)**sets forth a description of any writtenContract, other than the Benefit Plans set forth in **Schedules 3.9(a) & (i)**hereto, with respect to the conditions of employment of any of theEmployees. Except as set forth in **Schedule3.20(b)(ii)**, all RMIEmployees are employed on an “at-will” basis.

### (c)           None of the Employeesare working based upon a non-resident visa and the Company and the Subsidiaryhas complied with their respective obligations under the Immigration ReformControl Act.

## **3.21.       Subsidiary.** Except for the Subsidiary, the Company does notown any shares of stock or other securities or equity interests, directly orindirectly, in any other Person. Except as disclosed or described in thisAgreement or as set forth in **Schedule 3.21** hereto, the Company is not subject to anyobligation or requirement to provide funds to, or invest in, any such Person.

## **3.22.       Insurance.**

### (a)           TheCompany has delivered to Purchaser:

#### (i)            true and completecopies of all policies of insurance to which the Company, Subsidiary orAffiliate is a party or under which the Company, Subsidiary, or any officer ordirector of the Company, Subsidiary or Affiliate, has been covered at any timewithin the three (3) years preceding the date of this Agreement; and

#### (ii)           true and completecopies of all pending applications for policies of insurance;

### (b)           **Schedule 3.22(b)**contains a true and complete list and/ordescription of:

#### (i)            any self-insurancearrangement by or affecting the Company, Subsidiary or Affiliate, including anyreserves established thereunder;

#### (ii)           all insurancepolicies (including, but not limited to, liability, property and casualty,workers compensation, directors and officers liability, surety bonds, key manor corporate owned life insurance, vehicular and other insurance policies andcontracts) covering the Company, Subsidiary or Affiliate or otherwise held byor on behalf of it, or any aspect of its assets or business, indicating thetype of coverage, name of insured, the insurer, the amount of coverage, thedeductibles, the premium, the expiration date, and other material terms thereofand the aggregate amounts paid thereunder.

#### (iii)          any Contract, otherthan a policy of insurance, for the transfer or sharing of any risk by theCompany; and

#### (iv)          all obligations ofthe Company to third parties with respect to insurance (including suchobligations under leases and service agreements) and identifies the policyunder which such coverage is provided; and

### (c)           Except as set forthon **Schedule3.22(c)**, to Seller’sKnowledge, there are no pending claims under any of the foregoing. To Seller’sKnowledge there is no reason why any of such insurance policies or Contractswill be terminated, suspended, modified or amended, or not renewed onsubstantially identical terms (including, without limitation, premium costs),or will require alteration of any equipment or any improvements to realproperty occupied by or leased to or by the Company or Subsidiary, or thepurchase of additional equipment, or the modification of any of the methods ofdoing business. Neither the Company, Subsidiary nor Affiliate, or to the Seller’sKnowledge, any third party to such insurance policy or Contract is in defaultwith respect thereto, nor does any condition exist that with notice or lapse oftime or both could constitute such a default by any party thereunder. Neitherthe Company, Subsidiary nor Affiliate have failed to give any notice or presentany claim under any such insurance policy or Contract in due or timely fashionor as required thereby in a manner which may jeopardize full recoverythereunder. All such insurance policies or Contracts provide coverage inamounts and upon terms that are reasonable and adequate for Persons havingsimilar businesses, operation, assets and properties. Complete and accuratecopies of all such policies, Contracts and related documentation havepreviously been delivered to Purchaser.

### (d)           The Seller, theCompany, Subsidiary and Affiliate, as applicable, have individually or jointlymaintained, and will continue to maintain until the Closing Date, the insuranceset forth in **Schedule3.22(b)**, which insurancecovers the tangible real 

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### andpersonal property and assets of the Company, Subsidiary, and the Affiliate,whether owned or leased, against loss or damage by fire or other casualty. TheCompany and Subsidiary also carry product liability insurance. All suchinsurance is in full force on the date of this Agreement and is carried withinsurers licensed in the states affected by such policies.

### (e)           The Company andSubsidiary are presently insured for general liability and worker’scompensation risks through a third party insurance company, which insurancecovers claims made against the Company or Subsidiary.

### (f)            The Company andSubsidiary have promptly and adequately notified the insurance carriers of anyand all claims known with respect to the operations, products or services ofthe Company or Subsidiary for which the Company or Subsidiary are insured andno insurance carrier has denied coverage or reserved its rights with respect tosuch claims. The Company and Subsidiary have not been refused any insurancecoverage by any insurance carrier to which they, individually or collectively,have applied for insurance during the past three (3) years.

## **3.23.       Brokers.** Except for the engagement of TRUDEAU & TRUDEAUASSOCIATES, INC. by the Seller, neither the Company, Subsidiary, the Seller northe Affiliate has employed or engaged any broker, finder, agent, banker orthird party, nor have they otherwise dealt with anyone purporting to act in thecapacity of a finder or broker in connection with the transactions contemplatedhereby. No commissions, finder’s fees or like charges have been or will beincurred by the Company or the Subsidiary or Affiliate in connection with theexecution and delivery of this Agreement or the consummation of thetransactions contemplated hereby. Any such commissions, finders’ fees or likecharges shall be directly chargeable to and will be paid by the Seller ascontemplated by the terms of this Agreement.

## **3.24.       Environmental Matters.** Except as may be set forth in **Schedule 3.24** and as set forthin the information contained in the site surveys and the environmental reportslisted in **Schedule3.24**, copies of which have been provided to the Purchaser, and except aswould not have a Material Adverse Effect: (i) the Company, Subsidiary andAffiliate have transported, sorted, and/or disposed of Hazardous Materialshandled by the Company, Subsidiary and Affiliate in a manner that is reasonablynecessary for the conduct of the Business and in material compliance withEnvironmental Laws, (ii) to the Seller’s Knowledge, the Real Estate, during itsuse by the Company, Subsidiary, or Affiliate has not been used, as a landfill,dump or other disposal, storage, transfer, treating or handling area for anyHazardous Materials, except for such storage or handling of Hazardous Materialsas is reasonably necessary for the conduct of the Business and in materialcompliance with Environmental Laws, (iii) to the Seller’s Knowledge, noasbestos, polychlorinated biphenyls, or urea formaldehyde has been placed,stored, located, or disposed on the Real Estate, and (iv) the Company,Subsidiary and Affiliate have not agreed to assume and, to the Seller’sKnowledge, have not assumed by operation of law, any environmental Liability ofany other Person, including, but not limited to, environmental Liabilitiesunder CERCLA or SARA. Except as may be set forth in **Schedule 3.24** hereto, the RealEstate is not listed on the National Priorities List, the ComprehensiveEnvironmental Response Compensation and Liability Information System, theResource Conservation and Recovery Information System or any other governmentallist of potentially contaminated properties.

## **3.25.       Debt.****Schedule3.25** is a true, correct and complete list of all mortgages, indentures,notes, guarantees and other obligations for or relating to borrowed money, orpurchase money debt (including conditional sales contracts, capital leases andall letters of credit whether or not such letters of credit have been drawnagainst) for which the Company, Subsidiary, or Affiliate are primarily orsecondarily obligated.

## **3.26.       Customers and Suppliers.**

### (a)           **Schedule 3.26(a)**contains a true and complete list of thefifteen (15) largest customers of the Company and Subsidiary in order of dollarvolume of services provided during its last full fiscal year showing the totalservices provided in dollar volume to each such customer during such period.

### (b)           **Schedule 3.26(b)**contains a true and complete list of the five (5)largest suppliers of the Company and Subsidiary in order of dollar volume ofpurchases during its last full fiscal year showing the total of purchases indollars to each such supplier during such period.

### (c)           Except as set forthon **Schedule3.26(c)**:

#### (i)            There has not beenany Material Adverse Change and, to the Seller’s Knowledge, there are no factswhich may reasonably be expected to indicate that any Material Adverse Changemay occur in the business relationship of the Company or Subsidiary with anycustomer or supplier listed on **Schedule 3.26(a)**or**Schedule 3.26(b)**.

#### (ii)           Neither the Companynor Subsidiary is engaged in any material disputes with any customers orsuppliers listed or to be listed on **Schedules 3.26(a)**or**3.26(b)**and neither the Company, Subsidiary nor anySeller has any reason to believe that any such customer or supplier intends todiscontinue or adversely modify its relationship with the Company or Subsidiaryafter the Closing Date. In addition, to the Seller’s Knowledge, no customerlisted or to be listed on **Schedule3.26(a)**of the DisclosureSchedule is materially dissatisfied with its services. During the two-yearperiod prior to the date hereof neither the Company nor Subsidiary has grantedany rebate to any customer listed or to be listed on **Schedule 3.26(a)**of the Disclosure Schedule other than in theOrdinary Course of Business consistent with past practice.

## **3.27.       Seller Loans.** Except as set forth in **Schedule 3.27**, there are noloans, advances or other obligations for borrowed money owing by the Company orthe Subsidiary to the Seller.

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## **3.28.       Adequacy of Properties.** The Company, Subsidiary and Affiliate,respectively, own, lease or otherwise have adequate rights to use the tangibleand intangible personal property necessary for the conduct of their Business inthe manner in which such Business is presently being conducted with no materialconflict with or infringement of the rights of others such that the absence ofsuch ownership or rights could not reasonably be expected to have a MaterialAdverse Effect.

## **3.29.       Warranty and Product Liability Claims.** Except as disclosed on **Schedule 3.29**: (a) neither theCompany nor the Subsidiary has made any express warranties and guaranties withrespect to any products manufactured or sold or services rendered in theoperation of the Business, and (b) no claims have been asserted during the pastthree (3) years that any product of the Company or the Subsidiary was defectiveor caused any injury or harm to any person or property, including all suchclaims relating to returns, express or implied warranty violations, failure towarn or similar matters.

## **3.30.       Related Party Transactions****.** Except asdisclosed in **Schedule 3.30** hereto, no Person who is an officer, director orshareholder in the Company or the Subsidiary (either directly or indirectly),or a member of any such officer’s, director’s or shareholder’s immediatefamily, or any Affiliate thereof, has, directly or indirectly: (a) anyfinancial interest in any Contract with the Company or Subsidiary, except as anowner of the Company or for compensation for services as an officer, employeeor director of the Company or the Subsidiary; (b) any interest in any real orpersonal property used in the Company’s or Subsidiary’s business, except forthe normal rights of a shareholder; or (c) any interest in (i) any Person whichpurchases from or sells, licenses or furnishes to either of the Company orSubsidiary any goods, property, technology or intellectual or other propertyrights or services or (ii) any third-party Contract to which the Company or theSubsidiary is a party or by which the Company or the Subsidiary may be bound. Thereare no loans, advances or other obligations for borrowed money (i) from theSeller or any Affiliate of the Seller, on the one hand, to the Company orSubsidiary, on the other hand, or (ii) from the Company or Subsidiary, on theone hand, to the Seller or any Affiliate of the Seller, on the other hand.

## **3.31.       Permits****.****Schedule 3.31** contains acomplete listing and summary description of all Permits held by the Company,Subsidiary and Affiliate. Except as set forth on **Schedule 3.31**, the Company, Subsidiaryand Affiliate hold all of the Permits that are necessary or appropriate to ownand operate its Business as presently conducted, including, without limitation,all Permits required under any Applicable Laws and each such Permit is, andafter the Closing shall be, in full force and effect. The Company andSubsidiary are in compliance with the terms and conditions of the Permits setforth on **Schedule3.31**, and neither the Company nor Subsidiary has received any notices thatthe Company, Subsidiary or Affiliate is in violation of any of the terms orconditions of such Permits. There are no proceedings pending or, to the Seller’sKnowledge, Threatened which may result in the revocation, cancellation,suspension or modification of the Permits set forth on **Schedule 3.31**, and Seller doesnot have any Knowledge of any basis therefore; and the consummation of thecontemplated transactions hereby will not result in any such revocation,cancellation, suspension or modification nor require the Company, Subsidiary,Affiliate or the Purchaser to make any filing or take any action in order tomaintain the validity of any item listed on **Schedule 3.31**.

## **3.32.       Absence of Undisclosed Liabilities.**

## (a)           Neitherthe Company, Subsidiary nor Affiliate, has any liabilities, losses orobligations of any nature (whether absolute, known or unknown, accrued, fixed,contingent, liquidated, unliquidated, due or to become due, or otherwise),except for (i) Liabilities included or reflected in the Company’s financialstatements and adequately reserved against therein in accordance with GAAPconsistently applied, or (ii) Liabilities or performance obligations arisingsubsequent to the date of the Balance Sheet in the Ordinary Course of Business(and not as a result of a breach or default by the Company or any Subsidiary)out of or under agreements, Contracts, leases, arrangements or commitments towhich the Company or Subsidiary or Affiliate is a party.

(b)           To the extent that (i)the subject matter or events giving rise to a breach of the Seller’srepresentations set forth in Section 3.32(a) are specifically covered byanother representation in Article 3 and (ii) such other representation isqualified by Seller’s Knowledge, then such knowledge qualifier shall be deemedincluded in this Section 3.32 solely for purposes of determining whether thesubject matter or events in question constitute a breach of this Section 3.32.

## **3.33.       Closing Date.** All of the representations and warranties ofSeller contained in this Article 3 and elsewhere in this Agreement and allinformation delivered in any schedule or in any certificate delivered by anySeller to the Purchaser are true and correct on the Closing Date.

## **3.34.       Representations and Warranties.** No representation or warranty by the Sellerincluded in this Agreement, to Seller’s Knowledge, contains any untruestatement of a material fact or omits any material fact necessary to make theinformation contained herein not misleading.

## **3.35.****      ****Limitation on Representationsand Warranties.** Except for therepresentations and warranties contained in this Article 3, neither the Seller,the Company, the Subsidiary nor the Affiliate, nor any other Person acting onbehalf of the Seller, the Company, the Subsidiary or the Affiliate, makes anyrepresentation or warranty, express or implied, concerning, without limitation,the Stock, the Business, the Company and the Subsidiary or any other matter.

## **3.36        Assignabilityof Representations and Warranties.** In the eventPurchaser sells or otherwise transfers the Subsidiary to another entity ownedor controlled by Purchaser within the Company’s current fiscal year each of thewarranties and representations in this Article 3 of this Agreement shall bedeemed, as applicable, to be assigned to such transferee.

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**ARTICLE 4COVENANTS OF THE SELLER**

## **4.1.         Further Assurances.** The Seller hereto shall from time to time afterthe Closing Date execute and deliver such additional instruments and documents,as Purchaser may reasonably request. Without limiting the foregoing, Sellerspecifically agrees to take any and all actions necessary under applicable lawto ensure that Company and Subsidiary have full use of and rights in theIntellectual Property set forth on Schedule 3.13 following consummation of thetransactions contemplated by this Agreement. Seller also agrees to execute allpapers and to give such testimony and to perform such other acts as saidPurchaser or affiliates may require to enable it or them to procure anycontinuations, divisionals, reissues or trademarks, in the United States ofAmerica and/or in any foreign country, and/or to hold, enforce or convey saidIntellectual Property.

## **4.2.         Non-Solicitation of Employees.** Each Seller agrees that for a period commencing onthe Closing Date and expiring on the fifth anniversary of the Closing Date,each Seller will not, nor will any of his Affiliates, without the writtenconsent of Purchaser, directly or indirectly, for his own account or on behalfof any other Person, (i) hire any person who is an officer or employee of theCompany or Subsidiary or (ii) induce or attempt to induce any such officer oremployee of the Company or Subsidiary to leave his or her employment with theCompany or Subsidiary.

## **4.3.         Non-Solicitation or Interference withCustomers and Suppliers.** Each Seller agrees that for the period commencingon the Closing Date and expiring on the fifth anniversary of the Closing Date,each Seller will not, nor shall any of his Affiliates, without the writtenconsent of Purchaser, directly or indirectly, for his own account or on behalfof any other Person, solicit, accept orders from, divert, take away or attemptto take away any of the customers or suppliers of the Company or the Subsidiaryor the business or patronage of any such customers or suppliers or in any wayinterfere with, disrupt or attempt to disrupt any then existing relationshipsbetween the Company or the Subsidiary, on the one hand, and any of itscustomers or suppliers or other Persons with whom it deals, on the other.

## **4.4.         Non-Disclosure and Non-Competition.** Each Seller willenter into a five year Non-Disclosure and Non-Competition Agreement to beexecuted and delivered at Closing (“Non-Competition Agreements”).

## **4.5.         Confidential Information;Non-Disparagement.** The Seller shall not at any time use or disclose to orfor the benefit of any Person other than Purchaser, the Company and Subsidiary,any information, knowledge or data relating to the Business of Purchaser, theCompany or Subsidiary (including, without limitation, information relating toaccounts, financial dealings, transactions, recipes, formulae, know-how,distribution methods, intangibles, customer lists, pricing lists, processes,plans, proposals and trade secrets) whether or not marked or otherwiseidentified as confidential or secret. The Seller and Affiliate shall not,directly or indirectly, make any statements or take any actions which in anyway disparage or which could reasonably be expected to harm the reputationand/or goodwill of Purchaser.

## **4.6.         Acknowledgments.** Each Seller acknowledges that, in view of thenature of the business of the Company and Subsidiary and the businessobjectives of Purchaser in entering into this Agreement and the contemplatedtransactions, the restrictions contained in this Article 4 are reasonablynecessary to protect the legitimate business interests of Purchaser and thatany violation of such restrictions will result in irreparable injury toPurchaser, the Company and Subsidiary for which damages will not be an adequateremedy. Each Seller therefore acknowledges that, if any such restrictions areviolated, Purchaser, the Company and Subsidiary shall be entitled topreliminary and injunctive relief against each Seller as well as to anequitable accounting of earnings, profits and other benefits arising from suchviolation.

**ARTICLE 5REPRESENTATIONS AND WARRANTIES OF THE PURCHASER**

As an inducement for the Seller to enter into this Agreement and toconsummate the transactions contemplated hereby, the Purchaser represents andwarrants to the Seller that each and all of the following representations andwarranties are true and correct as of the date of this Agreement. The Schedulesshall be arranged in paragraphs corresponding to the sections and subsectionscontained in this Article 5.

## **5.1.         Organization.** The Purchaser is a corporation duly organized,validly existing and in good standing under the laws of the State of Delawareand has all requisite power and authority, corporate and otherwise, to own,operate and lease its properties and assets and to conduct its business as itis now being conducted.

## **5.2.         Due Authorization.** The execution, delivery and performance of thisAgreement and the Ancillary Documents to be executed and delivered by thePurchaser pursuant to this Agreement, and the consummation of the transactionscontemplated hereby and thereby have been duly and validly authorized by allnecessary corporate action on the part of the Purchaser. This Agreement and theAncillary Documents have been, or will be on or before the Closing Date, dulyand validly authorized, executed and delivered by the Purchaser and theobligations of the Purchaser hereunder and thereunder are or will be, upon suchexecution and delivery, valid, legally binding and enforceable against thePurchaser in accordance with their respective terms.

## **5.3.         No Breach.** The Purchaser has full power and authority,corporate and otherwise, to purchase the Stock being purchased hereunder and tootherwise perform its obligations under this Agreement and the AncillaryDocuments to be executed and delivered by the Purchaser pursuant hereto. Theexecution and delivery of this Agreement and the Ancillary Documents to beexecuted and delivered by the Purchaser pursuant to this Agreement, and theconsummation of the transactions contemplated hereby and thereby will not: (i) violateany 

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## provision of the Certificate ofIncorporation or Bylaws (or comparable governing documents or instruments) ofthe Purchaser, (ii) violate any Applicable Laws or Injunction applicable to thePurchaser, (iii) other than filings and approvals required to comply withApplicable Laws, including applicable requirements of any Governmental Body,require any filing with, authorization, consent or approval of, or the givingof any notice to, any Person, (iv) result in a violation or breach of, orconstitute (with or without due notice or lapse of time or both) a default (orgive another party any rights of termination, cancellation or acceleration)under, any of the terms, conditions or provisions of any note, bond, mortgage,indenture, license, franchise, lease or other Contract to which the Purchaseris a party, or by which it or any of its assets or properties may be bound.

## **5.4.         Investment Representations.** The Purchaser understands that the Stock has notbeen registered under the Securities Act of 1933, as amended, or under thesecurities laws of any jurisdiction, by reason of reliance upon certainexemptions.

## **5.5.         Brokers.** Neither the Purchaser nor its respectiveAffiliates has employed or engaged any broker, finder, agent, banker or thirdparty, nor have they otherwise dealt with anyone purporting to act in thecapacity of a finder or broker in connection with the transactions contemplatedhereby. Any such commissions, finders’ fees or like charges so claimed shall bedirectly chargeable to and will be paid by the Purchaser, subject to Purchaser’sright to contest any such claim.

## **5.6.         Securities and Exchange Commission andState or Other Securities Filing Requirements.** Except as set forth on **Schedule 5.6** hereto, thePurchaser is not required to file any pre-acquisition notifications either withthe United States Securities and Exchange Commission, any State or localgovernmental agencies, or with any securities exchange. If, however, any suchfiling is listed on **Schedule 5.6**, or is found to be required hereafter,Purchaser will pay all costs incurred in connection with said filing, includingany filing fees, late filing penalties, and reasonable attorneys fees incurredby either Seller or Purchaser; and Purchaser shall undertake to make any suchrequired filing in a timely manner so as not to delay the scheduled ClosingDate.

**ARTICLE 6INDEMNIFICATION**

## **6.1.         Survival of Representations andWarranties.**

### (a)           Representationsand Warranties of the Seller. Except as noted in section 6.1(b) below eachof the representations and warranties of the Seller contained in this Agreementand in any Ancillary Documents delivered by or on behalf of any of the Sellershereto pursuant to this Agreement and the transactions contemplated hereby shallsurvive the Closing of the transactions contemplated hereby for a period of two(2) years after the Closing Date, or longer as expressly specified below (the**“Survival Period”).**

### (b)           The representationsand warranties in Sections 3.1, 3.2 and 3.3****shall have no expiration; (ii) therepresentations and warranties in Section 3.8****(the**“Tax Representations”)**shall survive the applicable statute oflimitations; (iii) the representations and warranties in Section 3.24****(the**“Environmental Representations”)**will terminate upon the fifth (5th)year anniversary of the Closing Date.

### (c)           Representationsand Warranties of the Purchaser. The representations and warranties of thePurchaser in this Agreement will survive the Closing for two (2) years.

### (d)           Covenants. Allcovenants of the parties will survive until terminated in accordance with theirrespective terms.

### (e)           CertainDefinitions. The term “**Damages**” means any and all damages, losses, claims(including Taxes), expenses, costs, fines, attorney and professional fees,interest, penalties, special and punitive damages including incidental orconsequential damages; and with respect to indemnification for breach of therepresentations and warranties in Section 3.24 (EnvironmentalRepresentations), **“Damages”**shall mean such liabilitiesas referenced above arising out of or in connection with government-mandatedremediation of conditions caused by: (i) the presence of Hazardous Materials or(ii) any violation of Environmental Laws causing physical injury to persons orproperty. **“Damages”** also shall including costs incurred arisingfrom such claims, actions, suits, demands, assessments, investigations,judgments, penalties, fines, awards, arbitrations or other proceedings,together with reasonable attorneys’ fees and expenses. The term “**Purchaser Indemnitees**” means the Purchaser, the Purchaser’ssuccessors and assigns, and any present or future officer, director, partner,member, employee, agent, Affiliate, subsidiary, shareholder or Representativeof each such party. The term “**SellerIndemnitees**” means the Sellerand any present or future heir, beneficiary, successor, assign orRepresentative of the Seller.

(f)            The right toindemnification or payment of Damages will not be affected adversely by anyinvestigation by any party or any knowledge acquired at any time with respectto the accuracy or inaccuracy of or compliance with, any representation,warranty, covenant, or obligation, except for the EnvironmentalRepresentations, unless any such investigation was the result of a request ordirective by a Governmental Body or was reasonably required by a prospectivepurchaser or lender.

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## **6.2.         Indemnification by the Seller.**

### Subjectto the provisions of Section 6.1 above and Section 6.3 below,each Seller, jointly and severally, will indemnify and hold harmless thePurchaser Indemnitees from and against any and all Damages directly incurred,paid or accrued in connection with or resulting from or and arising out of:

#### (a)           the breach or inaccuracy of anyrepresentation or warranty of the Seller or Affiliate contained in thisAgreement or any Ancillary Document executed by the Seller or Affiliatepursuant hereto or thereto or in any certificate delivered to Purchaserpursuant to Section 2.5 above;

#### (b)           the breach or violation of anycovenant or other obligation of the Seller or Affiliate under this Agreement orany Ancillary Document executed by the Seller or Affiliate pursuant hereto orthereto;

#### (c)           all Taxes not properly paid oraccrued for by the Company, the Subsidiary or Affiliate as of the Closing Date;

#### (d)           (A) the violation by the Company, theSubsidiary, Affiliate or any of their respective affiliates or predecessors(which shall include any Person whose liabilities, including, withoutlimitation, liabilities arising under any Environmental Laws, have or may havebeen retained or assumed by the Company, the Subsidiary, Affiliate or any oftheir respective Affiliates, either contractually or by operation of law) ofany Environmental Laws prior to the Closing Date or (B) the presence or releaseof any Hazardous Materials at any property, present at the property on theClosing Date, including, without limitation, any property owned, leased oroperated by them prior to the Closing Date, in each case regardless of whethersuch violation of Environmental Laws or presence or Release of HazardousMaterials is described or referenced on **Schedule 3.24**hereto; and

#### (e)              damages or losses incurred for theitems set forth in **Schedule3.6(b)**and **Schedule****3.7****.**

## **6.3.         Limitations on Seller’s IndemnificationLiability.**

### (a)           Threshold forBringing Claims Against the Seller. If a Purchaser Indemnitee seeksindemnification for matters identified in Section 6.2(a), theindemnification by the Seller will not apply unless and until the aggregateDamages for all claims exceeds $250,000 (the “**Indemnification Threshold**”). Once the Indemnification Threshold hasbeen reached (and subject to the provisions of Section 6.3(b) below),the Seller will indemnify the Purchaser Indemnitees for the full amount of suchaggregate Damages exceeding the Indemnification Threshold.

### (b)           Limitation ofAggregate Amount of Seller’s Liability.

#### (i)            Except as set forthin Section 6.3(b)(ii), 6.3(b)(iii), 6.3(b)(iv) and 6.3(b)(v), the totalcumulative amount of Damages for which the Seller shall be liable to thePurchaser or Purchaser Indemnitees under Section 6.2(a) shall not exceed$8,500,000;

#### (ii)           Notwithstandingparagraph 6.3(b)(i) above, there shall not be any limitation on the aggregateDamages resulting from or arising out of any breach of the representations andwarranties contained in Sections 3.1, 3.2, 3.3, and 3.8;

#### (iii)          Notwithstanding anylimitations set forth above and without regard to whether any one or more ofthe items listed in this paragraph may be disclosed in any Schedule or otherwiseknown to Purchaser as of the date hereof or the Closing Date, there shall be aseparate limitation not to exceed $2,500,000 on the aggregate Damages resultingfrom or arising out of any generation, handling, transportation, storage,treatment, disposal or Release of any Hazardous Materials occurring on or priorto the Closing Date (including without limitation those that allegedly resultin, or result in, any Release or treatment of Hazardous Materials after theClosing Date), regardless of when liability is asserted, at any OffsiteFacility with regard to any Hazardous Materials with which Seller was involvedin any way at any time;

#### (iv)          The limitation doesnot apply to any intentional misstatement or misrepresentation, or fraudulentact; and

#### (v)           The limitation doesnot apply to any Damages arising out of or relating to the matters described in**Schedule 3.6(b)**.

### (c)           Escrowed Funds.The initial source for the Purchasers claims shall be the Escrow. The amount ofany Damages for which any Purchaser Indemnitee is entitled to be indemnifiedunder Section 6.1 of this Agreement shall be released from the EscrowedFunds pursuant to the terms of the Purchase Price Escrow Agreement; provided,however, that if the amount of Damages for which the Purchaser Indemniteesare entitled to be indemnified under Section 6.1 exceeds the amount thenin the Escrowed Funds, the Seller shall be jointly and severally responsiblefor all such excess amounts subject to the limitations set forth in this Section6.3.

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### (d)           Time Limit forClaims against Seller. Except Claims for Damages arising from or relatingto: (i) a breach of the representations and warranties contained in Sections3.1, 3.2, and 3.3 of this Agreement, which may be brought at any time priorto the expiration of such representations and warranties as provided in Section6.1(b) above and prosecuted until its conclusion (which may be after theapplicable expiration date), and (ii) matters described in Section 6.3(b)(iii),which may be brought at any time up to and including the seventh (7th) year anniversary of the Closing Date and prosecuted until itsconclusion (which may be after such seventh (7th)year anniversary), no Claim for indemnification for matters identified in Section6.2 may be asserted or brought by the Purchaser against the Seller afterthe applicable Survival Period has expired; provided, however, that any suchClaims asserted by written notice prior to the applicable Survival Period maybe prosecuted until its conclusion, which may be after the applicable SurvivalPeriod.

### (e)           Insurance. Damagesin respect of which the Seller is required to indemnify a Purchaser Indemniteeunder this Agreement shall be (i) reduced by an amount equal to the insuranceproceeds paid to or realized by the Purchaser Indemnitee with respect to anyClaim giving rise to Damages under this Agreement, and (ii) increased by anamount equal to the sum of the reasonable out-of-pocket costs incurred by thePurchaser Indemnitee in its pursuit of such insurance proceeds plus all othercosts incurred by the Purchaser Indemnitee as a result of any such insurance,including, but not limited to, retroactive premium adjustments,experience-based premium adjustments (whether retroactive or prospective forthe duration of the indemnification period only) and indemnification or suretyobligations of the Purchaser Indemnitee to any insurer.

## **6.4.         Indemnification by the Purchaser.** The Purchaser shall indemnify and hold each Sellerand each of his respective successors and assigns, harmless from, against andin respect of any and all Damages incurred, paid or accrued in connection withor resulting from or arising out of:

(a)           the breach orinaccuracy of any representation or warranty made by the Purchaser in thisAgreement and the Ancillary Documents to be executed and delivered by thePurchaser pursuant hereto and thereto; or

(b)           the breach orviolation of any covenant or other obligation of the Purchaser under thisAgreement or any Ancillary Document executed by the Purchaser or itsrepresentatives pursuant hereto or thereto.

## **6.5.         Procedure for Indemnification.**

### (a)           In the event a party intends to seekindemnification pursuant to the provisions of Sections 6.2 or 6.4 hereof (the “**Indemnified Party**”), the Indemnified Party shall promptly givenotice hereunder to the other party (the “**Indemnifying Party**”)of a claim or after obtaining written notice of any claim, investigation, orthe service of a summons or other initial or continuing legal or administrativeprocess or Proceeding in any action instituted against the Indemnified Party asto which recovery or other action may be sought against the Indemnified Partybecause of the indemnification provided for in Section 6.2 or 6.4 hereof, and,if such indemnity shall arise from the claim of a third party, the IndemnifiedParty shall permit the Indemnifying Party to assume the defense of any suchclaim and any litigation resulting from such claim; provided, however,that the Indemnified Party shall not be required to permit such an assumptionof the defense of any claim or Proceeding which, if not first paid, dischargedor otherwise complied with, would result in a material interruption ordisruption of the business of the Indemnified Party, or any material partthereof. Notwithstanding the foregoing, the right to indemnification hereundershall not be affected by any failure of the Indemnified Party to give suchnotice (or by delay by the Indemnified Party in giving such notice) unless, andthen only to the extent that, the rights and remedies of the Indemnifying Partyshall have been prejudiced as a result of the failure to give, or delay ingiving, such notice. Failure by the Indemnifying Party to notify theIndemnified Party of its election to defend any such claim or action by a thirdparty within thirty (30) days after notice thereof shall have been given to theIndemnifying Party shall be deemed a waiver by the Indemnifying Party of itsright to defend such claim or action.

### (b)           If the Indemnifying Party assumes thedefense of such claim, investigation or Proceeding resulting therefrom, theobligations of the Indemnifying Party hereunder as to such claim, investigationor Proceeding shall include taking all steps necessary in the defense orsettlement of such claim, investigation or Proceeding and holding the IndemnifiedParty harmless from and against any and all Losses arising from, in connectionwith or incident to any settlement approved by the Indemnifying Party or anyjudgment entered in connection with such claim, investigation or Proceeding,except where, and only to the extent that, the Indemnifying Party has beenprejudiced by the actions or omissions of the Indemnified Party. TheIndemnifying Party shall not, in the defense of such claim or any Proceedingresulting therefrom, consent to entry of any judgment (other than a judgment ofdismissal on the merits without costs) except with the written consent of theIndemnified Party (which consent shall not be unreasonably withheld, delayed orconditioned) or enter into any settlement (except with the written consent ofthe Indemnified Party, which consent shall not be unreasonably withheld,delayed or conditioned) unless (i) there is no finding or admission of anyviolation of Applicable Law and no material effect on any claims that couldreasonably be expected to be made by or against the Indemnified Party, (ii) thesole relief provided is monetary damages that are paid in full for Losses whichare or may be properly applied against the Indemnification Threshold, and (iii)the settlement shall include the giving by the claimant or the plaintiff to theIndemnified Party a release from all Liability in respect to such claim orlitigation.

### (c)           If the Indemnifying Party assumes thedefense of such claim, investigation or Proceeding resulting therefrom, theIndemnified Party shall be entitled to participate in the defense of the claim.The Indemnified Party shall bear the fees and expenses of any additionalcounsel retained by it to participate in its defense unless any of thefollowing shall apply: (i) the employment of such counsel shall have beenauthorized in writing by the Indemnifying Party, or (ii) the Indemnifying Party’slegal counsel shall advise the Indemnifying Party in writing, with a copy tothe Indemnified Party, that there is a conflict of interest that would make itinappropriate under applicable standards of professional conduct to have commoncounsel. If clause (i) or (ii) in the immediately preceding sentence isapplicable, then the Indemnified Party may employ separate counsel at theexpense of the 

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### Indemnifying Party torepresent the Indemnified Party, but in no event shall the Indemnifying Partybe obligated to pay the costs and expenses of more than one such separatecounsel for any one complaint, claim, action or Proceeding in any one jurisdiction.

### (d)           If the Indemnifying Party does notassume the defense of any such claim by a third party or litigation resultingtherefrom after receipt of notice from the Indemnified Party, the IndemnifiedParty may defend against such claim or litigation in such manner as itreasonably deems appropriate, and unless the Indemnifying Party shall depositwith the Indemnified Party a sum equivalent to the total amount demanded insuch claim or litigation plus the Indemnified Party’s estimate of the cost(including attorneys’ fees) of defending the same, the Indemnified Party maysettle such claim or Proceeding on such terms as it may reasonably deemappropriate and the Indemnifying Party shall, subject to its defenses and theapplicability of any remaining Indemnification Threshold balance amountprovided for in Section 6.3 hereof, promptly reimburse the Indemnified Partyfor the amount of such settlement and for all reasonable costs (includingattorneys’ fees), expenses and damages incurred by the Indemnified Party inconnection with the defense against or settlement of such claim, investigationor litigation, or if any such claim or litigation is not so settled, theIndemnifying Party shall, subject to its defenses and the applicability of anyremaining Indemnification Threshold balance provided for in Section 6.3 hereof,promptly reimburse the Indemnified Party for the amount of any finalnonappealable judgment rendered with respect to any claim by a third party insuch litigation and for all costs (including attorneys’ fees), expenses anddamage incurred by the Indemnified Party in connection with the defense againstsuch claim or litigation, whether or not resulting from, arising out of, orincurred with respect to, the act of a third party.

### (e)           Each party shall cooperate in goodfaith and in all respects with each Indemnifying Party and its representatives(including without limitation its counsel) in the investigation, negotiation,settlement, trial and/or defense of any Proceedings (and any appeal arisingtherefrom) or any claim. The parties shall cooperate with each other in anynotifications to and information requests of any insurers. No individualrepresentative of any Person, or their respective Affiliates shall bepersonally liable for any Loss or Losses under this Agreement, except asspecifically agreed to by said individual representative.

## **6.6.         Dispute Resolution.** In the event a dispute arises under thisAgreement, except with respect to equitable remedies pursued under thisAgreement, any controversy or claim arising out of or relating to thisAgreement, or the breach thereof, shall be settled by arbitration administeredby the American Arbitration Association under its Commercial Arbitration Rules exceptas modified by this section 6.6 (an “Arbitration”), with any hearing tobe conducted in Boston, Massachusetts subject to the following furtherprovisions:

(a)           Disputes Covered . Theagreement of the parties to arbitrate covers all disputes of every kindrelating to or arising out of this Agreement, and related agreement or any ofthe Contemplated Transactions. Disputes include actions for breach of contractwith respect to this Agreement or the related agreement, as well as any claimbased upon tort or any other causes of action relating to the ContemplatedTransactions, such as claims based upon an allegation of fraud ormisrepresentation and claims based upon a federal or state statute. Inaddition, the arbitrators selected according to procedures set forth belowshall determine the arbitrability of any matter brought to them, and theirdecision shall be final and binding on the parties.

(b)           Selection. Thereshall be three arbitrators, unless the parties are able to agree on a singlearbitrator. The parties shall make every reasonable effort to select a singlearbitrator, qualified by professional expertise and experience, to determineany claim of damages for less than U.S. One Million Dollars. In the absence ofsuch agreement within ten(10) days after the initiation of an arbitrationproceeding, Seller shall select one arbitrator and Buyer shall select onearbitrator, and those two arbitrators shall then select, within ten (10) days,a third arbitrator from the commercial panel of the American ArbitrationAssociation. The decision in writing agreed to by at least two of the threearbitrators shall be final and binding upon the parties.

(c)           Administration. TheArbitration shall be administered by the American Arbitration Association.

(d)           Rules. The rules ofarbitration shall be the Commercial Arbitration Rules of the AmericanArbitration Association, as modified by any other instructions that the partiesmay agree upon at the time or as set forth within this section 6.6. The partiesshall accept the application of the so-called fast track rules where applicable.All proceedings shall be conducted and decisions shall be rendered in English.

(e)           Substantive Law. Thearbitrators shall be bound by and shall strictly enforce the terms of thisAgreement and may not limit, expand or otherwise modify its terms. The arbitratorsshall make a good faith effort to apply substantive applicable law, but anarbitration decisions hall not be subject to review because of errors of law. Thearbitrators shall be bound to honor claims of privilege or work-productdoctrine recognized at law.

(f)            Decision. Thearbitrators’ decision shall provide a reasoned basis for the resolution’ ofeach dispute and for any award. The arbitrators shall not have power to awarddamages in connection with any dispute in excess of damages permitted by thisAgreement and shall not multiply actual damages.

(g)           Expenses. Each partyshall bear its own fees and expenses with respect to the arbitration and anyproceeding related thereto and the parties shall share equally the fees andexpenses of the American Arbitration Association and the arbitrators.

(h)           Remedies; Award. Thearbitrators shall have power and authority to award any remedy or judgment thatcould be awarded by a court of law in Massachusetts. The award rendered byarbitration shall be final and binding upon the parties, and judgment upon theaward may be entered in any court of competent jurisdiction in the UnitedStates.

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**ARTICLE 7TAX MATTERS**

The following provisions shall govern the allocation of responsibilityas between the Purchaser and the Seller for certain Tax matters following theClosing Date:

## **7.1.         Tax Returns.**

(a)           Purchaser and Selleragree to take all action required, or cause the Company to take the requiredaction, to elect under Code section 1377(a)(2) to make an interim closing ofthe Company’s books and treat the taxable year of sale as two separate taxyears, the first ending as of the Closing Date.

### (b)           The Seller has the exclusiveauthority and obligation to prepare, execute on behalf of the Company and theSubsidiary and timely file, or cause to be prepared and timely filed, all TaxReturns of the Company and the Subsidiary that are due with respect to anytaxable year or other taxable period ending prior to the Closing Date. Exceptas provided in Section 7.6, such authority shall include, but not be limitedto, the determination of the manner in which any items of income, gain,deduction, Loss or credit arising out of the income, properties and operationsof the Company and the Subsidiary shall be reported or disclosed in such TaxReturns; provided, however, that such Tax Returns shall beprepared by treating items on such Tax Returns in a manner consistent with thepast practices with respect to such items and in a manner consistent with allapplicable IRS regulations.

### (c)           Except as provided in Section 7.1(a),the Purchaser shall have the exclusive authority and obligation to prepare,execute on behalf of the Company and the Subsidiary and timely file, or causeto be prepared and timely filed, all Tax Returns of the Company and theSubsidiary that are due with respect to any taxable year or other taxableperiod ending after the Closing Date; provided, however, withrespect to Tax Returns to be filed by the Purchaser pursuant to this Section 7.1for taxable periods beginning before the Closing Date and ending after theClosing Date, items set forth on such Tax Returns shall be treated in a mannerconsistent with the past practices with respect to such items. Except asprovided in Section 7.6, such authority shall include, but not be limited to,the determination of the manner in which any items of income, gain, deduction,Loss or credit arising out of the income, properties and operations of theCompany shall be reported or disclosed on such Tax Returns.

(d)           All tax returns duefor the Affiliate whether prior to or after the Closing Date for the CalendarYear 2005, or for the period in 2006 prior to the Closing, shall be preparedand filed by the Seller, prepared consistent with past practices at theAffiliate’s expense, by Affiliate’s accountants and auditors as of the ClosingDate.

## **7.2.         Controversies.**

### (a)           The Purchaser shallpromptly notify the Seller in writing upon receipt by the Purchaser or anyAffiliate of the Purchaser (including the Company and the Subsidiary after theClosing Date) of written notice of any inquiries, claims, assessments, auditsor similar events with respect to Taxes relating to a taxable period endingprior to the Closing Date for which the Seller may be liable under thisAgreement (any such inquiry, claim, assessment, audit or similar event, a “**Tax Matter**”). The Seller, at its sole expense, shallhave the authority to represent the interests of the Company and the Subsidiarywith respect to any Tax Matter before the IRS, any other taxing authority, anyother Governmental Body or authority or any court and shall have the sole rightto control the defense, compromise or other resolution of any Tax Matter,including responding to inquiries, filing Tax Returns and contesting, defendingagainst and resolving any assessment for additional Taxes or notice of Taxdeficiency or other adjustment of Taxes of, or relating to, a Tax Matter. Neitherthe Purchaser nor any of its Affiliates shall enter into any settlement of orotherwise compromise any Tax Matter that affects or may affect the TaxLiability of the Seller, the Company, the Subsidiary or any Affiliate of theforegoing for any period ending after the Closing Date, which includes aportion of a period beginning before the Closing Date and ending after theClosing Date (the “**OverlapPeriod**”), without the priorwritten consent of the Seller, which consent shall not be unreasonablywithheld, delayed or conditioned. The parties hereto shall keep the other fullyand timely informed with respect to the commencement, status and nature of anyTax Matter.

### (b)           Except as otherwiseprovided in this Section 7.2, the Purchaser shall have the sole right tocontrol any audit or examination by any taxing authority, initiate any claimfor refund or amend any Tax Return, and contest, resolve and defend against anyassessment for additional Taxes, notice of Tax deficiency or other adjustmentof Taxes of, or relating to, the income, assets or operations of the Companyand the Subsidiary for all taxable periods; provided, however,that the Purchaser shall not, and shall cause its Affiliates (including theCompany and the Subsidiary) not to, enter into any settlement of any contest orotherwise compromise any issue with respect to the portion of the OverlapPeriod ending on or prior to the Closing Date without the prior written consentof the Seller, which consent shall not be unreasonably withheld, delayed orconditioned.

## **7.3.         Transfer Taxes.** All transfer, documentary, stamp, registration,sales and use and similar Taxes and fees (including all penalties and interest)imposed in connection with the sale of the Stock or any other transaction thatoccurs pursuant to this Agreement shall be the obligation of the Purchaser,except for real estate transfer taxes which shall be paid as provided in theReal Estate Purchase Agreement.

## **7.4.         Post-Closing Access and Cooperation.** From and after the Closing Date, the Purchaseragrees, and agrees to cause the Company and the Subsidiary, to permit theSeller and its representatives to have reasonable access, during normalbusiness hours, to the books and records of the Company and the Subsidiary, tothe extent that such books and records relate to a Pre-Closing Period, andpersonnel, for the 

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## purpose of enabling the Seller to: (i) prepareTax Returns, (ii) investigate or contest any Tax Matter which the Seller hasthe authority to conduct (iii) evaluate any claim for indemnification, and (iv)prepare the Seller and its Affiliates’ financial statements.

## **7.5.         §338(h)(10) Election**. At Purchaser’s option, each Seller shall joinwith Purchaser in making an election under Code §338(h)(10) (and anycorresponding election under state, local, and foreign tax law) with respect tothe purchase and sale of the Stock hereunder (collectively, a *“§338(h)(10)Election”*).

## **7.6          Purchase Price Allocation**. The Purchaser,the Company and Seller agree that the Final Purchase Price and the liabilitiesof the Company will be allocated to the assets of the Company for all purposes(including Tax and financial accounting) as shown on the Allocation Schedule tobe attached hereto as **Schedule 7.6** within forty-five(45) days following the Closing Date. The Purchaser, the Company and Sellershall file all Tax Returns (including amended returns and claims for refund)and information reports in a manner consistent with the Allocation Schedule.

**ARTICLE 8PERFORMANCE FOLLOWING THE CLOSING DATE**

The following covenants and agreements are to be performed after theClosing by the parties and shall continue in effect for the periodsrespectively indicated or, where no indication is made, until performed:

## **8.1.         Further Acts and Assurances**. The parties agree that, at any time and from timeto time, on and after the Closing Date, upon the reasonable request of theother party, they will do or cause to be done all such further acts and thingsand execute, acknowledge and deliver, or cause to be executed, acknowledged anddelivered any and all papers, documents, instruments, agreements, assignments,transfers, assurances and conveyances as may be necessary or desirable to carryout and give effect to the provisions and intent of this Agreement. Inaddition, from and after the Closing Date, the Purchaser will afford to theSeller and its attorneys, accountants and other representatives access, duringnormal business hours, to such personnel, books and records relating to theCompany and/or the Subsidiary as may reasonably be required in connection withthe preparation of financial information or the filing of Tax Returns and willcooperate in all reasonable respects in connection with claims and Proceedingasserted by or against third parties, relating to or arising from thetransactions contemplated hereby.

## **8.2.         Employee Matters.**

### (a)           Employment. EachEmployee who is employed by the Company or the Subsidiary on the Closing Dateshall continue to be employed by the Company or the Subsidiary, as applicable,on and after the Closing Date at substantially the same base wage or salary asin effect immediately prior to the Closing Date. Such continued employmentshall be employment at-will, except for those Employees with employmentagreements identified in **Schedule3.20(b)(ii)**of thisAgreement, and nothing in this Section 8.2 is intended to create, or shallcreate or confer, any right of employment after the Closing Date for anyEmployee.

### (b)           Service Credit.All past service of the Employees with the Company and/or the Subsidiary shallbe taken into account for purposes of eligibility and vesting under the benefitplans provided by the Purchaser and for purposes of calculating vacationbenefits and severance benefits under the vacation plan and severance planmaintained by the Purchaser.

### (c)           Welfare Plans.Assuming the applicable carrier(s) consents, the Purchaser shall take allaction necessary and appropriate to ensure that, as soon as practicable afterthe Closing Date, the Purchaser maintains or adopts (or causes the Subsidiaryto maintain or adopt), as of the Closing Date, one or more employee welfarebenefit plans, including medical, health, dental, flexible spending account,accident, life, short-term disability, and other employee welfare benefit plansfor the benefit of the Employees (the “**Purchaser Welfare Plans**”).Assuming the applicable carrier(s) consents, the Purchaser Welfare Plans shallprovide as of the Closing Date benefits to the Employees (and their dependentsand beneficiaries) that, in the aggregate, are comparable to the benefits towhich they were entitled under the corresponding welfare benefit plansmaintained by the Company or the Subsidiary on the Closing Date (the “**Company and Subsidiary WelfarePlans**”), through theapplicable renewal date. At renewal, Purchaser shall review renewal increasesand make necessary modifications. Any restrictions on coverage for preexistingconditions or requirements for evidence of insurability under the PurchaserWelfare Plan shall be waived for the Employees, and the Employees shall receivecredit under the Purchaser Welfare Plan for co-payments and payments under adeductible limit made by them and for out-of-pocket maximums applicable to themduring the plan year of the Company and Subsidiary Welfare Plan in accordancewith the corresponding Company and Subsidiary Welfare Plan. Notwithstanding theaforementioned, nothing contained herein shall obligate the Purchaser toprovide Purchaser Welfare Plans having benefits in excess of those currentlyoffered to Purchaser’s existing employees.

## **8.3.         Indemnification of Officers andDirectors of the Company and the Subsidiary.**

### (a)           Indemnification.After the Closing, the Company will, and the Purchaser will cause the Company,the Subsidiary and the Affiliate to: (i) indemnify, defend and hold harmlessthe present officers and directors (collectively, the “**Director Indemnified Parties**” and individually, a “**Director Indemnified Party**”) in respect of acts or omissions occurringon or prior to the Closing Date to the extent provided under Applicable Law orunder the organizational documents of the Company. The Subsidiary, orAffiliate, in each case as in effect on the date hereof, and (ii) advanceexpenses as incurred by such officers and directors to the fullest extentpermitted under Applicable Law or under the organizational documents of theCompany and/or the Subsidiary or Affiliate, 

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### whicheveris greater, in each case as in effect on the date hereof; provided, thatsuch indemnification and advancement of expenses shall be subject to anylimitation imposed from time to time under Applicable Law.

### (b)           No Claims. Exceptas set forth in **Schedule8.3**, there is no pending,nor, to the Seller’s Knowledge Threatened claims as described in Section 8.3(a)for indemnification by any Director Indemnified Party.

### (c)           Insurance Proceeds.If the Company and/or the Subsidiary provide indemnification and/or advancementof expenses as provided for in Section 8.3(a) above, the Company and/or theSubsidiary shall be entitled to all of the proceeds of any insurance providingcoverage under any policies maintained by the Seller, the Company, theSubsidiary, or any of the Affiliates for such acts or omissions prior to theClosing Date.

### (d)           Third PartyBeneficiaries. Notwithstanding any contrary provision set forth in thisAgreement or any Ancillary Document, the provisions of this Section 8.3 areintended for the benefit of, and shall be directly enforceable by, each of theDirector Indemnified Parties, their heirs and personal representatives.

## **8.4.         Continued Insurance Coverage**. The Purchaser will cause the Company to maintaingeneral and product liability insurance policies, reasonable in both scope andamount as determined in its sole discretion, for a period of three (3) yearsfrom the Closing Date.

**ARTICLE 9MISCELLANEOUS**

## **9.1.         Preservation of and Access to Records**. The Purchaser shall preserve or cause the Companyand the Subsidiary to preserve all books and records of the Company and theSubsidiary for a period of six (6) years after the later of Closing Date, orthe filing date of any Company or Subsidiary tax return due post-closing or anylater date of retention required by Applicable Law; provided, however,the Purchaser may destroy any part or parts of such records upon obtainingwritten consent of the Seller for such destruction, which consent may bewithheld in the Seller’s absolute discretion. Such records shall be madeavailable to the Seller and its representatives at all reasonable times duringnormal business hours of the Company and/or the Subsidiary, as applicable,during said retention period with the right at the Seller’s expense to makeabstracts from and copies thereof.

## **9.2.         Specific Performance**. The parties hereto agree that irreparable damagewould occur in the event that any of the provisions of this Agreement were notperformed in accordance with their specific terms or were otherwise breached. Itis accordingly agreed that, except as otherwise provided in this Agreement, theparties shall be entitled to injunctive relief to prevent breaches of thisAgreement and to enforce specifically the terms and provisions hereof in anycourt of the United States or any state having jurisdiction, this being inaddition to any other remedy to which they are entitled at law or in equity.

## **9.3.         Public and Private Announcements**. Any public or private announcement or similarpublicity (including, without limitation, the publication of any press release)with respect to this Agreement will be issued at such time and in such manneras the Purchaser determines. Purchaser and Seller shall keep this Agreementstrictly confidential and may not make any disclosure of this Agreement to anyPerson (except for (i) lenders, banks and financial institutions in connectionwith Purchaser’s financing of the acquisition, and (ii) Representatives,customers, and suppliers of the Company and any Subsidiary); provided, however,that any party hereto may make a public and/or private announcement to theextent required by law, judicial process or the rules, regulations orinterpretations of the Securities and Exchange Commission or any nationalsecurities exchange.

## **9.4.         Notices**. All notices, demands and other communications providedfor hereunder shall be in writing and shall be given (i) by personal delivery, (ii)via e-mail or facsimile transmission (receipt confirmed, with follow uptransmittal within 48 hours by (iii) or (iv) which follows), (iii) bynationally recognized overnight courier (prepaid), or (iv) by certified orregistered first class mail, postage prepaid, return receipt requested, sent toeach party, at its and its representative’s address as set forth below or atsuch other address or in such other manner as may be designated by such partyor the respective representative in a written notice to each of the otherparties:

If to the Purchaser:              Symmetry Medical USA Inc.

220West Market Street

Warsaw,IN 46580

E-Mail:fred.hite@symmetrymedical.com

Fax No.: 574-267-4551

Attention: Fred Hite, Chief Financial Officer

With a copy to:    Barrett & McNagny LLP

215East Berry Street

FortWayne, IN 46802

E-Mail:sjt@barrettlaw.com

Phone: 260-423-8812

Fax No.: 260-423-8920

Attention: Samuel J. Talarico,Jr., Esq.

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If to the Seller:      Edward D. Riley

16Brookside

EastFalmouth, ME

E-Mail:ed@rileymedical.com

Attention:Mr. Riley

Russell P. Holmes

16Fox Run

Dover,MA

E-Mail:holmes16@earthlink.net

Attention:Mr. Holmes

With a copy to:    Burns & Levinson, LLP

125Summer Street, 8th Floor

Boston,MA 02110

E-Mail:hburg@burnslev.com

FaxNo.: (617) 854-4040

Attention: Harvey M. Burg, Esq.

## **9.5.         Entire Agreement**. Except for any confidentiality agreement executedby a party hereto, this Agreement, including the Ancillary Documents to be executedby the parties pursuant hereto, contains the entire agreement of the partieshereto and supersedes all prior or contemporaneous agreements andunderstandings, oral or written, between the parties hereto with respect to thesubject matter hereof.

## **9.6.         Amendments**. No purported amendment, modification or waiver ofany provision of this Agreement or any of the documents, instruments oragreements to be executed by the parties pursuant hereto shall be effectiveunless in writing specifically referring to this Agreement and signed by all ofthe parties hereto.

## **9.7.         Successors and Assigns**. This Agreement shall be binding upon and inure tothe benefit of the parties hereto and their respective heirs, personalrepresentatives, successors and permitted assigns, but except as hereinafterprovided in this Section 9.7, nothing in this Agreement is to be construed asan authorization or right of any party to assign its rights or delegate itsduties under this Agreement without the prior written consent of the other partieshereto. Notwithstanding the foregoing, the Purchaser, in its sole discretion,may assign its rights in and/or delegate its duties under this Agreement to anAffiliate of the Purchaser. In the event of such an assignment of rights and/ordelegation of duties, all references to the Purchaser or the Seller, asapplicable to the assignment in this Agreement shall also be deemed to bereferences to the Person to which this Agreement is assigned; provided that nosuch assignment and/or delegation shall relieve the assignor of any of itsduties or obligations hereunder.

## **9.8.         Fees and Expenses**. Each party hereto shall pay their own fees andexpenses incurred in connection with negotiating and preparing this Agreementand consummating the transactions contemplated hereby, including but notlimited to fees and disbursements of their respective attorneys, accountantsand investment bankers, except with respect to such post-Closing Dateaccounting and auditing fees as referenced elsewhere in this Agreement. If thetransaction is consummated, all fees and expenses, including legal, accounting,investment banking, broker’s and finder’s fees and expenses incurred by theSeller in connection with this transaction shall be deemed expenses of theSeller and shall be borne by the Seller.

## **9.9.         Governing Law and Jurisdiction**. This Agreement, including the Ancillary Documentsto be executed and/or delivered by the parties pursuant hereto, shall beconstrued, governed by and enforced in accordance with the internal laws of theCommonwealth of Massachusetts, without giving effect to the principles ofcomity or conflicts of laws thereof.

## **9.10.       Counterparts and Facsimile Signature**. This Agreement may beexecuted in two or more counterparts, each of which shall be deemed an originalbut all of which together shall constitute one and the same Agreement. Thecounterparts of this Agreement and all Ancillary Documents may be executed anddelivered by facsimile signature by any of the parties to any other party andthe receiving party may rely on the receipt of such document so executed anddelivered by facsimile as if the original had been received.

## **9.11.       Headings**. The headings of the articles, sections andsubsections of this Agreement are intended for the convenience of the partiesonly and shall in no way be held to explain, modify, construe, limit, amplifyor aid in the interpretation of the provisions hereof. The terms “thisAgreement,” “hereof,” “herein,” “hereunder,” “hereto” and similar expressionsrefer to this Agreement as a whole and not to any particular article, section,subsection or other portion hereof and include the Schedules and Exhibitshereto and any document, instrument or agreement executed and/or delivered bythe parties pursuant hereto.

## **9.12.       Number and Gender**. Unless the context otherwise requires, wordsimporting the singular number shall include the plural and vice versa and wordsimporting the use of any gender shall include all genders.

## **9.13.       Severability**. In the event that any provision of this Agreementis declared or held by any court of competent jurisdiction to be invalid orunenforceable, such provision shall be severable from, and such invalidity orunenforceability shall not be construed to have any effect on, the remainingprovisions of this Agreement, unless such invalid or unenforceable provisiongoes to the essence of this Agreement, in which case the entire Agreement maybe declared invalid and not binding upon any of the parties.

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## **9.14.       Parties in Interest**. Nothing implied in this Agreement is intended orshall be construed to confer any rights or remedies under or by reason of thisAgreement upon any Person other than the Purchaser and the Seller and theirrespective representatives, successors and permitted assigns. Nothing in thisAgreement is intended to relieve or discharge the Liabilities of any thirdPerson to the Purchaser or the Seller.

## **9.15.       Waiver**. The terms, conditions, warranties, representationsand indemnities contained in this Agreement, including the documents,instruments and agreements executed and delivered by the parties pursuanthereto, may be waived only by a written instrument executed by the partywaiving compliance. Any such waiver shall only be effective in the specificinstance and for the specific purpose for which it was given and shall not bedeemed a waiver of any other provision hereof or of the same breach or defaultupon any recurrence thereof. No failure on the part of a party hereto toexercise and no delay in exercising any right hereunder shall operate as awaiver thereof nor shall any single or partial exercise of any right hereunderpreclude any other or further exercise thereof or the exercise of any otherright.

## **9.16.       Construction**. The parties have participated jointly in thenegotiation and drafting of this Agreement. In the event an ambiguity orquestion of intent or interpretation arises, this Agreement shall be construedas if drafted jointly by the parties and no presumption or burden of proofshall arise favoring or disfavoring any party by virtue of the authorship ofany of the provisions of this Agreement. The words “including,” “include” or “includes”shall mean including without limitation. The parties intend that eachrepresentation, warranty and covenant contained herein shall have independentsignificance. If any party has breached any representation, warranty orcovenant contained herein in any respect, the fact that there exists anotherrepresentation, warranty or covenant relating to the same subject matter(regardless of the relative levels of specificity) which the party has notbreached shall not detract from or mitigate the fact that the party is inbreach of the first representation, warranty or covenant.

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**IN WITNESSWHEREOF**, the partieshereto have caused this Agreement to be executed by duly authorizedrepresentatives as of the day, month and year first above written.
| **SELLER:**                   | ** **                 | **PURCHASER:**                |
|-------------------------------|----------------------------|-------------------------------|
| ** **                    | ** **                 | ** **                    |
| /s/  EDWARD  D. RILEY    | ** **                 | **SYMMETRY MEDICAL USA INC.** |
| **Edward  D. Riley**          | ** **                 | ** **                    |
| ** **                    | ** **                 | ** **                    |
| /s/  RUSSELL  P. HOLMES  |                       | By:                           | /s/  BRIAN S. MOORE |
| **Russell  P. Holmes**        |                       | Name:                         | Brian S. Moore |
|                          |                       | Title:                        | President and CEO |
|                          |                       |                          |
| **CONFIRMED  AS APPLICABLE:** | ** **                 | ** **                    |
| ** **                    | ** **                 | ** **                    |
| **RILEY  MEDICAL, Inc.**      | ** **                 | ** **                    |
| ** **                    | ** **                 | ** **                    |
| By:                           | /s/  EDWARD  D. RILEY |                          |   |
| Name:                         | Edward D. Riley            |                          |   |
| Title:                        | Chief Executive Officer    |                          |   |
|                          |                       |                          |
| **RILEY  REAL ESTATE LLC**    | ** **                 | ** **                    |
|                          |                       |                          |
| By:                           | /s/  EDWARD  D. RILEY |                          |   |
| Name:                         | Edward D. Riley            |                          |   |
| Title:                        | Managing Director          |                          |   |

 

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**EXHIBITSAND SCHEDULES**

**Schedules**

3.1                           Organizationand Good Standing

3.2(b)                      Authority;No Conflict

3.3                           Capitalization

3.4                           ClearTitle

3.5                           Conditionof Assets

3.6(a)                      LegalProceedings (24 months)

3.6(b)                      LegalProceedings (Threatened)

3.7                           LaborMatters

3.8(a)                      TaxReturns

3.8(c)                      OtherTax Matters

3.9(a)                      EmployeeBenefits

3.9(i)                       Non-QualifiedDeferred Compensation Plans

3.10                         Guarantees

3.11                         FinancialStatements

3.12                         Absenceof Certain Developments

3.13                         IntellectualProperty

3.14                         Compliancewith Laws

3.15                         Contracts

3.16                         Contracts;Compliance

3.17(a)                    RealEstate – Owned and Leased 

3.17(b)                    RealEstate – Taxes

3.17(c)                    RealEstate – Permitted Encumbrances

3.17(d)                    RealEstate – Material Encumbrances

3.17(e)                    RealEstate – Improvements

3.17(f)                     RealEstate – Adjoining Owner Encroachments

3.17(g)                    RealEstate – Easements

3.17(i)                     RealEstate – Owned Real Estate Leases

3.17(j)                     RealEstate – Separate Parcel

3.18                         AccountsReceivable

3.19                         Booksand Records

3.20(a)                    Employee– List

3.20(b)(ii)               Employee- Contracts

3.21                         Subsidiary

3.22(b)                    InsurancePolicies

3.22(c)                    InsurancePolicy Claims

3.24                         EnvironmentalMatters

3.25                         Debt

3.26(a)                    Customers

3.26(b)                    Suppliers

3.26(c)                    MaterialAdverse Changes

3.27                         SellerLoans

3.28                         Adequacyof Properties

3.29                         Warrantyand Product Liability Claims

3.30                         RelatedParty Transaction

3.31                         Permitsand Certifications

5.6                           SecuritiesFiling Requirements

7.6                           AllocationSchedule

8.3                           Director IndemnificationClaims 

**Exhibits**

Exhibit A                Real Estate Purchase and SaleAgreement

 

Exhibit B                Purchase Price Escrow Agreement

 

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