clarityspa.htm


    
      
         


      

      
         


        
          

        

      

      
         


        
          EXHIBIT
10.1

          


        

      

    


    STOCK
PURCHASE AGREEMENT

     

    


     

    by
and between

     

    


     

    ISCO
INTERNATIONAL, INC.

     

    


     

    and

     

    


     

    TAA
GROUP INC.

     

    


     

    


     

    Dated as
of December 5, 2008

     

    


     

    


     

    


     

    


     

    


     


    
      
        
           

        

         


      

      
         


        
          

        

      

      
         


        
          TABLE
OF CONTENTS

          


          Page

           

          


        

      

    


    
      	
              ARTICLE 1

            	
              DEFINITIONS;
      INTERPRETATION     

            	
              1

            


    

     

    
      	
               
      

            	
              Section
      1.1

            	
              Definitions             

            	
              1

            


    

     

    
      	
               
      

            	
              Section
      1.2

            	
              Interpretation             

            	
              8

            


    

     

    
      	
              ARTICLE
      2

            	
              PURCHASE
      AND SALE OF THE SHARES 

            	
              9

            


    

     

    
      	
               
      

            	
              Section
      2.1

            	
              Stock
      Purchase             

            	
              9

            


    

     

    
      	
               
      

            	
              Section
      2.2

            	
              Purchase
      Price             

            	
              9

            


    

     

    
      	
               
      

            	
              Section
      2.3

            	
              Settlement
      of Outstanding Payable Amounts             

            	
              10

            


    

     

    
      	
               
      

            	
              Section
      2.4

            	
              Deferred
      Consideration                         

            	
              10

            


    

     

    
      	
              ARTICLE
      3

            	
              THE
      CLOSING                                 

            	
              13

            


    

     

    
      	
               
      

            	
              Section
      3.1

            	
              The
      Closing                                 

            	
              13

            


    

     

    
      	
               
      

            	
              Section
      3.2

            	
              Closing
      Deliveries by Seller                         

            	
              13

            


    

     

    
      	
               
      

            	
              Section
      3.3

            	
              Closing
      Deliveries by Buyer                     

            	
              14

            


    

     

    
      	
              ARTICLE
      4

            	
              REPRESENTATIONS
      AND WARRANTIES OF SELLER         

            	
              14

            


    

     

    
      	
               
      

            	
              Section
      4.1

            	
              Incorporation,
      Qualification and Authority of Seller; Due Authorization and
      Enforceability  

            	
              14

            


    

     

    
      	
               
      

            	
              Section
      4.2

            	
              Incorporation,
      Qualification and Authority of the Company 

            	
              15

            


    

     

    
      	
               
      

            	
              Section
      4.3

            	
              Subsidiaries;
      Equity Interests                 

            	
              15

            


    

     

    
      	
               
      

            	
              Section
      4.4

            	
              Capital
      Structure of the Company             

            	
              15

            


    

     

    
      	
               
      

            	
              Section
      4.5

            	
              Conflicts;
      Consents                     

            	
              16

            


    

     

    
      	
               
      

            	
              Section
      4.6

            	
              Financial
      Statements; Absence of Liabilities     

            	
              16

            


    

     

    
      	
               
      

            	
              Section
      4.7

            	
              Absence
      of Certain Changes             

            	
              16

            


    

     

    
      	
               
      

            	
              Section
      4.8

            	
              Litigation                         

            	
              18

            


    

     

    
      	
               
      

            	
              Section
      4.9

            	
              Compliance
      with Laws                 

            	
              18

            


    

     

    
      	
               
      

            	
              Section
      4.10

            	
              Governmental
      Permits                 

            	
              18

            


    

     

    
      	
               
      

            	
              Section
      4.11

            	
              Title
      to Assets                     

            	
              18

            


    

     

    
      	
               
      

            	
              Section
      4.12

            	
              Intellectual
      Property                 

            	
              18

            


    

     

    
      	
               
      

            	
              Section
      4.13

            	
              Environmental
      Matters                 

            	
              20

            


    

     

    
      	
               
      

            	
              Section
      4.14

            	
              Contracts                      

            	
              21

            


    

     

    
      	
               
      

            	
              Section
      4.15

            	
              Employee
      Benefit Plans             

            	
              22

            


    

     

    
      	
               
      

            	
              Section
      4.16

            	
              Employees;
      Subcontractors; Labor Matters 

            	
              23

            


    

     

    
      	
               
      

            	
              Section
      4.17

            	
              Real
      Property                     

            	
              24

            


    

     

    
      	
               
      

            	
              Section
      4.18

            	
              Personal
      Property                 

            	
              24

            


    

     

    
      	
               
      

            	
              Section
      4.19

            	
              Taxes                         

            	
              24

            


    

     

    
      	
               
      

            	
              Section
      4.20

            	
              Insurance                     

            	
              25

            


    

                

    
      	
               
      

            	
              Section
      4.21

            	
              Affiliate
      Transactions             

            	
              26

            


    

     

    
      	
               
      

            	
              Section
      4.22

            	
              Customers
      and Suppliers             

            	
              26

            


    

     

    
      	
               
      

            	
              Section
      4.23

            	
              Brokers                     

            	
              26

            


    

     

    
      	
               
      

            	
              Section
      4.24

            	
              Solvency                     

            	
              26

            


    

     

    
      	
               
      

            	
              Section
      4.25

            	
              Directors
      and Officers of the Company     

            	
              27

            


    

     

    
      	
              ARTICLE
      5

            	
              REPRESENTATIONS
      AND WARRANTIES OF BUYER     

            	
              27

            


    

     

    
      	
               
      

            	
              Section
      5.1

            	
              Incorporation
      and Authority of Buyer; Due Authorization and
      Enforceability. 

            	
              27

            


    

     

    
      	
               
      

            	
              Section
      5.2

            	
              Conflicts;
      Consents                     

            	
              27

            


    

     

    
      	
               
      

            	
              Section
      5.3

            	
              Capitalization
      and Ongoing Operations of the Company 

            	
              28

            


    

     

    
      	
               
      

            	
              Section
      5.4

            	
              Brokers                             

            	
              28

            


    

     

    
      	
               
      

            	
              Section
      5.5

            	
              Intermediary
      Transactions                 

            	
              28

            


    

     

    
      	
              ARTICLE
      6

            	
              CERTAIN
      COVENANTS AND AGREEMENTS     

            	
              28

            


    

     

    
      	
               
      

            	
              Section
      6.1

            	
              Non-Competition;
      Non-Solicitation             

            	
              28

            


    

     

    
      	
               
      

            	
              Section
      6.2

            	
              Confidentiality                         

            	
              29

            


    

     

    
      	
               
      

            	
              Section
      6.3

            	
              Tax
      Matters                         

            	
              29

            


    

     

    
      	
               
      

            	
              Section
      6.4

            	
              Waiver
      of Non-Competition Obligations         

            	
              32

            


    

     

    
      	
               
      

            	
              Section
      6.5

            	
              Rivada
      Purchase Order                 

            	
              33

            


    

     

    
      	
              ARTICLE
      7

            	
              INDEMNIFICATION                 

            	
              33

            


    

     

    
      	
               
      

            	
              Section
      7.1

            	
              Survival
      Periods                 

            	
              33

            


    

     

    
      	
               
      

            	
              Section
      7.2

            	
              Indemnification
      by Seller             

            	
              33

            


    

     

    
      	
               
      

            	
              Section
      7.3

            	
              Indemnification
      by Buyer             

            	
              34

            


    

     

    
      	
               
      

            	
              Section
      7.4

            	
              Limitation
      on Indemnification Obligations     

            	
              34

            


    

     

    
      	
               
      

            	
              Section
      7.5

            	
              Indemnification
      Process                 

            	
              34

            


    

     

    
      	
               
      

            	
              Section
      7.6

            	
              Characterization
      of Indemnification Payments     

            	
              36

            


    

     

    
      	
               
      

            	
              Section
      7.7

            	
              Other
      Adjustments to Indemnification;
Damages36

            


    

     

    
      	
              ARTICLE
      8

            	
              MISCELLANEOUS                     

            	
              37

            


    

     

    
      	
               
      

            	
              Section
      8.1

            	
              Fees
      and Expenses                 

            	
              37

            


    

     

    
      	
               
      

            	
              Section
      8.2

            	
              Notices                         

            	
              37

            


    

     

    
      	
               
      

            	
              Section
      8.3

            	
              Waiver                         

            	
              38

            


    

     

    
      	
               
      

            	
              Section
      8.4

            	
              Counterparts                     

            	
              38

            


    

     

    
      	
               
      

            	
              Section
      8.5

            	
              Governing
      Law                     

            	
              38

            


    

     

    
      	
               
      

            	
              Section
      8.6

            	
              Waiver
      of Jury Trial                 

            	
              39

            


    

     

    
      	
               
      

            	
              Section
      8.7

            	
              Assignment                     

            	
              39

            


    

     

    
      	
               
      

            	
              Section
      8.8

            	
              Amendment                     

            	
              39

            


    

     

    
      	
               
      

            	
              Section
      8.9

            	
              Further
      Assurances                 

            	
              39

            


    

     

    
      	
               
      

            	
              Section
      8.10

            	
              No
      Third Party Beneficiaries             

            	
              39

            


    

     

    
      	
               
      

            	
              Section
      8.11

            	
              Entire
      Understanding                 

            	
              39

            


    

     

    
      	
               
      

            	
              Section
      8.12

            	
              Public
      Announcement                 

            	
              40

            


    

     

    
      	
               
      

            	
              Section
      8.13

            	
              Severability                     

            	
              40

            


    

     

    
      	
               
      

            	
              Section
      8.14

            	
              Schedules                         

            	
              40

            


    

     

    



    
                                                                


    

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    LIST
OF SCHEDULES

    


    


    Schedule
4.5                                           Conflicts;
Consents

    Schedule
4.6                                           Financial
Statements

    Schedule
4.7                                           Absence
of Certain Changes

    Schedule
4.8                                           Litigation

    Schedule
4.9                                           Compliance
with Laws

    Schedule
4.10                                           Governmental
Permits

    Schedule
4.11                                           Title
to Assets

    Schedule
4.12(a)                                           Sufficiency
of Company Intellectual Property

    Schedule
4.12
(e)                                           Company
Intellectual Property Royalties

    Schedule
4.12(g)                                           Registered
Company Intellectual Property

    Schedule
4.12(h)                                           Third
Party Intellectual Property

    Schedule
4.13                                           Environmental
Matters

    Schedule
4.14(a)                                           Material
Contracts

    Schedule
4.15                                           Employee
Benefit Plans

    Schedule
4.16                                           Employees;
Subcontractors

    Schedule
4.17                                           Real
Property Leases

    Schedule
4.18                                           Personal
Property

    Schedule
4.20                                           Insurance

    Schedule
4.21                                           Affiliate
Transactions

    Schedule
4.22                                           Customers
and Suppliers

    Schedule
4.25                                           Directors
and Officers of the Company

    



    
      
        
           

           

        

         


      

      
         


        
          

        

      

      
         


      

    


    STOCK PURCHASE
AGREEMENT

     

    THIS
STOCK PURCHASE AGREEMENT (this “Agreement”) is made
and entered into as of December 5, 2008, by and between ISCO INTERNATIONAL,
INC., a Delaware corporation (“Seller”), and TAA
GROUP INC., an Illinois corporation (“Buyer”).  Seller
and Buyer are sometimes individually referred to herein as a “Party” and together
as the “Parties.”

     

    W
I T N E S S E T H:

     

    WHEREAS,
the authorized capital stock of Clarity Communication Systems Inc., an Illinois
corporation (the “Company”), consists
of 1,000 shares of Common Stock, of which 1,000 shares are issued and
outstanding (the “Shares”).

     

    WHEREAS,
Seller owns beneficially and of record all of the Shares; and

     

    WHEREAS,
Buyer desires to acquire from Seller, and Seller desires to sell to Buyer, all
of the Shares on the terms and subject to the conditions set forth in this
Agreement.

     

    NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:

     

    ARTICLE
1                                

     

    


     

    DEFINITIONS;
INTERPRETATION

     

    Section
1.1 Definitions.  The
following terms shall have the meanings set forth below for purposes of this
Agreement:

     

    “Acquisition Date”
means January 3, 2008.

     

    “Agreement” shall have
the meaning set forth in the Preamble.

     

    “Affiliate” means,
with respect to any Person, any other Person directly or indirectly controlling,
controlled by or under direct or indirect common control with, such
Person.  For purposes of this definition, “control” (including, with
correlative meaning, the terms “controlling,” “controlled by” and “under common
control with”) means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person
through the ownership of more than fifty percent (50%) of such Person’s voting
securities, by contract or otherwise.

     

    “Approved Transaction”
shall have the meaning set forth in Section
2.4(e).

     

    “Arbitration Firm”
shall have the meaning set forth in Section
2.4(c).

     

    “Business” means
wireless applications software business.

     

    “Business Day” means
any day other than a Saturday, a Sunday or a day on which banks in the State of
Illinois are authorized or obligated by Law or executive order to
close.

     

    “Business Financing”
shall have the meaning set forth in Section
2.2(c).

     

    “Buyer” shall have the
meaning set forth in the Preamble.

     

    “Buyer Indemnified
Party” shall have the meaning set forth in Section
7.2.

     

    “Calculation Period”
shall have the meaning set forth in Section
2.4(a).

     

    “Change of Control”
means with respect to any Person, (i) a transfer of more than fifty percent
(50%) of all of the outstanding voting equity interests in such Person to one or
more other Persons or (ii) a merger or consolidation of such Person with one or
more other Persons in which the equity holders of such other Person or Persons
as of immediately prior to such merger or consolidation hold more than fifty
percent (50%) of all of the outstanding equity interests of the Person surviving
such merger or consolidation, in the case of each of clause (i) and (ii),
whether in a single transaction or through a series of related
transactions.

     

    “Charter Documents”
means (i) with respect to a corporation, the certificate of incorporation and
bylaws (or similar governing documents) and (ii) with respect to any other
entity, the governing documents of such entity.

     

    “Chosen Courts” shall
have the meaning set forth in Section
8.5(b).

     

    “Claim Notice” shall
have the meaning set forth in Section
8.5(a).

     

    “Closing” shall have
the meaning set forth in Section
3.1.

     

    “Closing Date” shall
have the meaning set forth in Section
3.1.

     

    “Closing Payment”
shall have the meaning set forth in Section
2.2.

     

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

     

    “Company” shall have
the meaning set forth in the Recitals.

     

    “Company Intellectual
Property” means, collectively, all Intellectual Property, Technology and
Software that is owned or used by the Company.

     

    “Company Software”
means all Software included in the Company Intellectual Property.

     

    “Compensation and Benefit
Plans” means any “employee benefit plan” (as defined in section 3(3) of
ERISA)  and any other retirement or deferred compensation plan,
incentive compensation plan, stock plan, retention plan or agreement,
unemployment compensation plan, vacation pay, change in control, severance pay,
bonus or benefit arrangement, insurance or hospitalization program or any fringe
benefit arrangements for any current or former employee, director, consultant or
agent, whether pursuant to contract, arrangement, custom or informal
understanding, which does not constitute an employee benefit plan (as defined in
section 3(3) of ERISA), in any case which the Company maintains, is a party to,
participates in or has any liability with respect to.

     

    “Competing Business”
shall have the meaning set forth in Section
6.1(a)(i).

     

    “Consent” means any
approval, authorization, consent, notification, filing, registration, permit,
ratification, waiver or other permission, in whatever form, given by, required
by, or obtained from any Person.

     

    “Contract” means any
contract, lease, license, indenture, note, bond, mortgage, agreement, Permit,
concession, franchise, instrument, undertaking, commitment, understanding or
other arrangement (whether written or oral).

     

    “Current Employee”
means any individual who is employed by the Company on the date of this
Agreement.

     

    “Current Employee
Amount” shall have the meaning set forth in Section
2.3.

     

    “Damages” means any
and all damages, losses, costs and expenses and Liabilities, and reasonable
attorney’s fees, expenses and disbursements in connection
therewith.

     

    “Deferred Closing
Amount” shall have the meaning set forth in Section
2.2(c).

     

    “Deposit Amount” shall
have the meaning set forth in Section
2.2(a).

     

    “Direct Claim” shall
have the meaning set forth in Section
7.5(a).

     

    “Disputed Amount”
shall have the meaning set forth in Section
2.4(b).

     

    “Environmental Laws”
means all Laws or other governmental requirements related to the protection of
the environment or human health and safety, including any Laws related to the
disposal of any Hazardous Substance.

     

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

     

    “Final Monthly Deferred
Consideration” means, for each Calculation Period, the Preliminary
Monthly Deferred Consideration plus or minus the Disputed Amount.

     

    “Final Monthly Revenue
Amount” shall have the meaning set forth in Section
2.4(c).

     

    “Final Monthly Revenue
Determination Date” shall have the meaning set forth in Section 2.4(b).

     

    “Financial Statements”
means the unaudited financial statements of the Company for the period ended
November 30, 2008, consisting of a balance sheet of the Company at such date and
the related statement of earnings and cash flows for the eleven-month period
then ended.

     

    “Financing Entity”
shall have the meaning set forth in Section
2.2(c).

     

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

     

    “Governmental
Authority” means any Federal, state, local or other political subdivision
thereof, and any entity, department, commission, bureau, agency, authority,
board, court, official or officer, domestic or foreign, exercising executive,
judicial, regulatory or administrative functions of or pertaining to government,
including any quasi-governmental entities established to perform such
functions.

     

    “Hazardous Substance”
means any material or substance which (i) constitutes a hazardous substance,
toxic substance or pollutant (as such terms are defined by or pursuant to any
Environmental Law) or (ii) is regulated or controlled as a hazardous substance,
toxic substance or pollutant or other regulated or controlled material,
substance or matter pursuant to any Environmental Law.

     

    “Indebtedness” means,
as to any Person, (i) all obligations of such Person for borrowed money
(including reimbursement and all other obligations with respect to surety bonds,
letters of credit and bankers’ acceptances, whether or not matured), (ii) all
obligations of such Person evidenced by notes, bonds, debentures or similar
instruments, (iii) all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable and accrued
commercial or trade liabilities arising in the ordinary course of business, (iv)
all interest rate and currency swaps, caps, collars and similar agreements or
hedging devices under which payments are obligated to be made by such Person,
whether periodically or upon the happening of a contingency, (v) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person, (vi) all
obligations of such Person under leases that have been or should be, in
accordance with relevant accounting principles, recorded as capital leases,
(vii) all indebtedness secured by any Lien on any property or asset owned or
held by such Person regardless of whether the indebtedness secured thereby shall
have been assumed by such Person or is non-recourse to the credit of such
Person, and (viii) all guarantees by such Person of the indebtedness of any
other Person.

     

    “Indemnified Party”
shall have the meaning set forth in Section
7.5.

     

    “Indemnifying Party”
shall have the meaning set forth in Section
7.5.

     

    “Initial Cash Amount”
means the Closing Payment plus the Deposit
Amount.

     

    “Intellectual
Property” means all of the following rights, title, or interest in or
arising under the Laws of the United States, any state, any other country, or
international treaty regime, whether or not filed, perfected, registered, or
recorded, including all renewals thereof: (i) certificates of invention and
other indicia of invention ownership, statutory invention registrations,
patents, patent applications, and patent rights, including any such rights
granted upon any reissue, reexamination, division, extension, provisional,
continuation, or continuation-in-part applications, and equivalent or similar
rights anywhere in the world in inventions and discoveries;
(ii) trademarks, service marks, trade names, service names, domain names,
trade dress, logos, images and other identifiers of same, including all goodwill
associated therewith, and any and all common law rights, and registrations and
applications for registration thereof, all rights therein provided by
international treaties or conventions, and all reissues, extensions and renewals
of any of the foregoing, (iii) rights associated with works of authorship
and literary property rights, including copyrightable works, copyrights, moral
rights, mask work rights, database rights and design rights, in each case, other
than Software, whether or not registered, and registrations and applications for
registration thereof, and all rights therein provided by international treaties
or conventions, (iv) confidential and proprietary information, including
rights relating to know-how or trade secrets, including ideas, concepts,
methods, techniques, inventions (whether patentable or unpatentable), and other
works, whether or not developed or reduced to practice, rights in industrial
property, customer, vendor, and prospect lists, and all associated information
or databases, and other confidential or proprietary information, in each case
other than Software (collectively, “Trade Secrets”) and
(v) any rights analogous to those set forth in the preceding clauses and any
other proprietary rights relating to intangible property anywhere in the world,
including all intellectual property rights in and to customer lists, databases,
data collections, engineering data, manufacturing and production processes and
procedures, design documents and analyses, diagrams, documentation, drawings,
formulae, marketing plans, methodologies, processes, program listings,
protocols, sales data, schematics, specifications, computer data, computer
programs and Software, web sites, and other forms of Technology (whether or not
embodied in any tangible form and including all tangible embodiments of the
foregoing such as blueprints, compilations of information, instruction manuals,
notebooks, prototypes, reports, samples, studies, and summaries), in each case
other than Software.

     

    “IRS” means the United
States Internal Revenue Service.

     

    “Judgment” means any
judgment, order, injunction, decree, writ, ruling, stipulation, assessment or
arbitration award of any Governmental Authority.

     

    “Law” means any
Federal, state, local or foreign statute, ordinance, rule, regulation or other
provision of law, or any Judgment or any other governmental requirement, Permit,
registration or authorization.

     

    “Lenders” means,
collectively, Alexander Finance, L.P. and Manchester Securities
Corporation.

     

    “Liabilities” means
any and all claims, charges, debts, demands, actions, obligations, bonds,
indemnities and similar obligations, controversies, guarantees, make-whole
agreements and similar obligations, and other liabilities, including all
contractual obligations, whether absolute or contingent, inchoate or otherwise,
matured or unmatured, liquidated or unliquidated, accrued or unaccrued, known or
unknown, whenever arising.

     

    “Lien” means any lien,
mortgage, security interest, pledge, restriction on transferability, defect of
title or other claim, charge or encumbrance of any nature whatsoever on any
property or property interest, including any restriction on the use, voting,
transfer, receipt of income or other exercise of any attributes of
ownership.

     

    “Material Adverse
Effect” means a material adverse change in, or a material adverse effect
upon (i) the business, condition (financial or otherwise), assets, liabilities
or results of operations of the Company, taken as a whole, or (ii) the ability
of either Party to consummate the transactions contemplated by this Agreement,
in each case, whether viewed on a short-term and/or a long-term
basis.

     

    “Material Contracts”
shall have the meaning set forth in Section
4.14(b).

     

    “Material Payment
Default” means any point at which (i) an aggregate amount of Final
Monthly Deferred Consideration in excess of $100,000 is past due or (ii) any
amount of Final Monthly Deferred Consideration is not paid within 120 calendar
days following the applicable Final Monthly Revenue Determination
Date.

     

    “Monthly Revenue
Amount” shall have the meaning set forth in Section
2.4(a).

     

    “Monthly Revenue
Statement” shall have the meaning set forth in Section
2.4(a).

     

    “Non-Compete Period”
shall have the meaning set forth in Section
6.1(a)(i).

     

    “Objection Notice”
shall have the meaning set forth in Section
2.4(c).

     

    “Party” shall have the
meaning set forth in the Preamble.

     

    “Payoff Amount” shall
have the meaning set forth in Section
2.4(d).

     

    “Permit” means any
permit, license, franchise, approval, order, qualification, waiver,
registration, certificate, variance or other authorization of any Governmental
Authority.

     

    “Person” means any
individual, bank, corporation, partnership, association, limited liability
company, business trust, unincorporated organization or similar organization,
whether domestic or foreign, or any Governmental Authority.

     

    “Personal Property”
shall have the meaning set forth in Section
4.18.

     

    “Personal Property
Leases” shall have the meaning set forth in Section
4.18.

     

    “Post-Closing Period”
shall have the meaning set forth in Section
6.3(d).

     

    “Pre-Closing Period”
shall have the meaning set forth in Section
6.3(d).

     

    “Preliminary Monthly Deferred
Consideration” shall have the meaning set forth in Section
2.4(a).

     

    “Previous Employee”
means any individual who has ever been employed by the Company or Seller, and
who is not employed by the Company or Seller on the date of this
Agreement.

     

    “Proceeding” means any
action, arbitration, audit, hearing, investigation, litigation, proceeding or
suit (whether civil, criminal, administrative, judicial or investigative,
whether formal or informal, or whether public or private), whether or not before
or by any Governmental Authority.

     

    “Real Property Leases”
shall have the meaning set forth in Section
4.17(b).

     

    “Registered Company
Intellectual Property” means all patents and pending patent applications,
trademark registrations and applications for registration of trademarks,
registered copyrights, and registered domain names filed in the U.S. Patent and
Trademark Office, U.S. Copyright Office or in any office or agency of the United
States or any State thereof or any other country or political subdivision
thereof or otherwise, in each case that are included within the Company
Intellectual Property.

     

    “Revenue” means the
amount of revenue received by the Company.

     

    “Review Period” shall
have the meaning set forth in Section
2.4(c).

     

    “Rivada Purchase
Order” shall have the meaning set forth in Section
6.5.

     

    “Seller” shall have
the meaning set forth in the Preamble.

     

    “Seller’s Knowledge”
means the actual knowledge, after reasonable inquiry, of Gordon Reichard, Gary
Berger, Amr Abdelmonem or Barb Olliges.

     

    “Seller Indemnified
Party” shall have the meaning set forth in Section
7.3.

     

     “Shares” has the
meaning set forth in the Recitals.

     

    “Software” means any
and all (i) computer programs, including any and all software implementation of
algorithms, models and methodologies, whether in source code, object code, human
readable form or other form, (ii) databases and compilations, including any and
all data and collections of data, whether machine readable or otherwise, (iii)
descriptions, flow charts and other work products used to design, plan, organize
and develop any of the foregoing, screens, user interfaces, report formats,
firmware, development tools, templates, menus, buttons and icons, and (iv) all
documentation including user manuals and other training documentation relating
to any of the foregoing.

     

    “Subcontractors” shall
have the meaning set forth in Section
4.16(a).

     

    “Taxes” means all
income, gross receipts, net proceeds, ad valorem, turnover, real and personal
property (tangible and intangible), sales, use, franchise, excise, value added,
license, payroll, unemployment, environmental, customs duties, capital stock,
disability, stamp, leasing, lease, user, transfer, fuel, excess profits,
occupational, windfall profits, severance and employees’ income withholding and
Social Security taxes, imposed by the United States or any foreign country or by
any state, municipality, subdivision or instrumentality of the Unites States or
of any foreign country or by any other tax authority, including all applicable
penalties and interest, and such term shall include any interest, penalties or
additions to tax attributable to such taxes.

     

    “Tax Proceeding” shall
have the meaning set forth in Section
6.3(f).

     

    “Tax Return” means any
report, return, document, declaration, payee statement or other information or
filing required to be supplied to any Tax authority with respect to
Taxes.

     

    “Technology” means,
collectively, all technology, designs, formulae, algorithms, procedures,
methods, discoveries, processes, techniques, ideas,
know-how,  research and development, technical data, tools, materials,
specifications, processes, inventions (whether patentable or unpatentable and
whether or not reduced to practice) apparatus, creations, improvements, works of
authorship in any media, confidential, proprietary or non-public information,
and other similar materials, and all recordings, graphs, drawings, reports,
analyses and other writings, and other tangible embodiments of the foregoing in
any form whether or not listed herein, and all related technology, other than
Software.

     

    “Third Party Claim”
shall have the meaning set forth in Section
7.5(a).

     

    “Third Party Intellectual
Property” shall have the meaning set forth in Section
4.12(h).

     

    “Title and Authorization
Representations” means the representations and warranties contained in
Section 4.1,
Section 4.2,
Section 4.4,
Section
4.5(a)(i), Section 4.23, Section 4.24, Section 5.1, Section 5.2(a)(i)
and Section 5.4.

     

    “Total Deferred
Consideration” shall have the meaning set forth in Section
2.4(d).

     

    “Trade Secrets” shall
have the meaning set forth in the definition of “Intellectual
Property.”

     

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

     

    Section
1.2 Interpretation.  In
this Agreement, unless otherwise specified or where the context otherwise
requires:

     

    (a) the table
of contents and headings of particular provisions of this Agreement are inserted
for reference purposes only and do not limit or otherwise affect any of the
provisions of this Agreement;

     

    (b) the words
“include,” “includes” or “including” shall be deemed to be followed by the words
“without limitation”;

     

    (c) the words
“hereof,” “hereto,” “herein” and “hereunder” and words of similar import shall,
unless otherwise stated, be deemed to refer to this Agreement as a whole and not
to any specific Article, Section or provision of this Agreement;

     

    (d) references
to any Person include the successors and permitted assigns of such Person;
and

     

    (e) references
to any Law shall mean such Law as amended, modified, codified, replaced or
re-enacted, in whole or in part, and in effect from time to time, including
rules and regulations promulgated thereunder.

     

    Each
Party acknowledges that (i) it has had the opportunity to read and review this
Agreement with counsel, (ii) this Agreement has been the subject of active and
complete negotiations between the Parties and (iii) this Agreement has been
jointly authored and shall not be interpreted to the benefit or detriment of
either Party based on authorship.

     

    ARTICLE
2                                

     

    


     

    PURCHASE
AND SALE OF THE SHARES

     

    Section
2.1 Stock
Purchase.  On the terms and subject to the conditions set forth
in this Agreement and in reliance upon the representations, warranties and
covenants contained herein, at the Closing, Buyer shall purchase from Seller,
and Seller shall sell, assign and transfer to Buyer, all of the Shares, which
Shares do and shall constitute all of the outstanding equity interests of the
Company, free and clear of any and all Liens.

     

    Section
2.2 Purchase
Price.   

     

    (a) In full
consideration for the transfer of the Shares and the non-competition obligations
of Seller set forth in Section 6.1, Buyer
shall pay the amounts and/or otherwise provide the consideration set forth in
Section 2.2 and
Section 2.4, in
each case in accordance with the terms thereof.  The Parties
acknowledge that Buyer has previously paid $75,000 (the “Deposit Amount”) to
Seller pursuant to that certain Letter of Intent, dated October 30, 2008,
between the Parties.

     

    (b) At the
Closing, Buyer shall pay to Seller an amount equal to $250,000 (the “Closing
Payment”).

     

    (c) Except as
provided below, Buyer shall pay to Seller in cash an amount equal to $175,000
(the “Deferred Closing
Amount”) on March 5, 2009.  Seller may provide notice on or
prior to March 5, 2009 that it wishes to defer receipt of, or convert, such
payment, in which event the Deferred Closing Amount shall be payable upon demand
at any time on or after March 5, 2009 or shall be converted as provided
herein.  If, prior to March 5, 2009, Buyer or an Affiliate of Buyer (a
“Financing
Entity”) consummates an equity financing transaction in which the
proceeds of such transaction will be used to provide funding for the Business (a
“Business
Financing”), the Financing Entity shall provide notice thereof to
Seller.  On or prior to March 5, 2009, Seller may provide notice to
Buyer that it wishes to convert the Deferred Closing Amount pursuant to the
terms hereof, and on March 5, 2009, in full satisfaction of the Deferred Closing
Amount, Buyer shall issue to Seller such number of equity securities of such
Financing Entity equal to the quotient of (i) (A) the amount of the Deferred
Closing Amount that Buyer has not previously paid multiplied by (B) 1.5
divided by (ii)
the price per equity security of the Financing Entity as valued in such Business
Financing.  If Seller has provided notice that it wishes to
defer receipt of the Deferred Closing Amount, and if a Financing Entity
consummates a Business Financing on or after March 5, 2009, then on the date of
the consummation of such Business Financing (unless Seller otherwise elects or
has elected to demand payment of all of the Deferred Closing Amount in cash or
Buyer elects or has elected to pay Seller all of the Deferred Closing Amount in
cash), in full satisfaction of the Deferred Closing Amount, Buyer shall issue
Seller such number of equity securities of such Financing Entity pursuant to the
formula set forth in this Section
2.2(c).  The economic terms and conditions applicable to Seller
in any issuance of equity securities of a Financing Entity pursuant to this
Section 2.2(c)
shall be the same as the economic terms and conditions applicable to the other
investors in any such Business Financing.  Buyer shall provide notice
to Seller no less than ten (10) calendar days prior to the consummation of any
Business Financing.  For the avoidance of doubt and notwithstanding
anything in this Section 2.2(c) to the
contrary, Buyer shall be entitled to pay, at its sole discretion and without
penalty, all or any part of the Deferred Closing Amount in cash at any time
after the Closing.

     

    (d) Payments
to Seller under this Section 2.2 shall be
made by means of a wire transfer of immediately available funds to the following
account of Seller:

     

    Bank
Name: First Bank

    Bank
Address: 678 Lee Street, Des Plaines, IL 60016

    Account
Number: 9944112754

    Bank
Routing Number: 081009428

    Bank
Swift Code: FBOLUS6L

    Beneficiary:
ISCO International, Inc.

     

    Section
2.3 Settlement of Outstanding
Payable Amounts.  On or prior to the date hereof, Seller has
paid the following amounts to the Current Employees: (i) $46,193.50, which
amount represents the amount of salary owing to the Current Employees up to and
including the date hereof; (ii) $90,199.98, which amount represents a retention
bonus owing to the Current Employees in the amount of one-month’s salary for
each Current Employee; and (iii) $33,614.80, which amount represents the
aggregate amount of accrued vacation owing to the Current Employees as of the
date hereof (such amounts are collectively referred to herein as the “Current Employee
Amount”).

     

    Section
2.4 Deferred
Consideration.

     

    (a) No later
than fifteen (15) calendar days after the end of each calendar month following
the Closing (beginning with the calendar month ending December 31, 2008) (each
such calendar month period, a “Calculation
Period”),  Buyer shall prepare and deliver to Seller a written
statement (a “Monthly
Revenue Statement”) setting forth the amount of Revenue, if any, of the
Company for the applicable Calculation Period (the “Monthly Revenue
Amount”), together with reasonably detailed back-up information with
respect to the calculation of such amount.  Buyer shall, concurrently
with its delivery of the Monthly Revenue Statement, pay to Seller an amount
equal to the product of 0.06 multiplied by the
Monthly Revenue Amount (such resulting amount, the “Preliminary Monthly Deferred
Consideration”).  If the Preliminary Monthly Deferred
Consideration is not paid within such fifteen (15) calendar period, any such
unpaid amount shall bear interest at a rate of 1% per month (or, as contemplated
by Section 2.4(f),
10% per month) until paid.

     

    (b) Following
any determination pursuant to Section 2.4(c) that
an adjustment to the Preliminary Monthly Deferred Consideration is necessary,
then (1) if the Disputed Amount is a positive number, then Buyer shall pay to
Seller, no later than five (5) calendar days following the date on which the
Final Monthly Revenue Amount is determined in accordance with Section 2.4(c)
(such date, the “Final
Monthly Revenue Determination Date”), an amount equal to the difference
of (i) the product of (y) the Final Monthly Revenue Amount multiplied by (z)
0.06 minus (ii)
the Preliminary Monthly Deferred Consideration (such resulting amount, the
“Disputed
Amount”), which is payable to Seller by means of a wire transfer of
immediately available funds to an account designated in writing by Seller, and
(2) if the Disputed Amount is a negative number, Seller shall pay such amount to
Buyer within five (5) calendar days following the Final Monthly Revenue
Determination Date.  If the Disputed Amount is not paid within such
five (5) calendar day period, any such unpaid amount shall bear interest at a
rate of 1% per month (or, as contemplated by Section 2.4(f), 10%
per month) until paid.

     

    (c) Within
thirty (30) calendar days after receipt by Seller of a Monthly Revenue Statement
(the “Review
Period”), Seller may deliver a written notice (an “Objection Notice”) to
Buyer of any good faith dispute it has with respect to the preparation or
content of such Monthly Revenue Statement (it being understood that any such
dispute by Seller shall relate solely to Buyer’s calculation of the Monthly
Revenue Amount).  During such thirty (30) calendar day period, Buyer
shall promptly deliver to Seller any materials reasonably requested by Seller in
order to allow Seller to verify Buyer’s calculation of the Monthly Revenue
Amount.  The Objection Notice shall describe in reasonable detail the
items contained in such Monthly Revenue Statement that Seller disputes and the
basis for any such disputes.  Any items other than those disputed in
the Objection Notice or arising out of or related to items disputed in the
Objection Notice shall be deemed to have been accepted by Seller.  If
Seller does not deliver an Objection Notice with respect to a Monthly Revenue
Statement within the Review Period (or if, within the Review Period, Seller
informs Buyer that it has no objection to the Monthly Revenue Statement), such
Monthly Revenue Statement shall be final, conclusive and binding on the Parties,
except in the case of intentional misrepresentation or fraud in the preparation
or presentation of any such Monthly Revenue Statement.  In the event
that Seller delivers a timely Objection Notice, the Parties shall negotiate in
good faith to resolve the disputes.  If the Parties, notwithstanding
such good faith effort, fail to resolve all such disputes within fifteen (15)
calendar days after Buyer receives an Objection Notice, then at any time
thereafter upon the request of either Party, the Parties shall jointly engage an
independent, nationally-recognized accounting firm mutually agreed to by the
Parties (the “Arbitration Firm”) to
resolve such dispute.  As promptly as practicable thereafter (and, in
any event within fifteen (15) calendar days after the Arbitration Firm’s
engagement), Seller shall submit any unresolved elements of its objection to the
Arbitration Firm in writing (with a copy to Buyer), supported by any documents
and arguments upon which it relies.  As promptly as practicable
thereafter (and, in any event, within fifteen (15) calendar days after Seller’s
submission of such unresolved elements), Buyer shall submit its response to the
Arbitration Firm (with a copy to Seller) supported by any documents and
arguments upon which it relies.  The Arbitration Firm shall render its
determination within fifteen (15) calendar days after its receipt of Buyer’s
response.  The scope of the disputes to be resolved by the Arbitration
Firm shall be limited to the unresolved items on the Objection
Notice.  The determination of the Arbitration Firm shall be conclusive
and binding on the Parties.  The Monthly Revenue Amount, as finally
determined pursuant to this Section 2.4(c),
for a particular Calculation Period shall be referred to herein as the “Final Monthly Revenue
Amount” for such Calculation Period.  The costs and expenses of
the Arbitration Firm’s review shall be borne by Seller unless the Final Monthly
Revenue Amount exceeds the Monthly Revenue Amount specified in the Monthly
Revenue Statement by 5% or more, in which case such costs and expenses shall be
borne by Buyer.

     

    (d) Seller
shall be entitled to receive payments pursuant to this Section 2.4 until the
aggregate amount of all Final Monthly Deferred Consideration paid to Seller is
equal to $5,000,000 (the “Total Deferred
Consideration”).  At such point, Seller shall no longer be
entitled to receive any further payments pursuant to this Section
2.4.  In addition, Buyer may, at any time and in its sole
discretion, pay to Seller an amount equal to (A) the Total Deferred
Consideration minus (B) the
aggregate amount of all Final Monthly Deferred Consideration paid to Seller as
of the applicable date (such resulting amount, the “Payoff
Amount”).  Upon Seller’s receipt of the Payoff Amount, it shall
no longer be entitled to receive any further payments pursuant to this Section
2.4.

     

    (e) Except as
set forth below, upon any (i) transfer, sale or assignment by Buyer of all or
substantially all of the Company’s Software, (ii) transfer, sale or assignment
by Buyer of all or substantially all of the assets of the Company or (iii) any
Change of Control of the Company, Buyer shall pay to Seller the Payoff Amount
and any Deferred Closing Amount that Buyer has not previously
paid.  Notwithstanding the foregoing sentence, Buyer shall be entitled
to (without triggering any obligation to pay the Payoff Amount or any Deferred
Closing Amount that Buyer has not previously paid) (A) enter into any of the
transactions contemplated by the foregoing clauses (i)-(iii) with any Affiliate
(so long as (x) such Affiliate assumes Buyer’s obligations under this Agreement
and (y) any such transaction with an Affiliate is approved in advance by Seller,
such approval not to be unreasonably withheld (an “Approved
Transaction”)) and (B) license any of the Company’s Software in the
ordinary course of business in connection with the operation of the Business by
the Company and not with a view to permanently divest such Software so that it
will no longer be part of the operation of the Business by the
Company.  For the avoidance of doubt, the transfer, sale, assignment
or issuance of less than a majority of the equity interests of the Company or
any Affiliate shall not trigger an obligation to pay the Payoff Amount or any
Deferred Closing Amount that Buyer has not previously paid.  Buyer
hereby agrees that until such time as the Total Deferred Consideration is paid
in full, Buyer shall cause the following legend to be included on each stock
certificate representing shares of capital stock of the Company:

     

    "The
securities evidenced by this certificate are subject to the terms and conditions
of that certain Stock Purchase Agreement by and between ISCO International, Inc.
and TAA Group Inc., dated December 5, 2008, which contains certain restrictions
on transfer of the securities evidenced by this certificate. The holder of this
certificate takes the same and holds it subject to the terms and conditions of
such Agreement, and any transfer in conflict therewith or in derogation thereof
is void and of no legal force or effect or validity whatsoever."

     

    (f) From and
after a Material Payment Default, (i) the interest on past-due amounts shall be
increased to 10% per month and (ii) Seller shall be entitled to exercise any and
all legal remedies available to it in order to collect such past due amounts
(plus the amount of interest thereon).

     

    (g) Until
such time as Buyer is no longer obligated to make payments to Seller pursuant to
this Section
2.4, Buyer shall not, without Seller’s consent, take any action that
results in (i) avoiding amounts that would otherwise be payable to Seller
pursuant to this Section 2.4,
(ii) adversely affecting the monitoring or reporting of amounts payable under
this Section
2.4, without a principal business objective other than the decrease of
the amounts otherwise payable under this Section 2.4 or the
adverse effect on the monitoring or reporting of amounts payable under this
Section 2.4, as
the case may be.  An action will be deemed to have such a principal
business objective if the projected financial results of such action are
materially favorable to the Company without considering the avoidance of
payments under this Section 2.4 or the
adverse affect on the monitoring or reporting of amounts payable under this
Section 2.4, as
the case may be.  Until such time as Buyer is no longer obligated to
make payments to Seller pursuant to this Section 2.4, Buyer
must not (A) operate or allow the Business to be operated in a manner that will,
or is reasonably likely to, materially impair the ability of Buyer or its
successors or assigns to make the payments provided for hereunder or (B) permit
its assets to become subject to any lien, mortgage, security interest or pledge
in favor of any Affiliates, officers or directors of Buyer.

     

    (h) Once per
calendar year until such time as Buyer is no longer obligated to make payments
to Seller pursuant to this Section 2.4, Buyer
shall, and shall cause the Company to, make available to Seller, upon reasonable
request and during normal business hours, copies of the books and records of
Buyer and the Company for the sole purpose of determining the amounts payable
pursuant to this Section 2.4 or
otherwise under this Agreement.

     

    (i) Buyer’s
payment obligations hereunder shall be absolute, and shall not be subject to
set-off, reduction, withholding or deduction of any kind.  If (i)
Seller is entitled to any payments pursuant to this Section 2.4 and such
payments are not paid when due and (ii) Seller successfully brings a legal
action against Buyer in order to collect any such past-due amounts, then Buyer
shall reimburse Seller for all legal fees incurred by Seller in connection with
bringing such action.

     

                                      
ARTICLE
3                                

     

    


     

    THE
CLOSING

     

    Section
3.1 The
Closing.  The closing of the transactions contemplated hereby
(the “Closing”) shall take
place at the offices of Mayer Brown LLP, 71 South Wacker Drive, Chicago,
Illinois, 60606-4637, on the date hereof and concurrently with the execution of
this Agreement (the “Closing
Date”).

     

    Section
3.2 Closing Deliveries by
Seller.  At the Closing, Seller shall deliver or cause to be
delivered to Buyer the following:

     

    (a) the stock
certificate(s) representing the Shares, duly endorsed for transfer (or
accompanied by duly executed stock powers), free and clear of any and all
Liens;

     

    (b) a receipt
for the Closing Payment;

     

    (c) a letter,
in form and substance satisfactory to Buyer, from each Lender setting forth the
full release and termination of any and all Liens held by such Person on any of
the assets or properties of the Company;

     

    (d) evidence,
in form and substance satisfactory to Buyer, of the receipt of each Consent set
forth on Schedule
4.5;

     

    (e) a
certificate of an authorized representative of Seller, dated the Closing Date,
in form and substance reasonably satisfactory to Buyer, certifying: (i) the
Charter Documents of the Company; (ii) the resolutions duly and validly adopted
by Seller’s board of directors evidencing its authorization of the execution,
delivery and performance of this Agreement and such other documents as may be
reasonably necessary to consummate the transactions contemplated hereby; and
(iii) incumbency and signatures of the officers of Seller executing this
Agreement;

     

    (f) a good
standing certificate of the Company, certified as of the most recent reasonably
practicable date by the Secretary of State of the State of
Illinois;

     

    (g) resignations
from all the Company’s directors and officers effective as of the Closing Date,
in forms and substance reasonably satisfactory to Buyer; and

     

    (h) evidence,
in form and substance satisfactory to Buyer, of the payment of the Current
Employee Amount.

     

    Section
3.3 Closing Deliveries by
Buyer.  At the Closing, Buyer shall deliver or cause to be
delivered to Seller the following:

     

    (a) the
Closing Payment;

     

    (b) a receipt
for the Shares; and

     

    (c) a
certificate of an authorized representative of Buyer, dated the Closing Date,
certifying: (i) the resolutions duly and validly adopted by Buyer’s board of
directors evidencing its authorization of the execution, delivery and
performance of this Agreement and such other documents as may be reasonably
necessary to consummate the transactions contemplated hereby; and (ii)
incumbency and signatures of the officers of Buyer executing this
Agreement.

     

    ARTICLE
4                                

     

    


     

    REPRESENTATIONS
AND WARRANTIES OF SELLER

     

    Except as
disclosed in the schedules to this Agreement (it being understood that each
schedule shall list the items applicable to such schedule, although the omission
of any item from a schedule shall not be a breach of this Agreement if such item
is disclosed in another schedule and the relevance to such other schedule is
reasonably apparent), Seller hereby represents and warrants to Buyer as
follows:

     

    Section
4.1 Incorporation, Qualification
and Authority of Seller; Due Authorization and
Enforceability.

     

    (a) Seller is
duly organized, validly existing and in good standing under the Laws of the
State of Delaware and has full power and authority to own, lease or otherwise
hold its properties and assets and to conduct its business as presently
conducted.  Seller
is duly qualified to do business in Illinois.

     

    (b) Seller
has the full power, authority and legal capacity to enter into this Agreement,
to consummate the transactions contemplated hereby, and to perform its
obligations hereunder.  The execution, delivery and performance by
Seller of this Agreement and the consummation by Seller of the transactions
contemplated hereby have been duly authorized by all requisite action on the
part of Seller, including approval of the board of directors of
Seller.  Approval of the shareholders of Seller is not required for
the execution, delivery and performance by Seller of this Agreement and the
consummation by Seller of the transactions contemplated hereby.  This
Agreement has been duly executed and delivered by Seller and (assuming due
authorization, execution and delivery by Buyer) constitutes legal, valid and
binding obligations of Seller, enforceable against Seller in accordance with its
terms, subject to the effect of any applicable Laws relating to bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance or preferential
transfers, or similar Laws relating to or affecting creditors’ rights generally
and subject, as to enforceability, to the effect of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

     

    Section
4.2 Incorporation, Qualification
and Authority of the Company.  The Company is validly existing
and in good standing under the Laws of the State of Illinois and has full power
and authority to own, lease or otherwise hold its properties and assets and to
conduct its business as presently conducted.  The Company is duly
qualified to do business in each jurisdiction where the nature of its business
or its ownership of its properties make such qualification necessary, except in
such jurisdictions where the failure to be so qualified, individually or in the
aggregate, has not had and would not reasonably be expected to have a Material
Adverse Effect.  Correct and complete copies of the Company’s Charter
Documents have been delivered to Buyer.  The Company is not in
violation of any term of the Company’s Charter Documents.

     

    Section
4.3 Subsidiaries; Equity
Interests.  The Company has no, and since the Acquisition Date,
has never had any, Subsidiaries and does not (a) own, or have any right to
acquire, directly or indirectly, any capital stock, membership interest,
partnership interest, joint venture interest or other equity interest in any
Person or (b) have the ability to control (whether through the ownership of
voting securities or otherwise) any other Person.

     

    Section
4.4 Capital Structure of the
Company.  The authorized capital stock of the Company consists
of 1,000 shares of Common Stock, par value $0.01 per share, of which 1,000
shares are issued and outstanding.  Seller owns all the outstanding
capital stock of the Company, free and clear of any and all
Liens.  All of the outstanding shares of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and are not
subject to, nor were they issued in violation of, any preemptive rights or
rights of first refusal.  No shares of capital stock are held in the
treasury of the Company.  There are no Contracts relating to the
issuance, sale or transfer of any equity securities or other securities of the
Company.  There are no outstanding or authorized options, warrants,
rights, calls, puts, rights to subscribe, conversion rights or other Contracts
to which the Company is a party or which are binding upon the Company providing
for the issuance, disposition or acquisition of any of its capital stock or
other equity interests (other than this Agreement).  There are no
outstanding or authorized stock appreciation, phantom stock or similar rights
with respect to the Company.  There are no voting trusts, proxies or
any other agreements, understandings or Contracts with respect to the voting of
the capital stock (or other equity interests) of the Company.  The
Company is not subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of its capital stock (or other equity
interest).

     

    Section
4.5 Conflicts;
Consents.  

     

    (a) Except as
set forth on Schedule
4.5, the execution, delivery and performance by Seller of this Agreement
and the consummation by Seller of the transactions contemplated hereby does not
and will not (i) violate or conflict with the Charter Documents of the Company
or Seller, (ii) conflict with or violate any Law or Judgment applicable to the
Company or Seller, (iii) result in any breach of, or constitute a default (or
event which, with the giving of notice or lapse of time, or both, would become a
default) under, or give any Person any rights of termination, revocation,
suspension, amendment, acceleration or cancellation of, any Contract to which
the Company or Seller is a party or by which any of their respective properties
or assets is bound, or (iv) result in the creation of any Lien upon any of the
properties or assets of the Company or the Shares.

     

    (b) Except as
set forth on Schedule
4.5, neither Seller nor the Company is or will be required to give any
notice to or otherwise give or obtain any Consent from any Person in connection
with the execution, delivery and performance by Seller of this Agreement and the
consummation by Seller of the transactions contemplated hereby.

     

    Section
4.6 Financial Statements; Absence of
Liabilities.  A copy of the Financial Statements is set forth
on Schedule
4.6.  Except as set forth on Schedule 4.6, the Financial Statements have
been prepared in accordance with GAAP consistently applied and present fairly in all material
respects the financial condition of the Company as of the dates
thereof.  The Financial Statements were prepared from and in
accordance with the Company’s books and records, and do not represent any
transactions which are not bona fide transactions.  Since the
Acquisition Date, the Company has not incurred any Liabilities that are
not set forth in the Financial Statements other than such Liabilities that are
immaterial.

     

    Section
4.7 Absence of Certain
Changes.  Except as set forth on Schedule 4.7,
since the Acquisition Date, the Company has not (voluntarily or involuntarily):


     

    (a) suffered
any material theft, damage, destruction or casualty loss to any of its assets or
properties (tangible or intangible), whether or not covered by insurance, or
suffered any substantial destruction of its books and records;

     

    (b) sold,
assigned, leased, licensed, transferred or otherwise disposed of or encumbered
any of its tangible assets or properties, except in the ordinary course of
business in a manner consistent with past practice, or sold, assigned, leased,
licensed, transferred or otherwise disposed of or encumbered any Intellectual
Property or other intangible assets, or disclosed any proprietary confidential
information to any Person;

     

    (c) incurred
or become subject to any material Liabilities;

     

    (d) borrowed
any money or issued or exchanged any notes or other evidences of any
Indebtedness, or mortgaged, pledged or subjected to (voluntarily or
involuntarily) any Lien any assets;

     

    (e) made any
loans or advances to, or guarantees for the benefit of, any Person or canceled
any Indebtedness or other claims or rights owing to or held by it;

     

    (f) discharged
or satisfied any Lien or Indebtedness or paid any material
Liability;

     

    (g) failed to
promptly pay and discharge any current Liabilities or became liable to repay any
loan or Indebtedness in advance of its stated maturity;

     

    (h) made or
granted any bonus, wage, salary or other compensation increase to any (or to any
group of) current or former equityholders, directors or managers (or equivalent
governing personnel), officers, partners, executives or (except in the ordinary
course of business consistent with the Company’s practices immediately prior to
the Acquisition Date) other employees, or entered into any employment,
severance, or similar Contract with any current or former equityholders,
directors or managers (or equivalent governing personnel), officers, partners,
executives or (except in the ordinary course of business consistent with the
Company’s practices immediately prior to the Acquisition Date) other
employees;

     

    (i) adopted,
or granted any increase in the payments to or benefits under, any Compensation
and Benefit Plan, or amended, supplemented, modified, replaced or terminated any
Compensation and Benefit Plan;

     

    (j) entered
into, amended, terminated (voluntarily or involuntarily) or received notice
(written or oral) of termination of, any Material Contract (including all
Contracts that would have been required to be disclosed on Schedule 4.14(a) but
for the termination of such Contract);

     

    (k) entered
into any Contract prohibiting or restricting the ability of the Company to
complete with any Person, engage in any business or operate in any geographical
area;

     

    (l) made a
material change in its accounting methods or made or rescinded any Tax election
or changed any method of accounting for foreign, federal or state income Tax
purposes;

     

    (m) acquired
any other business or entity (or any significant portion or division thereof),
whether by merger, consolidation or reorganization or by the purchase of its
assets and/or equity;

     

    (n) made any
capital expenditures or commitments therefor in excess of $10,000;

     

    (o) instituted,
compromised or settled any claim or lawsuit involving equitable or injunctive
relief or the payment by or on behalf of the Company;

     

    (p) failed to
maintain any of its insurance policies as currently in effect or allowed any of
such policies to lapse;

     

    (q) entered
into any other material transaction; or

     

    (r) committed,
either in writing or orally, to take any of the foregoing actions or
activities.

     

    Section
4.8 Litigation.  Except
as set forth on Schedule 4.8, since
the Acquisition Date, there have not been any Proceedings pending or, to
Seller’s Knowledge, threatened (i) against or affecting the Company or any of
its assets (tangible or intangible) or (ii) relating to the transactions
contemplated by this Agreement.  Except as set forth on Schedule 4.8,
neither the Company nor any of its assets (tangible or intangible) has, since
the Acquisition Date, been subject to any Judgment.  The
representations and warranties in this Section 4.8 do not
address or include Tax Proceedings or Judgments. 

     

    Section
4.9 Compliance with
Laws.  The Company is, and since the Acquisition Date has been,
in compliance, in all material respects, with all applicable Laws required by
its activities following the Acquisition Date.  Except as set forth on
Schedule 4.9,
since the Acquisition Date, neither Seller nor the Company has received a
written notice regarding any actual or alleged failure by the Company to comply
with applicable Laws.  The representations and warranties in this
Section 4.9 do
not address or include Tax Laws.

     

    Section
4.10 Governmental
Permits.  The Company holds, and since the Acquisition Date,
has held, all Permits required by any Governmental Authority to operate its
business and to own its assets as required by its activities following the
Acquisition Date.  All Permits currently held by the Company in
connection with its activities following the Acquisition Date are in full force
and effect and the Company is not in material default or violation of any such
Permits.  A correct and complete list of all Permits currently held by
the Company is set forth on Schedule 4.10.  

     

    Section
4.11 Title to
Assets.  Except as set forth on Schedule 4.11,
the Company has good and marketable title to, and is the lawful owner of, all of
its tangible and intangible assets, properties and rights, free and clear of any
and all Liens (other than Liens that have been in place since the Acquisition
Date).

     

    Section
4.12 Intellectual
Property.

     

    (a) To the
extent such Company Intellectual Property was procured on or after the
Acquisition Date, the Company owns and possesses all right, title and interest
to, or has the right to use pursuant to a valid and enforceable license, all of
such Company Intellectual Property, free and clear of any and all
Liens.  The Company Intellectual Property constitutes all of the
Intellectual Property, Technology and Software used in, related to or necessary
for the operation of the Business as conducted between the Acquisition Date and
the Closing.  Except as set forth on Schedule 4.12(a), the
Company Intellectual Property will be available for use by the Company on
substantially identical terms immediately after the Closing as were applicable
to the Company immediately prior to the Closing.

     

    (b) To
Seller’s Knowledge, use of the Company Intellectual Property as presently used
by the Company does not infringe upon or misappropriate the Intellectual
Property rights of any Person.

     

    (c) To
Seller’s Knowledge, no Person is engaging in, or since the Acquisition Date, has
engaged in, any activity that infringes upon the Company Intellectual
Property.

     

    (d) Since the
Acquisition Date, neither Seller nor the Company has received any written claim
or notice from any Person (i) alleging that the operation of the Company’s
business infringes upon any Intellectual Property rights of any Person, (ii)
challenging or asserting an ownership interest in any Company Intellectual
Property or (iii) challenging the validity or enforceability of the Company
Intellectual Property.  There are no, and since the Acquisition Date,
has never been any, infringement Proceedings pending or, to Seller’s Knowledge,
threatened against the Company with respect to any Company Intellectual
Property.

     

    (e) The
issued patents, registered trademarks, domain name registrations, and registered
copyrights included within the Registered Company Intellectual Property are
valid, enforceable, active and subsisting, and all registration, maintenance and
renewal fees required to have been paid after the Acquisition Date have been
paid and all documentation required to have been filed after the Acquisition
Date has been filed as required to maintain the Registered Company Intellectual
Property.  Schedule 4.12(e) sets
forth a list of all royalties, license fees, charges or other payments due to
any third party in respect of any licensed Company Intellectual
Property.

     

    (f) Since the
Acquisition Date, the Company has taken reasonable measures to protect the
confidentiality of the Trade Secrets and confidential information with respect
to the Company Intellectual Property.  Since the Acquisition Date, the
Company has maintained reasonable and appropriate security and data privacy
procedures intended to safeguard its computer systems and the data contained on
such computer systems.

     

    (g) Schedule 4.12(g) sets
forth a correct and complete list of all Registered Company Intellectual
Property and licenses relating thereto.

     

    (h) Schedule 4.12(h) sets
forth a correct and complete list of all Intellectual Property that any third
party has licensed to the Company or otherwise authorized the Company to use,
other than commercial off-the-shelf software (the “Third Party Intellectual
Property”).  All Contracts governing the Third Party
Intellectual Property are in full force and effect and neither the Company nor,
to Seller’s Knowledge, any other party thereto, is in breach of any such
Contracts due to action or inaction subsequent to the Acquisition
Date.

     

    (i) To
Seller’s Knowledge, since the Acquisition Date, in no instance has the
eligibility of the Company Software for protection under applicable patent or
copyright Law been forfeited or otherwise reverted to the public domain by
omission of any required notice or any other action.  None of the
Company Software, and no portion thereof, is licensed pursuant to an “open
source,” “shareware” or “freeware” license, or incorporates or is based on any
computer software that is licensed pursuant to an “open source,” “shareware” or
“freeware” license, or is otherwise distributed for use with any “open source,”
“shareware” or “freeware” licensed software.

     

    (j) Since the
Acquisition Date, all personnel, including employees, agents, consultants, and
contractors, who have contributed to or participated in the conception or
development of the Company Intellectual Property on behalf of Company either (i)
have been party to a “work-for-hire” arrangement or agreement with the Company,
in accordance with applicable Laws, that has transferred the creator’s right to
the Company as “author” under applicable copyright Law, or (ii) have executed
appropriate instruments of assignment in favor of the Company as assignee that
have conveyed to the Company full, effective, and exclusive ownership of all
tangible and intangible property and all Intellectual Property rights thereby
arising.

     

    Section
4.13 Environmental
Matters.  Except as set forth on Schedule
4.13,

     

    (a) the
Company is, and has been since the Acquisition Date, in compliance in all
material respects with all Environmental Laws applicable to its activities
following the Acquisition Date and no condition exists or event has occurred
since the Acquisition Date, with or without notice or the passage of time or
both, which would constitute a violation of or give rise to any Liability under
any Environmental Law;

     

    (b) the
Company is not, and since the Acquisition Date, has not been, required under any
Environmental Law applicable to its activities following the Acquisition Date to
possess any Permits;

     

    (c) since the
Acquisition Date, the Company has not treated, disposed of, arranged for or
permitted the disposal of, transported, handled, manufactured, distributed or
released any substance, including any Hazardous Substance, so as to give rise to
any current or future Liability (including any Liability for fines, penalties,
response costs, corrective action costs, personal injury, property damage,
natural resources damages or attorney’s fees) pursuant to any Environmental
Law;

     

    (d) since the
Acquisition Date, neither Seller nor the Company has received any notice from
any Governmental Authority or any other Person that the Company is in violation
of any Environmental Law, or that the Company is responsible (or potentially
responsible) for the cleanup or remediation of any substances at any
locations;

     

    (e) the
Company is not, and since the Acquisition Date, has not been, subject to any
pending or threatened Proceedings involving a demand for damages, injunctive
relief, penalties or other potential Liability with regard to alleged violations
of any Environmental Law in connection with its activities following the
Acquisition Date;

     

    (f) since the
Acquisition Date, the Company has timely filed all reports and notifications
required to be filed and has generated and maintained all required records and
data under all applicable Environmental Laws; and

     

    (g) since the
Acquisition Date, the Company has not caused any of the following to exist in or
at any real property owned or leased by the Company: (i) underground storage
tanks; (ii) asbestos-containing material in any form or condition; (iii)
materials or equipment containing polychlorinated biphenyls; (iv) landfills,
surface impoundments or disposal areas; or (v) mold or water intrusion that
could lead to the formation of mold.

     

    Section
4.14 Contracts.  

     

    (a) Schedule 4.14(a) sets
forth a correct and complete list of all Contracts of the following types to
which the Company is a party, by which it is bound, or to which any of its
assets or properties is subject:

     

    (i) any
Contract which requires or has required a payment by any party in excess of, or
a series of payments which in the aggregate exceed, $10,000, or provides or has
provided for the delivery of goods or performances of services, or any
combination thereof, having a value in excess of $10,000;

     

    (ii) any
collective bargaining agreement;

     

    (iii) any
Contract engaging any third party to act as a sales representative,
manufacturer’s representative, distributor, dealer, broker, sales agency,
advertising agency, or any Contract to act as one of the foregoing on behalf of
any Person;

     

    (iv) any
Contract or arrangement relating to Indebtedness;

     

    (v) any
Contract involving a partnership, joint venture or other cooperative
undertaking;

     

    (vi) any
Contract involving any restrictions with respect to the geographical area of
operations or scope or type of business of the Company or that requires the
Company to deal exclusively with any third party;

     

    (vii) any power
of attorney or Contract with any Person pursuant to which such Person is granted
the authority to act for or on behalf of the Company or the Company is granted
the authority to act for or on behalf of any Person;

     

    (viii) any
employment agreement, severance agreement or other Contract or arrangement
relating to the employment of any individual by the Company;

     

    (ix) any
Contract with an Affiliate;

     

    (x) any
Contract or arrangement of any kind with any employee, officer or director of
any Company or any Affiliates of such individuals, or any Contract or other
arrangement of any kind with Seller or any Affiliate of Seller;

     

    (xi) any
Contract not made in the ordinary course of business which is to be performed in
whole or in part at or after the date of this Agreement;

     

    (xii) any
Contract, whether or not fully performed, relating to any acquisition or
disposition of the Company, or any acquisition or disposition of any subsidiary,
division, line of business, or real property of the Company; and

     

    (xiii) any
Contract that is not of a type listed above but that is otherwise material to
the Company.

     

    (b) The
Contracts set forth, or required to be set forth, on Schedule 4.14(a) are
referred to herein as the “Material
Contracts.”  Correct and complete copies of each Material
Contract have been provided to Buyer.  Except as set forth on Schedule 4.14(a), (i)
each Material Contract is in full force and effect and constitutes a
legal, valid and binding obligation of the Company and, to Seller’s Knowledge,
the other parties thereto, enforceable in accordance with its terms, subject to
the effect of any applicable Laws relating to bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance or preferential transfers, or
similar Laws relating to or affecting creditors’ rights generally and subject,
as to enforceability, to the effect of general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law) and (ii) the Company is not in violation of or in default under (nor does
there exist any condition which with the passage of time or the giving of notice
or both would cause such a violation of or default under) any Material
Contract.  Except as set forth on Schedule 4.14(a),
since the Acquisition Date, no party to any Material Contract has given Seller
or the Company notice that it intends to terminate such Material Contract prior
to the end of the current term of such Material Contract.

     

    Section
4.15 Employee Benefit
Plans.  

     

    (a) All
Compensation and Benefit Plans are set forth on Schedule 4.15, and
correct and complete copies of all such Compensation and Benefit Plans have been
made available for Buyer’s review.

     

    (b) All
Compensation and Benefit Plans comply and have been administered in form and in
operation in all material respects with all applicable Laws since the
Acquisition Date and, since the Acquisition Date, the Company has not received
any notice issued by any Governmental Authority questioning or challenging such
compliance.

     

    (c) Each
Compensation and Benefit Plan intended to be qualified under Section 401(a) of
the Code has obtained or is the subject of a favorable determination or opinion
letter with respect to the qualified status of such Compensation and Benefit
Plan from the IRS and, since the Acquisition Date, to Seller’s Knowledge, no
event has occurred or facts exist that could reasonably be expected to adversely
affect the qualified status of such plan.

     

    (d) No
Compensation and Benefit Plan is a multiemployer plan  (as defined in
section 3(37) of ERISA) or is subject to title IV of ERISA.  Any
Compensation and Benefit Plan that is a nonqualified deferred compensation plan
within the meaning of section 409A of the Code has been administered in all
material respects in compliance with section 409A of the Code.

     

    (e) Since the
Acquisition Date, there have been no acts or omissions with respect to the
Compensation and Benefit Plans by the Company or, to Seller’s Knowledge, any
other person which have given rise to or may reasonably be expected to give rise
to any material interest, fines, penalties, taxes or related charges under
section 502 of ERISA or Chapters 43, 47, 68 or 100 of the Code for which the
Company may reasonably be expected to be liable.

     

    (f) None of
the payments contemplated by the Compensation and Benefit Plans would, in the
aggregate, constitute excess parachute payments (as defined in section 280G of
the Code (without regard to subsection (b)(4) thereof)).

     

    (g) There are
no, and since the Acquisition Date, has never been any, Proceedings (other than
routine claims for benefits) pending or, to Seller’s Knowledge, threatened
involving any Compensation and Benefit Plan or the assets thereof and, to
Seller’s Knowledge, no facts exist which could reasonably be expected to give
rise to any such Proceedings (other than routine claims for
benefits).

     

    (h) The
Company does not have any, and since the Acquisition Date, has never had any,
Liability for providing, under any Compensation and Benefit Plan or otherwise,
any post-retirement medical or life insurance benefits, other than statutory
Liability for providing group health plan continuation coverage under Part 6 of
Title I of ERISA and section 4980B of the Code or applicable state
Law.

     

    Section
4.16 Employees; Subcontractors;
Labor Matters.  

     

    (a) Schedule 4.16 sets
forth (i) a correct and complete list with job titles, principal work location,
rate of pay, length of continuous service, active or inactive status, reason for
inactive status and expected date of return to active status of all of the
Current Employees and (ii) a correct and complete list with rate of pay and
length of continuous service of all of the subcontractors currently working for
the Company (the “Subcontractors”).  Other
than the amounts reflected in the Current Employee Amount (which, as
contemplated by Section 2.3, will be
paid in full by Seller prior to the Closing) or as set forth on Schedule 4.16, there
are no amounts or other Liabilities owing by the Company to the Current
Employees, the Previous Employees, the Subcontractors or any past
subcontractors.

     

    (b) With
respect to any Current Employee or any Previous Employee, (i) the Company is not
a party to or bound by any collective bargaining agreement, Contract or other
understanding with a labor union or labor organization, (ii) the Company is not,
and since the Acquisition Date, has not been, the subject of a Proceeding
asserting that the Company has committed an unfair labor practice (within the
meaning of the National Labor Relations Act) or seeking to compel the Company to
bargain with any labor organization as to wages or conditions of employment of
any of the Current Employees or Previous Employees and (iii) there is no, and
since the Acquisition Date, has not been any, strike or other labor dispute
involving the Company pending or, to Seller’s Knowledge, threatened, with
respect to the Current Employees or Previous Employees seeking to certify a
collective bargaining unit or engaging in similar organizational
activity.  The Company is, and since the Acquisition Date, has been,
in compliance in all material respects with all applicable Laws respecting
employment practices, equal employment opportunity, immigration, occupational
safety and health, worker’s compensation, wages and hours, and any other terms
and conditions of employment and wages with respect to the Current Employees and
Previous Employees.  The Company is, and since the Acquisition Date,
has been, in compliance in all material respects with all Laws and regulations,
including those Laws regarding Tax and benefits treatment, applicable to
independent contractors, consultants, temporary and leased
employees.  Since the Acquisition Date, the Company has not taken any
action that could constitute a “mass layoff” or “plant closing” within the
meaning of the Worker Adjustment and Relocation Notification Act or could
otherwise trigger any notice requirement or Liability under any local or state
plant closing notice Law.

     

    Section
4.17 Real
Property.

     

    (a) The
Company does not own, and since the Acquisition Date, has not owned, any real
property, whether directly or indirectly.

     

    (b) Schedule 4.17 sets
forth a correct and complete list of all real property leases to which the
Company is a party (collectively, the “Real Property
Leases”).  All of the Real Property Leases are in full force
and effect and constitute the legal, valid and binding obligations of the
Company and, to Seller’s Knowledge, the other parties thereto.  All of
the Real Property Leases are enforceable in accordance with their respective
terms, subject to the effect of any applicable Laws relating to bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance or preferential
transfers, or similar Laws relating to or affecting creditors’ rights generally
and subject, as to enforceability, to the effect of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).  Since the Acquisition Date, neither Seller nor the
Company has given or received notice of, or is otherwise aware of any exercise
of, a right to terminate any Real Property Lease.  All rent and other
amounts due and payable with respect to the Real Property Leases have been paid
through the date of this Agreement and all rent and other amounts due and
payable with respect to the Real Property Leases on or prior to the Closing will
have been paid prior to the Closing.  Correct and complete copies of
each Real Property Lease have been provided to Buyer.

     

    (c) Since the
Acquisition Date, neither Seller nor the Company has received notice of, or is
otherwise aware of any violation of Law affecting the real property leased by
the Company pursuant to the Real Property Leases including, zoning, building or
similar Laws.

     

    Section
4.18 Personal
Property.  Schedule 4.18 sets
forth a correct and complete list of all the personal properties (including
equipment and other tangible assets) and assets owned, leased or used by the
Company with an individual book value in excess of $10,000 (the "Personal
Property").  The Company has a valid leasehold interest in all
of the Personal Property leased by the Company and all such leases (the “Personal Property
Leases”) are in full force and effect and constitute valid and binding
obligations of the Company and, to Seller’s Knowledge, the other parties
thereto.  Neither the Company nor, to Seller’s Knowledge, any other
party thereto is in breach of any of the terms of any Personal Property
Lease.  Schedule 4.18 sets
forth a correct and complete list of the Personal Property
Leases.  Correct and complete copies of each Personal Property Lease
have been provided to Buyer.

     

    Section
4.19 Taxes.  

     

    (a) Since the
Acquisition Date, the Company has filed on a timely basis all material Tax
Returns that are required by applicable Law to be filed on or before the Closing
Date.  Each such Tax Return is correct and complete in all material
respects.  All Taxes shown as due and owing on all such Tax Returns
have been paid.  Since the Acquisition Date, the Company has not
requested an extension of time within which to file any such Tax Return in
respect of any taxable year which has not since been filed.

     

    (b) No
federal, state, provincial, local or foreign audit or other Proceeding is
pending with regard to any Taxes or Tax Returns of the Company related to
periods after the Acquisition Date.  Since the Acquisition Date,
neither Seller nor the Company has received any written notice that an audit or
other Proceeding is threatened with respect to any Taxes due from or with
respect to the Company or any Tax Return filed by or with respect to the
Company.  Since the Acquisition Date, the Company has not granted or
been requested to grant any waiver of any statutes of limitations applicable to
any claim for Taxes.

     

    (c) All Tax
deficiencies which have been claimed, proposed or asserted in writing against
the Company since the Acquisition Date have been fully paid or finally
settled.

     

    (d) There are
no Tax Liens (other than for Taxes not yet due and payable, and other than Taxes
attributable to any Tax periods (or portions thereof) ending on or prior to the
Acquisition Date) upon the properties or assets of the Company.

     

    (e) Since the
Acquisition Date, the Company has not entered into or become subject to any Tax
sharing agreement.

     

    (f) Since the
Acquisition Date, the Company has not acquired assets from another corporation
in a transaction in which the Company’s Tax basis of the acquired assets was
determined, in whole or in party, by reference to the Tax basis of the acquired
assets (or other property) in the hands of the transferor.

     

    (g) Since the
Acquisition Date, the Company has withheld and timely paid all material Taxes
required to have been withheld and paid, and has collected and remitted all
material Taxes (including all sales and use Taxes) required to be collected and
remitted, and has complied with all material information reporting and backup
withholding requirements.

     

    (h) Seller is
not a foreign person within the meaning of Section 1445(b)(3) of the
Code.

     

    (i) Since the
Acquisition Date, the Company has not agreed to nor is it required to make by
reason of a change in accounting method or otherwise, any adjustment under
Section 481(a) of the Code.  Since the Acquisition Date, the Company
has not been the “distributing corporation” or the “controlled corporation” with
respect to a transaction described in Section 355 of the Code.  Since
the Acquisition Date, the Company has not received (and is not subject to) any
private ruling from any Taxing authority and has not entered into (and is not
subject to) any agreement with any Taxing authority.  Since the
Acquisition Date, the Company has not engaged in a “reportable transaction” as
defined in Treasury Regulation Section 1.6011-4.

     

    Section
4.20 Insurance.  Schedule 4.20 sets
forth a correct and complete list of all insurance for which the Company is a
beneficiary.  Except as set forth on Schedule 4.20, since
the Acquisition Date, no material claims have been made against such
insurance.  All such insurance is in full force and effect and all
premiums due to date have been paid.

     

    Section
4.21 Affiliate
Transactions.  Except as set forth on Schedule 4.21,
neither Seller nor any Affiliate of Seller (i) is a party to any Contract with
the Company, (ii) owns any property (whether real, personal, or mixed and
whether tangible or intangible) used in or pertaining to the business of the
Company or (iii) has or claims to have any direct or indirect interest in any
other Person which conducts a business similar to, has any Contract or
arrangement with, or does business or is involved in any way with, the
Company.  Schedule 4.21 sets
forth a correct and complete description of all such Contracts, properties,
Persons, interests, arrangements and involvements.

     

    Section
4.22 Customers and
Suppliers.  Schedule 4.22 sets
forth a correct and complete list of the 15 largest customers and suppliers of
the Company in terms of the dollar volume of sales made and purchases made,
respectively, during the most recently completed fiscal year and the portion of
the current fiscal year prior to the date of this Agreement.  Since
the Acquisition Date, no such customer or supplier has canceled or otherwise
terminated, or threatened to cancel or terminate its relationship with the
Company or, in the case of customers, reduced or threatened to reduce its
business with the Company.  Since the Acquisition Date, neither Seller
nor the Company has received written notice or has otherwise become aware that
any such customer or supplier intends to cancel or adversely modify its
relationship with the Company.

     

    Section
4.23 Brokers.  No
investment banker, broker, finder or other intermediary has been retained by, is
authorized to act on behalf of or is entitled to any fee or commission from
Seller, the Company or any of their respective Affiliates in connection with the
transactions contemplated by this Agreement.

     

    Section
4.24 Solvency.  

     

    (a) Seller is
executing and delivering this Agreement and entering into the transactions
contemplated hereby for legitimate business purposes, and specifically, Seller
does not intend (whether by virtue of the transactions contemplated hereby or
otherwise) to hinder, defraud or delay any of its present or future
creditors.  Seller is, and after giving effect to the transactions
contemplated by this Agreement will continue to be, solvent (as such term is
defined and determined for purposes of sections 547 and 548 of title 11 of the
Code and under any applicable state Law, including the Uniform Fraudulent
Transfer Act or the Uniform Fraudulent Conveyance Act, or other Law, as enacted
or otherwise applicable in such applicable jurisdiction).  Neither
Seller nor any of its Affiliates is engaged in a business or a transaction, or
is about to be engaged in a business or a transaction, for which any property
remaining with Seller or any of its Affiliates is an unreasonably small
capital.  Neither Seller nor any of its Affiliates intends to incur,
or believes that it is about to incur, debts that would be beyond the ability of
Seller or such Affiliate to pay as such debts matured.

     

    (b) Seller
has conducted a thorough sale process with respect to the Company, which sale
process was generally consistent with the sale process customarily undertaken by
sellers in an effort to maximize the value received for an asset or business
being sold.  Such sale process included contacting a number of
parties, in addition to Buyer, who were determined by Seller to potentially have
the interest and means to purchase the Company, and receiving alternative bids
and indications of interest from certain of those parties.   This
Agreement, and the consideration for the Shares set forth herein, was the result
of such sale process.  The terms and conditions set forth in this
Agreement, including the amounts to be paid by Buyer for the Company as set
forth herein, have been carefully reviewed by the board of directors of Seller
(including the independent directors thereof) and have, with the assistance of
management of Seller and outside advisors, been determined by the board of
directors to provide Seller with reasonably equivalent value and/or fair
consideration (as such terms are defined and determined for purposes of Section
548 of Title 11 of the Code and any applicable state Law, including the Uniform
Fraudulent Transfer Act or the Uniform Fraudulent Conveyance Act, or other Law,
as enacted or otherwise applicable in such applicable jurisdiction) for the
Company.

     

    Section
4.25 Directors and Officers of
the Company.  Schedule 4.25 sets
forth a correct and complete list, as of immediately prior to the Closing, of
all of the directors and officers of the Company.  

     

    ARTICLE
5                                

     

    


     

    REPRESENTATIONS
AND WARRANTIES OF BUYER

     

    Buyer
hereby represents and warrants to Seller as follows:

     

    Section
5.1 Incorporation and Authority
of Buyer; Due Authorization and Enforceability. 

     

    (a) Buyer is
duly organized, validly existing and in good standing under the Laws of the
State of Illinois and has full power and authority to own, lease or otherwise
hold its properties and assets and to conduct its business as presently
conducted.

     

    (b) Buyer has
the full power, authority and legal capacity to enter into this Agreement, to
consummate the transactions contemplated hereby, and to perform its obligations
hereunder.  The execution, delivery and performance by Buyer of this
Agreement and the consummation by Buyer of the transactions contemplated hereby
have been duly authorized by all requisite action on the part of
Buyer.  This Agreement has been duly executed and delivered by Buyer,
and (assuming due authorization, execution and delivery by Seller) this
Agreement constitutes legal, valid and binding obligations of Buyer, enforceable
against Buyer in accordance with its terms, subject to the effect of any
applicable Laws relating to bankruptcy, reorganization, insolvency, moratorium,
fraudulent conveyance or preferential transfers, or similar Laws relating to or
affecting creditors’ rights generally and subject, as to enforceability, to the
effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

     

    Section
5.2 Conflicts;
Consents.  

     

    (a) The
execution, delivery and performance by Buyer of this Agreement and the
consummation by Buyer of the transactions contemplated hereby does not and will
not (i) violate or conflict with Buyer’s Charter Documents, (ii) conflict with
or violate any Law or Judgment applicable to Buyer or (iii) result in any breach
of, or constitute a default (or event which, with the giving of notice or lapse
of time, or both, would become a default) under, or give any Person any rights
of termination, revocation, suspension, amendment, acceleration or cancellation
of, any material Contract to which Buyer is a party or by which any of its
properties or assets is bound.

     

    (b) Buyer is
not, and will not be, required to give any notice to or otherwise give or obtain
any Consent from any Person in connection with the execution, delivery and
performance by Buyer of this Agreement and the consummation by Buyer of the
transactions contemplated hereby.

     

    Section
5.3 Capitalization and Ongoing
Operations of the Company.  The authorized capital of Buyer
consists of 100,000,000 shares of common stock, of which 1,200 shares are issued
and outstanding.  The shares of Buyer are held by Jim Lin. Buyer has
obtained funding for its obligations contemplated under this Agreement,
including funding for payment of the Closing Payment, associated expenses, and
working capital through investment from Shanghai Automotive Manufacturing
Capital Corporation Limited in the amount of $2,500,000 pursuant to that certain
letter dated December 1, 2008.

     

    Section
5.4 Brokers.  No
investment banker, broker, finder or other intermediary has been retained by, is
authorized to act on behalf of or is entitled to any fee or commission from
Buyer or any Affiliate of Buyer in connection with the transactions contemplated
by this Agreement.

     

    Section
5.5 Intermediary
Transactions.   Buyer has no present plan or intention to dispose of
65% or more of the value of the Company’s assets within the 12 month period
following the Closing Date in a manner than would cause the transactions
contemplated by this Agreement to be treated as an “intermediary transaction”
within the meaning of Internal Revenue Service Notice 2008-111.

     

    ARTICLE
6                                

     

    


     

    CERTAIN
COVENANTS AND AGREEMENTS

     

    Section
6.1 Non-Competition;
Non-Solicitation.

     

    (a) As an
inducement for Buyer to enter into this Agreement, Seller shall not, and shall
cause its subsidiaries and any other Person under its control not to, directly
or indirectly:

     

    (i) engage
in, control, advise, manage, serve as a director or officer of, act as a
consultant to, receive any economic benefit from or exert any influence upon,
any Person which is at such time engaged, directly or indirectly, in the
Business as conducted between the Acquisition Date and the Closing (a “Competing Business”)
for a period of three (3) years from the Closing Date (the “Non-Compete
Period”);

     

    (ii) avail
itself of or invest in any business opportunity related to a Competing Business,
and which came to its attention during the Non-Compete Period;

     

    (iii) solicit,
divert or attempt to solicit or divert any party who is, was or was solicited to
become, a customer or supplier of the Company at any time prior to the Closing
Date;

     

    (iv) employ,
solicit for employment or encourage to leave their employment, any employee of
the Company, except for a person who responds to a public advertisement which is
not solely aimed at such employee or who is first approached when no longer an
employee of the Company; or

     

    (v) disturb,
or attempt to disturb, any business relationship between any third party and the
Company.

     

    This
Section 6.1(a)
shall not be deemed breached as a result of the ownership by Seller or any
Affiliate of Seller of (i) less than an aggregate of five percent (5%) of any
class of stock of a Person engaged, directly or indirectly, in a Competing
Business, or (ii) less than five percent (5%) in value of any Indebtedness of a
Person engaged, directly or indirectly, in a Competing Business.

     

    (b) Seller
acknowledges and agrees that the remedies at law for any breach of the
provisions of this Section 6.1 would be
inadequate and that, in addition to any other remedies that Buyer may have,
Buyer shall be entitled to temporary and permanent injunctive relief, without
the necessity of proving actual damages or posting bond, for any actual or
threatened breach of the provisions of this Section
6.1.

     

    (c) To the
extent that any part of this Section 6.1 may be
invalid, illegal or unenforceable for any reason, it is the intent of the
Parties that such part shall be enforceable to the extent that a court of
competent jurisdiction shall determine that such part, if more limited in
duration, area, scope or otherwise, would have been enforceable.

     

    (d) For the
avoidance of doubt, other than as expressly set forth in Section 6.4, there is
nothing contained in this Section 6.1 or
otherwise in this Agreement that is intended to, or that shall be deemed to have
the effect of, waiving, releasing, limiting or otherwise modifying in any way
any contractual or other rights that Seller or its Affiliates may have against
any Person, including Buyer, any Current Employee or any Previous
Employee.

     

    Section
6.2 Confidentiality.  After
the Closing Date, Seller shall not, and shall cause its Affiliates not to,
directly or indirectly, use or provide to any other Person any material
nonpublic information concerning the business or operations (financial or other)
of the Company, except if, based on the advice of counsel, such disclosure is
required by applicable Law.

     

    Section
6.3 Tax
Matters.  

     

    (a) All
Transfer Taxes incurred in connection with the transfer of the Shares pursuant
to this Agreement shall be borne equally by Seller and Buyer.  Buyer
shall file, to the extent required by applicable Tax laws, all necessary Tax
Returns and other documentation with respect to all such Transfer
Taxes.  To the extent one Party incurs or pays more than fifty percent
(50%) of such Transfer Taxes, the other Party shall reimburse such Party
therefore within five (5) days after written demand and presentation of
reasonable supporting documentation.   To the extent required by
Law, each of Buyer and Seller will join, and will cause their Affiliates to
join, in the execution of any Tax Returns or other documentation related to such
Transfer Taxes.

     

    (b) Any Tax
Return to be prepared pursuant to the provisions of this Section 6.3(b) shall
be prepared in a manner consistent with practices followed in prior years with
respect to similar Tax Returns, except for changes required by changes in
applicable Tax laws or changes in fact.  The following provisions
shall govern the allocation of responsibility as between the Parties for certain
Tax matters following the Closing Date:

     

    (i) Seller
shall prepare or cause to be prepared and file or cause to be filed all Tax
Returns of the Company that are filed on a consolidated, combined, or unitary
basis with Seller or any of Seller’s other Affiliates for all taxable periods
ending on or prior to the Closing Date regardless of when they are to be
filed.  Seller shall pay, or cause to be paid on the Company’s behalf,
the Taxes attributable to the Company with respect to such Tax Returns, other
than (A) Taxes becoming due as a result of actions taken by Buyer or the Company
on the Closing Date and after the Closing, which shall be the sole
responsibility of Buyer, and (B) Transfer Taxes, which shall be the
responsibility of the Parties as set forth in Section
6.3(a).  Following the Closing Date, if the Company or Buyer
pays Taxes for which Seller is responsible pursuant to this Section 6.3(b)(i),
Seller shall pay to Buyer the amount of such Taxes within five (5) days after
written demand and presentation of reasonable supporting
documentation.

     

    (ii) Buyer
shall prepare or cause to be prepared and file or cause to be filed any Tax
Returns of the Companies (A) for taxable periods ending on or prior to the
Closing Date that are due after the Closing Date, but only if such Tax Returns
are not the responsibility of Seller pursuant to Section 6.3(a)(i),
and (B) for taxable periods which begin before or on the Closing Date and end
after the Closing Date.  Following the Closing Date, if the Company or
Buyer pays Taxes attributable to a taxable period or portion thereof ending on
or before the Closing Date, Seller shall pay to Buyer within five (5) days after
written demand and presentation of reasonable supporting documentation, the
amount of such Taxes which relate to the portion of such taxable period ending
on or prior to the Closing Date, other than (A) Taxes becoming due as a result
of actions taken by Buyer or the Company on the Closing Date and after the
Closing, which shall be the responsibility of Buyer, and (B) Transfer Taxes,
which shall be the responsibility of the Parties as set forth in Section
6.3(a).

     

    (c) Buyer and
Seller shall, and shall each cause their respective Affiliates to, provide to
the other such cooperation and information, as and to the extent reasonably
requested, in connection with (A) the filing of any Tax Return, amended Tax
Return or claim for refund permitted under this Agreement, (B) determining
liability for Taxes or a right to refund of Taxes or (C) the conduct of any
audit, litigation or other proceeding with respect to Taxes.  Such
cooperation and information shall include providing copies of all relevant
portions of relevant Tax Returns, together with relevant accompanying schedules
and relevant work papers, relevant documents relating to rulings and other
determinations by Taxing authorities, and relevant records concerning the
ownership and Tax basis of property, which any such party may
possess.  Each party will retain all Tax Returns, schedules, work
papers, and all material records and other documents relating to Tax matters, of
the Company for the Tax period first ending after the Closing Date and for all
prior Tax periods until the later of either (i) the expiration of the applicable
statute of limitations (and, to the extent notice is provided with respect
thereto, any extensions thereof) for the Tax periods to which the Tax Returns
and other documents relate or (ii) eight (8) years following the due date
(without extension) for such Tax Returns.  Thereafter, the party
holding such Tax Returns or other documents may dispose of them; provided, however, that such
party shall give to the other party the notice prior to doing
so.  Each party shall make its employees reasonably available on a
mutually convenient basis at its cost to provide explanation of any documents or
information so provided.

     

    (d) In the
case of Taxes arising in a taxable period of the Company that includes, but does
not end on, the Closing Date, except as provided in Section 6.3(e), the
allocation of such Taxes between the Pre-Closing Period and the Post-Closing
Period shall be made on the basis of an interim closing of the books as of the
end of the Closing Date. "Post-Closing Period"
means any taxable period or portion thereof beginning after the Closing
Date.  If a taxable period begins on or prior to the Closing Date and
ends after the Closing Date, then the portion of the taxable period that begins
on the day following the Closing Date shall constitute a Post-Closing
Period.  "Pre-Closing Period"
means any taxable period or portion thereof that is not a Post-Closing Period.
For the avoidance of doubt, for purposes of this Section 6.3(d), any
Tax resulting from the transactions contemplated by this Agreement is
attributable to the Pre-Closing Period.

     

    (e) In the
case of any Taxes that are imposed on a periodic basis and are payable for a
taxable period that includes, but does not end on, the Closing Date, the portion
of such Tax which relates to the portion of such taxable period ending on the
Closing Date shall (i) in the case of any Taxes, other than Taxes based upon or
related to income or receipts, or franchise Taxes, or Taxes based on
capitalization, debt or shares of stock authorized, issued or outstanding, or ad
valorem Taxes, be deemed to be the amount of such Tax for the entire taxable
period multiplied by a fraction, the numerator of which is the number of days in
the taxable period ending on the Closing Date and the denominator of which is
the number of days in the entire taxable period, and (ii) in the case of any Tax
based upon or related to income or receipts, or franchise Taxes, or Taxes based
on capitalization, debt or shares of stock authorized, issued or outstanding, or
ad valorem Taxes, be deemed equal to the amount which would be payable if the
relevant taxable period ended as of the end of the Closing Date.  All
determinations necessary to give effect to the foregoing allocations shall be
made in a manner consistent with the prior practice of the Company.

     

    (f) In the
case of any audit, examination, or other proceeding (“Tax Proceeding”)
with respect to (i) any taxable period ending on or before the Closing Date and
(ii) with respect to any other period ending after the Closing Date for which
Seller is or may be liable for any Taxes pursuant to this Agreement, Buyer shall
inform Seller of such Tax Proceeding within ten (10) days after the receipt by
Buyer or any of its Affiliates (including after the Closing, the Company) of
written notice thereof.  Buyer shall afford Seller, at Seller's
expense, the opportunity to (i) control the conduct of any such Tax Proceeding
that pertains or relates to a consolidated, combined or unitary Tax Return that
includes Seller or any of Seller’s other Affiliates, with Buyer having the
right, at Buyer’s expense, to attend any such Tax Proceeding, and (ii)
participate but not control the conduct of any other such Tax
Proceeding.

     

    (g) Any
refund of Taxes paid or payable by or with respect to the Company shall be
promptly paid as follows (or to the extent payable but not paid due to offset
against other Taxes shall be promptly paid by the Party receiving the benefit of
the offset as follows): (i) to Seller if attributable to any taxable period or
portion thereof ending on or before the Closing Date, or for any taxable period
beginning before and ending after the Closing Date to the extent allocable
(determined in a manner consistent with Section 6.3(d) and
Section 6.3(e))
to the portion of such taxable period beginning before and ending on the Closing
Date; and (ii) to Buyer if attributable to any taxable period or portion thereof
beginning after the Closing Date or for any taxable period beginning before and
ending after the Closing Date to the extent allocable (determined in a manner
consistent with Section 6.3(d) and
Section 6.3(e))
to the portion of such taxable period ending after the Closing
Date.

     

    (h) On the
Closing Date, the Company shall not take, and none of Buyer or its Affiliates
shall permit or otherwise cause or allow the Company to take, any action not in
the ordinary course of the Company’s business, including, without limitation,
the merger or liquidation of the Company, the distribution of any property in
respect of the Company’s stock, or the acquisition by the Company of any
securities or equity interests in any other entity.

     

    (i) Buyer
shall file and shall cause each of its Affiliates (including after the Closing,
the Company) to file such Tax elections as are permitted by Law to irrevocably
relinquish and forego, with respect to any net operating loss or similar Tax
attribute of the Company arising in a taxable period or portion thereof
beginning after the Closing Date, the carryback of such net operating loss or
other Tax attribute to any taxable period or portion thereof ending on or before
the Closing Date.

     

    (j) Neither
Buyer nor any of its Affiliates (including after the Closing, the Company) shall
file or permit others to file an amended Tax Return with respect to the Company
for any taxable period ending on or prior to the Closing Date without obtaining
the prior written consent of Seller, which may be withheld by Seller in its sole
and absolute discretion.

     

    Section
6.4 Waiver of Non-Competition
Obligations.  Seller agrees that, after the Closing, it shall
not, directly or indirectly, enforce any contractual provision or other right to
prevent any Current Employee or Previous Employee from conducting the Business
as an employee of the Company and Seller hereby waives and releases, effective
upon the Closing without any further action of any Person, any provision
(including any non-solicitation provisions, any non-competition provisions and
any non-disclosure provisions) in any Contract or other arrangement between any
such Current Employee or Previous Employee, on the one hand, and Seller or any
Affiliate of Seller, on the other hand, to the extent necessary to permit such
employment or conduct, but without waiving any rights which may have accrued
under any such provision prior to the Closing.  For the avoidance of
doubt, the Parties acknowledge and agree that the foregoing is expressly limited
to such waivers of contractual or other rights as necessary to allow such Person
to engage in the Business of the Company and does not act as a waiver or
agreement not to enforce any provision with respect to any other businesses or
operations of Seller or any of its Affiliates (with any provisions which may be
in place between any Current Employee or Previous Employee, on the one hand, and
Seller or any Affiliate of Seller, on the other hand, with respect to any other
businesses or operations of Seller or any of its Affiliates continuing in effect
in accordance with their terms).

     

    Section
6.5 Rivada Purchase
Order.  Seller acknowledges that it has received that certain
Purchase Order No. 479, dated October 15, 2008 (the “Rivada Purchase
Order”), from Rivada Networks, LLC, and further acknowledges that it has
not, as of the Closing, accepted the Rivada Purchase Order.  Seller
agrees that, at and as of the Closing, its right to accept the Rivada Purchase
Order shall cease.  If requested by Buyer, Seller further agrees to
reasonably cooperate with Buyer and the Company after the Closing in order to
allow the Company to accept the Rivada Purchase
Order.         

     

    ARTICLE
7                                

     

    


     

    INDEMNIFICATION

     

    Section
7.1 Survival
Periods.  The representations and warranties of the Parties
contained herein shall survive the Closing for a period of twelve (12) months
following the Closing Date at which time they shall expire (other than with
respect to pending claims), except the following representations and warranties
shall survive as follows: (a) the Title and Authorization Representations shall
survive the Closing indefinitely; and (b) the representations and warranties
contained in Section
4.15 and Section 4.19 shall
survive the Closing until sixty (60) days after the expiration of the applicable
statute of limitations (including any extensions thereto).  All
covenants set forth herein shall survive the Closing in accordance with their
respective terms.  Any claims based on breaches of any representations
or warranties must be initiated within the period set forth in this Section 7.1 or shall
forever be barred.  

     

    Section
7.2 Indemnification by
Seller.  Seller shall indemnify and hold harmless Buyer and its
Affiliates, each of their respective directors, officers, employees and agents,
and each of the respective heirs, executors, successors and assigns of any of
the foregoing (collectively, the “Buyer Indemnified
Parties”) from and against any and all Damages incurred by or asserted
against any Buyer Indemnified Party in connection with, related to or arising
from:

     

    (a) any
material breach of any representation or warranty made by Seller under this
Agreement;

     

    (b) any
material breach of any covenant or agreement made by Seller under this
Agreement;

     

    (c) except as
provided otherwise in Section 6.3, any
material Liability for Taxes of the Company attributable to any Tax periods (or
portions thereof) beginning after the Acquisition Date and ending on the Closing
Date, and any material Liability for Taxes under U.S. Treasury Regulation
Section 1.1502-6 (or any similar provision under foreign, state or local Law)
attributable to any Tax periods (or portions thereof) beginning after the
Acquisition Date and ending on the Closing Date;

     

    (d) any
material Liability arising out of or resulting from a claim brought or
threatened to be brought by a shareholder or former shareholder of Seller, or
any heir, beneficiary, relative, personal or legal representative, successor,
assign, designee or transferee of such shareholder or former shareholder, to the
extent arising from actions or omissions after the Acquisition Date and prior to
the Closing Date;

     

    (e) other
than the employee Liabilities reflected in the Current Employee Amount, any
material Liability arising out of or resulting from any claim by any Current
Employee or Previous Employee related to the period between the Acquisition Date
and the Closing, regardless of whether asserted before or after the Closing;
or

     

    (f) any
material income Taxes incurred by the Company or Buyer after the Closing Date
relating to the license and service of software to SRA International Inc. under
its purchase order 9120900, but not to exceed the amount of Taxes incurred after
the Closing Date on that portion of the income attributable to the purchase
order that is deferred for federal income purposes as of the Closing
Date;

     

    provided, however, that Seller
shall not have any liability for any breach of or inaccuracy in a representation
or warranty contained in this Agreement if Seller can establish that Buyer,
Willen Wei or James Fuentes had actual knowledge of such breach or inconsistency
at the time of the Closing.

     

    Section
7.3 Indemnification by
Buyer.  Buyer shall indemnify and hold harmless Seller and its
Affiliates, each of their respective directors, officers, employees and agents,
and each of the respective heirs, executors, successors and assigns of any of
the foregoing (collectively, the “Seller Indemnified
Parties”) from and against any and all Damages incurred by or asserted
against any Seller Indemnified Party in connection with, related to or arising
from:   

     

    (a) any
breach of any representation or warranty made by Buyer under this Agreement;
or

     

    (b) any
breach of any covenant or agreement made by Buyer under this
Agreement.

     

    Section
7.4 Limitation on
Indemnification Obligations.  The Buyer Indemnified Parties
will not be entitled to recover Damages pursuant to Section 7.2(a) until
the aggregate amount that the Buyer Indemnified Parties would recover under
Section 7.2(a)
exceeds $100,000, and then only to the extent that Damages exceed
$50,000.  The cumulative indemnification obligation of Seller under
Section 7.2(a)
or Section
7.2(b) (other than with respect to a breach by Seller of any of the
covenants or agreements set forth in Section 6.1, Section 6.2 or Section 6.3) shall in
no event exceed $5,500,000.  In no event shall Seller be liable for
consequential, incidental, special or punitive damages, lost profits or the cost
of obtaining third party goods or services.  The limitations set forth
in this Section
7.4 (other than the limitations set forth in the immediately preceding
sentence) shall not apply to recovery for an inaccuracy in or breach of the
Title and Authorization Representations or an inaccuracy in or breach of the
representations and warranties set forth in Section 4.11 or the
first sentence of Section
4.12(a).

     

    Section
7.5 Indemnification
Process.  The party or parties making a claim for
indemnification under this Article 9 shall be,
for the purposes of this Agreement, referred to as the “Indemnified Party”
and the party or parties against whom such claims are asserted under this Article 7 shall be,
for the purposes of this Agreement, referred to as the “Indemnifying
Party.”  All claims by any Indemnified Party under this Article 7 shall be
asserted and resolved as follows:

     

    (a) In the
event that (i) any claim, demand or Proceeding is asserted or instituted by any
Person other than the Parties or their Affiliates which could give rise to
Damages for which an Indemnifying Party could be liable to an Indemnified Party
under this Agreement (such claim, demand or Proceeding, a “Third Party Claim”)
or (ii) any Indemnified Party under this Agreement shall have a claim to be
indemnified by any Indemnifying Party under this Agreement which does not
involve a Third Party Claim (such claim, a “Direct Claim”), the
Indemnified Party shall with reasonable promptness send to the Indemnifying
Party a written notice specifying the nature of such claim, demand or Proceeding
and the amount or estimated amount of such claim, demand or Proceeding (which
amount or estimated amount shall not be conclusive of the final amount, if any,
of such claim, demand or Proceeding) (a “Claim Notice”),
provided that a delay in notifying the Indemnifying Party shall not relieve the
Indemnifying Party of its obligations under this Agreement except to the extent
that (and only to the extent that) such failure shall have caused the Damages
for which the Indemnifying Party is obligated to be greater than such Damages
would have been had the Indemnified Party given the Indemnifying Party proper
notice.

     

    (b) In the
event of a Third Party Claim, the Indemnifying Party shall be entitled to
appoint counsel of the Indemnifying Party’s choice at the expense of the
Indemnifying Party to represent the Indemnified Party and any others the
Indemnifying Party may reasonably designate in connection with such claim,
demand or Proceeding (in which case the Indemnifying Party shall not thereafter
be responsible for the fees and expenses of any separate counsel retained by any
Indemnified Party except as set forth below); provided that such
counsel is reasonably acceptable to the Indemnified
Party.  Notwithstanding an Indemnifying Party’s election to appoint
counsel to represent an Indemnified Party in connection with a Third Party
Claim, an Indemnified Party shall have the right to participate in the defense
of such claim and to employ separate counsel of its choice for such purpose;
provided that
the fees and expenses of such separate counsel shall be borne by the Indemnified
Party (other than any fees and expenses of such separate counsel that are
incurred prior to the date the Indemnifying Party effectively assumes control of
such defense which, notwithstanding the forgoing, shall be borne by the
Indemnifying Party).  The Indemnifying Party shall not be entitled to
assume control of such defense and shall pay the reasonable fees and expenses of
counsel retained by the Indemnified Party to the extent that: (i) the
Indemnifying Party has not notified the Indemnified Party in writing within
thirty (30) days of receipt of a Claim Notice whether the Indemnifying Party
assumes the defense of such claim, the Indemnified Party would suffer material
prejudice to its rights if it did not obtain separate counsel and the
Indemnified Party has in fact retained such separate counsel with respect to the
matter; (ii) the claim for indemnification relates to or arises in connection
with any Proceeding that involved criminal charges against the Indemnified
Party; or (iii) the claim seeks an injunction or equitable relief against the
Indemnified Party and the Indemnifying Party has not engaged counsel in a manner
sufficiently timely to avoid material prejudice to the Indemnified Party’s
rights.  If the Indemnifying Party shall control the defense of any
such claim, the Indemnifying Party shall obtain the prior written consent of the
Indemnified Party (which shall not be unreasonably withheld) before entering
into any settlement of a claim or ceasing to defend such claim if, pursuant to
or as a result of such settlement or cessation, injunctive or other equitable
relief will be imposed against the Indemnified Party or if such settlement does
not expressly and unconditionally release the Indemnified Party from all
liabilities and obligations with respect to such claim, without
prejudice.

     

    (c) In the
event of a Direct Claim, in order to assume the defense of such Direct Claim
pursuant to Section
7.5(b), the Indemnifying Party shall notify the Indemnified Party in
writing within thirty (30) days of receipt of a Claim Notice whether or not the
Indemnifying Party assumes the defense of such claim.

     

    (d) From and
after the delivery of a Claim Notice under this Agreement, at the reasonable
request of the Indemnifying Party, each Indemnified Party shall grant the
Indemnifying Party and its representatives all reasonable access to the books,
records and properties of such Indemnified Party to the extent reasonably
related to the matters to which the Claim Notice relates.  All such
access shall be granted during normal business hours and shall be granted under
conditions that will not unreasonably interfere with the business and operations
of such Indemnified Party.  The Indemnifying Party shall not, and
shall require that its representatives do not, use (except in connection with
such Claim Notice) or disclose to any third Person other than the Indemnifying
Party’s representatives (except as may be required by applicable Law) any
information obtained pursuant to this Section 7.5(d) which
is designated as confidential by an Indemnified Party.

     

    Section
7.6 Characterization of
Indemnification Payments.  To the extent permitted by Law, any
amounts payable under this Article 7 shall be
treated by the Parties as an adjustment to the amount paid by Buyer for the
Shares hereunder. 

     

    Section
7.7 Other Adjustments to
Indemnification; Damages.  Without prejudice to the
indemnification rights of any Indemnified Party set forth this Article 7, if any
Damages sustained by an Indemnified Party are covered by an insurance policy or
an indemnification or reimbursement obligation of another Person (other than an
Affiliate of such Indemnified Party), the Indemnified Party shall use
commercially reasonable efforts to collect such insurance, indemnity or
reimbursement payments.  If the Indemnified Party receives such
insurance or indemnity payments prior to being indemnified, held harmless and
reimbursed under this Article 7 with
respect to such Damages, the payment by the Indemnifying Party with respect to
such Damages shall be reduced (but not below zero) by the net amount of such
insurance proceeds or indemnity payments to the extent related to such Damages,
less reasonable attorney’s fees and other third party expenses incurred in
connection with such recovery.  If an Indemnified Party receives such
insurance proceeds or indemnity or reimbursement payments after being
indemnified, held harmless and reimbursed by the Indemnifying Party with respect
to such Damages, such Indemnified Party shall pay to the Indemnifying Party (up
to a maximum of the total amount paid by the Indemnifying Party in respect of
such Damages and related expenses) the net amount of such insurance proceeds or
indemnity payment to the extent related to such Damages, less reasonable
attorney’s fees and other expenses incurred in connection with such
recovery.  For purposes of this Section 7.7, an
Indemnified Party shall not be deemed to have received an insurance payment if
such payment is made under an insurance plan or program that is self funded by
such Indemnified Party or its Affiliates.  If any Indemnified Party
receives payment under this Article 7 on account
of a claim that the Indemnifying Party believes in good faith is covered by an
insurance policy or an indemnification obligation of another Person (other than
an Affiliate of such Indemnified Party), that Indemnified Party shall (i) on
written request of the Indemnifying Party, assign, to the extent assignable, its
rights under such insurance policy or indemnification obligation with respect to
such claim to the Indemnifying Party (to the extent of such payment) and (ii) be
relieved of any further obligation to pursue collection of such insurance or
indemnification (except that, if requested to do so by the Indemnifying Party,
the Indemnified Party shall reasonably cooperate with the Indemnifying Party, at
the Indemnifying Party’s sole expense, to collect any such insurance or
indemnification).  The amount of any and all Damages payable pursuant
to this Article
7 shall be reduced (but not below zero) to take into account any actual
net reduction in cash Tax payable by the Indemnified Party or its Affiliates, to
the extent such reduction (A) results directly or indirectly from the incurrence
of such Damage, and (B) occurs during or prior to the Tax year in which the
indemnification payment is made.  To the extent the Taxes payable by
the Indemnified Party or its Affiliates may be reduced, as a consequence of the
incurrence of such Damage, in one or more Tax years following the year in which
the indemnification payment is made, the Indemnified Party shall (i) pay to the
Indemnifying Party the actual amount of such reduction in Tax within five (5)
days of the filing of the Tax Return on which such net reduction in Tax is
recognized, and (ii) provide such documentation as the Indemnifying Party may
periodically reasonably request to verify the utilization of any deductions or
losses that result from the incurrence of such Damage, and to verify the actual
amount of such reduction in Tax.  

     

    ARTICLE
8                                

     

    


     

    MISCELLANEOUS

     

    Section
8.1 Fees and
Expenses.  Except as expressly set forth in this Agreement, all
fees and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses.

     

    Section
8.2 Notices.  All
communications, notices and consents provided for herein shall be in writing and
be given in person or by means of telex, facsimile or other means of wire
transmission (with request for assurance of receipt in a manner typical with
respect to communications of that type), by overnight courier or by mail, and
shall become effective: (a) on delivery if given in person; (b) on the date of
transmission if sent by telex, facsimile, email or other means of wire
transmission; (c) one (1) Business Day after delivery to the overnight service;
or (d) four (4) Business Days after being deposited in the United States mails,
with proper postage and documentation, for first-class registered or certified
mail, prepaid.

     

    
      	
              Notices
      shall be addressed as follows:

               

            
	
              If
      to Seller, to:

            
	 
      	
              ISCO
      International, Inc.

              1001
      Cambridge Drive

              Elk
      Grove Village, Illinois 60007

              Attention:  Chief
      Financial Officer

              Facsimile
      Number: (847) 391-5015

               

            
	
              with
      copies to:

            
	 
      	
              McGuire
      Woods LLP

              77
      West Wacker Drive

              Chicago,
      Illinois  60601-1818

              Attention:  Scott
      L. Glickson

              Facsimile
      Number:  (312) 698-4585

               

            
	
              If
      to Buyer, to:

            
	 
      	
              TAA
      Group Inc.

              1200
      West Dower Place

              Aurora,
      Illinois 60506

              Attention:  Jim
      Lin

              Facsimile
      Number: (630) 897-8928

               

            
	
              with
      copies to:

            
	 
      	
              Mayer
      Brown LLP

              71
      South Wacker Drive

              Chicago,
      Illinois  60606-4637

              Attention:  William
      R. Kucera

              Facsimile
      Number:  (312) 706-8138

               

            


    

    or such
other Person or address as any Party shall specify by notice given in accordance
with this Section
8.2.

     

    Section
8.3 Waiver.  No
waiver by any Party of any condition or breach of any provision in this
Agreement shall be effective unless in writing, and no waiver in any one or more
instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other provision in this Agreement.  

     

    Section
8.4 Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, and all of which together shall constitute one and the same
instrument.

     

    Section
8.5 Governing
Law.  

     

    (a) This
Agreement shall be construed and enforced in accordance with and governed by the
laws of the State of Illinois without regard to the conflicts of laws provisions
thereof.

     

    (b) Each
Party agrees that it will, and shall cause its Affiliates to, bring any
Proceeding in respect to any claim arising out of or related to this Agreement
or the transactions contemplated hereby exclusively in the State Courts of Cook
County, Illinois or the Federal Courts of the Northern District of Illinois (the
“Chosen
Courts”) and solely in connection with claims arising under this
Agreement or the transactions contemplated hereby (i) irrevocably submit to the
exclusive jurisdiction of the Chosen Courts, (ii) waive any objection to laying
venue in such Proceeding in the Chosen Courts, (iii) to the fullest extent
permitted by Law, waive any objection that the Chosen Courts are an inconvenient
forum or do not have jurisdiction over any Party and (iv) agree that service of
process upon such Party in any such Proceeding will be effective if notice is
given in accordance with Section
8.2.

     

    Section
8.6 Waiver of Jury
Trial.  Each Party acknowledges and agrees that any controversy
which may arise under this Agreement is likely to involve complicated and
difficult issues, and therefore EACH
PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, AND SHALL CAUSE ITS
AFFILIATES TO IRREVOCABLY AND UNCONDITIONALLY WAIVE, ANY RIGHT SUCH PARTY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.  Each Party certifies and acknowledges that
(i) no representative, agent or attorney of any other Party has represented,
expressly or otherwise, that such other Party would not, in the event of
litigation, seek to enforce the foregoing waiver, (ii) each Party understands
and has considered the implications of this waiver, (iii) each Party makes this
waiver voluntarily and (iv) each Party has been induced to enter into this
Agreement by, among other things, the mutual waivers and certifications in this
Section
8.6.

     

    Section
8.7 Assignment.   This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors and assigns.  Buyer may assign this
Agreement or any of its rights hereunder to any of its Affiliates pursuant to an
Approved Transaction, and as long as such Affiliate assumes Buyer’s obligations
under this Agreement.  In the event of such assignment, Buyer shall be
responsible for all obligations of such assignee and shall continue to be bound
in all respects by the provisions hereof.  Seller may not assign this
Agreement without the written consent of Buyer.

     

    Section
8.8 Amendment.  This
Agreement may be amended, modified or supplemented only by written agreement of
the Parties.

     

    Section
8.9 Further
Assurances.  From time to time after the Closing and without
further consideration, Seller shall execute and deliver such documents and
instruments of conveyance and transfer, and take such additional action, as
Buyer may reasonably request in order to consummate more effectively the
transactions contemplated by this Agreement and to vest in Buyer title to the
Shares transferred under this Agreement.

     

    Section
8.10 No Third Party
Beneficiaries.  This Agreement is solely for the benefit of the
Parties and, to the extent provided herein, the Buyer Indemnified Parties and
the Seller Indemnified Parties, and no provision of this Agreement shall be
deemed to confer upon third parties any remedy, claim, liability, reimbursement,
cause of action or other right.

     

    Section
8.11 Entire
Understanding.  This Agreement constitutes the entire agreement
and supersedes all other prior agreements and understandings, both written and
oral, between the Parties with respect to the subject matter
hereof.

     

    Section
8.12 Public
Announcement.  Each Party shall, and shall cause their
respective Affiliates to, consult with each other and obtain each other’s
written approval before issuing any press release or otherwise making any public
statements with respect to, or disclose any of the terms of, this Agreement or
the transactions contemplated hereby.  

     

    Section
8.13 Severability.  If
any provision of this Agreement shall be held invalid, illegal or unenforceable,
the validity, legality or enforceability of the other provisions hereof shall
not be affected thereby, and there shall be deemed substituted for the provision
at issue a valid, legal and enforceable provision as similar as possible to the
provision at issue.

     

    Section
8.14 Schedules.  The
inclusion of any item in any schedule to this Agreement (a) does not represent a
determination of Seller that such item (i) is material (nor shall it be deemed
to establish a standard of materiality) or (ii) did not arise in the ordinary
course of business, and (b) shall not constitute, or be deemed to be, an
admission to any third party concerning any such item.

     

    [Signature
Page Follows]


    
      
        
           

        

         


      

      
         


        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, each Party has caused this Agreement to be duly executed and
delivered as of the day and year first written above.

     

    
      	 
      	
               

              ISCO
      INTERNATIONAL, INC.

               

               

              By:     /s/ Gordon E.
      Reichard, Jr.

              Name:  Gordon
      E. Reichard, Jr.

              Title:    Chief
      Executive Officer

               

            
	 
      	
               

              TAA
      GROUP INC.

               

               

              By:    /s/ James
      Lin

              Name:  James
      Lin

              Title:    President